Impact of Intellectual Property Rights on Covid-19 And Global Pharmaceutical Companies with Special Emphasis on India

Since 2019, the world has been witnessing a major pandemic that has claimed myriad lives and it still poses an alarming threat to the human race. The virus originated in Wuhan, China and in no time spread across the globe causing immense loss of life, education, and resulting in an impeded economy. It has claimed approximately 3.2 million lives since it emerged in late 2019. The dire situation caused nations to impose a lockdown to curb the spread of the deadly disease. However, the virus spread kept on aggravating all over the globe, creating an urgent need of a cure and specified vaccines to curb this global pandemic as it not only has affected the political and economic paradigm of the countries but has also affected the socializing patterns of the society

Organizations like the United Nations and World Health Organization have also been working on red alerts when it comes to COVID-19. WHO along with other organizations of the world has tried to initiate various programs to speed up the vaccination process and doze drives for free of cost or at the minimum costs possible. Countries individually have also started taking charge in the development and deployment of vaccines all around the globe. Some examples can include Pfizer, Covaxin, Covishield, Sputnik etc. These vaccines have different efficacies and efficiencies when it comes to their usage, dosage and effectiveness on protection from Covid-19.

Different governments of different countries started vaccine drives along with the help of renowned pharmaceutical companies. However, the distribution and availability of vaccines across the globe has been scathingly uneven so far. Pharmaceutical companies which operate and thrive on the model of Research & Development (R&D) have been limited by the resources to produce in order to meet the current demand of dosage.

The rights of these companies concerning their patented formulas of vaccines has also been questioned across the globe as the problem of shortage of resources can be tackled with the concept of waiver of rights. In order to understand the aforementioned problem, we will first have to look into the concept of Intellectual Property Rights and the concept of Patents along with the rights it creates.

 Intellectual property rights are the rights given to the creations of the mind which may be tangible or intangible in nature. They include patents, copyrights, trademarks, designs, etc. Intellectual property is everything that is a product of a person’s imagination. They are exclusive rights which are subject to certain limitations and exclusions and are usually given for a finite period of term. It allows the owner of the property to have a monopolist control over the IP. One such type of rights are patents which are territorial rights used in order to protect an invention, which is a process or a product that offers an effective technological solution to a problem. These exclusive rights are only applicable in the country or region in which a patent has been filed and granted, in accordance with the law of that country or region.[i]A granting of a patent requires certain parameters to fulfil which may include the concept of ‘industrial applicability’, ‘Uniqueness’ etc. which eventually results in granting the patent holder a exclusive monopoly right of using that particular invention in exchange of making that invention register in public domain. A patent owner has a complete right to stop anyone from commercially manufacturing, importing, selling, distributing his product without his consent.

Hinderance created by Intellectual Property Rights in expediting the production of vaccines

A considerable number of debates have been going on around the waiver of IP rights over covid-19 vaccines. Intellectual Property Rights play a crucial role at every stage of drug production. IPRs protect the investments that are done since the early stages of vaccine production to provide them to the patients by promising a return and encouraging trust.

The problem that has turned up during this pandemic lies in the very right that is created by the issuing of Patents for any pharmaceutical product. Different vaccines which are being developed by different companies have proven to be effective at a different rate and time when compared with each other as a result of specialized formulas which are used in these vaccines after various rounds of research and development. However, these companies have a limit of resources when it comes to the production in order to meet the demand of the vaccines in need and because of the monopoly rights enjoyed by these companies by the way of patents, no other company can produce the vaccines using the patented formulas.

When it comes to India, it is battling with the second wave of the virus, and the rapid need for the vaccine has caused a few nations to support a waiver of IP rights. India and South Africa were the first countries to support a waiver of certain provisions of the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement in the World Trade Organization (WTO).  With over 3 million deaths worldwide, this proposal of waiving off of IP rights has drawn attention and support from different nations. Academicians, Scholars, Health Activists have constantly been warning about how IP rights are going to obstruct and hinder the elimination of covid-19.  

Concept of Monopoly rights of Patents and Waiver of rights

Patents protect a certain invention from manufacturing and launching rival copies of those products and hence creating a monopoly over the market. The drug makers can eventually fluctuate or adjust the price as per their will during a drug’s patent protected years. A patent is only granted for an invention that is “new” and involves an “inventive” step, for a specific number of years, usually 20 years. While it can be argued upon the definitive nature of the absolute monopoly that is being granted to a patent owner, it is completely affirmed and accepted that it does create some monopoly rights of usage which are subjected to certain restrictions.

Under the Indian Patent law, the interest of the public in general is given an equal value when put on the same pedestal which provides rights to the patent holder for their individual interest. Section 107 A, of the Indian Patent Act provides for certain provisions which are considered for the interest of the public in general. This provision of the Act provides for concepts like Bolar-Like provisions and Parallel Import provisions for pharmaceutical companies and generic drugs which do not ultimately result in an infringement of the law under the statute.[ii]

While when we talk about ‘waiver of patent rights’, it refers to the removal of such absolute monopoly rights which are created while a patent gets registered by the government or any other regulatory body. The main purpose of waiving of the rights which are created through patents is to impediment a faster commercialization of the patented product in the market for quick supply in case of emergencies or needs.

In India, the exception for security enshrined in Article 73 of TRIPS has been incorporated and included in Section157 A of the Indian Patent Act. It allows the Government to not disclose any information which is relating to any patentable invention which can be termed against the interest of security of India. Moreover, the Government also has the power to revoke any patent which is considered necessary in the interests of the security of India by them. The interpretation of this section is wide enough to include the situation of COVID-19 as an emergency which is hampering the security of the state.

Analyzing Ground Reality and Assessments

With the advent of deployment of certified vaccines all over the world by different companies, the cure for this deadly pandemic was predicted to an end but instead the ground reality of resolving such an issue of the pandemic seemed unreal and never ending because of the shortage of the supply and production. The developed countries like the United States of America, Russia, France etc. have somewhat controlled the spread by the means of proper vaccination drives throughout the state. According to the recent guidelines issued by the Centre for Disease Control and Prevention, people who have been vaccinated with the second dose can stop wearing masks and can return back to the life they were living pre-pandemic.

