Unit 5
Foreign Exchange Management Act, 2000

5.1 FEMA – Objectives, Main Provisions

FEMA act was enacted by the parliament on 29th December, 1999 with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India. The act extends to the whole of India and applicable to all branches, offices and agencies outside India owned or controlled by a person resident in India and also to any contravention thereunder committed outside India by any person to whom this Act applies.

Main Provisions

Important definitions under the FEMA Act

According to Section 2(h) of the Act “currency” includes all currency notes, postal notes, postal orders, money orders, cheques, drafts, travellers’ cheques, letters of credit, bills of exchange and promissory notes, credit cards or such other similar instruments, as may be notified by the Reserve Bank.

According to Section 2(i) of the Act “currency notes” means and includes cash in the form of coins and bank notes.

According to section 2(j) of the Act “current account transaction” means a transaction other than a capital account transaction and without prejudice to the generality of the foregoing such transaction includes, —

(i) payments due in connection with foreign trade, other current business, services, and short-term banking and credit facilities in the ordinary course of business,

(ii) payments due as interest on loans and as net income from investments,

(iii) remittances for living expenses of parents, spouse and children residing abroad, and

(iv) expenses in connection with foreign travel, education and medical care of parents, spouse and children.

According to section 2(l) of the act “export”, with its grammatical variations and cognate expressions, means—

(i) the taking out of India to a place outside India any goods,

(ii) provision of services from India to any person outside India;

According to section 2(m), “foreign currency” means any currency other than Indian currency.

According to section 2(n), “foreign exchange” means foreign currency and includes,—

(i) deposits, credits and balances payable in any foreign currency,

(ii) drafts, travellers cheques, letters of credit or bills of exchange, expressed or drawn in Indian currency but payable in any foreign currency,

(iii) drafts, travellers’ cheques, letters of credit or bills of exchange drawn by banks, institutions or persons outside India, but payable in Indian currency.

According to section 2(o) “foreign security” means any security, in the form of shares, stocks, bonds, debentures or any other instrument denominated or expressed in foreign currency and includes securities expressed in foreign currency, but where redemption or any form of return such as interest or dividends is payable in Indian currency.

According to section 2(u) “person” includes—

(i) an individual,

(ii) a Hindu undivided family,

(iii) a company,

(iv) a firm,

(v) an association of persons or a body of individuals, whether incorporated or not,

(vi) every artificial juridical person, not falling within any of the preceding sub-clauses, and

(vii) any agency, office or branch owned or controlled by such person.

According to section 2(v) “person resident in India” means—

(i) a person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include—

(A) a person who has gone out of India or who stays outside India, in either case—

(a) for or on taking up employment outside India, or

(b) for carrying on outside India a business or vocation outside India, or

(c) for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period;

(B) a person who has come to or stays in India, in either case, otherwise than—

(a) for or on taking up employment in India, or

(b) for carrying on in India a business or vocation in India, or

(c) for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period;

(ii) any person or body corporate registered or incorporated in India,

(iii) an office, branch or agency in India owned or controlled by a person resident outside India,

(iv) an office, branch or agency outside India owned or controlled by a person resident in India.

Regulation and Management of Foreign Exchange

Section 3 of the FEMA act provides that according to the provisions in this Act, rules or regulations made thereunder, or with the general or special permission of the Reserve Bank, no person shall—

(a) deal in or transfer any foreign exchange or foreign security to any person not being an authorised person;

(b) make any payment to or for the credit of any person resident outside India in any manner;

(c) receive otherwise through an authorised person, any payment by order or on behalf of any person resident outside India in any manner.

d) enter into any financial transaction in India as consideration for or in association with acquisition or creation or transfer of a right to acquire, any asset outside India by any person.

Section 4 of the FEMA act provides that no person resident in India shall acquire, hold, own, possess or transfer any foreign exchange, foreign security or any immovable property situated outside India.

Section 5 of the FEMA act provides that any person may sell or draw foreign exchange to or from an authorised person if such sale or withdrawal is a current account transaction. Provided that the Central Government may, in public interest and in consultation with the Reserve Bank, impose such reasonable restrictions for current account transactions as may be prescribed.

According to section 6 of the FEMA act any person may sell or draw foreign exchange to or from an authorised person for a capital account transaction. But the RBI in consultation with the Central Government must specify—

(a) any class or classes of capital account transactions which are permissible;

(b)the limit up to which foreign exchange shall be admissible for such transactions.

(c) any conditions which may be placed on such transactions.

The Central Government in consultation with the Reserve Bank can prescribe—

(a) any class or classes of capital account transactions, not involving debt instruments, which are permissible;

(b) the limit up to which foreign exchange shall be admissible for such transactions; and

(c) any conditions which may be placed on such transactions.

The Reserve Bank may, by regulations prohibit, restrict or regulate the following: —

(a) transfer or issue of any foreign security by a person resident in India;

(b) transfer or issue of any security by a person resident outside India;

(c) transfer or issue of any security or foreign security by any branch, office or agency in India of a person resident outside India;

(d) any borrowing or lending in foreign exchange in whatever form or by whatever name called;

(e) any borrowing or lending in rupees in whatever form or by whatever name called between a person resident in India and a person resident outside India;

(f) deposits between persons resident in India and persons resident outside India;

(g) export, import or holding of currency or currency notes;

(h) transfer of immovable property outside India, other than a lease not exceeding five years, by a person resident in India;

(i) acquisition or transfer of immovable property in India, other than a lease not exceeding five years, by a person resident outside India;

(j) giving of a guarantee or surety in respect of any debt, obligation or other liability incurred—

(i) by a person resident in India and owed to a person resident outside India; or

(ii) by a person resident outside India.

(4) A person resident in India may hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India.

(5) A person resident outside India may hold, own, transfer or invest in Indian currency, security or any immovable property situated in India if such currency, security or property was acquired, held or owned by such person when he was resident in India or inherited from a person who was resident in India.

(6) The Reserve Bank may prohibit, restrict, or regulate establishment in India of a branch, office or other place of business by a person resident outside India, for carrying on any activity relating to such branch, office or other place of business.

Section 8 of the act mentions that where any amount of foreign exchange is due or has accrued to any person resident in India, such person shall take all reasonable steps to realise and repatriate to India such foreign exchange within such period and in such manner as may be specified by the Reserve Bank.

Provisions Related to Authorised Person

section 10(1) of the FEMA act mentions that the Reserve Bank may authorise any person to deal in foreign exchange or in foreign securities, as an authorised dealer, money changer or off-shore banking unit or in any other manner as it deems fit.

Section 10(3) provides that the authorisation granted may be revoked by the Reserve Bank at any time if the Reserve Bank is satisfied that—

(a) it is in public interest so to do; or

(b) the authorised person has failed to comply with the condition subject to which the authorisation was granted.

Section 10(4) An authorised person shall, in all his dealings in foreign exchange or foreign security, comply with such general or special directions or orders as the Reserve Bank may, from time to time, think fit to give, and, except with the previous permission of the Reserve Bank.

Section 10(5) of the FEMA act provides that before undertaking any transaction on behalf of any person an authorised person must make a declaration that person to make such declaration and give such information as will reasonably satisfy him that the transaction will not involve, and is not designed for the purpose of any contravention or evasion of the provisions of this Act or of any rule, regulation, notification, direction or order made thereunder.

Section 11of the FEMA act provides that Reserve Bank has powers to issue directions to authorised person regarding the following grounds-

(1) The Reserve Bank may, give direction in regard to making of payment or the doing or desist from doing any act relating to foreign exchange or foreign security.

(2) The Reserve Bank may direct any authorised person to furnish such information, in such manner, as it deems fit.

(3) Where any authorised person contravenes any direction given by the Reserve Bank under this Act or fails to file any return as directed by the Reserve Bank, the Reserve Bank may, after giving reasonable opportunity of being heard, impose on the authorised person a penalty which may extend to ten thousand rupees and in the case of continuing contravention with an additional penalty which may extend to two thousand rupees for every day during which such contravention continues.

