IP Law and Growing Technology

India is paving its way ahead in the field of innovation and technology and was recently ranked among the top 15 countries in relation to intellectual property (IP) filings by the World Intellectual Property Rights Organization (WIPO) . Even the Department of Promotion of Industry and Internal Trade (DPIIT) in India launched an app and a website to help innovators, entrepreneurs and small and medium industries (SMEs) to learn to protect their IP rights and maximise their innovations. Further, the Indian Courts are also trying to cope with technology, with the Delhi High Court ordering Facebook and other social media platforms to take down defamatory content of Baba Ramdev globally. Thus, we can see that steps are being taken to ensure that the Indian IP law is in sync with the growing technology. In this issue of our newsletter, we shed light on some of the recent developments in the field of IP law in India.

Global Injunction against Facebook to take down defamatory content of Baba Ramdev

The Delhi High Court on 23rd October 2019 directed Facebook Inc. and other social media platforms to take down the defamatory material against Baba Ramdev, globally. In the case against Facebook Inc., Google Inc., YouTube LLC and Twitter International Company, the plaintiffs pleaded that defamatory material based on a book titled ‘Godman to Tycoon- the Untold Story of Baba Ramdev’ was disseminated by these platforms. The book was banned with effect to 11th August, 2017 by the order of the Delhi High Court in a defamatory suit between Baba Ramdev and the publisher who filed an appeal which is pending before the Court. The defendants contended that they were intermediaries and were exempted from the liability under Section 79 of the Information Technology Act, 2000. The defendants exercising due diligence as per the said Section and in the compliance of order of the Court dated 24th January, 2019, in the same matter, took down the defamatory content from the Indian domain. They resisted the global injunction by contesting that an order for global injunction would frustrate the principles of comity of courts and state sovereignty in International law. Since the free speech standard varied in different countries, national courts should restrict their order to geo-blocking of the content. A global injunction order would adversely impact the interests of the defendants exposing them to legal proceedings for censoring content in various countries. The Delhi High Court based its decision on the rationale that the rights of dignity and reputation of an individual under Article 21 of the Constitution of India was of paramount importance and geo-blocking will only result in partial removal of the data as the same would be accessible through various technological means. It further held that the data originating in India is very well covered within the jurisdiction of the Indian courts and therefore, the order for global injunction of such data is not impugned or contrary to the principles of International Law. The Delhi High Court ordered global injunction of the material originating in India; and in so far as the content uploaded from outside India is concerned, the Court directed that access must be blocked in the Indian domain. Facebook has appealed against this order before the Division Bench of the Delhi High Court and the same is pending to be heard on 7th December, 2019.

S&Co. Comment:

We can see that the Court has tried to bridge the gap between law and technology, and tried to strike a balance between the freedom of speech and individual liberties. However, censoring data globally might infringe the right to information of users in other countries and also the freedom of speech of the content provider in jurisdictions where the data is not defamatory. This decision has also increased the level of private censorship as intermediaries will have to constantly monitor content on their platforms.

Grounds for refusing trademark registration to be recorded in writing

On 16th October 2019, the Delhi High Court held that it was mandatory for the Registrar of Trade Marks to record the grounds for refusal or conditional acceptance of the Trade Mark registration in writing. This decision came out of a petition filed against a non-speaking order passed by the Registrar of Trade Marks on the ground of it being in violation of Section 18(5) of the Trade Marks Act, 1999. The petitioner argued that while the said Section 18(5) mandated the recording of the reasons in writing, Rule 36 of the Trade Marks Rules, 2017, was inconsistent with Section 18(5) as it did not provide for recording of the grounds for refusal or conditional acceptance. Under Rule 36 of the Trade Marks Rules, 2017, it was provided that in case an applicant intended to appeal against the decision of the Registrar of Trade Marks, he would have to apply to the Registrar whereupon the grounds of refusal/ conditional acceptance would be furnished. The Court held that Section 18(5) of the Trade Marks Act, 1999, prevailed over Rule 36 of the Trade Marks Rules, 2017. An order was passed in favour of the petitioner and the Registrar was asked to furnish the grounds within two weeks of passing of the order.

S&Co. Comment:

We can see that the Court has tried to bridge the gap between law and technology, and tried to strike a balance between the freedom of speech and individual liberties. However, censoring data globally might infringe the right to information of users in other countries and also the freedom of speech of the content provider in jurisdictions where the data is not defamatory. This decision has also increased the level of private censorship as intermediaries will have to constantly monitor content on their platforms.

Grounds for refusing trademark registration to be recorded in writing

On 16th October 2019, the Delhi High Court held that it was mandatory for the Registrar of Trade Marks to record the grounds for refusal or conditional acceptance of the Trade Mark registration in writing. This decision came out of a petition filed against a non-speaking order passed by the Registrar of Trade Marks on the ground of it being in violation of Section 18(5) of the Trade Marks Act, 1999. The petitioner argued that while the said Section 18(5) mandated the recording of the reasons in writing, Rule 36 of the Trade Marks Rules, 2017, was inconsistent with Section 18(5) as it did not provide for recording of the grounds for refusal or conditional acceptance. Under Rule 36 of the Trade Marks Rules, 2017, it was provided that in case an applicant intended to appeal against the decision of the Registrar of Trade Marks, he would have to apply to the Registrar whereupon the grounds of refusal/ conditional acceptance would be furnished. The Court held that Section 18(5) of the Trade Marks Act, 1999, prevailed over Rule 36 of the Trade Marks Rules, 2017. An order was passed in favour of the petitioner and the Registrar was asked to furnish the grounds within two weeks of passing of the order.

