Celebrating World IP Day, 2016

Here’s wishing all our readers a very innovative and creative World IP Day 2016!

Every year, April 26 is celebrated globally as World Intellectual Property (IP) Day. It was initiated by the World Intellectual Property Organization (WIPO) in 2000 to promote discussions on the role IP plays in various aspects of our day to day lives and thus encourage innovation and creativity. Interestingly, the choosing of the date April 26 has a history behind it in the sense that it was on April 26, 1970 that the Convention establishing the WIPO, which would soon become the leading global forum to promote intellectual property as a force for positive change, was entered into force.

WIPO chooses and announces a theme for the day every year, and the theme chosen for 2016 is “Digital Creativity: Culture Reimagined”. The underlying idea behind this is to explore the future of culture in the digital age i.e. how it is created, how it is accessed, and of course, how it is financed. The endeavor is to arrive at a balanced and flexible intellectual property system that can help ensure that those working in the creative sector and artists themselves are properly paid for their work, so they can continue creating.

The advent of the internet and the digital revolution has already reimagined Culture as we know it. The internet has turned into something of a digital stage for the world, providing enormous opportunity for creators all across the world and without any barriers of age or location. It is a natural phenomenon in today’s world to have cultural and creative works produced around the world, distributed and consumed through digital channels in an unprecedented manner which was not imaginable only 20 years ago. Today, a creator or performer and his audience can interact on a digital level without having to even leave their homes. This massive evolution has made the entire world both a potential creator or performer, and a potential audience. The entire manner in which creative works are produced around the world, the sort of works that are produced, the way they are distributed, and even the way they are consumed or enjoyed worldwide has been reimagined as a consequence of digital technology. Today, there is a natural blending of global cultures on a level never thought of before, creating enormous cultural opportunity. Needless to state, this also creates massive economic opportunity for all stakeholders. It is this opportunity which WIPO wants to celebrate on World IP Day this year.

On this day, as we celebrate digital creativity across the world, WIPO urges us to think about how to find the right balance between recognizing the importance of creators and innovators to all the cultural and technological progress that we see as a consequence of digital technology, while at the same time ensuring the social benefit of widespread access to their works.

Message from WIPO Director General, Mr. Francis Gurry

“On this day, as we celebrate digital creativity across the world, we should also think about how to find the right balance – one which recognizes the importance of creators and innovators to all the progress that we see ... as a consequence of digital technology.”

Source:http://www.wipo.int/ip-outreach/en/ipday/2016/dg_message.html

S. S. Rana & Co. celebrates World IP Day: Script it!^™ Result Announced

For the last four years, S.S. Rana & Co. in collaboration with Vidya Darshan Rana Charitable Trust has been organizing Script it!^™ , the annual essay writing competition to give young students an opportunity to understand the role played by intellectual property rights and raise awareness on IP Rights in India.

The competition also intends to provide a platform to the students to share their views and enable them as well as their schools and/or colleges in getting National and International recognition.

This year also students were invited to submit their essays focusing on the World IP Day theme chosen by WIPO, i.e. ‘Digital Creativity: Culture Reimagined’. The suggested topics in this regard were:

1. International IP Framework vis-a-vis protection of Cultural Properties of Indigenous People;
2. Impact of the Free Culture Movement on IP rights;
3. The Effect of ‘Home Copying’ on the market for audio-visual recordings;
4. Protection of Traditional Foods in India;
5. Socio- Economics of Geographical Indications in India;

Out of a total of 25 entries received, we have shortlisted the winning entries in the respective categories.

The winners of the Competition are –

• College Category –

1. Shinjini Lama, of Symbiosis Law School, Pune, who wrote on the topic, “The Future of Copyright in India – A Special reference to digital piracy and its various aspects”
2. Shreyaa Verma, of Rajiv Gandhi School of Intellectual Property Law, IIT Kharagpur, who wrote on the topic, ‘Socio – Economics of Geographical Indications in India’.
3. Sakshi Pawar & Rishika Mendiratta, of Gujarat National Law University, Gandhinagar, who co-authored a paper on, ‘International IP Framework vis-avis protection of cultural properties on indigenous people.’

•  School Category –

1. Sonam.T of The Ideal Mount Litera Zee School, who wrote on the topic, ‘The Effect of ‘Home Copying’ on the market for audio-visual recordings.’

