September 24, 2011

Passing off, Extended Forms of Passing off and Reverse Passing Off


Passing off
This means doing business by presenting goods or services as someone else's, where the products may be of the same standard or be of substandard. The tort is known as "passing off". For most of the Commonwealth countries, "palming off" in the USA and unfair competition elsewhere. Passing off is a judge made law. In some countries they have incorporated a kind of passing off in their legislation as a type of infringement. There is an international obligation to assure effective protection against unfair competition under art 10 bis of the Paris Convention.

Classic Trinity Test:

The Honourable courts have developed a classic test to identify the tort of Passing off.

# In Reckitt & Colman Products Ltd. v Borden Inc [1990] RPC 341, it was held that: A claim may be bought:

· The claimant’s goods or services have acquired a goodwill or reputation in the market and are known by some distinguishing feature;

· There is a misrepresentation by the defendant (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by the defendant are goods or services of the claimant; and

· The claimant has suffered, or is likely to suffer, damage as a result of the erroneous belief engendered by the defendant’s misrepresentation.

# In Consorzio del Prosciutto di Parma v Marks & Spencer [1990] FSR 530, famously Known As The classical trinity, as the Parma ham case; In this case Court confirmed the three test as been laid down in Reckitt & colman case.Court also affirmed the stand as observed in the Pub Squash case (Cadbury Schweppes Pty Ltd. & ors. v. Pub Squash Co. Pty Ltd. (1981) RPC 429), the tort of passing off is no longer confined to early 19th century formulation, i.e. to the name or trademark or a product or a business. It is now recognised that the tort can encompass other descriptive material, such as slogans or visual images or advertisement campaigns that imply an association with the plaintiff's product, provided always that such descriptive material has become part of the goodwill of the product. The Ambit of passing of has been increased as been interpreted in famous “champagne case”.

# In Cadila Healthcare Limited vs Cadila Pharmaceuticals Limited, 2001, In this case Court laid down several points which needs to be considered for action of passing off on the basis of unregistered trade mark generally for deciding the question of deceptive similarity:
· The nature of the marks i.e. whether the marks are word marks or label marks or composite marks, i.e. both words and label works.
· The degree of resembleness between the marks, phonetically similar and hence similar in idea.
· The nature of the goods in respect of which they are used as trade marks.
· The similarity in the nature, character and performance of the goods of the rival traders.
· The class of purchasers who are likely to buy the goods bearing the marks they require, on their education and intelligence and a degree of care they are likely to exercise in purchasing and/or using the goods.
· The mode of purchasing the goods or placing orders for the goods and
· Any other surrounding circumstances which may be relevant in the extent of dissimilarity between the competing marks.
Court also held that weightage of various factors need to be considered on case to case basic. A fixed criteria on each factor cannot solve the purpose. Every case should be dealt on case to case basic, but court must consider these criteria in mind before considering the case for passing off.

# In AG Spalding & Bros v A W Gamage Ltd and the later cases make it possible to identify five characteristics which must be present in order to create a valid cause of action for passing off:
(1) a misrepresentation
(2) made by a trader in the course of trade,
(3) to prospective customers of his or ultimate consumers of goods or services supplied by him,
(4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and
(5) Which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so.

# In Bristol Conservatories Ltd v Conservatories Custom Built Ltd the defendants’ salesmen showed prospective customers a portfolio of photographs of ornamental conservatories as if constituting a sample of the defendants’ goods and workmanship. In fact these were photographs of the plaintiff’ ornamental conservatories. This was held to amount to passing-off as the defendants had misrepresented that they were the commercial source of those conservatories. By showing the photographs to prospective customers goodwill arose towards the supplier of those conservatories and was simultaneously misappropriated by the defendants. [This case might be considered as reverse passing off also]

# In John Henderson & Sons v Alexander Munro, In that case the defendant had issued circulars and claimed that a certain Mr Munro had experience in drilling artesian wells. However the circular did not state that Mr Munro had drilled the wells whilst working as managing director of the plaintiff’s company, not the defendants’. The Scottish House of Lords held that this amounted to passing off.

# The landmark passing off case J Bollinger v The Costa Brava Wine Co Ltd (Spanish Champagne) created 'extended passing off'. This enables a class of traders to prevent rivals from incorrectly applying descriptive terms. While the class cannot prevent rivals applying the term correctly, they can prevent its incorrect application. Other cases about products made in geographical areas followed, for example Scotch Blended Whiskey, and Spanish Sherry. It was widely believed that extended passing off required the plaintiff to prove that consumers associated the disputed term with a particular location.

“The usual remedies are injunctions, delivery up of offending items and inquiries as to damages or accounts of profits”.

