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

Source: www.ipabindia.org

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

Source: www.wipo.int

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.

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[1] http://www.wipo.int/edocs/pubdocs/en/intproperty/953/wipo_pub_953.pdf

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

Source: www.delhihighcourt.nic.in

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 www.tatacapitalfinancialservices.com and www.tatacapital.com
• 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 www.tatafinserve.com (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.

Issue

•  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 www.tatacapitalfinancialservices.com and www.tatacapital.com
• 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.

India: Delhi High Court awards damages to the tune of INR 10 Lakhs for infringement of the trademark ‘Shine.com’

Source: www.delhihighcourt.nic.in

The present suit had been filed by the Plaintiffs against the Defendants for using the domain name “CLICK2SHINE.COM” which was deceptively similar to the registered trademark of the Plaintiffs’, “SHINE.COM”. The suit was decreed in favor of the Plaintiffs’ because the Plaintiffs’ were able to prove that the Defendant’s adoption and using of counterfeit trade name or registered trademark, domain name, trade dress deceptively similar domain name, unequivocally amounts to infringement of the Plaintiff’s registered trademark and amounts to passing off of their goods and business as it was without authorization/affiliation by the Plaintiffs.

Brief Facts         

• M/S. H.T. Media Ltd & Anr (hereinafter referred to as the ‘Plaintiff no.1’) is a media house engaged in the business of print media, radio and internet services and enjoyed a leadership position in the English and Hindi newspaper market. The Plaintiff no. 2 was a subsidiary of the Plaintiff no. 1 and had acquired and adopted the domain name “SHINE.COM”.
• The Plaintiffs were registered proprietors of the trademarks “SHINE” and “SHINE.COM”.
• Susheel Kumar & Ors (hereinafter referred to as the Defendants no. 1, 2 and 3) were entities/companies engaged in the business of providing education, training, jobs via the website www.click2shine.com, www.success4career.in and www.success4career. Defendants no. 4 and 5 were managing and operating the said domain name.
• An ad-interim ex-parte injunction order was passed by this Court on May 30, 2014, in favor of the Plaintiffs and against the Defendants.
• Upon receiving knowledge of the Defendant’s domain name “CLICK2SHINE.COM”, the Plaintiffs sent a legal notice dated January 28, 2014 upon whose receipt the Defendants ceased to use the domain name and deactivated the website.
• In April 2014, the Plaintiffs found the Defendants have restored the website www.click2shine.com, and it again sent a legal notice calling upon the Defendant no. 4 to cease and desist from using the mark “CLICK2SHINE” in any manner.

Plaintiff’s Contentions

•  The Plaintiff contended that the Defendants have made money at the expense of the Plaintiff by charging money from the interested subscribers.
• The Plaintiffs contended that irreparable damage had been caused to the Plaintiff’s goodwill and reputation.
• The Plaintiff contended that the Defendants are liable to pay punitive damages for the obvious and willful infringement of the Plaintiff’s trademark for its contemptuous conduct. The Plaintiffs used the precedent set in the case of Hindustan Unilever Limited vs Reckitt Benckiser with reliance on Rookes v Bernard.
• The Plaintiff contended that the acts of the Defendants in adopting and using the identical/deceptively similar impugned mark and web address in respect of identical services had caused and would continue to cause irreparable damage and loss to the Plaintiffs’ business.
• The Plaintiff contended that the impugned website which forms a part of their trading name, infringes the rights of the Plaintiffs under Section 29 (5) of the Trademarks Act, 1999.
• The Plaintiff used the precedent set in the case of Kaviraj Pandit Durga Dutt Sharma vs Navarattana Pharmaceutical Lab, which held that, if the Defendant’s mark is closely, visually and phonetically similar, then no further proof is necessary in infringement cases.

Defendant’s Contentions

The Defendants chose to stay away from the proceedings of the Court, and thus the matter proceeded ex parte.

