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No.1
April 2008
International Association for the Protection of Intellectual Property
AIPPI General Secretariat |Toedistrasse 16 | CH-8027 Zurich
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The changing face of Intellectual Property in India
Pravin Anand, President of AIPPI India

A consensus amongst the IPR experts concluded that Intellectual Property is the key to India's growing knowledge economy. Having grown in leaps and bounds India has come a long way fast evolving reaching new heights and setting new milestones. From striking a balance between IPR protection and public policy to promoting IPR education at school and college level, India has taken cognizance to bring in better enforcement and protection laws. Some of the key developments in the last year include revamping and a face lift that has been given to the administration and infrastructure of the IP offices in India. On the legislative front, the recently notified Customs notification has been a significant measure to curb the menace of piracy and counterfeiting of goods across the Indian borders. The robust judiciary has not been very far behind in contributing towards the magnanimous development of IPR in India. Litigation in trademark, copyright, and patent in India has reached new heights with the Indian Courts adopting international principles and rulings to protect IP rights strictly in order to deter infringers. The progress in the last year has been critical having set new milestones in IPR for times to come.

Modernization of IP Infrastructure
With the new edifice in place, the recently completed modernization programme by the Government of India saw the establishment of state-of-the-art modern integrated intellectual property offices at the five branch offices including Ahmedabad and the four metros of Chennai, Delhi, Kolkata and Mumbai. The IT enabled trademark and patent offices have an updated computer database systems which has led to expedited prosecution of the patent and trademark applications as well as their grants.

Closely following the launch of the e-filing facility for patent and trade mark applications by the Union Minister of Commerce and Industry on 20th July, 2007 the Union Minister of Commerce & Industry on August 18, 2007 laid the foundation stone to the National Institute of Intellectual Property Management (NIIPM) in Nagpur which aims to cater to the needs of Intellectual Property regime that is in line with the global norms along with safeguarding national interests. Some of the primary functions of NIIPM encompass training, education and research, besides being a think tank of the government on important IP policy matters.

The Government of India already in full action plans on further expanding and investing into modernizing of the IP Offices to make them world class. It has already moved an application with the World Intellectual Property Organization (WIPO) to recognize the Indian Patent Office as an International Search Authority and an International Preliminary Examining Authority under the Patent Cooperation Treaty administered by WIPO. Currently there are 12 such offices. A significant development has been the constitution of the Intellectual Property Appellate Board (IPAB) on the April 2nd, 2007 for trying pending patent cases. On the trademark front, one of the most upcoming and awaited development would be the advent of the Madrid Protocol in India, for which India is already in league to becoming a Member conforming to the facilitative system of international standards for trademarks.

Patent Law comes of Age
The development of Patent laws in India in the recent past has been commendable with the Patents (Amendment) Act 2005 finally in place, introducing the product patent regime which affords protection to pharmaceuticals and agrochemicals recognising the end result i.e. actual product. An incidental impact of the amendment has resulted in an increase in the number of cases filed in the pre grant and post grant oppositions. Out of 190 such cases atleast 90% are directed towards the pharmaceutical sector. The first product patent that was granted for a combination to Roche in their product Pegasus. The Patent Amendment Rules 2006 have also brought in substantial degree of accountability in the Indian Patent regime in terms of the delays attributed at the administrative level in prosecuting and proceeding with the grant of patents. To effectuate and overhaul this shortcoming the Intellectual Property Appellate Board (IPAB) was constituted on April 2nd, 2007 dealing with pre and post grant opposition proceedings. All pending patent cases with effect from the noted date stood automatically transferred to the IPAB from the Delhi High Court.

