January 17, 2023

IPR News Letter - Developments 2022

IPR DEVELOPMENTS – 2022

There is no infringement of trademarks when the marks are derived from the active ingredient of a drug

In the case of “Sun Pharmaceutical Laboratories v. Hetero Healthcare Ltd. and Anr. [FAO (COMM) 96/2022, judgment dated August 26, 2022]”, the High Court of Delhi (“High Court”) ruled that there is no trademark infringement when the marks are derived from the active ingredient of a drug that is used to manufacture the products of both parties to the dispute. So, in the event of a passing-off lawsuit, it is important to consider both the similarity of the rival marks and the possibility of deception or confusion.

Sun Pharma, the appellant, filed an appeal challenging an order by which a Single Judge Bench of the High Court denied Sun Pharma’s request for an injunction. Sun Pharma had sued Hetero Healthcare Ltd. alleging trademark infringement and passing-off of its trademark “LETROZ,” and was requesting a decree of permanent injunction prohibiting the Respondent from using the trademark “LETERO” in relation to pharmaceutical products. The single judge dismissed the interim application filed by Sun Pharma stating that the marks were derived out of a generic name. The Sun Pharma filed an appeal before the High Court.

The High Court relied on the case of “Schering Corporation & Ors. v. Alkem Laboratories Ltd., 2009 SCC OnLine Del 3886” wherein the single judge declined to grant an injunction for the plaintiff’s mark TEMODAL’ and ‘TEMODAR’, in relation to its pharmaceutical products containing ‘TEMOZOLOMIDE’ as the API against the defendant’s mark TEMOKEM’ and ‘TEMOGET. The Court noted that while determining whether the trademarks are confusingly similar and can cause confusion, the fact that the product in question is a highly specialised medicine used for a particular treatment of brain cancer was a crucial consideration. The Court also noted that there was a significant price gap between the plaintiff and the defendant’s product.

Thus, the High Court stated that Sun Pharma cannot be permitted to monopolise the International Non-Proprietary Name (“INN”) “LETROZOLE” when ruling on the appeal.  The mark, ‘LETROZ’, is not similar to the trademark ‘LETERO’ merely because both the parties have adopted the initial letters of the INN ‘LETROZOLE’.

According to the High Court, Sun Pharma’s mark consists just of the first six letters of the INN, therefore there is presumptively little chance that the buyer of the drug will be deceived or confused. Accordingly, the High Court concluded that there is no infringement in such circumstances.

Outline of the Map of India can be used as part of Trade Mark

For a mark, Jindal Industries submitted a trade mark application under Class 17 of Nice Classification. The Senior Examiner of Trade Marks issued an order for the mark’s restriction and objection under Section 9(2) of the Trade Marks Act, 1999 and that its use was prohibited under the Emblems and Name (Prevention of Improper Use) Act, 1950. The mark was abandoned by the Registrar when no one appeared at the time of the hearing. The appellant filed a review, pursuant to which the Registrar ordered Refusal of the mark.

In the case of “M/S Jindal Industries Private Limited v. The Registrar of Trademark [C.A (COMM.IPD-TM) 51/2021]”, Jindal Industries filed an appeal challenging the order passed by the Examiner Trade Marks. The High Court of Delhi held that the grounds for refusal provided by the Examiner were completely unsustainable and made the following observations:

  1. The 1950 Act did not prevent the use of the outline of the map of India.
  2. The Survey of India had already given its “no objection” in favour of the Appellant for use of the mark with the outline of the map of India.
  3. There were various other trade mark registrations in the name of appellant bearing the outline of the map of India.
  4. The use of the outline of the map of India signified that the product originated from India, and therefore, was not violative of Section 9 of the Trade Marks Act nor the 1950 Act.

The Emblems and Name (Prevention of Improper Use) Act, 1950 does not expressly precludes the use of the national map of India as a symbol under its definition, and this may be confirmed by looking at a number of registered trademarks that include the national map alongside their trade mark. The Examiner’s orders were finally overruled by the Court, and the application for the mark was instructed to move forward with for registration.

