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Intellectual Property Rights
Certain important legal developments and case laws in this area are set out below.
Copyright (Amendment) Bill, 2010 Passed
The Copyright (Amendment) Bill, 2010 (‘Copyright Bill') has been passed by both houses of parliament and now awaits presidential assent to become effective as law. Some of the highlights of the Copyright Bill are:
- The author of a literary or musical work used in a cinematographic film cannot assign his right to receive royalties on an equal basis for exploitation of the work by another in any other form other than as a cinematographic film shown at a theatre or to his heirs or to collective societies. Similarly, an author of a literary or musical work used in a sound recording cannot assign his right to receive royalties on an equal basis for exploitation of the work by another other than to collective societies or to his heirs;
- Fair dealing of copyrighted works, that is, making or reproducing copies of an original work for private use, including research, for criticism or review and for reporting of current events or current affairs, has been extended to all works except software. Earlier fair dealing was only in respect of literary, dramatic, musical or artistic work. It would now cover video and sound recording as well;
- An author's right to relinquish part of whole of his copyright has been made easier. While earlier, an author of a work could only relinquish part of his copyright by submitting a form to the Registrar of Copyrights, now a public notice would suffice. Moreover, interest in a copyright by the owner may be licenced to another by stating so in writing. Earlier such licence was required to be in writing and signed by the owner;
- Transient or incidental storage of a work for the purposes of electronic transmission of the work, or for the purposes of providing electronic links, access or integration, unless explicitly prohibited by the copyright holder, would not constitute an infringement of copyright. This provision provided limited protection to Internet Service Providers (‘ISPs'), Virtual Private Networks (‘VPNs') etc;
- Compulsory licencing under the Copyright Act, 1957 has been extended to all works, whether Indian or not. Foreign works would now be capable of being licenced compulsorily in case it is released elsewhere in the world but not in India;
- The term of copyright for photographs has been increased from 60 years of publication of the photograph to 60 years from the death of the holder of copyright in the photograph;
- The time period after which cover recordings of a sound recording can be legally made has been increased from 2 years to 5 years. Further a cover recording has to be released in the same medium as the original. Payment of royalties on a minimum of 50,000 copies would have to be made by the person covering a sound recording to the copyright holder for ever year the cover versions intends to be sold.
Samsung Electronics Company Limited and Anr. v. Kapil Wadhwa and Ors.
In the instant case, the defendant, who was and erstwhile authorized dealers of Samsung printers, was selling genuine Samsung printers in the grey market in India, although the printers were procured from outside India. These printers were being sold in the grey market without adherence to various statutory norms such as affixing the maximum retail price and were also not earmarked to be ‘sold in India'. The defendant and his associates (‘Defendants') were also operating a website where the printers were being offered for sale at a much lower price than that of Samsung. The Defendants also used the technique of deep hyper linking to make it appear that they were indeed connected to Samsung.
The questions primarily decided by the court were as follows:
a. Whether the sale of genuine imported products without the consent of the exclusive right holder in India amount to infringement of trademark?
Section 29 of the Trademarks Act, 1999 (‘Trademarks Act') provides that when a person uses in the course of trade, a mark, which he is not permitted to use, he is culpable of infringement. This section makes no distinction between genuine and other products and as such, such a distinction may not be read into the Trademarks Act. The court observed that parallel import of genuine products amounts to use of identical trademark or identical goods and such import is a very straightforward infringement.
b. Whether section 30(3) of the Trademarks Act recognizes national exhaustion or international exhaustion?
Section 30(3) of the Trademarks Act has been interpreted to mean that once goods are acquired by a person from the registered proprietor within the same market, a registered proprietor cannot later claim that there has been an infringement of his trademark on account of change of ownership of the goods by way of assignment. However, it has been held that Section 30(3) is restricted to acquisitions from within the domestic market. Thus, goods acquired from outside India, without permission of the exclusive licenced authority/proprietor within India are not exempted under section 30(3) of the Trademarks Act and thus constitute an infringement of proprietor's trademark.
c. Whether meta tagging and deep hyper linking of a registered trademark constitute infringement?
On this issue, the court held that promotion of products on the defendants website by linking them to the trademark of Samsung in order to take advantage of the registered trademark of Samsung could not be categorized as fair use, and amounted to infringement.
Compulsory licence granted by Patent Office
In a landmark decision, the Indian Patent Office granted a compulsory licence to Natco Pharma Ltd ("Natco") in respect of chemotherapy drug named Nexavar manufactured and patented by M/s Bayer Corporation. This is the first compulsory licensing application of its kind.
Section 84 of the Indian Patents Act, 1970 ("Patent Act") provides that on the expiry of 3 (three) years from the date a patent was granted, any other interested person may apply for a compulsory licence to work the patented invention on any of the following grounds:
a. That the reasonable requirements of the public with respect to the patented invention have not been satisfied;
b. That the patented invention is not available to the public at a reasonably affordable price;
c. That the patented invention has not been worked in the territory of India
In the instant case Natco, in its application claimed that three years had elapsed since the grant of patent to Bayer and it had failed to work the invention in India and consequently the drug is not available to the public at large at a reasonable price. Natco claimed that Nexavar was priced at INR 2.85 lacs for a one month course of 120 tablets, whereas the generic version of the company was available at a fraction of the price at INR 8900. Hence, a compulsory licence to work the patent was granted in favour of the company.
The Controller of Patents, while deciding the matter, also observed that the company had tried to obtain a voluntary licence from Bayer for its generic version, but the request was refused.