Monthly Archives: July 2011

Border Enforcement Of Intellectual Property In The EU And Indian Goods

European Union (EU) has been actively working in the direction of improving Innovation and protection of Intellectual Property Rights (IPRs). EU has recently released a new IPR Strategy. Under this new IPR Strategy, EU proposes an ambitious programme until the end of 2012 that foresees actions in all the main IPRs. These include IPRs like Patents, Trademarks, Copyright and Related Rights and Geographical Indications.

Similarly, EU has also published a Green Paper on the Online Distribution of Audiovisual Works. In the framework of the IPR Strategy (Commission’s communication “A Single Market for Intellectual Property Rights”), this paper aims to contribute to the development of a digital single market by launching a consultation on the opportunities and challenges of the online distribution of audiovisual works. All stakeholders are invited to participate in this consultation, which is open until November 2011.

Now EU is streamlining its border enforcement of IPRs, especially those pertaining to Indian goods meant for third countries destinations. In this regard, EU India expressed their desire to sign a Letter of Understanding (LOU) to fairly deal with Off Patent Generic Drug Consignments. Now a LOU has been signed between EU India in this regard.

According to the Understanding, so long as the EU and its Member States adhere to the principles contained in the Understanding with respect to generic drugs in transit through the EU, India has assured the EU that India will not request the establishment of a Dispute Settlement Panel at the WTO. With the exchange of these letters, India and the EU have reached, for the present, an informal settlement of this dispute. This would also result in a better border enforcement of IPRs in the EU.

In addition, EU agreed to India’s request for adoption of guidelines which would confirm the principles agreed to in the Understanding with a view to give greater and immediate legal certainty for producers and traders. EU also agreed to reflect the principles contained in the Understanding in its proposal for a new Regulation to replace Regulation 1383/2003.

India has taken note of the commitments offered by the EU. India has reiterated the core principle of the Understanding that the mere fact that medicines are in transit through EU territory, and that there is a patent title applicable to such medicines in the EU territory, does not in itself constitute enough grounds for customs authorities in any Member State to suspect that the medicines at stake infringe patent rights. However, a situation in which medicines are in transit through EU territory and there is adequate evidence that satisfies the customs authorities that there is a substantial likelihood of diversion of such medicines on to the EU market may constitute enough grounds for customs authorities to suspect that the medicines at stake infringe patent rights in the EU.

India initiated dispute settlement consultations on 11 May 2010 at the WTO with the EU on the issue of detention of Indian generic medicines while in transit through the EU. The dispute was triggered by the repeated instances of detentions/seizure at EU ports, particularly in the Netherlands, of Indian generic drugs destined for export to Latin American and other countries. The detentions were made by invoking the EC’s Regulation 1383/2003 which contains customs procedures for taking action against goods suspected of infringing IPRs. These detentions were made during the period October – December 2008 at Schiphol airport, Netherlands. The consignments were initially detained and later, either destroyed or returned to India or allowed to proceed to the destination.

The detentions by the customs authorities of these generic medicine consignments were in violation of the obligations of the EU and the Netherlands under Article V of GATT which enshrines freedom of transit of goods through the territory of each contracting party of GATT via the routes most convenient for international transit. The detentions were also inconsistent with the EU and its Member States’ obligations under Articles 41 and 42 of the TRIPS Agreement as these detentions created barriers to legitimate trade, led to abuse of the rights conferred on the owner of a patent, were unfair and inequitable, unnecessarily burdensome and complicated and created unwarranted delays.

Moreover, these detentions were inconsistent with certain fundamental obligations of the EU under Article 31 of the TRIPS Agreement read together with the provisions of the Decision of the General Council of August 30, 2003 on the Implementation of Paragraph 6 of the Doha Declaration on the Trips Agreement and Public Health to ensure access to medicines for members of the WTO (“Members”) with insufficient or no capacity in the pharmaceutical sector to enable them to address their public health problems.

India was joined by Brazil in this dispute; Brazil also filed a similar complaint against the EU before the Dispute Settlement Body of the WTO. India and Brazil jointly held two rounds of consultations with the EU on 7-8 July 2010 and 13-14 September 2010 in Geneva. During these consultations, EU acknowledged that some provisions of the EC Regulation 1383 were misinterpreted by the customs authorities while detaining the Indian generic drugs. EU showed willingness to resolve this dispute without resorting to the WTO dispute panel.

Now that has been done, it is time to proceed further towards the conclusion of EU India Foreign Trade Agreement.

India Abandons The Demand For Establishment Of Dispute Settlement Panel At WTO

European Union (EU) and India have confronted each other on the issue of Generic Drugs shipments in the past. Indian Generic Drug consignments have been confiscated by some European Countries customs authorities in the past for violation of Intellectual Property Rights (IPRs).

