Tuesday, 11 July 2017

The Madrid Protocol: Putting this years’ statistics into perspective


Madrid System on the Rise!


April 14, 2016, marked the quasquicentennial anniversary of the Madrid System of International Trademark Registration, 125 years since its first governing treaty (the Madrid Agreement) was adopted in Madrid on this day in 1891[1]. And for the first time in its history, International Trademark applications crossed 50,000 in a single calendar year. An estimated 52,550 international trademark applications were filed under the WIPO-administered Madrid System in 2016- a growth of 7.2% since 2015, and the fastest since 2010! The system has continued to expand its geographical scope, with Brunei Darussalam being the latest country to have been granted membership, bringing the total number of members to 98. The Madrid System now encompasses an area covering 114 countries in which a member may obtain protection for its trademark.

Asia - the Place to do Business

    With the reach of the International Trademark Registration system broadening with every passing year, the Madrid Yearly Review for the year 2016 has thrown up a number of fascinating trends. Principal among these is the rise of non-traditional, middle-income markets, especially in Asia, as being the point of origin for a great number of international applications. Even though all top 10 Madrid applicants (in terms of number of filings) were European companies, it is notable that Asia has jumped to second spot in the number of international applications filed in 2016, with 17.5% of the total number of international applications filed.






The most dominant Asian country, which has seen a prominent spike in international applications is China. Filing a total of 3200 international trademark applications, China has jumped from ninth largest origin country in 2015 to fourth in 2016, with an increase of 1300 international applications filed.


The total number of designations in International Trademark applications showed an increase of 6.2% from the previous year. On average, applicants designated around 7 Madrid members per international application filed in 2016, and almost two-thirds of all international applications filed designated up to 5. More Madrid applicants sought to obtain protection for their trademarks in Asia with China being 2016’s leading country designated in Madrid applications (a total of 22,444). India placed at No. 9, with a total of 11,263 international applications designating India as a territory for protection .



China was the third largest designator in its international applications, and it is interesting to note that after the US, the maximum number of designations for India came from Chinese applications!




India also received 644 subsequent designations from Madrid applicants seeking to expand the range of protection for their marks. As an origin country also, India saw growth, filing 171 international application in 2016, up from 152 in 2015.
Another popular Asian country ranking among the top 10 designated countries was the Republic of Korea (South Korea), with 11,271 designations, only slightly more than India. It also featured as No. 15 on the list of the top 20 countries of origin for international applications, thanks to its two major global companies - Samsung Electronics and Hyundai Motor Company. The Republic of Korea obtained 1451 subsequent designations from holders of international registrations, making it the fourth largest recipient of subsequent designations.    

Trademark Protection in a Digital World


The total number of classes specified in international applications has grown steadily since 2000, corresponding to growth in number of applications. In 2016, over three-quarters of all applications filed included up to 3 goods or service classes.
As has been the trend for more than a decade, the majority of Madrid applications continued to be in the research and technology sector, with Class 9 goods, which includes computer hardware and software and other electrical or electronic apparatus of a scientific nature, being the ones most specified. This is reflective of a growth of 11.6% from 2015, and 9.4% of the total number of applications filed in 2016. Class 9 was followed by Classes 35, 42 and 41 in popularity. Three out of the six most specified classes are classes for services, and in fact, nearly one-third of all classes specified in international applications filed in 2016 were for services, in keeping with the trend from 2000-2016 where between 26%-34% of all International Trademark applications have been in service classes


Electronic transmission to communicate with the International Bureau was introduced for the first time in 1998, and up till 2014, only a little over half of all applications were received via the electronic medium. In 2016, this has spiked to a whopping 74.5%! A result of WIPO and the IB streamlining its online application procedure to make it easier and more accessible for applicants to apply through this method. To highlight its international accessibility and impact, the bulk of international applications (81.6%) filed at the International Bureau were in English, as compared with a meagre 15.8% in French, the original working language of the Madrid System!
A promising step towards widening the scope and accessibility of the Madrid System outside the First World is the drop in average registration fees, recorded in 2016- 2.968 Swiss francs, as compared to 3.734 Swiss francs in 2008. And while the EU (via the EUIPO) received the largest share of the total fees distributed to Madrid members in 2016, developing nations such as Uzbekistan and Mexico are climbing steadily, with India also receiving 0.8% (1,406,664 Swiss francs) of the total registration fees collected in 2016
On average, holders paid 2,968 Swiss francs per registration recorded in 2016, down from the peak of 3,734 Swiss francs in 2008.



