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1

Changing Environment of Enforcement of IP rights in India

Mr
.
V
.
Lakshmi Kumaran


India is the fastest growing democracy in the world and has taken giant strides in the
area
s

of science and technology
.
It presently boasts of having over three million
sc
ientific and technical person
s

and is second only to the United States of America in
terms of English speaking scientific manpower
.
There is a well diversified industrial
base

co
vering

all core

industri
es

and a large and sophisticated financial
system
.
T
he
composition of GDP of India is balanced with
significant
contributions from agricult
ure,
industry and services
.
India, in addition, also has strong know
ledge based industries
,

such as information technology
, biotechnology, pharmaceuticals and entertain
ment
.
All
these
developments have contributed in

placing India in an advantageous position.


India understands that for the maintenance of the advantage that it currently enjoys, it
must have an effective intellectual property (IP) regime
.
An effective I
P regime requires
both substantive provisions
creating and recognizing IP rights
and
an effective
enforcement
mechanism to protect the conferred
IP rights
.
The for
mer, about which
there is widespread debate
, is the easier of the two arms

of protection

to
achieve
.
This is
true especially in the case of developing countries where there is no history of enforcing
IP

rights
.
The problem of inadequate enforcement can also be attributed

to

the failure of
most
Conventions
on

intellectual property

to sufficientl
y focus on enforcement
1
.




1

Paris Convention, 1883 all
ows for seizure of goods unlawfully bearing a mark and injunctions for
unauthorized use of the trade mark; Berne Convention, 1886 allows for seizure of unlawful copies; the


2

The framers of the GATT recognized this problem and hence the
TRIPS
agreement
expressly provides for the establishment of an enforcement framework

in the WTO
member countries
.
The enforcement framework is provided in
Section
3 o
f the
agreement and the relevant provisions are contained in
Articles 41 to 61
.


The enforcement
framework

has five components
.
These are the enactment of legislation
(including rules and guidelines), establishment of proper administrative procedures,
s
treamlining of appellate procedures, imposition of civil, criminal and provisional
remedies, and finally implementation of effective border control

measures
.
This paper
would analyze each of the above components in the India
n

context.


Enactment of Legisl
ation


The enactment of legislation is the first step towards achieving a compreh
ensive and
effective regime
.
India has enacted various legislations to create
such
a regime
.
The
enactments cover the area of patents, trade marks, copyright, designs, plant

varieties,
geographical indications, and integrated circuits
.
These legislations contain both
substant
ive and enforcement provisions
.
India is a member of the WTO and was required
to become
TRIPS
compliant
by
January 1, 2005
.
Hence, India has been amen
ding its
laws relating to IP rights over the last few years to achieve compliance
.







Universal Copyright Convention, 1952 has very general provisions on protection of r
ights; Geneva
Phonograms Convention, 1971 does not have any provision on enforcement.



3

The major changes that have

been effected

in the recent past have concerned the

laws of
patents
.
The
se

changes
were made to bring the law in line with
TRIP
S
.
In the pas
t, India
did not grant product patents
for

drugs, chemicals and food
.
This position has been
revised and India now recognizes product patents in all fields
.
An
o
ther change that has
been effect
ed

is the extension of t
he term of
a

patent to twenty years.


India
has a list of subject matter that
is

not capable of being patented
.
This is provided in
section 3 of the Patents Act, 1970

(hereinafter referred to as the ‘Act’)
.
An interesting
inclusion within this list is second use of known substance
.
This is
provided in s
ection
3(
d
) of
the Act
,

which
reads as follows:

the mere discovery of a new form of a new substance which does not result in the
enhancement of the known efficacy of that substance or the mere discovery of any new
property or new use for a kno
wn substance or of the mere use of a known process, machine
or apparatus unless such known process results in a new product or employs at least one
new reactant
.

Explanation


For the purpos
es of this clause,

salts, esters, ethers, polymorphs, metabolite
s,
pure form, particle size, isomers, mixtures of isomers, complexes, combinations, and other
derivatives of a known substance shall be considered to be the same substance, unless they
differ significantly in properties with regard to efficacy;

The above
subsection exclude
s

the mere discovery of a new form of a known substance
which does not result in the enhancement of the known efficacy of that substance
from
patentability
.
The “Explanation” to this subsection

refers to
“s
alts, esters, ethers,
polymorph
s, metabolites, pure form, particle size, isomers, mixtures of isomers,


4

complexes, combinations, and other d
erivatives of a known substance

.
The

Explanation
appears to refer to
ph
a
rmaceutical substances
.


