Monday 19 September 2016

India: Delhi High Court grants interim injunction against Britannia for “deceptively similar” packaging

In this case, ITC Limited (hereinafter referred to as the Plaintiff) filed a suit against Britannia Industries Ltd (hereinafter referred to as the Defendant) to permanently injunct the latter from violating the packaging/trade dress rights of the Plaintiff’s products.

Brief facts and background of the case

The Plaintiff had launched a new product called “Sunfeast Farmlite Digestive – All Good” biscuit in February 2016. The packaging consisted a combination of the colors yellow and blue.. The Defendants launched a similar product under the name “Nutri Choice Digestive Zero” biscuit a few months later (July 2016). The packaging of the aforesaid product was also done in yellow and blue . The parties to this suit have previously been entangled in legal wrangles too. The Defendant had filed a complaint against the Plaintiff before the Advertising Standards Council of India (ASCI).

In the present case, the Defendants had offered to replace the blue color in their packaging by another shade of blue, and the same was deemed unacceptable by the Plaintiff. The Defendants stated that the color blue is an integral part of their packaging, as it supposedly reflects the “World Diabetes Day”. As there was no consensus between the parties regarding the issues at hand, the suit went to trial on September 2, 2016.

Plaintiff’s Submissions

The Plaintiff asserted three unique and distinctive features of their packaging. Details of the same are as under:
  • The brand name “Sunfeast” is written on the top-left hand side of the label on the yellow colored portion with the trade mark “Farmlite‟ underneath it, alongwith the mark “Digestive - All Good‟ situated below “Farmlite‟.
  • The color scheme used in the trade dress is Yellow and Blue. The left part of the packaging is in a yellow background and the right side of the packaging is in blue and both colors are separated by a curved line.
  • The picture of the biscuits appear on the right front side of the label which is depicted with a wheat spike/sheaf of wheat with grains lying at the bottom of an individual wheat biscuit with the words "No Added Sugar/Maida" written on the biscuit in a bold white font. The words Sugar and Maida are separated by a white horizontal dividing line between the two words.

The Plaintiff averred that the Defendant has copied various elements of their trade dress, including the color combination. They also submitted that the trade channels were identical and in furtherance to that also submitted sales and revenue as well as advertising figures to substantiate their claims.

Defendant’s Submissions

The Defendant claimed that they held 66% of the market share, whereas the plaintiff had a meagre 1.8%. They also averred that the predominant color of the packaging of their product is yellow, and that blue is merely a secondary color used to indicate a connection to diabetes. .

The Defendant stated that while there might be a similarity in the two packagings, when viewed as a whole there was no case made out for passing off. To that end, the defendant distinguished their packaging as follows:
  • The word “Britannia” itself appeared prominently against a red background in one corner of the impugned packaging.
  • The word “Nutri Choice‟ is featured prominently in their packaging, and the same is not present in the Plaintiff’s packaging.
  • That the shades of blue and yellow used in the impugned packaging are different from that of the Plaintiff’s.

The Defendant averred that a distinction has to be drawn between an action for infringement, and an action for passing off.

They claimed that the three essentials of passing off (establishing goodwill, demonstrating misrepresentation by Defendant to public, and establishing the loss suffered) were not demonstrated by the Plaintiff. They further averred that color per se is not an element of distinctiveness for identifying the source of the products. It was also averred that the Plaintiff had failed to establish distinctiveness and secondary meaning with respect of their packaging. 

Issues Involved
  • The difference between an action for infringement, and that of passing off.

The Hon’ble Court referred to the landmark judgement of Kaviraj Pandit Durga Dutt Sharma v Navaratna Pharmaceutical Laboratories to elucidate on this issue – the difference being that the use by the Defendant of the trade mark of the Plaintiff is not essential in an action for passing off, but is the sine qua non in the case of an action for infringement.
  • The elements of Passing Off.

With regard to this issue, the Court referred to the landmark judgment of the House of Lords in Reckitt & Colman Products Ltd. v. Borden Inc, wherein the elements of passing off were definitively established as - 
  • Establishing goodwill,
  • Demonstrating misrepresentation by defendant to public
  • And establishing the loss suffered

The Court’s Decision

The Court observed that the sales and turnover figures submitted by the Plaintiff in support of their claims is a significant factor whilst examining the reputation of the Plaintiff’s product. 

