Legal Updates

We bring you the updates for last week. Hope it updates you with all the news from legal world.

Updates: 19th October to 25th October 2014.

In a case by one Gursahani, the SEBI’s circular increasing the limitation for arbitration from six months to three years was challenged. The court upheld the circular and dismissed the case.

In Ranbaxy Laboratories Ltd. Vs.  Novartis AG, Suit seeking permanent injunction restraining the appellant from infringing respondents Indian Patent came up for preliminary consideration before the learned Single Judge on September 08, 2014, on which date the appellant appeared to oppose the grant of any ad-interim injunction. The Court said that no ad-interim injunction can be given on lines of LA Roche Ltd. & Anr. Vs. Cipla Ltd.

The Chief Information Officer, Prof M Sridhar Acharyulu, took a strict stance on the handling and weeding out policies of government documents subject to RTIs. The Commission looking into the matter asked the concerned authority to show cause to show cause why maximum penalty cannot be imposed on him for making a wrong claim of weeding the record and for not furnishing the information to the complainant. The direction of the Commission clearly reflects the harmony between Public Records Act and Right to Information Act.

After coming out on bail, Jayalalitha took notice of the extreme steps being taken in row of the Court’s decision. She has appealed to all the supporters to condemn such acts and has promised Rs. 3 Lacs compensation to the families of the deceased. A responsible gesture by the ex-CM, but it would have been prudent to take such a stance much earlier.

In the infamous case of alleged sexual harassment in the Madhya Pradesh High Court, the accused administrative Judge has asserted before the apex Court that the woman judge “was not a disciplined member of the judiciary and after an elapsation of 15 days after the glory of the post she had formerly held, she levied reckless allegations and concocted a story in an attempt to get herself reinstated in service”. The course ahead depends crucially on the evidence advanced before the Court for efficient dispense of justice.

The All Inida Bar Association (AIBA) has written to the Supreme Court to initiate suo moto contempt proceedings against Thanti TV, a Tamil news channel. The channel is alleged to have recorded the court proceedings of the arguments put forward by Mr. Fali Nariman in the  Jayalalitha case.  Amid all this, the Kerala High Court is discussing provisions to ban lawyers from talking to journalists about their pending cases and their proceedings.

According to the direction by the law ministry, all 15,000 subordinate courts will have their judgments digitised, with new judgments to be uploaded by 6pm on the day that it is handed down. This is a welcome step which should have seen the light of the day years ago for efficient administration of the Court proceedings.

According to the direction by the Government, all its ministries will have to upload all the RTI applications and their respective replies on their websites. This documents containing personal information can be put out of the ambit of this direction. This is a potential step towards greater transparency and efficiency.

In the alleged forest land encroachment by BS Yedurappa and his kin, the Karnataka High Court set aside the Sessions court order which was stalling the investigation. The estimated area encroached is around 84 acres in the Shimoga district. With all relevant documents submitted and arguments completed, the decision will be given on 28th October.

The deadline of the biometric attendance system kicks in on the 25^th of this month. According to the direction from the PMO, all the government offices are to be installed with the electronic attendance machines. Also, the attendance is accessible to the public through attendance.gov.in. This is a simple step taken by the Government to ensure efficient governance and better service.

We hope that this summarizes the last week's News. Your comments and suggestions are welcomed.

Until next post of weekly News updates.

Abhishek Chansoria (1st Year student of IIT Kharagpur Law School)

For 'OFF Court.'

Disclaimer: This blog or any post thereof is not to be considered to be in any way associated with the official stand of IIT kharagpur or RGSOIPL on the issues being discussed in the said post. The opinions on the blog are the authors own and should not be considered as legal advice.

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You can't escape CCI !!

Author: Prigya Arora, 1st year student of RGSOIPL, IIT Kharagpur Law School.

The pharmaceutical industry of India has matured over the years into a major producer of bulk drugs, rated among the top five in the world[1]. With the escalating number of diseases, more resistant bacteria and constantly evolving viruses, there is a constant increase in the demand of drugs in market. But making new drugs and taking them into the market is a hellacious task. It includes a lot of research and development and trials and rejections that leads to enormous costs.

A new analysis conducted at Forbes puts grim numbers on these costs. A company hoping to get a single drug to market can expect to have spent $350 million before the medicine is available for sale. In part because so many drugs fail, large pharmaceutical companies that are working on dozens of drug projects at once spend $5 billion per new medicine[2].

To acknowledge the efforts and costs put up by the pharmaceutical companies for this R&D, the novel drugs are given patents so that these companies can get the exclusive rights to manufacture that drug under The Patents Act, 1970. But once the patent expires, the formula of the drug becomes open (generic) and anyone is free to produce and manufacture it. The core issues for most drug companies are pricing, patent expiration of number of drugs and increasing legal and regulatory concern. To recover these high costs, the pharmaceutical companies try to maintain the monopoly in the market by paying off small local cheap generic drug producers for keeping them off the market. Some companies alter the compound and sell at much lower prices which surely upsets the comparatively larger companies.