T
he o
ther notable
exclusion from patentability is

in respect of
method of agriculture and
horticulture, method of treatment, mathematical or business methods, comp
u
ter programs
per se

and algorithms
.
The Indian position
,

in this respect,
appears to be
similar to the
position adopted by the European Unio
n and the Indian courts are expected to follow the
jurisprudence developed by the
latter
.


The
TRIP
S

agreement allows its members to
provide licenses to third parties to work the
invention in the patent without the permission of the patent holders upon t
he satisfaction
of certain conditions
.
India has enacted similar provisions

regulating the grant of
compulsory licenses
.
Section 84
of the Act
provides
that a

license may be granted to any
third person after

the expiry of three years from the date of gra
nt of the patent

if:

(i)

reasonable requirements of the public are not satisfied;

(ii)

if the patented invention is not available to the public at

an

affordable
price; or

(iii)

the invention is not worked in India

The license is, however
, not

permanent and the p
atente
e c
an

apply for
the
termination of
license on the plea that the conditions for
grant of
compulsory
licens
es
no longer exist
.
The patentee is entitled to payment of reasonable royalty
.
A patent may be revoked after
two years from grant of first compulsory li
cense if the conditions for the grant of license


5

still exist
.
F
urther, s
ecti
on 92 of the Act

allows
for the
grant of c
ompulsory licenses
,

at
any time
,

up
on the Central Government notifying that the circumstances of national
emergency, extreme urgency, pub
lic non
-
commercial use or public health crisis exist
.
The patentee
is

entitled to
a
reasonable

royalty even
in case of
such licensing
.
Section
92A has been additionally enacted to grant compulsory licenses for the export of patented
pharmaceutical produc
ts to any country facing public health problems and having
insufficient or no manufacturing capacity in the pharmaceutical sector for the concerned
product
.
This section appears
to be
in conformity with the Doha Declaration
.


India did not grant product

patents for pharmaceutical products until
the beginning of this
year
.
However, it had provided for a mailbox provision
.
The mailbox provision allowed
the applicants to submit applications for such patents
.
However, these applications were
not to be
exa
mined for grant of patent

till 1.1.2005
.
After this date, if an application
lodged in the mailbox satisfies the conditions of novelty, non
-
obviousness, utility and
other requirements for patentability, then
a
product
patent
would be granted
.
Such

patent
s

would be effective from the date of the grant of the patent rather than the date of
publication
.
Further, it
is
provide
d

that the patent would not be effective against a
previo
us manufacturer of the product

who has invested significantly for the manufact
ure
of the product and who continues to manufacture the products
on the date of grant of the
patent
.
I
n such cases, the patent holder
would be entitled to royalty
.


The Act recognizes

two further exceptions to patent infringement
.
First, the Act exclud
es
the act of making, constructing, using, selling or importing of patented product
s

for


6

regulatory purposes from the scope of
infringement

in India
.
The other exception is the
research exemption
.
The Act provides that the

working of the patent

for exper
imental
purposes,
and

for imparting instructions
does

not amount to infringement of the patent
.


The changes that India has made are not confined to the area of patent only
.
India has
enacted a new legislation
,

t
he Trade Marks Act, 1999
,

to regulate the

area of trade marks
.
Th
e provisions of this Act came into effect from

September 15,
200
3
.
The significant
changes made to the trade mark regime include

the widening of the definition of trade
mark to include shape of goods, packaging and combination of
colours, recognition of
trade m
ark in respect of services,
provision
s

for the protection of well
-
known trade marks
and
establishment of
tests for the determination of the same
.
The term of the registration
of a trade mark
has been extended to 10 years.


I
n the area of copyright,
India has ratified the Berne Convention and the Universal
Copyright Convention and it has effected changes to its copyright laws to reflect the
harmonized position
.
The legislation that regulates the
copyright regime in India
cont
inues to be the Copyright Act, 1957 though it has undergone several amendments to
bring the law in conformity with different Conventions
.
The major changes to the law
include the grant of broadcast reproduction rights to the broadcasting organizations and

the recognition of performer’s rights
.
Significantly, the Act prohibits the importation of
infringing works into India
.


