39. India and Intellectual Property Rights – Business Environment

39

INDIA AND INTELLECTUAL PROPERTY RIGHTS

In this chapter, we study the Indian Government's initiatives in establishing an IPR regime, the legislative framework and the Indian patent system. Trademarks, their evolution and role, trademarks legislations, registration of trademarks, and grounds for refusal of registration are also discussed. We conclude with a brief discussion on the copyright acts and other intellectual property rights.

In today's worldwide expansion of multilateral trade and commerce, it has become unavoidable for any country to protect its intellectual property by offering legal rights to the creators and inventors in its territory and help them fetch adequate commercial value for their efforts in the global market. One's innovative and creative ability is protected under the intellectual property system of World Trade Organization (WTO). Taking timely note of this fact, India, as a founder member of WTO, has ratified the Agreement on Trade Related Intellectual Property Rights (TRIPS). As per the agreement, all member countries including India are to institutionalize the mutually negotiated norms and standards within the predetermined time frame. Accordingly, India has set up an Intellectual Property Rights (IPR) regime, which is WTO compatible and is well established at all levels whether statutory, administrative or judicial.1 In the following pages, an attempt is made to outline the history, evolution and the setting up of an IPR regime in India and also the concerns of the Indian industry in this context to be addressed.

INTELLECTUAL PROPERTY

The term intellectual property (IP) signifies creations of the mind such as inventions, literary and artistic works, and symbols, names, images, and designs used in commerce. IP can be split into two types: (i) Industrial property that takes into account inventions (patents), trademarks, industrial designs and geographic indications of source; and (ii) Copyright that covers literary and artistic works such as novels, poems and plays, films, musical works, artistic works like drawings, paintings, photographs and sculptures, and architectural designs. Rights pertaining to copyright include those of performing artists in their performances, producers of phonograms in their recordings, and those of broadcasters in their radio and television programmes.

IPR is thus a common term encompassing patents, copyright, trademark, industrial designs, geographical indications, protection of layout design of integrated circuits and protection of undisclosed information (trade secrets). IP is a number of distinct types of legal monopolies over creations of the mind, both artistic and commercial, and the corresponding fields of law.2 Under the IP law, proprietors are granted certain exclusive rights to variegated intangible assets, like musical, literary, and artistic works; ideas, discoveries and inventions; and words, phrases, symbols and designs. The most ordinary kinds of intellectual property in some jurisdictions cover copyrights, trademarks, patents, industrial design rights and trade secrets.

The Indian Government's Initiatives

The Government of India has taken a comprehensive set of initiatives to streamline the intellectual property administration in the country in view of its strategic significance. The office of the “Controller General of Patents, Designs and Trademarks (CGPDTM)” has been set up under the Department of Industrial Policy and Promotion, in the Ministry of Commerce and Industry. The Central Government administers all matters relating to patents, designs, trademarks and geographical indications and also directs and supervises the functioning of:

  • The Patent Office (including Designs Wing)
  • The Patent Information System (PIS)
  • The Trademarks Registry (TMR)
  • The Geographical Indications Registry (GIR)

Besides, a ‘Copyright Office' has been set up in the Department of Education of the Ministry of Human Resource Development to provide all facilities including registration of copyrights and its related rights. With respect to issues concerning layout design of integrated circuits, “Department of Information Technology” in the Ministry of Information Technology is the nodal organization. “Protection of Plant Varieties and Farmers' Rights Authority” and all measures and policies relating to plant varieties are with the Ministry of Agriculture.

The Legislative Framework

Several legislative initiatives have been taken by the Indian Government for complementing the administrative set up for IPR. These are inter alia, the Trademarks Act, 1999; the Geographical Indications of Goods (Registration and Protection) Act 1999; the Designs Act, 2000; the Patents Act, 1970 and its subsequent amendments in 2002 and 2005; Indian Copyright Act, 1957 and its amendment Copyright (Amendment) Act, 1999; Semiconductor Integrated Circuit Layout Design Act, 2000; as well as the Protection of Plant varieties and Farmer's Rights Act, 2001. The following are some of the IPR-related, activity-specific legislations passed in India:

Design: A new Design Act 2000 has been enacted superseding the earlier Designs Act 1911.

Trademark: A new Trademarks Act, 1999 has been enacted superseding the earlier Trade and Merchandise Marks Act, 1958. The Act came in force from 15 September, 2003.3

Copyright: The Copyright Act, 1957 as amended in 1983, 1984 and 1992, 1994, 1999 and the Copyright Rules, 1958.

Layout Design of Integrated Circuits: The Semiconductor Integrated Circuit Layout Design Act 2000. (Enforcement pending).

