Category Archives: IP reviews

WWE Versus Reshma Collection: Territorial Jurisdiction of Delhi High Court.

Last week, His Honour Vipin Sanghi of Delhi High Court has ruled on the point of the territorial jurisdiction in intellectual property civil actions. The matter was World Wresteling Entertainment versus Reshma Collection.

Briefly stated, World Wrestling Entertainment Inc. (WWE), a Delaware corporation, instituted a civil action in Delhi High Court against a Mumbai based company. The allegation of WWE was that the Defendants were selling apparels and related items prominently displaying WWE’s characters and talents.

WWE claimed jurisdiction of Delhi High Court on the basis of following: –

  1. The broadcast of its programmes in Delhi;
  2. Its merchandise being available for sale in Delhi; and
  3. The merchandise is available on its website which is accessible in Delhi.

At the inception stage before even registering the plaint and issuing the summons of the suit to the Defendants, His Honour wanted to satisfy himself whether the Court had jurisdiction to entertain the matter. Mr. Pravin Anand, representing WWE, submitted at length the arguments and various precedents to impress upon His Honour that the Court indeed had territorial jurisdiction.

It was  not the case of WWE that the goods of the Defendants were available in Delhi. So WWE invoked the jurisdiction of the High Court only on account of Section 134 of the Trade Marks Act, 1999 and Section 62 of the Copyright Act. Both the provision provides an additional ground to the Plaintiff to institute a civil action provided Plaintiff is residing or carrying on business within the jurisdiction of the Court.

Mr. Anand submitted that although WWE has no place of business in Delhi, the transactions taking place online, a Company should be deemed to carry on the business within the territorial limits of the Court since the website can be accessed by residents of Delhi. Mr. Anand further submitted that the issue whether the Plaintiff carries on business in a particular territory is a mixed question of law and fact can could be gone into at the final hearing of the trial.

Per His Honour Sanghi,

The test to be satisfied as regards the aspect of carrying on business has been laid down in Dhodha House (supra). The sum and substance of the criteria laid down in Dhodha House (supra) is that an essential part of the plaintiff‟s business , coupled with an element of control exercised by the plaintiff, must exist in such place where the plaintiff claims to be carrying on business either on its own or through an exclusive agent.

Mr. Anand submitted that the Courts should now take into account a concept of “New Media” and make arrangements for the technological advancements. His Honour, rejecting this argument, held that the advent of internet transaction can be also compared to the time when the transaction used to take place simply by telephones and fax involving more than one jurisdiction. The New Media, per His Honour, is as applicable as Old Media which has always been used.

Mr. Anand relied upon the ruling of Division Bench in Banyan tree Holding. In that case, the DB held that if a Defendant, through its website, targeting people of a particular jurisdiction then the Court in that jurisdiction can entertain a civil action. However, His Honour Sanghi categorically pointed out that the situation at hand was not the Defendant’s site but of WWE’s. Hence, the reliance was of no consequence.

Finally, per His Honour in paragraph 30: –

When it is clear to me that this Court has no territorial jurisdiction even in the face of the plaintiffs own averments in the plaint, I am not inclined to issue summons to the defendant. The Court is obliged to return the plaint under Order 7 Rule 10 CPC, once it becomes clear that it has no jurisdiction, to be presented to the Court in which the suit should have been instituted.

Territorial jurisdiction is always the most simple aspect in a civil action for intellectual property right. However, it is, at the same time, most contentious point of determination and takes up most of the judicial time of Delhi High Court.

Lets see if WWE challenges the order or files the action in Mumbai, where Defendants are situated.

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Resolving IP Infringement Lawsuits: Swifter.

Contrary to the popular belief, intellectual property actions can be settled faster among the category of usual civil action, in comparison to suit for specific performance, partition of properties, etc. Though I generally file action on behalf of the Plaintiff, so the present post might prove as counter productive since I’m giving a Defendant’s perspective in light of precedents.

Whenever a Plaintiff is approaching the Court in an IP lawsuit, the sine qua non relief prayed is that the Defendant should immediately cease from the counterfeiting activities. Incidental relief, thereafter, are delivery of infringing goods and paying damages to the Plaintiff.

After the recent increase in the Court Fees in Delhi, usual practice is not to seek damages but rendition of accounts of the Defendant. Though I have my separate reservation on that front. Nonetheless, since the focus is shifting from damages, job of a Plaintiff to seek speedy disposal only becomes easier and swift.