US Trade representative Katherine Tai acknowledged the importance of patents however, she also mentioned how the central aim is to supply safe and effective vaccines to as many people as fast as possible. The Biden administration is putting to expand vaccine manufacturing and to pace up the production of raw materials required to develop the vaccines. More than 1.2 billion doses have been administered globally but only 1% out of that have been given to people in the developing countries.[iii] While the developing countries are dealing with advanced variants of covid-19, vaccine shortage has only added to the problem. In the United States, vaccines are aplenty with 300 million extra doses but the real challenge is being faced by the developing countries like India, which is battling with the second wave of coronavirus. The country is still dealing with virus mutations, a crumbled health infrastructure and shortage of vaccines.

While the situation seems promising in developed countries related to the pandemic, the underdeveloped and the developing countries are facing a lot of issues in tackling the need and demand of vaccination across their countries. Countries like India, parts of South Africa, Bangladesh etc. have been the most prominent states which are negatively affected by the spread of this virus. The death tolls in the second waves in these countries took off to extreme levels because of various social and political reasons.

Moreover, the most important factor which is affecting the stopping of the spread is the shortage of vaccines available in these countries. For instance, In India, Covaxin and Covishield were the only vaccines available in the market for a long time and that also was subjected to a huge scarcity. It was until, Russia decided to help India and send regular supplies of Sputnik vaccines which are indigenously developed by the Russians. Even though on paper, the country is having a regular supply of vaccines and various active drives but in reality, the population is struggling to get themself and their family a dose of life from the hospitals.

Viewpoints on waiver of rights across the world

US released a statement supporting temporary waiver of covid-19 vaccine to speed up the production and availability of covid-19 vaccines. It has been opined that the pandemic calls for extraordinary measures and this health crisis calls for ways and methods where vaccines can be easily produced. Around 120 countries have supported this temporary waiver of Intellectual Property Rights on covid-19 vaccine to fight this pandemic.

The proposal made by India and South Africa strongly argues that intellectual property rights could hinder the production and supply of vaccines at affordable prices. Therefore, at this time when the production of vaccines needs to be scaled up to meet the demands, it is proposed that “a waiver from the implementation, application, and enforcement of” certain provisions of the TRIPS Agreement (waiving IP rights like patents, copyright, and trademarks) for prevention, containment or treatment of Covid-19.

Germany has expressed its opposition to the proposal saying that “the protection of intellectual property is a source of innovation and must remain so.” [iv]Pharmaceutical industry is stern on its argument that a waiver of IP rights is not going to contribute to the increased production of vaccines and in turn it is only going to affect innovation in the long run.

BioNTech, the German company which partnered with Pfizer, contended that developing the manufacturing process itself took a decade and validating production sites could take up to a year. There is also a scarcity of raw resources required in the production of a vaccine.

Industry bodies fear that a waiver could result in quality, efficacy and safety issues and possibly even counterfeits. They point out that Moderna has already said it would not prosecute those found to be infringing their patent – but no one has yet.[v]

Concerns and Possible Solutions

Concern

-Can lead to fake products and fraud vaccine adulteration problems

After various deliberations on the issue and different arguments, it can also be predicted that in case of waiver and less regulations on the production in order to increase the supply, the problems of fake products and adulterated products will be witnessed in near future. The inference can be derived after people have sold many fake copies of Remdesivir medicine during the treatment process in India at exorbitant rates.

-Lesser efficiency and degraded quality production

After President Joe Biden’s support for international talks on waiving patent protections for Covid-19 vaccines, The European Federation of Pharmaceutical Industries and Associations says that a waiver could result in a fall in quality and efficacy of the vaccines, if raw materials are diverted away from approved production facilities.

However, a global concern for the waiver is palpable due to the inadequate number of vaccines in the developing countries like India and Brazil, where the cases are on surge. These countries have been facing disastrous loss to life due to mutated viruses and the variant that’s driving the second wave might pose a serious threat to other countries that have already made progress in controlling the transmission.

-Lack of technological advancement

Another concern that surrounds after the waiver of IP rights can be tracked down from the primitive methods and less advanced technical usage of the production process. There is a very high possibility that even after waiving of the rights secured through patents, the smaller companies will fail to produce the vaccines because of lack of technology. [vi]

Solutions

-Compulsory Licensing of the Patents

Compulsory licensing is an important tool against patent monopolies. During times as such, where public health is a matter of grave concern, compulsory licensing can help break the monopolistic control of the patent holder. Compulsory licensing is when a government allows a patented product to be produced with or without the consent of the patent owner. The patent owner will still have a right over his patent, including a right to be paid for the compensation for copies of the product in question made under the license. This concept is recognized at both national and international levels, with express mention in both (Indian) Patent Act, 1970 and TRIPS Agreement.

Owing to the condition of the majority population of the developing states, compulsory licensing could be a hopeful measure that can maintain a balance between safeguarding public health and complying with the international provisions of patent protection.

Since compulsory licensing permits certain activities without the consent of the patent holder, it faces a strong opposition for an emerging supplier with sophisticated technical skills might be able to compete aggressively with a patent holder by its means. [vii]

Inflow of technology and expansion of pharma companies in different countries to boost up the vaccine development process.

Another solution that can be put forward while catering the demand of vaccines in developing and underdeveloped countries like India, Bangladesh, Nepal etc. can be establishing new foreign company plants for immediate production of vaccines. The companies can be allowed to set up in places like India with minimum regulations and paperwork in order to expedite the faster production of vaccines. Moreover, this will also increase the inflow of technology in the host countries and will facilitate smaller companies in the jurisdiction to increase their production as well.

Conclusion

As a conclusion to the aforementioned research, it will be a challenge for the governments of different countries to come up to a decision as to the feasibility of waiving off the Intellectual Property Rights of the pharmaceutical companies in order to cater the demand of the vaccines over the world, but what is to be evaluated on a priority scale shall be the deciding factor of allowing or not allowing the waiver. The success of huge production of vaccines is not predetermined in case of allowing the waiver as it won’t be feasible for the small companies to gather resources, capital and most importantly technology even if they are allowed to license the patented information and to start production of new vaccines.

Therefore, in order to make the availability of the vaccines and its supply equivalent to the demand, there are more than just one step (Waiver of rights) required along with collaborative effort of different governments and non-governmental bodies.


