Thursday, 4 October 2018

India: Proposed Amendment to Drugs and Cosmetics Rules, 1945


The Drugs and Cosmetics Act, 1940 along with the Drugs and Cosmetics Rules, 1945 (“Rules”) made thereunder regulate the manufacturing, import, circulation and trade of the drugs and cosmetics industry in India. The objective of these laws is to protect the consumers from sub-standard, illegal and harmful drugs or cosmetics and prescribe detailed procedures to be adopted for their manufacturing, packaging and sale in India.

Import of manufacture of new drug for clinical trials or marketing:

PART XA of the Rules deals with import of manufacture of new drug for clinical trials or marketing. As per the Rules for the import of new drugs, prior approval is required to be obtained from the Licensing Authority established under the Rules. The said Rule prescribes inter alia the procedures for applying for the said approval.

Permission for import of drugs:

Once the Licensing Authority is satisfied as to the safety of the drug to be imported as raw material (bulk drug substance) or as finished formulation it may issue an import permission in the prescribed forms, subject to the conditions stated therein.

The Permission as may be granted will be subject related to the condition related to composition, packaging, labelling etc. mentioned therein. One such condition is that “Specimen of the carton, labels, package insert that will be adopted for marketing the drug in the country shall be approved from the Licensing Authority before the drug is marketed.”[1]

The Draft Drugs and Cosmetics (Amendment) Rules, 2018

Recently the Central Government after consultation with the Drugs Technical Advisory Board proposed amendment to the Rules. The Draft Drugs and Cosmetics (Amendment) Rules, 2018 proposes to add another condition in the license granted under Form 45, Form 46 etc. making inclusion of package inserts in each saleable unit to be provided to the consumer compulsory. This proposed amendment appears to be in the interests of consumers as it would ensure that consumers are aware of the details and instructions accompanying the drug.  

The Rules once notified are likely to come into force from January 2019.

[1] Drugs and Cosmetics Rules, 1945 Form 45/ 46- Conditions for License

Validity and Authentication of AADHAAR: much-awaited judgment by Hon’ble Supreme Court of India

The Supreme Court of India’s constitutional bench comprising Hon’ble CJI Dipak Misra, Hon’ble A.K. Sikri and Hon’ble A.M. Khanwilkar, JJ. have pronounced a detailed judgment[1] in the matter of Aadhaar. By majority judgment, it has been held that:

“(1) The requirement under Aadhaar Act to give one's demographic and biometric information does not violate fundamental right of privacy.
(2) The provisions of Aadhaar Act requiring demographic and biometric information from a resident for Aadhaar Number pass three­fold test as laid down in Puttaswamy case, hence cannot be said to be unconstitutional.
(3) Collection of data, its storage and use does not violate fundamental Right of Privacy.
(4) Aadhaar Act does not create an architecture for pervasive surveillance.
(5) Aadhaar Act and Regulations provides protection and safety of the data received from individuals.
(6) Section 7 of the Aadhaar is constitutional. The provision does not deserve to be struck down on account of denial in some cases of right to claim on account of failure of authentication.
(7) The State while enlivening right to food, right to shelter etc. envisaged under Article 21 cannot encroach upon the right of privacy of beneficiaries nor can former be given precedence over the latter.
(8) Provisions of Section 29 is constitutional and does not deserves to be struck down.
(9) Section 33 cannot be said to be unconstitutional as it provides for the use of Aadhaar data base for police investigation nor it can be   said to violate protection granted under Article 20(3).
(10) Section 47 of the Aadhaar Act cannot be held to be unconstitutional on the ground that it does not allow an individual who finds that there is a violation of Aadhaar Act to initiate any criminal process.
(11) Section 57, to the extent, which permits use of Aadhaar by the State or any body corporate or person, in pursuant to any contract to this effect is unconstitutional and void.  Thus, the last phrase in main provision of Section 57, i.e. “or any contract to this effect” is struck down.
(12) Section 59 has validated all actions taken by the Central Government under the notifications dated 28.01.2009 and 12.09.2009 and all actions shall be deemed to have been taken under the Aadhaar Act.
(13) Parental consent for providing biometric information under Regulation 3 & demographic information under Regulation 4 has to be read for enrolment of children between 5 to 18 years to uphold the constitutionality of Regulations 3 & 4 of Aadhaar (Enrolment and Update) Regulations, 2016.
(14) Rule 9 as amended by PMLA (Second Amendment) Rules, 2017 is not unconstitutional and does not violate Articles 14, 19(1)(g), 21 & 300A of the Constitution and Sections 3, 7 & 51 of the Aadhaar Act.  Further Rule 9 as amended is not ultra vires to PMLA Act, 2002
(15) Circular dated 23.03.2017 being unconstitutional is set aside.
(16) Aadhaar Act has been rightly passed as Money Bill.   The decision of Speaker certifying the Aadhaar Bill, 2016 as Money Bill is not immuned from Judicial Review.
(17) Section 139­AA does not breach fundamental Right of Privacy as per Privacy Judgment in Puttaswamy case.
(18) The Aadhaar Act does not violate the interim orders passed in Writ Petition (C) No. 494 of 2012 and other Writ Petitions.”

