Food Safety in India – Nestlé’s Maggi continues to Boil

The Hon’ble Bombay High Court, on June 12, 2015, heard the petition filed by Nestlé India (hereinafter referred to as Nestlé) raising issues of interpretation of the Food Safety and Standards Act, the orders passed by the Commissioner of Food Safety, Maharashtra and the Food Safety and Standards Authority of India (hereinafter referred to as FSSAI). However, Nestlé remains high and dry as it receives no immediate relief.

The developments in this issue were reported by us on June 1, 2015 and the same is accessible here 

Image Source: http://www.friedchillies.com

Issues raised by Nestlé

1. Nestlé challenged the order dated June 5, 2015 passed by the FSSAI as well as the order dated June 6, 2015 issued by the Commissioner of Food Safety, State of Maharashtra on the ground that the said orders were passed without giving any formal show cause notice. Further, the said orders were passed by authorities who allegedly had no jurisdiction to pass the same. Lastly, the procedure followed for the testing of the products was allegedly faulty and, therefore, the order passed on such improper testing was liable to be set aside.
2. The second issue pertained to the procedure followed by the FSSAI for the testing of the product. Mr. Iqbal Chagla, learned Senior Counsel appearing on behalf of Nestlé, submitted that some of the samples tested by FSSAI were expired. Also, during the testing period of three months, the samples were not sealed and, therefore, results of such product analysis were completely faulty and could not be relied upon.
3. The learned Senior Counsel further submitted that after having imposed the ban, Nestlé had been asked to show-cause why the product approval, which was granted in respect of 8 of the 9 products, should not be cancelled. It was contended by Mr. Chagla that the FSSAI having prejudged the issue, the procedure of the inquiry in respect of cancelling the product approval was completely arbitrary. He then submitted that Nestlé had already given a Press Release dated June 5, 2015 to withdraw the products from the shelves despite the product being safe.

Order of the Court

The Hon’ble Court has also directed the FSSAI to file a detailed affidavit in reply in respect of the averments made in the Petition and point out the factual and legal submissions which they propose to make. Further, the FSSAI was asked not to take any action in respect of the notice which required the company to explain itself within 15 days over the product approval already granted for MAGGI Noodles, till the next date of hearing.
 

The Court shall hear the FSSAI’s contentions on June 30, 2015.

_______________________

^[1] Writ Petition (L) No. 1688 of 2015

India: Conflict and Ruling on Bonafide Use of Acronym as Trademark

USE OF ACRONYM VIT AS TRADE MARK BY THE VELLORE INSTITUTE OF TECHNOLOGY (VIT)

Recently, the Hon'ble Madras High Court delivered an order in the case of VIT University vs. Bagaria Education Trust and Ors. wherein the name of the famous Vellore Institute of Technology (“VIT”) was under dispute. The Hon'ble Court analyzed the issues pertaining to bonafide trademarks and also opined on the merits and demerits while granting an injunction against any party.

