Covering myriad aspects of IP Law, deliberating insight on Counterfeiting, Digital piracy and more.

September 18, 2019
ISSUE No. 10
September 18, 2019

Faking It In Fashion


One of the primary advantages of owning a trademark registration is the element of monopoly that comes with it in relation to the goods and/or services applied for. Such exclusivity provides benefits to both the trademark holder and the consumer, in as much as a trademark holder has an exclusive proprietary right in his/her trademark that communicates the source of the product or service being purchased/availed to the consumer who encounters it. This need for monopoly becomes all the more important in the fashion industry, where wearing or owning products of a particular brand is directly correlated with status, eminence and desirability of an individual. Brands such as Louis Vuitton, Bulgari, Gucci, Prada, Hermes, Rolex, etc. are examples of brands known as ‘luxury brands’ that claim to bestow the wearer with a sense of power and prestige owing to their massive reputation, amassed over centuries in some cases. Now with the advancement in technology, brand recognition among consumers has become an integral part of generating revenue for proprietors and corporates alike. Moreover, with multiple e-commerce websites and increasing accessibility available to a wide consumer base, major players in the apparel and accessories industry have had to develop a narrative of uniqueness for consumers to desire their brand. Consequently, brands, specifically in the fashion industry, have acquired loyalists or ‘influencers’ (as they are known on social media) to promote or recommend their brand with the objective of ‘influencing’ the opinion of consumers in favor of the said brand. However, brand owners are now discovering that the faster their brand acquires the desired outcome of ‘trending’ on social media, the faster it becomes the subject of large scale counterfeiting.

A counterfeit product is one which is intended to deceive consumers into buying a fake or fraudulent product by misappropriating someone else’s registered trademark or one that is deceptively similar to the said trademark without authorization and in order to gain illegal profits by riding on the reputation and goodwill associated with the registered trademark. However, in the fashion industry, counterfeiting is of two (2) types, namely, deceptive and non-deceptive. As the name suggests, deceptive counterfeiting occurs when the consumer is not aware that he/she is purchasing a fake or fraudulent product, whereas non-deceptive counterfeiting occurs when a consumer intentionally and with full knowledge purchases a copy of the original product.

Peculiarly, the fashion industry is one such industry where consumers have shown a preference towards counterfeited products or ‘knock-offs’ (in popular parlance), despite being aware of the diminished quality and durability of the products they are purchasing. One can assume that this is owing to slashed prices of these counterfeit goods by margins as high as 60-70%, coupled with wearing/displaying a popular brand or a popular attribute of a brand, for instance, Louis Vuitton’s LV monogram or its Damier Canvas pattern purses.

A recent 2019 study undertaken by the Centre for New Economics Studies at O.P. Jindal University identified factors such as social motivation, brand value, and peer influence to explain why consumers in India prefer buying counterfeits.[1]

The epidemic of counterfeiting of apparels and accessories in India is thought to be a by-product of increasing manufacture of counterfeits in the South-East Asian region. Notably, the national capital alone is home to thriving markets selling counterfeit goods in the open, some of the popular ones being ‘ROY-BAN’, ‘PRADO’, ‘NKIE’, etc. Given the high demand of these products by consumers themselves and the fact that these markets have been operating since decades, enforcing agencies have been able to do little to curb this menace of counterfeiting, which has in fact shown a consistent increase in India.


In this regard, Sections 102, 103 and 135 of the Trademarks Act, 1999, can be employed as remedies against infringement and counterfeiting as they deal with falsification and false application of a trademark. Notably, Section 103 mandates imprisonment of three (3) years and a fine up to two lakh rupees as penalties for counterfeiting. The Delhi High Court has also stepped in to do its bit by compensating brand owners who are the victims of widespread counterfeiting in India.

A recent example is an order dated July 31, 2018[2], passed by a Single Judge of the Delhi High Court wherein Christian Loubutin was granted an ex parte injunction order against third parties who were selling footwear with a red sole, which is considered as a feature of one of Loubutin’s most iconic shoes. Even though this unconventional order (recognizing a specific tone of colour red [Pantone no. 18.1663TP] as applied to the outsole of a shoe as a well-known trademark) was in direct contravention to another previous 2017 Delhi High Court[3] judgement concerning Loubutins, it was hailed as a much needed win against counterfeiters.



