Intellectual Property Right The Indian Experience
by Dr Justice A.S. Aanad*
Cite as : (1997) 6 SCC (Jour) 1
Intellectual property as a class presents different issues and situations than other property and because of its strategic exploitation it poses different questions. Intellectual property differs from other forms of property because of uncertainties regarding its value and how it can be used. Intellectual property, cannot be kept in a safe deposit vault or be deposited in a bank or locked up in a house. The said property, whether in the form of a copyright, trade mark or a trade name, or in any other form, is easily and readily available to the general public and is, therefore, more easy to steal. Having the right of intellectual property registered is no guarantee of its safety from being stolen. The registration is nothing more, in effect, than the recognition of the right of ownership. This property, which is a product of the intellect, is, therefore, very difficult to protect. Commercial piracy is big business. There is hardly any country in the world where pirated articles are not being sold.
Any law which provides protection to intellectual property and creates legal rights in it must necessarily provide remedies if the rights are infringed.
Indian patents law has always had its roots in the UK patents law. However, unlike Great Britian where the concept of a patent originated from the exercise of Royal Prerogative to grant monopolies, in India a patent has always been the sole creation of statutes of Indian Legislature.
The first Indian law relevant to patents was enacted in 1856 for grant of exclusive privileges to inventors. This Act was however, found defective and was re-enacted in 1859. In 1872 the Patents and Designs Protection Act was passed followed by Inventions Act of 1883 and Inventions and Designs Act of 1888. Subsequently, Indian Patents Act and Designs Act, 1911 was passed which replaced all previous legislations. This Act established for the first time in India a system of patent administration under the management of Controller of Patents.
In India, there are four statutes dealing with intellectual property rights: The Designs Act, 1911; The Copyright Act, 1957; The Trade & Merchandise Marks Act, 1958 and The Patents Act, 1970 which govern and protect different types of Intellectual Property Rights. These Acts also provide for legal remedies which can be invoked by an aggrieved person in the event of an infringement.
All the four Acts contemplate and provide for civil action being taken, whenever the need arises. Even though criminal action can also be taken, in actual fact, for enforcing intellectual property rights, the aggrieved person in India generally speaking seeks civil remedy.
Civil remedy is invoked by instituting a suit in a court of competent jurisdiction. The reliefs which can be asked for are grant of injunction, damages and accounts, delivery of infringing goods or material. The most common and the most effective and important relief is that of grant of an injunction. Though the right to seek an injunction is expressly provided for by the provisions of the Copyright, Trade Marks, Designs and Patent Acts, the procedure and principles which have to be followed are those which are laid down in the Code of Civil Procedure, 1908 and the Specific Relief Act, 1963.
Under the Trade and Merchandise Marks Act, 1958 and the Indian Patents Act, 1970 no suit for the infringement of a registered trade mark or any right relating thereto or for passing off arising out of the use of any trade mark can be instituted in any court inferior to a District Court. District Court means the Principal Civil Court of Original Jurisdiction in an area and includes the High Court having original jurisdiction to decide civil suits.
Chapter XVIII of the Indian Patents Act, 1970, deals with suits concerning infringement of patents. Under this Act, suits for an infringement of patent shall be instituted in a court not inferior to a District Court having jurisdiction to try the suit. But where the defendant files a counter-claim for revocation of the patent, the suit along with the counter-claim must be transferred to the High Court for decision. Thus, Indian law permits a challenge to registration in the infringement action in the form of asking for revocation. Other laws may require a separate challenge to registration or an application for revocation before either administrative authorities or the court.
Under Section 105 of the Indian Patents Act, 1970 it is open to any person to institute a suit for a declaration that the use by him for any process or of use by him of sale of any article, as specified, would not constitute an infringement of patent. This procedure which is seldom availed of, is subject to the condition that the plaintiff must first apply in writing to the patentee or the exclusive licensee of the patent for an acknowledgement to the effect that the process being used by the plaintiff or the article manufactured or sold by the plaintiff does not infringe the rights of the patent-holder. The plaintiff should, for this purpose, provide to the patentee or the licensee, full particulars in writing of the process or article in question. Secondly, the patentee or the licensee should have refused or neglected to give such an acknowledgement. The plaintiff can also ask for such a declaration where the patentee or the exclusive licensee has asserted to the contrary. However, in such a suit for a declaration, the costs of the parties are required to be paid by the plaintiff, unless the court for any special reason orders to the contrary. In such a suit the validity of the patent cannot be called in question.