Extended Forms of Passing off

The extended forms of passing off are one kind of passing off. These basic principles have been refined over the years to protect appellations of origin, such as Swiss chocolate.
In the most famous Case, The UK’s biggest vodka supplier, Diageo, has succeeded in an action against the manufacturers of VODKAT, Intercontinental Brands, on the basis of “extended” passing off. VODKAT is a mixture of vodka and fermented alcohol, and has 22.5% of alcohol by volume (ABV).

“Extended” passing off applies where:
A) A particular sign has obtained some distinctiveness in relation to goods of a particular quality;
B) Goods not having that quality are sold under that sign (or a confusingly similar one); and,
C) Any business having goodwill from dealing properly in those goods under that sign has, or is likely to, suffer damage.

In this case, Court considered that the term “vodka” denotes a clearly defined class of goods (i.e. clear and substantially flavourless spirits with at least 37.5% ABV), having sufficient reputation to give rise to protectable goodwill. It was held that there is an assumption among consumers, retailers and wholesalers that VODKAT and vodka are the same thing, which was considered to be exacerbated by the nature of VODKAT's labelling and marketing. This was considered to amount to the misrepresentation of VODKAT as vodka, rather than a drink containing vodka, leading to the deception of consumers.
“The decision puts vodka in the same class of protectable product descriptions as champagne, sherry, Scotch whisky, and Swiss chocolate.”

# In Erwen Warnick B V vs. J Townend & Sons (Advocaat) the House of Lords dispelled that popular conception by preventing incorrect application of the descriptive term 'Advocaat', which was associated with specific ingredients rather than a geographical location. Thus extended passing off protects use of a descriptive term associated with a distinctive and recognisable product; geographical association is not required.

Reverse Passing Off

“A wrongdoer commits the tort of ‘reverse passing off’ when ‘the producer misrepresents someone else's goods or services as his own.’ That is, ‘X’ copies ‘Y's’ work without permission and claims it as ‘X's’ own.’ Or in other words when X puts his Mark, logo or sticker, on the product of “Y” which goes to prove that the product is of “X”, it is considered as reverse passing off. In this case actually the wrongdoer is not producing any new product and selling it in order to hamper the goodwill and reputation of others and to secure benefit. Basically he is using others product, by just giving it his name or brand, so the customer gets to know that it’s his product. In other words we can say that he is not creating any substandard product, but he is selling the product of same standard as of original one. Sometimes removing the label or removing the label and putting any other label is also considered as reverse passing off.

# In Bristol Conservatories Ltd. v Conservatories Custom built [1989] RPC 455), Court held that when defendant claims the claimant's work as his own; it can be condered as a case of reverse passing off.

# In Roberts Powers School v Tessensohn [1995] FSR 947), It will be recalled that orthodox passing off entails the defendant representing that his product is the plaintiff's product.

In many cases, reverse passing off can be explained under the ordinary rules: for example where a defendant may represent that he or she made goods which were in fact made by the plaintiff so as to pass off his own business as a branch of the plaintiff's. The classic example of passing off takes place when one trader represents his goods to be those of another trader with a better reputation. However modern cases show that passing off is also possible when one trader represents the inverse: that the goods of another trader are his own.

Reverse Passing off in China:
This is the first case in China about trademark reverse passing-off. On May 1994, a dealer of Singapore Crocodile bought some western-style garment with trademark “Maple Leaf” from Beijing Garment Factory with unit price RMB 230. Then it removed the logo of “Maple Leaf” and replaced it with the trademark “Crocodile” and resold to customers with unit price RMB 560 at Beijing Parkson Shopping Center. This was found by Beijing Garment Factory and a lawsuit was filed. The court finally recognized as unfair competition and the defendant was ordered to stop the infringement and liable to pay compensation.
After this case, China revised its trademark law in 2001 and reverse passing-off was officially listed as a type of trademark infringement.
If a person, without permission of the trademark holder, replaces the trademark with another one and resells the product in the market, his behavior may infringe the trademark right of the holder. To be simple, trademark reverse passing-off means a person buys another one’s goods, removes the trademark on the goods and replaces it with his trademark. And then he resells the goods to customer.

Following features for trademark reverse passing-off:
· The trademark infringed shall be a registered trademark. That is, the trademark must be registered;
· The product is acquired in a legal way. It may be manufactured or sold by the trademark holder;
· The purpose for reverse passing-off is to make use of the good quality reputation of other person’s product and therefore to make illegal profit by disguising the true source of the product.

" If goodwill, misrepresentation and damage can be proved an action will lie regardless of whether the wrongdoing was intended and there is no threats action to protect those accused of passing off from intimidation of their customers."