Section 12 empowers the RBI to inspect authorised person in the following cases-

(1) The Reserve Bank may, at any time inspect the business of any authorised person for the purpose of—

(a) verifying the correctness of any statement, information or particulars furnished to the Reserve Bank;

(b) obtaining any information or particulars which such authorised person has failed to furnish on being called upon to do so;

(c) securing compliance with the provisions of this Act or of any rules, regulations, directions or orders made thereunder.

(2) It shall be the duty of every authorised person, and where such person is a company or a firm, every director, partner or other officer of such company or firm to produce to any officer making an inspection the books, accounts and other documents in his custody or power and to furnish any statement or information relating to the affairs of such person, company or firm as the said officer may require within such time and in such manner as the said officer may direct.

Contravention and penalties

According to section 13(1) if any person contravenes any provision of this Act, or contravenes any rule, regulation, notification, direction or order issued in exercise of the powers under this Act, or contravenes any condition subject to which an authorisation is issued by the Reserve Bank, he shall be liable to a penalty up to thrice the sum involved in such contravention where such amount is quantifiable, or up to two lakh rupees where the amount is not quantifiable, and where such contravention is a continuing one, further penalty which may extend to five thousand rupees for every day after the first day during which the contravention continues.

According to section 13(2) of the FEMA any Adjudicating Authority adjudging  may, if he thinks fit in addition to any penalty which he may imposed direct that any currency, security or any other money or property in respect of which the contravention has taken place shall be confiscated to the Central Government and further direct that the foreign exchange holdings, if any, of the persons committing the contraventions or any part thereof, shall be brought back into India or shall be retained outside India in accordance with the directions made in this behalf.

Section 14 of the FEMA act deals with the enforcement of the orders of Adjudicating Authority which are as follows-

1. If any person fails to make full payment of the penalty imposed on him under section 13 within a period of ninety days, he shall be liable to civil imprisonment.
2. No order for the arrest and detention in civil prison of a defaulter shall be made unless the Adjudicating Authority, for reasons in writing, is satisfied—

(a)     that the defaulter, with the object or effect of obstructing the recovery of penalty, has after the issue of notice by the Adjudicating Authority, dishonestly transferred, concealed, or removed any part of his property, or

(b) that the defaulter has, or has had since the issuing of notice by the Adjudicating Authority, the means to pay the arrears or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same.

3.     A warrant for the arrest of the defaulter may be issued by the Adjudicating Authority if the Adjudicating Authority is satisfied, by affidavit or otherwise, that with the object or effect of delaying the execution of the certificate the defaulter is likely to abscond or leave the local limits of the jurisdiction of the Adjudicating Authority.

4.     Where appearance is not made pursuant to a notice issued and served, the Adjudicating Authority may issue a warrant for the arrest of the defaulter.

5.     A warrant of arrest issued by the Adjudicating Authority may also be executed by any other Adjudicating Authority within whose jurisdiction the defaulter may for the time being be found.

6.     Every person arrested in pursuance of a warrant of arrest under this section shall be brought before the Adjudicating Authority issuing the warrant as soon as practicable and in any event within twenty-four hours of his arrest.

7.     When a defaulter appears before the Adjudicating Authority pursuant to a notice to show cause or is brought before the Adjudicating Authority under this section, the Adjudicating Authority shall give the defaulter an opportunity showing cause why he should not be committed to the civil prison.

8.     Pending the conclusion of the inquiry, the Adjudicating Authority may, in his discretion, order the defaulter to be detained in the custody of such officer as the Adjudicating Authority may think fit or release him on his furnishing the security to the satisfaction of the Adjudicating Authority for his appearance as and when required.

9.     Upon the conclusion of the inquiry, the Adjudicating Authority may make an order for the detention of the defaulter in the civil prison and shall in that event cause him to be arrested if he is not already under arrest.

10. When the Adjudicating Authority does not make an order of detention, he shall, direct release of the defaulter.

Adjudication and appeal

Section 16(1) of the FEMA act provides that the Central Government may, by an order published in the Official Gazette, appoint as many officers of the Central Government as it may think fit, as the Adjudicating Authorities for the purpose of adjudication in their respective jurisdiction. Every Adjudicating Authority shall deal with the complaint as expeditiously as possible and endeavour shall be made to dispose of the complaint finally within one year from the date of receipt of the complaint.

Section 17(1) The Central Government shall, by notification, appoint one or more Special Directors (Appeals) to hear appeals against the orders of the Adjudicating Authorities and shall also specify in the said notification the matter and places in relation to which the Special Director (Appeals) may exercise jurisdiction. 

(2) Any person aggrieved by an order made by the Adjudicating Authority, being an Assistant Director of Enforcement or a Deputy Director of Enforcement may prefer an appeal to the Special Director (Appeals).

(3) Every appeal shall be filed within forty-five days from the date on which the copy of the order made by the Adjudicating Authority is received by the aggrieved person and it shall be in such form, verified in such manner and be accompanied by such fee as may be prescribed:

 (4) The Special Director (Appeals) may after giving the parties to the appeal an opportunity of being heard, pass such order thereon as he thinks fit, confirming, modifying or setting aside the order appealed against.

(5) The Special Director (Appeals) shall send a copy of every order made by him to the parties to appeal and to the concerned Adjudicating Authority.

(6) The Special Director (Appeals) shall have the same powers of a civil court which are conferred on the Appellate Tribunal and—

(a) all proceedings before him shall be deemed to be judicial proceedings;

(b) shall be deemed to be a civil court.

Section 19 (1) provided that the Central Government or any person aggrieved by an order made by an Adjudicating Authority, may prefer an appeal to the Appellate Tribunal. Every appeal shall be filed within a period of forty-five days from the date on which a copy of the order made by the Adjudicating Authority is received by the aggrieved person or by the Central Government [section 19(2)]. The appeal filed before the Appellate Tribunal shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within one hundred and eighty days from the date of receipt of the appeal [section 19(5)].

5.2 Introduction to Intellectual Property Rights- Copyright, Patent and Trademark

The term "Intellectual Property" has come to be internationally recognised as covering, patent, trademarks, copyright, design, know-how and confidential information. The scope of intellectual property is expanding very fast. Efforts are being made by person who create new creative ideas to seek protection under the protective shield of intellectual property. The law regarding intellectual property is based on certain basic concepts. For e.g., Patent law is based upon the concept of novelty, whereas Design' law is based on originality of the design.

The substantive law of trademarks is based on the concept of distinctiveness and similarity of marks and similarity of goods. Copyright is based on the concept of originality and reproduction of the work. Copyright relates to original literacy, dramatic, musical and artistic works, cinematograph films and sound recording. The statute law relating to intellectual property in India is undergoing changes. Attempts are being made to bring them on par with corresponding laws in the developed countries. This has become necessary after India signing the GATT and TRIPS and becoming a member of WTO.

• Nature of Intellectual Property

It is considered as an intangible incorporate property. It consists of a bundle of rights in relation to certain material objects created by the owner. In case of patent, the invention may relate to a new product or an improvement of an existing product or a new process of manufacturing an existing or a new product. After the expiry of the term of the patent, it becomes public property when anybody can use the patented invention. In case of industrial designs, the property consists in the exclusive right to apply the design registered under the Designs Act. This right to use can also license for use by third parties or assign to any person. On expiry of the term of registration anybody can use the design.

The works specified in the Copyright Act 1957 are an original literary, dramatic, musical and artistic work, or a cinematograph film or a sound recording. Literary work includes computer programmes, tables and compilation, also computer databases. By virtue of the international conventions such as Berne Convention and Universal Copyright Convention, copyright acquired in one country extends to other countries which are members of this conventions. India is a member of both the conventions.

There is also a commercial exploitation of intellectual property. In case of patent and patentee may himself exploit the patent or assign his right or license them to industrialist for a lumpsum payment on a royalty basis. In the similar manner registered design, copyright can also be commercially exploited.

INDIA AND IPR

• India is a member of the World Trade Organisation and dedicated to the Agreement on Trade Related Aspects of Intellectual Property (TRIPS Agreement).
• India is also a member of World Intellectual Property Organization, a body responsible for the promotion of the protection of intellectual property rights throughout the world.
• India is also a member of the following important WIPO-administered International Treaties and Conventions referring to IPRs.

• Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure
• Paris Convention for the Protection of Industrial Property
• Convention Establishing the World Intellectual Property Organization
• Berne Convention for the Protection of Literary and Artistic Works
• Patent Cooperation Treaty
• Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks- Madrid Protocol
• Washington Treaty on Intellectual Property in respect of Integrated Circuits
• Nairobi Treaty on the Protection of the Olympic Symbol
• Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms
• Marrakesh Treaty to facilitate Access to Published Works by Visually Impaired Persons and Persons with Print Disabilities.

National IPR Policy

•         The National Intellectual Property Rights (IPR) Policy 2016 was adopted in May 2016 as a vision file to guide future development of IPRs in the country.

•         Its clarion call is “Creative India; Innovative India”.

•         It encompasses and brings to a single platform all IPRs, taking into account all inter-linkages and thus targets to create and exploit synergies between all forms of intellectual property (IP), concerned statutes and agencies.

•         It sets in place an institutional mechanism for implementation, monitoring and review. It aims to incorporate and adapt global great practices to the Indian scenario.

•         Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce, Government of India, has been appointed as the nodal department to coordinate, guide and oversee the implementation and future development of IPRs in India.

•         The ‘Cell for IPR Promotion & Management (CIPAM)’, setup under the aegis of DIPP, is to be the single factor of reference for implementation of the objectives of the National IPR Policy.

India’s IPR regime is in compliance with the WTO's agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Objectives

•         IPR Awareness: Outreach and Promotion - To create public awareness about the economic, social and cultural benefits of IPRs among all sections of society.

•         Generation of IPRs - To stimulate the generation of IPRs.

•         Legal and Legislative Framework - To have strong and effective IPR laws, which balance the interests of rights owners with larger public interest.

•         Administration and Management - To modernize and strengthen service-oriented IPR administration.

•         Commercialization of IPRs - Get value for IPRs via commercialization.

•         Enforcement and Adjudication - To strengthen the enforcement and adjudicatory mechanisms for combating IPR infringements.

•         Human Capital Development - To strengthen and expand human resources, institutions and capacities for teaching, training, research and skill building in IPRs.

Achievements under new IPR policy

•         Improvement in GII Ranking: India’s rank in the Global Innovation Index (GII) issued by WIPO has expanded from 81st in 2015 to 52nd place in 2019.

•         Strengthening of institutional mechanism regarding IP protection and promotion.

•         Clearing Backlog/ Reducing Pendency in IP applications: Augmentation of technical manpower by the government, has resulted in drastic reduction in pendency in IP applications.

• Automatic issuance of electronically generated patent and trademark certificates has also been introduced.

•         Increase in Patent and trademark Filings: Patent filings have increased by nearly 7% in the first 8 months of 2018-19 vis-à-vis the corresponding period of 2017-18. Trademark filings have increased by nearly 28% in this duration.

•         IP Process Re-Engineering Patent Rules, 2003 have been amended to streamline methods and make them more user friendly. Revamped Trade Marks Rules have been notified in 2017.

•         Creating IPR Awareness: IPR Awareness programs have been conducted in educational institutions, including rural schools through satellite communication, and for industry, police, customs and judiciary.

•         Technology and Innovation Support Centres (TISCs): In conjunction with WIPO, TISCs have been set up in various institutions across different states.

•         Issues in India’s IPR regime

•         Section 3(d) of the Indian Patent Act 1970 (as amended in 2005) does not allow patent to be granted to inventions involving new forms of a known substance until it differs significantly in properties with regard to efficacy.

IPR related to Copyright

Copyright refers to the legal right of the owner of intellectual property. In simpler terms, copyright is the right to copy. This means that the original creators of products and anyone they give authorization to are the only ones with the exclusive right to reproduce the work.

Copyright law gives creators of original material the unique right to further use and duplicate that material for a given amount of time, at which point the copyrighted item becomes public domain.

When someone creates a product that is seen as original and that required significant mental activity to create, this product will become intellectual property that must be protected from unauthorized duplication. Examples of unique creations consist of computer software, art, poetry, graphic designs, musical lyrics and compositions, novels, film, original architectural designs, website content, etc. One safeguard that can be used to protect an original creation is copyright.

Under copyright law, a work is considered authentic if the author created it from independent thinking void of duplication. This type of work is acknowledged as Original Work of Authorship (OWA). Anyone with an original work of authorship automatically has the copyright to that work, preventing anyone else from the usage of or replicating it. The copyright can be registered voluntarily by the original owner if he or she would like to get an upper hand in the legal system if the need arises.

Not all types of work can be copyrighted. A copyright does not protect ideas, discoveries, concepts, and theories. Brand names, logos, slogans, domain names, and titles also cannot be protected under copyright law. For an original work to fall under creation, it has to be in tangible form. This means that any speech, discoveries, musical scores, or ideas have to be written down in physical form in order to be protected by copyright.

Copyrights

Law – Copyrights Act 1957, amended in 2012

Ministry – Copyright Office, Ministry of Human Recourse Development

Copyright is a bundle of rights given by the law to the creators of literary, dramatic, musical and artistic works and the producers of cinematograph films and sound recordings. The rights provided under Copyright law include the rights of reproduction of the work, communication of the work to the public, adaptation of the work and translation of the work.

Copyrights of works of the countries noted in the International Copyright Order are protected in India, as if such works are Indian works. The term of copyright in a work shall not exceed that which is enjoyed by means of it in its country of origin.

Acquisition of copyright is automatic and it does not require any formality. Copyright comes into existence as soon as a work is created and no formality is required to be carried out for acquiring copyright. However, certificate of registration of copyright and the entries made therein serve as prima facie evidence in a court of law with reference to dispute relating to ownership of copyright. Application for copyright can be filed in Copyright office.

Computer Software or programme can also be registered as a ‘literary work’. As per Copyright Act, 1957 “literary work” includes computer programmes, tables and compilations, including computer databases. ‘Source Code’ has also to be supplied along with the application for registration of copyright for software products.

The 2012 amendments make Indian Copyright Law compliant with the Internet Treaties – the WIPO Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty (WPPT).

1. Literary

2. dramatic,

3. Musical and

4. Artistic works Lifetime of the author + sixty years from the beginning of the calendar year next following the year in which the author dies.

1. Anonymous and pseudonymous works

2. Posthumous work

3. Cinematograph films

4. Sound records

5. Government work

6. Public undertakings

7. International Agencies

8. Photographs Until sixty years from the beginning of the calendar years subsequent following the year in which the work is first publish

India has a very large copyright-based creative industry.  two The Copyright Act is comprehensive and with the recent amendments, the rights of creators have been strengthened. India was the first country to ratify the Marrakesh Treaty 2013 for Access to copyright works for visually impaired persons. Enforcement in copyright has been sizable and will be further reinforced. Judgments of Indian courts have adequately balanced the rights of copyright owners with the rights of public. Moral rights are fully recognized.

The venture in the future is the enforcement of copyright in digital platforms for which the statute has adequate provisions. Indian copyright owners are also victims of copyright violations and piracy. Apart from Copyrights Act, Information Technology Act, 2000 too has certain relevant provisions for copyright in electronics and digital field.

There have been disagreements over the question whether Software’s are eligible for copyrights or for patents. Copyright Office recently held that software’s, if are not in conjuncture with novel hardware should be protected by copyright. This is relief for software program industry as Copyrights are cheap, automatically recognised and protects for 60 years while patents are only for 20 years.

COPYRIGHT LAW IN INDIA

Copyright is a form of intellectual property protection granted under Indian law to the creators of original works of authorship such as literary works (including computer programs, tables and compilations including computer databases which may be expressed in words, codes, schemes or in any other form, including a machine readable medium), dramatic, musical and artistic works, cinematographic films and sound recordings.

Copyright law protects expressions of ideas rather than the ideas themselves. Under section 13 of the Copyright Act 1957, copyright protection is conferred on literary works, dramatic works, musical works, artistic works, cinematograph films and sound recording. For example, books, computer programs are protected under the Act as literary works.