Using a trademark for non-competing businesses still amounts to trademark infringement

In the case, “Kaira District Cooperative Milk Producers Union Ltd. Vs. Maa Tara Trading Co., [2022 SCC OnLine Cal 2516]”, the plaintiff, Kaira District, which is registered proprietor of brand Amul, sought a perpetual injunction against the Defendant for duping the Plaintiff’s trade mark, ‘AMUL’ to sell candles in Kolkata, West Bengal.

The Court held the Defendant responsible for infringement of the Plaintiff’s registered trade mark under the Trade Marks Act, 1999. In an infringement action, once the Defendant uses a mark, which indicates commercial origin, no amount of added matter intended to show the true origin of the goods could protect the Defendant No further proof is required, if Court finds that the defendant’s mark is closely, visually and phonetically similar to the plaintiff’s registered trademark. It is also important to note that consumers do not compare rival marks in a meticulous manner and the marks should be viewed from the perspective of an average man of ordinary intelligence.

In the present case, applying the previously mentioned test, this Court was of the view that the Defendant had tried to dupe the general public by using of an identical mark “AMUL” in respect of candles. The Defendant had violated statutory rights as well as the common law rights of the Plaintiff by using their registered trademark.

The bench led by Krishna Rao, J. stated “The defendants are not entitled to use the mark Amul or any other mark deceptively similar thereto as that of the plaintiffs. The trademark Amul has assumed a secondary meaning and as such the trade mark Amul is solely and exclusively identified with the goods and services of the plaintiffs. The said trade mark cannot be utilized by any entity,”

Additionally, the Plaintiff was found accountable for the passing off tort. It was noted that the Plaintiff has had the registered trademark “AMUL” since 1958 and has established invaluable goodwill and immense reputation both in India and throughout the world. As a result, it was decided that the Plaintiff’s well-known trade mark “AMUL” needs a wider range of protection, even on a non-competing products like candles, which the applicant may not be manufacturing or selling.

Settlement in IPR Disputes

The pending disputes between Theos Food Pvt. Ltd. and Theobroma Foods Pvt. Ltd were amicably settled before the High Court of Delhi wherein the parties agreed to co-exist within the specified territories.

While Theobroma Foods Pvt. Ltd. conducts most of its business in Mumbai, Maharashtra, Theos Food Pvt. Ltd. is headquartered in New Delhi and Noida. For the adoption of the trademarks “THEOBROMA,” “THEOS,” and “THEO’S,” both parties filed two lawsuits in front of the high courts in Delhi and Bombay.

“Theobroma Foods Pvt. Ltd. v. Mr. Karan Narula [Commercial IP Suit No.342 of 2016]” was pending before Bombay High Court. The suit was filed to seek an injunction restraining Theos from using the marks ‘THEOBROMA,’ ‘Theobroma’ ‘theobroma’, ‘theo’, ‘Theo’, ‘Theo’s’, ‘Theos’ and various other variant and derivatives thereof.

“Theos Food Pvt Ltd. V. Theobroma Foods Pvt Ltd [2022 SCC OnLine Del 2309]” was pending before the High Court of Delhi. The instant suit was filed seeking permanent injunction restraining Theobroma from infringing the trade mark ‘THEOS’, ‘THEO’S’ and ‘THEO’S PATISSERIE & CHOCOLATARIE’, passing off, unfair competition, dilution etc.