[i] Jaya Bhatnagar, Vidisha Garg, “Patent Law in India”, available at: https://www.mondaq.com/ (Last Modified December 13, 2007).

[ii] Christopher Garrison, “Intellectual Property Rights and Vaccines in Developing Countries”, April.13,2004.

[iii] Narayan Lakshman, “Explained | Intellectual Property Rights waiver resolve the COVID-19 vaccine shortage?”, The Hindu, May.9,2021. (Katherine)

[iv] Vaccine patent waiver: What are IP rights, and which nations stand for and against US proposal, available at:https://www.firstpost.com/ (Last modified May 07, 2021).

[v] Geetika Mantri, “Why removing patents on COVID-19 vaccines is the need of the hour”, The News Minute, May.6, 2021.

[vi] Philips Stevens, Mark Schultz, “Why Intellectual Property Rights Matter for Covid-19”, Geneva Network, January, 2021.

[vii] Compulsory Licensing in India, available at: https://www.iiprd.com/compulsory-licensing-in-india/ (Last

Modified January 14, 2019).

Author: Layba Yaseen from Amity Law School, Lucknow.

COVID19: The Role of IPR during the Pandemic

Reading time : 8 minutes

INTRODUCTION

Since the first detected case of novel corona virus back in November 2019[1], The pandemic has spread wide across the world. This has led to a crisis in terms of medical treatments to cure this disease. There are no established treatment methods or vaccines which could possibly lead to its eradication. The pandemic has created a global medical emergency where hospitals are bombarded with patients suffering from this virus. There have been instances of lack of room for patients in the hospital due to the exhausting patient loads which leads to over spending of medical resources.[2]

This crisis has led to finding a proper cure for the disease. Various Guidelines have been generated by World Health Organisation in order to prevent the spread of this disease such as wearing of masks in the public gathering, maintaining social distance etc.[3] However, to prevent the spread of this virus a proper vaccine is the need of the hour. There are several vaccines which have passed their clinical trials and are now available to be used.[4]

However, before developing the vaccines there were a plenty of questions regarding the method used to make such vaccines and to what extent does Intellectual Property Rights play a part. Development of vaccines requires various usage of patent methods which are protected under the patent laws of different countries. It is important to understand the potential conflict that a patent owner may have with the vaccine developers or various medical units which can lead to litigation. It is also important to understand how a patent can be easily available to be used a amidst a global health emergency without jeopardizing the invention of the patent owner.

Further, it is also important to understand how IP rights in the future get affected due to such medical emergencies.

IPR: A NECESSARY TOOL TO COMBAT COVID-19

The role of IPR is to protect a creator’s original work.[5] During the time of a global pandemic such inventions can be of great use for the development of a medically certified cure. However, IPR can act as a barrier for general usage of these invention as these are protected in order to prevent its infringement. In order to find a conducive medical remedy for a global pandemic the medical industry has to bypass the patent laws which protect the methods through which a certain medical cure can be obtained.

Patent laws gives protection to the patent owner over the process of his invention. The only way that a patent can be used other than the owner is by licensing.[6] However, such method of third party use of a patent cannot be useful in a scenario of a global pandemic specially where multiple medical companies are in a race to develop vaccines. IPR protection act as a barrier towards developing of medical products which can prevent the spread of a pandemic. Traditional path of licensing patents would cause inordinate delay in manufacturing of these products.

Therefore, it is important that a uniform mechanism is put into place in order to prevent the infringement of the owners right as well as the usage of these patents in manufacturing is smoothened.

In order to smoothen the usage of IPR, governments across the globe have opted to enact special legislations. For instance, in Malta suspension of IPR is possible under the patent and design Act, keeping in mind the national security and public safety.[7] Similarly, in Britain under Crown use rules, the government can suspend the right of the patent holder to address a global crisis.[8]

Such measures which are implemented by the government is know as compulsory licensing. Such methods though do not bring voluntary exchange of information and are rather coerced. It is important to identify methods which bring voluntary cooperation between the IP holders and the third party.

EFFECTIVE WAYS OF PATENTING IN A GLOBAL PANDEMIC

It is important to identify as to how patenting in global pandemic can benefit both the patent owner and the medical industry. One of the main methods in addressing this conflict can be of establishing a patent pool. Creation of patent pool ensures quick access of Patents. A patent pool can be managed by central agency which handles various aspects of licensing of patent such as royalty rates of a particular patent.[9] This method ensures protection of the right of the patent holder. It also ensures that manufactures gain quick access to these patents through which they can rapidly develop medical products.

 pledge is also a viable method through which patents can be licensed. There are different kind of pledges. First one consists of voluntary pledge under which organizations freely license their IPR.[10] Few Organisation license their IPR on the condition of having a sperate agreement with the patent holder.[11] Examples of companies which have resorted to open pledge are Amazon, HP, Facebook etc.[12] Open pledge not only provides benefits for manufacturers but also helps to enhance the reputation of a company which grant these licenses for free in a global crisis.

Pledging helps a patent holder to have control over his invention. Pledging ensures that an agreement between the patentholder and the third party is for a limited time period, which means a pledge can be sustained till the end of the pandemic and for some duration after it.[13] Pledge gives a viable option to the patent holder to also suspend the patent agreement for its infringement. Pledge is also commercially viable for patent holders who can extract royalty rates for the duration of the pledge without their right being compromised.

The pandemic has helped to identify the role of IPR. It is important to establish a road map for the future to look at Intellectual Property as a solution rather than a problem for a global crisis.

IP PROTECTION: THE WAY FORWARD

Intellectual Property Rights play a huge part in building resources for a nation, specially in the field of medics. Initiatives such as the open pledge where several Organisation consisting of companies, universities etc have forged a remarkable alliance in order to develop medical logistics. These changes in itself in the IP domain demands a new outlook in order to further, tackle such global crisis in the future.