Heartiest Congratulations on behalf of S.S. Rana & Co and Vidya Darshan Rana Charitable Trust to all the winners, with the top three ranked students in the college category winning prizes worth ₹ 7,500, ₹ 5,000 and ₹ 2,500 respectively, and the winner in the school category winning prizes worth ₹ 5,000.

The winners in the college category also get a chance to intern with our firm for a period of one month.

All participants shall receive a participation certificate from the firm.

We look forward to further such participation in the future. 

India: Vikrant Rana speaks at FICCI on the occasion of World IP Day 2016

In an effort to raise awareness and culture of Intellectual Property in the country and to commemorate the World IP Day, the Federation of Indian Chambers of Commerce and Industry (hereinafter referred to as ‘FICCI’) organized a conference on “Intellectual Property: A Key Enabler for Strengthening India’s Business Landscape” on April 25, 2016 at the FICCI, Federation House in New Delhi, India.

With the conference, FICCI celebrated the spirit of Intellectual Property in all its forms and encouraged stakeholders to leverage IP to derive innovation and strengthen India’s business landscape. The stage was graced by bigwigs of the industry with the Welcome address given by Dr. A Didar Singh, Secretary General of FICCI followed by an inaugural address by Mr. Ramesh Abhishek, Secretary, Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry, Government of India.

The conference was divided into four different sessions with each addressing on of the major challenges in the IP ecosystem in India. The First session was titled ‘Incentivizing IP in the Knowledge Driven Economy’. It focused on the strengths, challenges and future growth prospects for Businesses and Industry in the light of the various pro Industry campaigns such as Make in India, Digital India, and Start Up India. The second session was titled ‘Securing IP Edge for Business Growth and Competence’. The session explored the importance of IP protection, and how it enables a business to derive a competitive edge in the global market. The penultimate session titled ‘Facilitating a sustainable IP Ecosystem in India: The way forward’. The session focused on bringing forth National and International perspective in the emerging IP environment and its likely impact on India’s business landscape. Lastly, the conference was concluded with a session on ‘Strengthening IP Enforcement in India’. It endeavored to bring forth and address the critical challenges which IP intensive industries are facing due to rampant IP infringement and suggested a few practices for countering this menace.

Mr. Vikrant Rana, Managing Partner at S.S. Rana & Co., was invited as a panelist on the Fourth Session to talk about a few measures that can be taken to Strengthen IP Enforcement in India. His presentation focused on a few compelling statistics related to the trend of decisions given by various High Courts in the country related to each individual Intellectual Property. His presentation was empirical, and drawing from past experiences he suggested ways in which IP enforcement in the country can be strengthened.

World Book and Copyright Day celebrated Worldwide on April 23, 2016

April 23 is celebrated every year as World Book and Copyright Day as designated by the United Nations. It is a yearly event organized by the United Nations Educational, Scientific and Cultural Organization (UNESCO) to promote reading habit, publishing and copyright.

The original idea of World Book Day was of the Valencian writer Vicente Clavel Andrés as a way to honour the author Miguel de Cervantes, who died on April 23. The date is also the anniversary of the death of William Shakespeare and Inca Garcilaso de la Vega. It is also the date of birth or death of other prominent authors, such as Maurice Druon, Haldor K. Laxness, Vladimir Nabokov, Josep Pla and Manuel Mejía Vallejo. April 23 was, therefore, a natural choice for UNESCO’s General Conference held in Paris in 1995 to commemorate this day and pay a worldwide tribute to books and authors, encouraging everyone, especially young people, to discover the pleasure of reading and gain a renewed respect for the irreplaceable contributions of literature.

Image Source: http://www.un.org/News/dh/photos/large/2013/April/04-23-2013bookday.jpg

World Book Capital 2016: Wroclaw, Poland

Every year, UNESCO and the international organizations representing the three major sectors of the book industry i.e. the publishers, booksellers and libraries select the World Book Capital for a period of one year, effective 23 April each year. This year, the city of Wroclaw (Poland) has been chosen for its commitment to spreading the message of the power books possess in nurturing creativity and advancing dialogue between women and men from all cultures.

Message from the Director-General of UNESCO, Ms. Irina Bokova

“A book is a link between the past and the future. It is a bridge between generations and across cultures. It is a force for creating and sharing wisdom and knowledge.

Frank Kafka once said, “A book must be an ice-axe to break the seas frozen inside our soul.”

A window onto our inner lives, books are also the doorway to mutual respect and understanding between people, across all boundaries and differences.

