A. P. LEGAL SERVICES PVT. LTD.
Legal Empowerment through Professional Excellence

NEED FOR REFORMS IN IPR LAWS IN INDIA

“Until the 19th century, intellectual property rights were protected by common law — contract law. At first it appears to be a good idea to codify common law into statutory law, but if you look at IPR law, it only creates arbitrary definitions and confusion. That’s what you get when you move away from principle, morals and common law, to explicit legislation.”

What Is IPR ?

Intellectual property rights are legal rights, which result from intellectual activity in the industrial, scientific, literary and artistic fields. These rights give statutory expression to the moral and economic rights of creators in their creations. Intellectual property rights safeguard creators and other producers of intellectual goods and services by granting them certain time-limited rights to control the use made of those productions. These rights also promote creativity and the dissemination and application of its results and encourage fair-trading, which contributes to economic and social development.

Background

In the year 1883 Paris Convention for protection of industrial property came into existence. This was the first internationally recognized agreement for cooperation among nations for the protection of  intellectual property where 140 states signed to implement its provisions. The Paris Convention bears the concept of union. This meant that a national of any country of union enjoyed the protection of industrial property in all other countries of the union, to the extent of advantages of the laws granted to its own nationals. India was not its member but after signing the Trade Related Aspects Of Intellectual Property Rights (TRIPS), is now obliged to recognize and implement the provision to national treatment to nationals of other members which was the concept of paris convention.

The Paris Convention dealt with Patents, Trademarks, Designs and Utility Models but did not deal with copyright. The first international convention addressing copyright was “The Berne Convention of 1886”, to which India is one of the members, among 120 states.

During 1980s, multi-national corporations and international agencies started emphasizing to include intellectual property as a subject of discussion at General Agreements On Tarrifs And Trade (GATT), as the developed countries were curious to get statutory protection for their patents, trademarks and designs, which were largely being infringed by developing countries.

In the absence of global legal provisions, each country either followed its own statute or had no statute at hand. After the sustained efforts of universal IP law, the developed countries in the year 1986 could get some relief, when the Uruguay round of negotiations concluded with the signing of the ‘Final Act’.

Types Of IPR

In general there are three types of rights available to the intellectual and creative persons, they are :

1. Patents – Patent means the grant of some privilege, property or authority made by the government to one or more individuals.  A Patent is a legal monopoly, which is granted for a limited time by a country to the owner of an invention. Merely to have a patent does not give the owner the rights to use or exploit the patented invention. That right may still be affected by other laws such as health and safety regulation, or the food and drugs regulation or even by other patents. The patent, in the eyes of the law, is a property right and it can be given away, inherited, sold, licensed and can even be abandoned.

A Patent gives an inventor the right for a limited period to stop others from making, using, selling or importing an invention without the permission of the inventor. That is why patent is called a "negative right".

B) Copyright - The right of an author or his assignee, under statute, to print and publish his literary or artistic work, exclusively of all other persons. This right may be had in maps, charts, engravings, plays, and musical compositions, as well as in books. Copyright refers to laws that regulate the use of the work of a creator, such as an artist or author. This includes copying, distributing, altering and displaying creative, literary and other types of work. Unless otherwise stated in a contract, the author or creator of a work retains the copyright. For a copyright to apply to a work, it must be an original idea that is put to use. The idea alone cannot be protected by copyright. It is the physical use of that idea, such as an illustration or a written novel, that is covered under copyright law.

C) Trademark - A trademark, trade mark, or trade-mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or services from those of other entities.A trademark is a device, word or combination of words, or symbol that indicates the source or ownership of a product or service. A trademark can be a name, such as Adidas, or a symbol, such as McDonald's golden arches, or it can be a combination of the two, such as when the NIKE name is written with the "swoosh" symbol beneath it. In very limited cases, a shape or even a distinctive color can become a trademark.

People rely on trademarks to make informed decisions about the products they buy. A trademark acts as a guarantee of the quality and origin of a particular good. A competing manufacturer may not use another company's trademark. The owner of a trademark may challenge any use of the mark that infringes upon the owner's rights.