September 23, 2011

Stealing Trade Secret With Zeal: May Make You Reel


A federal jury in the State of Virginia gave, which is undoubtedly the biggest verdict till date in a case of 'misappropriation of trade secret' till date. The Jury awarded a whopping $919.9 million verdict in favor of DuPont in the case of E.I. du Pont de Nemours v. Kolon Industries. The verdict marks the end of the two-and-a-half year battle that DuPont waged against Kolon Industries (a relatively new comer to the industry of rubber/tyre manufacturing) claiming that Kolon had willfully misappropriated key aspects of its formula for Kevlar®, a high strength synthetic fiber used in applications as diverse as bicycle tires and body armor.
(Image from here)

Such huge verdict was a result of twofold wrongs:
a. of 'stealing' of the trade secrets through a former DuPont employee (who had supposedly stored the data in his home computer, who later confessed the theft and hence was separately sentenced to 18 months of imprisonment)

b. of willful destruction of evidence by deletion of several emails and related documents by Kolon which was caught by the forensic experts employed by DuPont.

Though some of those evidences were recovered on backup tapes after extensive computer forensic analyses, much of it remained missing. This led Judge Robert Payne to provide a so-called adverse inference instruction to the jury, meaning that the jury was free to assume that the missing evidence would have weighed against Kolon.

Hence, due to such serious 'bad faith' conduct by the employees of Kolon, the award included if not punitive damages, but atleast sanctions. Further, the Judge refused to give a default award in favor of DuPont, so this position of law may still be open to reviews, though prima facae it is a open and shut case, hence the Jury was allowed to infer adversely (against Kolon).

What is learnt from this case is that, it is not only the duty of any organisation to protect its trade secret, but also be aware of any potential theft of other's trade secrets by its own employees. Moreover, in case any such theft is brought into notice of the employer, proper measures should be taken, not to effect any damage to the evidences so that such theft is undetectable, but to ensure that all the employees, including the IT team and the IP teams are set at high alert thereby tracing all the subsequent steps so as to preserve all the evidences in favor of such employer being sued.

September 16, 2011

America (re)Invents its 'Acts' !!

After lot of contemplations and lobbying, the 4th round of Patent Reforms have finally happened in the USA.
With the passing of the Bill by Senate with an overwhelming majority, the US Patent Law has after a long time, undergone a substantial changes. Changes, which has brought US now in the same lines of most of the other patent systems in the world.

The major reforms are listed below:
1. first and foremost, US, from now on, would be having the 'first to file' system, replacing the controversial and time (and ofcourse money) consuming 'first to invent' system, thereby changing the definition of 'prior art' substantially and also repealing the interference proceedings.
2. The opposition procedures have been revised and several other features been added, like inter partes review, post-grant review and also tools to oppose patent applications with expanded discovery and to file multiple oppositions.
3. Several enforcement and related issues are now eligible to be decided by USPTO, without going to the Court.

Though the opponents of the Bill are many, but with its signature scheduled on 16th Sept, 2011, the Act would be coming into effect almost immediately.

With several critiques of the Act in the federation, one may have read several complaints/grudges about this Bill. But, we would try to tell you the story from the other side, as to, how the Act would indeed help the small innovators and foster healthy research. An exhaustive reading of the Act would probably throw some more light on this.

Till then, keep reading and waiting for the detailed analysis !!

