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SSRana Newsletter 2021 Issue 21

November 10, 2021

Delhi High Court proposes Intellectual Property Rights Divisions Rules, 2021

delhi-high-courtIn consequence of IPAB Dissolution, the Delhi High Court has now released the Draft Intellectual Property Rights Divisions Rules 2021 for matters listed before it’s Intellectual Property Division with respect to practice and procedure for the exercise of its original and appellate jurisdiction, and for other miscellaneous petitions arising out of specific statutes.

The Counterfeit Conundrum: Civil and Criminal Remedies for spurious medicines in India

medicineThe Report on Countrywide Survey for Spurious Drugs by the Central Drugs Standard Control Organization under Ministry of Health and Family Welfare in India, states that the supply of spurious goods in the Indian retail market is about 0.3%.

Arbitrability of Trademark Disputes

arbitrationThe path to Arbitrability of Intellectual Property Rights disputes has never been without challenges. From giving firm and rigid judgements against arbritrability of IPR disputes to giving green signal to certain IPR disputes, the Indian Courts have come a long from their anti-arbitration attitude in IPR disputes.

GII 2021- India performs “above expectations”

WIPO-ProofThe Global Innovation Index GII `of ds2021 Report places India on position 46 among 132 nations worldwide. The report also applauds India as over performing on innovation and development landscape in comparison to their level of development.

Delhi High Court releases Video Conferencing Rules 2021

delhi-high-courtIn the wake of the pandemic, virtual hearings and video conferencing have become a common mode of court proceedings. To streamline the process, the High Court of Delhi recently released Video Conferencing Rules namely the “High Court of Delhi Rules for Video Conferencing for Courts 2021”.

HIRED OR (NOT)? Job Scams and Frauds

MCARecently, an unemployed man who was unable to find a job due to the Covid-19 Pandemic was reportedly cheated of INR 2.58 Lakh (approx. USD 3.4 Thousand) by a cyber fraudster who had lured the man by assuring him part time job at an e-commerce giant. Are cybercrimes on a rise during COVID-19?

MASK UP! An Initiative by Nestle

nestleNestle India has announced that it is incorporating a mask on each of their iconic product packaging, like Maggi, KitKat, Nescafe, Everyday, to remind and sensitise about the basic practice that should be followed by everyone at this vulnerable time period.

Delhi High Court proposes Intellectual Property Rights Divisions Rules, 2021

delhi-high-court

By Priya Adlakha and Shilpi Sinha

In a much anticipated and awaited development, the High Court of Delhi has issued a Public Notice dated October 10, 2021[1] proposing the Draft “Delhi High Court Intellectual Property Rights Division Rules, ­ 2021”.

The Court vide the said notice had invited comments from members of the Bar.

Brief Background

The dissolution of the IPAB and emergence of IPD

Readers may be aware that the Intellectual Property Appellate Board (IPAB) was dissolved by the Government vide “The Tribunals Reforms Ordinance, 2021”. (Read Adios, IPAB: Government of India Officially abolishes IPAB ).

Subsequently, all cases/appeals pending before the IPAB are to be transferred to the respective High Courts (of Delhi, Bombay, Madras, Calcutta or Ahmedabad as the case may be) or Commercial Courts in copyright matters. Hence, the IP-related appeals and procedures are currently being filed with the appropriate High Courts or Commercial Courts, depending on the jurisdiction.

On July 7, 2021, the Delhi High Court, seizing the opportunity and living up to its reputation as a progressive IP savvy court, established an Intellectual Property Division (IPD) with dedicated IP benches to handle all IPR issues. (Read Delhi High Court directs Creation of Intellectual Property Division (IPD) )

Thereafter, the Delhi High Court had also notified the Nomenclatures and Court Fees for the newly created Intellectual Property Division.

Read Intellectual Property Division: Delhi HC notifies Nomenclatures and Court Fees

The Delhi High Court has now released the said Draft Rules for matters listed before it’s IPD with respect to practice and procedure for the exercise of its original and appellate jurisdiction, and for other miscellaneous petitions arising out of specific statutes.

The IPD Delhi High Court Regulations, which is a complete new set of rules, are up for suggestions. As a result, business conflicts would also be governed by the Civil Procedure Code (CPC) and the provisions of the Commercial Courts Act, 2015 (which includes procedures designed to speed up the disposal of cases).

Pathway to New Rules

The Rules include important definitions, filing and nomenclature, procedure for appeals, original petitions, writ petitions, civil miscellaneous main Petition, pleadings, intervention, summary adjudication, general clauses, guidelines for written submissions, and timelines for oral submissions, amongst other things.

The IPD was formed based on the suggestions of a Committee chaired by Hon’ble Mr. Chief Justice DN Patel and comprised of Hon’ble Mrs. Justice Prathiba M. Singh and Justice Sanjeev Narula. The committee was formed to simplify and thoroughly evaluate how a large number of IPR matters should be handled.

Apart from initial procedures, the IPD is entrusted with hearing Writ Petitions (Civil), CMM, RFA, and FAO pertaining to Intellectual Property Rights issues (save those that must be heard by the Division Bench). In July, the Delhi High Court announced the immediate implementation of a new nomenclature for matters involving Intellectual Property Rights (IPR) Disputes.

The new nomenclature is based on the suggestions of a two-member Committee chaired by Hon’ble Mr. Chief Justice DN Patel and comprising of Hon’ble Mrs. Justice Prathiba M Singh and Hon’ble Mr. Justice Sanjeev Narula. The new terminology refers to ‘Writ Petition (C)’ as ‘Writ Petition (C)-IPD’ in accordance with the suggestions. Similarly, ‘Civil Misc. (Main)’ will include the ‘IPD’ suffix.

