22 October, 2019
INTRODUCTION
This newsletter brings to you the key intellectual property and related updates in India from the third quarter of 2019.
Of particular significance, the High Court of Delhi in a patent dispute initiated by Novartis clarified that an infringement action is not maintainable against a revoked patent, even though an appeal is pending disposal against the revocation order. In another dispute concerning Juggernaut Books, a digital book publishing house from India, the Court revisited the principles of ‘purposeful availment’ for determining the territorial jurisdiction of the Court for infringement and passing off caused by a website originating from a foreign source. We also cover the tiff between international social media platform TikTok and Indian social media platform ShareChat offering content in regional languages, that puts a question mark on the status of TikTok as an internet intermediary under the IT law.
On the regulatory side, we saw the notification of the Patent Amendment Rules, 2019, which amended the procedures of patent prosecution actions before the Patent Office. The Copyright Office by way of a public notice clarified certain uses of sound recordings as fair dealings under the copyright law. Additionally, the government issued draft Geographical Indication Amendment Rules inviting comments from stakeholders.
The above-mentioned updates are discussed below.
Novartis AG & Anr. v. Natco Pharma Limited1
In this judgement, a single judge of the Delhi High Court (the “Court”) ruled that no infringement action is maintainable in respect of an unregistered or revoked patent.
Background:
This patent infringement suit was instituted by the Swiss pharma major, Novartis AG (“Novartis”) seeking permanent injunction, damages, rendition of accounts and delivery up, in respect of its granted patented drug titled “Novel Pyrimidine Compounds and Compositions as Protein Kinase Inhibitors” (“Suit Patent”), against Natco Pharma Limited (“Natco”).
Novartis’s main contentions were that it had been granted the patent for a novel and inventive compound “Ceritinib” for treatment of non-small cell lung cancer and Natco’s recent launch of a new product in the market containing Ceritinib amounts to patent infringement. Natco on the other hand alleged that the Suit Patent is neither novel nor inventive and took steps for its revocation by way of a post grant opposition before the Patent Office during the pendency of the suit.
During the pendency of the post grant opposition, the Court restrained Natco from carrying out any fresh manufacturing of pharmaceutical preparations comprising of “Ceritinib”, as Natco launched their new drug containing the Suit Patent during its validity period and was found to be committing patent infringement under the Patents Act, 1970 (the “Patent Act”).
Subsequent to the Patent Office’s order of revocation of Said Patent, in the post grant opposition proceedings, Novartis filed an appeal before the Intellectual Property Appellate Board; and Natco filed applications seeking dismissal of the present suit and vacation/suspension of the interim injunction against fresh manufacturing on the ground that the patent granted in favour of Novartis has been revoked in the post grant opposition proceedings before the Court.
Findings of the Court:
From a reading of Section 62(2) and Section 11A(7) of the Patents Act, 1970, the Court observed that once a patent is revoked, a suit for infringement of the patent itself would not be maintainable.
The Court further clarified that the rights in a patent are only for the life of a patent, which remains granted and have not been revoked. The manner in which patent rights operate is that they are merely statutory rights and there are no common law rights in patents. Patent infringement actions are maintainable only in respect of granted and live patents.
Based on the above, the Court suspended the earlier interim relief granted in favour of Novartis and held that the continuation of an injunction against Natco, even for a day, would not be permissible once the Novartis’s patent is revoked.
Juggernaut Books Pvt. Ltd. v. Ink Mango Inc. and Ors.2
Juggernaut Books Pvt. Ltd. (“JBPL”), recently obtained an interim injunction against Ink Mango Inc. (“Ink Mango”) in a trademark infringement and passing off suit from the Delhi High Court (the “Court”) to prevent Ink Mango from using its registered trademark and domain name. JBPL was able to demonstrate the jurisdiction of the Court by highlighting that the website of Ink Mango, though originating from a foreign source, is targeting customers in Delhi, and therefore, the test of purposeful availment was satisfied3.
Background:
Delhi-based JBPL is a publisher of books and e-books by various well-known authors through a web- based software, which is accessible from computers and smart phones on its subscription-based website ‘www.juggernaut.in’. The said platform was introduced by JBPL in India in 2015. JBPL is also the registered proprietor of trademark “JUGGERNAUT” in India in Class 16 (related to stationary and publishing materials) and pending registration in Classes 41 (related to services of providing education, training and teaching) and 42 (related to services of providing IT solutions).