Brand owners have also decided to take matters into their own hands by developing technology that enables consumer to identity fakes. A start up called “Group Project” has developed block chain technology that can scan the tag on products to identify if a product is genuine or not.[4] This of course depends wholly on the willingness of consumers who want to avoid buying fakes but will not be effective in case of consumers who are engaging in non-deceptive counterfeiting. However, with an increase in awareness of intellectual property rights among the consuming public and brand owners doubling down on counterfeiters, the end to this epidemic may be possible in the near future.

[1] https://www.fortuneindia.com/opinion/why-most-indians-purchase-counterfeits/103166

[2] Christian Loubutin SAS v. Ashish Bansal & Anr (CS(COMM) 503/2016)

[3] Christian Louboutin SAS v. Abubaker (CS (COMM) No 890/2018)

[4] https://irishtechnews.ie/the-beginning-of-the-end-to-the-500-billion-counterfeit-fashion-industry/


Digital Piracy- Copyright Holders & Safegaurding Measures


The intangible rights which protect the creations of the human intellect and their expression are collectively known as Intellectual Property Rights. One such intellectual property is copyright, which provides the creator of an original work (including literary, dramatic, musical, artistic works) a bundle of exclusive rights aimed at protecting, distributing and sharing the creator’s original work in a lawful manner and without detriment to the creator/owner of such work. With the advancement of digital technology, creators can now disseminate their work across borders at the click of a button. Territorial barriers no longer serve as a restraint and work can be circulated in a convenient and inexpensive manner. However, with ease of distribution, such literary, dramatic, musical and/or artistic works are becoming increasingly vulnerable to digital piracy (a form of online piracy), which deprives the producers of such work from getting the due recognition and monetary benefits they are entitled to, owing to rampant and unauthorized distribution of their original work.

The digitization of media goods has made internet piracy the most prevalent in the recent times and is leading to the continuous weakening of copyright laws across the globe by making it easy for ordinary consumers to illegally share media files from one to another. However, these advancements have in the process made certain industries more susceptible to copyright piracy; one such being the entertainment industry. Accordingly, the Indian media and film industry, being one of the largest entertainment sectors in the world, was bound to fall prey to the menace of online piracy. Websites such as Torrent and Megaupload, which are easily accessible to Indian consumers, are examples of platforms that enable users to (a) download music, movies, books and other digital content and (b) stream such digital content posted on public access servers, without prior authorization of the creator/owner with whom copyright of such work subsists. By allowing digital piracy to remain unchecked for a substantial period of time, India came to be ranked at number four (4) in the world, for peer-to-peer (P2P) downloads, between January 2017 and May 2018.[1]

This alarming increase in digital piracy in India, has prompted both rights-holders and the government to introduce necessary measures so as to safeguard original content that is available online. Rights-holders have begun to introduce ‘digital watermarks’ on online content in a bid to track the use and movement of their work across the globe. With specific reference to India, the government, in 2012, introduced several amendments to the existing Copyright Act, 1957, aimed at inter alia curbing online piracy in India. The amendments mandate copyright owners to employ ‘Technological Protection Measures’ to protect their rights in a work and have penalized any attempts, to breach or circumvent these measures, with fine and imprisonment.

In addition to the above, courts in India, particularly the Delhi High Court has played an instrumental role in developing the jurisprudence on real-life enforcement against digital piracy. In 2002, the Delhi High Court in Taj Television Ltd. and ors. v. Rajan Mandal and ors[2] passed its very first ‘John Doe order’, commonly known in India as an ‘Ashok Kumar order‘. As the name suggests, John Doe orders are ex-parte orders enforceable against an unknown party. These orders help prohibit any potential infringing activities by unidentified people. If a rights-holder becomes aware of any incident of infringement after passing of the order, the plaintiff can save precious time by presenting the order to infringing parties instead of filing a suit and waiting for the court to pass an injunction order. The reasoning behind such an order is to not let the mystery of the defendant’s identity be an obstacle in pursuance of justice.