Another interesting procedure which is available under the Indian Patents Act, 1970 is the power granted to the court to grant relief in cases of groundless threats of infringement proceedings. In such an action under these provisions the plaintiff can pray for a declaration to the effect that the threats are unjustified; he can ask for an injunction against the continuance of the threats and also damages if any, he may have sustained thereby. In such a suit, unless the defendant proves that there is, in fact a threat of infringement of his patent or any other right arising from the publication of the complete specification in respect of the patent the court may not grant relief to the plaintiff. However, a mere notification regarding an existing patent issued by the defendant cannot be construed as a threat of infringement.
Generally speaking, to constitute an infringement, the article must contain each and every essential element of the registered article. If the infringement is of a non-essential element the action will fail. Normally, the infringer mixes the essential and non-essential features. The question which, therefore, has to be decided is: What is the real substance of the invention which has been patented; whether it is a patent of the process, or whether it is a patent of the end result, or whether it is a combination of both. For example, where a patent is taken out for a process in arriving at a known result, any other person may take out a patent for another process for arriving at the same known result. But when a patent is taken out for a new result which was not known before and the patent describes one specific process in arriving at the new result, the patent is entitled to protection against even other processes in arriving at the same result. Therefore, no other person may be allowed to simply adopt a different process in arriving at the result without infringing the patent.
There is another common type of infringement. A person may make slight differences in the appearance or arrangement of his article although he really uses the essential features of the patent. He may change the colour or modify the shape or make some small changes or additions in order to suggest that he has not infringed the patent in question. In such cases, the court may hold the article to be a colourable imitation of the patented machine. The same is true of trade marks registered under the Trade and Merchandise Marks Act, where the infringer may change some small feature, or in the case of a letter mark, change one or two letters of the word. In every case, the court has the obligation to judge whether the infringing mark is essentially similar to the registered mark.
One of the effective orders at the interim stage which is used in some jurisdictions is what has come to be known as Anton Piller order. In the case of Anton Piller KG v. Manufacturing Processes Ltd.1 the Court of Appeal in England held that in most exceptional circumstances, where plaintiffs had a very strong prima facie case, actual or potential damage to them was very serious and there was clear evidence that defendants possessed vital material which they might destroy or dispose of so as to defeat the ends of justice before any application inter partes could be made, the Court has inherent jurisdiction to order the defendants to permit the plaintiffs' representatives to enter the defendants' premises to inspect and remove such material; and that in the very exceptional circumstances the Court is justified in making the order sought on the plaintiffs' ex parte application. Thus, the Anton Piller order aims at protecting the plaintiff against the activities of an unscrupulous defendant who may defeat or diminish the plaintiff's chances of success by destroying or removing offending evidence.
Indian law excludes inter alia the following inventions from patentability-
(a) contrary to law and morality,
(c) mathematical formulae or abstract theory,
(d) living organisms per se,
(e) methods of agriculture and horticulture,
(f) foods and drugs per se.
The terms of an Indian patent is 7 years from the date of filing in respect of food and drugs. In other cases it is 14 years.
India's Patents Act prohibits patents for any invention intended for use or capable of being used as a food, medicine, or drug, or relating to substances prepared or produced by chemical processes.
Under the Indian Patents Act of 1970, there is a provision that if the patent is applied for in respect of an invention which is relevant for defence purposes, the Controller may give directions prohibiting or restricting the publication of information with respect to the invention. The Controller is required to give notice to the Central Government in order that the Central Government may consider whether the publication of invention is prejudicial to the defence of India. When such directions have been given by the Controller, any contravention of such directions is punishable with imprisonment which may extend to two years or with fine or both.