JBPL came to know of a recent website www.thejuggernaut.com, a subscription backed media publication for South Asian stories, targeting India and Delhi based customers specifically, launched by Ink Mango, a New York based company.
This suit was thus instituted by JBPL seeking permanent injunction restraining infringement of trademark, passing off, dilution, unfair competition, damages, delivery up etc. against Ink Mango before the Court. JBPL’s main contentions were that Ink Mango is deliberately targeting Delhi customers, and as a result of the improper use of its trade name and registered mark by Ink Mango, there is confusion been created between JBPL and Ink Mango’s business in Delhi.
Findings of the Court:
The Court noted that Ink Mango runs a digital publishing website containing a subsequently-adopted identical name just like JBPL’s and is also trying to promote their platform for same business in India. Hence, the target customer base between JBPL and Ink Mango are identical.
The Court also observed that the test of purposeful availment was satisfied by Ink Mango, and hence it has the jurisdiction to pass necessary orders in the suit.
Based on the above, the Court passed an order restraining Ink Mango and anyone acting for and on their behalf, from using the mark/word “Juggernaut” including the domain name “www.thejuggernaut.com” or any other mark/name that is similar to JBPL’s registered trademark `JUGGERNAUT’ for the purposes of digital publishing, publication of articles, books and other content or any other form of publishing services including in online platforms, social media platforms such as Facebook, Twitter, LinkedIn etc., so as to result in infringement of JBPL’s registered trademark and passing off of Ink Mango’s services as that of JBPL’s.
The Tiktok Sharechat tiff
As per media reports in August, the owner of famous social media platform “Tiktok”, Chinese start-up ByteDance Technology, (“Tiktok”) sent take down notices to Bangalore-based social media platform Sharechat, popular for its regional language content, asking to take down close to a hundred video compilations that were originally uploaded on the Tiktok platform and re-uploaded on the Sharechat platform.
TikTok claimed ‘exclusive ownership and copyrights’ over such video content, and that the uploading and sharing of such content on the Sharechat platform was happening without any authorization from Tiktok. Sharechat complied with the take down notices and took down the allegedly infringing content.
However, it was further reported that Sharechat also complained to the Ministry of Electronics and Information Technology (MeitY) regarding the “intermediary liability status of platforms such as TikTok and others who are engaging in such practices.” Post this, TikTok in a public statement clarified that it is an intermediary, but also enters into mutual contractual arrangements with some content creators; hence, it may enjoy exclusivity over some content.
This raises the question, whether Tiktok would be considered an “Intermediary” and have the obligations and immunities under the Information Technology Act, 2000 (the “IT Act”). As per Section 2(w) of the Act, “an intermediary with respect to any particular electronic records, means any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record and includes telecom service providers, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-market places and cyber cafes.” Till date, Tiktok has claimed of being an intermediary during its earlier tiffs with the Indian Government and MeitY; and its public affirmations regarding entering in mutual contracts for content creation granting it exclusive rights over such content may go against its previous status as an intermediary.
Section 79 of the IT Act prevents intermediaries from initiating any transmissions, selecting the receiver, and selecting/ modifying the information contained in the transmission. An intermediary gets immunity from liability for infringement through the platform of third-party intellectual property, provided the intermediary complies with the requirements of Section 79. If TikTok claims copyright or control over the content uploaded on their platform, this may exclude TikTok from claiming safe harbour exemptions under Section 79 for the specific pieces of content over which it is claiming to exercise exclusive control on the grounds that such content no longer qualifies as ‘third-party information’, or that it is ‘selecting or modifying’ the transmission. However, it is now left to the government to deliberate upon the situation.
and points of ambiguity about intermediaries in the context of the scope of activities undertaken by Tiktok.