Court’s Decision

• The Court relied on the precedent set in the case of Mex Switchgears Pvt Ltd v Max Switchgears Pvt Ltd which stated that “the essential features of rival marks are to be considered in determining infringement”.
• The Court held that from the perusal of the record and available evidence, the Defendant’s use of the counterfeit domain name or registered trademark amounted to infringement of the Plaintiff’s registered domain name or trademark. 
• The Court held that the Defendants are guilty of infringing the Plaintiff’s trademark by using the domain name “CLICK2SHINE.COM” and that it amounts to infringement and passing off of their goods and business as it is without authorization or affiliation.
• The Court held that the Plaintiffs are entitled to a decree of permanent injunction restraining the Defendants from using the mark “CLICK2SHINE.COM” or any deceptive variant thereof which is identical/similar to the Plaintiff’s trademark “SHINE” and “SHINE.COM” in respect of their online job portal services or any other products or services thereby amounting to infringement/passing off. The Court held that the Plaintiffs are entitled to their prayer.
• The Court held that the Plaintiffs are entitled to a grant of damages not only in terms of compensatory damages but also in the form of punitive damages for the immense loss to goodwill and reputation.
• The Court held that where the Defendants reclused themselves from the proceedings, they cannot be permitted to enjoy the benefits of evasion or covert priorities as has been using the domain websites and have been infringing the Plaintiffs’ trademark certainly makes the Defendants liable to pay the damages to the Plaintiffs. Hence, a decree for a sum of INR 10 lakhs in favor of the Plaintiffs and against Defendants, is passed on account of infringing the registered marks, trade dress and violating interim order.
• The Court held that the Plaintiffs shall also be entitled to interest @ 10% pa on the damages so awarded from the date of filing of the suit till the date of ealization.
• The Court awarded the costs of the suit to the Plaintiffs and against the Defendants. The Defendants were held to be jointly and severally liable to pay the damages and costs to the Plaintiff.

European Union: Dispute Over ‘France.com’ Trademark

Source: www.europa.eu

Technology for the modern world is as important as oxygen is for life. The development of internet and the exchange of data amongst different computers has led to major technological as well as telecommunication revolutions. With the advent of Internet, the domain names have taken a new dimension for the business potentials. As is a fact of today’s world, domain names are a part of the corporate assest of a company and their identity on the Internet.

In March 2018, Jean-Noel Frydman, who owned France.com Inc. was prevented from using his registered domain name ‘France.com’ by the French Government. He had valid trademark registrations for ‘France.com’ covering Classes 35, 39 and 41 in the US. The first registration of the domain name France.com dated back to February 10, 1994. The domain name was used as a "digital kiosk" for France-lovers based in the U.S.

In 2015, the French government sued Jean-Noel Frydman in French Court to recover the domain name. In 2017, an Appeals Court ruled that the domain name France.com violated French trademark law. In March 2018, the domain name was transferred to the Ministry of Foreign Affairs by the registrar of the domain, Web.com.

In response to this in April 2018, Jean-Noel Frydman sued the French Government in Virginia Court to get back his rights on the domain name he was using for more than two decades.  His allegations included accusing the French government and Atout France, the French Government’s tourism agency, of cybersquatting, hijacking his domain name, expropriation of property, infringing on his trademark, and unfair competition.

In its ruling, the Court of EU held that ‘the privately owned “France.com” cannot be registered as an EU trademark’. Further upholding the EUIPO’s analysis, it held that, ‘In light of the fact that the signs at issue cover identical or similar services and have a particularly high degree of phonetic and conceptual similarity, the Court finds that there is a likelihood of confusion. It follows that, as EUIPO decided, France is entitled to oppose registration of the sign france.com.’

Japan: JPO publishes New Guide for SEP Licensing Negotiations

Source: www.jpo.go.jp

Japan Patent Office (JPO) has joined the league of countries, which are very few in number, who have a guide related to SEP as it recently released its practical guide to Standard Essential Patent (sep) Licensing Negotiations.

The guide would assist international and Japanese parties to arrange for equitable licensing of key technologies covered by SEPs. The Guide states that ‘it aims to enhance transparency and predictability, facilitate negotiations between rights holders and implementers, and help prevent or quickly resolve disputes concerning the licensing of standard essential patents (“SEPs”), which are the patents essential in implementing standards in the field of wireless communications and the like.’