Brief Facts of the Case

1. 'VIT UNIVERSITY' (hereinafter referred to as the Plaintiff) is a university started by the trust 'North Arcot Educational and Charitable Trust'. The Department of Education, Government of Tamil Nadu, by G.O.Ms.No.1279, dated September 27, 1984, permitted the above Trust to start a private Engineering College in the name and style of Vellore Engineering College at Vellore, North Arcot District with effect from 1984-85 which was later renamed as VIT.
2. The Plaintiff had applied for registration of its name “VIT” vide Trade Mark Application No.1130066, dated August 30, 2002, in Class 16 in respect of paper and paper articles, cardboard and cardboard articles, printed matter, newspapers and periodicals, books, photographs, stationery adhesive materials (stationary), instructional and teaching materials (other than apparatus), pamphlets, visiting cards, letter heads, bill books, invoices. Further, the Plaintiff had also filed another Trade Mark Application No.1130065 dated August 30, 2002 in Class 16 for registration of marks 'VIT A PLACE TO LEARN, A CHANCE TO GROW'. Also, the Plaintiff filed Trade Mark Application No.1324167, dated December 06, 2004, in Class 41 for registration of Mark “VIT” in respect of Education, providing of training, entertainment, sporting and cultural activities. All the above trade marks are registered, valid and subsisting till date.
3. During June 2011, the Plaintiff, through Internet, came across one Vivekananda Institute of Technology and Vivekananda Institute of Technology (East) (Part of SKIT Groups of Colleges), which are using the mark “VIT CAMPUS” on their buildings and in their other printed material in Jaipur. The Plaintiff immediately issued a cease and desist notice to the said institutions asking them not to use the Plaintiff's registered trade mark VIT in any manner. Despite receipt of the notice, the said institutes have not ceased use of the trade mark VIT nor complied with the other demands. Hence, the Plaintiff issued another legal notice through their Advocate on May 04, 2012.
4. During May 2012, the Plaintiff conducted a search and came to know about one Bagaria Education Trust, Jaipur (hereinafter referred to as the Defendant No. 1) that started a University in the name of 'VIT University'.

Contentions of the Plaintiff

1. The Plaintiff has made a mark in the global arena of education through strong integration linkage. People from abroad as well as from India identify the Plaintiff University with the above name only.
2. That the act of the Defendants in naming their institutions as VIT University is an act of infringement of the registered trade mark of the Plaintiff.
3. That after filing of the suit, the Board of Management of the VIT University, Jaipur, after seeking approval of the sponsoring body i.e., Bagaria Educational Trust, has changed the name from VIT University to Vivekananda Global University.
4. That the Defendants, during the academic year 2013-2014, had circulated a brochure under the caption/title VIT CAMPUS, JAIPUR, and the aforesaid change of name effected by the Defendants is not followed by them and it remains only on paper.
5. That continuous use of the name VIT by the Defendants, despite passing an amendment to the VIT University Jaipur Act, 2012 only proves their malafide intention to divert the Plaintiff from proceeding with the pending litigation.

Contentions of the Defendants

1. That the Defendants have built the institution on the eternal guidelines and thoughts as advocated by Swami Vivekananda.
2. That the Defendants have bonefidely adopted and used VIT University, Jaipur, as it has become an essential feature of their trade name.
3. That the Defendants do not use VIT per se, but in a composite form and as an acronym of its trade names namely, 'Vivekanand Institute of Technology', 'Vivekanand Institute of Technology (East)', 'VIT University, Jaipur', which are always used as a whole and which have been assigned to it by the Rajasthan State Legislature.
4. That the Defendants and their institutions started using the acronym VIT in 2008, but the Plaintiff has filed the present suit only in the year 2012. Hence, there is an unexplained delay of three years in filing the suit.
5. That the acronym VIT is only a descriptive and generic word, hence, the Plaintiff cannot claim monopoly over VIT.

Court's Observation and Judgment

1. That the Plaintiff has been using the mark VIT right from the year 2001 and the said mark was also registered in the year 2005 in favour of the Plaintiff, and by continuous usage of the same, the Plaintiff has built the said mark as a 'well known mark'.
2. That when the Plaintiff has already registered the mark VIT, the Defendant Nos. 1 to 4 cannot use the mark VIT to refer to their campus, that too particularly when the name of the Defendant No. 1’s institution has been changed from VIT University, Jaipur to Vivekananda Global University.
3. The Defendants have claimed that there is no likelihood of confusion between the two marks, however, the Defendant No. 1 has filed a rectification application against the registered trade mark of the Plaintiff, which is pending before the Trade Marks Registry. Hence, the said contention of the Defendants fails.
4. That mere use of the mark by third parties would not be a defense unless it is established that by such rampant use there is no exclusivity for the Plaintiff, as held in Kishore Jain vs. Navratna Khazana Jewelers.
5. That if the Defendant Nos. 1 to 4 are allowed to use the same mark for the identical service, certainly it would cause great confusion in the minds of the general public.

In view of the aforesaid, the Hon’ble Court granted an interim injunction to the Plaintiff as prayed for.