Delhi High Court Intellectual Property Rights Division Rules, ­ 2021

In keeping with worldwide practice, the establishment of IPD will be a key step towards successfully resolving IPR issues. IP Divisions or IP Courts dedicated only to IPR disputes can also be found in countries such as the United Kingdom, Japan, Malaysia, Thailand, and China.

The IPD would be under the aegis of the IPD Delhi High Court Rules, which are currently being developed. The original proceedings before the IPD will also be regulated by the Delhi High Court (Original Side) Rules, 2018, as well as the rules of the CPC as they apply to commercial disputes, as well as the provisions of the Commercial Courts Act, 2015. According to the office ruling, appeals filed under Section 5C of the Cinematograph Act of 1952 shall be recorded as RFA (Regular First Appeal) till the Rules are formulated.

According to the Office order dated July 07, 2021, the IPD of the Delhi High Court will handle the following matters:

  • All original and appellate proceedings, including Writ Petitions (Civil), Civil Misc. (Major), RFA, and FAO, relating to IPR disputes, except those that are to be heard by a Division Bench.
  • The IPD would also handle all new filings under the different IPR categories.
  • IPR suits, revocation applications, cancellation applications, other original proceedings, appeals from the offices of the Registrar of Trade Marks, Controller of Patents, and Copyright Registrar, and all other proceedings previously maintainable before the IPAB under the provisions of the Trade Marks Act, 1999; the Copyright Act, 1957; the Patents Act, 1970; the Designs Act, 2000; the Geographical Indications of Goods (Registration and Protection) Act, 1999; the Geographical Indications of Good.

With effect from July 08, 2021, the Roster of Sitting Judges of the Delhi High Court was amended to include Hon’ble Mr. Justice Suresh Kumar Kait, Hon’ble Mr. Justice Jayant Nath, Hon’ble Ms. Justice Anu Malhotra, Hon’ble Mr. Justice C. Hari Shankar, and Hon’ble Mr. Justice Sanjeev Narula as ‘IP Division’ nominees.

The Hon’ble Delhi High Court’s Intellectual Property Division will be responsible for considering and adjudicating all issues relating to Intellectual Property Rights. Included in this will be the following:

  • Proceedings in the original and appellate courts;
  • Petitions for Writs (civil);
  • First Appeals on a Regular Basis (RFA); First Appellate Appeal from an Order (FAO);
  • All new IPR filings in all categories;
  • Suits based on intellectual property rights;
  • Applications for Revocation;
  • Applications for cancellations;
  • Or any other appeals from the Trademark Registrar’s, Patent Controller’s, or Copyright Registrar’s offices;
  • All additional proceedings that may be brought before the former IPAB pursuant to the Trademarks, Copyrights, Patents, and Designs Act.

Parting thoughts

With the IPAB no longer in existence, the cases will be transferred to the various High Courts in Delhi, Bombay, Calcutta, and Madras depending upon their jurisdictions.

The aforesaid scenario has consequently resulted in the establishment of an Intellectual Property Division at the Delhi High Court via an Office Order dated July 7th. The IP Division is constituted of Five Judges from the Delhi High Court’s Original Side.

Things to keep in mind are:

  • The number of Judges are the same as those of Commercial Courts, which is five;
  • The Hon’ble Judges while dealing with IPR cases shall continue to hear all cases, including those involving property, arbitration, and contractual disputes.
  • The Judges’ roster will be changed on a regular basis, perhaps every six months to a year. As a result, there is no continuity beyond the term of a typical roster.

The creation of an exclusive division for Intellectual Property is a clear acknowledgement of the importance and value of intellectual property (IP) in our Economy in the recent times. As the creation of IP Division is still at its nascent stage, it is too early to deliberate on its impact on IP. The goal is that in the long run, the IP division will provide the additional certainty of fair and timely disposal of IP cases, thereby strengthening the trust of IP holders in the system and administration of IP cases in India.

The deadline to submit comments/ suggestions to the Draft IPD Rules ended on November 10, 2021.

[1] https://delhihighcourt.nic.in/writereaddata/Upload/PublicNotices/PublicNotice_5J4GUGI051K.PDF

The Counterfeit Conundrum: Civil and Criminal Remedies for spurious medicines in India

medicine

By Lucy Rana and Nihit Nagpal

Introduction

The Indian Pharmaceutical sector has seen tremendous growth in the past few decades which has made it one of the leading exporters of pharmaceuticals in the world. While the business for medicines has expanded in the country, the quality of the formulation of drugs has been a major concern at both national and international levels. The dawn of the Covid-19 pandemic has brought forth the perfect circumstances for counterfeiters to increase their production and distribute illegal goods. Aided by a new world-wide supply chain, the dire need for medicines and the new regulatory developments in India, counterfeit products in the country have grown under various parallel supply chains. The Report on Countrywide Survey for Spurious Drugs by the Central Drugs Standard Control Organization under Ministry of Health and Family Welfare in India, states that the supply of spurious goods in the Indian retail market is about 0.3%.

On the other hand, The World Health Organization’s Global Surveillance and Monitoring System Report for Substandard and Falsified Medical Products in 2017, has claimed that about 10.5% of medicines which are sold in lower and middle income countries that include India have been reported to be counterfeit[1] Further, the 301 Special Report on State Intellectual Property protection and enforcement by the United States Trade Representatives have placed India in the “priority watch list” for the sale and promotion of counterfeit medicines and poor Intellectual property rights enforcement for drug piracy.[2] While the variety of survey estimations vary, it is apparent that the supply of spurious drugs can lead to grave consequences for both the patients (consumers) and genuine manufacturers (suppliers) of medicines in India. Considering the dreadful implications on public safety and pharmacy revenues, ascertaining the civil and criminal remedies available as a recourse to both suppliers and consumers in context to their utility is the dire need of the hour.