Amongst other significant developments affected by the Patent (Amendment) Act, 2005 and the Amendment Rules in 2006 there has been a substantial increase in patent litigation over the last two years. In the much awaited decision of patent litigation Novartis suffered its blow when the Madras High Court dismissed its challenge to the country's patent law. The company had argued that Section 3(d) of Indian Patents Act, 1970 was unconstitutional and did not comply with the WTO's TRIPs Agreement. The Court further went on to say that it lacked the jurisdiction to rule on whether or not section 3(d) of the amended Patents Act of 2005 contravened TRIPS — and that the appropriate forum to adjudicate this issue was the WTO. Novartis launched its challenge after its patent application for Glivec was rejected under Section 3(d) of the Act, which restricts what can be patented. In particular, the section states that salts and other derivatives of known substances "shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy". India known to be having a booming generic drugs industry, the organizations campaigning for greater access to medicines claimed that if Novartis's challenge to India's new patent law was successful, then it would have restricted access to affordable medicines in the developing world. The Court also said that the question of TRIPs compliance should be dealt with at the WTO using the trade body's dispute resolution mechanism. The instant judgment is historic not only for India, but also for the rest of the world since India produces drugs worth $ 5 billions of which 65% are exported to the underdeveloped countries.

The Indian Patent legislation has come a long way from its foundation to reaching international comparable standards, providing statutory relief and the administrative upgradation, for the public at large.

IP protection at Indian Borders
In an arena where counterfeiting and piracy had become an issue of concern, the Indian government recognised the need for IPR border protection as one of its integral responsibilities to curb the menace and to deter infringers. In keeping with the International practice and harmonising Intellectual Property Legislations with the Customs Act, 1962, the Government of India through the Ministry of Finance and Department of Revenue, brought into effect the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 on May 8th, 2007. The new notification gives power to the Customs Authorities to adjudicate upon issues involving infringing products being imported into or exported from India.Under the new notification, if a rights holder apprehends the import of goods that infringe his Intellectual Property Rights, he may under Rule 3 of the said notification, give notice of the same to the Commissioner of Customs or to such officer authorised by the Commissioner, at the port of import, requesting suspension or clearance of infringing goods. Once such notice is made, the Commissioner notifies the rejection or acceptance of the same within 30 working days of the receipt of such notice, entailing the validity period during which the Customs would provide assistance to the rights holder.

An additional facet of the new ruling is to safeguard the rights of the importer, towards destruction, demurrage, and detention charges incurred till the time of disposal or destruction of such goods. This is taken care of by way of a bond executed by the rights holder with the Commissioner of Customs. The Customs Authorities also have the suo moto power to suspend clearance of goods where they have prima facie evidence or reason to believe that the imported goods are infringing Intellectual Property Rights of any rights holder. The first notice to be filed under the said notification is 'Rayban' to prevent import of its counterfeits in India.

The present notification being a powerful legislative tool has set the much needed new trend towards curbing the prevalent practice of counterfeiting and piracy of goods at a global level.

Recent Cases in Trademarks and Copyrights
Having taken the lead in 2005 in awarding high punitive and exemplary damages for infringement of Intellectual Property the trend has continued with the robust judiciary and legislative measures affording blanket protection to the Intellectual Property right owners with the overwhelming reason to deter infringers. The Courts in India have taken a leap recognising rights in shapes, movie titles, movie characters, trade dress, and colour marks protecting trademarks, copyrights and other moral rights from habitual infringers. The much talked about case of Sholay Media & Entertainment Pvt. Ltd. & Anr. v. Mr. Parag M. Sanghavi & Ors., (unreported) (CS (OS) No. 1892 of 2006) which was filed to restrain the remake of the famous Bollywood film "Sholay" by a reputed Director in the Indian Film Industry, set a milestone in the history of entertainment law in India. The suit involved issues of whether trademark protection can be granted to the title of a film and the name of its characters and whether copyright protection can be afforded to the construction of characters. The Delhi High Court in an ex-parte injunction was pleased to restrain the defendants from infringing the Plaintiff's rights and granted recognition of rights in the title of the film and name and construction of its characters. The terms of this order were further confirmed against the Defendants after a series of hearings and who gave undertakings that they will not infringe the Plaintiffs rights.