However, these orders were becoming ineffective due to similar ‘mirror/redirect/alphanumeric’ websites that cropped up after the original website was taken down and that displayed the same infringing content as the original website. Taking a leap forward, the Delhi High Court on April 10, 2019, through its order in UTV Software Communication Ltd. and ors  v. 1337x.To and ors[3], set down a broad legal framework for blocking websites, by granting, for the first time, the remedy of a ‘dynamic injunction’. Borrowing from Singapore High Court’s decision in Disney Enterprise v. Ml Ltd[4]., the Delhi High Court has allowed plaintiffs to directly approach the Joint Registrar of the Delhi High Court, for extension of an existing injunction granted against a website, against mirror/redirect/alphanumeric websites which contain the same content as the injuncted website. This has eliminated the need to obtain a judicial order against each and every one of these ‘hydra-headed’ or ‘rogue’ websites, thereby saving time and money of legitimate IP holders.

The aforementioned order by the Delhi High Court resulted in inter alia shutting down of approximately thirty (30) Torrent websites from hosting infringing content. However, only time will tell if creators/owners of copyright in India, who have been plagued with widespread infringement of their IP, will be able to rely on the remedy of dynamic injunction as a fool-proof method of blocking infringers in bulk from engaging in digital piracy of their work. Till then, we can only hope to be one step ahead of the wily digital pirates who try to subvert the law.

[1] ‘The Irdeto Global Consumer Piracy Threat Report 2018’ available at https://resources.irdeto.com/i/1013045-irdeto-global-consumer-piracy-threat-2018/6

[2] CS(OS) No. 1072/2002

[3] Cs (Comm) No. 724/2017

[4] (2018) SGHC 206)


Sampling of Phonogram: Fair use or Infringement


In a recent case that brought forth the issue of sampling of a phonogram recording amounting to infringement, the Federal Court of Justice, Germany on account of an appeal has put the particulars of the matter in front of the Court of Justice of the European Union (CJEU) for a preliminary ruling.
There was an unauthorized sampling of a 1977 recording owned by electro band Kraftwerk. Ralf Hütter and Mr. Florian Schneider-Esleben, members of the music group Kraftwerk, claimed that Pelham GmbH sampled approximately two seconds of a rhythm sequence from the track “Metall für Metall” and incorporated the sample as a continuous loop and with minimal modifications, in the defendant’s Sabrina Setlur’s  track ‘Nur mir’. The Kraftwerk band members initiated proceedings in the German courts claiming that Pelham GmbH, producers of the infringing phonogram, had infringed their exclusive rights of reproduction in the original work.[1]

The above matter was referred to the CJEU for a preliminary ruling along with questions as to the scope of EU laws on sampling. Further, the questions are referred to CJEU in order to shed some additional light and perspective on the ongoing debate of ‘post modern’ artistic freedom against established IPR.

CJEU, through (AG)Advocate General Szpunar (Court of Justice: Judge for the current case.), was of the following opinion:

  • The sampling of the phonogram recording amounts to infringement owing to it being protected under the meaning of the Copyright Directive, Article 2(c).[2]
  • A phonogram is a fixation of sounds that is protected by virtue of the fixation itself. Stating that although a sound or a word cannot be monopolized by an author by fixation alone, in case of a phonogram it falls within the scope of protection of copyright the moment a sound or word is recorded. Hence, the reproduction of the recording, owing to the copyright, is the exclusive right of the producer.
  • He rejected the view that the part copied was short in length and opined that there exists no de minimis limit with respect to works protected by copyright.
  • Further he stated that the to set a limit upon the financial interest of a copyright owner (producer) was unjust and that a producer’s right to exploit his work is not limited to mere distribution (selling copies) but also extends by way of authorizing sampling.
  • Addressing the apprehension of phonogram producers must not be eligible for a protection greater than that of given to authors; he dismissed these concerns as a misrepresentation, and stated that the producers of phonograms do not have any greater protection afforded by the subject matter of their work than author for his authorial works.
  • He also denied the position that is enshrined in WPPT [3]11, which confers exclusive right on the producers of phonogram for authorizing reproduction of their phonograms. He also stated that it does not apply to the case at hand and that it only dealt with protection against the unauthorized reproduction of a phonogram as a whole.

He concluded by iterating that ‘sampling’ of the phonogram recording in the present case is an act of infringement and it infringed the exclusive right of the producer to authorize or restrict the reproduction of the recording regardless of the length of the sample.