Protection of Undisclosed Information: No exclusive legislation exists but the matter would be generally covered under the Contract Act, 1872.4

Geographical Indications: The Geographical Indication of Goods (Registration and Protection) Act 1999.5

Apart from these legislative initiatives, the Indian Government has introduced several measures to strengthen and streamline the IPR system in the country. With a view to modernize the patent information services and trademarks registry, schemes have been implemented with the help from global organizations. Moreover, the Patents (Second Amendment) Bill, 1999 has laid down a process of appeal before an Appellate Board to enable would-be patentees appeal against any decision of the Controller of Patents including a grant of compulsory license before approaching the judiciary. The Indian patent laws are neutral and are equally applicable to both domestic and foreign inventions. Negative clauses such as disqualification, compulsory licensing and prevention of patentability are all laid down only to safeguard public interest, national security, traditional knowledge and the biodiversity. Of course, all these protections are permissible under Articles 27, 30 and 31 of TRIPS.

The Indian Patent System

A patent is a legal protection granted for an invention that is new, non-obvious and useful to society. The primary object of the patent system is to benefit the society. Patents, by giving an opportunity to the patent holder to recoup the cost of invention and to earn profit out of it, encourage research and development and thereby contribute to the well-being of the society.

The first legislation in India relating to patents was the Act VI of 1856 whose objective was to encourage inventions of new and useful manufactures and inventors to disclose secret of their inventions. The Act was subsequently repealed by Act IX of 1857 as this piece of legislation did not have the approval of the British government. Fresh legislation for granting “exclusive privileges” was introduced in the Act XV of 1859 that contained certain modifications such as the grant of exclusive privileges to useful inventions only and extension of priority period from 6 months to 12 months which were not there in the earlier legislation. Importers are excluded from the definition of inventor under this Act.

The Act of 1859 was consolidated in 1872 as “The Patterns and Designs Protection Act” with a view of providing protection relating to designs. The Act was further amended in 1883 to introduce a provision to protect novelty of the invention. This Act remained in force for about 30 years without any change, but in the year 1883, certain modifications in the patent law were made in accordance with those made in the patent law in the United Kingdom. In the year 1888, a new legislation was introduced to bring together and amend the law relating to invention and designs to follow what has been done in the parent law in the United Kingdom.

An entirely new piece of legislation known as The Indian Patents and Designs Act, 1911 substituted all the previous acts and brought patent administration under the management of Controller of Patents for the first time. This Act was further amended in 1920 for the purpose of entering into reciprocal arrangements with England and other countries for securing priority. In 1930, some more amendments were made to incorporate, inter alia, provisions relating to grant of secret patents, patent of addition, use of invention by the Government, powers of the Controller to rectify register of patent and increase of term of the patent from 14 years to 16 years. In 1945, another modification was made in the Act to provide for filing of provisional specification and submission of complete specification within 9 months.

The Justice Bakshi Tek Chand Committee

After Independence, it was felt that the Indian Patents & Designs Act, 1911 was inadequate to fulfil the objective for which it was enacted in the context of a fast-developing economy. It was found desirable to legislate a more comprehensive patent law taking cognizance of the considerable changes that have taken place in the political and economic conditions in the country. Accordingly, the Government of India constituted a Committee under the Chairmanship of Justice Bakshi Tek Chand in 1949 to examine the patent law in India in depth and to report on any improvement that the Committee wanted to recommend for enabling the Indian Patent System to be more conducive to national interest by encouraging invention and the commercial development and use of inventions. The Committee submitted its interim report on 4 August, 1949 with recommendations for prevention of misuse or abuse of patent right in India and suggested amendments to Sections 22, 23 and 23A of the Patents & Designs Act, 1911. The Committee observed further that the Patents Act should contain clear indication to ensure that food, medicine, surgical and curative devices are made available to the public at the cheapest price even while giving adequate compensation to the patentee.

Based on the above recommendations of the Justice Bakshi Tek Chand Committee, the 1911 Act was amended in 1950 pertaining to the working of inventions and compulsory licence/revocation. Other provisions include matters relating to endorsement of the patent with the legend “licence of right” on an application by the Government so that the Controller could give licences relating to the application. In 1952 an amendment was made to provide compulsory licence in relation to patents in respect of food and medicines, insecticide, germicide or fungicide and a process for producing substance or any invention relating to surgical or curative devices. The compulsory licence was also available on notification by the Central Government. Based on the recommendations of the Committee, a bill was introduced in the Parliament in 1953.6 However, the Government did not press for the consideration of the bill and it was allowed to lapse.

The Justice N. Rajagopala Ayyangar Committee

In 1957, the Government of India appointed Justice N. Rajagopala Ayyangar Committee to review the question of bringing changes in the Patent Law, if found wanted, and advise Government accordingly. The Report of the Committee, which consisted of two parts, was submitted in September 1959. The first part dealt with general aspects of the Patent Law and the evils of the patent system and solutions with recommendations in regard to the law; and the second part gave a detailed note on the several clauses of the lapsed bills of 1953. The Committee recommended retention of the Patent System, notwithstanding its shortcomings. This report recommended major changes in the law which formed the basis of the introduction of the Patents Bill, 1965 introduced in the Lok Sabha on 21 September of that year. But this Bill lapsed. In 1967, an amended bill was introduced again. This was referred to a Joint Parliamentary Committee and on the final recommendation of the Committee, the Patents Act, 1970 was passed repealing and replacing the 1911 Act so far as the patents law was concerned, although the Act continued to be applicable to designs. Most of the provisions of the 1970 Act were brought into force on 20 April, 1972 with publication of the Patent Rules, 1972.