During this period various forms of partnerships have been a catalyst for a steady progress of developing a vaccine. Smaller manufacturers are working with bigger firms in an open system of negotiations.[14] Public-Private partnerships have also flourished during this period as governments across the globe are working in tandem with vaccine developers.[15]

These developments clearly depict that there is a lot of scope of innovative IP practices which can be resorted to on the future to find a plausible solution to a global question. In future we can witness compulsory licensing being replaced by negotiation between the patent holder and the government. Where there will be a reasonable price paid for the licensing to the patent owner which would lead to the usage of an IP more efficiently with proper knowledge being shared as well as royalty rates would also be just reasonably paid to the patent holder.[16]

This would mean a patent holder’s right would be secured and he would be able to control the ebbs and flows of his patent. There are also debates about relinquishing the IP rights during such crisis as this would allow manufacturers to develop the vaccine in a cost-effective manner.[17]India for instance has categorically asked for waiver of IPR, in order to tackle the existing crisis.[18]

The TRIPS agreement is considered to be a viable mechanism in order to deal with IP rights. However, in a global pandemic stringent barriers of IP protection are detrimental for manufacturers. Further, TRIPS offers very limited solutions to a global issue.[19]

Creating any sort of hindrance during a global crisis can slowdown the process of responsive mechanism. It can create unnecessary divide amongst stakeholders consisting of international institutions, companies, patent holders etc. The ideal step is to act through cooperation. The Doha Declaration for instances incapsulates that, steps to be taken to protect health and welfare[20]. This is also on the lines of the TRIPS Agreement.[21]

It is not a viable option to completely wave off IP Protection. The way forward is to make the regime less stringent. Which requires dialogue between the IP holders and other stakeholders. During the course of this pandemic, it is well established that methods of open pledge, patent pool and the Public-Private Partnerships are a viable option. However, a well-defined mechanism in the International regime is the need of the hour. International Regime such as TRIPS can add an exception clause where IP holders through reasonable negotiations can license out their patent.

Well defined legislations at the national level shall also help in creating a better response mechanism to deal with such crisis. A National Health Emergency Act can be enacted which clearly defines rights of an IP holder as well as the criteria of reasonable negotiations. The Act shall also, specify the time period for which such reasonable licensing is applicable and shall also enshrine provisions which assist the development of medical logistics. Further, in order to prevent any infringement of IP rights a separate tribunal can deal with such special cases without hindering the process of basic manufacturing. Further, the other provisions can be embedded as the native government deems fit.


[1] Jeanne Bryner, 1st known case of coronavirus traced back to November in China, available athttps://www.livescience.com/first-case-coronavirus-found.html (Last visited on February 7,2021)

[2] Daniel A Donoho, Hospital Capacity and Operations in the Coronavirus Disease 2019 (COVID-19) Pandemic—Planning for the Nth Patient, available at https://jamanetwork.com/channels/health-forum/fullarticle/2763353 (Last Visited on February 7, 2021)

[3] Coronavirus disease (COVID-19) advice for public, available at https://www.who.int/emergencies/diseases/novel-coronavirus-2019/advice-for-public?gclid=Cj0KCQiAvP6ABhCjARIsAH37rbQ95R5PcWeCR4t7_b9SR16_qYGmOpaecJQpxMvmNEVEM6Pk-d_AOe0aAh5KEALw_wcB (Last Visited on February 7, 2021)

[4] Sukriti Dwivedi, 57 Lakh Get Coronavirus Vaccine Shots In India, 3rd Highest After US, UK, available at https://www.ndtv.com/india-news/coronavirus-57-lakh-get-covid-19-vaccine-shots-in-india-3rd-highest-after-us-uk-2364980 (Last visited on February 7, 2021)

[5] The Different Types of IP Protection and Why They are Important, available at https://www.inquartik.com/inq-intellectual-property-rights/#:~:text=Intellectual%20property%20rights%20are%20legal,scientific%20developments%2C%20and%20so%20on. (Last Visited on February 8, 2021)

[6] ibid

[7] Terence Casar, Bernice saliba and Emma Marie Sammut, COVID-19 And its effects on Intellectual Property, available at https://www.mondaq.com/patent/992968/covid-19-and-its-effects-on-intellectual-property#:~:text=The%20effects%20of%20the%20COVID,the%20process%20of%20acquiring%20protection. (Last Visited on February 8, 2021)

[8] ibid

[9] Prathiba M. Singh, needed: a pandemic Patent Pool, available at https://www.thehindu.com/opinion/lead/needed-a-pandemic-patent-pool/article31475628.ece (Last visited on February 8, 2021)

[10] Contreras, J.L., Eisen, M., Ganz, A. et al. Pledging intellectual property for COVID-19 available at. Nat Biotechnology 38, 1146–1149 (2020). https://doi.org/10.1038/s41587-020-0682-1 (Last visited on February 8, 2021)

[11] ibid

[12] Mitthatmeer Kaur, Role of Intellectual Property Amid Covid-19 Pandemic, available athttps://ttconsultants.com/role-of-intellectual-property-amid-covid-19-pandemic/ (Last visited on February 8, 2021)

[13] Supra note 5

[14] Anjula Gurtoo, Will the COVID-19, Pandemic Change the IP Domain, available at https://science.thewire.in/health/covid-19-pandemic-research-collaborations-intellectual-property/ (Last visited on February 9, 2021)

[15] ibid

[16] ibid

[17] Arnab Acharya, OPINION: the debate around Intellectual Property Rights and the COVID- 19 Vaccine, available at https://www.devex.com/news/opinion-the-debate-around-intellectual-property-rights-and-the-covid-19-vaccine-97609 (Last Visited on February 9, 2021)

[18] Joe C Mathew, Get rid of intellectual property rights on COVID-19 products, available at https://www.businesstoday.in/current/economy-politics/get-rid-of-intellectual-property-rights-on-covid-19-products-india-tells-wto/story/423067.html (Last visited on February 9, 2021)

[19] ibid

[20] Supra note 9

[21] ibid

Author: Kartikey Mishra

Editor: Kanishka VaishSenior Editor, LexLife India.

Analysis: Trademark Infringement in Naming Products in Light of Divergent Precedents

Reading Time: 6-8 minutes

By: Tamanna Gupta, Student, RGNUL Punjab.

Introduction

Recently, the tussle between two leading conglomerates, Emami Ltd & Hindustan Unilever Ltd. (HUL) hit the headlines. In Hindustan Unilever Limited v Emami Limited (2020), Both the companies contended that the trademark of the phrase “Glow & Handsome” belonged to their respective organization. The row over the trademark began when HUL rebranded its skin lightening products in light of anti-racism protests. HUL removed the word “fair” from its skin lightening creams, replacing it with the word “glow”, thus rebranding the products as “Glow & Lovely” & “Glow & Handsome”. While HUL claims that it applied for the trademarks way back in September 2018, Emami claimed ownership of the trademark. However, the court denied relief to Emami stating that ‘prima facie’ it could be discerned that HUL applied for the trademark first, thus it has a right over using the phraseology for marketing, etc.