Coming in all forms, books embody the diversity of human ingenuity, giving shape to the wealth of human experience, expressing the search for meaning and expression that all women and men share, that drive all societies forward. Books help weave humanity together as a single family, holding a past in common, a history and heritage, to craft a destiny that is shared, where all voices are heard in the great chorus of human aspiration.

This is what we celebrate on World Book and Copyright Day, in partnership with the International Publishers Association, the International Booksellers Federation and the International Federation of Library Associations and Institutions -- the power of books to nurture creativity and advance dialogue between women and men of all cultures.

I thank Wroclaw, Poland, as the 2016 World Book Capital, for its commitment to spreading this message across the globe. This has never been so important at a time when culture is under attack, when freedom of expression is threatened, when diversity is challenged by rising intolerance.

In turbulent times, books embody the human capacity to conjure up worlds of reality and imagination and express them in voices of understanding, dialogue and tolerance. They are symbols of hope and dialogue that we must cherish and defend.

William Shakespeare died on 23 April, 1616, preceded by only one day by Cervantes. On this day, I call upon all of UNESCO’s partners to share the message that books are a force to counter, what Shakespeare called, “the common curse of mankind -- folly and ignorance.”

Source of above message from Ms. Irina Bokova: http://www.unesco.org/new/en/wbcd

India: Apple gets relief from Delhi High Court to use the term ‘Splitview’

The Division Bench of the Delhi High Court has recently vacated the ex-parte ad-interim injunction order dated March 01, 2016 granted to the original plaintiffs by the learned Single Judge in Rohit Singh and Anr. v. Apple Inc [CS (COMM) 153/2016]. The Division Bench found that on the existing material before the learned Single Judge, case was not made out to grant ex parte ad interim injunction because an ex-parte ad-interim injunction in a matter concerning trademark violation should ensue only if a very strong prima-facie case is made out with respect to a trademark which is inherently distinctive.

Brief background

The Single Judge of the Delhi High Court vide order dated March 1, 2016 had directed the US technology major, Apple Inc, not to use the name ‘SplitView’ in any of its products or services such as iPad, iPhone, iOS, etc. after a little known Delhi-based software company Vyooh Low Level Computing LLP (hereinafter refered to as ‘Vyooh’) moved court, alleging trademark violation by Apple.

The suit for passing off was filed by a software developer Mr. Rohit Singh, who claims to work as a consultant with Vyooh, which owns the trademark for the name ‘SplitView’. The suit had been filed jointly by Mr. Rohit Singh and Vyooh claiming that he had developed the software in 2005, which is meant for multitasking on a single display.

Apple is using the term "Split View" in both iOS 9 and OS X El Capitan, referring to a feature that lets people run two apps side-by-side in a full screen mode. The iOS 9 option only works on recently launched iPads, like the iPad Air 2 and the iPad Pro.

While deciding the application by the Plaintiffs for grant of ex-parte ad interim injunction against Apple, the learned Single Judge had observed that the plaintiffs had a prima facie case, availability of balance of convenience in their favor, and might suffering an irreparable injury in the absence of grant of injunction.  

Thus, the Single Judge granted the injunction to the plaintiffs, restraining Apple from using the trademark Split View till final disposal of suit. Aggrieved by the aforesaid decision, Apple filed an appeal before the Division bench of the Delhi High Court, seeking vacation of the aforesaid order dated March 01, 2016.

Contentions by Apple Inc. (Appellants)

1. That SplitView/ Split View is a descriptive term and cannot assume trademark significance. On this basis, Apple argued that Mr. Rohit Singh cannot claim proprietorship over the mark, let alone seek to restrain third parties from using it. Apple has used the descriptiveness argument, both to challenge the respondents’ entitlement over SplitView as a trade mark and also as a form of defense to justify its use of Split View.
2. That Apple is in fact a prior user of the word SplitView since 1993 through their predecessor in use NeXT Inc.
3. If there are various methods to describe an essential feature and in particular concerning the functionality of a product, any one or more may be used and it is no argument that there are other words to describe the feature.
4. Apple is selling the operating system OS X El Capitan and iOS which would be akin to a combo offer to purchase a basket having an integrated package comprising various elements and assuming each element is treated as a product, individually none is being sold and respondents’ product is sold individually and this distinction would be akin to a situation where Apple has added matters.