S&Co. Comment:

This decision ensures that the Registrar of Trade Marks follows the principles of natural justice when passing an order refusing or granting conditional acceptance to a Trade Mark registration. It will also facilitate and expedite the process of appeal against the decision of the Registrar.

Reliance Life Sciences Private Limited v. Genentech Inc. – a litigation battle over the Trastuzumab biosimilars

In this case, Genentech Inc. and Roche Products Pvt. Ltd. (Respondents) had sought an injunction against Reliance Life Sciences Pvt. Ltd. (Appellant) from launching, selling, marketing and/or distributing the biosimilar drug “TrastuRel” in the domestic market as Trastuzumab. The Respondents had developed the drug, Trastuzumab, and had obtained a patent for the same which lapsed in the year 2013. The Respondents marketed Trastuzumab under the brand names HERCEPTIN, HERCLON and BICELTIS which was used to treat HER2+, a type of breast cancer. The Respondents also prayed for restraining the Appellant from relying on the data developed by the Respondents on Trastuzumab on its package and cartons. Further, the Respondents sought for a declaration that the approvals, with regard to clinical protocol trials, granted by the Drug Controller General of India (DCGI) were invalid as tests conducted were not in compliance with the laws on drugs in India. The Single Judge of the Delhi High Court passed an interim order permitting the Appellant to launch, manufacture, market and advertise their drug TrastuRel without calling the same as biosimilar to the Respondents drugs. The Court also directed the Appellant to not use the International Non-proprietary Name (INN) – Trastuzumab alone on the carton or package but to use the INN name as Reliance Trastuzumab or TrastuRel for the purpose of labeling; and restricted the Appellant from use of data relating to safety, efficacy and manufacturing process of the Respondents biological drug. Aggrieved by this decision, the Appellant filed an appeal before the Division Bench of the Delhi High Court. During the same time period, the Single Judge of the Delhi High Court had decided a similar case that was filed by the Respondents against Biocon Ltd. and Mylan Inc. who had also launched their biosimilar drug as Trastuzamab. However, the Court passed an interim order in favour of Biocon Ltd. and Mylan Inc. permitting them to produce and sell Trastuzumab and market it as CANMAb and HERTRAZ. Thus, the Appellant contended that it should be granted similar relief. The Division Bench held that the Appellant was entitled to the same interim relief that was granted to Biocon Ltd. and Mylan Inc.; and a qualifier before the INN was contrary to Rule 96 of the amended Drugs and Cosmetics Rules, 1945. It also held that the approval granted by DCGI to the Appellant could not be said to be illegal as an interim measure as that would amount to deciding the issue finally. The Court also observed that as the Respondents’ patent had expired it could be considered that they had filed the suit to stifle competition.

S&Co. Comments:

We are yet to await the final decision in this suit, but the Court has rightly permitted Reliance Life Sciences Pvt. Ltd. to market and sell its biosimilar drug at the interim stage, especially when their drug was approved by the DCGI. The Court has also made an interesting observation that Genentech Inc. and Roche Products Pvt. Ltd. may be using litigation as a tactic to curb competition even after the expiry of its patent, and the same should not be allowed.

Amendments suggested to the industrial design rules

On 18th October 2019, the Government of India published draft Design (Amendment) Rules 2019 and Patents (2nd Amendment) Rules, 2019 for seeking objections or suggestions from the persons to be affected by these rules. These amendments aim to introduce the definition of “startup” which shall mean an entity recognized as a startup under the Startup India initiative; and in case of a foreign entity it should fulfill the criteria of turnover and period of incorporation as per the Startup India initiative. In order to facilitate filings by startups and small entities, the amendment also makes a clarification that the startup/ small entity will not have to pay an additional application fee after filing an application for industrial design is case the applicant ceases to be a startup/ small entity after the filing due to an increase in their turnover. The amended rules also suggest a reduction in fees for startups and small entities. In order to be in consonance with the international standards, it has been proposed that the classification of articles, for which an industrial design is sought, should be as per the ‘International Classification for Industrial Designs (Locarno Classification)’ published by the World Intellectual Property Organization.

S&Co. Comment:

The proposed amendment brings clarity to the startups and will facilitate the process of registration of an industrial design for them. These changes will surely encourage more innovation and development in the start-up sector.

India ranked among top 15 countries in intellectual property filings as per World Intellectual Property Organization (WIPO)

As per the World Intellectual Property Indicators 2019 issued by WIPO, India secured the 9th rank with respect to the total (resident and abroad) trademarks filing activity by origin in the year 2018. With respect to patents and industrial designs filing, India secured the 12th and 13th rank respectively. The WIPO analyzed the data of 49 countries for the purpose of publishing this report. India witnessed an increase in its trademark filing by 20.9% and its industrial design filing by 13.6%. This increase in both trademarks and industrial designs filings was driven by resident applications. India was also recognized as large contributor in the growth of patent filings in the world after China, European Patent Office and Korea. The growth in patent filings in India was by 7.5%, which was driven by non-resident applications. India was also featured among the top 10 patent offices in the world to receive patent applications. According to the Annual Report 2017-18 issued by the Office of the Controller General of Patents, Design & Trademarks, Government of India, there has been an increase in the IP filings by start-ups and small enterprises by 200% from 160 in 2016-17 to 511 in 2017-18. This increase has been seen in the fields of IT, science and computer science. Further, IT giants like Wipro and Tata Consultancy Services (TCS) have secured the first and second rank in relation to patent filing in the field of IT; and Hike, a seven year old start-up, has secured the third rank.

S&Co. Comment:

This is a positive development indicating India’s growth in the field of innovation and technology. With further impetus to research and development and with ease in IP filings, India is definitely going to be among the top five countries in the near future.