INTRODUCTION

As our country witnesses the second wave of the coronavirus pandemic and its impact, we continue to witness some interesting case updates that took place in the field of Intellectual Property. This newsletter brings to you the key intellectual property related updates in India for the first quarter of 2021.

Three major regulatory changes that occurred in this quarter are: the abolishment of Intellectual Property Appellate Board (IPAB) under the Tribunals Reforms (Rationalization and Conditions of Service) Ordinance, 2021, issued by the Ministry of Law and Justice, the Government of India; the notification of the Copyright Amendment Rules, 2021; and the notification of the Design Amendment Rules, 2021.

In what can be termed as a landmark decision, the Delhi High Court held that that when a recorded song is communicated to the public by radio diffusion, underlying works (as integrated in the sound recording) are not utilized, as independent bundle of copyrights subsists in the sound recordings; and the same does not attract additional royalty payable to the owners of the underlying works. However, in an appeal filed against the decision, a division bench of the High Court stayed its operation and shall be deliberating upon the substantive principles more in due course.

In a key clarificatory judgement, the Bombay High Court held that copyright registration is not mandatory for seeking reliefs under the Copyright Act, 1957.

Further, the Hon'ble Supreme Court in a landmark tax law related judgment has held that the amounts paid by resident Indian end-users/distributors to nonresident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software, does not amount to payment of royalty for the use of copyright in the computer software.

In another decision by the Delhi District Court relating to software copyrights, the Court granted a permanent injunction restraining Lucent Engineering Company from infringing the copyright in the software programs of Siemens Product Lifecycle Management Software Inc.

On the trademark side, the Bombay High Court, passed an interim order, restraining Urban Foodmart India Pvt. Ltd. from infringing and passing off trademark "BAJAJ" of Bajaj Electricals by unauthorizedly using the same in relation to their food retail chain with the name "BAJAJ SUPERMART" in Hyderabad.

In another case relating to trademark violations online, the Delhi High Court granted ad-interim injunction in favor of Shenzhen Jiayz Photo Industrial Ltd, the owner of BOYA wireless microphones and accessories and restrained several e-commerce websites such as Flipkart, Amazon India, Paytm Mall, Tata Cliq and Snapdeal from selling fakes and counterfeits of the Plaintiff's products on their respective platforms.

The above updates have been discussed below.

Intellectual Property Appellate Board (IPAB) Abolished

The Tribunals Reforms (Rationalization and Conditions of Service) Ordinance, 2021 (the "Ordinance"), issued by the Ministry of Law and Justice, the Government of India, has been notified and abolishes the IPAB1

The Ordinance has brought key amendments in various industrial and commercial legislations such as - the Copyright Act, 1957, the Patents Act, 1970, the Trade Marks Act, 1999, the Geographical Indications of Goods (Registration and Protection) Act, 1999, the Protection of Plant Varieties and Farmers' Rights Act, 2001, the Cinematograph Act, 1952, the Customs Act, 1962, the Airport Authority of India Act, 1994, the Finance Act, 2017, amongst others.

The IPAB had been the authority for appellate and related issues relating to intellectual property rights arising under the Trade Marks Act, 1999, the Patents Act, 1970, the Geographical Indications of Goods (Registration and Protection) Act, 1999, the Protection of Plant Varieties and Farmers' Rights Act, 2001, and the Copyrights Act, 1957, and operated for almost 18 years. With the abolishment of the IPAB, the Ordinance makes the following key amendments:

  • The appeals against various intellectual property offices will now be dealt by the High Court or the Commercial Court (also a Commercial Division of the High Court);
  • The rectification, revocation and removal actions relating to the IP rights under the above statutes can now be initiated before the High Court having jurisdiction in addition to the IP Office; and
  • Issues relating to the determination of compulsory / statutory licensing of certain kinds of IPs and the assignment of copyrights, are now to be determined by the Commercial Court or a Commercial Division of the High Court.

The process of rationalization of tribunals has been ongoing since 2015. As per the statement from the Government, the Ordinance seeks to remove such tribunals that have neither reduced the burden of the higher courts nor provided speedy disposal of cases. It is envisioned that reducing the number of tribunals will not only benefit the public but also decrease the burden on public exchequer and the shortage of staff at the tribunals.

However, it remains to be seen how the Government proposes to organize the process of determination of intricate IP issues and disputes (requiring subject-matter knowledge and expert understanding that was provided by IPAB's technical members) by the High Courts and the Commercial Courts. Considering that the High Courts and the Commercial Courts are overburdened with huge backlog of regular cases pending disposal, the courts may further delay the process of determination of existing and new IP disputes and issues, unless special IP courts on the lines of the Commercial Division of the High Courts are additionally organized.

The Copyright Amendment Rules, 2021, Notified

The Department of Industrial Policy and Promotion, the Government of India, has notified the Copyright (Amendment) Rules, 2021 ("2021 Rules") in the official gazette recently.

The salient features of the 2021 Rules are as follows:

1. Relating to copyright societies: the 2021 Rules provide for strict and transparent processes to be followed by the copyright societies for their members in relation to the grants of licenses, royalty collections and distributions, etc., and to draw up and make public an Annual Transparency Report for each financial year;

2. Relating to transfer of appellate and related powers from the Copyright Board: the 2021 Rules also shift appellate powers of the Copyright Board along with related powers to hear petitions for revocation of copyright, petitions for fixation of royalties for statutory licensing, etc., to the Intellectual Property Appellate Board (IPAB), which are practically transferred to the High Courts after the abolition of the IPAB by the Tribunals Reforms (Rationalization and Conditions of Service) Ordinance, 2021;

3. Relating to software copyright applications: the 2021 Rules do away with the requirement of the submission of the object code (machine readable code generated by the compiler) as part of the copyright applications for the registration of software copyright; and now only the source code (human-made set of instructions

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Footnote

1. Along with the IPAB, a few other tribunals like the Film Certification Appellate Tribunal, Customs Authority for Advance Rulings and the Airport Appellate Tribunal under different statutes have also been abolished by the Ordinance.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.