September 14, 2011

Initial Interest Confusion

Initial interest confusion

Have you ever faced a situation where you went to the market to buy your favourite deo and ended up picking something similar to it, but as soon as you reached the counter to pay the bill you realize it is not what you were looking for? If yes, then I must tell you that you have just experienced of what is known as “Initial interest confusion.”
In 2006, the International Trademark Association adopted the definition of an expression “initial interest confusion” which is largely derived from US trademark law. The resolution defines the expression as:
"initial interest confusion is a doctrine which allows for a finding of liability where a plaintiff can demonstrate that a consumer was confused by a defendant's conduct at the time of interest in a product or service, even if that initial confusion is corrected by the time of purchase."
In simple terms "initial interest confusion" is a confusion on the part of the public as to the trade origin of the goods or services in relation to which the impugned sign has been used arising from use of the sign prior to purchase of those goods or services, and in particular confusion arising from use of the sign in advertising or promotional materials.[1]
It is a very good defence which can be taken by the person who claims that his trademark is being infringed by the other where both belong to a similar class of goods and the similarity between the goods is the way they are packed. Moreover, in cases where this doctrine is used, the plaintiff does not have to prove that there exists a likelihood of confusion, all he needs to prove is that the similar mark/ packaging grabbed the initial attention of the consumer.
The first case which discussed this doctrine is Grotrian v Steinway & Sons[2], even though the exact phrase is not used but one could sense that it is in this case the doctrine first came into existence. In this case the plaintiff imported pianos in US labelled “Grotrian-Steinweg" and advertised under the mark "Steinweg". The founder of Steinway & Sons was initially making pianos labelled “Steinweg” in Germany. When he immigrated to New York, the business was sold to the three employees Grotrian, Helfferich and Schultz, with the permission to use the "Steinweg" mark. Consequently, Steinway filed an infringement suit against Grotrian.
On appeal the court held that the name “Grotrian-steinweg” would "misled into an initial interest, a potential Steinway buyer who may satisfy himself that the less expensive Grotrian-Steinweg is at least as good, if not better, than a Steinway". And thereby attract potential consumers based on the reputation built by Steinway in US for many years.
Similarly, in Mobil Oil Corp. v Pegasus Petroleum Corp[3] case, Mobil the holder of a registered trademark in both the flying horse symbol representing the Greek mythological figure of Pegasus and the name "Pegasus" sued Pegasus Petroleum, an oil trading company, on the basis of a trademark infringement concerning the "Pegasus" name. Even though the logo of Pegasus Petroleum did not represent any sort of flying horse and solely consisted of two interlocking letters "P" the Court held that "there is a sufficient likelihood of confusion between Mobil's flying horse symbol and Pegasus Petroleum's use of the 'Pegasus' mark to grant Mobil relief under the Lanham Act." Further, the 2nd Circuit Court clarified on Appeal that the likelihood of confusion had to be understood as a "likelihood that Pegasus Petroleum would gain crucial credibility during the initial phases of a deal". The Court concluded that Pegasus Petroleum was misleading potential customers because of their initial interest suggested by the Pegasus mark and holds that this initial confusion alone constitutes a sufficient trademark injury.
In recent times where the marketing strategy is stronger than ever before, the Courts have relied on the doctrine of “initial interest confusion” and held that the displaying the trademark logo of the competitor in ones advertisement also leads to infringement. Storus Corp v. Aroa Marketing Inc.[4], one of the first case related to comparative advertising dealing with this doctrine, the Federal Court held that “displaying a competitor's trademark in Adwords ad copy constitutes impermissible initial interest confusion”, leading to a summary judgment win for the trademark owner.
In one of the recent cases, the issue rose whether initial interest confusion claim is actionable or not? Answering in affirmative Court in case of Och-Ziff Management Europe v Och Capital[5], held that the claim based on the aforesaid doctrine in actionable both in case of trademark and passing off.
Thus, by looking at the cases mentioned above, one can say that this doctrine works as a relief to the registered owner where all he needs to show is that the product of another person creates initial confusion in minds of the consumer and he will win the case even without proving the likelihood of confusion. It would be especially useful in cases where the relevant market for the product of the claimant lies in rural areas where the consumers identifies the product by the way it is packed/ way the logo looks. It still remains to be seen how this doctrine will be adopted in India as rural India forms a substantial portion of the consumers.



[1] Och-Ziff Management Europe Ltd & Anor v Och Capital LLP & Anor [2010] EWHC 2599 (Ch)

[2] Grotrian, Helfferich, Schults., Th. Steinweg Nachf. v. Steinway & Sons, 523 F.2d 1331 (2d Cir. 1975), Grotrian, Helfferich, Schulz, Th. Steinweg Nachf. v. Steinway & Sons, 365 F. Supp. 707, 717 (S.D.N.Y. 1973).
[3] Mobil Oil Corp. v Pegasus Petroleum Corp., 818 F.2d 254
[4] 2008 WL 449835 (N.D. Cal. Feb. 15, 2008)
[5] [2010] EWHC 2599 (Ch)






September 13, 2011

Survival Clause And Law of Contracts

This blog is in reference to the lecture by one eminent professor of law at IIT Kharagpur. The lecture primarily focused on the practical aspects of contractual issues in law. The question that struck the most part of the lecture was if the confidentiality clause of contract can be extended beyond the term of contract? What about the legality of such clause? Typically, it is assumed that the term of contract is till the performance of the contract and the contract is drafted in the manner that "the confidentiality of the data will be maintained by the party for during and the five years beyond the term of contract". In other words, the contract terminates with performance of prime promise. The question put by the professor is, does the confidentiality cease with the termination of contract? How to maintain the legality of contract?

The recourse taken by the professor is to the section 1 of the Contract Act. The saving clause of the provision states that the Act wouldn't affect the legality of any custom, unless the custom or other local methods is inconsistent with the Act. Hence the Contract Act is wider than the subject matter and methods of contracting it provides.

The question that is open for discussion is, what is significance of survival clause and how it can be justified in view of Indian Contract Act? Would the performance of such contracts still be pending unless the confidentiality term is expired.