IP laws in India and Counterfeit Medicines

The Trademark Act, 1999

The Trademark Act, 1999 provides civil and criminal remedies against the infringement of any trademark. The Trademarks Act prohibits the registration of trademarks which are descriptive or which are devoid of any distinctiveness[3]. Pharmaceutical trademarks are usually based on the chemical compound used by the drug or salt composition of the drug which deters the brand from having inherent distinctiveness. However, the distinctive nature of a brand is a prerequisite for a mark to qualify as a trademark. Further, under the Trademarks Act, 1999 a trademark must not be similar to an existing trademark which is likely to confuse the customers.[4] The Trademarks Act, also holds that trademarks must not be deceptively similar to chemical elements, compounds and International Non- Proprietary Names (INN) which have been declared by the World Health Organization and notified by the Registrar of Trademarks.

Furthermore, the Trademark Law necessitates the appropriate action against passing off which refers to the imitation of marks or goods in order to take advantage of the goodwill of the lawful owner in order to deceive the customers.[5] The law against passing off is a form of tort which is based in common law. The recourse against which can be utilized by pharmaceutical companies in order protect the goodwill of their product against spurious drugs. In Cadila Healthcare ltd. V. Cadila Pharmaceuticals ltds,[6] it was held by the apex court that certain factors have to be met in order to hold an action of passing off against a deceptively similar mark. This factors include, the nature of the mark, the degree of resemblances between the marks, the nature of the good and the similarity between the two marks. Furthermore, in Allergen Inc. v. Sun Pharmaceuticals Industries Ltd[7], it was held that in the case of medical products, there cannot be any doubt that the utmost precaution should be taken in order to prevent any confusion in the mind of the customer regarding the actual product that he is taking.

The Trademarks Act provides a penalty for applying for false trademarks or trade descriptions with an imprisonment up to three years and a fine ranging from fifty thousand to two lakh rupees as a criminal remedy[8]. Further, the Trademarks Act also empowers the court to grant ex-parte injunctions in order to restraint the infringers from selling counterfeit goods and for discovery of documents and other related evidence as a part of civil remedy.

The Patents Act, 1970

The Patents Act, 1970 provides protection to the process of making a chemical substance or drug and not to the drug itself. Furthermore, the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the discovery of new property or use of the same substance would not be inventions and would not be provided protection under the Patents Act, 1970[9]. The Supreme Court in Novartis AG v. Union of India emphasized that the true legislative of the protection provided by the Patents Act mentioned above, is to allow genuine inventions with respect to chemical substances but also to stop repetitive patents on chemical substances on spurious grounds[10].

Under the Patent’s Act, any violation of the said act imposes a duty upon the judiciary to intervene and pass orders to secure the patent holders rights. The patentee is required to institute a suit for seeking remedies such as interlocutory or interim injunctions and damages arising out of the said infringement.[11]

Criminal Law in India and Counterfeit Medicines

The Indian Penal Code 1860

The Indian Penal Code, 1860 holds that any individual who adulterates any drug or medical preparation in a manner as to lessen the efficacy or change the operation of such a drug or medical preparation in manner so as to use or sell it for any medicinal purpose would be imprisoned for either description for a term that may extend to six months or a fine up to a thousand rupees[12]. The code further holds that an individual who sells an adulterated medicine in guise of an unadulterated or innocuous substance shall be punished with imprisonment of a term that may extend to six months or a fine that may extend to a thousand rupees or both.

Drugs and Cosmetics Act, 1940

The Drugs and Cosmetics Act, 1940 stipulates procedures to counter adulterated, spurious or misbranded drugs and their exports in India. The Act defines a drug spurious drug as a drug which is manufactured under a name which belongs to another drug or if it is in imitation of or substitute of another drug and purports the purpose of a manufacturer of whom it is not truly a product[13]. Furthermore, the act prohibits the manufacture and sale of such drugs and cosmetics. Furthermore, the Act holds that any drug which is deemed to be adulterated or spurious and which is likely to result in the consumer’s death or cause grievous harm on his body would be punishable with imprisonment for a term which shall not be less than seven to ten years but which may extend to an imprisonment for life and shall also be liable to a fine which will not be less than ten lakhs or three times the value of the drugs confiscated[14]. The act also envisages that when an individual has been convicted under the Act, then the drug inspector may confiscate the stock, packages, labels or any machinery or implements utilized to manufacture the said counterfeit medicine so as to deter any future contraventions.

The Supreme Court in the Drug Inspector and Ors. V. Fizikem Laboratories[15] has held that the inspector appointed under the act has the power to inspect any premises wherein any drug or cosmetic is being manufactured. Furthermore, the inspector has the power to search and also test drugs and cosmetics being manufactured. Additionally the Supreme Court in Union of India v. Ashok Kumar Sharma[16]has stated that that though it is on the Police Officer to register the FIR, the action to be taken in such cases is for the Drug Inspector, whose powers may enable him to search any premises with respect to such offences and take any such steps as stated in the act in order to enable him to curb such offences. The process, as stated by the court is to harmonize interpretation of the law with respect to the Drugs and Cosmetics Act and the Indian Penal Code.

Thus the drug inspector may take any measures that is required to end the manufacture or sale of spurious medicines, which makes the criminal recourse under the Drug and Cosmetics act an efficacious remedy against counterfeiters. Additionally, the act also holds that offences with respect to counterfeit medicines and spurious pharmaceuticals are offences which are cognizable and non-bailable[17]

The Center and the State are both responsible for the enforcement of the Drug and Cosmetics Act. The Central Standard Drug Control Organization (CDSCO) is responsible for the coordinating activities of the State Drug Control Organization (SDCO) and performs regulatory control over the import of drugs, approving these medicines and their clinical trial. CDSCO has six zonal offices, four sub-zonal offices, 13 port offices and seven laboratories under its control. The Organizational structure is divided under the Drug Control General.