Copyright refers to a bundle of exclusive rights vested in the owner of copyright by virtue of Section 14 of the Act. These rights can be exercised only by the owner of copyright or by any other person who is duly licensed in this regard by the owner of copyright. These rights include the right of adaptation, right of reproduction, right of publication, right to make translations, communication to public etc.

Copyright protection is conferred on all Original literary, artistic, musical or dramatic, cinematograph and sound recording works. Original means, that the work has not been copied from any other source. Copyright protection commences the moment a work is created, and its registration is optional. However, it is always advisable to obtain a registration for a better protection. Copyright registration does not confer any rights and is merely a prima facie proof of an entry in respect of the work in the Copyright Register maintained by the Registrar of Copyright.

As per Section 17 of the Act, the author or creator of the work is the first owner of copyright. An exception to this rule is that, the employer becomes the owner of copyright in circumstances where the employee creates a work in the course of and scope of employment.

Copyright registration is invaluable to a copyright holder who wishes to take a civil or criminal action against the infringer. Registration formalities are simple and the paperwork is least. In case, the work has been created by a person other than employee, it would be necessary to file with the application, a copy of the assignment deed.

One of the supreme advantages of copyright protection is that protection is available in several countries across the world, although the work is first published in India by reason of India being a member of Berne Convention. Protection is given to works first published in India, in respect of all countries that are member states to treaties and conventions to which India is a member. Thus, without formally applying for protection, copyright protection is available to works first published in India, across several countries. Also, the government of India has by virtue of the International Copyright Order, 1999, extended copyright protection to works first published outside India.

RIGHTS OF COPYRIGHT HOLDER

The Copyright Act, 1957 affords copyright protection in India. It confers copyright protection in the following two forms:

1.              Economic rights of the author, and
2.               Moral Rights of the author.

(A) Economic Rights:

The copyright subsists in original literary, dramatic, musical and artistic works; cinematographs movies and sound recordings. The authors of copyright in the aforesaid works enjoy economic rights u/s 14 of the Act. The rights are mainly, in respect of literary, dramatic and musical, other than computer program, to reproduce the work in any material form including the storing of it in any medium by electronic means, to issue copies of the work to the public, to perform the work in public or communicating it to the public, to make any cinematograph film or sound recording in appreciate of the work, and to make any translation or adaptation of the work.

In the case of computer program, the author enjoys in addition to the aforesaid rights, the right to sell or supply on hire, or offer for sale or hire any copy of the computer program regardless whether such copy has been sold or given on hire on previously occasions.

In the case of an artistic work, the rights available to an author include the right to reproduce the work in any material form, including depiction in three dimensions of a two-dimensional work or in two dimensions of a three-dimensional work, to communicate or issues copies of the work to the public, to include the work in any cinematograph work, and to make any adaptation of the work.

In the case of cinematograph film, the author enjoys the right to make a copy of the film consisting of a photograph of any image forming part thereof, to sell or supply on hire or offer for sale or hire, any copy of the film, and to communicate the movie to the public. These rights are similarly available to the author of sound recording. In addition to the aforesaid rights, the author of a painting, sculpture, drawing or of a manuscript of a literary, dramatic or musical work, if he was once the first owner of the copyright, shall be entitled to have a right to share in the resale price of such original copy provided that the resale price exceeds rupees ten thousand.

(B) Moral Rights:

Section 57 of the Act defines the two basics 'moral rights of an author. These are:

(i) Right of paternity:

(ii) Right of integrity.

The right of paternity refers to a right of an author to claim authorship of work and a right to prevent all others from claiming authorship of his work. Right of integrity empowers the author to prevent distortion, mutilation or other alterations of his work, or any different action in relation to said work, which would be prejudicial to his honour or reputation.

The proviso to section 57(1) provides that the writer shall not have any right to restrain or claim damages in respect of any adaptation of a laptop program to which section 52 (1) (aa) applies (i.e., reverse engineering of the same). It must be mentioned that failure to display a work or to display it to the satisfaction of the author shall not be deemed to be an infringement of the rights conferred by this section. The legal representatives of the author may workout the rights conferred upon an author of a work by section 57(1), other than the right to claim authorship of the work.

Indian Judiciary Response:

The response of Indian judiciary regarding copyright protection can be grouped under the following headings:

(1) Ownership of copyright,

(2) Jurisdictional aspect,

(3) Cognizance taken through the court,

(4) Infringement of copyright,

(5) Availability of alternative remedy, and

(6) Rectification of copyright.

In Eastern Book company v Navin J. Desai, the question involved was whether there is any copyright in the reporting of the judgment of a court. The Delhi High court observed: It is not denied that under section 2(k) of the Copyright Act, a work which is made or published under the direction or manage of any Court, tribunal or other judicial authority in India is a Government work. Under section 52(q), the reproduction or publication of any judgment or order of a court, tribunal or different judicial authority shall not constitute infringement of copyright of the government in these works. It is thus clear that it is open to each person to reproduce and publish the government work including the judgment/ order of a court. However, in case, a person by means of extensive reading, careful study and comparison and with the exercise of taste and judgment has made certain comments about judgment or has written a commentary thereon, may be such a remark and commentary is entitled to protection under the Copyright Act.

The court further observed: In phrases of section 52(1)(q) of the Act, reproduction of a judgment of the court is an exception to the infringement of the Copyright. The orders and judgments of the court are in the public area and anyone can publish them. Not only that being a Government work, no copyright exists in these orders and judgments. No one can claim copyright in these judgments and orders of the courtroom merely on the ground that he had first published them in his book. Changes consisting of elimination, changes of spelling, removal or addition of quotations and corrections of typographical mistakes are trivial and hence no copyright exists therein.

In Godrej Soaps (P) Ltd v Dora Cosmetics Co, the Delhi High Court held that where the carton was designed for valuable consideration by a person in the course of his employment for and on behalf of the plaintiff and the defendant had led no evidence in his favour, the plaintiff is the assignee and the legal owner of copyright in the carton including the logo.

(2) Jurisdictional aspect: The question of territorial jurisdiction of the court to deal with copyright infringement was considered by the courts on several occasions.

In Caterpillar Inc v Kailash Nichani, the plaintiff, a foreign company, was carrying on business in several places in India including Delhi, through its Indian distributors and collaborators. The plaintiff claimed the relief of ad-interim injunction for preventing infringement of its copyright by the defendant, though the defendant was dealing in different goods. The Delhi high Court held that it was not necessary to show that the business being carried on by the plaintiff in Delhi should necessarily be in respect of footwear and articles of clothing as well. It is sufficient if the business was being carried on by the plaintiff in Delhi and further that there was an infringement of plaintiff's copyright in appreciate of certain goods, which were being sold by the defendant in Delhi.

The court further held that section 62 of the Copyright Act makes an obvious and large departure from the norm that the choice of jurisdiction should primarily be governed by way of the convenience of the defendant. The legislature in its wisdom introduced this provision laying down absolutely opposite norm than the one set out in section 20 CPC. The purpose is to expose the transgressor with inconvenience rather than compelling the sufferer to chase after the former.

In Lachhman Das Behari Lal v Padam Trading Co, the Delhi High Court observed that the plaintiff being a company functioning at Delhi, the suit filed by it in the Delhi courts is maintainable and is not liable to be rejected underneath Order 7 Rule 11 of the CPC as prayed. The Court further observed that the plea regarding prefer of territorial jurisdiction is not covered by Order7 rule 11 of CPC. The court observed that even if it is held that this court has not the territorial jurisdiction, the plaint cannot be rejected. At the most it can be again for presentation to the proper court.

In Exphar SA and Anr v Eupharma Laboratories Ltd & Anr, the Supreme Court finally settled the position in this regard. The Court observed: Section 62(2) cannot be examine as limiting the jurisdiction of the District Court only to cases where the person instituting the swimsuit or other proceeding or where there are more than one such persons, any of them without a doubt and voluntarily resides or carries on business or presently works for gain. It prescribes an additional ground for attracting the jurisdiction of a court over and above the normal grounds as laid down in Section 20 of the C.P.C.