Patents Act 1972 remained in force for 24 years till December 1994 without any change. An Ordinance with certain changes in the Act was issued on 31 December, 1994, which had a legal existence only for 6 months. Subsequently, replacing another Ordinance in 1999, the Patents (Amendment) Act, 1999 was made into a law retrospectively from 1 January, 1995. The amended Act permitted filing of applications for product patents in the areas of drugs, pharmaceuticals and agro chemicals to be legally effective after 31 December, 2004. Meanwhile, the applicants could be allowed Exclusive Marketing Rights (EMR) to sell or distribute these products in India, subject to the proviso they fulfilled certain conditions. The Patents (Amendment) Act, 2002 which constituted the second amendment to the 1970 Act became operational on 20 May, 2003 with the introduction of the new Patent Rules, 2003. Another amendment to the Patents Act 1970 was introduced through the Patents (Amendment) Ordinance, 2004 effective from the 1 January, 2005. This Ordinance was later replaced by the Patents (Amendment) Act 2005 on 4 April, 2005 which became effective from 1 January, 2005.

Patent Rules

Under the provisions of Section 159 of the Patents Act, 1970 the Central Government has been vested with powers to make rules for the administration of the Act and regulating patent. Accordingly, the Patents Rules, 1972 were notified and brought into force effective from 20 April, 1972. These rules were amended from time to time till 20 May 2003 when new Patents Rules, 2003 were brought into force by replacing the 1972 rules. These rules were further amended by the Patents (Amendment) Rules, 2005 and the Patents (Amendment) Rules, 2006. The last amendments were made effective from 5 May, 2006.7 As per the Patent Act of 1970, only process patent, and not product patent is allowed with regard to inventions in cases of materials used in the protection of food, drug or medicines, or substances manufactured by chemical process is restricted to methods or processes of productive alone. “This means that one can make and market a product similar to the patented product through a different process or method other than the patented one. This practice has been very prevalent in the Indian pharmaceutical industry. The Uruguay Agreement of the GATT (now WTO) requires both product and process patent”.8

The Indian Patents Act of 1970 which was put into effect in 1972 brought in notable changes with the placing of a number of restrictions related to patenting of inventions, especially in chemicals, pharmaceuticals, agrochemicals and foods, in which product patents had been discontinued and patenting of processes with a restricted life of 7 years from the date of filing of the complete specification (or 5 years from the date of sealing the patent, whichever is shorter) was introduced. This protected patent regime provided a safe platform for pharmaceutical and chemical industries to strike roots in India and grow and also meet the need for increased production rather than relying on imports, which was critical for the national economy. “For example, pesticide imports were reduced from around 12,000 tonnes in 1965–66 to a mere 1100 tonnes in 1992–93. A number of new processes and technologies for production of drugs, medicines and pesticides have been developed in India resulting in one of the most cost effective and vibrant drug industry in the world.”9

The question before the Indian Government is how to adopt the changes in the Patents Act to make them TRIPS compliant and at the same time allow the home-grown industries continue to grow and be ready to confront the global competition. Another area of concern is the protection of the country's rich bio-diversity, traditional knowledge with fair benefit sharing arrangements to communities responsible for their upkeep and development. An issue of significance is one of a delicate balancing of a patents regime that would offer the inventors a safe protection platform for their inventions and at the same time keep adequate provisions for intervention by the Government to check either the overuse or misuse of IPR. The debatable question is should we retain strong and limiting features in the IPR laws by means of “compulsory licensing” or bring in a strong and enforceable IPR regime and do the harmonizing act of controlling misuse or overuse of IPR through a strong competition law.

TRADEMARKS

A trademark is a visual symbol that distinguishes the goods or services of one enterprise from those of the competitors. A trademark, also known as brand name in ordinary language, is a visual symbol in the form of a word, signature, name, device, label, numerals or combination of colours used by one enterprise on goods or services or other articles of commerce to differentiate it from other similar goods or services originating from a different enterprise. Any indication to goods will imply services also, unless its reference is expressly prohibits. Trademarks are increasingly becoming the cynosure of global business today and happen to be the primary source of product differentiation and non-price competition in modern, market-driven economies. Consumers come to associate certain value to trademark in terms of performance, durability, price, after-sales service, etc. in the goods sold under specific brands, which may be among the greatest assets of the enterprise.

In the legal parlance, brand names are referred to as trademarks. Several goods, of the same category or of different categories, can be sold under one brand name. Recently, non-visual signs are being pushed for recognition as trademarks. Though not yet recognized in India, smell and sound signs belong to this category. Several electronic media and film producers have specific signature tunes to identify their programmes.