The Court also opined that secondary meaning or distinctiveness can be acquired in a short span of time. Even more so for eatables. They also observed that with respect to eatables like biscuits, the color scheme of the packaging plays an important role in the consumer making an initial choice and in enabling a discerning consumer to locate the particular brand of a manufacturer.

It was held that the Defendant’s packaging was deceptively similar to that of the Plaintiff’s product, and that the three elements of passing off are fulfilled in the present case.

As per the Court’s reasoning, the balance of convenience is in favor of the Plaintiff, and that granting an interim injunction would cause far less damage to the Defendant as their product has been in the market for only two months.

The Court thereby granted an interim injunction, and restrained the Defendant from using any variant of color blue in the packaging. But they allowed the Defendant to use any other distinctive color instead or to use the same packaging as used in the international markets for the same product.

Sunday 18 September 2016

India: DIPP makes Statutory Licensing Scheme Applicable to Online Broadcasting

In a recent paradigm shift regarding the status of internet broadcasting companies, the Department of Industrial Policy and Promotion (hereinafter referred to as “DIPP”) vide office memo dated September 5, 2016 gave directions to liberally interpret sections 31D and 2 (ff) of the Copyright Act 1957 (hereinafter referred to as the ‘Act’), so as to include internet broadcasting companies within the ambit of the aforesaid sections.

Section 31D of the Act is one of the most important provisions of the Act, as it deals with compulsory licensing. Even though the terminology used in the aforesaid section reads as “Any broadcasting organization desirous of communicating to the public...”, a close reading of the entirety of the section reveals that this provision (which was introduced by way of the 2012 amendment) is largely directed towards TV and radio broadcasting companies. This is reiterated by a reading of clause 3 of section 31D, which reads as – “The rates of royalty for radio broadcasting shall be different from television broadcasting and the Copyright Board shall fix separate rates for radio broadcasting and television broadcasting.
This Office Memo issued by the DIPP is of considerable importance to the online broadcasting community. This is bound to have a significant impact on activities like online live streaming of various media, although the effect of the same is yet to be seen in action. One very clear cut inference that can be drawn from this memo is that now various rights holders of media, like music, might have to approach the Copyright Board for fixation of royalties. This represents a paradigm shift between music right holders and internet broadcasting companies, as it at least theoretically decreases the balance of power between the two sides mentioned herein.

Thursday 8 September 2016

Delhi High Court Rules that the Infraction of Right Coupled with the Right itself Constitutes the ‘Cause of Action’

In a recent judgment delivered in the case of Music Broadcast Limited v. Axis Bank & anr, the Division Bench of the Delhi High Court ruled with respect to the exclusive jurisdictional clauses contemplated in voluntary license agreements and entailed the circumstances in which such jurisdictional clauses came into play vis-à-vis “cause of action”.

Brief Facts of the Case –

In this case, Music Broadcast Limited (hereinafter referred to as the Plaintiff) filed an appeal against the order of a Single Judge of the Delhi High Court dated February 09, 2016. The learned Single Judge held that the matter fell under the jurisdiction of the High Court of Bombay only, and ordered the case to be transferred to the aforesaid Court.

The Plaintiff operates FM radio stations in several cities like Mumbai, Delhi, Bengaluru, Pune etc. Axis Bank is listed as Defendant no. 1 as the bank had furnished guarantees on the request of the Plaintiff in favor of Phonographic Performances Limited, who is listed as Defendant No. 2.

Background of the case- The Defendant No. 2 had granted a non- exclusive and non- transferable voluntary license to the Plaintiff to broadcast sound recordings (over which the Defendant had control) from radio stations of various cities. One of the clauses of the voluntary license agreement stated that "this licence shall be governed by and construed in accordance with the laws of India and the High Court of Judicature at Bombay shall have exclusive jurisdiction." The cause of action in the matter arose when the Defendants cancelled all the compulsory licenses granted to the Plaintiff vide a cancellation notice pursuant to an order passed by the Copyright Board.

The suit was filed in respect of the compulsory licenses granted on September 3, 2010, and the cancellation thereof. The infraction of rights as claimed in the suit flow from the aforesaid compulsory licenses, and not the voluntary licenses. Furthermore, the compulsory licences were issued by the Registrar of Copyrights at New Delhi and they did not contain any jurisdiction clause.

Aggrieved by the aforesaid, the Plaintiff sought to stay the operation of the impugned cancellation notice. When the matter came before the Single Judge of the Delhi High Court, the Court stayed the operation of cancellation notice, however did not make any final observation with respect to the issue of jurisdiction in the case.