As suggested by the professor, there is no provision in Indian Contract Act about the survival clause or similar clauses and so did he find his recourse in saving clause of section 1 of the Act. In my opinion, there is nothing in contract Act which is against the survival clause of a contract. I would also take recourse to the section 1 of the Act, however, "not inconsistent" part of the same. I don't see anything in Indian Contract Act which put such survival clause into question. I am not sure about the custom of Survival clause itself, however, if it is there since long, it is beyond doubt that the custom part of saving clause also rescue the matter.

Having said all this, I am still curious to know about the significance of Survival Clause and its special stature in contracts. In my opinion, the provisions of indemnity and other provisions related to breach of contracts (S. 73) are sufficient to provide the protection to party. Other provisions of continuing guarantee in the Act also give sufficient protection.

Taking the crux to question: Indian Contract Act says nothing about the survival clause in particular, however, reading definition of Contract together saving clause of Act, it very much ca be evolved. On the second part of the question, even if survival clause is not there in the contract and confidentiality is extended beyond the performance of one of the promises, the contract subsist to the extent of confidentiality protection. In other instance of presence of survival clause, the contract in whole would subsist, not just the "survival clause" despite the performance of chief subject matter of the Contract.

I am open to suggestion on this by readers as I am curious to have explanation of some unanswered questions. To the rest, I agree with Professor.


September 10, 2011

Oracle v. Google - An interesting case for open source licensing issues



Oracle filed a wilful infringement case against Google for developing android. Oracle claims that following patents had been infringed by Google:
6,125,447 - Protection Domains to Provide Security In A Computer System
6,192,476 - Controlling Access to A Resource
5,966,702 - Method And Apparatus For Pre-processing And Packaging Class Files
7,426,720 - System and Method For Dynamic Preloading Of Classes Through Memory Space Cloning Of A Master Runtime System Process
RE38,104 - Method And Apparatus For Resolving Data References In Generate Code
(A reissued patent; the original number was 5,367,685)
6,910,205 - Interpreting Functions Utilizing a Hybrid Of Virtual And Native Machine Instructions
6,061,520 - Method and System for Performing Static Initialization
All these patents related to Java platform which were previously held by Sun Microsystems were assigned to Oracle after Oracle took over Sun Microsystems in 2010. Oracle America, subsidiary of Oracle previously Sun, owns copyrights in the code, documentation, specifications, libraries, and other materials that comprise the Java platform. Oracle America’s Java-related copyrights are registered with the United States Copyright Office.

Google’s Android competes with Java as an operating system software platform for cellular telephones and other mobile devices. The Android operating system software “stack” consists of Java applications running on a Java-based object-oriented application framework, and core libraries running on a “Dalvik” virtual machine (VM) that features just-in-time (JIT) compilation.

Oracle has taken a plea that Google has actively, and voluntarily distributed Android and related applications, devices, platforms, and services with the expectation that they will be purchased, used, or licensed by consumers in the Northern District of California. Also without consent, authorization, approval, or license, Google knowingly, willingly and unlawfully copied, prepared, published and distributed Oracle America’s copyrighted work,
portions thereof, or derivative works and continues to do so. Google’s Android infringes Oracle America’s copyrights in Java and Google is not licensed to do so.

In this case, Google instead of making derivates of OpenJDK or using OpenJDK, has reimplemented it. So pertinent question here is that if I reimplement patented software which is distributed freely by way of GPL v2, can I bring a suit of patent infringement and copyright protection?

Issues in the case as per my understanding:

1. Can Google be made liable of patent infringement when Google has not copied or even made a derivative of source code of Oracle which is protected under GPL v.2 license?
Problem: Google has reimplemented the source code instead of reusing or making derivative of source code of Oracle. Google has used Apache Harmony source instead of OpenJDK source, which does not have an implied patent license from Oracle. The patent license granted by OpenJDK only covers OpenJDK derivative works, not reimplementations. So pertinent point is can Oracle still claim patent infringement case against Google when GPL v2 states about an implied patent licence? On the first instance Can Oracle enforce his patent rights on source code when it is available under GPL license v.2?

2. Can copyright infringement case be brought against Google?
Problem: As Google has made its Dalvik, virtual machine, licensed under Apache License v2 and not GPL. Therefore it is not bound by GPL. So if Dalvik is derivative of OpenJDK then Google may be even violating GPL. Going into this deeper, a look into definition of derivative work from US copyright act-
“derivative work” is a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications, which, as a whole, represent an original work of authorship, is a “derivative work”

As per this definition, Google is safe from this perspective as well as Dalvik cannot be termed as derivative of JIT. A reimplemented version of software cannot be termed as derivative. If it’s a derivative work, then of course GPL comes into picture as derivative of OpenJDK should be protected by GPL and not Apache License.