Evolution

The concept of identifying the source of a product by a mark or symbol is an ancient one. As early as some 3,000 years ago, signatures of craftsmen have been found engraved on goods sent to Iran from India! But trademark gained importance after the industrial revolution when because of large-scale production, publicity through print and audio-visual media became necessary to distribute a large volume of goods all over the world. The use of modern trademark as a distinguishing sign to indicate the origin or source of the product, carrying with it a mark of high quality, goes back to the eighteenth century in England, as was done in the case of cutlery trade. The real push for the acceptance of trademark as an effective instrument of promoting a product came with Unilever. It marketed its soap under the brand Sunlight, highlighting not the product as such but the glow that its use brought to the clothes cleaned with it. The similarity of the products in the same market has brought to the fore the need to the marking of goods by a publicity through print and audio-visual media became a necessary symbol, which could distinguish one's products from similar goods made by others.

Role

Trademarks play a highly intricate role in market-driven economies, operating in the context of rapid integration of global economy. Through advertisement and other strategies, large market shares are captured by a few brands leading to concentration of market power in a few huge corporations like Hindustan Lever and Procter & Gamble. If due precautions are not taken, a developing country may find itself a dumping ground for foreign brands, without any flow of technology and building up of domestic capabilities. Indigenous brands may be exposed to severe and unequal competition in which they have to prove themselves.

Under modern business conditions a trademark performs the following functions:

  1. It identifies the goods/or services and its origin.
  2. It guarantees its unchanged quality
  3. It advertises the goods/services
  4. It creates an image for the goods/services.

Trademarks Legislations

In 1940, the then British Government of India passed the Trademarks Act for uniform and systematic registration of trademarks in India, which came into force on 1 June, 1942. Once India became free, the Trade and Merchandise Marks Act, 1958 replaced it. After almost 40 years in 1995, it became necessary to effect changes in the trademark law as India joined WTO as an original member and it was obligatory to bring the Indian law in consonance with TRIPS. The new Trademark Act, 1999 repealed the old Act.

The trademark signifies the quality of product and services of the trademark owner; it is in the interest of corporations or individuals to get the trademark registered in India to exclude others from using the same or deceptively similar trademark in the country. To meet international commitments, Indian Government has enforced with effect from 15 September, 2003.10

The Trademarks Act, 1999 and Trademarks Rules, 2002 replaced the old Trademarks and Merchandising Act, 1958. The New Trademarks Act, 1999 is TRIPS compliant and more in conformity with US Federal and State Trademarks laws than it was earlier. It is now possible to register Service Marks in India. The objective of the Trademarks Act, 1999 are to make provisions for

  • The registration and protection of trademarks for both goods and services
  • Avoidance of the use of fraudulent marks

In India, a trademark for goods or services can be protected on the basis of either use or registration or on basis of both elements. A trademark can be registered only for a limited period of time, but it is renewable without any other restriction. Thus, a trademark may be protected for an indefinite period.

The Trademarks Registry is also proposed to be further strengthened and modernized. A project for modernization was earlier implemented during 1993–96. Further strengthening of the Registry is being taken up at a cost of INR 86 million.11 The main thrust now is to strengthen the infrastructure of the Trademarks Registry and the early removal of backlog of pending applications, transfer of records to CD-ROM's, re-engineering of work processes, appointment of additional examiners, etc.

The Act of 1999 makes important departures from the Act of 1958 in two important respects:

  • Shape of goods is recognized as a trademark
  • Trademarks are now granted for services also, besides goods.

A good is defined as anything which is the subject of trade or manufacture. Service implies rendering of any service provided to users and includes such services as construction, hotels, transport, entertainment, finance, banking, insurance, energy supply, information and broadcasting, etc. These are all examples of areas in business, industry or commerce where services are offered. Definition of service is meant to be all inclusive.

Salient Features of Indian Trademark Act, 1999

Some major changes as summarized below had been brought about in the law of trademarks in India by the Trademarks Act, 1999

  1. Trademark for services in the definition of trademark has been included
  2. Registration of Collective Marks has been provided for
  3. Registration of certain marks which are mere reproductions of or imitations of well-known marks has been prohibited
  4. Filing a single application for registration in more than one class of goods and/or services are provided for
  5. The term of registration of a trademark increased from 7 to 10 years and a grace period of 6 months for payment of renewal fees provided
  6. Circumstances in which validity of registration can be contested has been amplified
  7. The final authority is vested in the Registrar for disposing of application for registration of Certification Trademarks
  8. Penal provisions of the Trademarks Law with the Copyright Law has been harmonized
  9. Establishment of an Appellate Board has been provided for

Registration of Trademarks

Any person who has the legal claims of a trademark can apply to the Registrar of Trademarks for its registration. The application shall be made in the name of an individual, partners of a firm, a Corporation, any government department, a trust or joint applicants claiming to be the proprietor of the trademark. For registration of a trademark for different classes of goods and services, a single application is enough.

The application shall be filled in the office of the Trademarks Registry within whose territorial limits the principal place of business in India of the applicant is located. In the case of joint applicants it shall be filed in the office of the Trademarks Registry within whose territorial limits the principal place of business in India is situated.

In case, the applicant or any of the joint applicants does not carry on business in India, the application shall be filed in the office of the Trademarks Registry within whose territorial limits the place mentioned in the address for service in India as disclosed in the application is situated.