Several claims regarding Trademark Infringement under Section 29 of the Trademarks Act, 1999 have reached the court in recent times, which has led to an ambiguity in the criteria for deciding claims involving trademark infringement & deceptive similarity. While several tests have been laid down both nationally & internationally, the haphazard approach of the court in deciding the rights of the prevailing party with respect to use of trademark has led to complications, leaving the parties in a lurch as to the proper recourse. This article analyzes the divergent precedents laid down by the courts, further suggesting compliance with international precedents in order to present a unified stance in cases involving trademark infringement.

Laws Governing Trademark Infringement

In the Indian Context, the Trademarks Act, 1999 governs the disputes arising due to claims over trademark infringement. Section 2(h) of the Trademarks Act, 1999 defines “deceptively similar”, stating that a particular trademark shall be deemed to be deceptively similar in nature to another if there is a close resemblance between the two that is likely to deceive consumers or cause confusion amongst the consumers regarding the two. Furthermore, Section 29 of the Trademarks Act, 1999, under Clause (2) lays down the requirements for “Infringement of Registered Trademark”, stating under Section 29(2)(b) that similarity to another registered trademark is a ground for infringement. 

The Indian Trademark law falls in line with the acts governing common law countries, as can be ascertained from the provision regarding trademark infringement laid down under Section 10(2)(b) of the Trademarks Act, 1994 of the United Kingdom, that states that “similarity” is a ground for trademark infringement. In Australia, The Trademarks Act, 1995defines “deceptively similar” under Section 10 of the act, the definition in consonance with the Indian act. Despite such a watertight compartmentalized definition in the Indian Context, courts find themselves at sea when deciding claims regarding trademark infringement, due to varying precedents in cases involving deceptively similar trademarks & trademark infringement.

Conflicting Precedents & The Paradox of “Deceptively Similar”

When it comes to trademark infringement cases that are resolved by the courts, the court mainly has to deal with two categories of cases-

  1. Cases wherein both the goods/services/products have a similar/identical name but both conflicting companies cater to different consumer base.
  2. Cases wherein both the goods/services/products have a similar/identical name and the companies also work in the same line of business/ have the same consumer base.

In cases involving “deceptively similar claims”, but with companies working in different lines of business, or serving a different consumer base, the courts have laid down a pretty uniform interpretation. In the case of AMF Inc. v Sleekcraft Boats (1979), the plaintiff, involved in sale of boats meant for recreation, owned the trademark “Slickcraft”, while the defendant, dealing with sales of high speed performance boats, used the mark “Sleekcraft” for commercial purposes. While the court acceded to the fact that the name of the products sounded similar, the court stated that the two types of boats served substantially different markets, thus taking this factor into consideration, before ultimately deciding against the respondents. Thus, the jurisprudence regarding whether the businesses serve the same consumer base also came into play, which led to easy disposal of cases wherein the market was completely divergent from one another. However, most claims involving trademark infringement involve companies serving the same clientele, which leads to the question of which party should be given precedence.

In cases involving a similar/identical name and companies working in the same line of business, the courts have laid down various precedents. In the case of M/S Lakme Ltd. v M/S Subhash Trading (1996), involving an infringement claim by petitioner company “Lakme”, a cosmetic giant, against the respondent for using the mark “LikeMe”, and selling cosmetic products, the court stated that both the marks were “separate marks”, and do not cause confusion, despite the fact that both catered to the same target consumer base. Similar ratios were stated in the case of SM Dyechem Ltd. v Cadbury (India) Ltd. (2000) & M/S Allied Blenders & Distillers Pvt. Ltd. v Govind Yadav & Anr., wherein arguments regarding the fact that similar pricing, packaging & even the name of the product was likely to cause confusion amongst the “same consumer base”, were dismissed by the court. 

However, the court laid down a contrasting decision in the case of Cadila Health Care Ltd v Cadila Pharmaceutical Ltd (2001), wherein the plaintiff marketed medicines by the name of “Falcigo”, while the defendant sold medicines under the name “Falcitab”. Taking note of the fact that both the drugs were used to cure the same disease, the court held the marks to be phonetically & deceptively similar. The court also stated that due to the diversified population of the country, and factor such as illiteracy, confusion regarding the said products is likely to arise amongst the masses, thus holding them to be “deceptively similar”.

Haphazard Application of “Test of Likelihood of Confusion”

The test of “likelihood of confusion”, literally means analyzing both the trademarks, to find out whether any likelihood of confusion between the consumers is possible, which might lead to a consumer mistaking one product as the other and vice versa. While the term “likelihood of confusion” is not defined under the Trademarks Act 1999, several courts have laid down jurisprudential principles as to the components of the test. In the case of Frisch Rests Inc. v Elby’s Big Boy (1982), the court laid down several factors that could lead to an inference regarding the likelihood of confusion. The court stated that factors such as relatedness of goods or services marketed, likelihood of expansion of product line, and marketing channels used have to be taken into consideration, in order to decide claims involving trademark infringement. 

However, Indian Courts in most cases has not taken the aspect of “similarity of business” into consideration, rather relying solely on factors such as the appearance, spelling and phonetics of the trademarks in question. It can be inferred that the Indian jurisprudence & precedents are restricted to the trademark in question, completely disregarding external yet important factors such as consumer base, marketing & expansion of product lines. However, with the rise of claims involving trademark infringement, the direction in which Indian Courts proceed is yet to be ascertained.

Concluding Remarks

With the rise of disputes involving Trademark Infringement in the Indian Context, it is imperative that Indian Courts should also expand its horizons and expand factors taken into consideration while applying the “test of likelihood”, in cases involving trademark infringement. While the Indian jurisprudence in this context is yet to evolve, the Indian courts can also give wide berth with regards to inclusion of factors in applying the “test of likelihood” in resolving claims involving trademark infringement & deceptive similarity of trademarks. 

By: Tamanna Gupta, Student, RGNUL Punjab.