IP matters do not require the whole nine yards of a garden variety civil litigation. With minimal evidence, maximum result is possible. In 2006, His Honour Sanjay Kishan Kaul paved the way of culminating an IP lawsuit faster in cases where Defendant is willfully abstaining from the proceedings. In the Glaxo matter, His Honour held that where the Defendant is not joining the proceedings, no useful purpose can be served by asking the Plaintiff to bring witness before the Court for deposition. His Honour, under Order 19 Rule 2 sub-rule 2 of the Code of Civil procedure, not only exempted the witnesses from appearing personally, but also decreed the lawsuit then and there on the basis of the material before the Court.

His Honour S. N. Dhingra too followed the Glaxo ruling in Eco Labs and dispensed with the appearance of the witness of the Plaintiff in similar circumstances. Meaning thereby, in matters where the Plaintiff’s officials are not in Delhi generally, or even out of the Country, they need not come to the Court and can seek exemption.

However, these were the cases where the Defendant abstained from joining the proceedings. In some IP cases where the Defendant has put in his appearance, the matter can also culminate soon, in fact sooner, if the Defendant chooses not to contest the matter and suffers the decree with prejudice at the very first opportunity.

The landmark precedent is, again, by His Honour Kaul in Nestle vs Satya Prakash Maheshwari. The last order disposing off the lawsuit is here. In the matter, His Honour faced a situation where Nestle had instituted a lawsuit against infringing wrappers similar to its flagship ready-to-cook noodle brand Maggi. When the lawsuit came up for hearing for the first time, the High Court also allowed Plaintiff’s prayer for appointing Court Commissioners to conduct search and seizure action in the premises of the Defendants.

At the inception, the Defendants chose not to contest the proceedings and offered to suffer a decree of permanent injunction provided Nestle gave up relief of damages against the Defendant. Nestle was, obviously, not interested in giving up claim for damages. Counsel for the Defendant relied upon Section 135(3) of the Trade Marks Act to strengthen his submissions. The provision provides that when the Defendant has chosen to cease his activities in question, then the Court cannot pass any relief for damages, other than nominal damages in Court’s discretion.

Relying upon the provision, His Honour Kaul decreed the suit in favour of Nestle without any damages awarded. Nestle, understandably, took the matter in the Appeal Court before the Division Bench. Their Honours, comprising Mudgal and Shali, with one of the best counsel for IP matters, Mr. Saikrishna Rajgopal as Amicus deliberated on the matter at length.

The Appeals Court, in the comprehensive ruling, not only upheld His Honour Kaul’s judgment, but also cleared the way for the Defendants who want to avoid the rigmarole of long drawn out litigation, most probably resulting in injunction and damages.

This speedier resolution is more favourable to the Plaintiff than the Defendant in a more practical way. By and large, Delhi High Court does not award massive damages after a matter reaches culmination. Settling much earlier and for a token damage can save the Plaintiff a lot of cost and paperwork.

Frankly, a speedier disposal helps the counsels more than the parties. Once an ex-parte interim injunction is in favour of the Plaintiff, if an IP suit gets settled after first few hearings, the legal team can focus on other pressing matters.

Maybe because I had my training as a Mediator during my LL. M. that is why I have more resolution oriented approach towards litigation rather than prolonging it.

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No Rights In A NON-used, Registered, Trademark?

In recent pronouncements, Delhi High Court has come down heavily against companies which, though registered proprietor of, never used the trade marks on their own choice.

Briefly stated, the law of the trade mark is that registered or not, any person can claim priority in a coined/invented trade mark and prevent others from using the same/deceptively similar mark lest people might confuse the source of the goods. The cardinal principle of IP law as, as taught by a former senior and a very seasoned lawyer: There can be only one mark and one source.

Non use of a trade mark, if it is on the Register, gives anyone a statutory right to file a cancellation petition before the Registrar of trade Mark under Section 47 of the trade Marks Act, 1999 to have the mark removed. The period to initiate the petition must be five years and one month prior to initiate the petition.

Now the Courts way up to Supreme Court realise that the use of a mark can be in various ways and there is no limitation for a person to use a mark. However, the Courts should see the evidence of use, even in any form.

Two prominent cases are Virumal Praveen Kumar vs. Needle Industries (India) and Fedders Lloyd Corporation Ltd. & Anr. Vs. Fedders Corporation.

In Needle Industries ruling, the High Court held the following in paragraph 24:

In view of the aforesaid factual position what has to be considered is whether the factum of the registration of the trademark in the name of appellant is sufficient to grant relief in favor of the respondents or whether something more is required. This has to be considered in view of the submission of learned counsel for the appellant that the trademark cannot exist in vacuum and in view of their being a non-user of trademark since 1981, the respondents are not entitled to any protection.