Even if the jurisdiction of the Court were restricted in the manner construed by the Division Bench, it is evident not only from the cause title but also from the body of the plaint that the Appellant No 2 carries on business within the jurisdiction of the Delhi High Court. The Appellant No 2 in reality a person instituting the suit. The Division Bench went beyond the express words of the statute and negative the jurisdiction of the Court due to the fact it found that the Appellant No 2 had not claimed ownership of the copyright, infringement of which was claimed in the suit. The appellant No 2 might also not be entitled to the relief claimed in the suit but that is no reason for holding that it was not a person who had instituted the go well with within the meaning of Section 62(2) of the Act.

(3) Cognizance taken by the court: To prevent copyright infringement, well timed cognizance taking by the appropriate court is surely essential. The taking of cognizance by the court depends upon the obstacle period as mentioned in the Limitation Act, 1963 and Cr.P.C, 1973.

In David Pon Pandian v State, the Madras High Court, while dealing with section 68A of the Copyright Act, observed: The Court can take cognizance of the offence if the charge sheet is filed within the period of limitation prescribed beneath Section 468 of the Cr.P.C and in computing the period of limitation, the date of commission of the offence is to be reckoned as the starting point. If the charge sheet is not filled so, the Court has no power to entertain the complaint

The court referred the decision of the Supreme Court in State of Punjab v Sarwan Singh in which it was observed: 'The object of Cr.P.C in putting a bar of limitation on the prosecution was clearly to stop the parties from filing cases after a long time, as a end result of which material evidence may disappear and also to forestall abuse of the process of Court by filing vexatious and belated prosecutions long after the date of the offence. The object, which the statute seeks to sub-serve, is certainly in consonance with the concept of fairness of trial as enshrined in Article 21 of the Constitution. It is, therefore, of utmost importance that any prosecution, whether through State or a private complainant, must abide by the letter of the law or to take the hazard of the prosecution failing on the ground of limitation

In Shree Devendra Somabhai Naik v Accurate Transheet Pvt Ltd, the Gujarat High Court explained the inter-relationship between Article 137 of the Limitation Act, 1963 and section 50 of the Copyright Act, 1957. The Court observed: The order passed by the by the Copyright Board is an order whereby it is held that the provisions of Article 137 of the Limitation Act are not applicable and the board has also held that the Copyright Board is a Tribunal and quasi-judicial authority for all other purposes except for the purposes which are specifically provided in the Copyright Act. It is an order by which an application under Section 50 of the Copyright act is entertained and the Copyright Board will decide the identical on merits. The Copyright Board does not believe the delay alleged by the current appellant. Entertaining an application is a matter of discretion. In the present case, the Copyright Board in its wisdom, overruling the contention that the utility was barred by limitation, decided to entertain the application. It is a discretionary order

INFRINGEMENT OF COPYRIGHT

• Acts Which Constitute Infringement

The acts which constitute infringement would depend upon the nature of the work.

Section 51 of the Act defines infringement of a copyright not specifically with respect to each kind of creative work, but in general terms. According to section 51 of the Act, copyright in a work shall be deemed to be infringed.

(a) When any person without a license from the owner or the Registrar of Copyrights does anything, the exclusive right to do which is by this Act conferred upon the owner of copyright, or permits for profit, any place to be used for the communication of the work to the public, unless he was not aware and had no reasonable ground for believing that such communication would be an infringement of copyright; or

(b) When any person:

(i) makes for sale or hires or sells or lets for hire or by way of trade displays or offers for sale or hire any fringing copies of the work covered by copyright; or

(ii) distributes, either for the purpose of trade, or to such an extent as to affect prejudicially the owner of the copyright, any infringing copies of the work; or

(iii) exhibits in public by way of trade any infringing copies of the work;

(iv) imports into India any infringing copies of work except the copy of any work for the private and domestic use of the importer.

For the purpose of this section, the reproduction of a literary, dramatic, musical or artistic work in the form of a cinematograph firm shall be deemed to be an infringing copy.

• Civil Remedies for Infringement of Copyright

According to sub-section (1) of section 55, where copyright in any work has been infringed, the owner of the copyright shall be entitled to all such remedies by way of injunction, damages, accounts and otherwise as are or may be conferred by law for the infringement of a right. Where the defendant proves that at the date of the infringement, he was not aware and had no reasonable ground for believing that copyright subsisted in the work, the plaintiff shall not be entitled to any remedy other than an injunction in respect of the infringement and a decree for the whole or part of the profits made by the defendant by the sale of the infringing copies as the court may in the circumstances deem reasonable.

Injunction: Injunction is a normal remedy, though discretionary on the part of the court. Injunction stops during the pendency of the proceedings and ensures that no further loss or damage is caused to the owner of the copyright during the period when the injunction is in force.

Damages: Damages account for the loss in monetary terms suffered by the owner of the copyright due to infringement.

Accounts: Accounts relates to the accounts of net profits earned by the defendant or infringer. If there are no profits, accounts is not ordered as a remedy.

Damages and Accounts are alternative remedies, the owner has to choose only one of them and not both.

According to sub-section (2) of section 55, where, in the case of a literary dramatic, musical or artistic work, a name purporting to be that of the author or the publisher, as the case may be, appears on copies of the work as published, or, in the case of an artistic work, appeared on the work when it was made, the person whose name so appears or appeared shall, in any proceeding in respect of infringement of copyright in such work, be presumed, unless the contrary is proved, to be the author or the publisher of the work, as the case may be.

According to sub-section (3) of section 55, the costs of all parties in any proceedings in respect of the infringement of copyright shall be in the discretion of the court.

IPR RELATED TO TRADEMARKS

What is a Trade mark?

A trade mark is a visual symbol in the form of a word, a device or a label applied to articles of commerce with a view to indicate to the purchasing public that they are the goods manufactured or otherwise dealt in by a particular person as distinguished from similar goods manufactured or dealt in by other persons. A person who sells his goods under a particular trade mark acquires a sort of limited exclusive right to the use of the mark in relation to those goods. Such a right acquired by use is recognised as a form of property in the trade mark.

Statutory Definition of Trade Mark Section 2(1)(zb) of the 1999 Act,

1. Trade mark must be a mark which includes a device, brand, heading label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination of colours or any combination thereto section 2(1)(m).

2. The mark must be capable of being represented graphically.

3. It must be capable of distinguishing the goods or services of one person from those of others.

4. It may include shape of goods, their packaging and combination of colours.

5. It must be used or proposed to be used in relation to goods or services.

6. The use must be for the purpose of indicating a connection in the course of trade between the goods or services and some persons having the right as proprietor to use the mark.

7. The right to proprietorship of a trade mark may be acquired by registration under the Act or by use in relation to particular goods or services.

8. The right of proprietorship acquired by registration is a statutory right which requires no actual user but only an intention to use the mark.

A registered trade mark can be protected against unauthorised use by others by an action for infringement. This is a statutory remedy. A trade mark may be used to indicate not only that the goods are of a particular make but are goods of that maker of a particular kind or quality. Thus a trade may indicate his best quality by one trade mark, his second quality by another trademark and so on.

Trade mark performs four functions:

      It identifies the product and its origin.

      It in guarantees its unchanged quality.

      It advertises the product.

      It creates an image for the product.

The function of a service mark in relation to services is similar to that of trade mark in relation to goods.

• What is a Good Trade Mark?

• It should be easy to pronounce and remember, if the mark is a word.
• It must be easy to spell correctly and write legibly.
• It should be suggestive of the quality of goods.
• It should be short.
• In case of device mark - it should be described by a single word.
• It should appeal to the eye as well as the ear.
• It should satisfy the requirements of registration.

TRADEMARK REGISTRATION PROCEDURE

• Conduct a trademark search. To identify a definitely original trademark you may refer to the national trademark database online.

• File the application for trademark registration alongside with the prescribed fees.

• Once the mark is registered, the Trade Marks Registry sends the “Official Examination Report” asking for clarifications, if any, in accordance with the Trade Marks Act.