Further the Advocate General (AG) also gave his comments on the quotation exception with respect to sampling as is provided under the German copyright laws[1], stating that the exception can only apply if a few stipulated conditions are met. These conditions provided that;

  • The quotation must enter into some kind of dialogue with the work quoted (for the purposes of critique and review, for instance);
  • The quotation must be incorporated in the quoting work without modification; and
  • The quotation must indicate the source, including the author’s name.

Post the above perspective/opinion given by the AG on the present matter, the conclusion of the subject matter in view of the questions flows with the below mentioned answers for the same:

In the first question, the referring court asked, in essence, whether Article 2(c) of Directive 2001/29 should be interpreted as meaning that taking an extract of a phonogram for the purpose of using it in another phonogram (sampling) infringes the exclusive right of the producer of the first phonogram to authorize or prohibit the reproduction of his phonogram within the meaning of that provision, where it is taken without the latter’s permission.[2]

For this question the AG proposed that the provision of the directive must be interpreted to mean that in taking an extract of a phonogram for the purpose of sampling infringes upon the exclusive right of the producer to authorize or prohibit the reproduction of his work, without permission.

In the second question, the referring court asked whether Article 9(1)(b)[3] of Directive 2006/115 [4]should be interpreted as meaning that a phonogram which contains extracts transferred from another phonogram (samples) is a copy of the other phonogram within the meaning of that provision.[5]

For this question the AG proposed that Article 9(1)(b) of Directive 2006/115/EC must be interpreted to mean that a phonogram that consists of sampling, is not a copy of the phonogram being sampled under the meaning of the provision.

In the third question, the referring court asked, in essence, whether Article 2(c) of Directive 2001/29 and Article 9(1)(b) of Directive 2006/115 must be interpreted as precluding the application of a provision of the national law of a Member State, such as Paragraph/Section 24(1) of the UrhG[6], according to which an independent work may be created in the free use of another work without the consent of the author of the work used, (25) to phonograms.[7]

For this question the AG proposed that the Article 2(c) of Directive 2001/29 must be interpreted such that it overrules the application of the provisions of the national law of a Member State. Laws such as that stated under Paragraph/Section 24 of the German Law on Copyright and Related Rights, 1965, under which it is provided that a work may be created by free use of another work, without the consent of the author of such said work. This provision is precluded by Directive 2001/29, especially for phonograms, in so far as it exceeds the scope of the exceptions and limitations to exclusive rights provided for in Article 5(2) and (3) of that directive.

In the fourth question, the referring court asked, in essence, whether the quotation exception provided for in Article 5(3)(d) of Directive 2001/29,[1] applies where an extract of a phonogram has been incorporated into another phonogram such that it forms an indistinguishable part of the second phonogram.[2]

For this question the AG proposed that the quotation exception provided for in Article 5(3)(d) of Directive 2001/29 is not applicable to the current case where an extract of a phonogram (sample) is incorporated into another phonogram and lacks the intention of interacting with the first (source) phonogram and in such a way that it forms an indistinguishable part of the second phonogram.

In the fifth question, the referring court seeks to determine the degree of latitude afforded to the Member States in transposing into their domestic law the provisions relating to the exclusive rights provided for in Articles 2[3] and 3[4] of Directive 2001/29 and Article 9[5] of Directive 2006/115 and the exceptions to those rights set out in Article 5 of Directive 2001/29 and Article 10[6] of Directive 2006/115.[7]

For this question the AG proposed that the Member States must ensure and uphold the protection of the exclusive rights as under Articles 2 to 4[8] of Directive 2001/29, in so far as those rights can be limited by the application of the exceptions and limitations listed under Article 5 of said directive. Member States are nevertheless free as to the choice of form and methods they consider appropriate to implement in order to comply with that obligation.[9]

In the sixth question, the referring court asked how the fundamental rights set out in the Charter are to be taken into account when interpreting the scope of the exclusive rights of phonogram producers under Directives 2001/29 and 2006/115 and the limitations and exceptions to those rights provided for by those same directives.[10]

For this question the AG proposed that the exclusive right of the producers of phonogram under the Article 2(c) of Directive 2001/29 to authorize or prohibit reproduction, in part, of their phonogram in the event of its use for sampling purposes is not contrary to the freedom of the arts as enshrined in Article 13[11] of the Charter of Fundamental Rights of the European Union.[12]

Opinion of CJEU, in a brief

The CJEU was of the opinion that sampling of a phonogram and using it in a new phonogram amounts to infringement of the distribution right of the original phonogram producer (whose work is sampled) although the resulting phonogram would not be construed to be a copy of the original phonogram as long its association with the same is not identifiable by the ear. On the basis of the opinions and reasons given above, it is fair to say that the “postmodern” artistic freedom is given a heed to and alongside it, the exclusive rights of the IP holder are not overstepped.