Establishment of administrative procedure
s



7


The Indian Patent Office
is the administrative body created for the purpose of grant of

patents
.
The Controller
General
of
P
atents
, Designs and Trademarks
is the chief officer
in the Patent Office
.
The Controller

decides the question of
grant of patent
.
The Act
allows any person to oppose
both the grant of a patent as well as seek revocat
ion of
a
patent after grant of the patent by the Controller
.
Such opposition
/revocation

proceedings
are heard in the first instance by the Controller
.
In such proceedings, the Controller is
required to follow the principle
s

of natural justice
.
The Act a
lso requires the Controller
to collect evidence, and review her own decision
.
A
ppeals
from the
orders of the
Controller

lie to the Intellectual Property Appellate Board.


The Trade Mark registry

is responsible for the registration of trade marks
and the
C
ontroller
General
of
P
atents
, Designs and Trademarks
is the chief officer
.
The
Controller
General
of
P
atents
, Designs and Trademarks

is also known as the Registrar of
Trademarks
.
In deciding
applications for registration of trademarks and in hearing
oppo
sition to the registration
,
the Registrar is required to follow the princ
iples of natural
justice
.
A
ppeals
from the order of the Registrar

again

lie to the Intellectual Property

Appellate

Board
.


In case of copyrights, registration of works is not neces
sary for copyright to subsist
.
Nevertheless, works may be registered with the Copyright registry and the names or titles
of works and the names and addresses of authors, publishers and owners of copyright and
such other particulars may be entered in the c
opyright register
.
The registration only


8

raises a presumption that the person shown is the actual author
.
The Registrar has powers
to

correct entries in the register, and to order the prohibition of importation of infringing
works
.
Appeals
from the orde
r of the Registrar lie to the
Copyright Board
.



India follows the common law tradition and has developed its court system based on the
English court system
.
There are three
tiers

of courts in India


the Supreme Court, the
High Courts, and the District

Courts
.
The Supreme Court is the
apex

court in India and
its ruling
s

are binding on all other courts
.
There are fifteen High Courts in India

and they
have clearly defined territorial jurisdiction
.
District courts are
next in
the hierarchy

and

also
have

clearly defined
territorial jurisdiction
.


A frequent allegation directed against the
justice delivery

system in developing countries
concerns the slowness of the system
.
This slowness results in negating the rights of the
IP ow
n
ers
.
India recognized
this problem and
has set up specialized appellate boards to
hear IP matters
.
The amended Patents Act, 1970 has created a new appellate board
,

namely the Intellectual Property Appellate Board
.
The new Board has the jurisdiction to
hear appeals from the or
ders of the Controller
in matters relating to patents, designs and
trademarks
.
The Board
has judicial and technical members
.
The Copyright Board hears
the appeal from the order of the Registrar of
Copyright
.
T
he creation of such Boards
will

hasten the p
rocess of obtaining
relief and improve enforcement o
f

intellectual property
rights.




9

The Patents Act, 1970 read with the Code of Civil Procedure, 1908 provides that a suit
for patent infringement must be heard by the District Court or the High Court depend
ing
upon the jurisdiction
.
In an infringement action, the defendant is allowed to counter
claim for revocation of the patent
.
I
f the defendant counter claims for revocation the
matter is transferred to the High Court, if not being already heard by such c
ourt
.
The
appeal procedure allows a
ny party aggrieved by the decision of the District Court
to

appeal to the High Court
.
In
the
first appeal
,

both questions of fact and law can be raised
.
This case is heard by a single
judge
of the

High Court.


In case
the matter in the first instance was heard by the High Court,
the
appeal

from the
judgment of the single
judge

of

the High Court lie
s

to a two
judge
bench
of

the High
Court
.
The party is allowed to appeal against the judgment of such a court to the
Suprem
e Court
only on questions of substantial law
.
T
rade

marks and copyright

cases

also follow similar appeal procedure
s
.