Quoting from the Cluett Peabody & Co. Inc. vs Arrow Apparals, passed by His Honour S. Kapadia in Bombay High Court, their Honours held further in paragraph 26:

Though delay be itself would not be a defense but if there was a non-user for a long period of time the mark would lose its distinctiveness or the mark is then permitted to die for non-user. The Bombay High Court observed “It is well settled that lapse of time may bring about a change in the state of things in such a manner that to grant injunction in favor of the plaintiff’s would be harsh and it may cause irreparable damage or harm to the rights of the defendants.” Thus the Bombay High Court was of the view that non-use of trademark does have a bearing in action for infringement specially at the interlocutory stage and equities would have to be balanced in such a situation. The Bombay High Court had further laid down certain principles in this behalf which have been reproduced in the impugned judgment. In point (f) of the order dated 28th March, 2000 it is stated that the object of the Act is to protect the right and not be a source of monopoly. In point (j) it has been observed that a mark can lose its distinctiveness by non-user. Thus the enforcement of the right of exclusive use of a trade mark will depend on continuous use of the mark by the proprietor. In point (k) it has been observed that the court shall not protect the right of proprietor unless there is sale of the articles to which trade mark is attached or related. (emphasis added)

In paragraph 23 of the Fedders Judgement, their Honours in the Division Bench held as follows:

Though the object of the Trade Marks Act is to protect the proprietary rights of a registered trademark holder, at the same time the object is not to facilitate any monopoly of such registered trade mark holder, despite non use of the trademark by him as contemplated by the Act. A trademark has no meaning, even if it is registered, unless it is used in relation to goods and/or services. A Trademark which drops out of the use, dies when there are no goods offered for sale as there is no use of the trademark. The mark can lose its distinctiveness by non use, where non use is on the part of registered trade mark holder but not on account of external factors beyond the control of such registered trade mark holder.

After the pronouncements of their Honours at the Division Bench, the aspect of non use in relation to defense set up in infringement action has notably been discussed in the following three rulings.

In Sun Pharma vs Cipla, His Honour R. S. Endlaw was dealing with a situation where the Defendant took up a defense that the Plaintiff has not used the registered mark for considerable length of time and was, therefore, disentitled for any relief, much less interim. His Honour examined at length and held the following in paragraph 19:

The law laid down thus appears to be that trade mark cannot be got registered and held by persons as ?investors? only and with no intention whatsoever to use the same in connection with any goods and services. Even though I feel that in present times of encouraging creativity and rights in ?abstract properties? viz in domain names, there should be no bar to professionals / intellectuals creating rights in marks and being permitted to profiteer from them and there is a need for re-think on this position, I find that even within the frame work of the existing law, in the present case, there is sufficient trade connection between the registered trade mark and the business/activities of the plaintiff and the plaintiff cannot be termed as a mere trafficker in the trade mark. The Apex Court itself noted the complexities and delays in modern times in starting a business and without the mark being taken off the Register, I find that action for infringement of registered trade mark cannot be defeated for disuse. We have in recent times also seen new scientific research finding well known brands in the field of pharmaceuticals to be harmful and the said research findings being reversed after a decade or more. It would be travesty to allow to be extinguished rights in such well known brands in the interregnum. Such rights have come to be known as ?intellectual properties? and there is no reason why facets of tangible property which can be bought and retained by persons who have no use therefor and merely as investors, ought not to apply to ?intellectual property? as well. In present day times of surrogacy, when the child may not belong to the mother from whose womb born and of sale for premium of automobile number plates, there is no reason why insistence on owners using or intending to use the mark or why restrictions in the name of trafficking, ought to continue vis-?-vis trade marks.

However, in this case, His Honour also found evidence that the Plaintiff was not sitting on the mark and was in fact, acting on it.

In the following two cases, neither the Court found any evidence of any use by the proprietor of the mark nor found any circumstances which prevented him from using it. The cases, as they turned out rightly, were dismissed on this ground alone.