The other forms of IPR are-

1. Service Mark - Service Marks are marks used in any form of service business where actual goods under that mark are not traded. For instance, a Hotel or a restaurant is a service: under the marks Taj, Oberoi, Sheraton, Meridian, Sher-e-Punjab, Khyber, Chinese Room, no goods are traded, but services are offered and purchased, these marks will now be statutorily protected under the Act.
2. Design - Design means only the features of shape, configuration, pattern or ornament or composition of lines or color or combination thereof applied to any article whether two dimensional or three dimensional or in both forms, by any industrial process or means, which in the finished article appeal to and are judged solely by the eye but does not include any mode or principle of construction or any thing which is in substance a mere mechanical device and does not include any trade mark, property mark or artistic works.
3. Geographical Indications - A geographical indication (GI) is a name or sign used on certain products which corresponds to a specific geographical location or origin (e.g. a town, region, or country). The use of a GI may act as a certification that the product possesses certain qualities, is made according to traditional methods, or enjoys a certain reputation, due to its geographical origin.

Protection Of IPR In India

In India, the beginning of Intellectual Property Rights (IPR) is marked with the patent system instituted by the british colonial government based on their own patent system in 1856. As such, to save the interests of inventors, the then british rulers enacted the Indian Patents And Design Act, 1911. India has throughout shown serious concerns towards IP Rights and systematically developed laws to protect these rights. Today, there is a well established statutory, administrarive and judicial framework to safeguard th IPRs in India, whether they relate to patents, trademarks, copyright or industrial designs. Well known International trademarks have been protected in india even when they were not registered in india.

The Indian Trademark Law through court rulings has been extended to service marks in addition to trademarks for goods. The court rulings have helped computer software companies in successfully curtailing piracy

Indian Patent Act : Need For Reforms

Indian Patent Act, 1970 although amended through 2005 amendment act but still there is a space to make reforms in the law for the purpose of proper functioning of patents law in India. They are as follows :

• the term ‘inventor’ has not been properly defined or interpreted by the court whether it includes a joint inventor and coinventor or not.
• The provisions given for patent interference disputes should be properly checked and revised in order to get speedy justice.
• Revising requirements for an inventor's oath or declaration to allow substitute statements in specified circumstances (e.g., death or disability) and supplemental and corrected statements.
• There is no mention of  right of a third party having properietory interest (other than the inventor)  to file a patent application.
• There is no mention of about banning of a tax planning patent as in u.s.a.

     - -      The loophole is actually a provision—Section 107A(b) of the Indian patent law amended in 2005—that allows local companies to import copycat or generic drugs manufactured in least developed countries such as Bangladesh, Nepal and several African nations, without the authorization of the patent holder. This means companies here can import drugs from a country where pharma patents are not in effect if the local law in that country authorizes the manufacture of those medicines. In the earlier version of the law, an authorization by the patent holder was a compulsory requirement.

Indian drug makers have rushed to take advantage of this, and several of them have even started working on building manufacturing plants in these countries.

The new provision may not be in complete compliance with the international trade rules of WTO. However, a smart judiciary interpretation could make it possible for generic drug companies such as Cipla Ltd, Ranbaxy, Sun Pharmaceutical Industries Ltd, Dr Reddy’s Laboratories Ltd and Natco Pharma Ltd to set up manufacturing facilities in least developed countries

The only hurdle is with the interpretation of certain sections of the law as companies that choose to import patented drugs from least developed countries might run a serious risk of violating the exclusive right to import guaranteed under Trade Related Aspects of Intellectual Property Rights, or TRIPS.

According to a recent post in an international patent blog SpicyIP, selling copycat drugs in India manufactured in least developed countries violates TRIPS norms as there is no first sale of the patented drug by the patentee as required in TRIPS.

“In short, the very essence of an exclusive right to ‘import’ mandated under Article 28 of TRIPS is affected. Consequently, the parallel import provision in India—Section 107A(b) —will be seen to violate Article 28 of TRIPS,” the blog says.

 “Section 48 of the Indian Patent Act requires that a patentee’s exclusive right to ‘import’ be protected. Section 107A(b) hits at the very essence of this right,” he said.

Taking this into account, an Indian judge could render the amendment to Section 107A redundant, and revert to the earlier provision, which said it is not an infringement to import a patented product only if the import was from an exporter ‘duly authorised by the patentee’.