Sampling of Phonogram and India
Under the Indian Copyright regime, there exists similar provisions as discussed above in detail. These provisions have a different scope than the EU and German laws but deal with the same question of law. Infringement of a sound recording/ phonogram would fall under Section 51 of the Copyright Act, 1957. Although under the given facts of the case, and the opinion of the CJEU therein, there is a clear parallel that can be drawn between the ‘free use’ and ‘fair dealing’ provisions as well as the exclusive rights provisions provided under respective German and Indian copyright laws.
Although, to invoke the infringement provisions, a need to address what amounts to infringement under respective laws is necessary. As is clear by the decision of the German Courts and the opinions of the CJEU, there is a clear impression that infringement occurs irrespective of the degree of copying, even be it 2 seconds (as was the case in the subject matter). Whereas, the same legal opinion is not widely upheld under the Indian copyright laws for two reasons:

  • The meaning of copyright under Section 14 of the Copyright Act, 1957 states that copyright provides for exclusive rights with respect to the whole work or to a substantial part thereof.
  • Due to a lack of any provisions dealing with ‘sampling’ of sound recording, there is a reliance on the term “substantial part” used throughout the Copyright Act, 1957.

Further, Indian laws and legal opinions might be of the same view with the CJEU on the question of the resulting phonogram recording not being a copy of the original; as there exists a few tests that reflect the same reason given by the CJEU to consider the resulting phonogram as an original copyrightable work. These tests are:

  • Sweat of the brow test.

  Under this test, the minimum modicum of creativity is checked as well as the effort that is put into the work. This test checks that if there was ample effort put in to make a resulting work.

  • Look and feel test. (qualitative test) 

This test has been upheld in the landmark R G Anand case. This test is in place as to not restrict infringement to only mean the making of exact copies of the protected work. The test provides for the acknowledgment of any work side by side to the infringing work to determine if they seem strikingly or substantially similar.

In view of the above, considering the infringement of 2 seconds of impugned recording (as in the present subject matter), the possibility of allowing infringement may have not succeeded under the Indian regime. This can be addressed on the following grounds:

  • There being only 7 notes in music, there can only be a certain definite number of combinations to the same for using it in a sound recording. Such notes when strung along in a sound recording, can only be done in repetitions of such certain number of patterns and combinations. On assessing a recording based on a 2 second frame, it might be found that thousands of recordings currently infringe upon the music in that frame.
  • The 2 second frame may be able to become grounds for infringement as long as it can prove that it is unique and has acquired such distinctiveness that people will be able to hear the specific frame apart from the infringing copy. Although, it would still be required to prove that the 2 second frame qualifies as a substantial part of the work.

[1] Entertainment Law Review (2019) Case Comment: “The Kraftwerk case – does a two-second sample infringe copyright?”: Calum Bryant & Rachael Heeley

[2] Directive 2001/29/EC Reproduction right. This provision provides for exclusive right to authorise or prohibit any direct or indirect, temporary or permanent reproduction by any means and in any form, in whole or in part for phonogram producers, of their phonograms.

[3] WIPO Performances and Phonogram Treaty.

[4] German Copyright Act, 1965: Section 51: This Section provides for the scenarios in which the use of a copyrighted work is permissible to be distributed and communicated to the public for the purpose of quotation.

[5] Opinion of Advocate General Szpunar delivered on 12 December 2018 (1) Case C‑476/17: Paragraph 19

[6]Directive 2006/115: Article 9(1)(b): This Article provides for the exclusive right if the copyright owner to make his work available to the public by sale or by any other means.