In Smithkline Beecham Plc. & Anr vs Sunil Sarmalkar, His Honour Valmiki J. Mehta dismissed the suit of the Plaintiff, where the Defendants were no longer appearing on the ground of non use alone. In paragraph 7, His Honour held:

So far as the fact that the trade mark PANAMAX is registered in favour of the plaintiffs is concerned, the same cannot be disputed, however mere registration of a trade mark cannot confer a right unless goods have been sold under the said trade mark. The entire issue of distinctiveness qua the trade mark is necessarily with reference to sales made under a trade mark. If there are no sales there cannot be distinctiveness……

Quoting paragraphs from Fedders and Needle Industries, His Honour also observed that the Plaintiff did not even file a single document with respect of the tablet. The Judge held in paragraph no. 11:

So far as the alternative case of passing off with respect to the trade mark PANAMAX is concerned, even that right with respect to passing off has to be established by prior use of the trade mark PANAMAX by the plaintiffs as compared to the defendants. Actual use, as already stated above, is only by showing sales in the market. Sales admittedly have not been proved and established on record. A self-serving statement in an affidavit by way of evidence cannot be a substitute for actual discharge of onus of proof which is required to be done by leading credible evidence and which surely could have been done in this case inasmuch as if the plaintiff no.1 has huge sales it was not difficult at all for the plaintiff no. 1 to prove the sales of the paracetamol tablets under the trade mark PANAMAX.

In more recent pronouncement of Allergan Inc vs Intas Pharmaceuticals, His Honour Valmiki J. Mehta was dealing with the infringement case set up for trade marks BOTOX and BTX-A, both registered marks.

The Defendant stated that it has no conflict whatsoever with Botox and the Plaintiff conceded that the trade mark BTX-A, despite registered since the year 2002, was never used till 2012 in India. The Plaintiff stressed that even without the use of the mark, the registration should confer rights to prevent someone else using an identical/deceptively similar mark.

Relying upon Needle Industries and Fedders, His Honour held in paragraph 6:

A reference to the aforesaid para shows that though registration of the trademark is intended to confer ownership rights qua the trademark which is registered, however, the object is not to facilitate any monopoly of such registered trademark holder despite non-use of the trademark. The Division Bench has also observed that a trademark has no meaning, even if it is registered, unless, it is used in relation to goods and services. The Division Bench has categorically observed that the trademark which drops out of the use dies when there are no goods under the trademark available for sale.

In paragraph 8, His Honour held:

A reading of the aforesaid two judgments leaves no manner of doubt that the entire object of trademark law in conferring ownership rights by registration of trademark is that the trademark becomes distinctive qua the goods on account of the sale of goods with such trademark in the market.

If there is no sale, there does not arise the issue of distinctiveness, and mere registration without sales with the trademark does not entitle grant of relief of infringement or passing off. Not only there is no distinctiveness without user of the mark but the judgments observe that the object of registration is not to allow a person to squat on the trademark i.e. continuation of the claim to the trademark without using the same.

Though the counsel for the Plaintiff relied upon the judgements of the Supreme Court for protecting persons claiming transborder reputation and use in special circumstances, His Honour categorically held that since the pleadings made no mention about any transborder reputation or any circumstances preventing the company to launch the product, the reliance was misplaced.

Though the matters shall travel to the Appeals Court but what is clear from the ruling is this:

The law pertaining to non use is a given. If you are not using the mark for a considerable length of time, merely flashing a registration certificate shall not help, more so when you are seeking interim protection against a person.

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Novartis’s Gleevec: Supreme Court Brings Patent Law To New Heights.

The least popular branch of intellectual property (IP) law–patents–got the most coverage in media world over, thanks to the Supreme Court’s verdict today in Novartis patent litigation for Gleevec application.

The judgement of Supreme Court can be accessed here: Gleevec (pdf) (HTML)

Brief facts:

Novartis applied for a patent in India for a anti cancer drug by the name of Gleevec. Even before the application was taken up for consideration, it attracted 5 pre-grant opposition proceedings from Cancer Patients Aid, Natco, Ranbaxy, Cipla & Hetro Drugs. On December 15, 2005, Assistant Controller of Patents heard all 5 proceedings together and rejected patent application by Novartis.

Controller held that the invention claimed by the appellant was anticipated by prior publication, i.e., the Zimmermann patent; that the invention claimed by the appellant was obvious to a person skilled in the art in view of the disclosure provided in the Zimmermann patent specifications; and further that the patentability of the alleged invention was disallowed by section 3(d) of the Act

Novartis challenged the Controller’s order before the Madras High Court in 5 writ petition and filed 2 separate writ petitions challenging constitutionality of Section 3(d) of the Patents Act. Once the High Court dismissed the writ petitions challenging 3(d), Novartis did not prefer any appeal to the Supreme Court. The other bunch of 5 petitions were transferred to Intellectual Property Appellate Board (IPAB) for adjudication.