- There is need for retaining the pre-grant opposition provision in the patents Act. This will prelude grant of bad patents. but safeguards are needed to ensure that the provision is not used to delay patents. Both post- and pre-grant challenges to patents have their benefits and shortcomings. That is why there is no consensus the world over on which is a better approach. While most countries allow objections only after the grant of a patent, some like Australia and New Zealand have opted for the other. The obvious benefit of pre-grant system is that it precludes bad or frivolous patents. Its major failing is that it could degenerate into a tool for delaying : patents. Post-grant provision has no such problem as complete information on a patented product is available, making the challenges and the defence more informed. Moreover, there is no danger of competition delaying a patent. The major shortcoming of the post-grant challenge is that remedy is available only through courts, which makes redressal a lengthy process. In the case of bad patents, the delay allows the patent holder to enjoy a wrongful monopoly. This is of particular concern in India given the time-taking judicial process.

- Section 3(i) of the Indian Patents Act, 1970 states that any process for the medicinal, surgical, curative, prophylactic or other treatment of human beings or any process for a similar treatment of animals or plants to render them free of disease or to increase their economic value are not patentable. Although with the advent of The Patents (Amendment) Act, 2002, any process for treatment of plants has now become patentable, the diagnostic or therapeutic process are still not considered to be patentable.¹

- Section 2(1)(j) of The Patents(Amendment) Act, 2002 defines invention as: -

"invention" means a new product or process involving an inventive step and capable of industrial application. this ‘industrial application’ requirement is a very vague concept because no criteria has yet been evolved to determine what constitutes industrial application.

In the case of Indian Vacuum Brake Co., Ltd. vs E.S. Luard on 14 July, 1925 it was held by a single Judge of the Calcutta High Court that the term ‘utility’ used in the Act has been used in a special sense. Mere usefulness is not sufficient to support the patent. Patent for making in one piece articles which were formerly prepared in two or more pieces could not be called to be a valid patent.

European Patent Office (EPO) has interpreted ‘capable of industrial application’ in relation to its use in the industry, that is its feasibility to be used in the industry on the day when patent is claimed. The EPO has clearly denied any patent on mere assumption of utility by the industry in future. This objective criteria for determining industrial application should be incorporated by the Indian courts.

- In conclusion, the Indian Patent system is lagging behind the foreign patent develpments due to its constricted approach towards patentability of various processes as well as the narrow interpretation given to various technical terms in the Patents Act.

Indian Copyright Act : Need For Reforms

The Copyright Act of 1957 which protects original literary, dramatic, musical and artistic works and cinematograph films and sound recordings from unauthorised uses, comes under the HRD ministry, whereas subjects such as patents, trademarks, geographical indicators etc. belong to the department of industrial policy and promotion in the industry ministry.

Yet, unlike in patents or trademarks, the acquisition of copyright by law itself is automatic in nature, and it does not require any formality. For the record, copyright comes into existence as soon as a work is created and no formality is required to be completed for acquiring copyright. And only when there's a dispute in a court, the certificate of registration of copyright is needed as it serves as prima facie evidence.

Yet, there are still some grey areas left in the India's Copyright Act. 

 The Copyright Act, 1957 prohibits reproduction of the copyrighted work in any material form including the storing of it in any medium by electronic means, by any unauthorized person but is incapacitated to deal with illegal duplication, importation, distribution and sale of pirated music as it becomes difficult to trace location       of       information.

In this scenario, where sharing of information among people has become the major function of the internet, the peer-to-peer file sharing services provided by various websites, linking, deep linking, framing and other innovations which have changed the way people share information over the world wide web, have given rise to a legal controversy. While the users downloading music, software, computer games and other copyrighted material are held liable for direct copyright infringement, the service providers go scot free as the existing Copyright Act has no provision for making a service provider liable in such a situation. The rapid dissemination of data over the Internet means that one has to spend a lifetime and fortune tracking down copies of the work that infringes those rights, indentifying the infringer and litigating        in       each  concern       jurisdiction.

The protection to computer software is derived out of two Acts, the Indian Copyright Act, 1957 and the IT Act, 2000. While the Copyright Act grants protection to the computer program as it is granted to other forms of copyrighted work, the technological and complex nature of the computer programs calls for technically         effective       protection.
The Indian Copyright Act, 1957 accords a special status to computer software as compared to other forms of copyrighted work. The Copyright Act regards the computer programs as literary works, and in addition to the general exclusive rights provided to other literary works, it grants extraordinary exclusive rights to the owners of the computer programs like right to sell or offer for sale, and the right to give on commercial rental or offer for commercial rental. The Act has also exempted computer programs from ‘fair dealing exception’ (i.e. private use for research, criticism or review of that work or any other work) which is available in case of other copyright works.