Standard Essential Patents (SEPs), described by the Guide, are "patents essential in implementing standards in the field of wireless communications and the like," namely essential to making "smart" devices and appliances. These cases are complicated because an industry totally foreign (until recently) with artificial intelligence (AI) may now be incorporating such technology into products without awareness of the market value that it holds for the wireless communications developer of that technology. This cross-disciplinary, cross-sector conflict of interest stimulated the JPO's interest in helping illumine a pathway for businesses on either side to make good headway toward fair licensing agreements in Japan.[1]

EPO had issued a similar guide last year which was hailed by many as a great document to refer to. The Japanese Guide is just an initial edition expected to change through further discussion and developments.

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[1] http://www.mondaq.com/x/713854/Patent/JPO+Publishes+New+Guide+For+SEP+Standard+Essential+Patent+Licensing+Negotiations

Serial Cybersquatting/ Mala Fide Domain Registrations: A Valid Argument in favour of Bad Faith in Domain Dispute Cases

Cybersquatting, or piggy-backing on the reputations of well-known companies and brands by registering corresponding domain names, is seen as an effective though unscrupulous practice of making fast bucks. With rise in awareness of cybersquatting practices as well as the value of domain names as trademarks, trademark owners are initiating more actions now to recover their intellectual property online, before arbitration panels of organizations such as WIPO as well as national level domain recovery agencies (such as NIXI, the National Internet Exchange of India).

But cybersquatters generally rely on the advantage in numbers- there are such a huge number of domain variations and domain name extensions to choose from nowadays, that registering one trademark across a multitude of domains by a cybersquatter can make individual recovery of the said domains extraordinarily expensive for a company and therefore extraordinarily profitable for a cybersquatter. In the case domain dispute proceedings are instituted, the cybersquatter only loses a domain or two. For a serial cybersquatter, that does not end up making much of a dent in the pool.

Domain dispute proceedings provide three basic grounds which a complainant is compulsorily required to prove in order to establish their rights to a domain name:

1.      That the disputed domain name comprises of a mark in which they have rights;
2.      That the registrant has no rights or legitimate interests in the said domain name;
3.     That the registrant has registered the disputed domain name in bad faith.

While grounds (i) and (ii) are fairly straightforward to prove with the help of use in trade and trademark registrations (or lack thereof), ground (iii) offers the opportunity for a more complex argument.

In proving mala fide or bad faith registration of a domain, the UDRP stipulates that factors such as:

• Registration for the sole purpose of selling, renting or otherwise transferring the disputed domain name to the complainant for valuable consideration;
• Registration intended to prevent the rightful owner of the trademark from reflecting the same in a corresponding domain name;
• Registration for the purpose of disrupting the business of a competitor; or
• Registration/use of the disputed domain name for the purpose of diverting traffic from the website of a competitor or rightful trademark owner by creating initial interest confusion amongst the relevant consuming public.

The above-mentioned factors may be proven in a number of different ways that depend on the particular facts and circumstances of each case.

Serial cybersquatting, where a cybersquatter unscrupulously registers domain names across the board pertaining either to one brand or a number of brands/trademarks can be used to evidence the mala fide or bad faith intentions of a registrant as it serves as ample proof of the registrant’s motive to profit off the reputation of others without making legitimate or fair use of the registered domain names.

Various WIPO Arbitration Panel have recognized serial cybersquatting to be evidence of mala fide registration as recently as in the decision rendered in the case of Little Acorns Fostering Ltd. v. W P, The Cloud Corp / Al Perkins, D2017-1776 on October 18, 2017 wherein the learned sole arbitrator ruled in favour of the complainant who was able to establish that the registrant had taken over their domain after it was inadvertently allowed to expire and had subsequently claimed exorbitant sums of money when the complainant had approached him to acquire the domain without resorting to legal proceedings, and had further previously engaged habitually in such activity, even having prior WIPO rulings passed against him.

A few earlier notable domain dispute decisions held against the registrant on the grounds of serial cybersquatting are The Toronto-Dominion Bank v. DOMAIN CONTROLLER / YOYO EMAIL, NAF Claim No. FA1506001622018; Sanofi v. Aleksei Shutov, WIPO Case No. D2016-0311.