Contentions by Mr. Rohit Singh & Vyooh (Respondents)

1. Apple uses Split View as the name for the product feature – it appears as a stand-alone heading as the name and is not used as part of a sentence that merely demonstrates its functionality.
2. Split View is written in capital letter which is indicative of trademark use and not descriptive use.
3. Several other ‘features’ of the El Capitan Operating System i.e. Spotlight and Mission Control, which appear immediately after SplitView are all terms or words over which Apple has claimed trademark rights.
4. For an ordinary consumer, there is no discernible difference between the manner in which Apple presents the Split View feature and the manner in which it presents the Spotlight or Mission Control feature, hence, there is no reason to assume that the ordinary consumer will perceive that Split View is being used in a descriptive sense by Apple and Spotlight or Mission Control are being used in a trademark sense.
5. Apple has claimed trademark rights over several seemingly descriptive or suggestive words in the past and Split View, from the perspective of consumers is no different. It is in fact a common practice in the technology space to do so. Thus, Apple has claimed trademark rights over AirPrint, CarPlay, Cinema Tools, DVD@CCESS, DVD Studio Pro, FileVault, Final Cut, LaserWriter, LocalTlak, NetInfo, PhotoBooth, QuickDraw, App Store and to an ordinary consumer Split View is no different from this body of trademarks. 

Observation/Decision of the Court

1. The Division Bench of the Delhi High Court, found that SplitView was in fact never used in conjunction with a monitor splitting or screen splitting functionality offered by a software product/application (app) and was in fact called NXSplitView/NSSplitView in certain developer toolkits to describe a certain functionality that was to be used by app developers. Further, SplitView or even NXSplitView is not in the list of trademarks owned by NeXT Inc. The test to determine priority in a mark is to determine continuous prior use and the volume of sales or the degree of public familiarity with the mark. Undisputedly, OS X El Capitan was launched only in 2015.
2. That prima facie, Apple’s product is doing the same thing as the respondents’ i.e. split the window on the monitor so that two applications can be seen while being simultaneously operated.
3. The respondents’ use of SplitView for their software product clearly dates back to the year 2005.
4. That it is prima facie evident that SplitView comprises two words, joined together in one unique collocation. The combination has prima facie to be considered unique, although the words individually may not be so. The Court after referring to Patent Applications filed before the European and United States Patent Offices observed that the contention made by Apple that people in the field of computer software programming use the words Split View to describe an essential feature of the function of the software programme is viable. There is a lot of conflicting material where consumers with imperfect recollection associate the words Split View as a trademark for the split screen feature and some associate the words as descriptive of an essential feature of a system where visually the computer screen shows two windows displaying two different contents.

Held

In view of the above, the Division Bench of the Delhi High Court vide it’s order dated April 7, 2016, held that a strong prima facie case was not made out for grant of an ex-parte ad-interim injunction against Apple Inc, and thus vacated the injunction order dated March 1, 2016 of the Single Judge. The Court further observed that it requires a strong consideration whether ‘SplitView’ is descriptive of an essential feature of the computer programme, thereby rendering it not eligible to be a trade mark as some consumers may refer to Split View as a trademark for the split screen feature and some associate the words as descriptive of an essential feature of a system. Apple has now been directed to file its written statement of defense along with documents relied upon by April 21, 2016. The Division Bench directed the parties to complete the pleadings within the stipulated time frame of five weeks and the learned Single Judge to hear the injunction application on May 9, 2016 and pronounce judgment before June 4, 2016.  

India: Maruti Udyog Wins Trademark Battle Against Maruti Piston

Indian Automobile giant Maruti Udyog Limited (hereinafter referred to as the ‘Respondent’) has won a legal battle against a piston producing company from the Indian state of Gujarat, i.e., Maruti Piston Private Limited (hereinafter referred to as the ‘Appellant’) which sought to claim trademark rights over the mark ‘Maruti’. Dismissing the appeal, the Intellectual Property Appellate Board (hereinafter referred to as the ‘IPAB’) held that no one is entitled to encroach on the goodwill and reputation obtained by another company. The bench comprising of the Honorable IPAB Chairman, Mr. Justice K.N. Basha and Technical Member (Trade Marks), Mr. Sanjeev Kumar Chaswal, stated in their order dated December 17, 2015 (made available on February 12, 2016), that it is needless to say that the brand name Maruti has obtained a world-wide reputation in four-wheelers and any attempt to use the name for two-wheelers or three-wheelers would affect the reputation of Maruti.

The initial case was instituted by the Respondent against the Appellant where the Assistant Registrar of Trademarks, had held that the Appellant cannot register the mark ‘Maruti’ in their name. Subsequently, the Appellant appealed to the IPAB which upheld the decision of the Assistant Registrar.