In a suit for infringement of trade mark, the reliefs which are usually asked for and granted are of injunction, and at the option of the plaintiff, either damages or an account of profit. The distinctive feature of an injunction is that it restrains the defendant from doing certain specific acts. But some additional forms of action are available at times under the Indian law.
In the recent years, difficulty has been felt with regard to the jurisdiction of the courts to deal with cases of passing off where action is brought by persons who have intellectual property rights registered abroad. I shall deal with it in a later part of this paper.
In the case of trade marks under the 1958 Act, the plaintiff can also file a suit against the defendant for passing off his goods as those of the plaintiff. This claim does not depend on the trade mark being registered. The plaintiff can bring an action for passing off, if the mark, sign or device which is used by the defendant is deceptively similar to that of the plaintiff. The principle of a passing off action is that no man is entitled to represent his goods as being the goods of another man. In some jurisdictions, an allied principle of "unfair competition" is applied. Passing off actions are very common even in countries where there is not much litigation relating to patents. A new entrant or even an existing entrant in a trade is often tempted to copy a successful product of another competitor, either by using a similar mark or label or wrapper of the more successful product. In a more extreme case, there may be a direct false representation that the goods are manufactured by the plaintiff. But normally the device used is to adopt a mark which is a colourable imitation of the mark of the plaintiff. Sometimes, the essential part of the rival trader's name is adopted as a part of the defendant's name. At times, the get up or colour scheme of the label which is used by the plaintiff is a copy. At times, the design or shape of the goods or design or shape of the container are imitated. Sometimes, the trade mark of the article which is known in the market is adopted or used by the defendant. As in the case of infringement so in the case of passing off also, the plaintiff will have to prove damages or ask for an account of profits. The remedies basically which are available to the plaintiff for such an action are similar to the remedies available for infringement actions. The same is the case where the claim involves piracy of a design.
Under the Indian Designs Act, 1911, for every contravention the infringer may be ordered to pay to the registered proprietor of the design, a sum not exceeding Rs 500 up to a maximum of Rs 1000. In case the proprietor brings a suit for recovery of damages and injunction, the infringer will have to pay such damages as may be awarded by the court.
The experience in India has been that most of the disputes, relating to breach of intellectual property rights get decided and settled at the interlocutory stage, more often than not out of court. For reasons beyond the control of the courts, an action for breach of an intellectual property right takes a number of years before it is finally concluded, with the passing of the decree or dismissal of the suit. That is why the parties attach utmost importance to the decision on the application for temporary injunction. Normally, the plaintiff asks for an interim injunction against the defendant from infringing his intellectual property rights during the pendency of the litigation. This is a very important remedy in an infringement action because it provides immediate relief against infringement. However, such an interim injunction is granted on the basis of affidavits and before a full trial. Therefore, the plaintiff is required to make out a strong prima facie case before he can obtain an interim injunction. Clearly, such an injunction would considerably restrain the defendant's activity and, therefore, the court will not put such a restraint on the defendant unless it is satisfied that there is a strong prima facie case which indicates infringement. The grant or refusal of temporary injunction, more often than not, brings about an end of litigation between the parties. If an injunction is granted and the defendant is prevented from, for example, selling goods in breach of a registered trade mark then thereafter the plaintiff is usually in no hurry to expedite the hearing of the case.
The Indian Copyright Act, 1914 and the Copyright Act, 1911 passed by the British Parliament (as modified in its application to India by the 1914 Act) were in force in India at the time when India became independent. These pre-existing laws continued to be in force by virtue of Article 372 of the Constitution of India till 21-1-1958, when the Copyright Act, 1957 passed by the Indian Parliament came into force.