The Universal Domain Name Dispute Resolution Policy (UDRP) provides for including multiple infringing domain names belonging to a single registrant to be acted against within a single domain complaint. In fact, in recognition of the problem of serial cybersquatting, WIPO has come up with a dedicated procedure called the Uniform Rapid Suspension System (URS) which is an even more simplified procedure than the UDRP for filing a complaint against multiple infringing domain names being held by one registrant. It aims to provide a faster and more cost-effective method to trademark owners plagued by serial cybersquatting.

Sources:-

Uniform Domain Name Dispute Resolution Policy

Uniform Rapid Suspension System

https://www.icann.org/resources/pages/cybersquatting-2013-05-03-en

https://www.upcounsel.com/cybersquatting-examples

http://www.wipo.int/amc/en/domains/search/text.jsp?case=D2017-1776

http://www.wipo.int/amc/en/domains/decisions/text/2016/d2016-0311.html

https://blog.safenames.com/domain-name-disputes/safenames-helps-to-expose-serial-cyber-squatter

http://www.adrforum.com/domaindecisions/1622018.htm

India: Access and Benefit Sharing under CBD and the Ayurveda Industry

Source: www.nbaindia.org

Plant genetic resources were considered to be heritage of mankind and was shared freely among nations, till the concern for conservation of biological diversity were raised by the Convention of Biological Diversity (CBD), 1993. India being a signatory to CBD, enacted the Biodiversity (BD) Act in 2002, (hereinafter referred as “Act”) with three main objectives:

1. conservation of biological diversity,
2. sustainable use of its components, and
3. equitable sharing of benefits arising out of the use of biological resources.

For the effective implementation of the Act, a three-tier system was established with a National Biodiversity Authority (NBA) at the Centre, State Biodiversity Boards (SBBs) in each of the Indian states and local-level Biodiversity Management Committees (BMCs) functioning with both municipalities and panchayats. Further, India adopted Nagoya Protocol (2014) on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity, a supplementary provision in compliance with the third objective of CBD, 2002. In pursuance of the Nagoya Protocol, NBA published Guidelines on Access to Biological Resources and Associated Knowledge and Benefits Sharing Regulations, 2014, popularly known as ABS guidelines, 2014. These guidelines provide a detailed procedure for determination and sharing of benefits arising out of the use of biological resources obtained from India.

The provisions of the BD Act, 2002, have differential restrictions and exemptions, depending on the person involved or the activity envisaged with respect to bio-resources. Foreign nationals or Indian citizen or body corporate falling under Section 3 (2) of the Act, are required to obtain prior approval of NBA for obtaining any biological resource occurring in India or knowledge associated thereto for research or for commercial utilization or for bio-survey and bio-utilization. Provided that under Section 5, collaborative research projects are exempted from prior-approval of NBA. In case of obtaining intellectual property rights (IPR) on research results involving biological resources obtained from India, prior NBA approval is required under Section 6, irrespective of the category of the person. Further, under Section 7, Indian nationals or a body corporate, association or organization which is registered in India shall not obtain any biological resource for commercial utilization, or bio-survey and bio-utilization for commercial utilization, except after giving prior intimation to the concerned State Biodiversity Board in the prescribed manner. Provided that the provisions of this section shall not apply to the local people and communities of the area, including growers and cultivators of biodiversity, and vaids and hakims, who have been practicing indigenous medicine.

As per NBA official records, thousands of notices were issued by SBBs under Section 7 of the Act to various Indian companies including those of pharmaceuticals, ayurvedic, coal extracting, liquor, sugar, oil as well as food and industrial processors using bio-resources, for deposition of a “benefit sharing” amount as per ABS guidelines, 2014. Several times this issue got media attention and various reports were published in leading newspaper where the companies challenged the vires of the state rules and ABS Guidelines, which ask for benefit sharing upon access by Indian entities. One of the leading case in this regard is the Uttarakhand HC case, filed in 2016 by Ramdev’s Hardiwar-based Divya Yoga Mandir Trust when the Uttarakhand State Biodiversity Board (SBB) asked its pharma unit, Divya Pharmacy, to share INR 20.4 million of its INR 4.21-billion revenue in 2014-15 with farmers as benefit sharing under the BD Act, 2002. Patanjali pleaded in the Court that it being an Indian company hence, ABS compliance is not applicable to it. In 2015, the Ayurvedic Drug Manufacturers Association (ADMA) approached government officials for modification in provisions of ABS guidelines, 2014, but the response was not favorable to them. As per official records, only a handful of companies are sharing their profits as per ABS guidelines, 2014. Hence, at present, the effectiveness of the regulatory regime on benefit sharing is not very promising in herbal sector.