However, Hon’ble D.Y. Chandrachud and Hon’ble Ashok Bhushan, JJ. have given a separate judgment dissenting on a few points.

[1] Supreme Court judgment in Writ Petition (Civil) No. 494 OF 2012 and connected matters delivered on September 26, 2018.

India: Supplier liable for not passing GST benefits

Goods and Services Tax (hereinafter referred to as “GST”) is a single tax on the supply of goods and services. The dual system of taxation levied on the consumption of goods/ services at the Central as well as State levels is applicable only on value addition at each stage. With the objective of avoidance of multiple taxation and enhancement of clearer administration of the system to prevent tax evasion, GST comes forward as a pragmatic tax regime.

Liability for not passing on GST benefits

The "anti-profiteering" measures enshrined in the GST law provide an institutional mechanism to ensure that the full benefits of input tax credits and reduced GST rates on supply of goods or services flow to the consumers.

The National Anti-Profiteering Authority (hereinafter referred to as “NAA”) has been established by the Government, with the objective to ensure that the benefits of implementation of GST in terms of lower prices of the goods and services reach the consumers. In the event the NAA confirms there is a necessity to apply anti-profiteering measures, it has the authority to order the supplier / business concerned to reduce its prices or return the undue benefit availed by it along with interest to the recipient of the goods or services. Further, it may impose a penalty on the defaulting business entity and even order the cancellation of its registration under extreme circumstances.[1]

In a forward-looking judgement[2] dated September 7, 2018, the NAA ruled that the suppliers would be held liable for not passing on the benefits of GST rate reduction on the sale of goods.

In the aforesaid matter it was alleged that a supplier/ business entity- M/s Sharma Trading Company had not passed on the benefit of reduction in the rate of tax (from 28% to 18%) by lowering the price of a product - Vaseline when the same was purchased on November 15, 2017.
It was observed that despite the reduction in the rate of GST, there was no reduction in the sale price rather the base price was increased thus amounting to illegal profiteering and contravening the provisions of CGST Act, 2017 (Section 171). The supplier in the recent case was held to be bound by the GST registration norms requiring him not to charge the enhanced base price resulting in negation of tax lowering. Also, it was mandatory for the supplier displayed the revised MRP as per the provisions of the Legal Metrology (Packaged Commodity) Rules, 2011.

The NAA ordered the supplier to reduce the prices and return to the consumer the amount of profiteering in terms of tax @ 18% interest.

By the ruling stated above, NAA reposes faith and confidence amongst the consumers that they would not be made subject to the illegal profiteering of the suppliers in conscious disregard of their obligations stated under law.


India: Incentivisation of Electric Vehicles

The Government has accelerated its efforts towards encouragement of environmentally conducive options in the country. Aiming to revolutionize the automobile sector by adoption of practices reducing environmental pollution, the Government looks forward to the introduction of policy on electric vehicles and alternative fuel technology to give a thrust to e-mobility in the country.

