Justifying the Trademark Registration Regime

Tracing Origins[1]

Merchants have been using unique insignia on their goods since ancient Greek and Roman times. This was done mainly to inform buyers and other traders of the origin of their goods and to distinguish them from those manufactured by others. This practice was implicitly respected in the merchant community and guilds[2]. But for a long time, they possessed no justiciable right, except under the law of fraud, against any misappropriation of their merchandise marks. Continue reading

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Pretentious Report Reviews: GIPC Index ranks India Second-to-Worst in IP Protection

Ritvik M. Kulkarni

The United States Chamber of Commerce (USCC) has yet again awarded a dismal rank to the Indian IP Regime in the 4th Global IP Index released on February 10, 2016. The Global Index, which is prepared annually by the Global IP Chamber of the USCC (GIPC), has set out a total of 30 indicators for assessing the effectiveness and strength of IP law and enforcement in 38 countries. The GIPC also released on February 5, 2016 its Special 301 Report as an evaluative precursor to its Global Index. The Special Report and the Global Index are available here and here respectively.

The Special Report purports to serve as a comprehensive guide to all the factors that make up a robust intellectual property and enforcement system. At the very outset it expresses the American apprehension towards a concerted effort across the world to change the public perception and debate on IP, often based on distorted and inaccurate claims and in contradiction to the careful balance already integrated into the system. It further observes that:

“Globally, there are increasing calls to limit how innovators are able to protect the property rights in their inventions and creations and even calls to limit the scope of what can be protected[1].”

Graphical representations of the Overall Economy Scores, as awarded in the Global Index, are reproduced herein below[2]:

Figure 1
All rights with the US Government

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Via SpicyIP: The Delhi High Court has its Hands Tied: Writ Concerning Divisional Patent Applications

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An Insight into Sound Trademarks (Part-II)

By Ritvik M. Kulkarni, III BSL LLB, ILS Law College, Pune 

Examination of a Sound Mark

Section 2(1)(i)(viii)(zb) of The Trade Marks Act, 1999 defines “trade mark” as a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colors. Therefore prima facie, graphical representability is a sine qua non for obtaining statutory protection in India. Concurrently it is also required under the trademark laws inter alia of Australia[1], Canada and Japan.

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An Insight into Sound Trademarks (Part-I)

By Ritvik M. Kulkarni, III BSL LLB, ILS Law College, Pune 

A sound trademark is a unique sound which performs the function of distinguishing the goods / services of their manufacturer or service provider from those manufactured by all others. The scope of sound trademark may vary from a musical note (such as Intel’s jingle) to a non-human sound note (such as a MGM’s Lion Roar).

An unregistered trademark can be protected in several jurisdictions through an action for passing off, but a registered trademark is in a far better position as it receives statutory protection. In order to get a trademark registered, one is ideally required by the concerned Trademark Authority to supply a graphic representation of the proposed mark. While compliance with this requirement is fairly simple for word and device marks, it may prove as a barrier for registration of non visual marks such as those for sound, color, scent etc

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Software Licensing Audits: Autodesk Secures Right to Conduct Software Audit on Licensee

Ritvik M. Kulkarni, III BSL LLB, ILS Law College, Pune
rmkulkarni.ils@gmail.com  

Often we, as individual users, believe that using pirated software (solely for private non-profit usage of course) is not going to cause any financial or other harm to huge corporation like Microsoft. To a certain extent that may be true because for one, the cost involved in the litigation (even more in arbitration) against such an average “middle-class” infringer is going to be far more than the maximum damages that the software owner can possibly cull out from the same person.

However, when huge corporations need software to satisfy the appetite of their large number of computer systems; they have to enter into a Software Licensing Agreement with the Developer Company (or the Company which owns the software) in order to procure such software. In most cases, the SLA will carry a few restrictive clauses which perform the function of risk minimization for the developer company.

A simple example can be that of an agreement between a law firm and Manupatra for installing and getting online access to the latter’s software database. If the said law firm opts for a single-user license, the database can be accessed by the firm personnel only from one computer at any given point of time. On the other hand if the firm opts for IP access, a much larger number of personnel will get access simultaneously.