Patentability of Block Chain Technology

Blockchain technology is basically a type of technique or platform used to implement public ledger system. The blockchain is an indestructible digital ledger with respect to economic transactions that can be programmed to record not just financial transactions but virtually everything of value. Data can be sent across a network securely by implementing blockchain’s ledger methodology and cryptographic techniques. The technique will ensure that the data is from the correct sources and that there are no interim obstructions interim. If this technology is used more widely then the probability of hacking can be decreased. 

In contrast to conventional centralized data management system, blockchain technology integrates data in a unique ledger while maintaining consistency even with a decentralized management. The benefit of decentralized control is that it eliminates the risks of centralized control. With a centralized database, anybody with sufficient access to that database can destroy or corrupt the data within. Therefore, no centralized version of this information exists for a hacker to corrupt. Hence, decentralization is the essence and strenght of blockchain technology.

With the increasing popularity of cryptocurrency and other block chain/public ledger system based applications, block chain technology is attracting a lot of attention. The growth in prices of cryptocurrency is evidence of popularity of block chain technology. With increasing popularity of technology, there is a steep rise in filing of patent applications claiming invention based on block chain technology.[1] The innovators of block chain technology are still confused about patentability of inventions based on block chain technology.

Generally, inventions covered in patent application are required to satisfy the test of novelty, non-obviousness and industrial applicability. There is no doubt about industrial applicability of block chain technology in areas like cryptocurrency, logistics, asset management, insurance, peer to peer lending platforms, Internet of Things, etc. Hence, the main issues in determining patentability of block chain-based inventions are:

• Whether the invention is anticipated by prior art (patent literature or non-patent literature published before filing of patent application) or product already in use or offered for sale before filing date?
• Whether invention is obvious to person ordinarily skilled in the art looking at state of art or closest prior art?

With respect to the first issue, there are assumption in the industry that block chain technology per se has limited novel features because innovators are merely using existing technology for making transactions.[2] However, the implementation of technology at large scale has posed new challenges and problems. There is no doubt that block chain technology in its current form needs improvement considering high power usage, latency in execution of transaction, inefficiency in storage of records, efficient distribution of proof of work among miners, etc. This provides innovators in the field of block chain with opportunity of coming up with new solutions.[3]

With respect to second issue, it needs to be examined whether new techniques proposed for improving efficiency or security in block chain technology implementing public ledger system are similar to one existing in traditional platforms other than block chain (existing applications like electronic payment systems and other fin-tech technology) and whether it is obvious for person ordinarily skilled in the art to apply same technique in block chain technology. In such evaluation of similarity of proposed invention with existing technology, the focus should be whether such existing (known) platform is independent of trusted central entity for validation which is key feature of block chain technology. If the inventive feature of proposed inventions are implemented in existing platforms which is independent of trusted central entity, then proposed invention will not be considered patentable being obvious to person skilled in the art.

Apart from novelty and non-obviousness, the other key issue involved in patentability of block chain technology which is implemented as software platform is whether invention will be considered as patentable subject matter under Section 3(k) of Indian Patent Act which prohibits patentability of computer programme per se, algorithm, business methods, etc. The parallel provisions under US patent law is 35 USC Section 101 which prohibits patentability of business methods and abstract ideas.

In November 2008, Bitcoin’s creator, known by the pseudonym Satoshi Nakamoto, published a paper via the Cryptography Mailing List titled “Bitcoin: A Peer-to-Peer Electronic Cash System” where he described blockchain. The bitcoin network is in operation since 2009 and qualified as “prior art” hence it is against any new attempt to get patented but important additions and variations which results in new utility can be patented.

In Alice Corp v CLS International[4], US Supreme Court held that computer implemented methods of assessing settlement risk in financial transaction are ineligible for patent protection, and that laws of nature, natural phenomena, and abstract ideas are not patentable because they are “the basic tools of scientific and technological work.