• After the application is accepted, it is published in the ‘Trade Marks Journal’, a government publication to call upon opposition from the general public, if any.

• If the application is not opposed inside four months, then the registration is granted. In case of opposition, registration is granted only after the case is resolved.

• After all due consideration is met, an official letter intimating the acceptance of the application alongside with the trademark certificate is issued by the Trade Marks Registry.

The whole process takes about 15 to 18 months. The trademark is valid for ten years starting from the date of issuance of the certificate. It can be renewed for another 10 years on the payment of the prescribed fees.

PROCESS FOR REGISTRATION OF A TRADEMARK IN INDIA

The process for registration of the trademark can be carried out by the business owner or his/her representative. Though entrepreneurs prefer to use an agent or a lawyer for submitting an application for registration, there is no reason why it cannot be done with the aid of the entrepreneur or his/her employees. The entire registration process can be described in the following steps:

1. Trademark Search:

The following tips are useful while selecting a trademark:

1. It should be easy to speak, spell, and remember.
2. Invented words or coined words are advisable.
3. Avoid selection of a geographical name.
4. Avoid adopting laudatory word or words that describe the quality of goods (such as best, perfect, super, etc.)
5. It is advisable to conduct a survey to ascertain if same/similar mark is used in market.

2.     Application for Registration:

The request for the registration should be in the prescribed form. Three completed copies of the shape are submitted along with ten additional representations of the trademark. The representation of the trademark must incorporate a clear reproduction of the sign.

Even though a bare representation may additionally be sufficient, it is advisable to include any colours, forms, or three-dimensional features. In addition to details of the applicant, the software must also indicate the class of goods/services to which it would apply. The following statistics should be mentioned in the form:

(a) The class of goods for which the mark is sought must be specified. Classes can be textiles, food and confectionery, machine tools, etc. Separate applica¬tions are required for applying in different classes.

(b) Definition of items that is sought to be registered should be given.

(c) Details of the applicant including name, age, occupation, address, and nationality should be given.

(d) Whether the trademark is in use or is proposed to be used. If it is in use, then applicant must specify through whom it is being used and for what period.

3. Receipt and Examination:

Receipt of the application is acknowledged by returning a copy of the utility along with a representation of the mark. An official number is given to the application. The date of receipt of utility can become very important in possible infringement proceedings later.

The workplace considers all documents and evidences and searches among existing trademarks. After such searching, the registrar can respond in the following ways:

1. Absolute acceptance

2. Acceptance challenge to modifications in the mark

3. Refusal

In case modifications have been asked for, the applicant must comply with them inside the stipulated period of three months.

4. Acceptance, Advertisement, and Opposition:

After the application has been accepted, it will be published in the Trademark journal. The advertisement will encompass all details of the acceptance including representation of the mark, date of filing, particulars of applicant, and conditions or limitations, if any. Opposition has to be done within three months of the date of the advertisement. Opposition must be in the prescribed form, in triplicate, and with the prescribed fee.

• In addition to trademarks, the following categories of marks can also be registered below the TM Act:

i. Certification marks, which are given for compliance with defined standards. These are not confined to any restricted membership. Such marks are granted to any entity that can certify that its products meet certain established standards. The internationally accepted ‘ISO 9000’ quality general and the Indian ISI mark are examples of widely recognized certification marks.

ii. Collective marks can be owned by any association. The members of such an affiliation will be allowed to use the collective mark to identify themselves as members of the association. Examples of such associations would be those representing accountants, engineers, or architects or industry associations such as CII.

Usually, the entire process of registration takes more than a year after application. Although after receipt of the official number of an application, the applicant can request an expedited (Tatkat) examination of the registration application, together with a declaration stating the reason for the request and a payment of the fee five times the application fee.

If the Registrar of Trade Marks is comfy with the reason, the examination of the application is expedited and the examination report is issued within three months of the date of the request. If such a request is rejected after the hearing, the fee paid is refunded.

The registration is legitimate for ten years and is renewable for subsequent consecutive periods of ten years. Non-renewal leads to a lapse of registration. However, a lapsed registration can be easily restored.

Reciprocity for the purpose of claiming priority is now allowed from the purposes originating from the Paris Convention countries if filed within six months of the date of priority.

The courts in India have recognized the international recognition of foreign trademarks and trade names and the significance of their protection. Marks such as these of Amway, Whirlpool, and Ferrari have received protection through judicial decisions in India.

• Cancellation:

An application for cancellation or rectification of registration of a trademark can only be filed by aggrieved parties, for example, those claiming to be prior users of the mark. An application for cancellation must be filed with the Registrar of Trade Marks or the Appellate Board.

The following are some of the usual grounds on the basis of which the registration of a trademark can be removed or cancelled:

1. The applicant did not intend to use the trademark in the normal course or trade and there has been no bona fide use of the trademark for the time being up to the date three months before the date of the utility for removal.

2. There has been no bona fide use of the trademark for a continuous period of five years from the date on which the trademark was without a doubt entered on the register or longer, during which the trademark was registered.

3. The trademark was wrongly registered. Before this trademark came into being, there used to be an established trademark that was identical or deceptively similar.

Rights Conferred by Registration:

The registration of a trademark offers the registered proprietor the exclusive right to use the trademark in relation to the goods or services for which it is registered and to gain relief with respect to infringement of the same. Registration acts as a public notice to others, informing them that they should now not use the trademarks that are registered or pending for registration.

Trademarks can also be assigned, licensed, or transferred with or without transmitting the goodwill of the company. There is a process for registration of all agreements that contain transmitting a trademark without the goodwill of the company.

INFRINGEMENT OF TRADEMARKS:

Registration of a trademark is a prerequisite for initiating an infringement action. The registered proprietor, his/her heirs and users can sue for infringement. An assignee of a registered trademark can also sue for infringement.

The following essential prerequisites must exist for initiation of an infringement action:

1. The allegedly infringing mark must be either identical or deceptively comparable to the registered trademark.

2. The goods/services in relation to which the allegedly infringing mark is used must be specifically covered by the registration of the registered trademark.

3. The use of the allegedly infringing mark have to be in the course of trade.

4. The use must be in such a manner as to render the use likely to be taken as being used as a trademark.

• A registered trademark (RTM) is also infringed via use of a mark when because of:

1. Its identity with RTM and similarity with goods/services covered by registration;
2. Its similarity with RTM and identification with goods/services covered by registration; or
3. Its identity with RTM and identity with goods/services blanketed by registration

It is likely to cause confusion on the part of the public (in case 3 above, confusion is presumed), or which is likely to have an association with the RTM.

If an identical or similar mark is used with appreciate to goods or services that are not similar to these for which an RTM is registered, such use amounts to infringement if an RTM has reputation in India and the use of the mark without due cause takes unfair advantage of, or is detrimental to, the distinctive character or repute of the RTM.

• Under the TM Act, the following acts would additionally amount to an infringement of the RTM:

1. Use of the RTM as a trade name or part of the alternate name dealing in same goods or services for which the RTM is registered.
2. Use of the trademark in advertising if such advertising takes unfair advantage of and is contrary to the honest practice in industrial or commercial matters, or is detrimental to its distinctive character; or is against the recognition of the trademark.

Under the TM Act, even verbal use of the mark can constitute infringement.

• Passing Off:

The user of an unregistered trademark is barred from instituting an infringement action. However, if the mark in question has become well known in India, the user of such a trademark is not without recourse and may also seek a remedy by means of a passing-off action. The purpose of this tort is to protect commercial goodwill and to ensure that the user’s business reputation is not exploited.

Since business goodwill is an asset and, therefore, a species of property, the law protects it against encroachment as such. In a passing-off action, the plaintiff need to establish that the mark, name, or get-up-the use of which by the defendant is subject of the action is unique of his/her goods in the eyes of the public or class of public and that his/her goods are identified in the market by using a particular mark or symbol. A passing-off suit can be converted into a combined action of infringement and passing off, if the registration of the trademark is obtained before the final hearing of the passing-off suit.