 
                                         

Provisional Refusals to Trademark Protection by Member States

On the whole, issuance of provisional refusals fell by 1.7% in 2016, indicating greater facilitation to applicants looking to enter international markets, as well as increased familiarity and streamlining of Madrid System classification and procedure among both applicants and Member States. The US and the Republic of Korea led the pack in issuing provisional refusals, but India was not far behind, at No. 5, issuing a cumulative of 7,702 provisional refusals to international registrations



Conclusion


The statistics coming out of WIPO regarding Madrid System International filings are reflective of larger changes in global business and communication practices. The world is shrinking as the digital sphere expands, connecting everyone, no matter how far away through just a few clicks. The rise of goods and services catering to the needs of an ever more connected populace, and a marketplace transcending territorial boundaries poses its own set of challenges.
The Madrid System for the International Registration of Marks serves as a solution to traders and businesses looking for a single, over-arching system of trademark protection, without having to painstakingly go through the individual registration procedures of each country. And for an inter-connected digital modern world, the Madrid System has achieved its purpose of being the most convenient as well as cost effective “one-stop shop” for garnering trademark protection. Towards this, the Madrid System itself is evolving to improve and enhance its utility by facilitating access to new and emerging markets. The WIPO website provides access to a host of Madrid System related electronic tools, portals and databases. Starting with electronic access to the International Register through the ROMARIN CD-ROM first released in 1992, E-Services – such as E-Renewal (since 2006), Madrid Real-Time Status (since 2010), Madrid Portfolio Manager (since 2012), and E-Subsequent Designation (since 2014) – have made it increasingly easy for users to track and manage their international trademark registrations.[2] These services have laid the groundwork for a new digital initiative, E-Madrid, focused on the delivery of an enhanced online experience for customers throughout the lifecycle of their mark.[3]












Substantial amendments for COMPUTER- RELATED INVENTIONS (CRIs) - “Novel Hardware” provision waived off

India: Substantial amendments for Computer- Related Inventions (CRIs) -  “Novel Hardware” provision waived off
The journey pertaining to Guidelines for Examination of Computer Related Inventions (herein CRI) has been both time-consuming as well as riddled with lot of amendments. In light of several remarks and comments from numerous stakeholder’s and further sessions with the Indian Patent Office, revised guidelines pertaining to examination of CRIs has been published on the 30th of June, 2017  which are breather after a long dry spell.
Item 1.3 of the amended guidelines states:
“The objective is to bring out clarity in terms of exclusions under Section 3(k) to allow eligible applications of patents relating to CRIs be examined speedily”.
The major highlight in the guidelines is deletion of the concept of “novel hardware”.
Summarized below are several revisions executed by the Indian Patent Office for Computer Related Inventions in several categories.
A.    Test of Patentability
For novelty, inventive step (Obviousness) and industrial applicability the amended guidelines completely rely on the Manual of Patent office practice and procedure.
B.     Sufficiency of Disclosure - It is a mandate to specify “what” is the invention and “how‟ to perform it. For computer related inventions (CRIs), there are requirements laid down and considered as fulfilled if the following are addressed:
·         every feature of the invention described with suitable illustrative drawings;
·         if the invention relates to “method”, the necessary sequence of steps shall clearly be described with the help of the flowcharts;
·         working relationship of different components together with connectivity shall be described;
·         desired result/output or the outcome of the invention as envisaged in the specification; and
·         best mode of performing and/or use of the invention with suitable illustrations.
B.     The Notoroius - Section 3(k)
The guidelines also state to be overriding the chapter of Patent Manual containing provisions pertaining to section 3(k) of the Patent Act , 1970