Such issues can be observed as in the case of F. Hoffmann-La Roche Ltd. v. Cipla Ltd.[3]In 2008, Roche sued Cipla before Delhi High Court claiming that Cipla’s generic product Erlocip violates Roche’s patent rights over the Erlotinib Hydrochloride (EH); Indian Patent No. IN '774. Moreover, Cipla’s generic version costs about 1/3rd of Roche’s patented drug. The Court dismissed Roche's patent infringement suit in 2012. To counter such problems, the Competition Commission of India (CCI) which regulates country’s competition may now examine the details of patent settlements being negotiated between foreign branded medicine companies and local generic drug makers as these agreements may restrict the access of cheaper drugs to the unwell.

The other cases which CCI is likely to examine includes patent infringement battle between Swiss drug maker Novartis and Indian biotech firm Biocon, and the other between US-drug multinational Merck Sharp and Dohme Corp. (MSD) and India’s Glenmark Pharmaceuticals Ltd., both these cases are based on patent infringements of anti-diabetic drug of different kinds.

The argument is not that MNCs should be stopped from coming to India; the real concern is to guarantee that if they potentially harm competition, then steps are taken to ensure that the harmful effect is diluted. Generic drugs on the other hand, have become a necessity for the availability of cheap medicine to the poor class of India. With the involvement of CCI in the pharmaceutical sector, it is expected to bring a positive impact on the distribution of medicines in India as well as a check on prices charged to the customers.

In the past, until the passage of the CCI’s involvement, these issues were managed by administrative decisions of ministries and the Foreign Investment Promotion Board (FIPB) route. This approach had the impression of arbitrariness of government decisions. On the contrary, CCI operates within a well defined structure, providing legal certainty and transparency to the parties with clearly defined appellate processes. The Competition Act, 2002 empowers the Commission to evaluate all aspect of the proposed deal such as reduction of capacities for production or R&D and market distorting issues related to ownership of IPR. Further, this structure has in-built systems for consultation with appropriate sources, including ministries, department of government and designated persons or cells in these organizations[4].

Government of India has taken a very optimistic decision to allow CCI to be the watchdog of pharmaceutical settlements. As the role and powers of the CCI have been notified very recently, the ultimate test of their efficacy lies in the implementation. Both domestic and foreign pharmaceutical companies must realize the importance of public health and the need for affordable and accessible medicines to all consumers in a densely populated country like India and must rearrange their business models to serve the larger purpose.

 Disclaimer: This blog or any post thereof is not to be considered to be in any way associated with the official stand of IIT kharagpur or RGSOIPL on the issues being discussed in the said post. The opinions on the blog are the authors own and should not be considered as legal advice.

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[1] Dr. Geeta Gouri (Member: Competition Commission of India), Competition Issues in the Generic Pharmaceuticals Industry in India,http://www.cci.gov.in/images/media/presentations/ComIssGenPharmIndusIndia_20100401142

346.pdf

[2] http://www.forbes.com/sites/matthewherper/2013/08/11/how-the-staggering-cost-of-inventing-new-drugs-is-shaping-the-future-of-medicine/

[3] 159(2009)DLT243

[4] “Foreign Direct Investment in Indian Pharmaceutical industry”,http://cci.gov.in/images/media/ResearchReports/shahbaazInternreportdec2011.pdf

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Extending the ‘passing off’ remedy of Trademark to domain names

Domain Name

In the general parlance we know that a Trademark is used to identify the products or services from a particular source (the Company from where the goods/services originate) , for example at the very moment the device through which this article is being accessed, be it a laptop, tablet, phone etc. has a Trademark say Dell, Sony, Apple, Nokia, Nexus etc. Due to the wide reach of internet to the users, almost all the companies have a website where the products and its specifications are displayed. Every company obtains a domain name and usually companies desire to obtain such domain names similar to the Trade mark of the company for the ease of users to relate. For example,consider 'Cipla' which is the Trade mark of one of the largest generic drug manufacturer in India, has the domain name of the Company as "www.cipla.com". 

The important question that would arise is ‘How does a domain name satisfy the characteristics of a trademark, thereby invoke a remedy for passing off?’ This can be understood by looking into the decisions of High Court and Supreme Court.The vacuum formed due to lack of legislation in this area has been filled by the Indian judiciary (The domain name disputes can be resolved through Uniform Domain-Name Dispute-Resolution Policy (UDRP) where there are Approved Dispute Resolution Service Providers like WIPO – it is not the area of our focus).

Let’s decipher the concept of passing off and later extend it to domain names.

Trade mark (as defined in Section 2(1)(zb) of The Indian Trademark Act, 1999): means 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.

Passing off: A company would establish consumer base, goodwill and reputation through its goods and services; Passing off is the act of gaining advantage (by misrepresentation) of the established goodwill of the former.The prior user of the mark has an added advantage. As stated by P.Narayanan, an established author in intellectual property law,few examples of passing off are[i]:

• False representation;
• Adoption of a trade mark either in whole or in part;
• Colorable reproduction of trade mark;
• Copying the label, scheme or get up of the mark.