Conclusion

The Indian Courts, in recent years, have witnessed and decided various cases where acronyms are used as trade marks by one party and infringed by the other to gain profit, goodwill and cause confusion of association. A similar issue had cropped up before the High Court of Bombay in 2014 in the case of Mahindra & Mahindra Limited & Anr vs. MnM Marketing Pvt. Ltd. & Anr. wherein the use of the trade mark M&M was disputed and the Hon'ble Court upheld the right of the Plaintiff over the acronym MnM. Likewise in the present case also, the Court, keeping in mind the reputation and goodwill of the Plaintiff, recognized the exclusive right of the Plaintiff to use the acronym VIT as its trade mark.

INDIA - Opposition Against Gilead’s Patent “Sovaldi” 

We had previously reported in our newsletter Vol. VII, Issues 06 and 10 dated February 09, 2015 and March 09, 2015 respectively that Gilead’s patent application for hepatitis C drug, Sovaldi was opposed by NATCO Pharma Ltd. (an Indian Generic drug manufacturing company), Delhi Network of Positive People (DNP+) and Initiative for Medicines, Access & Knowledge (I-MAK), and the said patent application was rejected by the Indian Patent Office on January 13, 2015. However, Gilead filed a writ petition against the same and the order was set aside by the Hon'ble Delhi High Court on January 30, 2015. (Click here to access the news reported by us) 

Later, Gilead Sciences entered into a non-exclusive licensing agreement with NATCO Pharma Limited, allowing NATCO to manufacture and sell generic versions of its chronic hepatitis C medicines in 91 developing countries. (Click here to access the news reported by us) 

Now, Initiative for Medicines, Access & Knowledge (I-MAK) has released a statement on May 20, 2015 that it has challenged Gilead’s patent application for hepatitis C medicine, Sovaldi (sofosbuvir) in China and also worked with its partners, Fundación Grupo Efecto Positivo (Fundación GEP) of Argentina, Grupo de Trabalho sobre Propriedade Intelectual (GTPI) of Brazil, Treatment Preparedness Coalition of Russia and the All-Ukrainian Network of People Living with HIV/AIDS of Ukraine, details of the same are given below:

These countries together account for about 30-40% hepatitis C patents in the world and were excluded from the list of countries where NATCO could sell its generic version of the medicine.

I-MAK reasoned that- if Gilead is awarded unjustified patents in the aforesaid countries, based on the likely prices that will be set for these countries, they could be faced with an overspend of US$270 billion to treat all people with hepatitis C. Click here to access I-MAK’s statement

INDIA - Draft National Medical Device Policy-2015 -Department of Pharmaceuticals

Source: https://plus.google.com/108903930289578506501

On June 03, 2015, the Department of Pharmaceuticals (DoP) has issued the draft of the National Medical Device Policy-2015 delineating the objective, responsibilities, initiatives, framework and implementation of  the “National Medical Device Authority (NMDA)” and invited comments from stakeholders by June 30, 2015.

The objective of the National Medical Device Policy is to strengthen the 'Make in India' drive in the medical device sector by reducing dependence on imports and setting up a strong base for medical devices in terms of affordability and availability for patients.

Following are the highlights of the Policy:

1. An autonomous body, "National Medical Device Authority"(NMDA), to be created under the DoP which shall: 
• identify and prevent creation of unnecessary and unjustified technical barriers to trade, especially by new or changing technical regulations;
• support and prepare indigenous businesses to face competition, access foreign markets, and find new business partners abroad;
• promote networking of national and international organizations within and outside India with the aim of facilitating scientific co-operation, coordination of activities, exchange of information, implementation of joint projects and exchange of expertise;
• take all such steps to ensure that the public, medical professionals and interested parties receive rapid, reliable, objective and comprehensive information through appropriate methods and means.
2. The Government on the recommendations of NMDA, subject to availability of Budgetary resources, may consider the following incentives for both Greenfield and Brownfield units:
• Preference in government procurement may be considered for medical devices which are being manufactured in India with an additional preference for medical devices manufactured under the MSME sector.
• R&D by agencies like ICMR, DBT, CSIR, DIETY & DoP should be supported/ coordinated through the single window facilitating body.
• Low cost funding like interest subsidy to MSME
• Concessional power tariff for up to 5-10 years
• Provide seed capital, viability gap funding and co-fund start-up projects
• Provide longer term view (10 years window) for 200% weighted tax deduction on approved expenditure on R&D as the gestation period is high in this industry.
• Tax/ duty structure to be designed to promote local manufacturing of quality medical devices and diagnostic equipment
• Minimum/ zero duty on the import of raw materials and manufacturing equipment for production of medical devices.
• Restrictions on import of second hand diagnostic equipment/ tools
• Higher taxes after 5-7 years of usage for imported second hand devices
3. Institutional framework:
• Set up a Skill Development Committee under National Medical Devices Authority with representatives from Medical devices Industry, academia (NIPERs) and Healthcare Sector Skill Council (HSSC) under National Skill Development Council (NSDC).
• To create a system where Industry may place/make available their IP in non-core activities available to the exchange which may help technological up-gradation of the sector.
   
4. Affordability:
• The medical devices may be included as a separate entry in the list of commodities controlled under the Essential Commodities Act.
• The Government may announce a separate policy enunciating the principles for regulating the prices of identified medical devices and implement the same by notifying a separate Medical Devices Prices Control Order (MDPCO).
• A separate division may be created in the National Pharmaceuticals Pricing Authority for pricing of the devices by suitably amending the resolution constituting NPPA.

INDIAN Government Approves Proposal for Negotiable Instruments (Amendment) Bill 2015

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, approved the long-pending Negotiable Instruments (Amendment) Ordinance, 2015 on June 10, 2015. The corresponding Bill was passed in the Lok Sabha, earlier this year in May, seeking to overturn a Supreme Court 2014 ruling.

The ruling in question is the controversial case of Dashrath Rupsingh Rathore vs. State of Maharashtra, whereby the Hon’ble Apex Court, in a bid to overcome the legal lacunae, had ruled that for a case of cheque bouncing under Section 138 of the Negotiable Instruments Act, 1881, the suit is to be initiated where the cheque-issuing branch was located. The said ruling was also covered by us in our September 8, 2014 issue, which can be accessed here.

To refresh our readers’ minds, according to the aforesaid ruling, for prosecuting a person under Section 138 of the Negotiable Instruments Act, 1881 (i.e. for presenting a cheque which bounced for insufficiency of funds), the case has to be initiated at the place where the branch of the bank in which the cheque was drawn is located. The earlier rule allowed such a case to be initiated by the holder of the cheque at his place of business or residence. But as per the 2014 ruling, for instance, if a person from Delhi gave a cheque drawn on a Delhi bank for buying goods in Kerala and it bounced for insufficiency of funds, then the aggrieved person would have to travel all the way from Kerala to Delhi just to initiate prosecution against the defaulter under Section 138. Moreover, this judgment demanded a retrospective application, thereby, directly affecting the lakhs of cheque bouncing cases pending in various courts all over the country which would now have to go through interstate transfers. However, since this order is not Payee-friendly (who is the victim), the Government of India has brought the present amendment bill to by-pass the Court’s order.

Necessity of the NI (Amendment) Bill 2015

The Negotiable Instruments Act, 1881 defines promissory notes, bills of exchange, cheques etc. and creates penalties for issues like bouncing of cheques. The Act specifies the circumstances under which cheque bouncing complaints can be filed, however, it fails to specify the territorial jurisdiction of the courts where such a complaint is to be filed.

The Statement of Objects of the bill stated that following the aforementioned apex court ruling, representations have been made to the government by various stakeholders, including industry associations and financial institutions, expressing concerns about the wide impact the judgement would have on the business interests as it will offer undue protection to defaulters at the expense of the aggrieved complainant.