Internet technology facilitates the gathering of personal data. But this also brings a possibility of a threat to the privacy of a cyber consumer or netizens. With the boom in online service provider companies in India, misusing of the personal data of        a        cyber consumer    has    become       a major menace.

However, there is no specific legislation to protect the personal data of a person though to a little extent protection may be given under the Copyright Act, 1957.
With US and EU having strict policies relating to privacy and protection of personal data, it becomes very important for India, considering the inflow of foreign investments and other business opportunities, to have specific data protection and privacy laws. The absence of data protection and privacy law has also been creating obstacles for Indian companies while dealing with the EU as the data protection directives require a very high level of protection. India needs to adapt to the changing needs of the time and provide for a comprehensive data protection regime which will not only help in gaining consumer confidence but also increase the amount of business that Indian BPO service providers receive from the EU.

• The Act fails to address the issue of cross-border taxation that may arise in international              contracts.
• The Act does not address the issue of protection of intellectual property on the internet.
• The Act does not deal with privacy and data protection issues on the internet.
• The Act fails to cover cyber laundering of money, spamming, phishing, cyber stalking, cyber squatting and other innovative cybercrimes.
• The Act does not clarify the situation regarding the liability of network service providers.

Indian trademark act : Need For Reforms

Passing off can often arise in comparative advertising disputes. The key essence of a passing-off action is confusion. The entire concept of ‘disparagement of goods of another person’ flows from the MRTP Act which leads to unfair trade practice. And that is what is condemned in the section 29(8)(a) of Trademark Act also. Therefore as the MRTP Act stands repealed now, it creates ambiguity in the section. Nevertheless, courts are relying upon the precedents and Council Directive 84/450/EEC of 10 September 1984 relating to the approximation of the laws, regulations and administrative provisions of the Member States concerning misleading advertising, to determine the extent of comparative advertising.

CONCLUSION

IPR laws have three branches, Trade Mark, Patent and Copy Right. The Trademark and Patents come under the Ministry of commerce and Trade while the copy right comes          under          the       HRD     Ministry.
The Copy Right Act is no longer restricted to books. It now covers a whole gamut of products which need registration. The artists, cinematographers, Music, entertainment, satellite, computers, broadcasters all come under the copyright act. However, because of neglect of the copyright board the grievances of these people are not being addressed. They have to approach the courts adding additional    burden         to       the already burdened legal system.

'We should not blindly follow the International laws on IPR but have to make a distinction on how these laws affect our country. We are still a developing country and if we go by the International advice on the patents of drugs so many life saving drugs will become unaffordable for the middle-class people also,'
There is a lot of International pressure on the Prime Minister's Office to amend Patents laws. The Prime Minister should resist making such changes. Patents litigation has just started in India. However, hardly any case is concluded. The registry of the Patents office needed greater reforms. After the application is filed for registration of a patent, the party has to go on and on in providing documents to them. Even after all the complex formalities are completed, the process goes on and on and there is hardly     any    patent          granted        to       a        party.

In case of any litigation, all interim orders are passed by the courts. The paradox is that there are interlocutory orders which keep going on and on. 'In the past 60 years, not one case in our courts has been concluded, 'We do not mind if the rules for grant of patent are made very stringent, but once all requirements are fulfilled, the patent should be granted to a party without any presumption of being withdrawn,' Additional strength of judges to the High Court are required & a separate bench for the IPR cases can be  established.
'We are a growing market, many companies are looking towards our legal system as how it should become easier to get legal remedy from Indian courts. Little reforms in the IP laws will go a long way to establish faith to the investors.

However, if the recommendation given in this paper are implemented, then the Indian legal system dealing with protection of IPR will be at par with the international standards, thereby removing the disharmony presently existing and the suppression of the ‘ambit of IPR law resulting therefrom.

Author – Sarvesh Kumar Shahi

LL.M.1^st year, NALSAR University Of Law, Hyderabad