Intellectual Property Law regarding Quia Timet Injunctions

Reading time: 8 minutes.

 “A stitch in time saves nine.”

As the Black’s Law Dictionary goes to define an injunction; it can be understood as nothing but a prohibitive writ issued by the court asking a defendant or his servants or agents or any other person so authorised, to either do or not to do a certain act which is unjust and inequitable and whose happening/ non-happening might result as injurious for the plaintiff.

Indian jurisdiction recognizes injunction in the simplest of it forms which can be classified as:

  1. Temporary injunction
  2. Permanent/ Perpetual injunction

Temporary injunction has been discussed under Section 94 and 95 read along with Order XXXIX of the Code of Civil Procedure (“CPC”). Similarly, permanent injunction has been covered under Sections 37 and 38 of the Specific Relief Act, 1963.

One such unique kind of injunction is the Quia timet injunction which literally translates to, ‘because he fears.’ This simply means that the plaintiff files such an injunction in the court of law because he fears that the defendant might in future cause some harm and infringe his rights. Hence, in such a case the Court is required to first assess whether or not a cause of action has arisen in favour of the Plaintiff, and then go ahead with deciding the injunctive relief. Quia timet injunction is in the nature of a permanent injunction. For instance, in intellectual property rights, the defendant is prevented from launching such a product or service till the time the term of the Plaintiff’s patent expires.

Also read: IPR Laws in India

Gee explains the jargon as: a quia timet injunction is the one where no kind of an actionable wrong has taken place and such an injunction is awarded in order to prevent the very occurrence of an actionable wrong, or to prevent repetition of an actionable wrong. In a landmark 2012 English case a quia timet injunction was granted as the Plaintiff had brought up an action for the removal of trees even though no actual damage had occurred. As the facts of the case made it pretty evident that upon the growth of the roots of the tree, the property would face huge loss, therefore the roots needed to be removed.

Pearson J. held that there are two ingredients that need to be fulfilled for a Quia timet injunction to be granted:

  1. In case no actual damage has been proved, then the proof of imminent and substantial danger needs to be established; and
  2. The damage must be shown to be irreparable, because if that is not done then the Court shall have no reason to believe that delay in remedy might lead to any damage to the plaintiff.  

Pearson J. concluded by saying that the damage should be of such a nature that it would become impossible for the Plaintiff to protect himself from the damage that might occur in future.

There are a variety of factors which ought to be considered while assessing the first essential:

  • What actions, if any were taken by the Plaintiff to ensure that the infringement does not take place;
  •  Whether or not the attitude of the defendant points to the fact that he might commit such an infringement; whether adequate steps have been taken to prevent the action despite which a certain degree of threat persists and most importantly whether awarding of interim injunction along with the damages would be an effective remedy equivalent to the anticipated harm.
  • The duration between the application for relief and the threatened infringement may be relevant;
  • Where the acts leading to future damage have already been committed, it is to be considered whether it is possible that the defendant’s intentions were less significant than the natural and probable consequences of their act.

Indian courts and quia timet injunction

Indian courts have over the years accepted the application of quia timet injunction and borrowed understanding of the principle from various English judgements. However, they still remain sceptical while granting the same to the Plaintiffs, fearful of the fact that the Plaintiffs don’t always approach the Courts with clean hands. Quia timet injunctions have primarily been granted in intellectual property matters especially trademark and patent.

So far, Indian courts have not had a systematic approach in determining the exact standard for establishing the proof of imminent danger before awarding a quia timet injunction. It has been observed that quia timet actions in India came into the lime light after the denial of interim reliefs based on application of equitable factors like those of irreparable damage or presence of public interest.

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Conclusion

From the above parameters it can be deduced that there doesn’t exist any straight jacket formulae for determining what can amount to proof of imminent danger in a patent case. Mere indicators such as regulatory approvals, marketing approvals, and silence on launch plans by generic or mere allegations of clinical trials cannot be sufficient to prove the presence of imminent danger. The rationale that trademarks do not have an expiry period makes it easy for us to conclude that even in trademark matters the degree of threat of future damage instances can be ascertained conclusively, as the Defendant would clearly have no intention of waiting. As we all know, with great power comes greater responsibility; which is what the judicial system in India needs to realise for this particular principle of law.

Before granting a quia timet injunction it is the Author’s firm belief, that the Courts need to have a standard test for determining the imminent threat in future and restrict its application before they are highly misused. Having said that, we cannot undermine the reasonableness the Courts have adopted until now to grant a quia timet injunctions, considering the newness of this concept to the Indian courts. Primarily pharmaceutical companies are the one’s approaching Courts with a quia timet action suit, for instance Novartis was awarded the injunction successfully against Bajaj healthcare, Cadila healthcare, Alembic Pharmaceutical’s and Glenmark Generics.  

Authors: Stuti Mandhotra, student of School of Law, UPES, Dehradun and Advocate Avijit Sharma.

Editor: Astha Garg, Junior Editor, LexLife India.

Analysis: ‘Glow and Handsome’ Trademark Dispute

Reading time: 8-10 minutes.

In a recent trademark dispute between Emami Limited and Hindustan Unilever Limited (hereinafter referred to as “HUL”), the Bombay High Court dismissed an appeal which was filed by Emami Limited, challenging an ex-parte order that was passed by a Single Judge Bench on 6th July, 2020. The order had given interim relief to Hindustan Unilever Limited in the ongoing trademark dispute between the two companies, over the names of their fairness creams. Both Emami and HUL claim to have a trademark over the name “Glow and Handsome”. The dispute started when HUL branded their cosmetic product “Fair and Lovely” (for women) and “Fair and Handsome” (for men) as “Glow and Lovely” and “Glow and Handsome” respectively.

Facts of the Incident

The dispute began when HUL made a formal announcement that its trademark brand “Fair and Handsome” under its skin care range of products for men is rebranded as “Glow and Handsome”. HUL started commercial advertising of the product under the said name from 4th July in various newspapers and on various digital platforms. In response to the said advertisements, Emami Ltd. gave statements in newspapers allegedly threatening to take legal actions against HUL for violating its rights under the trademark. HUL then filed a case against Emami, under Section 142 of the Trademarks Act, 1999 against the statements published by Emami. According to its counsel, HUL had filed application for the trademark “Glow and Handsome” and “Glow and Lovely” on 7th September, 2018.