Under Section 14(1)(a) of the Copyright Act, 1957, copyright in the case of a literary, dramatic or musical work means the exclusive right of the holder to reproduce the work in any material form; to publish the work; to produce, reproduce, perform or publish any translation of the work; to make any cinematographic film or a record in respect of his work; to communicate the work by any means to the public as well as to make any adaptation of the work. In the case of an artistic work, the holder of copyright may do whatever is recognized in Section 14(1)(b) of the Copyright Act, 1957. Clauses (c) and (d) of Section 14(1) of the Act deal with the rights of a copyright-holder in a cinematograph film or any record. Chapter IV of the Copyright Act, 1957, deals with the ownership of copyright and the rights of the owner. The author of a work or a person who is deemed to be the first owner of the work under Section 17 is recognised as the first owner of the copyright. A copyright can be assigned for value under Section 18 and, on such assignment, the assignee becomes the owner, with the right to exploit the copyright to his advantage to the extent it is assigned in his favour. The owner of a copyright can relinquish his right also, as provided by Section 21 and, on such relinquishment, it ceases to exist. Section 22 of the Act provides that except as otherwise provided therein, copyright shall subsist in any literary, dramatic, musical or artistic work (other than a photograph) published within the lifetime of the author until 50 years from the beginning of the calendar year next following the year in which the author dies. The period of 50 years has been increased to 60 years by an amendment of the Act in 1992.
Under the Copyright Act, 1957 also the court in which an action for infringement would lie is a District Court. With regard to the territorial jurisdiction, however, it is provided by Section 62(2) of the Copyright Act that it is that District Court which will have the jurisdiction to try such an action within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceedings, the person instituting the suit or other proceeding or, where there are more than one such persons, any of them actually and voluntarily resides or carries on business or personally works for gain.
Under the Copyright Act, 1957 any person who knowingly infringes or abets the infringement of copyright in a work or any other right conferred by the Act, is also punishable by imprisonment for a term of not less than 6 months, but which may extend to 3 years and with a fine which shall not be less than fifty thousand rupees, but which may extend to two lakhs of rupees. If the infringement has not been made in the course of trade or business, a lesser sentence and lesser punishment can be imposed. There is an enhanced penalty for a second and subsequent infringement.
Another special provision under the Copyright Act deals with knowingly making use on a computer of an infringing copy of a computer program, where the punishment of imprisonment may extend to 3 years and a fine of not less than fifty thousand rupees, but which may extend to two lakh rupees. The police have been given the power to seize the infringing copies.
There has been, however, substantial strengthening of India's copyright law to bring it on a par with international standards. There is no statutory presumption of copyright ownership and the defendant's actual knowledge of infringement must be proved.
The latest threat to copyright law is in the increasing proliferation of Internet. The Internet development has changed the dissemination of information even to the extent of replacing printed works completely. Today a large number of houses/offices throughout the globe are linked to a computer centre via viewer/printer consoles. The result is that the supply of one copy of a new work to a central point would make it or even selections from it, available to all offices and houses which are linked to the central point. Bearing in mind that the whole concept of copyright in modern times arose from the invention of the printing press, even its partial replacement by computers amounts to a revolutionary change, why should not copyright owners be allowed to exercise their copyright at the input stage and look to the computer disseminator for the royalties in the same way that they have looked towards their publishers in the past. There is yet another challenge to copyright law which is posed by cable diffusion and it also requires institutionalized collective administration of the rights and payment of an equitable remuneration for performances and producers of phonograms whose performances or phonograms are used in cable transmission.
In the case of infringement of copyright, however, by reason of recent amendments in law, the offence which is committed is regarded as a cognizable offence. A cognizable offence means for which a police officer may arrest without warrant. A police officer, not below the rank of a sub-inspector, on his being satisfied that an offence of infringement of copyright or other rights conferred by the Act is being or is likely to be committed has also the power to seize without warrant all copies of the infringing work and all plates used for the purpose of making infringing copies of the work. This seizure can be effected wherever the said infringing material is found. This makes the criminal proceedings under the Copyright Act more effective, as the delay in obtaining warrants from the Magistrate before conducting a raid is eliminated. The effect of this provision is that a threatened infringement of the copyright can be nipped in the bud, possibly even before the commission of an offence. In fact, even at the preparation stage the police officer has the power to take custody of the infringing material.
In the field of copyright, India as a signatory to the Berne Convention passed the International Copyright Order, 1958 which is now replaced by the International Copyright Order of 1991. It provides the same protection to nationals of member States as its own nationals. The States so covered are the Berne Convention signatories, the Universal Copyright Convention countries and the Phonograms Convention countries. Patents and trade marks registered outside the country are protected against infringement in India if they have acquired international reputation and goodwill. The courts often extend the principles of unfair competition or passing off to stop infringement.