The objective of the proposed amendments is to clarify the jurisdiction related issues for filing cases under Section 138 of the NI Act. Such a clarification is a much desired one from the equity point of view, as this would be in the interests of the aggrieved complainant and would also ensure a fair trial. It would also increase the credibility of the cheque as a financial instrument, and allow lending institutions, including banks, to continue to extend financing to the economy, without the apprehension of the loan default on account of bouncing of a cheque. Therefore, the entire move would help the trade and commerce in general.

The new law is also intended to help consolidate the already pending cases and aid the judicial system, which currently has 21 lakh cheque-bounce cases pending with 259 courts hearing them exclusively.

Israeli Patent and Trademark launches Design Database

The Israeli Patent and Trademark Office (ILPTO), on June 9, 2015, announced the launch of a new database of registered designs which can be accessed at http://designsearch.justice.gov.il/

The said database is bilingual and provides information in both English and Hebrew and also comprises of an instructional video for tutorial purposes. The Database provides results in parameters like 'By details of a person who has title or rights in the design' and 'By priority details'.

The launch of Design search database is an appreciable move by the ILPTO and remarked as a milestone in IP digitization.

Unwittingly Licensing IP on Social Media? India

Former BJP leader K. N. Govindacharya put the Modi government on the stand for their recent action of opening accounts on social media for governmental departments.

K.N. Govindacharya filed a writ petition[1] with the Delhi High Court in 2012 to raise various issues associated with regulation of social media sites such as Facebook, Twitter, Google etc. in India. The most prominent issues were the use of such sites by underage children, use of the sites by government departments, recovery of taxes from the websites on their income from operations in India.

All issues were adjudicated on by the bench consisting of Justice Badar Durrez Ahmed and Justice Sanjeev Sachdeva. The only issue that is left in this petition is with regard to the social media network usage by the Government/Government Departments. A point has been raised with regard to the nature of contracts entered into by the Government/Government Departments with social media sites such as Facebook, Twitter, Goggle +, etc. when they sign up on these accounts and click on ‘I Agree’ to their ‘Terms of Service’ absent-mindedly.

Govindacharya contended that the making account on various social media site for government departments is illegal. The terms and conditions of these sites clearly state that the data uploaded with them could be used by the networking sites for their gain. The issue of licensing of IP Rights in photographs and videos and other content was brought to the notice of the Court.

The Court in its order dated May 7, 2015 said “it appears that there are certain settings which the users of social media networks can opt for to restrict the usage of IP rights but it is also apparent that there could be grant of a royalty free license insofar as those IP rights are concerned.”

The Court questioned the Government on its awareness on this subject.  The court also said when the government gives royalty free license to Facebook without anything in return, “it was akin to (giving) state largesse” and asked Mr. Sanjay Jain, the learned Additional Solicitor General to place before it, by July 30, the exact nature of the contract it has entered into with the social media sites.

Our Inquiry

To bring clarity to this debate, a general review of the Facebooks ‘Terms of service’ was conducted and the following clause was uncovered:

2. Sharing Your Content and Information

You own all of the content and information you post on Facebook, and you can control how it is shared through your privacy and application settings. In addition:

For content that is covered by intellectual property rights, like photos and videos (IP content), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (IP License). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it.

The above clause makes the picture quite clear. Whether governmental data or personal, everything is licensed to Facebook, royalty free unless the government is taking certain specific steps to safeguard their IP. The ASG appearing on behalf of Union of India requested for some time to place before the Court the exact nature of the contracts which have been entered into by the Government/Government Departments with the social media sites on the internet.

It shall be interesting to read the government’s reply in this regard on July 30, 2015.

Sources:

1.  http://timesofindia.indiatimes.com/tech/social/Are-pacts-with-social-media-sites-legal-HC-asks-government/articleshow/47195982.cms
2. http://articles.economictimes.indiatimes.com/2015-05-07/news/61902286_1_social-media-sites-licence-indian-railways
3. http://delhihighcourt.nic.in/

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[1] W.P.(C) 3672/2012.