Appellant’s contentions before IPAB

The learned counsel for the appellant, Mr. R.R. Shah contented that:

1. The appellant using the trademark only for pistons which could be used for two wheeler or three wheeler and not for four wheeler
2. Trademark No. 405671 under class 12 of the respondent is not in existence as on date as per the status report and the website report is produced.
3. The Assistant Registrar failed to consider the special circumstances contemplated under Section 12 namely Piston not manufactured by the respondent/opponent. The piston to be used only two wheeler and not for four wheeler of the respondent/ opponent.
4. The appellant has regularly participated in the world famous Auto Expo held at Pragathi Maidan, Delhi right from the year 2004-2012 and the same was ignored and all these special circumstances have been ignored
5. The respondent/opponent has not initiated any civil proceedings for infringement or passing-off nor issued any desist notice against the appellant herein.
6. The volume of evidence namely sales particulars have been ignored by the Registrar.

Respondent’s Contentions

The counsel for the respondent, Ms. Anju Agarwal contented that:

1. The so called special circumstances relied by the appellant were not placed before the Registrar before passing the impugned order and as such the same could not be relied for the application of Section 12
2. Even in the application, the appellant has specifically stated that they proposed to use the trademark under question and as such they cannot take shelter under Section 12
3. The appellant/application has not established their distinctiveness of their product and as such they are not entitled for seeking registration of the trademark ‘Maruti’
4. The appellant failed to clear the obstacles contemplated under Section 9(1), 11(1), 11(1)(b) 11(2) and 11(3).

Observation/Decision of the IPAB

Though the Appellant contended that they were using the mark Maruti for a long time, they were not able to substantiate their reputation and goodwill to establish the distinctiveness of their products for registration. The claim that their mark was different and dissimilar did not hold good according to the Assistant Registrar. The Applicant’s mark was similar or identical to the Respondent’s and the logo device was also same, namely the wing device. The name of the mark makes it clear that the Appellant’s trademark is visually and phonetically similar to the Respondent’s trademark, which would certainly cause confusion in the minds of the public who are the consumers and users of Maruti cars.

Held

The bench held that the brand name Maruti has obtained a world-wide reputation with respect to the four wheelers and there was an attempt to use the same brand name for two or three wheelers, which would definitely affect the reputation of the Respondent that would result in the reduction of trade of the Respondent and dilution of their reputation.

Copyright and Semi-Conductors brought under the ambit of Department of Industrial Policy

Government of India has announced that copyright and semiconductors are to be brought under the ambit of the Department of Industrial Policy and Promotion (DIPP). The news was revealed by DIPP, Joint Secretary, Rajiv Aggarwal at a seminar on ‘Managing Copyright in Publishing’ organized by the Federation of Indian Chambers of Commerce and Industry (FICCI) along with the department and World Intellectual Property Organization (WIPO) on March 31, 2016.

The move of shifting copyright from the Human Resource Development Ministry (HRD) and semiconductors from the purview of the Department of Information Technology is being touted as a welcome development by many. The transfer has the consequence of consolidating all IP related functions in one body, with the hope of reducing turf wars between different departments with regard to jurisdiction and uniformity in decision making at national and international levels. The DIPP is already administering the Patents Act, 1970, The Trade Marks Act, 1999, The Designs Act, 2000 and the Geographical Indication of Goods (Registration and Protection) Act, 1999 and also matters pertaining to the World Trade Organization (WTO) and World Intellectual Property Organization.

It remains to be seen that the underlying objective behind the department re-shuffling is successfully achieved and till then, the universal truth remains that the DIPP has now become an all-powerful body, covering almost all species of IP laws in India.

FSSAI Registration A Must For Food E-Tailers Now

All e-commerce entities selling food products or running a food business will now have to get themselves registered with the Indian food regulator, Food Safety and Standards Authority of India (hereinafter referred to as the ‘FSSAI’). The regulatory authority has directed online retailers to register under the Food Safety and Standards Act, 2006, with the FSSAI. The FSSAI Chairman, Mr. Ashish Bahuguna, said that since the e-commerce players are selling food products or dealing in one or another form of food business at their platforms and since food and food businesses come under the ambit of FSSAI, so, they have register if they want to continue their food business operations. This would also allow FSSAI inspectors to do regular checks on the safety of the food products that the platforms deal with or store in their warehouses along with taking action in the cases of complaints. FSSAI has also asked e-commerce companies to display all details regarding food items on their portals clearly. This would include names and addresses of sellers, their license numbers, nutrition and ingredient information, food safety details and price parameters. This would ensure that the consumers are fully aware of what they are buying.