The Bureau of Indian Standards Act, 2016

The Bureau of Indian Standards Act also contains penalties for offences conducted by those who use standards (ISI) Mark without obtaining the requisite license. The Bureau investigates and detects the case of misuse of the ISI mark and prosecutes the offenders wherever required.

Various Recourses for Consumer and Manufacturers

Pharmaceutical Companies in India have developed new technologies that include SMS based QR codes to help consumers to acquire information about the supply of the medicines and the details regarding production/manufacturing. These companies have also utilized color and smell based technologies which informs a consumer if the medicine in question has been tampered with. On the other hand, the current scenarios and circumstances have enabled counterfeiters to access global supply chains for the supply of essential pharmaceuticals. Desperate consumers may not pay attention to QR codes or whether the said product contains a tamper-based indicator. With the increase of heavy demand of pharmaceuticals in India, it is prudent to believe that many counterfeiters may aim to meet this demand. The variety of manufacturers, consumers and distributors have different forms of recourses under the laws and legislation mentioned above. These remedies act to provide specific objectives and some may be more practical for stakeholders depending on their need and requirements.

Conclusion

The effective recourse under Indian law to curb counterfeited products is to utilize an amalgamation of both civil and criminal remedies to counter the availability and sale of such a product. The civil remedies under the IP laws in India, though effective, require a higher degree of identification and specification of counterfeited products. Furthermore, the act may only be available as a recourse for Intellectual property right holders. In order to thoroughly address negative externalities like public health and safety, tax and customs grievances and investor confidence, the act must be criminalized and a proper recourse under the criminal law should be utilized to punish and deter all counterfeiters. A national database for recording and accessing information needs to be created which work hand-in-hand with pharmaceutical companies. Legitimate manufacturers of medicines should utilize new technologies to aid the consumers and public authorities. Pharmaceutical companies may utilize artificial intelligence-based recognition softwares, smart packaging and labeling which uses track and trace based technologies to map the products across supply chain, the information for which can be made available to both government agencies and consumers.

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[1] https://www.who.int/medicines/regulation/ssffc/publications/GSMSreport_EN.pdf?ua=1

[2] https://ustr.gov/sites/default/files/files/reports/2021/2021%20Special%20301%20Report%20(final).pdf

[3] Section 9(a) of the Trade Marks Act, 1999

[4] Section 11 of the Trade Marks Act, 1999

[5] Section 134 (b) and 135 Trade Marks Act,1999

[6] JT 2001 (4) SC 243

[7](Cal.) 2006 (32) PTC 495

[8] Section 103 of the Trade Marks Act, 1990

[9] Section 3 (d) of the Patents Act, 1970

[10] (2013) 6 SCC 1

[11] Section 104 of the Patents Act, 1970

[12] Section 274 of the Indian Penal Code, 1860

[13] Section 17B of the Drugs and Cosmetics Act, 1940

[14] Section 27 of the Drugs and Cosmetics Act, 1940

[15] 2008 (2) ACR 2212 (SC)

[16]  Criminal Appeal No.200 OF 2020

[17]  Section 36AC of the Drugs and Cosmetics Act, 1940

 

Arbitrability of Trademark Disputes

supreme

By Nihit Nagpal and Manmeet Singh Marwah

INTRODUCTION

The answer to overcoming of overburdening of Courts was resolution of cases through arbitration.
Since its advent, disputes pertaining to various areas of laws have been adjudicated by arbitration and now it has become a stable device for settling out the disputes between the parties. However, the evolution of its jurisprudence in Intellectual Property Rights (IPR) is quite different.

The Courts ad nauseam have stated that Intellectual Property Rights disputes cannot be referred to Arbitrators with the preeminent reason being that the IPR rights fall under the bracket of right in rem and not under right in personam. However, the Hon’ble High Court of Delhi in Golden Tobie (P) Ltd. v. Golden Tobacco Ltd[1] passed a judgement dated June 04, 2021 wherein it was held that the dispute was primarily related to interpretation of the terms of the Agreement between the parties and right asserted by Plaintiff emanates from the Agreement. Therefore, the Assignment of trademark is by a contract and not by a statutory act and the matter was accordingly referred to Arbitration.

BRIEF FACTS

The Defendants had filed an Application before the Hon’ble High Court of Delhi under Section 8 of the Arbitration and Conciliation Act, 1996 for referring the disputes between the parties to Arbitration.

The plea of the Plaintiff was that both the parties to the suit entered into a Master Long Term Supply Agreement dated August 16, 2019 which granted the Plaintiff exclusive right to sell, supply and distribute the Defendants brands “Golden’s Gold Flake, Golden Classic, Taj Chap, Panama and Chancellor” in international and domestic domain. The parties on February 12, 2020 agreed to enter into a Trademark License Agreement. However, later on August 14, 2020, the Defendants ignoring the fact that Plaintiff had already incurred huge amount of capital on promotions and advertisements, terminated the Trademark License Agreement on the ground that commercial production had not begun yet. Consequently, the above stated termination notice was set aside and a new amendment Agreement was agreed by the parties on August 29, 2020. These Agreements gave the Plaintiff right to manufacture the Defendant’s products in an exclusive manner and the rights granted through the Agreement were non-assignable, non-transferable. In February, 2021 another termination notice was served by the Defendant to the Plaintiffs stating that Agreements dated February 12, 2020 and August 29, 2020 stands cancelled. The Defendants through the notice blamed the Plaintiff for not making timely payments in accordance with the Agreement thereby, withdrawing the Plaintiff’s right to manufacture and sell the brands of the Defendant. The Plaintiff in the suit has pleaded to restraint the Defendant from using the trademark which had been conferred upon them in perpetuity through trademark agreement dated February 12, 2020 and August 29, 2020.