According to the counsel, the trademark application was filed after duly searching the Register of Trademark and this year in the month of June, HUL again filed for the said trademark on proposed to be used basis. The counsel also submitted in the Court that on 3rd July, it got the FDA license to manufacture the product under the name “Glow and Handsome” following which, it issued advertisements and made an official announcement. The Court in the impugned order, observed that since the plaintiff (HUL) had duly filed for the trademark in the month of September and then July, the plaintiff adapted the mark before. However, whether the statements made by Emami had some ground is to be decided after hearing both the parties. Emami Ltd. had filed an Appeal against this order of the Bombay High Court which granted interim relief to HUL. The Appeal was heard by a division bench of the Bombay High Court comprising of Justice VG Bisht and Justice RD Dhanuka. The bench dismissed the appeal after perusal of the impugned order stating that since the Single Bench had directed to list the interim application for further relief on 27th July, it is thus not inclined to interfere with the order passed.

Legal Provisions Involved

Section 142 of the Trademarks Act, 1999 prevents a person from issuing groundless threats to a registered trademark user, and if someone does so, then the registered trademark user may obtain an order for injunction against the continuance of such threats and also recover any damages that he might have suffered due to such threats. Thus, in the instant case, HUL might get relief if it proves that the alleged threats issued by Emami did not have any merit and were groundless. The Court in the interim order had also observed that Emami must give a prior notice of 7 days to HUL before initiating any legal action against HUL. This principle was upheld by the HC previously in the case of Kokanratna Holiday Resorts vs. Millennium & Copt Horne International Limited. In this case, the Bombay High Court had observed that the defendant shall give a prior written notice of 7 days to the plaintiff before initiating any legal proceedings against them pertaining to the trademark.

From the above discussion, it is clear that in order to bring a successful claim HUL needs to prove, firstly, that it got the trademark registered for “Glow and Handsome” before Emami and secondly, that the statements issued by Emami in newspapers were groundless. While Emami on the other hand must prove that it was an honest and prior adapter of the trademark and HUL’s use of it constitutes a trademark infringement.

Critical Analysis

HUL had applied for numerous trademarks along with “Glow and Handsome” while a few of them got approved, “Glow and Lovely” and “Glow and Handsome” were not granted. It was stated by the Trademark Registry that they lacked intended designated purpose and were non-distinctive. This matter is separately pending before the Intellectual Property Appellate Board. However, the filing of new applications by HUL before the launch of its rebranding campaign gives it an upper hand over Emami since it didn’t file for the trademark even after 7 days of launching it digitally. Registration is one of the primary claims in ownership of a trademark however the Indian Trademark Act, 1999 gives priority to ‘adoption and use’ over ‘registration’ while determining the owner of a trademark. Section 34 of the Act provides that a registered proprietor of a trademark cannot interfere with the rights of a prior user of an identical or similar mark. Hence, it would be interesting to see in whose favour the Court decides this dispute.

Conclusion

Disputes arising in Intellectual property rights are growing day by day. It is important to prevent businesses from adopting unfair trade practices in order to maintain a level playing field for everyone. A well thought approach towards filing trademark applications before launching a product can save businesses from getting into legal troubles like the one in the instant case. The final outcome of the case is yet to be decided and the issue shall be resolved by the Bombay High Court in the next hearing on 27th July 2020.

Author: Avani Jain from National Law Institute University, Bhopal.

Editor: Astha Garg, Junior Editor, Lexlife India.

IPR laws in India

Reading time: 8-10 minutes.

The United States Trade Representative (USTR) kept India in its Priority Watch List in its Annual Special 301 Report released on 29 April 2020. As India persists to be on this list, it becomes very imperative to know about what USTR is and why the Annual Special 301 Report released by it has its value. The United States Trade Representatives is a specialized group of people having great deal of experience in trade and related functionalities over varied region of the globe. The United States believes in creating global market for its players. The U.S. Trade Representatives is vested with the power to coordinate, direct and monitor the United States’ trade with other economies. It can negotiate directly with the governments of different countries to enter into a propitious trade agreement.

The USTR after its annual review and analysis of the status of the Intellectual Property Rights protection in the US trading partner nations across the world, prepares and presents a report i.e. Special 301 Report. The report reveals the competency and effectiveness of the protection of IP rights of the trade partners. After all, it is to expose the policies and laws, which lacks to provide adequate protection of IP rights to the US based manufactures, companies, investors and inventors. Furthermore, it also gives suggestions to those countries, which fails in protecting the IP rights and are proving to be downturn for the United States.

Considering that, India is a part of “Priority watch list” in the 2020 report; it is requisite to throw light on this listing. The rationale given by the agency for placing India in the Priority watch list is that India has not been able to make considerable advancement in its IP set-up together with the new intricacies, which ultimately was leading to unfavourable conditions particularly for the right holders of US in India. The report points out that, innovators in India face perplexity in receiving and enforcing patent right in the country.

As per the report, the procedures for mandatory licenses, patent revocation and the narrow patentability laid down in patent laws of India, proves to be a trouble element. Pharmaceutical sector has been kept on the centre of the report for India. The patent issues continue to be of particular concern in India as long-standing issues remain for innovative industries and patent applicants continue to confront costly and time-consuming pre & post grant oppositions, long waiting periods to receive patent approval, and excessive reporting requirements. The inadequacy of patent laws, has kept the pharm sector unyielding. In addition, the administration too has been held responsible for this steadiness, whether it be in terms of coordination among several agencies, enforcement mechanism or the dispute settlement bodies. The USTR also hints at the serious issue of Piracy in India, it refers the OECD Trends in Trade in Counterfeit and Pirated Goods report 2019, which ranked India as one of the top five economies for fake goods. Nevertheless, USTR has recognized the progress made by India in the field of IP protection through amendments in the existing rules and coming up with some new sets of policies and laws, which suits the challenges of modern world.

IPR laws in India

India has done so far a lot to protect and manage Intellectual Property Rights. Here Intellectual property is classified into Patents, Trademarks, Copyrights, Industrial Design and Geographical indication. These intellectual properties except Copyright are administered by the Comptroller General of Patents, Designs and Trademarks which is under the control of the Department  of  Industrial  Policy  and  Promotion,  Ministry  of  Commerce  and  Industry. Copyrights and its related issues are regulated by the Ministry of Human Resource and Development.