Aggrieved by the order of Single Judge, the Defendant preferred an Appeal before the Division Bench of the Court, however, the Division Bench refrained from making any observations with respect to the issue of jurisdiction on the ground that Single Judge of the Court had not conclusively decided the issue of jurisdiction.

Pursuant to the aforesaid, the Single Judge of the Court vide its impugned order pronounced that the High Court of Delhi did not have territorial jurisdiction to entertain the suit.

Plaintiff's Submissions

The Plaintiffs submitted that the clause in the voluntary license agreement pertaining to the exclusive jurisdiction of the High Court of Bombay has no applicability to the present suit in the High Court of Delhi, as the present suit is regarding the cancellation of the compulsory licences only.

Furthermore, the suit filed at the High Court of Bombay was related to adjustments under the voluntary licence agreements and related to the period prior to the compulsory licences, whereas the present suit is concerned with the compulsory licences and the alleged illegal conduct on the part of the Defendant No.2 in cancelling the said compulsory licences by virtue of the impugned notice dated June 21, 2013.
In support of the jurisdiction of the High Court of Delhi, they also put for the averment that the Copyright Board had its office in New Delhi and all the proceedings, which preceded the issuance of the compulsory licences, had taken place in New Delhi. They also pointed out that the Plaintiff was also carrying on business from its office in New Delhi.

The Plaintiff also advanced arguments regarding the "cause of action". The Plaintiff submitted that the term "cause of action" can be said to include not only the infraction of the right, but also the infraction coupled with the right itself. The Plaintiff relied on the case of Om Prakash Srivastava v. Union of India and Another[1] to substantiate this contention. This was to reiterate that the license was granted in Delhi, therefore, it can be said that the cause of action arose in Delhi.

Submissions of the Defendants

The Defendants contended that the compulsory licences were nothing but a continuation of the arrangement under the voluntary licence agreements and, therefore, the exclusive jurisdiction clause would apply to the compulsory licences also.

They also submitted that the issuance of a compulsory licence was not a part of the cause of action. And that the cancellation of the said compulsory licences could be a part of the cause of action. They also contended that no part of the cause of action, in any event, arose in Delhi, inasmuch as both the Plaintiff and the Defendant No.2 have their registered offices in Mumbai, the cancellation notice dated June 21, 2013 was issued by the Defendant No.2 at Mumbai and the same was received by the Plaintiff at its office in Mumbai.

It was submitted that the Defendant No.2 does not carry on business in Delhi and that it only has a subordinate office and since no cause of action has accrued in Delhi, it cannot be considered that the Defendant No.2 carries on business in Delhi.

Issue involved and the Division Bench’s Judgment and Observation:

Whether the Delhi High Court had the territorial jurisdiction to entertain the suit?

The Division Bench noted that the learned Single Judge had erred in holding that the exclusive jurisdictional clause of the voluntary license will be applicable to the present case.

The Division Bench of the Court opined that as both the issuance of the compulsory licences and the cancellation of compulsory license was done by the Registrar of Copyrights at Delhi, the same can be referred to as the 'cause of action'. Hence, the fact that the compulsory licences were issued in Delhi necessarily entails that a part of the cause of action arose in Delhi. Hence, the Court at Delhi had the territorial jurisdiction to entertain the instant suit.

That the exclusive jurisdiction clause in the voluntary licence agreement, does not come into play in the case as the case pertained to the cancellation of compulsory license which was issued by the Registrar of Copyrights at Delhi. The Court further observed in the case, that the licences did not contain any exclusive jurisdiction clause and in such cases it has to be seen as to where the cause of action occurred.

In view of the aforesaid observations, the Division Bench of the Delhi High Court dismissed the impugned order passed by the Single Judge.

[1]2006 (6) SCC 207

India: Bombay High Court says that viewing of pirated films online is not an offence

In a recent order, the Bombay High Court has said that it is inaccurate to suggest that merely viewing an illicit copy of a film is a punishable offence under the Copyright Act. Honorable Justice G.S. Patel said, “The offence is not in viewing, but in making a prejudicial distribution, a public exhibition or letting for sale or hire without appropriate permission copyright–protected material. These error pages appear to have confused the penal provisions regarding obscenity with penalties under the Copyright Act, 1957.”