The rules comments on certain provisions of Section 3(k) and clarify the following;
Mathematical Method: The rules read that the mere presence of a mathematical formula in a claim, to clearly specify the scope of protection being sought in an invention, may not necessarily render it to be a “mathematical method” claim.
Business Method: Herein in relation to business methods, there is a significant improvement, wherein it is stated that mere presence of the words such as “enterprise”, “business”, “business rules”, “supply-chain”, “order”, “sales”, “transactions”, “commerce”, “payment” etc. in the claims may not lead to conclusion of an invention being just a “Business Method”.
Algorithm and Computer Programme per se: Computer programs are claimed in the form of algorithms as method claims or system claims with some “means” indicating the functions of flow charts or process steps. While establishing patentability, the focus should be on the underlying substance of the invention and not on the particular form in which it is claimed.
However, it has been clarified that if in substance, the claim, taken as whole, does not fall in any of the aforesaid excluded categories, the patent should not be denied.
Further, the exclusion of computer programs should not be avoided merely by camouflaging the substance of the claim by its wordings.

Conclusion
It is believed that the revised guidelines implemented will be useful to applicants and patent practitioners alike and lead to the acceptance of a wider range of patents in the field of CRIs. On a wider spectrum, there may also be an acute decrease in the number of patent litigation stalling the progress of many companies that have their base in software.
The rules appear to indicate that the Indian Patent Office has taken a more favorable approach to the allowability of CRIs as compared to the past.

As a whole after a long wait and patience, theses improvisations have brought in a ‘NEW DAY’ for the software fraternity.

India: Patanjali withdraws its trademark applications for “OJAS” after facing suit for trademark infringement

Recently, Patanjali Ayurveda Limited was faced with allegations of infringing Charak Pharma Pvt. Ltd.’s trademark “Ojus” by using a deceptively similar trade mark “Ojas” for its soap brand.
Brief Description of the Parties
Charak Pharma Pvt. Ltd. is an Indian company founded in 1947 by the brother duo, Shri D.N. Shroff and Dr. S.N. Shroff, which manufactures and sells ayurvedic and herbal medicines in India and also exports to 35 other countries abroad. Patanjali Ayurveda Limited is an Indian fast-moving consumer goods (FMCG) company, which was founded by renowned yoga guru, Baba Ramdev and his close aide, Āchārya Balkrishna, and is known to have achieved a tremendous presence around the globe and throughout India in a very small time since its inception in 2006.
Litigation Proceedings in the Bombay High Court
Charak Pharma Pvt. Ltd. had filed a case being Suit (L) No. 216 of 2017 with Notice of Motion (L) No. 724 of 2017 in the Bombay High Court on March 27, 2017, against Patanjali Ayurveda Limited for allegedly using the mark “Ojas” which is deceptively similar to its registered trade mark “Ojus”.
Pursuant thereto, Patanjali Ayurved Limited appeared before Hon’ble Mr. Justice G.S. Patel of the Bombay High Court through their counsels and undertook to withdraw their applications for registration of the impugned mark “Ojas”. The said undertaking was accepted and recorded by the Court vide its order dated April 11, 2017. In view of the said undertaking, the Plaintiff, i.e., Charak Pharma Pvt. Ltd., did not press for their prayers for damages and costs against Patanjali Ayurved Ltd.

Status of Trade Marks of the Parties

Our research team has put together a list of the trade mark applications/registrations of both Charak Pharma and Patanjali for their marks “Ojus” and “Ojas” in India:-





Ola Cabs arraigned for “Pirated Music”

Recently, on May 20, 2017, a criminal complaint for copyright infringement was filed by a Bengaluru-based music label company, Lahari Recording Co., against ANI Technologies Pvt. Ltd. and its founders for allegedly downloading and streaming songs from popular Telugu and Kannada movies, without owning the rights, that is, using pirated music on OLA Play.

Brief Background
ANI Technologies Pvt. Ltd. operates under the popular trade name OLA, and is an Indian online transportation network company having its registered office at Bengaluru, India. OLA was founded as an online cab aggregator by Mr. Bhavish Aggarwal, presently Chief Executive Officer of the Company, and Mr. Ankit Bhati, presently Chief Technical Officer of the Company.

