ARTICLE
1 September 2022

Intellectual Property Rights In Bar Codes And QR Codes

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Shardul Amarchand Mangaldas & Co

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Shardul Amarchand Mangaldas & Co founded on a century of legal achievements, is one of India’s leading full-service law firms. The Firm’s mission is to enable business by providing solutions as trusted advisers through excellence, responsiveness, innovation and collaboration. SAM & Co is known globally for its exceptional practices in mergers & acquisitions, private equity, competition law, insolvency & bankruptcy, dispute resolution, capital markets, banking & finance and projects & infrastructure.
Bar codes and Quick Response Codes ("QR Codes") use the underlying technology of encoding certain information or data in unique patterns and combinations of shapes, numbers, letters etc.
India Intellectual Property
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Introduction

Bar codes and Quick Response Codes ("QR Codes") use the underlying technology of encoding certain information or data in unique patterns and combinations of shapes, numbers, letters etc. A bar code consists of vertical lines and spaces of varying width and length with a combination of letters and numbers printed below it. Each bar code has a unique pattern and has information/data encoded in it, which can be decoded or accessed using a bar code scanner, a laser device which transfers the information/data encoded in a bar code to a computer. QR Codes are 2-dimensional representations of square blocks arranged in unique patterns which store the information/data and are a subset of bar codes. Each unique pattern has certain information/data encoded in it. QR Codes can be scanned by phone cameras, which usually have in-built QR Code readers, and information/data encoded can be decoded or accessed by scanning the QR Code, which transfers the information/data to the device used to scan the same. Bar codes and QR codes have been widely used by companies in various industries such as print media, banking, education and entertainment.

Bar codes and QR Codes are capable of and are widely used for identifying goods and/or services of an entity in the marketplace. By providing a user-friendly method of authentication and encoding information accessible to end consumers that can be used to determine the authenticity of the products, use of bar codes and QR Codes makes the end consumers less vulnerable to purchase of counterfeit products.

Any unauthorized use or misappropriation of bar codes and QR Codes potentially has the risk of causing confusion amongst the members of trade and public about the origin/source of goods and/or services, thereby causing dilution and loss of goodwill and reputation of the manufacturer and its brand. Further, such misappropriation of bar codes or QR Codes can be detrimental to the interest of the public, who maybe led into buying counterfeit or infringing products on account of such confusion.

Intellectual Property Rights in Bar Codes and QR Codes

Bar codes and QR Codes have been afforded protection in India by courts under trade marks law.

In Needle Industries (India) Pvt. Ltd v. Mr. Sushil Jain & Anr1, the plaintiff, who was engaged in the business of manufacturing of haberdashery material like hand sewing needles, knitting pins and other products including crocket hooks, snap fasteners, zip locks, knitting pins etc., sought an order of injunction from the High Court of Delhi against use of its bar code by the defendant on snap fasteners. The plaintiff contended that the defendant's activities amount to deception in the market and are violating the rights of the plaintiff, which flow from the licence that has been given to the plaintiff by the GS1 (an international certification authority that maintains a global database and maintains standards concerning the use of bar codes). The plaintiff further submitted that this violation is causing loss of business to it and is diminishing the integrity of the GS1 system apart from sale of products of lower quality than that of the plaintiff. Considering the facts of the case, the court granted an order of interim injunction restraining the defendant from using the plaintiff's bar codes. The said order of injunction was later confirmed, and the suit was decreed on the basis of the statement of the defendant that he will not, in the future, use the plaintiff's bar codes.

Similarly, in GS1 India v. Global Barcodes SL & Ors2, the Plaintiff, a license holder of GS1 and engaged in the business of certification, had sought an order of injunction from the High Court of Delhi against allocation by the defendant to third parties, of bar codes starting with '890', which had been allocated to the plaintiff by GS1. The plaintiff also had a certificate of registration for the trade mark with a pictorial design and '890' therein in class 35 for certification services. The court held that the defendant's activities amounted to infringement of the plaintiff's trade mark and violated the common law rights of the plaintiff, thereby causing deception amongst the customers and public at large. The court further emphasised that due to the misrepresentation of the defendant, innocent customers are made to believe that the bar codes assigned by the defendant originate from the plaintiff and are compliant with GS1 standards. Hence, the court granted injunction restraining the defendant from, inter-alia, using the bar codes starting with '890'.

Draft rules issued to amend Drugs Rules, 1945

The Ministry of Health and Family Welfare has issued draft rules3 to amend the Drugs Rules, 1945 ("Draft Rules"). The Draft Rules mandate manufacturers of around 300 top drug formulation products to print or affix bar codes or QR Codes on their products from May 1, 2023.

The move is in line with the suggestion of the Drugs Technical Advisory Board to track and trace products through the manufacturing and supply chain. The Draft Rules seek to introduce a new Schedule H2 with a list of 300 brands, and to insert a new sub-rule after Rule 96(5) of the Drugs Rules, 1945.

As per the proposed new sub-rule (5A), the manufacturers of drug formulation products specified in Schedule H2 of the Draft Rules, shall print or affix a bar code or a QR Code on their packaging/label that stores data or information legible with software application to facilitate authentication. The data or information includes the particulars, including unique product identification code, brand name, name and address of the manufacturer, proper and generic name of the drug, batch number, date of manufacturing and date of expiry, manufacturing license number etc. Some of the notable brands/drugs included in Schedule H2 are Allegra, Betadine ointment, Calpol, Combiflam, Dolo and Electral Sachet.

The Draft Rules aim to ensure that the products being sold to end consumers are genuine, by enabling them to trace the various details of the origin of the product and other product related information by simply scanning the bar code or the QR Code. Considering that the sale of counterfeit drugs/pharmaceutical formulations can be severely detrimental to public health and interest, the need to ensure sale of genuine products is the highest in this sector. The implementation of the Draft Rules will also create awareness amongst healthcare professionals, nursing staff, pharmacists, and consumers about the need to check the authenticity of the medicine(s).

Conclusion

Under the trade marks law in India, registration of bar codes and QR Codes as trade marks raises various questions of distinctiveness, customary use and public policy, which may be difficult to overcome. This does not, however, mean that bar codes and QR Codes cannot be registered as trade marks in India. Further, the protection afforded to bar codes and QR codes, and introduction of the Draft Rules by Ministry of Health and Family Welfare clearly emphasises the importance of technology in doing business and the advantage it provides to businesses over competitors.

Footnotes

1. CS(OS) 1933/2006

2. CS(COMM) 147/2020

3. G.S.R. 448(E) dated 14 June 2022

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.

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