In yet another case breaking the norm, in the test for protection to shape marks under the Trade Marks Act, 1999 the Delhi High Court in Zippo v. Anil Manchandani (CS (OS) 1355/2006) (unreported) held that "where the shape mark enables the public to distinguish a product from others which have another commercial origin and to conclude that all the goods bearing it have originated under the control of the proprietor of the shape mark to whom the responsibility for their quality can be attributed". It was bracing to note that the Trade Marks Act, 1999 recognising shape marks as a statutory right was finally translated into reality. In Colgate-Palmolive Limited & Anr. v. Mr. A.O. Patel & Anr. (2005 (31) PTC 583) the Court recognised the trade dress and proprietary rights of the plaintiffs' toothpowder can and restrained the defendants from using the deceptively similar red and white trade dress of the Plaintiff's toothpowder can. On the lines of this case the court once again protected the packaging combination used by the proprietor stopping the defendant from using it in Colgate Palmoive Company v. Anchor Health and Beauty Care Pvt. Ltd. (2003 (27) PTC 478 (Delhi)). In Diago North America Inc. v. Shiva Distillaries Limited (I.A. 1717/2004 CS (OS) 255 of 2004), the Delhi High Court dismissed the plaintiff's claim for an injunction to restrain the use of the mark BRISNOFF for vodka against the deceptively similar trademark of the plaintiffs being SMIRNOFF. However, the Court recognised the similarity in trade dress and close resemblance between the defendants mark 'BRISNOFF and eyebrow device' along with the colour combination used in their bottle label, to plaintiffs' mark 'SMIRNOFF and eyebrow device' label, thereby asking the defendants to undertake and drop such deceptively similar device and make changes to the colour combinations in their label.

Taking the trend of awarding punitive damages further, in Hilton International Company v. Mr. K.V. Kumar (Suit No. 2015 of 2003), not only did the honourable Court permanently restrain the defendants from using the trademark HILTEN in respect of their Hotel business but also granted damages worth US $ 58,975 (Rs. 23.59 Lakh) to the plaintiffs. In Cartier v. Cartier Enterprises (CS (OS) no. 1208 of 2003), recognising the well established rights of the trademark owner, the Court imposed US $ 44,500 (INR 17.80 Lakh) plus 12 percent interest as damages on the defendants for infringing the trademark rights of the rights holder.

As a measure to further crack down the influx of illegal trade,.the Courts in a series of subsequent successful cases for Microsoft, awarded damages ranging from $ 15,000 to $ 2 million In Microsoft Corporation v. Ms. K. Mayuri & Ors. (unreported) (CS (OS) No. 1027 of 2005), the Court in April 2007 awarded exemplary and punitive damages as well as damages on account of loss of reputation and goodwill amounting to US $ 25,000 (INR 10 Lakh) for the reason of the sale of the spurious and pirated goods by the defendant in the name of the plaintiff's company. In July 2007 in Microsoft Corporation v. Mr. Rajendra Pawar (unreported) (CS (OS) No. 530 of 2003), filed for infringement of their trademarks and copyright, the Delhi High Court after acknowledging the rights of the Plaintiff in the trademark "Microsoft" and due consideration of the case law precedents placed on record by the Plaintiffs', awarded $ 50,000 (Rs. 20 Lakh) as compensatory and punitive damages, along with interest at 6 % per annum from the date of the decree till realisation.

The IP sector has unanimously supported the paradigm shift in the judiciary's approach towards damages in IP rights matters, which looks set to usher in a more favourable legal environment for the creation, promotion and protection of IP rights in India.

Conclusion
Undoubtedly, the Indian Intellectual Property regime has come a long way since its inception towards the protection and enforcement of Intellectual Property Rights looks ever promising. Although the recent substantive developments have bequeathed great benefits to the IP owners in India, there are still unchartered waters waiting to be explored in the pool of IP regime world wide. With a 1 billion strong pool to attract business from, India offers to be a promising player in a global market place exhibiting its fervour and commitment for proactive protection of IP rights for those who seek to invest and reap strategic benefits for times to come.
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