Reacting sharply, India and Brazil filed a case against the EU in the World Trade Organisation (WTO) protesting the action. India contented that such seizures were against the provisions of multilateral Trade Related Intellectual Property Rights Agreement (TRIPS Agreement), as the medicines were off-patent both in India and the country where they were being exported.

Even some unpleasant speculations like removal of India from Generalised Systems of Preferences (GSP) Scheme of EU, disagreements over TRIPS Plus provisions vis-à-vis IPRs, issues of Data Exclusivity, etc also surfaced. However, all these issues were amicable settled between India and EU.

The best shot came when EU India expressed their desire to sign a Letter of Understanding (LOU) to fairly deal with Off Patent Generic Drug Consignments. Now a LOU has been signed between EU India in this regard.

According to the Understanding, so long as the EU and its Member States adhere to the principles contained in the Understanding with respect to generic drugs in transit through the EU, India has assured the EU that India will not request the establishment of a Dispute Settlement Panel at the WTO. With the exchange of these letters, India and the EU have reached, for the present, an informal settlement of this dispute.

India would watch with interest EU’s further steps in implementing its commitments. India’s options to revive the dispute remain intact in case the EU does not abide by the core principles agreed to in the Understanding.

To Whom Radio Stations Must Pay Music Royalty?

Radio stations around the globe are using songs for their broadcasts and are willing to pay reasonable royalties in this regard. But the crucial question is when radio stations play copyrighted songs in India, to whom they are liable to pay royalties?

Is it the music company, the music composers and lyricists, Indian Performing Right Society Limited (IPRS) or Phonographic Performances Limited? This question recently came for determination before the Bombay High Court.

The Bombay High Court upheld the right of the music companies over a song recording. The order by Justice S J Vazifdar is a welcome relief for the radio stations, hotels and discotheques, etc of India that are playing copyrighted songs. Music composers and lyricists were demanding a separate royalty every time their music was played by these entities.

The Bombay High Court also ruled that IPRS is not entitled to claim or demand royalty or licence fees from a private FM channel for the recorded song and music it plays on its radio station. This means that the FM stations would now have to only deal with Phonographic Performances Limited for obtaining a licence to play the music.

The judge, however, clarified that the owners of the copyright-composers and lyricists-do not lose all their rights when they allow it to be recorded. “It does not prevent the owners of the copyright in the underlying musical and literary works from making any other sound recording embodying the same underlying work,” said Justice Vazifdar.

The HC has stayed the judgment till October 31, 2011 and an appeal against the decision is very likely.

Patents Registrations In India Are Declining

Patent law of India has been in existence for a considerable long period of time. It has also been amended from time to time to incorporate the requirements of contemporary times, technology and international treaties.

While patent law of India is well established, India is lagging behind in the field of innovation and administrative efficiencies. This is resulting in a declining numbers of patents applications in India.

As per the latest annual report 2009-10 of the intellectual property office India, the number of patents applications filed has decreased as compared to previous years’ applications. India has also slipped to the 62nd position in the global innovation index. Further, although India is a member of patent cooperation treaty (PCT) yet it has still not been able to utilise it to maximum possible extent.

Some other issues that have to be taken care of by Indian patent office (IPO) pertains to software patents, challenges from software patents trolls, working of pharmaceuticals patents, regulation of patents trolls, etc.

On the positive side, India is planning to confer utility models protection to Indian innovators. Similarly, the efforts to digitalise the patent documents by IPO, recognition of the IPO as an International Search Authority (ISA) and International Preliminary Examining Authority (IPEA), etc are also positive developments.

Let us see how Indian patent regime would proceed from this juncture.

Software Patents In India And Their Registrability

Patent Law of India is well established. For a considerable long period of time it was primarily based upon Indian Socio Economic conditions. With the signing of Trade Related Intellectual Property Rights (TRIPS) Agreement, Indian Patent Act, 1970 was also amended accordingly. One major change was allowing Product Patents for Patentable Pharmaceuticals in India.

After India signed the TRIPS Agreement, an Ordinance to bring necessary changes in the Patent Law of India was passed. The Ordinance also incorporated a provision that allowed granting of Software related Patents. In fact, on the basis of such Ordinance, many Software related Patents were granted by the Patent Office of India.

While the Patents Ordinance had allowed such Patenting, the final Patent Amendment Bill passed in Parliament of India in this regard dropped the clause that allowed Patenting of Software-related inventions. So as on date, granting of Patent for Software per se is not allowed in India.

However, this has not deterred the Software patent Trolls in India from claiming Patent Rights in the same. This is happening because there is a general lack of awareness about Patent Trolls and their Regulations in India. Thankfully, the mainstream press is turning against such Software Patents and their Trolling exercises.