IPAB reversed Controller’s decisions in all 5 petitions to the extent that Novartis invention satisfied the tests of novelty and non-obviousness. The IPAB, however, held that the patentability of the subject product was hit by section 3(d) of the Act. In an unprecedented manner, and with the Consent of the parties to save considerable time, Their Honours in the Supreme Court decided to hear the appales against the IPAB order though the Appellate Court was Madras High Court.

The 5 Objectors stated before the SC that the TRIPS agreement has sufficient flexibility for Member States to control Patent rights to guard against adverse impact on public health.

The SC also noted that amended portion of section 3(d) clearly sets up a second tier of qualifying standards for chemical substances / pharmaceutical products in order to leave the door open for true and genuine inventions but, at the same time, to check any attempt at repetitive patenting or extension of the patent term on spurious grounds.

Furthermore, the Bench also noted that the Zimmermann patent, Novartis applied for, and in several cases obtained, patent in the US not only for the beta and alpha crystalline forms of Imatinib Mesylate, but also for Imatinib in a number of different forms. Novartis, however, never asked for any patent for Imatinib Mesylate in non-crystalline form, for the simple reason that it had always maintained that Imatinib Mesylate is fully a part of the Zimmermann patent and does not call for any separate patent.

This factor also played a crucial role before the Bench since Novartis maintained in the Indian application that Gleevec was a new substance as applied took a contrary position to earlier patent applications and even while sending a cease and desist letter to Natco.

When Novartis cited foreign rulings in support of the arguments, the Bench held as following:

“In this country the law of patent, after the introduction of product patent for all kinds of substances in the patent regime, is in its infancy. We certainly do not wish the law of patent in this country to develop on lines where there may be a vast gap between the coverage and the disclosure under the patent; where the scope of the patent is determined not on the intrinsic worth of the invention but by the artful drafting of its claims by skillful lawyers, and where patents are traded as a commodity not for production and marketing of the patented products but to search for someone who may be sued for infringement of the patent.”

Finally, in paragraph 164 of the judgement, SC has stated that while going through the Zimmermann patent one cannot but feel that it relates to some very serious, important and valuable researches. The subject patent application (Gleevec), on the other hand, appears to be a loosely assembled, cut-and-paste job, drawing heavily upon the Zimmermann patent.

Charity programme by Novartis:

Though a lot has been written & spoken about the charity programme by Novartis, few points are very important to note. IPAB in its order notes that : –

“We are fully conscious of the Appellant’s (Novartis’s) benevolent GIPAP program for free distribution of GLEEVEC to certain cancer patients. But as per information furnished in its written counter–argument by R 3 that when the Appellant was holding the right as Exclusive Marketing Rights on GLEEVEC it used to charge Rs.1,20,000/- per month for a required dose of the drug from a cancer patient, not disputed by the Appellant, which in our view is too un-affordable to the poor cancer patients in India. Thus, we also observe that a grant of product patent on this application can create a havoc to the lives of poor people and their families affected with the cancer for which this drug is effective.

Furthermore, Supreme Court in the order also notes that when asking Novartis about the massive pricing of the drugs, it stated to run a huge charity programme for free distribution of drugs as well to the needy. However, when the Supreme Court questioned if Novartis can abolish the charity programme and rework on the pricing, Novartis could not reply satisfactorily.

Point being, the Court were aware of the Charity argument of Novartis but the price difference between a monthly dosage of 120 thousands and 8 thousands was astonishing.

TRIPS agreement versus local laws:

The most crucial aspect which weighed in before Their Honours at the Bench was the contribution which the manufacturers of Indian generic industry had made world over to supply life saving drugs to poor countries. Two letters which the Bench quoted are relevant as well. One was dated 17 December, 2004, from Director, Dept of AIDS at WHO writing to Union Health Minister stating that WHO is aware that TRIPS compliance was important but also is most important that India continues to export cheaper medicines to not only Member States but also countries which are poor. Some countries which WHO mentioned where India is a massive supplier of cheap anti cancer life saving generic drugs were Ghana, Lesotho, Malawi, Namibia, Bangladesh, etc.

Another letter was from UNAIDS asking India to make sure that the Patent regime after complying with TRIPS does not restrict / undermine India’s position as a leader in supplying affordable life saving drugs to countries that do not have manufacturing capacity to manufacture such drugs.

It is, therefore, a fallacy to say that Indian Patent Act is not in consonance with the requirements under TRIPS or that Courts were not mindful of the R&D and charities done by Novartis. However, at the end of the day, courts will have to interpret provisions of Patent Act keeping India as a jurisdiction because Patent provisions, unlike trademarks and copyright, are not enforceable internationally.