Similarly, certain developer companies, such as Autodesk, contractually require their licensee to allow the former to conduct periodic software audits on the latter. This is so required in order to ensure compliance with all restrictive clauses and other terms of use and to check the validity (and existence) of the software being used by the licensee company. In a recent case, Bangalore based BMM Ispat Ltd. filed a suit against Autodesk for intruding in the business matters of the former company under the pretext of exercising its contractual right to conduct a software audit of their SLA.

The SLA for Autodesk’s AutoCAD software provided that Autodesk reserved the right to conduct an independent software audit at a given time. Subsequently, when Ernst and Young was hired by the licensor to conduct the said audit in October 2014; it found that there were almost 50 instances of unauthorized use of the licensor’s AutoCAD software. When Autodesk confronted BMM about these findings and asked it to purchase the required 50 licenses, the latter rubbished these claims and instead filed a claim before the Additional City Civil Judge. The Learned Judge did not grant an interim – injunctions against the said audit vide an order dated 17th January 2015. After BMM filed a writ petition (WP No.3221/2015) against that order before the Karnataka High Court on 26th February 2015, the said Court directed the Learned Judge to dispose of the injunction application within 15 days.

The Learned Judge stated that Autodesk had every right to ensure compliance with the terms of the SLA as they have been so incorporated to protect Autodesk from infringement. To that extent such act cannot constitute interference with BMM’s business activities. Furthermore, the balance of convenience in the said case lied with Autodesk, and not with BMM. Consequently the Learned Judge held that while Autodesk (through its officers) was entitled to conduct the software audits, BMM was not entitled to injunctive relief.

Game of Thrones Special: HBO Cracks Down on Videology and Periscope for Unlawfully Hosting GoT Episodes

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Ritvik M. Kulkarni, III BSL LLB, ILS Law College, Pune

While Game of Thrones is one of the most popular and most viewed TV shows in the world, it is also one of the most pirated TV shows in the world. Most importantly, as many GoT fans may know, the first four episodes of the fifth season were leaked on the web.

HBO claims that this disastrous leak has been caused by groups which have been privy to the DVD preview copies of the said episodes. In order to take active steps against such unauthorized use and broadcast, HBO issued a “take-down” notices to Periscope to stop allowing its users from uploading GoT content on its live video streaming app. Furthermore, HBO also demanded a Brooklyn based bar named Videology to stop screening unlicensed GoT episodes at the bar for its customers.

Take a look at Videology’s tweet following HBO’s action here.

Even though HBO is completely right in taking such steps, maybe they should be spending more money (and then earning some more of it) on getting such entities to get a license at cheaper rates to broadcast their proprietary content.

It may be noted that HBO has tied up with TataSky in India to legitimately broadcast full length episodes to Indian viewers only a day after the US release date. However, the problem with that, for the users, is that the television censorship in India causes major (if not complete) dilution of its content; thereby leaving the viewers really disappointed and dissatisfied.

What’s the solution? Bring online streaming (live or otherwise) platforms like Netflix (or even YouTube) in India on which censorship may not be as effective. This will surely benefit HBO in the form of periodic and assured revenue from Indian viewers (who by the way make a large chunk of its viewers).

I understand that this may be an overly simplistic approach to resolve the menace of piracy; but hey, it might just work out well for everyone in the end!

(On this note I would like to invite suggestions on how we can obliterate piracy while still being able to watch our favorite shows at dirt cheap rates)

Where’s the Board’s IP Committee?