India is not granting any Software Patent per se as per its Laws and any person or institution claming the same is not entitled to any such protection in India. Any Software Patent infringement claim must be thoroughly analysed and fiercely fought against at all appropriate forums in India.

European Commission’s Green Paper On Online Distribution Of Audiovisual Works

European Commission’s stress upon intellectual property rights (IPRs) is well founded as IPRs bring innovation and prosperity to any nation. These days, IPRs of media, film industry, audio visual works, etc have assumed great importance.

Recently EU declared the new IPR policy for European economy. Under this new strategy, the Commission proposes an ambitious programme until the end of 2012 that foresees actions in all the main IPR, in particular patents, trade marks, copyright and related rights and geographical indications.

EU has also published a Green Paper on the online distribution of audiovisual works. In the framework of the IPR Strategy (Commission’s communication “A Single Market for Intellectual Property Rights”), this paper aims to contribute to the development of a digital single market by launching a consultation on the opportunities and challenges of the online distribution of audiovisual works. All stakeholders are invited to participate in this consultation, which is open until November 2011.

This Green Paper is focused on the copyright licensing framework, but it also looks at the remuneration of authors and performers for the online use of their works.

New IPR Strategy Of European Union Declared

European Union (EU) has been stressing upon increase in innovation and protection of intellectual property rights (IPRs). In order to achieve this task, EU has been declaring various initiatives and policies from time to time.

The latest to add to this effort of EU is the declaration of new IPR strategy for the EU economy. Last week, EU published a communication titled “a Single Market for Intellectual Property Rights: Boosting creativity and innovation to provide economic growth, high quality jobs and first class products and services in Europe”. In this document, the Commission sets out its new IPR strategy intended to foster innovation, as well as the growth and competitiveness of the EU economy.

Under this new strategy, the Commission proposes an ambitious programme until the end of 2012 that foresees actions in all the main IPR, in particular patents, trade marks, copyright and related rights and geographical indications.

In the field of enforcement, it is foreseen the expansion of the responsibilities of the European Observatory on Counterfeiting and Piracy, the revision of the IPR Enforcement Directive (Directive 2004/48/EC), the support of further voluntary measures between stakeholders in the context of the internet and the adoption of a new Customs Regulation.

The Commission also prepared a booklet and frequently asked questions with the purpose to explain the IPR strategy, its goals and main actions foreseen.

Patent Cooperation Treaty (PCT) 1970 And Indian Response

Patent Cooperation Treaty (PCT) is one of the most significant Treaties of our times. It covers issues pertaining to grant of Patents at both National and International levels. The PCT was concluded in 1970 and it was subsequently amended in 1979, and modified in 1984 and 2001.

Any States party to the Paris Convention for the Protection of Industrial Property (1883) can become a member of PCT. Once accepted, the instruments of Ratification or Accession must be deposited with the Director General of WIPO.

PCT has a distinctive advantage of seeking Patent protection for an invention simultaneously in each of a large number of countries by filing an “International Patent Application”. Such an Application may be filed by anyone who is a National or Resident of a Contracting State. It may generally be filed with the National Patent Office of the Contracting State of which the applicant is a National or Resident or, at the applicant’s option, with the International Bureau of WIPO in Geneva.

If the applicant is a National or Resident of a Contracting State which is party to the European Patent Convention, the Harare Protocol on Patents and Industrial Designs (Harare Protocol), the revised Bangui Agreement Relating to the Creation of an African Intellectual Property Organization or the Eurasian Patent Convention, the International Application may also be filed with the European Patent Office (EPO), the African Regional Industrial Property Organization (ARIPO), the African Intellectual Property Organization (OAPI) or the Eurasian Patent Office (EAPO), respectively.

The International Application is then subjected to what is called an “International Search.” That search is carried out by one of the major Patent Offices appointed by the PCT Assembly as an International Searching Authority (ISA). The said search results in an “International Search Report,” that is, a listing of the citations of such published documents that might affect the Patentability of the Invention claimed in the International Application. At the same time, the ISA prepares a written “Opinion on Patentability”.

The International Search Report and the written opinion are communicated by the ISA to the applicant who may decide to withdraw his application, in particular where the said report or opinion makes the granting of Patents unlikely.

If the International Application is not withdrawn, it is, together with the International Search Report, published by the International Bureau. The written opinion is not published.

The procedure under the PCT has great advantages for the Applicant, the Patent Offices and the general public:

(i) The Applicant has up to 18 months more than he has in a procedure outside the PCT to reflect on the desirability of seeking protection in Foreign Countries, to appoint local patent agents in each foreign country, to prepare the necessary translations and to pay the national fees; he is assured that, if his International Application is in the form prescribed by the PCT, it cannot be rejected on “Formal Grounds” by any designated Office during the National Phase of the processing of the application; on the basis of the International Search Report or the written opinion, he can evaluate with reasonable probability the chances of his invention being patented; and the applicant has the possibility during the International Preliminary Examination to amend the International Application to put it in order before processing by the Designated Offices;

(ii) The search and examination work of Patent Offices can be considerably reduced or virtually eliminated thanks to the International Search Report, the written opinion and, where applicable, the International Preliminary Examination report that accompany the International Application;

(iii) Since each International Application is published together with an International Search Report, third parties are in a better position to formulate a well-founded opinion about the patentability of the claimed invention.