Protection of trade marks/patents registered abroad:
Soon after India became independent in 1947, it was felt that the Indian patents law required revisions to make special allowance for the existing socio-economic conditions of the country. The Patents Act, 1970 is the culmination of that revision. The Act changed the concept of invention and separated designs law from patents law. Last few years have seen changes in the industrial policy, liberalisation and emergence of India as an important global market. However, despite strong opposition by political parties and by pharmaceutical and agricultural sectors on personal grounds, India which did not sign the Paris Convention has signed GATT/TRIPS agreements in 1994. The reasons why public opinion became strong and India did not become a party to the Paris Convention are:
(a) it was considered retrograde step towards recolonisation;
(b) it was considered as aimed at undermining Indian legal system by reversal of burden of proof;
(c) that it would escalate drug prices and made the availability of drugs to the poor citizens impossible; and
(d) it would have a devastating effect on agriculture.
However, on account of the signing of GATT/TRIPS agreement from 1-1-1995, Indian Patent Office has started receiving applications for pharmaceutical substances as per Article 70(8) of GATT. These applications are commonly called "Black Box applications" and will be taken up for consideration only after 31-12-2004 for grant of a patent with a provision for obtaining pipeline protection - Article 70(9). With effect from 3-1-1995, India recognises all signatories to GATT/TRIPS Agreement for the purposes of claiming priority. Thus, an Indian application may claim priority from a basic application filed in Japan provided the Indian application is filed within twelve months from the date of filing of the Japanese application.
India has, thus, been given 10 years' time to amend the patents law to incorporate the requirements of GATT. It may not take 10 years because the process has already been initiated.
Important changes which are expected by amendment are:
(i) grant of patents for pharmaceutical, chemical and food substances per se which are at present unpatentable.
(ii) enlargement of the term of a patent from 14 years to 20 years from the date of filing.
(iii) recognition of micro-organism as a patentable subject-matter.
(iv) reversal of burden of proof in cases of infringement of a process for producing a novel compound where it prima facie appears that no other process could have been used.
The TRIPS Agreement concluded as a part of the GATT Uruguay Round of 1994 contains specific provisions for standards which should be provided in the laws which may be framed by the member States for the protection of intellectual property. Many of the requirements under the TRIPS Agreement are similar to those found in existing international conventions which have been formulated and administered under the auspices of the World Intellectual Property Organisation, such as the Paris Convention covering patents, trademarks, industrial designs and the Berne Convention which covers copyright in literary, dramatic, musical and artistic work. Two basic principles provided by TRIPS are that each member State shall accord to the nationals of other members treatment no less favourable than it accords to its own nationals (national treatment) and any advantage, favour, privilege or immunity granted by a member to the nationals of any other country shall be accorded immediately and unconditionally to the nationals of all other members (Most-Favoured Nation treatment).
India has declared all members of GATT as "convention" countries. An Indian application can, therefore, claim priority from a basic application filed in any member country of GATT after 3-1-1995.
Meanwhile, it would be comforting for the international community to know that reputation of trade marks of overseas companies is being recognised in India and there have been significant judicial precedents on the question of transborder or spill-over of international reputation, notwithstanding the fact that India is not a signatory to the Paris Convention and the patents law has not so far been amended in India after the signing of GATT.
In November 1993 the Delhi High Court restrained two local companies by separate orders of interim injunction from using BENZ and MERCEDES respectively.
The restraint order in respect of BENZ involved a company in India engaged in sale of undergarments under trade mark VIP-BENZ in combination with a three-pointed human figure in a ring - characteristic of the three-pointed star device of Daimler Benz AG - with the legend "Germans would be proud of it". While upholding the plaintiff's claim for interim injunction, the High Court made the following observations:
"I think it will be a great perversion of the law relating to trade marks and designs, if a mark of the order of the 'MERCEDES BENZ', its symbol, a three-pointed star, is humbled by indiscriminate colourable imitation by all or anyone; whether they are persons, who make undergarments like the defendant, or anyone else. Such a mark is not up for grabs - not available to any person to apply upon anything or goods. That name which is well known in India and worldwide, with respect to cars, as is its symbol a three-pointed star."