In Gleevec ruling, SC has displayed as excellent and pragmatic approach in dealing with one of the most complicated branches of law. The judgement, apart from being excellently sound in law, is written in such an elaborate manner that any person with even basic knowledge about patent law can understand and appreciate it.

After a long time, an excellent IP ruling from  the Supreme Court.

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Intellectual Property Rights by Ananth Padmanabhan @LexisNexisIndia

I jumped at the opportunity given by LexisNexis to try my hand at this new book, Intellectual Property Rights-Infringement and Remedies by Ananth Padmanabhan. After buying the revised Venkateswaran on Passing Off last year, I wasn’t a big fan of LexisNexis though it is one of my most preferred publishing house.

Well begun is half done. Not just a cliche. In the preface alone, the Author does a great job and appreciates the various schools of thought in commentary books we have. He also notes what is the main problem in usual ones.

The first chapter gives out the brief details of various forms of injunctions granted by Courts and various heads / branches of the intellectual property rights. Next chapter deals with infringement of trade marks and reliefs. Chapter three deals with copyright. Fourth chapter discusses patents. Author covered designs infringement in fifth chapter. The last chapter gives brief detail on common law rights focusing on the trade secret aspects.

The book, like others, has a compilation of various statutes and rules of different laws covering intellectual property rights.

The attention with which the Author has dealt with the topics in each of the branch of intellectual property law is magnificent, fantastic and surprisingly elaborate–without giving legal jargon. The Author has not given paragraphs after paragraphs of a judgement and that has helped in the book giving us his  perspective–which is a cardinal rule of a book–rather than a lecture flowing through a Court ruling.

Only after going through the book can one realise that the purpose of the author was not just to write 500 odd pages but to give us his understanding of plethora of judgement and commentaries summarised in these pages about various aspects of intellectual property right. The table of contents in each chapter is very helpful and will assist the reader to reach the precise proposition.

At various instances, the Author has given a detailed study where he has disagreed with a particular judgement. This is not something which we usually get to read in a typical commentary book. The Author has made sure that the disagreement with a particular judgement is explained properly rather than just branding a judgement as non application of mind.

Though the Appendix has 10 acts / rules, what is missing is Trade and Merchandise Marks Act 1958, Trade and Merchandise Marks Rules 1959, Designs Act, 1911 and the Designs Rules, 1933 which surely come handy.

The book is must for anyone studying / practicing / interested in intellectual property laws. I am really glad that I have this one from LexisNexis in my library next to the Nimmer, Copinger and Venkateswaran among others.

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Court Fee In Delhi: Increased or DECREASED For IP Matters?

A little background:

Government of NCT of Delhi issued a notification on July 23, 2012 bringing into force the Court Fee (Delhi Amendment) Act, 2012. The notification increased the Court Fee applicable in Delhi since August 01, 2012.

In Schedule I dealing with Ad Valorem Fees, few significant changes in the civil suits–for written statements too–and  cheque bouncing cases by the notification are the following: –

  1. Upto fifty thousand rupees–two percent on such amount or a thousand rupees as fixed fee, whichever is more;
  2. From fifty thousand rupees to twenty lakh–three percent on such amount or value; and
  3. Above twenty lakhs–four percent on such amount.

As expected, the fixed fee on the written statements and the fees for the cheque bouncing cases of higher amount were the biggest sufferers. Imagine a situation where a person has bounced cheques worth 4 million. His court fee alone before the Magistrate shall be one hundred and sixty thousands in the notification.

It is true that some fees needs to be increased in some segments but no increase should have happened, as presently, without keeping in mind the paying capacity of a litigant.

Since the notified Schedules increased Court Fee substantially across the board, Delhi High Court Bar Association (DHCBA) filed a writ petition in the High Court of Delhi and obtained a stay on the notification on August 9, 2012. During the course of this writ petition, it came to be known that the Govt approached the Supreme Court by filing a Special Leave Petition against the stay order. Their Honours sitting in the Supreme Court, on September 26, 2012, vacated the stay granted by the High Court. Meaning thereby, the notification would prevail.

However, later on DHCBA appeared before the Supreme Court and apprised the Bench their view. On October 16, SC modified the earlier order dated September 26 only to the extent that the written statements will not have the fixed fee and the cheque bouncing cases would go on with the earlier fees.

The Bench disposed off the SLP on October 30 requesting the High Court to decide the writ petition at the earliest.

With this background, let us see one branch of the civil suits pending in the High Court–intellectual property (IP) matters pertaining to actions for infringement of patent, design, copyright and trademark. In the Schedule II to the notification detailing the fixed fee, at Article 30, following are the charges specifically for the IP suits: –

  1.  When filed before a Civil Judge–five hundred rupees;
  2. When filed before a District Judge–one thousand rupees; and
  3. When filed before the High Court–five thousand rupees.