• Orders in Infringement and Passing-Off Suits:

In an action for infringement of a registered trademark, or in an action for passing off for either a registered or an unregistered mark, the court may order an injunction. The court docket may also pass an order to award damages on account of profits lost along with the delivery of the infringing marks, for destruction or erasure. In addition to the civil remedies, the TM Act contains stringent criminal provisions bearing on to offences and penalties.

Indian courts have been proactive in granting orders against the use of infringing domain names. In the www.yahoo.com vs. yahooindia.com case, it has been held that ‘the domain name serves the same function as a trademark, and is not a mere address or like finding number on the Internet, and, therefore, it is entitled to equal protection as a trademark.’

Often, new ventures neglect to approach the issue of emblems in an organized way. It is important for entrepreneurial firms to establish a trademark in the early days of the organisation and to protect it once it gets established.

The following path is recommended for firms in creating and dealing with their intellectual property in the form of trademarks:

Select Trademark:

The trademark chosen should be distinctive. There should not be any scope for confusion with existing trademarks. Not solely is it bad for business, it is unlikely to be registered by the Registry of Trademarks. Also, the trademark should be attractive to the consumers.

Search and Register:

A few selected trademarks should be submitted at the Registry of Trademarks for a paid search. Even the unlikeliest of trademarks could have been visualized and registered by someone in the past. This search will virtually eliminate the possibility of a similar trademark having been registered earlier.

Establish Trademark:

The trademark can be established in the market by brand building exposure. A trademark is established by building recognition. Adequate investments have to be made in an appropriate marketing and marketing strategy.

Protecting Trademark:

The trademark is protected by regularly scanning the market for imitations and attempts of passing off. The market has to be monitored by the sales team. The Journal of Trademarks has to be scanned to ensure that similar or equal trademarks do not get registered.

IPR RELATING TO PATENTS

A patent is an intellectual property (IP) right for a technical invention. It permits you to prevent others from using your invention for commercial purposes for up to 20 years. You decide who is allowed to produce, sell or import your invention in those countries in which you own a valid patent. You can also trade your patent, e.g. sell it or licence the use of your invention.

You can patent products (e.g. heated ski boots) and processes (e.g. a method for freeze-drying coffee). However, the invention must solve a problem in a new, non-obvious and technical way. In the instance of the ski boots, the problem of cold feet while skiing is solved by fitting self-regulating heating elements to the boots.

Once a patent expires, an invention becomes common property and can then be freely used by anyone.

Patents

Law – Patents Act, 1970, amended in 2006

Ministry – DIPP, Ministry of Commerce and industry

The object of patent law is to encourage scientific research, new technology and industrial progress. The price of the grant of the monopoly is the disclosure of the invention at the Patent Office, which, after the expiry of the fixed period (20 years) of the monopoly, passes into the public domain. The fundamental principle of Patent law is that a patent is granted only for an invention which must have novelty and utility. It is essential for the validity of a patent that it need to be the inventor’s own discovery as opposed to mere verification of what was, already known before the date of the patent. A patentable invention, apart from being a new manufacture, must also be useful.

Ever greening of patent is not allowed: In order to be patentable, an improvement on something known before or a combination of different things already known, should be something more than a mere workshop improvement, and must independently satisfy the test of invention or an inventive step. It must produce a new result, or a new article or a better or cheaper article than before. The new subject matter must involve “invention” over what is old.

It approves Compulsory Licensing: This strikes balance between two objectives – Rewarding patentees for innovation and to make sure that patented products, particularly Pharmaceutical ones, are accessible to public in developing and underdeveloped countries at affordable prices.

In March 2012, India granted its first compulsory license ever. The license used to be granted to Indian generic drug manufacturer Natco Pharma Ltd for Sorafenib tosylate, a cancer drug patented by Bayer. Non-governmental agencies reportedly welcomed the decision.

TRIPS also allows for compulsory licensing under sure circumstances. The principal requirement for the issue of a compulsory license is that attempts to attain a license under reasonable commercial terms ought to have failed over a reasonable period of time. Specific situations in which compulsory licenses may also be issued are set out in the legislation of each patent system and vary between systems. Some examples are – Unaffordable expenses of particular drug for masses or inability of patentee to fulfill demand in markets. Further, TRIPs also gives that the requirements for a compulsory license may be waived in certain situations, in unique cases of national emergency or extreme urgency or in cases of public non-commercial use.

It approves both Product and Process patent: Prior to 2006 amendment, only process was allowed to be patented. It capability that if same product is manufactured using some process different than that was patented, there shall be no infringement.

System of pre-grant and post-grant oppositions: Introduced in 2005, ensures that only deserving patents are granted. It is now possible to raise objection both earlier than and after the patent has been granted.

Data exclusivity: Indian Patent Act doesn’t specifically provide for data exclusivity. Companies spend significant time, power and money on research and clinical trials. During all this they gather massive amount of useful data. While obtaining permission for launch of product in markets or while making use of for patents, these companies have to provide data to authorities. By provision of data exclusivity, groups want authorities to not to share such data with any third party for certain period.

Article 39(3) of the TRIPS states that that “Members when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which make use of new chemical entities, the submission of undisclosed test or data, the origination of which involves a considerable effort, shall protect such facts against unfair commercial use. In addition, Members shall protect such data towards disclosure, except where necessary to protect the public, or until steps are taken to ensure that data are protected against unfair commercial use.

But it should be remembered that Article 39(3) does not talk about “Data Exclusivity” but solely about “unfair commercial use” and it is this phrase that is interpreted by Multi-national companies as containing “Data Exclusivity” provision and thus demanding data exclusivity law.

Data exclusivity however, is opposed on following grounds –

1. If generic drugs manufacturers are denied access to such data then they will have to do separate clinical trials which will increase costs.

2. Further, there are moral issues with clinical trials as it involves experimentation on animals or humans.

3. TRIPS agreement not at all mentions ‘data exclusivity’. It is just creative interpretation of MNCs.

4. It can become an alternative to patentability and can be used for ever greening. Data exclusivity idea is different from patent. If a company manages to protect data, then it may continue to maintain its monopoly by incremental improvement in products and era of new data.

There is no need of a “further protection” to pharmaceuticals in the form of “Data Exclusivity” as the protection underneath the Patents Act, 1970 is not only sufficient but additionally in conformity with the TRIPS Agreement. The protection in the form of “Data Exclusivity” is a “TRIPS plus” provision to which Indian does not owe any obligation.

The Health Ministry has said that India already has vital legal provisions to protect data and hence there is no need for any further protection, while Satwant Reddy committee was of the view that there is no legal provision to guard test data. It is alleged by the Health and Human right activist that government is below pressure from Multi-National Companies and western countries to enact law on data exclusivity.

India has adopted a balanced approach towards patent law.   It is committed to protect innovation while promoting the larger goal of welfare of its citizens. Courts and tribunals have upheld key provisions of India’s patent law through their authoritative pronouncements. The system of pre-grant and post-grant oppositions introduced in 2005 ensures that only deserving patents are granted.

It is expected that there would be a constant evolution of patent jurisprudence in India. Patent filings too have gone up by 10.56% from 2008-2009 to 2013-2014. Over 75% of patent filings are by foreign entities and so there is a need for concerted action to be taken to increase filings by Indians.

VALIDITY AND ENFORCING A PATENT

The term of every patent in India is twenty years from the date of filing the patent application, irrespective of whether it is filed with provisional or complete specification. However, in case of applications filed under the Patent Cooperative Treaty (PCT), the term of twenty years begins from the priority date.

It is important to note that a patentee has to renew the patent every year by paying the renewal fee, which can be paid every year or in lump sum.

A request for restoration of patent can be filed within eighteen months from the date of cessation of patent along with the prescribed fee. After the receipt of the request, the matter is notified in the official journal for further processing of the request.

If the invention uses a biological material which is new, it is essential to deposit the same in the International Depository Authority ("IDA") prior to the filing of the application in India in order to supplement the description. If such biological materials are already known, in such a case it is not essential to deposit the same. The IDA in India located at Chandigarh is known as Institute of Microbial Technology (IMTECH).