Yet another interesting observation in this case was:
"In my view, the trade mark law is not intended to protect a person who deliberately sets out to take the benefit of somebody else's reputation with reference to goods, especially so when the reputation extends worldwide. By no stretch of imagination can it be said that use for any length of time of the name 'BENZ' should not be objected to."
(Daimler Benz v. Hybo-Hindustan2 )
The Supreme Court upheld that order. A restraint order was also passed in respect of use of MERCEDES on casseroles following the above judgment.
The principles enunciated in the above decisions were followed in another judgment by the Delhi High Court in October 1994 in the Whirlpool case. This was a passing off action instituted by Whirlpool Corpn. against an Indian company, seeking grant of an ad interim injunction preventing the defendant from passing off its goods as those of the plaintiffs by use of trade mark "WHIRLPOOL". One of the questions before the Court was whether the plaintiff - who was not selling in India - could claim the benefit of transborder reputation in trade mark "WHIRLPOOL" so as to maintain a passing off action in India or should its goodwill and reputation be confined to territories in which it has proved actual use of the trade mark in the market. The documents filed in the proceedings proved that some limited sales had been made to US Embassy and USAID in India and that the "WHIRLPOOL" products had been advertised in magazines having international circulation including in India. The Court held that the plaintiff could bank upon transborder reputation of its washing machines for the purpose of maintaining passing off action in India. The Supreme Court upheld that decision.3
It would, thus be seen, that even where neither "the process" nor the "product" is directly in issue Indian courts have gone beyond the cold print of the statute and granted relief to protect worldwide reputation which a trade mark has acquired, even where the trade mark as such has not been registered in India.
The rapidly growing international trade makes it imperative that intellectual property rights are properly recognized and managed in different countries of the globe. National protection is no longer adequate to safeguard intellectual property rights which can easily be pirated or copied by nationals of other countries and exploited in their own market or even in international markets. International remedies for such infringement are necessary. The earlier conventions which are administered by the World Intellectual Property Organisation and the provisions of the TRIPS Agreement are a step towards such international protection of intellectual property rights. Suitable laws which will protect such rights internationally and give adequate monetary compensation to the owner without creating any undue monopoly in the property can and are being formulated as standards for laws to be enacted by the different countries of the world. These standards reflect the experience of various countries of the world in protecting and enforcing such rights, while taking care of public interest in the availability of new ideas and technologies.
At this stage, it will be relevant also to point out some dangers inherent in the grant of certain patents which affect human life. A patent has been granted by the European Patent Office to Biocyte according to which Biocyte has the right to the use of any "stem cells" from umbilical blood. Anyone who wants to use "stem cells" for medical purposes and procedure would have to apply for a licence and possibly pay a royalty to Biocyte under terms of the patent. Patenting blood cells found in the umbilical blood between mother and child is a serious matter as these mother cells of blood when introduced into diseased part of the body can repopulate with new healthy blood cells. Why was the patent obtained from European Forum and not from US? Is the patent not too broad? Should life be patented? These questions need an answer.
There are allegations that developed countries have taken away germ plasm (first generation) and are patenting seeds made out of them (2nd generation) - Biotech diversity - for sale in India at high prices. Should not underdeveloped countries get compensation from them for pirating these genes? The developing countries should protect and promote breeding and research operations which can increase production of new seeds.
The concern of the developing countries, when they are opening their vast markets for international trade by adding safeguards against undue monopolistic exploitation of vital knowledge techniques or life-saving drugs needs to be taken note of to draw up acceptable standards for protection of intellectual property rights and ensure fair international trade and commerce and bring about some sort of uniformity in this field for all the "convention" countries to follow.
- (1976) 1 All ER 779 : (1976) 2 WLR 162, CA
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- CA No. 4839 of 1994 decided on 18-7-1994 (arising out of Suit No. 1388 of 1993, High Court of Delhi)
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- N.R. Dongre v. Whirlpool Corpn., (1996) 5 SCC 714 Return to Text