The court while observing the business and commercial interest of the parties ordered an amicable settlement of the dispute. In their settlement, the parties have decided to reached an agreement that:

  • Theos agrees to acknowledge the trademark “THEOBROMA” and to refrain from using it in any way. Whereas the Theobroma will likewise stop objecting to the plaintiff’s use of the trademarks “THEOS” and “THEO’S”;
  • Theobroma is free to grow its network of locations using the name/mark “THEOBROMA” throughout the nation. However, as far as its goods and services delivered under the mark/name “THEOS” or “THEO’S” are concerned, they will restrict its operations to the Delhi-NCR region.
  • Theos will stop using the marks “THEOS” and “THEO’S” on its internet menus for five items, but they may continue to use them on its physical menus.
  • Neither party shall oppose each other’s marks or object to the same, in any manner, so long as the same are in compliance with the terms of this settlement.
  • If Theos receives any requests for online supply or deliveries outside the Delhi-NCR region, the same shall be serviced under a different mark and name, as set out in (v) above. The said mark/name shall not be identical or deceptively similar to ‘THEOBROMA’.

COPYRIGHT & IT LAW

Intermediaries Operating outside India can be directed to disclose the identities of the Copyright Infringers

The Delhi High court in the case of “Neetu Singh & Anr. v. Telegram FZ LLC & Ors. [CS (Comm) 282 of 2020, decided on 30th August, 2022]”, held that courts in India will have jurisdiction to direct intermediaries to disclose details about copyright infringement claims which have arisen in India despite the servers holding data of intermediary located outside India.

The suit was filed by Neetu singh (plaintiff), claiming that her copyrighted works including the online lectures, books, publications, etc were being uploaded unauthorisedly through several channels on Telegram, a social media intermediary which enables interaction between two or more users. Telegram was directed to take down all the impugned channels in an ad-interim order 23 September 2020. The plaintiff filed an application seeking to disclose the identities of people who are disseminating the infringing materials on these channels.

The main issue held before the court was whether the intermediary having data base abroad but operating in India can be directed to disclose the identity of the person who is infringing copyrights in India. The court rejected the Telegram contention that it cannot share the data relating to the creators or users of the channels, as the said data is stored in its data servers in Singapore and the law there prohibits such disclosure.

The court held that the Copyright Act, 1970 provides for the person to file for copyright infringement at a place where the person resides or owns a business. The jurisdiction of court cannot be ousted if the person infringing the copyright are using such intermediary platform, which stores its data on servers outside India, Courts in India would be perfectly justified in directing Telegram, which runs its massive operations in India to adhere to Indian law for disclosure of relevant information relating to infringers. 

The Court subsequently ordered Telegram to provide information regarding the channels or devices that were used to distribute the infringing content, as well as any mobile phone numbers, IP addresses, email addresses, etc., that were used to upload and communicate that content.

Recently, the Telegram complying with the order of Delhi High Court, disclosed the administrator names, phone numbers, and IP addresses of the channels sharing the copyrighted works of the plaintiff.

PATENT LAW

Detailed reasoning to be given by the Controller of Patents while rejecting patent application due to lack of inventive step:

In the case of “Gogoro Inc v. The Controller of Patents And Designs & Anr. [C.A.(COMM.IPD-PAT) 25/2021]” the Delhi High Court held that the controller should analyse prior art, the subject invention, and the way in which the subject invention would be obvious to a person skilled in the art when rejecting an application for lack of inventive step.

Gogoro Inc. appealed against the order of the Controller of Patents, which denied its patent application for a power charging system on the grounds that it lacked inventive step. According to the Appellant, although he cited three previous art references, the Controller did not explain as to how the invention lacks an inventive step under section 2(1)(j) of the Patents Act, 1970.

The court relied on the case of “Agriboard International LLC. v. Deputy Controller of Patents & Designs [C.A.(COMM. IPD-PAT) 4/2022” wherein it was held that for rejecting an application under lack of inventive step discussion on prior art, the subject invention and obviousness of the patent has to be analysed. The judge decided that it would be against Section 2(1)(ja) of the Patents Act, 1970, which defines “inventive step,” to simply come to the bare conclusion that the submitted invention lacked inventive step. The Controller has to consider three elements-

  • the invention disclosed in the prior art,
  • the invention disclosed in the application under consideration, and
  • the manner in which subject invention would be obvious to a person skilled in the art.