Last year, on November 22, 2016, OLA had launched their connected car platform for ride-sharing called ‘OLA Play’ in their “OLA Prime” segment, claiming it to be a global first and aimed at “transforming the in-car experience for users on the go like never before”. OLA Play provides customizable experience to premium members of OLA to view content of their choice and play music including radio while they take their ride. The in-car entertainment system uses custom user preferences and ride information, such as time and destination, to offer recommendations. OLA Play is stated to be the world’s first such technology and collaboration for a cab-aggregator. The company partnered with notable companies like Qualcomm, Mahindra and Mahindra, Apple Music, Sony LIV, Audio Compass and Fynd to build an interactive experience for users through listening to music and watching videos at their option, on the go. OLA Play is currently available in four cities in India – Mumbai, Delhi, Bengaluru and Hyderabad.
                                          
Issue in brief
The issue came to light in May 2017 after the director of music label company Lahari Recording Co., Mr. Tulsiram Naidu, booked a cab in the Indian city of Bengaluru and realized that the songs from the Tollywood* movies, ‘Baahubali’ and ‘Khaidi No 150’ and from the Kannada** movie ‘Sundaranga Jaana’ were being played in the cab without taking any prior permission or license from the company by OLA. The songs from the said movies are claimed to be owned by Lahari Recording Co. Reportedly, Mr. Tulsiram Naidu stated that nobody had come from ANI Technologies Pvt. Ltd. for licensing the songs and a loss of INR 6 crores i.e. INR 60 million (Approx. USD 928,857 @ 1 USD= 64.6 INR) is estimated in the future.

Pursuant to the complaint filed by Mr. Tulsiram Naidu/ Lahari Recording Co. with the concerned police station i.e. Jeevan Bima Nagar Police Station in Bengaluru, the police officials searched the offices of the cab aggregator, ANI Technologies Pvt. Ltd. and reportedly seized the hard disks and other electronic devices which were suspected to store songs that had been illegally downloaded and were being played in the company’s taxis without the requisite permission. The police also reportedly conducted surprise checks on OLA cabs and seized some of the electronic devices and hard disks wherein such songs were alleged to have been illegally downloaded and stored.

As per the media statements made by the concerned Police, notice was issued to both the founders of OLA, namely Mr. Bhavish Aggarwal and Mr. Ankit Bhati, to show their valid copyright/ license on each song. However, they reportedly failed to appear before the police. Following the developments, both the founders have reportedly secured an anticipatory bail from the concerned magistrate’s court.

In the meanwhile, OLA’s legal counsel has released a media statement that the company has been conducting its business legally and ethically and its management has been dragged into this issue with a mala fide intention. Also, they have taken appropriate legal steps to protect the interest of their client and the matter is before the concerned court now.

Interestingly, OLA has recently received funding from Tekne Capital Management of about INR 5 crores i.e. INR 50 million (Approx. USD 774,047 @ 1 USD=64.6 INR), only a few days before the allegations of copyright infringement.

This is not the first time that OLA has been in the limelight for piracy or copyright infringement. Earlier this year, in February 2017, ANI Technologies Pvt. Ltd. was embroiled in a copyright infringement case over an image, when a Bengaluru-based designer’s creatives were used by it. Mr. Ramakrishna V. is an Indian graphic designer who has worked with popular technology company, Zoho Corporation and is currently positioned as an UI/UX Designer in a real estate agency called Housing. On February 17, 2015 he posted the image of Vidhana Soudha at Dribbble.com, an online community for showcasing user-made artwork, for commercial purposes under the creative commons license terms of the website. Vidhana Soudha is a prominent landmark located in Bengaluru and is the seat of the state legislature of Karnataka and also an imposing building, constructed in a style sometimes described as Mysore Neo-Dravidian, and incorporates elements of Indo-Saracenic and Dravidian styles. ANI Technologies Pvt. Ltd. was accused by Mr. Ramakrishna V. of copying his design on hoardings used in advertisements for promoting OLA’s INR 29 Campaign, without his express permission. Later, the creative agency associated with OLA resolved the matter of copyright infringement amicably between the designer and the agency which had made the hoardings in the first place and the designer was adequately compensated.

Relevant Provision of Law

Section 30, Copyright Act, 1957 (as amended in 2012)
Licences by owners of copyright.—The owner of the copyright in any existing work or the prospective owner of the copyright in any future work may grant any interest in the right by licence in writing signed by him or by his duly authorised agent: Provided that in the case of a licence relating to copyright in any future work, the licence shall take effect only when the work comes into existence. Explanation—Where a person to whom a licence relating to copyright in any future work is granted under this section dies before the work comes into existence, his legal representatives shall, in the absence of any provision to the contrary in the licence, be entitled to the benefit of the licence.