Ritvik M. Kulkarni, III BSL LLB, ILS Law College, Pune 

The Companies Act, 2013 (the Act) has brought many a change to Indian company law and its functioning. One such change is the introduction of new board committees with the intent to improve corporate governance. The following committees of the Board are now required to be set up under the Act:

  1. Audit Committee;
  1. Stakeholder Relationship Committee (earlier known as the Investor Service Committee);
  1. Business Operations and Finance Committee (earlier known as the Finance Committee);
  1. Nomination and Remuneration Committee (earlier known as the Remuneration Committee) and;
  1. Corporate Social Responsibility Committee (newly introduced)

The requirement to constitute any of these companies is based on various factors; therefore not all companies are required to form all the committees. Each such committee has a specific set of functions; often based on a policy developed and set up by a company. A company has to adopt these policies, set up the committees and appoint members of the committees through board resolutions.

The question therefore remains as to why there are no provisions in the Act for setting up an IP committee. The main reason for making such provisions is to ensure the formation of a comprehensive IP policy for the company. I understand that IP does not play a major part in all companies. To that extent such provisions should be made applicable to companies operating in certain industries such as the pharmaceutical, IT, FMCG and entertainment sectors. Since these industries earn a considerable share of their revenue from IP licensing and monetization, it is pertinent that their activities be regulated and monitored in a focused manner.

It is submitted that the Act should make room for an IP Committee based on the formulation of an IP policy. Like any other committee, the IP Committee may also be governed by set principles and functions. Some of its possible functions are as follows:

  • To review the Company’s R&D costs, expenses and revenue on a regular basis (whether monthly or quarterly). Among other things, this will compel the company to keep accurate records of their R&D activities; which may be shared with the RoC and other relevant authorities for the purpose of assessment.
  • To conduct regular IP audits in collaboration with the Audit Committee
  • To make a comprehensive and accurate valuation. This will help the company AND its investors to get a fair idea of where the company’s IP portfolio stands in the market.
  • To strategize and formulate new and innovative methods to reduce costs involved in IP related and other transactions.
  • (most importantly) to set up and hire professionals to ensure a strong and efficient IP management.
  • To assemble a team of skilled IP lawyers to aid in IP filings, negotiating licensing and technology transfer agreements, dispute resolution and other legal proceedings. Furthermore, the company may set up an IP Enforcement department to keep a stringent check upon developments with the Patent Office, Trademark Registry and Design Registry to check for infringement.
  • To infuse into the company’s personnel, especially those working in R&D and marketing, a sense of understanding the dynamics of intellectual property with a view to facilitate IP commercialization

I came across IP Committees of a couple of US corporations; view the IP policy of Unwired Planet Inc here and that of the Redpoint Bio Corporation here.

Intellectual Property in Escrow Agreements

Ritvik M. Kulkarni, III BSL LLB, ILS Law College, Pune 

An escrow is a financial instrument which is held by a third party (escrow agent) on behalf of the (mostly two) parties to a transaction. The monies in this escrow account are released only after the happening or non-happening of certain pre-decided events.

The most common example of such escrow arrangements can be found in the sale of real estate (in the US), where the buyer is required to deposit a certain amount of money in an escrow account, which is released and paid to the seller after the former has successfully met with all the conditions of their agreement to sell.

Another instance of an escrow arrangement is when a lender asks the borrower to put up security against the loan. In such agreements, the lender requires the borrower to deposit a certain amount of money (either at once or on a monthly basis) in the escrow account. If the borrower fails to pay back the amount of the loan (in accordance with the loan agreement), then the lender can, inter alia, withdraw the borrower’s money in the escrow account to adjust her dues.  On the other hand if the Borrower successfully pays back the loan amount, then she will get back all the money in the escrow account.

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Quia Timet Injunctions: Devil In Disguise?

Section 13(4) of the Patent Act, 1970 says that even after a patent has been granted, it is not presumed to be valid. Once a patent is applied for, it goes through various levels of scrutiny, namely it first goes to the Examiner of Patents who gives his opinion via the First Examination Report (FER), next the Controller examines the patent in a pre-grant opposition and then the patent is finally granted. However, as per the provisions of the Act even after going through so many levels of scrutiny, the status of patent is still under question.

Though it does sound like a self-defeating provision, in cases where injunctions are granted by the Court, first the patent needs to be prima facie proved to be valid and then a prima facie case has to be established to prove whether an injunction should be granted.

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