The Court additionally held that the Controller’s decision is no longer justified in the absence of the analysis required by Section 2(1)(ja). The Controller has been urged to quickly re-examine the patent application after the Court overruled the Controller’s order.   

DESIGN LAW

Tests to consider Design Infringement under The Designs Act, 2000

The Delhi High court in the case of “Diageo Brands B.V. & Anr. vs Great Galleon Ventures Limited [CS(COMM) 87/2021, decided on 2nd August, 2022]” held that the test is not to look out for subtle dissimilarities, but rather, to see if there is substantial and overall similarity in the designs of two products.

Diageo Brand (plaintiff) is a proprietor of a registered design of “Hipster” bottles of alcoholic beverages. They claim trade dress and get up of the bottles. They filed a design infringement suit against Great Galleon (defendant) alleging that the Defendant has been infringing their design rights and passing-off its the “Hipster” bottle design by selling its alcoholic beverages in 180 ml bottles having a similar design.

The Court concluded that the Defendant’s impugned bottles bear a remarkable similarity to the Plaintiff’s registered design. The Court also noted that Plaintiffs had established a prima facie case of infringement as earlier the Defendant was selling its product in a different design bottle, which was distinct and different from the Plaintiff’s design and trade dress. The court also observed that a design may already available in the public domain but it will be protected as “original” if its commercial application is new and original. The Court observed that hip flask is not new or novel invention by itself; but Plaintiff’s product is new as it is the first to apply to pre-packaged alcohol.

The court while comparing between the Plaintiff’s and the Defendant’s packaging, stated that a trade dress has to be seen as a whole to determine what features are distinctive enough to become a source identifier and held that a claim for passing off was not made out as the plaintiff’s trade dress was dissimilar to defendant’s packaging.

RULES ON INTELLECTUAL PROPERTY DIVISION

Developments in terms of adjudication of IPR Matters in IPD

With the dissolution of the Intellectual Property Appellate Board (IPAB), all its matters were transferred to the High Court of Delhi alone. To effectively manage pending cases of IPAB, an Intellectual Property Division (IP Division) in the High Court of Delhi, was created.

Further, for a smooth adjudication of Intellectual Property matters in the IP Division there are certain rules which have been drafted and consolidated as the  “Delhi High Court Intellectual Property Rights Division Rules, 2022” and “High Court of Delhi Rules Governing Patent Suits, 2022.”

The same was duly notified by the Delhi High Court on 24th February, 2022.

Some of the salient features of these IPD Rules, 2022 are as follows-

  1. The Draft Intellectual Property Rights Division Rules, 2021 has a framework of thirty-one Rules dealing with different procedures and definitions that is to be applied while dealing with cases under the IPD.

 

  1. The General Clause under Rule 24 clarifies that the procedures which are not specifically provided for in these Rules shall, in general, be governed by the Civil Procedure Code, 1908 as amended by the Commercial Courts Act, 2015 and the Delhi High Court (Original Side) Rules, 2018.

 

  1. The DHC IPD Rules clearly lay down the factors to be taken into consideration by the court while determining the ‘quantum of damages.’ These include lost profits of the injured party, profits earned by the infringing party, quantum of income that could have been earned by the injured party through licenses and royalties, duration of infringement, degree of intention/neglect underlying the infringement, and conduct of the infringing party to mitigate the damages being incurred by the injured party.

 

  1. Another key development introduced is ‘mandatory mediation’ or ‘early neutral evaluation’ (ENE). If at any stage of the trial the court is of the opinion that the parties should resort to mediation, they can appoint a qualified mediator or a panel of mediators.
  2. Introduction of ‘confidentiality clubs’ is another development. One of the concern with any parties is confidentiality of their IP. To secure their rights, the court may constitute a confidentiality club or adopt such measures as appropriate, consisting of lawyers, experts, nominated representatives, for the preservation and exchange of confidential information filed before the court at any stage in a proceeding. This helps in maintaining confidentiality and preserving the intellectual properties of the parties.

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