Such limitation may create prejudice against block chain technology in fin-tech industry considering its implementation as method for performing financial transaction. However, the invention covering techniques which improves functionality of technology, processes or security of payment system may be considered eligible for patentability.[5] In addition, where the invention is merely proposing the use of existing block chain technology with new business model, the proposed invention will not be considered patent eligible subject matter.[6]

Further, the claims for patent application claiming block chain technology-based inventions need to be drafted considering that such platforms involve multiple parties (e.g. in case of cryptocurrency, miners implement validation of public ledger records, cryptocurrency exchange provide platform for trade of cryptocurrency, cryptocurrency wallet manufacturers provides security solution for cryptocurrency traders) and all components of the invention might not be implemented by each party. Therefore, separate independent claims need to be drafted for each of the prospective invention keeping in mind entities involved in implementation of technology. Alternatively, separate patent application can also be filed for separate inventions, if these inventions are unique and distinguishable.[7]

Looking at complicated legal and technical issues involved in patentability of block chain technology, there is a need to develop and train legal practitioners in this specialized area so that innovators are provided with quality legal advice. Further, most of the innovators do not show interest in patent protection because they consider this technology as more suitable for open source. The innovators need to be made aware that patent protection can also be used as defense against infringement action filed by competitors. Therefore, the innovators in the field of block chain technology needs to be proactive when it comes to filing patent applications for improved techniques and systems.

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[1] https://ipspotlight.com/2018/01/22/trends-in-patenting-blockchain-technologies/

[2] https://ipspotlight.com/2018/01/18/intellectual-property-strategies-for-next-generation-cybersecurity-technologies/

[3] https://ipspotlight.com/2018/01/18/intellectual-property-strategies-for-next-generation-cybersecurity-technologies/

[4] 3 Alice Corporation Pty. Ltd. v. CLS Bank International, et al, 573 US, 134 S.Ct. 2347 (2014)

[5]http://www.ipindia.nic.in/writereaddata/Portal/Images/pdf/Revised__Guidelines_for_Examination_of_Computer-related_Inventions_CRI__.pdf

[6] https://www.alixpartners.com/media/3782/ap_the_race_to_patent_the_blockchain_sep_2016.pdf

[7] https://ipspotlight.com/2018/01/26/defensive-patent-strategies-for-blockchain-and-distributed-ledger-technologies/

India: Constitutionality of Rules 56, 57(5), and Rule 61(5) of the Copyright Rules, 2013 upheld

Source: www.delhihighcourt.nic.in

Recently, the Delhi High Court in the case of Anand Bhushan v Union of India upheld the constitutionality of Rules 56, 57(5), and Rule 61(5) of the Copyright Rules, 2013.

Brief Facts

• Anand Bhushan (hereinafter referred to as ‘Petitioner No. 1’) is a shareholder and Joint Managing Director of M/s Pitambar Publishing Co. Pvt. Ltd. (hereinafter referred to as ‘Petitioner No.2’).
• Petitioner No. 2 is a Company registered under the Companies Act, 1956. Petitioner No. 3, the Indian Reprographic Rights Organization (hereinafter referred to as "IRRO"), is a registered Society under the Societies (Registration) Act, 1860, having its head office in Delhi, whereas Petitioner No.4, the Federation of Indian Publishers (hereinafter referred to as "FIP"), is also a registered Society which is an apex body representing the Indian Publishing Industry and engaged in promoting and representing the interests of the said industry.
•  It was submitted that the Petitioner’s publishing business and commercial activities extended to the whole country and beyond, specifically Delhi, which was a major center for publishing activities.
• It was further submitted that their constitutional rights were affected by the Rules 56(3), 56(4), 56(5), 56(6), 57(5), and Rule 61(5) of the Copyright Rules, 2013.
• Thus, the following Petition.  

Issues

• Whether Sections 11(2), 12(2), 31 and 33A (2) of the Copyright Act, 1957 (as amended by the Copyright Amendment Act 2012; “Act” for short) violate the provisions of Articles 14, 19(1)(c) and 19(1)(g) of the Constitution of India?
• Whether Rules 3, 47(1), 56(3), 56(4), 56(5), 56(6), 57, 59(7) and 61(5) of the Copyright Rules 2013 (“Rules” for short) violate the provisions of Articles 14, 19(1)(c) and 19(1)(g) of the Constitution of India. 
• Whether the Petitioner’s prayer to prohibit the Respondent from making any appointment to the Copyright Board in terms of the impugned provisions is justified or not?