Efforts so far …

In the spree to endorse the increased usage of electric vehicles, some of the steps taken by the Government are stated below:

  • The Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (hereinafter referred to as “FAME”) was launched in 2015 under National Electric Mobility Mission market development and its manufacturing eco-system in the country in respect of environmental-friendly vehicles. [1]
  • It plans to provide INR 1,000 crore as subsidy for building a nationwide charging infrastructure for electric vehicles as it seeks to expedite the roll-out of India’s ambitious EV programme.[2]
  •  It has exempted the requirement of any permits in order to encourage the use of vehicles which do not pollute the environment.[3]
  • It has provided GST at 12 % with respect of electric vehicles.
  • It has been promoting investment in the electric vehicles manufacturing sector.[4]

Latest Approach …

While aiming towards the attainment of the objective of inducing more electric vehicles in the transportation system, the Government is working to bring forward schemes and policies to incentivise the local production of lithium-ion batteries. [5]

This will not only lower the cost of production of electric vehicles in India making them affordable by the customers but will also serve as a profitable business opportunity for the entrepreneurs while generating employment and fulfilling the aspect of ‘Make in India’.

The Government takes yet another step towards its progressive vision to make a pollution free nation by taking recourse to resources which do not harm the environment.


Thursday, 27 September 2018

India: CNN - GNN Trademark Dispute: IPAB Decides in Favor of CNN

CNN, the US based cable and satellite television channel owned by the Turner Broadcasting System has won a four-year-old trademark battle against media company GNN India Ltd (GNN) for using a similar logo.  CNN had moved the IPAB in April 2014.

The Chennai Bench of the Intellectual Property Appellate Board (IPAB) headed by Justice Manmohan Singh issued the order, and also directed the Registrar of Trademarks to remove the already registered trademark of GNN India from the Register.

“The Respondent (GNN India Limited) has cleverly structured the impugned mark ‘GNN’ with a view to coming close to the ‘CNN’ trademark” was the reasoning provided by the IPAB in the order, while also stating that “From an overall comparison of the marks, it is apparent that the rival marks are extremely similar. As such it will lead to a likelihood of association with the brand ‘CNN’ whose services, being broadcasting and telecommunication, are virtually identical,” the order stated, adding that it clearly displays the Indian firm’s unlawful intent to trade upon the goodwill and worldwide reputation associated with the ‘CNN’ trademark.”

Justice Manmohan Singh, while issuing the final order, reportedly observed that the Indian firm had adopted the original trademark with “bad faith”.

While noting that the onus of identifying bogus trademarks lies with the Registrar of trademarks being the public authority on the subject matter, the Bench in its order also stated that “The objective of maintaining a trademark register is that the public should know whose goods they are buying and with whom particular goods are associated”.

Reportedly, GNN did not file any counter statement nor did it appear on the dates on which it was summoned by the IPAB.

WIPO: Trademark is used more than Patents in developing countries

World Intellectual Property Organization (hereinafter referred to as ‘WIPO’) through its research and an analytical analysis of available data regarding intellectual property has shown that trademarks are used more widely than patents in developing countries.
Recently, WIPO prepared a new comprehensive dataset for Chile, through a research paper titled ‘Intellectual property use in middle income countries: the case of Chile’. The paper combined detailed firm-level information. It analyzed the use of IP by firms in Chile and its effect on outcomes, including growth and productivity. The results showed that Chilean firms relied much more on the use of trademarks than patents or industrial designs.
In another study, titled ‘WIPO-ASEAN Study: The Strategic Use of Intellectual Property to Enhance Competitiveness in Select Industries in ASEAN’ it was found that trademarks received the highest importance rating for firms from almost all countries except few like Indonesia, Singapore, where firms considered patents the most important means to protect their IP. In Malaysia and India, trademarks led by a wide margin as the most important type of IP, whereas in Brunei, Cambodia, Laos and Myanmar the difference was not large.

The results in the above table confirmed that trademark was the most important means of IP protection for the firms and produce a clear ranking of the relative importance of the five types of IP: trademark was followed by patent with geographical indication being third. Copyright and industrial design were considered to be the least important among the five.[3]

The said study also reported the importance scores of the IP by industry. This is given on Table 4.4.2 on Page Number 29 of THE WIPO-ASEAN STUDY. Trademark was considered the most important IP by firms from all industries except the ICT and food industries. The ICT firms were from Republic of Korea, Laos and Singapore and patent was regarded as the most important form of protection. In the pharmaceutical industry, patents and trademarks were both highly valued. Again, copyright and GI received the lowest importance ratings.