Concluding remarks
Start-ups in India are witnessing age old talent for entrepreneurship being unleashed like never before. New ideas are exploding into business models and investors are all lining up to provide the requisite finance and mentoring taking the start-up to the next round of funding and higher valuations. Today, India is replete with examples of successful start-ups that have seen valuations ballooning within the first five years of operations, notable names being Flipkart, Snapdeal, Zomato, Make My Trip, Naukri.com, Shaadi.com, Just Dial etc., which are all success stories that have survived and grown from the last internet boom. Start-ups in India are although noticing an increase in facilities provided by the Indian Government like Start-up India campaign launched by Indian Prime Minister, Narendra Modi, there are still day to day issues, prominently Intellectual Property (IP) issues that are being faced by them in their regular business decisions. It will be interesting to see how OLA tackles this fresh IP complaint against it- whether it will walk away without a scratch or succumb to the IP demands of an established organization, only time will tell.

*The Indian Telugu-language film industry based in the city of Hyderabad, Telangana
** colloquially referred to as Sandalwood, the Indian Kannada language film industry based in the state of Karnataka.

Monday, 12 June 2017

The Startup is Staying Up! – DIPP Notifies Amended Definition of Startups in India

Government of India’s flagship initiative met with an enlarged definition of startup under the purview of Startup India, Stand up India. The Ministry of Commerce and Industry vide its notification G.S.R 501(E) dated May 23, 2017[1] broadened the definition of a startup for the purpose of government schemes taking into account long gestation period in establishing startups. Further, startups would no longer need a letter of recommendation from an incubator or an Industry Association for either recognition or for claiming tax benefits under the Startup India program. This move could be seen as a positive step to improve the ease of doing business in India, and promoting entrepreneurship in India to build the India story. The present notification is in supersession of the earlier notification dated February 17, 2016[2].
Bringing in the “New”
As per the present notification, a Private Limited Company organized under the Companies Act, 2013, a Partnership Firm registered under the Partnership Act, 1932, or a Limited Liability Partnership organized under the Limited Liability Partnership Act, 2008, can now be recognized as a Startup upto a period of seven years instead of the earlier stipulated five years from the date of incorporation or registration; for startups in Biotechnology sector the gestation period is extended to 10 years. Therefore, these startup companies would continue to enjoy their privileged status until the completion of their respective startup gestation period, and by fulfilling the below mentioned criteria during their gestation period -
a.       If it is working toward innovation, development or improvement of product or process or service or an accessible business model with great prospective of employment generation or wealth creation.
b.      Wherein, the turnover[3] for any financial year since incorporation should not exceed INR 25 crore (USD 3884702 approx.). Herein, the term turnover should be read in consonance with Section 2 (91) of the Companies Act, 2013, where it is defined as the aggregate value of the realization of amount made from the sale, supply, or distribution of goods, or on account of services rendered, or both, by the company during a financial year.
However, it must be noted that, no recognition will be granted to entity or entities formed from splitting or reconstruction of an entity already in existence.

Ease in Process
Online applications aim to improve upon the ease of governance and expediting the administration process. The present notification is in line with the previous 2016 notification and reiterates that the entity willing to be recognized as startup must apply online through mobile app/portal set up by Department of Industrial Policy and Promotion (hereinafter referred to as the ‘DIPP’). Application has to be submitted along with a Certificate of Incorporation/Registration with other relevant details as may be required. The entity has to provide the details about how it is working towards innovation, development, improvement of product or process or service or its scalability in terms of employment and wealth generation.
As per the notification, the startup recognition will cease once the entity’s turnover exceeds INR 25 crore (USD 3884702 approx.) or completes seven years (Ten years in case of Biotechnology startups) of incorporation, whichever is earlier.

Tax Boons
For the purpose of claiming tax benefits, the startup must be incorporated after April 01, 2016, but before April 01, 2019. It must be engaged toward development, innovation, improvement of products or process or service or must have high potential of employment generation or wealth creation. However, it may be noted that the definition of startup includes a partnership firm, registered under Section 59 of the Partnership Act, 1932, but tax benefits are only provided to Private Limited Companies and Limited Liability Partnerships as per the present notification.
Entity is also required to obtain a certificate of eligible business from Inter-Ministerial Board of Certification as constituted by DIPP.
However, no startup recognition for the purpose of tax benefit would be given if a startup is engaged in developing
1.      Products or services or processes which don’t have potential for commercialization.
2.      Undifferentiated products or services or processes
3.      Products or services or processes with no or limited incremental value for customers.