Remedies


India provides various remedies for violation of IP laws
.
These remedies
include
civil,
crimi
nal and

provisional remedies
.
Up
on
a
successful suit
for
pa
tent infringement, the
court will

order

an injunction restraining the infringer

from working the patented
invention

for

the

entire term of the patent
.
In addition, the court will either order the
infringer to
pay damages for
inf
ringing
the patent or
give account of the profits
.
The
holder of an exclusive license is also entitled to damages or account of profit
.
Further,


10

t
he court has the power to seize, confiscate and destroy the infringing goods

without
payment of any compensa
tion
.
If the

infringer can show that the infringement was
innocent
, the court will not order the payment of either damages or
a
ccount of profits
.
The remedies of injunction a
nd damages/account of profits are

also
available for trade
mark and copyright vi
olation
.
In addition to these civil remedies, the court has in the
recent case of
Time Incorporated v
.
Lokesh Srivastava
,
2

awarded
punitive damages for
infringement of

Time


trade mark
.
The courts are not averse to considering foreign
jurisprudence
in
arriving
at a conclusion and in this case
,

American jurisprudence
regarding punitive damages was applied
.
In another case, the court allowed Whirlpool
Corporation to recover

damages

against a trade mark owner who had wrongfully
registered the ‘Whirlpool’
mark in India.
3

A similar decision was reached in a case
involving Allegan Incorporation where the court recognized that in case of passing off
of
an
unregistered trade mark, worldwide reputation of the product/mark was an important
factor.
4

The court has
also decided that the premises of an alleged infringer may be
searched if the claimant can show the court that abstention from such a search may result
in the destruction of the infringing goods
.
This court can pass such an order
even
in an
ex parte proce
eding
.
Thus, the Indian courts have donned the mantle of
protecting IP
rights in India
.
The willful disobedience of any judgment
5

of the Court amounts to
contempt of court and it
attracts penal consequences under
the
Contempt of Court Act,
1971
.





2

Time Incorporated v Lokesh Srivastava (2005) 30 PTC 3, High Court of Delhi

3

N.R Dongre v. Whirlpool Corpn & Ors.
(1996) 5 SCC 174
, Supreme Court of India

4

Milmet Oftho

Industries and Ors.v.Allergan Inc

(2004) 12 SCC 624
, Supreme Court of India

5

The judgment here includes decree, direction, order, writ or other process of a Court or an undertaking
given to Court.



11

There

are no cr
iminal sanction
s

for infringement of patents
.
In respect of copyright and
trade mark viol
ation, the court can order imprisonment

of the infringer

for a term ranging
from six months to three years
.
In addition to imprisonment a fine is imposed u
pon the
violator
.
In case of copyright, a repeat violation can attract

even

more severe
punishments
.


T
he
Patents
Act,

1970

grants power to the courts for making a declaratory judgment as to
non
-
infringement
.
The validity of the claims contained in the

patent cannot be the
subject matter of such proceedings
.
Thus, the declaration of non
-
infringement does not
affect the validity of the patent in question
.
Further, the court has the power to grant
relief by way of a declaration to the effect that the al
legations of infringement of patent
made by a person are unjustified
.
Such declaratory judgments are
also
available under
the trade mark and copyright laws.


The courts can also order interim relief pending final settlement of the matter
.
A

court
may ord
er is the grant of an interim injunction

whereby

the

d
efendant

may be restrained

from using the plaintiff
’s invention, or mark or work

until hearing of the suit or further
order
.







12

Border Control Measures


S
ection

11

of the Customs Act, 1962
, specifica
lly
empowers

the Central Government to
prohibit the import or export of goods for the purpose of protection of patents, trade
marks and copyright
.
This power can be exercised upon the issuance of a notification by
the Central Government
.


Further, secti
on 111 of the Customs Act 1962 empowers the Customs

authorities

to
confiscate prohibited goods entering India
.
Subsection 111 (d) recognizes that where
goods fall foul of the notifications issued under section 11, then such goods will be
considered as pro
hibited goods for the purposes of this section
.
S
ection

11

also applies to
copyright goods since the Copyright Act, 1957

expressly prohibits the import of
infringing goods
.
Upon confiscation of such prohibited goods, the property in the goods
passes to t
he
G
overnment of India

except in the case of copyright where the property in
the goods passes to the owner of the work
.
In addition, section 112 provides that the
Customs may impose a penalty on the infringing importer for an amount that could be as
high
as
hundred percent of the

value of the infringing goods
.
Sections 113 and 114
similarly impose restrictions on the export of prohibited goods
.


Conclusion


India has enacted legislation for substantive protection and enforcement
.
The
administrative and

appellate procedures are streamlined
.
India recognized the slowness


13

in
its

court system and has set up specialized appellate boards to deal with intellectual
property cases
.
These boards have been conferred the power to
expedite the
grant
of the
remedie
s that a court would have
granted
.
The Customs Act

1962 recognizes and
provides for the protection of intellectual property
.
It may therefore be concluded that an
effective enforcement framework
has been

established in India.