If the grant of the patent is for a product, then the patentee has a right to prevent others from making, using, offering for sale, selling or importing the patented product in India. If the patent is for a process, then the patentee has the right to prevent others from using the process, using the product directly obtained by the process, offering for sale, selling or importing the product in India directly obtained by the process.

• Enforcement measures available under the Indian law

A patentee should consider the backlog generally in Indian courts. The patentee may file an action for patent infringement in either a District Court or a High Court. Whenever a defendant counter-claims for revocation of the patent, the suit along with the counterclaims is transferred to a High Court for decision. Because defendants invariably counterclaim for revocation, patent infringement suits are typically heard by a High Court only. According to patent law in India, the High Court may allow the patentee to amend the application in order to preserve the validity of the patent. In such an event, the applicant must give notice to the Controller, who may be entitled to appear and be heard and shall appear if so directed by the High Court.

If a patentee is successful in proving its case of patent infringement, and if the defendant does not comply with the judgment, a petition for contempt of court can be filed. Contempt of court is a criminal offense, while patent infringement is a civil offense. In the event of a contempt of court, Indian law provides for imprisoning the authorized person(s) of the defendant. It is also possible to obtain a preliminary injunction, although the above-noted judicial backlog should be considered. The basis upon which a preliminary injunction is granted is whether the plaintiff shows a prima facie case and also whether the balance of "convenience" is in the plaintiff's favor.

However, an important consideration before enforcing a patent in India is to ensure that the patentee has worked the invention directly or through its licensees in India. If a patentee has not worked the invention in India, then the defendant could seek a compulsory license under Section 84(1)(c), if the patent has been in force for more than three years. In addition, if a compulsory license is already in place and the patentee has still not worked the invention but yet asserts it, the defendant can seek a revocation of the patent under Section 85(1) of the Patent Act.

INVENTION AND DISCOVERY

Discovery and Invention: Discovery relates to the new information and knowledge which already exists in nature. Whereas invention relates to the creation of new product or process which never existed before.

Some of the inventions, inspite of being new, non-obvious and useful cannot be patented under the Act.

1. Inventions which are not Patentable Under the Act: Section 3 and 4 of the Indian Patent Act, 1970 lists the following as not being inventions within the meaning of the Act, therefore not patentable:

1. An invention which is frivolous or which claims anything obviously contrary to the well-established natural law.
2. An invention, the primary or intended use or commercial exploitation of which could be contrary to public order or morality or which causes serious prejudice to human, animal or plant life or health or to environment.
3. The mere discovery of a scientific principle or the formulation of an abstract theory of discovery of any living thing or non-living substance occurring in nature.
4. The mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process result in a new product or employs at least one new reactant.
5. A substance obtained by a mere admixture resulting only in the aggregation of the properties of the components thereof or a process for producing such substance.
6. Mere arrangement or rearrangement or duplication of known devices each functioning independently of another in a known way.
7. A method of agriculture or horticulture.
8. Any process for the medical, surgical, curative, prophylactic, diagnostic, therapeutic or other treatment of human beings or any process for a similar treatment of animal to render them free of disease or increase their economic value or that of their products.
9. Plant and animals in whole or any part thereof other than micro-organism but including seeds, varieties and species and essentially biological process for production or propagation of plants and animals.
10. A mathematical or business method or a computer programme per se or alogarithms.
11. Literary, dramatic, musical or artistic work or any other aesthetic creation including cinematographic works and television productions.
12. A mere scheme or rule or method of performing mental act or method of playing game.
13. A presentation of information.
14. Topography of integrated circuits.
15. An invention which, in effect, is a traditional knowledge or which is an aggregation or duplication of known properties of traditionally known component.

2. Invention must be fully disclosed: It is the duty of the inventor to fully disclose the invention in the complete specification so as to facilitate anyone from the public working the invention, once the period of protection expires. The full disclosure of the patented invention is mandatory. Otherwise the patent will not be granted.

3. Use by a person other than a patentee constitutes infringement of the patent the use by a person other than the patentees or assignee or licensee would be infringement of the patent.

4. Relief in case of infringement: The plaintiff on satisfying the court about infringement of his patent would be entitled to the following reliefs:

(i) Interlocutory Injunction

(ii) Damages

(iii) Account to Profits

INFRINGEMENT OF PATENT RIGHTS

• Jurisdiction

Infringement of a patent shall be instituted in any court inferior to a district court having jurisdiction to try the suit. However, counter-claim for revocation of the patent is made by the defendant and the suit along with the counter-claim shall be transferred to the High Court for decision. Power of court to make declaration as to non-infringement 1. According to section 105 of Patents Act, any person may institute a

suit for a declaration that the use by him or any process or the making use or sale of any article by him does not, or would not, constitute an infringement of a claim of a patent against the patentee or the holder of an exclusive licence under the patent, notwithstanding that no assertion to the contrary has been made by the patentee or the licensee, if it is shown -

a)     that the plaintiff has applied in writing to the patentee or exclusive licensee for a written acknowledgement to the effect of the declaration claimed and has furnished him with full particulars in writing of the process or article in question; and

b)    that the patentee or licensee has refused or neglected to give such an acknowledgement.

2. The costs of all parties in a suit for a declaration brought by virtue of this section shall, unless for special reasons the court thinks fit to order otherwise, be paid by the plaintiff.

3. The validity of a claim of the specification of a patent shall not be called in question in a suit for a declaration brought by virtue of this i section, and accordingly the making or refusal of such a declaration in the case of a patent shall not be deemed to imply that the patent is valid or invalid.

4. A suit for a declaration may be brought by virtue of this section at any time after the date of advertisement of acceptance of the complete specification of a patent, and references in this section to the patentee shall be construed accordingly.

• Remedies

Defences in suits for infringement

In any suit for infringement of a patent every ground on which it may be revoked under section 64 shall be available as a ground for defence. In any suit for infringement of a patent by the making, using for importation of any machine, apparatus or other article or by the using of any process or buy the importation and, use or distribution of any medicine or drug, shall be a ground for defence.

Rights of Patentees

Section 48 confers exclusive rights upon the patentee to rule out third parties from making, importing, using, offering for sale or selling the patented process. The right a patentee acquires is a monopoly to him personally to manufacture the patented chattel. Without the Patent Act

As per provisions of Section 48: the following actions would amount to infringement –

In case of a product patent, the following actions would amount to infringement:

• Making,

• Using

• Offering for sale,

• Selling, or

• Importing for these purposes, the product in India without the permission of patentee.

In case of a process patent, the following actions would amount to infringement:

• Using,

• Offering for sale,

• Selling, or

• Importing for these purposes, the technique in India without the permission of patentee.

Any person who without the consent of patentee performs the above activities infringes the patent.

In patent infringement suits, the damages are now not granted for the use of the patented invention during the period prior to the date of acceptance of the patent application.

In a patent infringement action, the defendant can file a counterclaim for a revocation of the patent. Consequently, the main suit and the counterclaim are heard together.

Case Law: Symed Labs vs. Glenmark Pharmaceuticals

In this case Symed Labs Ltd. had sued Glenmark Pharmaceuticals Laboratories before the Delhi High Court for allegedly infringing two of its patents: IN213062 & 213063. First patent was granted for “Novel intermediates for Linezolid and related compounds” while the ‘063 patent was granted for “A novel process for the preparation of Linezolid and related compounds.

While declaring the judgment on 9th Jan 2015, the judge was convinced that the Plaintiff has got top prima facie case in favour of Symed. He further decided that protection to the patent processes ought to be granted to the Plaintiff as damages will not be an efficacious remedy.

Thus, there will be irreparable loss and injury because of the long uninterrupted use of patents, the balance of comfort also lies in favour of the Plaintiff. Thus the judge granted an ad interim injunction restraining Glenmark from manufacturing, selling, presenting for sale, advertising or directly or indirectly dealing in the production of Linezolid manufactured in a manner so as to result in infringement of the Plaintiff’s registered Patents.

References

1. https://indiankanoon.org/doc/600757/
2. https://www.mondaq.com/india/trademark/901982/intellectual-property-rights