Also, the passing off remedy can be invoked by non-registered users also unlike a remedy for infringement which is only provided for registered users, so this is the only form of remedy in case of domain name. 

A Trademark should be capable of distinguishing the goods or services of one from another whereas passing off is an act of gaining advantage by misreporting the goods or services of another. Passing off is against the primary purpose of the Indian Trade mark Act, 1999 (herein after referred as “the Act”) which can be inferred from the preamble which says “An Act to amend and consolidate the law relating to trade marks, to provide for registration and better protection of trade marks for goods and services and for the prevention of the use of fraudulent marks.”The common law right against passing off can be enforced for protecting the goodwill of a trader. This right has been included in the Act and has been extended to protect the right of unregistered users.

In the ErvenWarnink B.V. v. J. Townend & Sons (Hull) Ltd., [1980] R.P.C. 31, famously known as the Advocaat case, a five element test was laid down by the House of Lords to establish a valid cause of action for passing off (which has been cited by the Delhi Court in series of cases). The apex court in the case of Laxmikant V. Patel v. Chetanbhat Shah &Anr., [2002(24) PTC 1 (SC)] laid the classical trinity test as:

1. Plaintiff must establish goodwill associated with the goods or services

2. Misrepresentation by the defendant

3. Plaintiff must show that he suffered a loss.

The first case on passing off in domain names came up before the Delhi High Court in the case of Yahoo! Inc. v. Akash Arora nand Anr.,[1999 PTC (19)210 (Delhi)], in which the plaintiff owned the domain name “www.yahoo.com”. The defendant was using the domain name “www.yahooindia.com” in relation to internet related services which is the similar field in which the plaintiff is operating. So, the plaintiff alleged that by using a quite similar domain name and format to their domain name there is an act of deceit and “Passing off”. Thus by applying the principles of “passing off” the court passed an injunction.

There were similar disputes dealt by the courts in similar circumstances but the most important case is Satyam Infoway Ltd. v. Sifynet Soloutions Pvt. Ltd.,[2004 (28) PTC 566 (SC)]. The appellant in this case, incorporated in 1995, registered domain names like “www.sifynet”, “www.sifymall.com”, “www.sifyrealestate.com” etc. in 1999. The word ‘SIFY’ is a coined word adapted from ‘Satyam InFowaY’. The defendant has obtained the registration for the domain names “www.siffynet.com” and “www.siffynet.net” in 2001 and 2002 respectively. The respondent has contended that a Domain Name could not be confused with "property names" such as Trade mark. In this case the principal questions raised were:

1. “whether internet domain names are subject to the legal norms applicable to other intellectual properties such as Trade marks?”

and

2. “whether a domain name can be said to be a word or name which is capable of distinguishing the subject of trade or service made available to potential users of the internet?”

The Apex court has held with regard to the questions raised stating that:

• The internet has become a mode for commercial activity rather than a mere means of communication;
• Domain name identifies the specific internet site, it may pertain to provision of ‘services’ within the meaning of Section 2(z) (the ‘domain name’ identifies a‘service’ which is the website, so it qualifies to be a Trade mark);
• Trade marks containing same name can co-exist but the distinctive nature of the domain name providing global exclusivity is much sought after. The fact that consumers are likely to guess a domain name has enhanced its value.

In relation to first question of passing off, the court has applied the classical trinity test:

• The evidence (newspaper publication and user base) provided by the appellant shows that it has good will;
• It is evident from the facts that appellant is the first user;
• There is likely hood of confusion (‘sify’ & ‘siffy’), with possible injury to the public and consequential loss to the appellant.

Holding that the respondent has dishonestly adapted the domain name to free-ride on appellants, the Court upheld the injunction.

The recent case of Crayons Advertising Ltd v. Crayon Advertising, of Jan 17, 2014, is also a similar domain name dispute. The disputed domain names are “www.crayonad.com” and “www.crayonadv.com” of plaintiff and defendant respectively. In this case also the Delhi High Court has iterated the same principal and this is the case which has ignited the thought in these lines.

It can be concluded that a domain name qualifies to be a Trade mark and is used to identify the source of the “services” (which is the website) provided by a person. In case of any act of deceit and passing off by a person, for using a domain similar to that another person, the latter, by proving the elements of classical trinity test and prior use, can get an injunction against the mala fide user. The Indian judiciary has played an active role by filling the gaps formed by the lack of legislation in this area by extending the passing off remedy of Trade marks to domain names.

Abbreviations:

PTC – Patent & Trademark Cases.

R.P.C – Reports of Patent Cases

SC – Supreme Court

[i]Sreenivasulu N.S, “Law Relating to Intellectual Property”.Partridge Publishing, 2013.Page 114. 

Author - Murthy Yeggina

Disclaimer: This blog or any post thereof is not to be considered to be in any way associated with the official stand of IIT kharagpur or RGSOIPL on the issues being discussed in the said post. The opinions on the blog are the authors own and should not be considered as legal advice.

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