JUDGEMENT BY THE HON’BLE HIGH COURT

The Hon’ble High Court of Delhi to arrive at the decision in the present case had observed the judgments passed in various earlier cases. The Hon’ble Court elucidated the four fold test of arbitrability as established by the Hon’ble Supreme Court in Vidya Drolia and Ors. vs. Durga Trading Corporation[2], and held that the issuance of patents and registration of trademarks come under the category of actions in rem. Not only these matters are subjected to sovereign as well as government functions but these intellectual properties also confers monopolistic rights and have erga omnes effect and thus, are non-arbitrable.

The Hon’ble Court further observed the legal position of the principles laid out in Hero Electric Vehicles Pvt. Ltd. & Anr. vs. Lectro E-Mobility Pvt. Ltd & Anr.[3], wherein it referred the matter to arbitration in a trademark dispute. The Hon’ble Court sustained that the right sought by the Plaintiff is a right that stems from Family Settlement Agreement & Trade Mark and Name Agreement and not from Trademark Act. The Hon’ble Court further observed that the Plaintiff’s right to trademark is claimed only against a specific family group and not against the world at large and thus, the view point that the dispute being an action in rem cannot be arbitrable is not correct. In the said case the partnership firm i.e. Hero exports was divided among four family groups designated as F1, F2, F3, and F4.

After perusing the contentions of both the parties, the Single Bench of Hon’ble High Court of Delhi consisting of Justice Jayant Nath held that the Plaintiff’s right does not emanate from Trademark Act rather arises from the Agreement dated February 12, 2020 and the amendment Agreement dated August 29, 2020. The Hon’ble Court in furtherance to holding that pleas of learned Senior Counsel of Plaintiff’s is without merit pronounced that the disputed trademark was assigned through a contract and not by a statutory act. The states do not exercise their sovereign functions in such cases and thus, the dispute can very much be referred to arbitration. Accordingly, the parties were referred to Arbitration as per the Arbitration Agreement.

HISTORY OF ARBITRATION OF IPR DISPUTES

The whole conundrum of arbitrality of IPR disputes can be viewed through different stances and decisions of different Courts throughout India.

The Hon’ble Delhi High Court passed a judgment dated September 11, 1990 in Mundipharma Ag vs. Awochardt[4] stating that the copyright disputes do not fall within the ambit of arbitration as remedies for such infringement are statutory in nature which are to be exclusively granted by the Civil Courts.

The Hon’ble Supreme Court in Booz Allen & Hamilton Inc. vs. SBI Home Finance Ltd[5] while laying down the test of arbitration, passed a judgment dated April 15, 2011 stating that the disputes which fall under the category of right in rem are non arbitrable whereas disputes falling within the category of Right in personam are arbitrable. It is pertinent to note that IPR matters fall within the scope of right in rem because the creator of such intellectual property is conferred with monopoly rights which enables him to prevent the exploitation of his creation by others, allowing him to enjoy his right against the world at large.

The Hon’ble Supreme Court in its judgement dated October 4, 2016, in A. Ayyasamy vs. A. Paramasivam and Ors,[6] referred to the book penned by OP Malhotra called “The Law & Practice of Arbitration and Conciliation” and stated that generally patent, copyright, trademark disputes are non arbitrable. This was well recognised as obiter dictum in many cases. The Hon’ble Apex Court has reiterated the same stance of non arbitrability of IPR disputes in Vikas sales case vs. Commissioner of Commercial Taxes[7]and in the case of Emar MGF. Vs. Aftab Singh [8].

The Bombay High Court vide its judgement dated April 12, 2016 in Eros International Media Limited vs. Telemax Links India Pvt. Ltd. and Ors.,[9] initiated a new trend by pronouncing the Judgement in favour of arbitration. The Hon’ble Court in this case allowed an application for copyright infringement under section 8 of Arbitration and Conciliation Act, 1996 and held that if the parties have wilfully decided to adjudicate their commercial disputes ascending from contract to a private forum then no question regarding their non- arbitrability shall be raised. The High Court made it clear that these disputes can be taken up to the arbitration centres as they are in nature of action in personam, only one party is asserting their right against a particular group and not against the world in large.

The Madras High Court in its judgement dated September 3, 2020 in Sanjay Lalwani V Joystar Enterprises and Ors[10] acknowledged the prior decisions of the Hon’ble Supreme Court and stated that copyright disputes are in the nature of action in rem and thus, cannot be adjudicated through arbitration.

Taking all together a different stand in Hero Electric Vehicles Private Limited and Anr. v. Lectro E- Mobility Private Limited and Anr[11], the Delhi High Court vide its judgement dated ­­March 2, 2021 gave a pro arbitration judgement by holding the view that if the dispute is regarding the enforcement of trademark against the particular group as contrary to enforcement of such rights against the world, then such cases are arbitrable.

CONCLUSION

The path to Arbitrability of Intellectual Property Rights disputes has never been without challenges.  From giving firm and rigid judgements against arbritrability of IPR disputes to giving green signal to certain IPR disputes, the Indian Courts have come a long from their anti-arbitration attitude in IPR disputes.
It is to be noted that through dictums laid in abovementioned cases Hero Electric Vehicles; Vidya Drolia and Golden Tobie, the Courts have established a principle that IPR disputes that emanates from right in rem (like registration/grant of trademark and patent) cannot fall within the realm of arbitration because in addition to having erga omnes effect, it grants monopoly rights and are subjected to the functions of the Government. Whereas, certain disputes pertaining to IPR where right asserted by a Plaintiff is not a right that emanates from any statutory act but a right that emanates from an Agreement, can be resolved through Arbitration. Like in the present case, the assignment of trademark was through contract and thus, the infringement of trademark can be resolved through the terms of the contract.