Although the case is still in mediation stage, but I can say that Google is safe from claims of Oracle as far as copyright infringement is concerned but question still remains for patent infringement in this complex situation of patent rights v. Open source licensing(for Oracle).
A much awaited decision to clarify Open source licensing issues.

US Patent System:Shift from "First-to-Invent" Doctrine to "First-to-File" Doctrine.


Finally Patent system of United States of America is going to adopt “First-to-file” doctrine, in the lines of most of the other countries of the world. The United States and the Philippines were the only two countries in the world whose patent systems are based on First-to-Invent regime. Philippines have already adopted “First-to-file” doctrine. United States of America is going to be the last country to adopt “First-to-file” doctrine. In this system, the patent is granted to the inventor, who is the first to file a patent application at USPTO. After being many unsuccessful attempts to change the US patent system from a First-to-Invent to a First-to-File system, in the year 2011, it is going to be successful. Patent reform bill, is approved by the U.S. Senate In the month of September 2011. The only requirement left is the signature of President Barack Obama.

Advantages of First-to-file:
It is an expensive and involved procedure as it involves in determining who conceived of the invention first, is a tough Job. It rewards the first inventor, not the winner of the race to the Patent Office.
By the use of “First-to-file” doctrine, costly and lengthy interference proceeding at USPTO is going to come to an end. And also it’s a matter of rejoice to small inventor, as it was proving to be expensive for fighting patent interference proceedings.
Another advantage of the First-to-File system is that it eliminates so-called "secret prior art," which are inventions for which patent applications have not yet been filed and therefore cannot be found through a prior art search. As most of the parties will be interested in filing their application as soon as they deem fit. As United States is a developed country with a well developed patent system, public at large is going to get benefit from the system.

Disadvantages of First to file:

Universities are the major incubators of research and development. These universities derive significant income from technology transfer and patent licensing. Scientists/academicians are more concerned with presenting their results at conferences and publishing them in peer-reviewed journals, as an elaborate discussion/debate at various levels brings positive impacts to the research, or matters which were not looked at is given a priority in order to achieve a better and a productive result.   A change to the First-to-File regime may have the unintended consequence of a sharp decline in university patents, ultimately resulting in a decline of technology transfer revenues.

Over all, this is going to benefit public at large, but concerns are bounds to happen, as communities like Biotechnology, biomedical, pharmaceutical, agricultural communities will be in the race of filing applications at USPTO, leaving room for mistakes that can cause headaches for all involved. Concerns with these industries are going to grow in a rapid manner. Hoping USPTO to consider concerns of these particular communities on priority.

September 9, 2011

FTO (Freedom to operate) Search

A FTO (Freedom to operate) search is a search done in order to ensure that the claims of a particular Product/process of a particular company/Individual/organization [Here in refer as Party] is not encroaching upon the claims by the patent of third party. This search enables the Party to analyze if his product/process is infringing on in-force patents/patent applications, belonging to a third party. And secondly, FTO is Jurisdiction or territorial specific. As in If a particular party wants to release a product in India, where in party posses the patent on its product/process, FTO search with the relevant technology/product will give a information about the patent/applications already made in India, for specific matter/technology. A FTO Search is a search among the claims of in-force patents/patent applications for specific elements/steps of a product/process. A comparison is done between elements/steps of a product/process and individual claims of identified in-force patents/patent applications to determine the freedom to operate.  Claims are the most important part of a patent, where the domain/scope of the patent is determined. It is very pertinent that it is not an easy job to determine the scope of a patent. Studying and analysing the scope of a patent requires skills and experience in interpreting the claims. 

September 8, 2011

Invalidity Search: Way to healthy R&D and genuine competition


Invalidity Search:


A patent invalidity search is a search done to invalidate the claims of the issued patent. Mostly competitors of a particular field perform this search in order to invalidate the patent, which has been granted/issued to its competitor.  The claim  may relate to a product or process or both. As the technology and competitions are advancing, this search is beneficial to the company/organization. It’s simply because of the reason that no company/organization wants its competitor to grow by taking the undue advantage of circumstances. This is done by uncovering appropriate prior art and best mode, which at most of the times are not mentioned by the applicant. On a practical note, our patent office is burdened with a good number of applications for patent, having inadequate resources, limited time and limited number of persons working with the department, this creates a scenario where Patent Office allows the claims due to error by overlooking the best prior art. In such instances, the invalidity search conducted by the parties for the patent in question will uncover better prior art than the prior art of record uncovered earlier by the patent examiner. By help of this invalidity search, the company/organization is benefited as it can stop its competitors to get undue benefit. Also, it paves the way for a system where only genuine Patents are granted, which further gives rise to better R&D as well as healthy and genuine competition. 