With regard to the acceptance or rejection of application, the Registrar may accept the application absolutely or subject to such amendments, modifications, conditions or limitations, if any, as he may think fit, or refuse the application.

In the event of a rejection or conditional acceptance of an application, the Registrar shall put in writing the grounds for such refusal or conditional acceptance and the materials used by him in arriving at his decision.

When the Registrar accepts an application for registration of a trademark, he shall cause the application as accepted along with the conditions or limitations, if any, subject to which it has been accepted, to be advertised in the prescribed manner. The need for the issue of the advertisement is to allow opponents to the registration of the proposed trademark to give notice to the Registrar, of his opposition to the registration.

Once a trademark is registered, the applicant will receive from the Registrar a certificate in the prescribed form, sealed with the seal of the Trademarks Registry. The duration of the registration of a trademark is 10 years, but may be renewed from time to time according the provisions of the Act. The failure to renew the registration may result in the removal of the trade from the register.

Grounds for Refusal of Registration

The Act lays down a number of absolute grounds for refusal of registration of trademarks: the trademark is without distinctive characteristics, it is of such nature as to dupe the public or cause confusion; it is likely to hurt the religious sentiments of any class or section of people; it contains scandalous or obscene matter; it consists exclusively of marks or indications which have become customary in the current language or in the bona fide and established practices of the trade, etc. and relative grounds for refusal (such as identity or similarity with order trademarks) of registration.

The Registrar may refuse registration to a trademark which suggests without any basis of truth a connection with any living person, or a person whose death took place within 20 years prior to the date of application for registration of the trademark, if the applicant does not furnish the consent of such living person or, as the case may be, of the legal representative of the deceased person.

Appellate Board

The Trademarks Act has provisions for the establishment of an Appellate Board to be called as the Intellectual Property Appellate Board by the Central Government to exercise the jurisdiction, powers and authority conferred on it by or under this Act.

The Appellate Board shall comprise a Chairman, Vice- Chairman and such number of other members, as the Central Government may deem fit. The Benches shall exercise the jurisdiction, powers and authority of the Appellate Board. A Bench shall comprise one judicial member and one technical member and shall sit at such place as the Central Government may specify.

Any person adversely affected by an order or decision of the Registrar under this Act, or the rules made there under may prefer an appeal to the Appellate Board in the prescribed manner within 3 months from the date on which the order or decision sought to be appealed against is made known to such person preferring the appeal.

Since the Trademarks Registry is located in Mumbai, the registration of Trademarks is done there. There are branch offices of the Registry at Kolkatta, Delhi and Chennai with separate jurisdictions. In India, an office of the Registrar of trademarks has been established for the maintenance of the Trademark Registry. The Registrar of Trademarks is the Controller General of Patents and Designs. The Register of Trademarks has in it the record of all registered trademarks, with names, addresses and description of proprietors and users, assignments and transmissions, and conditions and limitations and the name of registered users.

Kinds of Trademarks that can be Registered

For registering a trademark, it should have at least one of the following essential characteristics:

  1. The details of a company such as its name, individual or firm represented in a particular or special manner
  2. The applicant's signature for registration
  3. One or more invented words
  4. One or more words having no direct reference to the character or quality of the goods except the exceptions listed in the next section
  5. Any other distinctive trademark
  6. A trademark which has acquired distinctiveness by use over a long period of time

A part of trademark can be registered separately apart from a whole trademark if it fulfils the conditions of registration of a trademark. The Act also lays down for registration of the same or similar trademark by more than one proprietors in the case of honest concurrent use or other special circumstances.

Unregistrable Trademarks

The Act disqualifies a trademark from being registered if it is not distinctive, or consists exclusively of marks or indications which have become customary in the current language and practice. Also, mark falling in any of the following categories is not registrable:

  • A mark which is similar or deceptively similar to a trademark already registered in respect of the same goods or goods of the same description
  • A mark the use of which would be inimical to any law of the land or which could not be entitled for protection in a court of law
  • A mark having scandalous or obscene matter
  • a mark having any matter likely to hurt the religious susceptibilities of any class or section of people
  • A word which is the commonly used and accepted name of any single chemical element or compound, with regard to chemical substances
  • A geographical name or a surname or a personal name or any common abbreviation thereof or the name of a sect, caste or tribe in India

Besides these, a mark cannot be registered as a trademark if:

  • it consists exclusively of the shape of goods, or
  • it results from the nature of goods themselves. For example, shape of a mango used for mangoes or their packaging, or
  • it is necessary to obtain a technical result. An exclusively technical shape will be the one if no other shape will perform its function, or
  • it gives substantial value to the goods.

Infringement

A person is said to infringe a trademark, if he is not the owner of a registered trademark, and uses it without permission from the owner of the same trademark, or a deceptively similar trademark in the course of trade. He is liable to be sued for legal remedies by the rightful owner, or persons so authorized. No penalty for infringement is legally possible in case of unregistered trademarks; however, this would not affect common law rights for action against “passing off'.