[7] Directive 2006/115/EC  on  Rental Right and Lending Right and on certain Rights Related to Copyright in the Field of Intellectual Property,2006

[8] Opinion of Advocate General Szpunar delivered on 12 December 2018 (1) Case C‑476/17: Paragraph 41

[9] German Law on Copyright and Related Rights, 1965

[10] Opinion of Advocate General Szpunar delivered on 12 December 2018 (1) Case C‑476/17: Paragraph 50

[11]Directive 2001/29 Article 5 (Limitations & Exceptions): This Article provides that  quotations for purposes such as criticism or review as long as conditions under this Article are met would not amount to infringement.

[12] Opinion of Advocate General Szpunar delivered on 12 December 2018 (1) Case C‑476/17: Paragraph 60

[13] Directive 2001/29 Article 2 (Reproduction right)

[14] Directive 2001/29 Article 3 (Right of communication to the public of works and right of making available to the public other subject-matter)

[15] Directive 2006/115/EC: Article 9: (Distribution right)

[16] Directive 2006/115/EC: Article 9: (Limitations to rights)

[17] Opinion of Advocate General Szpunar delivered on 12 December 2018 (1) Case C‑476/17: Paragraph  71

[18] Directive 2001/29 Article 5 (Distribution right)

[19] Opinion of Advocate General Szpunar delivered on 12 December 2018 (1) Case C‑476/17: Paragraph  100(5)

[20 Opinion of Advocate General Szpunar delivered on 12 December 2018 (1) Case C‑476/17: Paragraph  80

[21] Charter of Fundamental Rights of the European Union 2012/C 326/02: Article 13: (Freedom of the arts and sciences): “The arts and scientific research shall be free of constraint. Academic freedom shall be respected.”

[22] Opinion of Advocate General Szpunar delivered on 12 December 2018 (1) Case C‑476/17: Paragraph  100 (6)


India Loses 1 Lakh Crore Rupees Annually Due To Counterfeit Market”- ASPA


A counterfeit product is one that is intended to deceive consumers into buying a fake or fraudulent product by misappropriating someone else’s registered trademark or one that is deceptively similar to the said trademark without authorization and in order to gain illegal profits by riding on the reputation and goodwill associated with the trademark. Recently, the Authentication Solution Providers’ Association or ASPA has reported that India suffers a loss of over one lakh crore rupees per annum owing to the sale/purchase of counterfeit goods by consumers across all sectors. Established in 1998, ASPA is a self-regulated, non-profit organization tasked with combatting fake and fraudulent goods in circulation in the market. As per the information provided on ASPA’s official website, its members protect over 15,000 brands worldwide through the identification of genuine products and services by providing them with cost-efficient and technologically innovative anti-counterfeiting solutions.
According to ASPA’s president Mr. Nakul Pasricha, counterfeiting in India is most prevalent in the pharmaceutical industry. Given that counterfeiting in the pharma/medicine sector poses a major threat to public health and safety, Mr. Pasricha has urged the government to take adequate steps to mitigate such risks. He further stresses on the need for proper implementation of authentication solutions, enforcement, awareness and monitoring and envisages reducing counterfeiting in India by 50%, which would mean saving fifty thousand crore rupees per annum. Quoting from a report of the Organisation for Economic Co-operation and Development , Mr. Pasricha states that unfortunately in India, trade in counterfeit goods has risen steadily in the last few years globally with trade volumes in fake products now standing at 3.3 % of total global trade, thereby causing brand owners to suffer huge losses in revenue.
Furthering ASPA’s objectives of adoption and advancement of authentication technology, the ASPA president talked about several kinds of technologies available against counterfeiters, namely, anti-tampering, tracking and tracing. He also illustrated Nigeria’s example that adopted both physical as well as digital authentication solutions and reduced its rate of counterfeiting from approximately 20% to 3.5% in the pharma sector in three years. Lastly, citing the high return of investment and positive impact of anti-counterfeit solutions around the world, Mr. Pasricha expressed confidence that India too will be on the road to adopt authentication technology.
As per its website, ASPA also talks about placing reliance on promising anti-counterfeiting technologies, such as, Blockchain, Artificial Intelligence, NFC, traceability, etc., to provide support to the government in the fight against counterfeiting, increasing brand protection and safeguarding consumer interest . Surely, ASPA has provided some alarming statistics that highlight the extent of India’s counterfeiting problem. However, with the promise of advanced anti-counterfeiting technology, an end to India’s counterfeiting epidemic does seem to be in sight


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