India is a signatory to Trade Related Aspects of Intellectual Property Rights (TRIPS), which is the most vital and compendious agreement on Intellectual Property Rights. It lays down minimum standards for protection and enforcement of IP rights in member countries which are required to promote effective and adequate protection of IP rights with a view to curb impediments to international trade.

Copyrights:

To begin with copyrights, The Copyrights Act, 1957, regulates it. Registering for copyright is done through the procedure established by this enactment. In India, copyrights can be availed for artistic works, dramatic, musical, literary works. Some major amendments were made in the Act in the year 2012. Registration under the Copyright act works as an evidence that the person in the register is the original owner or author of the work. Infringement of copyright avails the owner to some remedies like damages and injunction of the activity. Registration of Copyright protects the owner of the work from copying of his work without having prior consent from him. Copyright protection commences the moment a work is created, and its registration is optional. The protection granted by this statute is not limited only to India but it extends protection in several countries, this is by the virtue of Berne Convention of which India is one of the member. The period of allotment of copyright varies for different type of works, like for literary and musical it extends to lifetime of author plus fifty years. Anonymous works and works of International organization are given copyrights for fifty years from date of its publication.

Trademark:

The Trademarks Act of 1999 govern registration of Trademarks in India. This act was amended as to make it TRIPS compliant. A registry of trademarks has been established by the act to register and grant protection of the trademarks, which is headed by the Registrar of Trademarks. “Mark” as defined under the Trademarks Act includes “a device, brand, heading, label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or, combination of colours, or any combination thereof.” Any mark, which is fit for categorizing as a graphical representation and in some manner indicates its connection with trade, is entitled to get registered as trademark. The Act facilitates registration of trademarks for goods as well as services. Registration of trademarks that are counterfeit of some other trademarks are not permitted. An appellate board has been set up for speedy disposal of appeals and applications.

Patents:

Patents in India are subject matter of The Patents Act of 1970, the last amendment to this act was made in the year 2005 to make it TRIPS compliant. The term “invention” is defined under Section 2(1) (j) of the Patents Act as “a new product or process involving an inventive step and capable of industrial application”. Recognition of product patent protection under this act is provided for 14 years except for food, pharms and chemical products for which the protection is only for 7 years. The patent is to ensure commercial returns to the inventor for the investment in whatsoever form he has made for making a new product. Three types of patents are granted by this act, Ordinary patent, Patent of Convention and Patent of Addition.

Design:

The Designs Act of 2000 incorporates the minimum standards for the protection of industrial designs, in accordance with the TRIPS agreement. The act defines design as “The features of shape, configuration, pattern, ornament or composition of lines or colours applied to any ‘article’ whether in two or three dimensional forms, by an industrial process which appeals to the eye can be registered under the said Act.” To acquire registration of design under this act, the design must be applied to an article. In other words, a mere painting of a natural scene or its presentation on paper is not entitled for registration under this act. Application for registration can be made only when it is not published previously in any country and is not contrary to public order and morality.

Salient features:

  • Patent laws in India provide for both the product as well as the process of making the product.
  • The Patent Act has a provision which allows secrecy in inventions related to defence purposes.
  • The recent amendment in the copyright laws has given the right to store. This right is available for artistic works, cinematography and sound works. This right includes “storing of it in any medium”.
  • The trademarks act has enhanced the protection of well-known trademarks. The proprietor of well-known mark will be entitled to prevent use of identical or similar trademark in connection with goods or services.
  • Under section 21 of the Copyright Amendment Act 2012, the author has an option to relinquish his copyright by way of public notice.
  • The Design Act, 2000 uses Locarno classification in which the classification is based only on the subject matter of design. Under the previous provisions, the classification was made on the basis of the material which has been used to make that material.
  • Getting GI tag registered in the name of an individual is not possible, but any association of individuals, producers or any authority recognized by law can apply for it. Also, there is no expiry for GI tag.

Critical analysis:

Having just a strong law for IPR will be of no means if there is no strong enforcement mechanism. Absence of strong and decisive mechanism fails in providing remedy and thereby causes negative effect on the investment and Research and Development in the country. European countries have a much rigid enforcement mechanism of IPR, hence they are easily able to attract much more investor as stricter entry ensures more returns and it makes new entry into the competition uneasy. Authorities responsible for providing remedies against infringement of IPR lacks expertise and training in IP. Imparting training is the first step which should be taken to strengthen the machinery of IPR. Delayed processing of applications and others actions is one of the major reasons for short enjoyment of intellectual property rights by the holders.

Scope of improvement:

  • Indian IP laws have by far evolved a lot, it has many provision for remedies available in case of infringement of IPR, but lack of effective enforcement is the reason which hinders the growth of IP.
  • Indian IP laws still does not incorporates the international best practises in field of IPR.
  • Piracy is one of the major IPR violation which occurs in India, there is an urgent requirement of strict anti-piracy laws to limit this menace.
  • In 2015 the Controller General reported that the patentability requirements of our country are below international standards. Efforts must be made to bring the standards at par with the international standards.
  • Inadequate and inefficacious enforcement of remedies and penalties encourages the wrongdoers to commit IPR related offences.
  • There is a need to create awareness regarding offences, crimes and remedies of IPR. In addition to that the police machinery should also be trained to deal with IPR crimes.

Conclusion:

In last two decades, Intellectual property rights have developed in India to such an extent that it has a large share in the economy. Laws and policies related to IPR exists in India since we achieved independence but after mid 90s the existing laws were amended and new set of rules were introduced to strengthen the regulatory system of IP. Protection of IPR is essential for trade and business in a modern economy. Since, there is a large scope of competition in our country, protection of IPR encourages fair practises and innovations. India has felt the need for protection of IPR and hence it has been a signatory of various international agreements and conventions. Recent judicial pronouncements and actions taken by other agencies shows that India is moving towards an economy with effective protection of IPR. No doubt, India has taken steps for improving IPR but yet many a steps needs to be taken in the coming years.

Author: Himanshu Chandrakar from Hidayatullah National Law University Naya, Raipur.

Editor: Shashank Shekhar from Central University of South Bihar.