Petitioner’s Contentions

• It contended that the Sections 11 (2) & 12 (2) of the Act suffered from the vice of excessive delegation. Also, Rule 3 of the Rules was argued to be violative of Article 14 of the Constitution, being contrary to the principles for appointment of Tribunals like the Copyright Board laid down by the Supreme Court.
• It contended that the expression ‘unreasonable element’ should be read as by applying the doctrine of 'noscitur a sociis', which meant, the expression ‘unreasonable’ in Section 33A(2) of the Act must take its color and meaning from the words ‘anomaly and inconsistency’ in the tariff scheme.
•  It submitted that the challenged Rules impose unreasonable, unjustified and fatuous restrictions on the Copyright Society registered under Section 33 (3) of the Act, without any rationale. Also, the said Rules limited the frequency of tariff revisions (whether upward or downward), which was beyond any rule-making power conferred by the Act. 

Respondent’s Contentions

• It claimed that the decision of the Copyright Board cannot be considered as wide and unlimited as the final orders of the Copyright Board can be challenged before the High Court.
• It submitted that Section 31 of the Act provided for compulsory license in case of abuse of rights. It argued that the Copyright Board, only after giving a reasonable opportunity of being heard to the owner of the copyright in the work, would direct the Registrar to grant a compulsory license as per the rates fixed by the Board.
•  It also submitted that Rule 56 introduced a system of transparency in fixing prices by the Copyright Societies and governed and regulated the system of fixation, collection and distribution of royalties. Further, Rules 59(6), 59(7) and 61(5) were in harmony with the legislative intent of Section 35(3), which provided for equal membership of authors and owners.
• Therefore, it argued that the Rules were not, in any way, violative of Articles 19(1)(c) & (g) of the Constitution.

Court’s Decision

• With regards to the noscitur a sociis argument of the Petitioners, the High Court (hereinafter referred to as ‘the Court’) was of the view that it would not like to curtail or water down the scope and ambit of language employed and adopted, given the importance to the Copyright Board for the said purpose.
•  It held that ‘while exercising the power of judicial review, it is not to examine merits of delegated legislation. A writ petition for judicial review of the Rules would lie only on certain well-defined grounds. Courts cannot always go into the merits or demerits of a policy reflected in the substratum of the Rules. The parameters of judicial review of subordinate legislation have been succinctly stated in various decisions of the Supreme Court.’
• It further held that Rule 56 does not in any way ran counter to or defeated the rights of the Copyright Society to fix and claim reasonable tariff. The Court specified that the object and the purpose behind Clauses (a) to (d) of Rule 56 was to ensure that different Copyright Societies should publish tariffs which have some form of uniformity and consistency for the users to be able to understand and appreciate them. It was a regulatory exercise and not an exercise which curtails freedom and discretion of Copyright Societies to fix tariff.
• With regard to Rule 57, the Court held that it ensures that the Board while examining the question whether the tariff was unreasonable can examine the prevailing standards of royalties to such commercial exploitation of works. This according to the Court was not an unreasonable or illegal stipulation which the Board must take into consideration while deciding the appeal. If an appeal was filed, the Board can issue general directions on whether the tariff was unreasonable and suffers inherent inconsistency.
• Regarding Rule 61, the Court refused to accept the argument of the Petitioner that some of the members of the Copyright Societies cannot be treated as legitimate or righteous members under the Act as in the view of the Court the argument was hypothetical and based on assumption that a wrong or ineligible person would be enrolled as a member of the Copyright Society. The Court further held that in case a wrong or ineligible person was enrolled, he can always be removed from the Copyright Society by following the procedure in accordance with law.

The Court held that ‘the Rules do not negate the principal enactment and it cannot be said that they are repugnant to or in derogation of the object or purpose which the principal enactment seeks to achieve. The impugned rules were held to be in consonance with the main enactment, i.e., the Copyright Act 1957. The writ petition was therefore dismissed.’