Though the first entry is GRAVELY flawed since the IP matters can never be filed before a Civil Judge. The District Court is the first instance Court for IP matters.

Coupled with the enhanced fees for the applications, vakalatnama (form of authorisation for an advocate to appear) and other sundry charges–not to forget 4 percent on 2 million (eighty thousand) and five thousand rupees as fixed fee, counsels were affixing fees close to ninety thousands for IP actions. It is not difficult to imagine that fresh filing would have surely taken a beating.

Since the notification came into force and effect from August 01, 2012, the counsels were also required to make up deficient court fee in the suits filed after this date.  Article 30 states that suit and or petitions will require fixed fees of five thousand rupees. The counter claims were always filed with the fees proportionate to the amount claimed. Same is happening as of now too except for the fixed fees.

Last week, on December 7, 2012, to the Author’s knowledge–subject to correction–His Honour Mr. V. K. Jain, in a civil suit admitted a fresh civil action with only ten thousand rupees as court fees. Now, a very seasoned and distinguished intellectual property attorney filed this suit. I’m sure that the ever so generous counsel will share some details to enlighten me. Though I understand that some counsels are now filing suits with only Schedule II fees.

The order is available here.

Following is an extract of the order: –

As per Article 30 of Schedule II to the Court Fee Act, as applicable to Delhi, in any suit or petition under the Intellectual Property Rights, the court fee required to be paid is Rs.5,000/- when the suit or petition is filed before the High Court. Since this is a suit seeking to enforce Intellectual Property Rights of the plaintiff Company, it is clearly governed by the aforesaid Article and accordingly requisite court fee stands already paid.

What I, as a counsel practicing intellectual property law myself, do not understand is how come the ad valorem fee (in Schedule I) gets a waiver. The said Article nowhere says that the counter claims, of whatever amount, shall not require ad valorem fees. Why sudden exemption to plaints then? My limited understanding of the notification and the Schedules nowhere tells me that the Schedule I is, henceforth, inapplicable to IP matters. If it is, then the Govt should rectify it to remove the anomaly since we were, earlier, filing even IP matters with the increased Court fees.

The Schedule II is in addition to or rather an exemption from Schedule I requires clarity.

My senior colleagues in the Bar will agree with me that, invariably, cash rich companies file cases to protect their intellectual property. If the idea of the Government was to give these companies some exemption so to say then same logic should apply to every citizen who is approaching the High Court after, presently, arranging mammoth Court Fees and resources.

I am again stressing everyone to read the increased jurisdiction note and enlighten me with their thoughts for me to gain knowledge on this critically important segment in my area of practice.

I am sure in times to come, I will be able to get more clarity since, as of now, I have very little.

Suggestions welcome.

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Delhi High Court allows appeal by Liv.52. Restrains LIV-T.

A long drawn out legal battle, which started in 1996, has reached some finality on November 9, 2012 when Their Honours Pradeep Nandrajog and Manmohan Singh sitting in the Division Bench of Delhi High Court reversed the judgement by His Honour Dr. S. Muralidhar dismissing civil action by ‘Liv.52’ against ‘LIV-T’.

The judgement by His Honour Dr. Muralidhar is available here. The decision by the Appeals Court is available here.

Brief facts: Plaintiff, Himalaya Drug Co. (HDC), is registered proprietor since 1957–and user since 1955–of trademark ‘Liv.52’ for medicinal preparationn for treatment of disorder of liver. HDC initiated action against LIV-T trademark of SBL Limited (SBL), the Defendant, for using the trademark for the identical medicinal preparation.

Brief legal hisotry of this battle is that HDC sent a legal notice to SBL in March 1996 to cease and desist the usage of the LIV-T trade mark. The notice wasn’t a success and HDC instituted a civil action against SBL in Delhi High Court in the same year claiming damages to the tune of over Rs. 500,000.

The Court granted ex-parte interim relief to HDC on 23rd May, 96 and restrained LIV-T. The Court later, on 12th July, 96, confirmed the interim injunction and restrained SBL. SBL challenged this injunction order in the Appeals Court claiming LIV to be derived from descriptive and generic term liver and used it in reference to it as well.

Their Honours sitting in the Division Bench vacated the injunction on 15 July, 1997 agreeing with SBL’s contentions that the mark Liv.52 and LIV-T are not deceptively similar. The Court further held that the acronym, LIV, has become publici juris and generic by multiple people using LIV to sell their medicinal preparations.