[1] CS(COMM) 178/2021

[2] (2021) 2 SCC 1

[3] 2021 SCC OnLine Del 1058

[4] ILR 1991 Delhi 606

[5] 2011 5 SCC 532

[6] AIR2016SC 4675

[7] (1996)4SCC433

[8] 2018 SCC Online SC 2771

[9] 2016(6)BomC R321

[10] (2020) SCC Online Mad 2003

[11] 2021 SCC OnLine Del 1058

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GII 2021- India performs “above expectations”

WIPO

The World Intellectual Property Organization (WIPO) released its Global Innovation Index for 2021[1]. The 14th Edition of the GII is based on the theme- “Tracking Innovation through the COVID-19 Crisis”.  The GII reports the worldwide innovation landscape and annual performance rankings of 132 economies, while relying on 81 indicators. According to Daren Tang, Director General of WIPO, the GII 2021 finds that the innovative sectors of the global economy have remained strong, despite severe disruptions caused in the wake of the COVID-19 crisis. The Report also infers that governments and enterprises in many parts of the world have scaled up their investments in innovation during the COVID-19 pandemic.

TOP 3 INNOVATION ECONOMIES BY REGION

GII 2021- India Ranking

GII 2021 places India rank 46 among 132 nations. Hence, India jumped by 2 positions from its previous ranking in GII 2020, wherein India was placed at 48th rank in 131 economies across the world. The Report also remarks that selected middle-income economies like India, are changing the innovation landscape.

Key Findings- GII 2021- INDIA

  • India is placed at the 2nd position in Innovation performance at the Lower middle income group level[2].
  • India holds the record for over performing on innovation relative to their level of development for the 11th year in a row.
  • India is systematically catching up and has romped up the ranks by an average of 22 positions in the past decade:
  • India has also been portrayed as successful in developing sophisticated services that are technologically dynamic and can be traded internationally.
  • India continues to lead the world in the ICT services exports indicator (1st) and holds top ranks in other indicators, such as Domestic industry diversification (12th) and Graduates in science and engineering (12th).
  • India’s innovation performance is above the average for the upper middle-income group in five of the seven innovation pillars (it scores below average in the pillars of Infrastructure and Creative outputs).
  • India is also at the top of the region in the Knowledge and technology outputs pillar.

India’s Report card at GII 2021

India’s innovation and development have been applauded as “above expectations” in the GII Report of 2021. This is indeed a matter of pride for India, as its economic and innovation landscape is being appreciated on the International diaspora. The Government’s incentives for Start-ups and MSMEs to encourage innovation and research and development in India also plays an immense role in displaying India’s positive relationship between innovation and development.

[1] https://www.wipo.int/global_innovation_index/en/2021/

[2] The report categorises different income levels of nations- high income group, upper-middle income group, lower middle income group, low income group.

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Delhi High Court releases Video Conferencing Rules 2021

delhi-high-court

The High Court of Delhi on October 26, 2021 released the Video Conferencing Rules namely the “High Court of Delhi Rules for Video Conferencing for Courts 2021”[1]. The Rules are applicable to Courts or proceedings or classes of courts or proceedings as the High Court may notify in the Official Gazette.

The Rules in detail can be accessed here.

The Rules provide for Guidelines for governing the conduct of video conference and hearings by the Court. The Rules inter alia provide for General principles governing video conferencing, the facilities recommended for video conferencing, the procedure for video conferencing, service of summons, examination of persons, cost of video conferencing, conduct of proceedings etc.

Video Conferencing Rules 2021- Key Highlights

  • Video conferencing facilities may be used at all stages of judicial proceedings and proceedings conducted by the Court;
  • All proceedings conducted by a Court via video conferencing shall be judicial proceedings;
  • No unauthorised recording of the proceedings by any person or entity is allowed;
  • All relevant statutory provisions applicable to judicial proceedings including provisions of the CPC, CrPC, Contempt of Courts Act, 1971, Indian Evidence Act, 1872 and Information Technology Act, 2000 will apply to proceedings conducted by video conferencing;
  • The Rules also define “Court point” and “Remote point”. Court point refers to Courtroom or where the Court is physically convened, or the place where a Commissioner or an inquiring officer holds proceedings under the directions of the Court and Remote point is a place where persons are required to be present or appear through a video link;
  • Any party to the proceeding may move a request for video conferencing on the prescribed form;
  • Summons issued to a witness who is to be examined through video conferencing, shall mention the date, time and venue of the concerned Remote Point and shall direct the witness to attend in person along with proof of identity or an affidavit;
  • The Court may direct appropriate measures to protect the privacy of the person being examined during virtual conference proceedings;
  • On the completion of video conferencing, if a Remote User believes that they have been prejudiced due to poor video and/or audio quality, then the Remote User shall immediately inform the Coordinator at the Court Point;
  • The Coordinator at the Court Point shall ensure that video conferencing is conducted only through a Designated Video Conferencing Software;
  • Video conferencing shall ordinarily take place during the Court hours;
  • In criminal cases, the expenses of the video conferencing facility, shall be borne by such party as directed by the Court;
  • In civil cases, generally, the party requesting for recording evidence through video conferencing shall bear the expenses;

The global pandemic which commenced in early 2020 compelled several organizations including the Indian Courts and Tribunals to resort to virtual and online mediums. The Video Conferencing Rules streamline the procedure and the processes to be followed with reference to the use of video conferencing for Courts in India.