The resultant order by Justice Patel stems from a warning message that was displayed by all Internet Service Providers (hereinafter referred to as ISPs), on all the websites that were hosting pirated content. The said message was, ““This URL has been blocked under the instructions of the Competent Government Authority or in compliance with the orders of a Court of competent jurisdiction. Viewing, downloading, exhibiting or duplicating an illicit copy of the contents under this URL is punishable as an offence under the laws of India, including but not limited to under Sections 63, 63-A, 65 and 65-A of the Copyright Act, 1957 which prescribe imprisonment for 3 years and also fine of upto Rs. 3,00,000/-. Any person aggrieved by any such blocking of this URL may contact at who will, within 48 hours, provide you the details of relevant proceedings under which you can approach the relevant High Court or Authority for redressal of your grievance”. He directed all ISPs to drop the line "'viewing, downloading, exhibiting or duplicating' a particular film is a penal offence" from the 'error message' and directed them to display a more generic message on URLS to be blocked for infringement of copyright.

This message led a number of newspapers around the country to wrongly report that, a mere viewing of illicit copies of a film could land one in jail. The Copyright Act, 1957, nowhere states the same and sections 63, 63A, 65 and 65A suffer from a gross misinterpretation. The message has been poorly drafted by ISPs, which was the primary cause for the confusion.

In a later order dated August 30, a copy of which can be found over here, Justice Patel asked all ISPs to display a more accurate generic message. The said message contained in paragraph 4 of the order read as, “This URL has been blocked under instructions of a competent Government Authority or in compliance with the orders of a Court of competent jurisdiction. Infringing or abetting infringement of copyright-protected content including under this URL is an offence in law. Ss. 63, 63-A, 65 and 65-A of the Copyright Act, 1957, read with Section 51, prescribe penalties of a prison term of upto 3 years and a fine of upto Rs.3 lakhs. Any person aggrieved by the blocking of this URL may contact the Nodal Officer at xyz@[isp-domain] for details of the blocking order including the case number, court or authority to be approached for grievance redressals. Emails will be answered within two working days. Only enquiries regarding the blocking will be entertained.”

The matter has now been listed for September 23, when the court will examine if a more complete error message can be displayed by the ISPs. While doing so, Justice Patel also endorsed the suggestion made by Prof. Basheer for a need of a neutral ombudsman for future blocking related issues. 
Admittance of opposition procedure in Mexico - a step towards a more effective registration system
As a result of the recent amendments and with a view to provide third parties an opportunity to oppose their conflicting marks, the Mexican Trade Mark Office has now implemented Trademark Opposition system w.e.f. August 30, 2016.

The amendment was approved by the Chamber of Deputies on April 28, 2016, was  published in the Official Gazette of the Federation on June 01, 2016 and it finally became effective from August 30, 2016.
Prior to the introduction of opposition system, the trademarks were registered solely on the basis of the examiner’s considerations. However, with the implementation of the opposition procedure in Mexico, any interested third party can file his/her oppositions against the trademark applications.

The opposition system in Mexico has laid down the following procedure:
  • The trademark applications to be published in the Mexican Trademarks Gazette within 10 days of filing the said application.
  • Any interested party may file a Notice of Opposition against an application on relative or absolute grounds within a non-extendable deadline of 30 days from the date of such publication.
  • If the grounds of opposition are valid, the authority shall publish the same in the Mexican Trademarks Gazette within 10 days of the said notice.
  • After the publication of the Notice of Opposition in the Gazette, the applicant is provided a non-extendable time period of 30 days to file his response against the said opposition.
  • After the submission of the response, the examiner shall examine the application considering the arguments submitted by both the parties.
  • After the final examination of the application, the Examiner of Mexican Trade Mark Office shall grant or refuse the registration of the trademark application.

India: New notification paves way for faster communication of Design Registration

In a public notice released on September 05, 2016, the Office of the Controller General of Patents, Designs and Trademarks (hereinafter referred to as the ‘CGPDTM’), has intimated all stakeholders that in order to facilitate faster processing of applications for registration of designs, First Examination Reports (FER) and subsequent office communications shall be communicated in the e-mail or digital address of the applicant/agent as mentioned in the address of service for respective design applications wherever available.  

This is a welcome move and will certainly go a long way to fasten up the process of applications for registrations of Designs and this provision of sending First Examination Reports to applicant/ agent through e-mail has commenced from September 5, 2016.

According to the Information Booklet published by the CGPDTM, the time period for acceptance of an application is six months which can subsequently be extended to another three months. The new notice pertaining to online correspondences between the Applicant and the registry will ensure that the whole process is expedited and the said time frame is reduced considerably.