Man's camera, Monkey's work-No Copyright

Image
This is my reply to the blog written by Prashant yesterday whose link is here.http://justlegalip.blogspot.com/2011/09/can-animal-own-copyright.html#links

Prashant has very nicely described the facts. I will argue here that neither the animal nor the photographer possess the copyright in the photographer.

As sec. 2(d)(iv) of the act says that the author will be

(iv) in relation to a photograph, the person taking the photograph;

It is clear that the definition of person was never intended to include animals in its ambit. So the question of monkey having the copyright does not arise. As Prashant has pointed out that monkey clicked the photo at the instance of author(though this cannot be legally tenable according to definition of instance, I will address this issue separately) proviso (b) to sec. 17 would come into play and hence the person will have photograph. But again, in the main part of the section 17. First owner of copyright.-Subject to provisions of this Act, the author of a work shall be the first owner of the copyright therein
So, the word used here is author which we know according to the definition will include only persons and hence sec. 17 will not come into play.



Prashant has interpreted the word at instance as to include an incident which was not in the control of the photographer. If photographer accidentally leaves the camera and a monkey clicks the photos then he has not done so at the instance of the photographer. When we use word instance there is a certain control or a sense of command in it. But what has happened here is just a series of incidents over which the photographer had no control. Meanings of instance can be found here http://www.merriam-webster.com/dictionary/instance. Instance will necessarily involve a certain amount of intention to enter into a relationship, whether legal or otherwise.


It may sound a little strange but in this case, the photograph will go straight in public domain where no single person can claim copyright in the photograph.

Lastly, we should not forget the purpose of copyright law is among other things, to promote the growth of arts in the society. Obviously when the photograph in this case goes in public domain, the interst for larger public clearly out weighs the interest of the photographer who is claiming copyright without exercising any judgment or skill in the work. By doing so, the economic incentive for other photographers to click more photos will not get affected because incidents like are unlikely to happen. We should not forget that IP laws seek to give protection where the creators deserve and IP laws also seek to not to give protection where a person does not deserve protection because there is no originality in the work. That is why we have remedies against infringement.





September 7, 2011

Can an Animal own a copyright ?

After an overdose of boring 'intellectual posts' I hope this rather humorous copyright controversy would be more enlightening than all others.. Though the parties to the controversy and the applicable copyright laws are not Indian, we may still discuss the Indian Position on this for the 'learning sake'

Facts in short, a famous wild life photographer David Slater during his visit to a national park in Indonesia, left his camera unattended (as claimed in the news report here and a macaque (a type of dexterous monkey) took up the camera and ended up clicking some fantastic photographs that have become a talk of the photography world. A couple of these photographs contain a copyright notice which indicates that the copyright in the photographs clicked by the macaque belongs to 'Caters News Agency'. The website techdirt.com covered this story and questioned the copyright ownership of Caters News Agency in these photographs. In turn, Caters News Agency sent a letter to techdirt requiring them to remove the photographs claiming that techdirt did not hold any copyrights in the photograph. The exchange of letters and notices continues, with techdirt publishing all letters and their replies on their website.

This controversy has brought to light one of the basic inquiries in copyright law i.e. who owns the copyright? Analyzing this with respect to Indian Copyright provisions, the first section that adds to the notoriety of the entire situation is section 2 (d) of the Copyright Act, 1957 which very clearly states that an author in relation to a photograph is the person taking the photograph (probably our legislators never contemplated a monkey clicking a photograph and hence the term 'person' in the definition). Caters News Agency claims to have obtained the copyright from the photographer i.e. David Slater but the pertinent question is- whether David Slater owns a copyright on the photographs in the first place? Techdirt's argument on the other hand is that the copyright in the content is not really owned by anyone and the photographs are in the public domain, open for anyone's use.

My argument on this would be based on the basic premise of copyright law which says that the creator of the copyrightable work is the first owner, in the absence of any agreement to the contrary(see Section 17 of ICA, 1957). So if the student writes an essay in exam, the teacher who asked him to write through a question owns the copyright or if a producer makes a movie, the copyright over everything, from script to music is owned by him (though, we have 'express' agreements stating 'otherwise' in this regard now).

Hence, whether Slater had he intention or not, he left the camera unattended and hence the monkey clicked the pictures, it was done at the instance of him, hence making him the owner of the copyright... (assuming the zoo keepers didnt have any express agreements in this regard, contemplating such situations)
and Probably, this argument would also be applicable to almost all the jurisdictions..