[1] http://delhihighcourt.nic.in/writereaddata/upload/Notification/vc12272021.PDF

HIRED OR (NOT)? Job Scams and Frauds

MCA

A person cheated of INR 2.58 Lakh (approximately USD 3.4 Thousand) by promising Job at an E-commerce Giant

By Nihit Nagpal and Manmeet Singh Marwah

INTRODUCTION

Cybercrimes can be generalized as criminal offences involving inter alia, computers, internet, networks, information technology, and virtual reality. With advancement in technology and globalization, such crimes have been increasing at an alarming pace in India. Moreover, the impact of the COVID-19 Pandemic has seen cybercriminals elevating their cyber-attacks to hitherto unknown levels, in order to exploit the fear and uncertainty caused by the unstable economic situation. Recently, an unemployed man who was unable to find a job due to the Covid-19 Pandemic was reportedly cheated of INR 2.58 Lakh (approx. USD 3.4 Thousand) by a cyber fraudster who had lured the man by assuring him part time job at an e-commerce giant.[1]

FACTS OF THE CASE

The victim (reportedly a 34 year old male), had received a text message regarding a job offer at an e-commerce giant, which entailed purchase of certain products from the e-commerce platform by him to increase their sales, and in lieu thereof, he would receive hefty commissions. Upon receipt of the commission, the orders could be cancelled to get refund of the orders too. Thus, the victim contacted the number mentioned in the text message and the fraudster who picked up the call impersonated to be a representative of a private company which had partnered with the e-commerce giant to increase sales of products through it.

The cyber fraudster informed the victim that he had to purchase a product by making payment via an e-wallet account issued to him and thereafter, he will receive a commission for it. To lure the man and gain his trust, the cyber fraudster persuaded the man to put small amounts of INR 200, INR 1,000 and INR 3,000 in the e-wallet account issued to him. The man thereafter received INR 118, INR 468 and INR 1400 as commission for the said amounts. Subsequently, the cyber fraudster persuaded the man to place an order for eight products so that he could earn huge amount of commission on it. The victim, being likely enthralled by the promise of huge returns, deposited a sum of INR 2.58 Lakh (approx. USD 3.4 Thousand) for the products. However, he did not receive any commission for the same and the cyber fraudster refused to pay the commission or give back the money to the man!

In light of such scams and frauds, it is more important than ever to exercise Constant Vigilance and not pay attention to such fraudulent calls or SMSes. Even more importantly perhaps, it is imperative to be aware of the legal remedies available to people regarding such frauds and cybercrimes. Further, one must also be aware of the various types of cybercrimes or frauds that may occur.

Legal Remedies against Cyber Crimes

The Information Technology Act, 2000 and the Indian Penal Code, 1860 criminalizes a number of cybercrimes for protection of the citizens and discouraging cyber fraudsters to commit such offences. The aggrieved person should immediately file a Police Complaint for Registration of the First Information Report (FIR). The aggrieved person can also file a complaint along with proofs with the Cyber Cell of the concerned jurisdiction, inter alia intimating them about the said cybercrime. The complaint can be filed through the National Cyber Crime Reporting Portal[2].

Various types of Cyber crimes

A non-exhaustive list of some of the more prevalent cybercrimes is given below:

  1. Child Pornography/ Child Sexually Abusive Material (CSAM) – It refers to material containing sexual image in any form, of a child who is abused or sexually exploited.
  2. Cyber Bullying – It is a form of harassment or bullying inflicted through the use of electronic or communication devices such as computer, mobile phone, laptop, etc.
  3. Cyber Stalking – It is the use of electronic communication to follow a person, or attempt to contact a person to foster personal interaction repeatedly despite a clear indication to the accused of disinterest by such person.
  4. Cyber Grooming – It occurs when a person builds an online relationship with a young person and tricks or pressures him/ her into doing sexual acts.
  5. Online Job Fraud – It is an attempt to defraud people who are in need of employment by giving them a false hope/ promise of better employment with higher wages.
  6. Online Sextortion – It occurs when someone threatens to distribute private and sensitive material using an electronic medium if he/ she does not provide images of a sexual nature, sexual favors, or money.
  7. Vishing – It is essentially a form of phishing, which involves attempts wherein fraudsters try to seek personal information like Customer ID, Net Banking password, ATM PIN, OTP, Card expiry date, CVV etc. through phone calls.
  8. Sexting – It is an act of sending sexually explicit digital images, videos, text messages, or emails, usually by cell phone.
  9. Smshing – It is a type of fraud that uses mobile phone text messages to lure victims into calling back on a fraudulent phone number, visiting fraudulent websites or downloading malicious content via phone or web.
  10. SIM Swap Scam – It occurs when fraudsters manage to get a new SIM card issued against a registered mobile number fraudulently through the mobile service provider for making financial transactions through victim’s bank account.
  11. Debit/Credit Card Fraud – It involves an unauthorized use of another’s credit or debit card information for the purpose of purchases or withdrawing funds from the accounts.
  12. Impersonation and Identity Theft – It is an act of fraudulently or dishonestly making use of the electronic signature, password or any other unique identification feature of any other person.
  13. Phishing – It is a type of fraud that involves sending emails with malicious intent for stealing personal information such as Customer ID, IPIN, Credit/Debit Card number, Card expiry date, CVV number, etc.
  14. Spamming – This involves unsolicited commercial messages sent via email, SMS, MMS and any other similar electronic messaging media.
  15. Ransomware – It is a type of computer malware that encrypts the files, storage media on communication devices like desktops, Laptops, Mobile phones etc., holding data/information as a hostage for demanding ransom.
  16. Virus, Worms & Trojans – Virus is a program written to enter to your computer and damage/alter your files/data and replicate themselves. Worms are malicious programs that make repetitive copies of themselves on the local drive, network shares, etc. A Trojan is a destructive program that looks as a genuine application.
  17. Data Breach – It is an incident in which information is accessed without authorization.
  18. Denial Of Services/Distributed DOS – It is an attack intended for denying access to computer resources without permission of the owner or any other person who is in-charge of a computer, computer system or computer network.
  19. Website Defacement – It is an attack intended to change visual appearance of a website and/ or make it dysfunctional.
  20. Cyber Squatting – It is an act of registering, trafficking in, or using a domain name with an intent to profit from the goodwill of a trademark belonging to someone else.
  21. Pharming – It is cyber-attack aiming to redirect a website’s traffic to another, bogus website.
  22. Cryptojacking – It is the unauthorized use of computing resources to mine cryptocurrencies.
  23. Online Drug Trafficking – It is a crime of selling, transporting, or illegally importing unlawful controlled substances, such as heroin, cocaine, marijuana, or other illegal drugs using electronic means. This is especially prevalent in the dark web.
  24. Espionage – It is the act or practice of obtaining data and information without the permission and knowledge of the owner.