Without a registration, it would be ‘illegal’ for such companies to deal in food products or food businesses. As of now, there is no penalty for the non-compliance of the same but an appropriate action as per the food safety and standards law could be explored for violation.

Startups operating in food businesses like Zomato, Foodpanda and Swiggy, grocery delivery players like Grofers, Bigbasket and Peppertap and e-commerce giants like Amazon, Flipkart and Snapdeal will now be required to register with the regulatory body. FSSAI CEO, Mr. Pawan Agarwal, justified this move by saying that this will be in the interest of the e-commerce players.  “By following the regulations of the Food Safety Act, the e-commerce players can ensure the quality of food products or even services to their consumers which will help these companies also”, he said. He added that their transactions are electronic but if they want to sell food products or dealing in the food business, then that will fall under ambit of the FSSAI. The FSSAI is not ready to accept that the e-commerce companies are only technology facilitators. The food regulator wants e-commerce entities to come under its purview just like state governments want them to take responsibility for the VAT payments.

The online distribution channel has been neglected with regard to food safety. In this regard, it has been noted that online shops are not necessarily subjected to inspection since sampling and analysis is often complicated as the provisions in FSS Act cannot be completely fulfilled in such business operations. FSSAI held a meeting with senior executives of the online companies in New Delhi on March 18, 2016, with respect to the new guidelines being planned.

FSSAI also plans to divide the online companies into two categories where the online marketplaces like Flipkart, Amazon and Snapdeal were being asked to get licensed under FSSAI, while the second category is being formed to address online food delivery companies which are being advised to facilitate business of food business operations who are FSSAI registered and licensed. FSSAI Chairman also stated that the aim of the move is to provide uniform safety to consumers on both online and offline channels. He said that such companies already fall under the Food Safety Act and, thus, should follow the provisions immediately.

The task will be very complex for sellers on the marketplaces. In order to make sure all the sellers are FSSAI registered and licensed will be a massive and complex process. Over the previous few months, online marketplaces have started selling various food products on their platforms.

India: Delhi High Court Orders only the Brews from Scotland to be called Scotch

India has a total of 261 registered geographical indications (hereinafter referred to as the ‘GIs’). However, there are not many landmark cases involving the GIs. In a recent case involving GIs, the Scotch Whisky Association (hereinafter referred to as the ‘SWA’) filed a case with the Delhi High Court seeking redressal.

Earlier, in 2004, the SWA had filed a case in the Delhi High Court against Golden Bottling Limited for the manufacture of ‘Red Scot’ Whisky, alleging that the name of the whisky would confuse consumers to believe that the said Whisky was from Scotland. The Court, in 2006, observed that Scotch Whisky was indeed a GI but since it was not a registered GI in India at that time, the Court could not uphold the GI. Thus, the Court relied on Section 20(1) of the Indian Geographical Indications of Goods (Registration and Protection Act), 1999, prohibiting all persons from instituting any proceedings to prevent or to recover damages for the infringement of an unregistered GI, and held the defendant guilty of passing off only. The Court also restrained the defendant from using the words ‘Scot’ or ‘Scotch’ in the marketing of its products.  

The SWA applied for the registration of Scotch Whisky as a GI for Scotland on January 05, 2009, for goods in class 33 and was granted the said registration. The SWA controls 90% of the Scotch market. It has 58 members and engages in producing and selling world renowned brands such as Johnnie Walker, J&B, Ballantine's, Chivas Regal, Dewar's, Glenfiddich, Grant's, Black and White, Vat 69, Haig, White Horse, 100 Pipers, The Famous Grouse and Cutty Sark.

In the present case, the SWA filed an original suit against Oasis Distilleries, Adie Broswon Distilleries & Bottlers and Malbros International Private Limited on December 8, 2015, in the Delhi High Court for using the term ‘Scotch Whisky’ on their labels. It sought to restrain the Indian companies from selling their brews, other than those which are sourced from the registered association of Scotch producers in the United Kingdom, as ‘Scotch’, ‘Scotch Whisky’ or ‘Whisky from Scotland’, thus, protecting Scotland's national drink.