So, with all due respect to the skills of the macaque, but Mr. Slater, you have all the rights according to me..

September 6, 2011

When can an Arbitration clause in the contract be Invoked


            Nathani Steels Ltd. Vs. Associated Constructions,  1995(Supp) 3 SCC 324


Fact of the Case:

The facts giving rise to this appeal reveal that on 5.9.1989 respondent submitted a tender for the construction of sheds in the appellant’s factory which came to be accepted and a contract came to be executed. Under the terms of the contract executed on 22.9.1989 the work had to be completed by 5.6.1990. The work was not in fact completed on or before the due date. The contract contained the arbitration clause. The dispute which arose on account of the non-completion of the contract was settled by and between the parties and the settlement was reduced to writing as found in the documents submitted as exhibits. By this document the disputes and differences were amicably settled by and between the parties in the presence of the architect on terms and conditions set out in the clauses 1 to 8 thereof. The documents bear the signature between the parties. The respondent, although voluntarily entered into the said settlement, he later realized that there was a calculation mistake in regard to the amount in question on his part and thereupon invoked the arbitration clause. The appellant in High Court however contended that in view of the dispute disputes and differences in connection with the contract having been finally and amicably settled by and between the parties, it was not open to the respondent to unilaterally brush aside the settlement and invoke the arbitration clause as if the dispute survives without having the settlement set aside on the ground of mistake as permissible by law.

Held:

Once the dispute by and between the parties under a contract arising and that is amicably settled by way of a final settlement unless that settlement is set aside in proper proceedings, it cannot lie in the mouth of one of the parties to the settlement to spurn it on the ground that it was a mistake and proceed to invoke the Arbitration
clause. If it is permitted the sanctity of contract the settlement would be wholly lost and one party can take the benefit under the settlement .In the circumstances, since the dispute or difference was finally settled and payments were made as per the settlement it was not open to the respondent to treat the settlement as non est and proceed to invoke the Arbitration clause. So the High Court was wrong in its view therefore the Supreme Court allowed the appeal and set aside the impugned order of the High Court and holds that the respondent cannot invoke the Arbitration clause in relation to the dispute difference settled under the terms of the settlement.

Analysis:

Once the dispute is amicably settled between the parties finally, arbitration clause should be invoked by a party to resolve the same on ground of mistake in the settlement unless the settlement is first set aside in proper proceedings. If the settlement is unilateral and the other party has not given any receipt of settlement, the arbitration clause can be invoked as supreme observed in P.K. Ramaiah and Co v. Chairman & Managing Director, National Thermal Power Corporation.

September 1, 2011

Karala Muslim Jama- Ath Council vs. The State of Kerala , The Secretary Higher Education and The Directoe of Collegiate Education.

The government of Kerala reserved 10% of total seats in the higher education for the forward class below poverty line. The petitioner filed writ petition against the order contending that the reservation to the forward classes is ultra vires the constitution and that, Article 15(4) contemplates reservation for the socially and educationally backward classes , Scheduled Class and Scheduled Tribes. The reservation of forward class is the encroachment on the privilege provided to these classes under Constitution.
The petitioner also alleged that such step of government is mere appeasement of the forward class who are in majority in the state. It was further argued that such arrangement would keep the unproportionate representation of the socially and educationally backward classes in educational institutes.
Court disagreed with the petitioner. Stating the importance of competition and better education for development, Court suggested that the privilege provided by the Constitution is supposed to be fading everyday as we develop. Court held that the despite being in fortunate classes, “fortunately or unfortunately” they are devoid of admission to good institutes due to reservation and poverty. The grievances of this class were addressed by the Government through the provision of reservation. Further, Court observed that the number of seats remain same for the backward classes as the number of seats in the institutes is increased by the government to match the present number of seats.
The judgment is progressive in nature, however lacks the constitutional discussion that can be expected out of such matter. Court concluded the matter without discussing constitutionality of reservation in this case and without any substantive discussion on Art 15(4).
In KC Vasant and later in Indra Shawaney and Ashok Kumar Thakur cast was put as one of the criteria to regard a community as SEBC, however, the same can’t be the strict rule per se. The class as said in Art 15(4) is independent identity from caste or community. It can be formed with elements of different community who are socially and economically backward.
The question is can economic backwardness be read alone in Article 15(4) for providing reservations. The previous precedence by Supreme Court establishes that the “class” in Article 15(4) of the constitution doesn’t necessarily constitute a caste or set of castes. It may constitute the class when it can be shown that the caste as a whole is socially and educationally backward. The “socially and educationally” backward essentially constitute the destitute, but it has to be shown that the same destitution is so connected that it is to make them socially inferior as well. When a destitute of forward class can be called socially backward is still untold.