Revocation of Startup Status
As per the present notification, DIPP reserves the right to rescind the startup status of an entity without furnishing any prior notice to the party concerned. Therefore, if recognition is found to have been obtained without uploading the necessary documents, or on false premises, the same may result in revocation of the startup status of the entity if deemed fit by DIPP.

Therefore, as a relentless exertion to facilitate a comfortable startup ecosystem, the above changes can be seen as a robust effort and a welcome move by the government to guarantee ease of starting new businesses that would eventually encourage creation of jobs in the country.


India climbs six places to rank 60 in Global Innovation Index

Recently, on June 15, 2017, the World Intellectual Property Organization (hereinafter referred to as the ‘WIPO’) published the Global Innovation Index (hereinafter referred to as GII) for the year 2017, revolving around the theme: 'Innovation Feeding the World. The GII is an annual ranking of countries by their capacity for, and success in, ‘innovation’.  It is published by Cornell University, the Institut Européen d'Administration des Affaires (hereinafter referred to as ‘INSEAD’), in collaboration with WIPO and is based on both subjective and objective data derived from several sources, including the International Telecommunication Union, the World Bank and the World Economic Forum. The GII is commonly used by corporate and government officials to compare countries by their level of innovation in the field of science and technology, most importantly a country’s economic growth annually. Each year, the GII surveys some 130 economies using dozens of metrics, from patent filings to education spending providing decision makers a high-level look at the innovative activity which increasingly drives economic and social growth. For the last ten years, it has been observed that there is an innovative capacity gap between developed and developing nations due to lackluster growth rates for research and development activities at both the government and corporate levels.


On analyzing the annual growth rate of other nations, it can be inferred that Indian markets are on the rise and its growth rate is not stagnant. It has moved up six places to 60th among 130 nations, emerging as the top-ranked economy in Central and South Asia. Previously, in 2016 it was ranked in 66. This year’s report demonstrated India to be a consistent outperformer on innovation relative to its GDP per capita. It made important strides in innovation input and output performance, which highlighted the continual improvement of India in terms of investment, tertiary education, quality of its publications and universities, its ICT services, exports and innovation clusters. According to the Director General of Confederation of Indian Industries (hereinafter referred to as the ‘CII’) Chandrajit Banerjee, “Public policy plays a pivotal role in creating an enabling environment conducive to innovation, and since the last two years, we have seen important activities in India like the formation of India's high-level task force on innovation and consultative exercises on both innovation policy and better innovation metrics.”[1]



[1] http://www.business-standard.com/article/current-affairs/india-moves-up-six-places-to-60th-on-global-innovation-index-report-117061500680_1.html

Bitten by the Yoga bug, S.S. Rana & Co., turns it’s Conference Room into a Yoga Studio

June 21, 2017 marks the third International Yoga Day, two years after Indian Prime Minister Narendra Modi successfully convinced the UN to declare an International Day for Yoga. The declaration was made on December 10, 2014, and India celebrated the inaugural Yoga day with full fervor on June 21, 2015, as covered in Vol. VII, Issue No. 25 of our e-newsletter “IP ©onnect”, dated June 22, 2015, available here.
The celebrations did not simmer down for the third edition of the Yoga day, as over 50,000 people performed yoga braving early morning drizzles, led by PM Modi during the event held at Ramabai Ambedkar Maidan in the city of Lucknow, Uttar Pradesh.
The logo of International Day of Yoga is the folding of both hands. It symbolizes ‘Yoga’ that is the union, which reflects the union of individual consciousness with that of universal consciousness, a perfect harmony between mind and body, man and nature – a holistic approach to health and well-being.

Bitten by the Yoga bug, we turned our office Conference room into a makeshift Yoga Studio. From short talks on yoga, work-life balance, a session on relaxation techniques and experiential session on meditation, we organized a series of events, and the employees also pledged to make yoga an integral part of their daily lives.