Specifically, infringement is committed in the following cases:

  • The mark is identical and is used for similar goods/services
  • The mark is similar to the registered mark and is used for the same or similar goods/services as covered by the registered trademark
  • The mark is identical with the registered trademark and is used for identical goods; and the mark is therefore likely to cause confusion in the minds of the public

If a trademark is of a reputed brand in India, the use of a mark identical with or similar to it, on goods or services which are different, constitutes infringement as such use, without due cause, would take unfair advantage of a reputed trademark or harm its distinctive character. The Act prohibits adoption of a registered trademark by another person as trade name, i.e. the name of an enterprise.

A suit for infringement of registered trademark must be filed in the district court within whose territorial jurisdiction, the plaintiff (or if there are more than one such person, any one of them) instituting the suit or proceeding actually and voluntarily resides or carries on business or personally works for gain.12

Offences and Penalties

Falsifying and falsely applying trademarks: A person using a registered trademark or a deceptively similar mark is said to falsify a trademark if he is doing it without the consent of the proprietor of the trademark. Falsification also includes any alteration, addition or effacement of a genuine trademark.

A person who, without authorization, applies registered trademark or a deceptively similar mark to goods or services or any package containing goods is said to falsely apply the genuine trademark. A person is guilty of unlawfully applying the trademark if he uses any packet bearing a mark which is similar or deceptively the same to the registered trademark for packing, filling or wrapping any goods other than the genuine goods of the proprietor of the trademark.

A person is also guilty under the Act if he makes, disposes of, or has in his possession, any die, block, machine, plate or other instrument with a view to falsify or of being used for falsifying a trademark:

  • Uses any false trade portrayal of goods or services
  • Gives a false suggestion of the country or place where the goods were manufactured or name and address of the manufacturer, or of the person for whom they are produced.
  • Provides, alters or effaces an indication of origin which has been applied to any goods to which it is required to be applied

The above-mentioned offences shall be punishable with imprisonment for a term of minimum of 6 months but which may extend to 3 years and with a minimum fine of INR 50,000 but which may extend to INR 200,000. For adequate and special reasons mentioned in the judgement, the court may impose a sentence of imprisonment for a term of less than 6 months or a fine of less than INR 50,000.

Penalty for selling goods or providing services to which false trademark or false trade description is applied is punishable with imprisonment for a minimum term of 6 months but which may extend to 3 years and with a minimum fine of INR 50,000 but which may extend to INR 200,000.

Increased penalty can be imposed on second conviction or thereafter. Such offences shall be punishable with imprisonment for a term between 1 and 3 years and with fine between INR 100,000 and INR 200,000.

A person shall be punishable with imprisonment for a term which may extend to 3 years, or with fine, or with both if he represents an unregistered trademark as a registered trademark.

The penalty of imprisonment for a term which may extend to 2 years, or a fine, or both will be imposed for a person who indulges in falsification of entries in the register is. The use of words, which may falsely suggest that a person's place of business is officially connected with the trademark office, attracts imprisonment for a term up to 2 years or a fine or both.

In case a person committing an offence under this Act were a company, the company as well as every person involved with, and responsible to, the company for the running of its business at the time of the commission of the offence shall be deemed to be guilty of the offence. A company implies any corporate body and includes a firm or other association of individuals. Abetment of any offence is punishable as if the abettor himself committed that offence.

COPYRIGHT ACTS

India has one of the most up-to-date copyright protection laws in the world, governed by the Copyright Act, 1957. The Copyright Act was based on the Copyright Act of 1914, framed by the Indian Government of the British colonial era and also based primarily on the 1956 Copyright Act of the United Kingdom. A major landmark in the sphere of copyright during 1999 was the amendment to the Copyright Act of 1957 to make it fully attuned with the provisions of the TRIPS Agreement. Called the Copyright (Amendment) Act, 1999, this amended law became effective from 15 January, 2000. The Copyright (Amendment) Act, 1999 was a modern act that introduced the Indian IT industry and gave it the right impetus to develop and grow to world-class standards.

The Act, with five amendments, in 1983, 1984, 1992, 1999 and a substantial one in 1994, adheres to the treaties of the Berne Convention, the Universal Copyright Convention, the Rome Convention and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement.13

Earlier, the 1994 amendment to the Copyright Act of 1957 had provided protection to all original literary, dramatic, musical and artistic works, cinematography, films and sound recordings. It also brought sectors such as satellite broadcasting, computer software and digital technology under Indian copyright protection. The Copyright Act is now in full conformity with the TRIPS obligations.14

The other important development during 1999 was the issuance of the International Copyright Order, 1999 extending the provisions of the Copyright Act to nationals of all World Trade Organization (WTO) member countries.

The Copyright Act, 1957 lays down mandatory punishment for piracy of copyrighted matter in accordance with the gravity of the offence to deter infringement, in compliance with the TRIPS Agreement. Section 63 of the Copyright Act, 1957 provides that an offence of infringement of copyright or other rights conferred by the Act shall be penalized with a jail sentence for a term which shall not be less than 6 months but which may extend to 3 years with fine which shall not be less than INR 50, 000 but which may extend to INR 200,000, depending on the gravity of the offence.