The three abovementioned companies were allegedly selling three local products, that is, Royal Arms, Blue Patrol and Malbros, without sourcing them from the SWA. The SWA alleged the infringement of the registration of Scotch Whisky in India as a GI as they were based outside of Scotland and had not been verified by the Spirit Drinks Verification Scheme (hereinafter referred to as the ‘Scheme’) introduced in January, 2014, to give Scotch whisky consumers around the world assurance of authenticity. They stated that Scotch can only be sourced from the members of the SWA under its verification Scheme. They also cited the GI registration in India in 2010 and Article 23 of the TRIPS Agreement which allows for additional protection to be granted in case of wines and spirits. According to the SWA, it meant that no reference to ‘Scotch Whisky’ could be made on the labels of whisky that is produced in India, even if it contains some amount of Scotch.

The SWA argued that the lack of verification suggested that there was no Scotch present in any product and so the companies were in breach of Scotch Whisky's GI in India. The SWA also claimed that such labelling, packaging and advertising was misleading the public and infringing the registered Scotch Whisky GI. Scotch Whisky has an additional protection under the GI Act, meaning that even products that do contain some Scotch cannot reference it on labels or in adverts for a Whisky made in India since Scotch is a specific term for Whisky made from malted barley by a legally defined process, originating in Scotland only and any bottlers outside Scotland who want to use Scotch Whisky as a constituent in a local spirit must first apply for the verification process. An interim relief was granted to SWA vide an order dated December 9, 2015.

However, the present case was not decided on merits as the parties settled the matter by consent. The defendants filed an undertaking to not use the said term to sell their products and to withdraw their trademark application. This means that an opportunity to have a ruling based on merits in the present case was lost. Had the case been decided on merit, it could have been the first case of an injunction being granted in a case regarding the infringement of GIs. The abovementioned order can be accessed here. The Delhi High Court also noted that the United Kingdom Regulations had been duly incorporated in the registration certificate and was acknowledged in the European Union Regulation No. 110/2008.

The present suit was one of the very first disputes under the newly-enacted Commercial Courts, Commercial Division and Commercial Appellate Division of the High Courts Act, 2015. This was the first action raised by the SWA using the Scheme and also the first action taken by the SWA under the new commercial court rules in India. It is also interesting to note that the suit was disposed off in a record time of only two weeks from the date of its institution.

The SWA was successful in proving that Scotch Whisky was just another name for Whisky made in Scotland. It was made approximately 500 years ago in Scotland and has been exported for over 200 years. It has acquired a significant reputation worldwide and is produced as per tried and tested traditional methods. Products brewed locally in India cannot allude to the word Scotch or Scotch Whisky, especially since Scotch Whisky was registered as a GI in India in 2009. As per the law, local distillers cannot use the term Scotch Whisky in their labelling, packaging or advertising. The law recognizes traditionally produced goods of a particular area like Benarasi Silk Sarees and Tirupati Laddoos.

Hence, the Indian companies filed an undertaking to not sell the products which made any reference to Scotch, Scotch Whisky, Scotland or use any words, names or images evocative of Scotland or Scotch Whisky. They also undertook to withdraw their trademark application no. 1691168 for Royal Arms (label mark).

India: Retrospective Effect from FY 2014-15 of Payment of Bonus (Amendment) Act, 2015 Stayed by various High Courts

Brief Background

The Payment of Bonus Act, 1965 provides for the payment of statutory bonus to eligible employees. The bonus payable is to be determined on the basis of profits or on the basis of production or productivity of the establishment. The Act is applicable to factories and establishments employing at least 20 persons, although in some Indian states, the Government has extended the applicability of the law by reducing the threshold to factories and establishments employing at least 10 persons. The Act requires an employer to pay to an eligible employee a minimum bonus at the rate of 8.33% of the salary earned by the employee during the accounting year or INR 100 (USD 1.5), whichever is higher. As per law, the maximum statutory bonus can be limited to 20% of the employee’s salary.