HDC challenged this order in the Supreme Court which remanded the matter again to the Single Judge with a request to decide the matter expeditiously, on 27 February 1998.

The Single Judge framed issues in the matter on 30th November 98 and the trial commenced.

In 2003, due to increase in the pecuniary jurisdiction of Courts, all the civil suits pending in High Court which were of less than 2 million in valuation were transferred to the District Courts. So was also the fate of HDC’s civil suit. After an amendment application which enhanced the valuation of the suit, the matter was again transferred to the High Court in the year 2005.

Both parties led their evidence and after the final arguments, His Honour Dr. Muralidhar decided all the issues. Issue No. 10, which is reproduced herein, was the crux of the lawsuit: –

Whether the use of the trademark “LIV-T” by the Defendant amounts to infringement of trade mark of the Plaintiff?

His Honour dismissed this issue, as also HDC’s suit, primarily, on following grounds:

1) Liv followed by a dot and numerals cannot be similar to LIV written in capital followed by a hyphen and a capital T;

2) The competing marks ‘Liv.52’ and ‘LIV-T’ are not phonetically similar;

3) There was no likelihood of confusion at the end of a pharmacist in comparing the two marks; and

4) HDC had not been able to establish any evidence on actual confusion by a consumer.

HDC’s counsel, Mr. Hemant Singh, one of the best intellectual property litigation lawyer, stressed on the aspect that SBL, all this while, never raised any objection to HDC’s trademarks and never sought rectification as well. HDC also pressed that the marks Liv.52 and LIV-T were overall structurally and phonetically similar. HDC also argued that being medicinal preparations, utmost care should be there in allowing similar sounding brands to compete.

SBL’s primary argument was that the suffix LIV has become common to the trade and there are various manufacturers using LIV to denote their medicines. This argument weighed in with His Honour Dr. Muralidhar in His observation that LIV has indeed become generic and publici juris.

HDC, obviously, carried the judgement in appeal.

The Division Bench (DB), before deciphering the impugned order, observed that since HDC’s trademark ‘Liv.52’ was registered since 1957, under Section 32 of the old Act, the registration was conclusive proof of its validity. Per the Division Bench, this discussion assumed significance since the Single Judge held that ‘LIV’ has become publici juris which is a wrong finding in light of Section 32.

The DB also placed strong reliance on Issue No. 12 which is reproduced here: –

Whether the word mark “LIV” is Publici-Juris and if so, to what effect?

The Appeals Court further held that the competing mark have to be judged in the light of overall similarity and not by placing them next to each other. The DB also observed that it was SBL which had the onus to prove the issue that whether ‘LIV’ has become publici juris or generic and it produced no such evidence.

Moreover, the DB dealt in detail the case laws protecting the marks even though the marks contained component derived from organ / salt. Furthermore, the DB also held that as ‘Liv.52’ was HDC’s registered mark since 1957 and the fact that SBL never applied for the cancellation of these trademarks, in light of Section 32, ‘Liv.52’ enjoys a formidable and enforceable reputation.

Unlike Section 37 of The Lanham Act of the US which is reproduced here: –

§ 37 (15 U.S.C. § 1119). Power of court over registration; certification of decrees and
orders
In any action involving a registered mark the court may determine the right to registration, order the cancellation of registrations, in whole or in part, restore cancelled registrations, and otherwise rectify the register with respect to the registrations of any party to the action. Decrees and orders shall be certified by the court to the Director, who shall make appropriate entry upon the records of the Patent and Trademark Office, and shall be controlled thereby.

there is no such corresponding provision in Trade Marks Act, 1999 to enlarge the scope of an infringement proceeding, as undertaken by His Honour Muralidhar in the impugned judgement.

The DB, therefore, reversed the judgement by His Honour Muralidhar and granted the injunction to HDC’s Liv.52 against SBL’s LIV-T and allowed SBL to exhaust the pending stock within a period of six months.

That this order shall reach the Supreme Court is a but natural consequence. Let us await what finally becomes of this long legal battle.

But the IP jurisprudence should indeed carve out a stricter measure qua the trademarks for medicinal preparations. Here is an example how a wrong medication can be fatal. A 65 years old male in Mumbai died due to consuming wrong medication which the chemist gave to him. But then, is confusion at the end of a pharmacist alone to be blamed? What about few doctors writing the prescription in largely illegible handwriting? I hope the Indian Medical Council has some study for this and is taking some corrective measures.

Let us await if there is any observation by the Supreme Court in the instant matter.

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