Consequent to the number of measures initiated by the Government, there has been more activity in the enforcement of copyright laws in the country reflecting the general improvement in the enforcement of the copyright law.

Other IPRs

Intellectual property rights are applicable to many products for various reasons. Some of the common ones are briefly discussed here.

  1. Geographical indications: Geographical indications refer to the identity of a good as originating in the territory of a member, or a region or locality in that territory where a given quality or reputation of the good is essentially attributed to its geographical origin. Members are required to provide the legal means for interested parties to prevent the misuse of any indication which may mislead the consumer as to the origin of goods and any use which would constitute an act of unfair competition. Additional production is applied for geographical indications for wines and spirits.
  2. Industrial designs: Industrial designs are protected for a period of 10 years. Owners of protected designs would be able to prevent the manufacture, sale or importation of articles bearing or embodying a design which is a copy of the protected design for commercial purposes. The duration of protections available shall be for a minimum period of 10 years.
  3. Integrated circuits: The TRIPs Agreement provides protection to the layout-designs (topographies) of integrated circuits for a period of 10 years. But the protection shall lapse 15 years after the creation of the layout design.
  4. Trade secrets: Trade secrets and know-how having commercial value shall be protected against breach of confidence and other acts. Test data submitted to the governments in order to obtain marketing approval for pharmaceuticals or agricultural chemicals shall be protected against unfair commercial use.

Apart from economic developmental factors, future competition between nations will be determined by their ability to create market and manage value-added intellectual assets. National policy on IPR management will mean creation of well-balanced enforceable IPR laws, apart from putting in place a conducive environment for innovations to seed, nurture and grow, maintenance of targeted and strategic IPR portfolio by institutions, transmitting IPR appropriately and at the optimum value, striking collaborative linkages, etc. These have to be strongly anchored to the process of identifying national priorities and formulating the national science and technology strategy and industrial policies. The complex relationship between the technical worth of the IPR protected innovations and their commercial and strategic needs have to be well understood at the national level. Similarly, a good many activities related to IPR have to get aligned into national processes. Major IPR capability building programmes have to be undertaken with right earnest.

Often, the unobserved complexity and dynamics of change in real time smear the horizon leading to unsupportive and irreconcilable differences between nations. Frameworks for cooperative societal interactions will have to be remodelled, business strategies redesigned; issues related to cost-effective access to the benefits of technology has to drive the international developmental agenda. Trade will have to discover ways and means to ensure enabling and conducive environment for continued innovations with optimal use of global resources and goal alignment for sustainable development of nations and their people. Nations will have to strike a delicate balance between multi-cornered forces involving IPR-related conflicts and the need for global cohesion with respect to IPR management, and affordable access to food, medicines, meaningful health care facilities for all and an overall enhancement in the quality of life.

As the debate progresses, a section of the Indian industry especially in the pharmaceutical sector has already made rapid strides in restructuring their business to meet global standards to steer their growth through world class R&D, striking global alliances, partnerships, collaborations, licensing, etc. and in the process becoming MNCs. The coming years will be crucial for the Indian industry as changes are being introduced as the country moves towards a patent regime as required by TRIPS.