In or about February 2013, the country faced nationwide general strikes by trade unions for removal of all ceilings under the Payment of Bonus Act, 1965. On September 2, 2015, 10 central trade unions were reported to have gone on a one-day strike demanding an increase in the wage ceiling and bonus calculation ceiling. Pursuant to these strikes, the Central Government gave assurances to the public regarding the sought amendment, also in light of the fact that the last revision of the two ceilings were made a long time ago in 2007. The Payment of Bonus (Amendment) Bill, 2015 was introduced in the Lok Sabha (House of People) of the Indian Parliament on December 7, 2015. The amendment was proposed to be made effective from April 1, 2015. However, Indian Prime Minister Mr. Narenda Modi signed off a last moment direction that the benefits should accrue from April 1, 2014, and on December 23, 2015, the Rajya Sabha (House of Ministers) of the Indian Parliament passed the bill, being effective from April 1, 2014, with a voice vote. The bill sought to amend the Payment of Bonus Act, 1965 as existing. The President of India gave his assent on the Bill on December 31, 2015 thus, making it an Act. The Payment of Bonus (Amendment) Act, 2015 as passed was published on the E-Gazette website on January 1, 2016 for notice upon the general public.

Key amendments brought about by the Payment of Bonus (Amendment) Act, 2015:

1. Eligibility Wage Ceiling increased - under the provisions of the previous Act, an employee who had worked for at least 30 days (in an accounting year) and drew a salary of INR 10,000 (Approx. USD 150) per month, was eligible to receiving statutory bonus. The amendment increases this eligibility limit to a salary threshold of INR 21,000 (Approx. USD 325) per month.
2. Ceiling for Bonus Calculation increased - under the previous Act, if an eligible employee’s salary were more than INR 3,500 (Approx. USD 55) per month, for the purposes of calculation of bonus, the salary would be assumed to be limited to INR 3,500 per month. The amendment raises this wage ceiling to INR 7,000 (Approx. USD 110) per month or the minimum wage notified for the employment under the Minimum Wages Act, 1948, whichever is higher.
3. Retrospective amendment - the amendment has been given effect from April 1, 2014.

In the year 2007, through the Payment of Bonus (Amendment) Act, 2007, the salary threshold for eligibility for for payment of bonus was increased from INR 3,500 (Approx. USD 55) to INR 10,000 (Approx. USD 150). Further, through the same amendment, the wage ceiling for computation of bonus was enhanced from INR 2,500 (Approx. USD 39) to INR 3,500 (Approx. USD 55).

Reactions from various Associations on the Retrospective Effect from FY 2014-15

Many were of the view that the retrospective nature of the amendments should have been avoided and employers should have been given adequate time to plan for such increase in their salary costs. The main concern was that employers would not have budgeted for this expense in the previous financial year (2014-2015) for which the books of accounts were already closed and taxes also paid. Such retrospective application from April 2014 would lead to financial stress, especially on the manufacturing sector where the number of workers is high.

As per media reports by The Hindu, an Indian daily, the Confederation of Indian Industries (CII) had written to the Labour Ministry on January 8, 2016 seeking a clarification to be given to allow industries to give bonus installments over the next two financial years to ease off the burden. It also demanded that the excess bonus received by employees, besides the minimum bonus, be adjusted in the next two financial years so as to “accommodate the newer workforce using the same or reduced allocable surplus.” In another report, a FICCI representative had reportedly stated that the industry had urged the government to amend the law prospectively from 2016-17 rather than give it a retrospective effect. The Micro, Small and Medium Enterprises (MSME) chamber, Indian Industries Association (IIA) in the Indian state of Uttar Pradesh is also known to have strongly opposed the retrospective implementation of the amendment, stating that MSMEs have no means to pay such bonus in arrears, while the Government by way of collecting taxes can pay the bonus. Even NASSCOM reportedly made representations on the retrospective applicability, financial impact, administrative challenges and the ambiguities in the revised Act to the concerned ministries.

Stay on Retrospective Effect from April 1, 2014

Upon representations from various industry bodies by way of writ petitions in various State High Courts challenging the retrospective effect from FY 2014-15, several high courts have stayed the retrospective operation temporarily.

For all of the above stay orders, it is clarified that the amendment would take effect from the financial year 2015-16 onwards, and not 2014-15 as earlier stipulated.

Thus, within a period of two to four months, six states in India have already obtained a stay on the retrospective operation of the amendment from FY 2014-15. It seems it is only a matter of time till all states follow suit. Meanwhile, the Indian Government’s continuing focus on labour law reforms calls for attention to a few important proposed changes to the Indian labour laws including the Labour Code on Wages Bill, 2015 which seeks to consolidate, simplify and rationalise various labour laws in India pertaining to wages, namely, the Payment of Bonus Act, 1965, Minimum Wages Act, 1948, Payment of Wages Act, 1936 and the Equal Remuneration Act, 1976.With the financial management of even private companies at stake, this area of law is surely one to watch out for.