India approved the PCT and the Ministry of Minister for Foreign Affairs deposited the required instrument with the Director General of WIPO on September 7, 1998. The said instrument of accession also contained the declaration that the Government of India declares that pursuant to paragraph (5) of Article 64 of the Patent Cooperation Treaty (PCT) of 1970, it does not consider itself bound by the provisions of Article 59 of the said Treaty. PCT became “Applicable” to India from December 7, 1998.

Patent Trolls And Their Regulation In India

Patent Trolls are increasingly becoming a nuisance world over. Patent Troll is a negative term that is used in the context of a person or company that enforces its Patents against one or more alleged infringers in a manner considered unduly aggressive or opportunistic.

Patent Trolls usually have no intention to manufacture or market the patented invention and their sole purpose is to make some quick money through cease and desist orders and Patents infringement litigations. Now even in India this practice has begun to surface.

Patent Trolls frequently explore Information and Communication Technology (ICT) related fields though other fields are also covered. This is the main reason why many Software Developers have decided to leave US unless the US Patent Laws are modified suitably to immune them from Patent Trolls.

Patent Trolls are flourishing due to “Very Liberal Patent Regimes” like the US Patents System. These Patent Systems grant Patents in a very “Wide and Liberal Manner” that gives lot of leverage to Patent Trolls to harass others. Since legal fees for litigation is reasonably high, most of the Companies or Individuals prefer to settle the case out of the Court.

Many activists have been raising their voices against the granting of Patent for Software that is the main reason for flourishing of “Software Patent Trolls”. The way Software Patents are allowed in the “Most Liberal Manner”, it is also hindering “Innovation” in this regard.

The Indian Patents Act, 1970 does not grant a Patent for Software Per Se but India extends a Copyright Protection to Software under the Indian Copyright Act, 1957. So the nuisance of Patent Trolls in the field of Software is not troublesome as even if a cease and desist order or litigation is started in India, not much benefit would be derived out of the same.

Similarly, Indian Patents Act 1970 “Prohibits” Unfair Trade Practices of Hoarding a Patent by not using the same and hindering its availability to general public. If a cease and desist order is issued in respect of such a “Hoarded Patent”, the very grant of Patent can be challenged. This is sufficient “Deterrent” for Patent Trolls operating in India.

It seems Indian Patent Law is better formulated for Software Developers and those harassed by Patent Trolls. If you are a Software developer or an SME Innovator, it is a better idea to shift your work to India to get maximum commercial benefits.

Effective Brand Enforcement Policy Is Needed In India

Recently I was engaged in a very informative discussion about brand protection laws in India and brand enforcement laws in India at a networking group. The discussion focused on the nature, scope, brand enforcement policy, brand risk management strategy and legal framework of brand protection and enforcement in India.

Brand protection and enforcement is generally managed by the intellectual property (IP) laws of India, especially Trademarks law of India. However, there is a difference between Trademark and Brand. Though in general practice, Trademark and Brand are often used as interchangeable terms but technically, the term brand is much wider than Trademark. Trademark is one of the pivotal and crucial components of Brand. The other components of Brand vary from country to country and industry to industry.

Trademark registration is one of the steps in creation of brand but such registration in itself is not capable of creating Brand since a registration can be sought and obtained in respect of Trademark proposed to be used in future. Further, one can even develop a brand without getting their Trademark registered.

The Brand signifies existence of some sort of goodwill or reputation between particular goods/services and the owner/entity manufacturing/trading/rendering them. Such goodwill, apart from Trademark can even be associated with any / more of following –

(a) Company slogan,

(b) Products/services themselves,

(c) Unique feature(s) of the Products/services, such as the manufacturing process or the way they are made available to consumer/client, e.g. particular ambience created or a particular dish served by a particular hospitality player in their hotels/restaurants,

(d) Market positioning of the product / services.

The above stated are the features that are taken as a base for determining the financial value of any brand.

Further, a Trademark can be changed/discontinued at any point of time without affecting the brand of particular product/service or of corporate houses as whole. It is one of widely used risk mitigation strategy to check infringement and piracy of goods.

In Brand, it is the goods/services themselves which assume a personality. Thus, through effective Brand Enforcement Policy, the Corporates needs to protect the personality and goodwill of their goods/services, not the trademark (which in most of the cases is just a name or graphical representation) under which they are sold/served.