SUMMARY
  • IPR is a common term implying patents, copyright, trademark, industrial designs, geographical indications, protection of layout design of integrated circuits and of undisclosed information (trade secrets). India, as a founder member of WTO, has ratified the Agreement on Trade Related Intellectual Property Rights (TRIPS). India has set up an Intellectual Property Rights (IPR) regime, which is WTO-compatible and is well established at all levels whether statutory, administrative or judicial.
  • The Government has taken a whole lot of initiatives to streamline the intellectual property administration in the country in view of its strategic significance. The office of the “Controller General of Patents, Designs and Trademarks (CGPDTM)” has been set up under the Department of Industrial Policy and Promotion, in the Ministry of Commerce and Industry. The Central Government administers all matters relating to patents, designs, trademarks and geographical indications and also directs and supervises the functioning of: (i) The Patent Office (including Designs Wing); (ii) The Patent Information System (PIS); (iii) The Trademarks Registry (TMR) and (iv) The Geographical Indications Registry (GIR).
  • Several legislative initiatives have been taken for complementing the administrative set up. These are inter alia, the Trademarks Act, 1999; the Geographical Indications of Goods (Registration and Protection) Act, 1999; the Designs Act, 2000; the Patents Act, 1970 and its subsequent amendments in 2002 and 2005; Indian Copyright Act, 1957 and the Copyright (Amendment) Act, 1999; Semiconductor Integrated Circuit Layout Design Act, 2000; as well as the Protection of Plant varieties and Farmer's Rights Act, 2001.
  • The first legislation in India relating to patents was the Act VI of 1856 whose objective was to encourage inventions of new and useful manufactures and inventors to disclose secret of their inventions. Legislation for granting “exclusive privileges” was introduced in the Act XV of 1859. The Act of 1859 was consolidated in 1872 as “The Patterns and Designs Protection Act” with a view to protect the designs. An entirely new piece of legislation known as The Indian Patents and Designs Act, 1911 substituted all the previous acts and brought patent administration under the management of Controller of Patents for the first time.
  • After Independence, the Government of India constituted the Justice Bakshi Tek Chand Committee in 1949 to examine in depth the patent law in India and to report on any improvement that the Committee wanted to recommend for enabling the Indian Patent System to be more conducive to national interest by encouraging invention and the commercial development and use of inventions. In 1957, the Government of India appointed Justice N. Rajagopala Ayyangar Committee to review the Patent Law, and advise Government. On the final recommendation of the Committee, the Patents Act, 1970 was passed repealing and replacing the 1911 Act. Patents Act 1972 remained in force for 24 years till December 1994 without any change. The Patents (Amendment) Act, 2002 which constituted the second amendment to the 1970 Act became operational on 20 May 2003 with the introduction of the new Patent Rules, 2003.
  • Under the provisions of Section 159 of the Patents Act, 1970 the Central Government has been vested with powers to make rules for the administration of the Act and regulating patent. Accordingly, the Patents Rules, 1972 were notified and brought into force effective from 1972. The Indian Patents Act of 1970 which was put into effect in 1972 brought in notable changes with the placing of a number of restrictions related to patenting of inventions, especially in chemicals, pharmaceuticals, agrochemicals, foods, in which product patents had been discontinued and patenting of processes with a restricted life of 7 years from the date of filing of the complete specification. The question before the Indian Government is how to adopt the changes in the Patents Act to make them TRIPS-compliant and at the same time allow the home-grown industries continue to grow and be ready to confront the global competition.
  • A trademark is a visual symbol that distinguishes the goods or services of one enterprise from those of its competitors. A trademark, also known as brand name in ordinary language, is a visual symbol in the form of a word, signature, name, device, label, numerals or combination of colours used by one enterprise on goods or services or other articles of commerce to differentiate it from other similar goods or services originating from a different enterprise. Trademarks play a highly intricate role in market-driven economies, operating in the context of rapid integration of global economy. Through advertisement and other strategies, large market shares are captured by a few brands leading to concentration of market power in a few huge corporations.
  • In 1940, the then British Government of India passed the Trademarks Act for uniform and systematic registration of trademarks in India, which came into force on 1 June, 1942. Once India became free, the Trade and Merchandise Marks Act, 1958, replaced it. After 40 years in 1995 it became necessary to effect changes in the trademark law as India joined WTO as an original member and it was obligatory to bring the Indian law in consonance with TRIPS. Hence new Trademark Act, 1999, repealed the old Act.
  • The Act of 1999 makes important departures from the Act of 1958 in two important respects: (a) Shape of goods is recognized as a trademark; and (b) Trademarks are now granted for services also, besides goods. A good is defined as anything which is the subject of trade or manufacture. Service means service of any description offered to users. Banking, finance, insurance, transport, energy supply, construction, hotels, entertainment, information and broadcasting, etc. are all examples of areas where services are offered in connection with business, industry or commerce. Definition of service is meant to be all subsuming.
  • The Copyright Act, 1957 is one of the most up-to-date copyright protection laws in the world. The Act, with five amendments, in 1983, 1984, 1992, 1999 and a substantial one in 1994, adheres to the treaties of the Berne Convention, the Universal Copyright Convention, the Rome Convention and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement.
  • The other important development during 1999 was the issuance of the International Copyright Order, 1999 extending the provisions of the Copyright Act to nationals of all World Trade Organization (WTO) Member countries. The Copyright Act, 1957 lays down mandatory punishment for piracy of copyrighted matter in accordance with the gravity of the offence to deter infringement, in compliance with the TRIPS Agreement.
KEY WORDS
copyright geographical indications industrial designs
integrated circuits IPR layout designs
patents patent information system patents rules
R&D trade secrets trademark
trademark registry TRIPS WTO
DISCUSSION QUESTIONS
  1. What do you understand by Intellectual Property Rights (IPR)? Explain the series of initiatives taken by the Indian Government to make Indian IPR regime TRIPS-Compliant.
  2. Explain briefly Indian legislation with regard to (a) patents, (b) trademarks and (c) copyrights.
  3. There is a perception among Western investors that Indian laws are very lax with respect of IPR compliance. Do you agree with the view? Substantiate your answer.
  4. Trace the evolution of the Patents regime in India. What are the important landmarks in its evolution?
  5. Discuss the salient features of the Trademarks Act, 1999.
  6. What are the kinds of trademarks that can be registered?
  7. Discuss the Copyrights Act with suitable examples.
SUGGESTED READINGS

Intellectual Property Rights in India, Embassy of India, Washington DC (2000), http://www.indianembassy.org/policy/ipr/ipr_2000.htm.

Jha, P. S. “Dunkel Draft: The Brighter Side”, The Economic Times, 25 December, 1993, p. 4.

Wattal, Jayashree. “The Sunny Side”, The Economic Times, 27 December, 1993, p. 7.