India: Tata Sons Granted INR 10,00,000 by Delhi High Court in Infringement Case

The Delhi High Court in the case of Tata Sons Limited & Anr V. Krishna Kumar granted INR 10,00,000 (USD 14307) as damages to the Plaintiffs in light of the Defendants’ illegal and infringing activities.

Brief Facts                 

  • Tata Sons Limited (hereinafter referred to as the plaintiff no. 1) is the promoter and principal investment holding company of the House of TATA, which is India's oldest, largest and best-known business conglomerate. It owns 21 tea gardens in the State of Assam and has 21,000 employees in its roll.
  • Plaintiff No.2 is a subsidiary of Tata Capital Limited, which in turn is a subsidiary of Plaintiff No.1. is a trusted and customer centric service provider and caters to the diverse needs of the retail, corporate and institutional customers across various areas of business namely Commercial Finance, Infrastructure Finance, Wealth Management, Consumer Loans including distribution and marketing of Tata Cards.
  • Plaintiff No. 2 has its websites illustrating its various financial services/ products located at and
  • Krishna Kumar (hereinafter referred to as defendant No.1) is the owner of the Tata Finserve Pvt. Ltd. (hereinafter referred to as defendant No.2).
  • The Plaintiff came to know about a domain name (hereinafter referred to as ‘Impugned Domain Name’) and the website which was parked on the impugned domain name.  
  • Also, it was found out that the Defendant No. 1 was using trademark TATA as its corporate name i.e. M/s Tata Finserve Pvt. Ltd.
  • Therefore, the Plaintiff filed a suit for permanent injunction, infringement of registered trademark and passing off before the Delhi High Court.
  •  Whether the Defendant is guilty of infringing the Plaintiff’s trademark ‘TATA’?

Plaintiff’s Contentions
  •  It was submitted that Plaintiff No.1 was the proprietor of the trademark TATA by virtue of priority in adoption since the year 1917.
  • It was also submitted that in addition to the common law rights it is also the registered proprietor of the name/mark 'TATA', 'T within a circle device' as well as several other TATA-formative trademarks in relation to various goods across various classes.

  • It was contended that because of the continuous and extensive use of the trademark TATA over a long period of time spanning a wide geographical area coupled with extensive promotion and publicity, the said trademark had been enjoying an unparalleled reputation and goodwill and had acquired the status of a "well-known" trademark. Also, the trademark TATA and the 'T' within a circle Device mark has been acknowledged as a well-known trademark by the Court in various judgments.
  • It was alleged that the impugned domain name was registered by the Defendants on September 20, 2014.
  • Further, it was alleged that in November 2014, the Defendant Nos. l were portraying themselves to be a part of the Plaintiff No.1, and that they were portraying to be engaged in the business of providing multilayered financial insurance services identical to that of Plaintiff No.2.
  •  It was contended that on a bare perusal of the impugned website revealed striking resemblance it had with the Plaintiffs' website namely and
  • It was contended that the Defendants were using the trademark TATA as a part of its domain name and corporate name.
Defendants Contentions

Since the Defendants did not appear before the Court the suit was proceeded ex parte.

Court’s Analysis
  • The Court held that the acts of the defendants in adopting and using the identical/ deceptively similar impugned mark and dealing in the goods which are identical to the goods of the plaintiffs certainly has caused irreparable injury to the plaintiffs.
  • The Court noted that no further proof is needed if the Defendant’s mark is closely, visually and phonetically similar to that of the Plaintiff.
  • The Court held that balance of convenience was in favor of Plaintiff, therefore an order of permanent injunction was passed against the Defendants their partners or proprietors, their officers, servants. Further it held that the plaintiffs have also suffered immense loss to goodwill and reputation and hence are entitled to a grant of damages not only in terms of compensatory damages but also in the form of punitive damages. Hence, a decree for a sum of INR 10,00,000 (USD 14307) in favour of the plaintiffs was passed. The plaintiffs were further awarded an interest @ 10% pa on the damages so awarded from the date of filing of the suit till the date of realization.