CONCLUSION

In today’s world where technology has reached great heights, offences such as cybercrimes are not only limited to the computers only but the impact of such cybercriminal activities can be seen on mobile devices as well. Even opening a single link on a mobile device can lead to installation of malware and cybercriminals could easily hack the mobile device to cause great harm to any individual. During the COVID-19 Pandemic, it has been observed that the private information of the users of various apps has also been leaked and sold on dark web. The general public should be aware of the cybercrimes happening around them and should immediately report any such cybercrimes to the authorities so that quick action can be taken against such cyber fraudsters.

[1] https://indianexpress.com/article/cities/mumbai/mumbai-cyber-fraudster-promises-part-time-job-for-amazon-dupes-unemployed-man-of-rs-2-58-lakh-7497859/#:~:text=A%2034%2Dyear%2Dold%20unemployed,hefty%20commission%20after%20each%20sale.

[2] https://cybercrime.gov.in/

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MASK UP! An Initiative by Nestle

nestle

By Pranit Biswas and Sulagna Goswami

With the ongoing speculations of the possible outbreak of a third wave of COVID 19, ‘MASK UP!’ an initiative by Nestle, is a step forward towards spreading greater awareness about the importance of wearing a mask. Nestle India has announced that it is incorporating a mask onto each of their iconic product packaging, like Maggi, KitKat, Nescafe, Everyday, etc. to remind and sensitise every individual about the basic practice that should be followed by everyone at this vulnerable time period being faced by the country.

With current relaxations in COVID restrictions, many having already been vaccinated with the double dose of a COVID vaccine, and eventually resuming their daily lifestyle has resulted in several sections of the public becoming callous and lax in their self-discipline, thereby either forgetting or choosing not to continue wearing a mask when around others. Even though the number of daily COVID positive cases are currently thankfully under control, proper precautions such as wearing masks, maintaining social distancing and regularly sanitizing surfaces and washing or sanitizing one’s hands still needs to be a very important part of everybody’s lifestyle and consciously followed by all. Incorporating the imagery of masks on the packaging of the major brands and most commonly consumed goods can help serve as a constant reminder of this extremely important safety protocol and increase awareness among the consuming public. The constant visual of masks will reinforce the social message and people will be reminded of the basic practice of masking up and consequently make a conscious effort to do the same.

SOCIAL USE OF TRADEMARKS

It comes as no surprise that the intention behind adopting trade marks is essentially to create a distinguishing element for the recognition of one’s business in the market place. Additionally, putting these very trade marks to use for invoking a social aspect on the overall brand image of the said business, might just be another effective strategy to not only do their bit towards its corporate social responsibility, but also to appeal to its target customers. For example, tweaking packaging to spread a social message is not a new concept for Nestle. Reinforcing a social message through their packaging had been adopted by Nestle back in 2016 as well to support girl child education. Maggi had changed its tagline from “2 minute noodles” to “2 minutes for education”, while Kitkat had changed the visual of the finger snap to one without the break with the line — “No break from education”. Meanwhile, Nescafe had changed the tagline “It all starts with a Nescafe” to “It all starts with education”.[i]

This move garnered significant attention from its consumers, in positive light, which would have eventually contributed towards building a strong goodwill for the company at the least. Initiatives taken by companies which strike a chord with their target consumers, not only helps to garner the consumer’s trust in the brand and also instils a good amount of trust that the brand cares.

Following Nestle’s move, dozens of brands such as Dunzo, Zomato, Subway, Vodafone, Urban Clap, Make My Trip also added masks in their logos and phone application icons during the first wave of COVID 19 itself, as visual reinforcement has been considered an effective strategy to imprint behavioural regulations upon one’s minds, especially children.

Putting one’s trade marks to use with respect to social causes appears to be a fairly new concept, however, with the evolution of marketing in the fast paced era of technology, adopting new strategies to utilise ones registered trade marks in the appropriate manner is in fact a good call. This step taken by Nestle is indeed the need of the hour, especially when people are loosening up and have inculcated a casual approach towards still extremely critical COVID precautions. The ‘MASK UP!’ initiative by Nestle will remind people that even though relaxations have been made, precautions are still mandatory as it was only a few months ago, thus, proving to be a win-win strategy for the buyer, seller and the society’s perspectives combined. However, one must practice caution by applying the right amount of creativity and not ending up overdoing it, otherwise the same may be a complete miss.

[i]https://www.thehindubusinessline.com/companies/nestles-brands-set-to-mask-up-to-generate-awareness-on-covid-appropriate-behaviour/article35814341.ece

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