REGULATORY UPDATES
Notification of the Patent Amendment Rules, 2019
Recently on 17th September 2019, the Patent (Amendment) Rules, 2019 (the “New Rules”) were notified by the Department of Industrial Policy and Promotion of the Ministry of Commerce and Industry. The new Rules once more substantially amend the principle Patent Rules, 2003 (“Principle Rules”) in the following manner:
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The New Rules aim to digitize the process of filing the documents by making it mandatory to submit all original documents only by way of e-transmission now and to submit the original documents, only if called upon by the Patent Office within 15 days from the date of Patent Office’s request;
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The New Rules have removed the requirement of paying the transmittal fee for PCT applications originating from India as well as the fee with respect to the preparation of certified copies of priority documents and e-transmission through WIPO’s software (which were payable to the Patent Office along with the filing fees towards PCT applications);
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The New Rules have also expanded the eligibility criteria for Applicants who can choose the process of expedited examination during patent prosecution before the Indian Patent Office. The eligibility criteria of such Applicants now include (a) a small entity, (b) a female applicant or at least one of the applicants being a female (in case of natural persons only), (c) a government undertaking/ company, and (d) applicants from foreign countries whose patent office has entered into a special agreement with the Indian Patent Office giving eligibility to file for expedited examination to its applicants. Earlier this facility was merely available to (a) start-ups and (b) international PCT applicants, who chose Indian Patent Office as the International Search or Examining Authority.
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The New Rules also specify the documents that are required to be filed by each type of Applicant, national or international, showing their eligibility to pay a special fee prescribed for them under the Principle Rules.
Copyright Office Notice on the use of Sound Recordings During Social and Religious Functions
The Copyright Office, by way of a public notice, clarified that, the utilization of any sound recording in the course of religious and social ceremonies including a marriage function is not copyright infringement under the Copyright Act, 1957 (the “Copyright Act”); and hence, no license is required from the copyright owner for the said purpose.
For this clarification, the notice referred to a ‘fair dealing’ prescribed under Section 52 (1) (za) of the Copyright Act, which states that the performance of a literary, dramatic or musical work or the communication to the public of such work or of a sound recording in the course of any bona fide religious ceremony (which includes a marriage procession and other social festivities associated with a marriage) or an official ceremony held by the Central Government or the State Government or any local authority” do not constitute an infringement of Copyright.
Draft GI Amendment Rules Issued for Comments
On September 16, 2019, the Ministry of Commerce & Industry (Department for Promotion of Industry and Internal Trade) issued draft Geographical Indications of Goods (Registration and Protection) (Amendment) Rules, 2019, proposing amendment to the Geographical Indications of Goods (Registration and Protection) Rules, 2002 (the “Principal Rules”). The draft amendment proposes to amend the Principle Rules as follows:
1. Proposal to amend the process and fees relating to registration as authorized user:
The Principle Rules require4 an application to the Registrar for the registration as authorized user under Section 17 of the Geographical Indications of Goods (Registration and Protection) Act, 1999, to be made jointly by the registered proprietor and the proposed authorized user.
The draft rules seek to amend this provision. The proposed amendment requires only the proposed authorized user to file an application to Registrar.
Additionally, the Principle Rules require5 a copy of the letter of consent from the registered proprietor of the geographical indication to be accompanied along with an application for the registration as authorized user, and where such consent letter is not furnished, a copy of the application must be endorsed to the registered proprietor for information, and the Registrar to be intimated of due service by the proposed authorised user. The draft amendment proposes this requirement for a copy of letter of consent under Rule 56(2) to be removed.
The draft amendment rules also propose that the fees to be paid for the registration and renewal of an authorized user of a registered geographical indication be removed completely. Earlier the said registration and renewal fees were INR 500 and INR 1000 respectively.
2. Proposal to amend the procedure after an opposition gets dismissed under the Principal Rules:
The Principle Rules require6 the Registrar to wait till the end of the appeal period after the opposition is dismissed to enter the authorized user in Part B of the register, and only on receipt of a request for issuance of the registration certificate together with the prescribed fee. The draft amendment rules seek to remove the obligation of the Registrar to wait till the end of the appeal period along with removal of the fees that is charged currently for issuance of the registration certificate.
For further information, please contact:
Aditi Verma Thakur, Partner, Induslaw
bangalore@induslaw.com
1 CS (COMM) 229/2019 and I.As. 11304/2019, 11305/2019
2 CS (COMM) 421/2019
3 The test of purposeful availment in relation to internet based platforms was first laid down by Banyan Tree Holding Pvt Ltd. v. A. Murali & another [citation] in India; it essentially set out that if an internet based platform targets a particular jurisdiction or uses a mark in a particular jurisdiction, in relation to goods and/or services for which the mark is registered, there is infringement of trademark and passing off.
4 Rule 56(1) of the Principle Rules
5 Rule 56(2) of the Principle Rules
6 Rule 59 (1) of the Principle Rules
