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Design protection provides protection to a functional items’ look and feel or in other words to the non – functional attributes of the item. An object with a substantially similar design to an existing items’ design cannot be made, copied or used without the permission of the person who holds the right to the existing design. Few notable examples include, shape of a bottle of a beverage like Coca – Cola, design of an automobile, mobile phones and iPod. Additionally, design of a product is a critical factor that attracts or influences the behaviour of a consumer and ultimately creates an impact on the products performance in the market.

Strategy is an essential part of any organization doing business of any sort. These strategies can be about the business model, marketing strategy to penetrate multiple markets or demographics etc. Similarly, IP (Intellectual property) strategy is essential however is often overlooked. A good IP strategy is of utmost importance to further grow or scale a business. A poor strategy or a lack of one can often lead to the end of a business. Especially in areas like South East Asia where there is an overabundance of competitors, cheap manufacturing costs and cheaper automation making it a hub for notorious endeavours.

As these rights are territorial in nature, it is a good strategy to at least seek protection on a products design in multiple countries where an organization plans to indulge in business activities. An industrial design may consist of three dimensional shapes or two dimensional structures like lines/patterns or colours.

How Industrial Design Rights Are Obtained

Depending on the applicable laws, independently created industrial designs must fulfil some or all of the following criteria: novelty/originality.

Novelty or originality of a design, to some extent, is subjective in nature and can vary from one jurisdiction to another. Generally, a design which is not disclosed to the public can be considered novel. Similarly, a design can be considered original if the design is different from the existing known designs or their combinations.

The duration of these rights also varies from country to country, for example:

In Indonesia, a design right is valid for ten years and the holder cannot seek renewal. Likewise, ten years is also the validity period for design rights in Canada. In Japan, the same right is provided for twenty years while in Singapore, the right in a design expires after fifteen years.

The procedure of applying for these rights differs from country to country as well, as does the cost. There can be different out of pocket expenses that can be incurred depending upon the country the application is being made to.

It is recommended to conduct searches for existing designs as it helps save time, money and avoid any potential infringement (knowingly or unknowingly) of others’ rights before applying for a design application.

Strategies

Since the design right is an intellectual property, there is always the option of licensing. If an organization isn’t operating in a certain region yet and finds out that there exist other company/companies in those areas with substantially similar or even infringed design, it is within the rights of the organization to seek an infringement suit or settle for a certain amount of royalty to be paid to them for making use of their designs.

Organizations must also keep the relationship of design rights and other intellectual properties in mind. Some countries allow for an overlap between the design right and copyright applications as well. This overlap however by no means states that it provides a cumulative protection and is solely dependent upon the countries laws. However, this does provide the benefit of having an added layer of protection over the design rights.

Author: Dhruv Verma, Intern at Khurana & Khurana, Advocates and IP Attorneys. In case of any  queries please contact/write back to us at swapnils@khuranaandkhurana.com.

References: [1]https://www.wipo.int/wipo_magazine/en/2017/04/article_0006.html [2] https://www.aseanbriefing.com/news/2018/06/14/design-rights-protection-south-east-asia.html [3] https://www.wipo.int/designs/en/
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In India, the Patents Act, 1970, and the Patents Rules, 2003, have undergone number of changes in last decade or so. The initial changes in the Act and corresponding Rules were mostly with a vision to make the Indian Patent Laws in conformity to the TRIPS guidelines with the allowed extent of exemptions. Later on, one can say that the focus of amendments moved towards making the procedure to apply for and grant of patent more transparent and swift. Now recently, the Office of Controller General of Patents, Designs & Trademarks had recently notified few changes in the Drafting Manual of a patent, India and the purpose of referrals to the changes is to prevent divergence and provide clarity on the implementation of the law.

MAJOR HIGHLIGHTS OF THE MANUAL

Illumination on determination of inventive step:
Before describing anything lets explains the condition to be satisfied by an invention to be patentable. As we know many of us know all the 3 important parts of the invention before letting it be patentable but let start from the basic. In most cases, a patent application is examined by a technical expert to ensure that it meets the substantive criteria for patentability.
The 1st of those criteria is that it has to be Novel (New).
The 2nd of those criteria is that it should have Inventive step and thirdly should be industrially applicable.
One of the most important criteria is that an invention should have Inventive step.

Inventive step under the Act is defined as follows:
“Inventive step” means a feature of an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art.

  • How do we determine Inventive step?

The proposed invention is not obvious to a person skilled in art i.e., skilled in the subject matter of application.

In the determination of the Inventive step, it is not sufficient to draw the conclusion that a claimed invention is obvious merely because individual parts of the claims taken separately are known or might be found to be obvious.

  • Let’s redefine it by the help of famous case

In the case of “Biswanath Prasad RadheyShyam vs. Hindustan Metal Industries Ltd.”Hon’ble Supreme Court of India on the inventive step said: “the expression” does not involve any “inventive step” used in section 26(1) (a) of Act. “Obvious” has acquired special significance in the terminology of patent law.

This case can be considered to be the most important case in inventive step jurisdiction in India. Though the case was decided in 1978, the principle laid down in the case is followed even today & have been codified in the Indian Patent Act.

Here, the term “obvious” means that the invention does not go beyond the normal process of technology but merely follow plainly and logical form of the prior art. In other words, how would be defined inventive step is by just asking a question i.e., “Would a non-inventive mind have thought of alleged invention?”, If the answer is “NO”, then the invention is non-obvious.

In case of modification in applicant name:

The death of the patent applicant or Inventor has an impact on the patent application and the patents that they own.Although if there are living co-inventors, they may be able to enter a request by virtue of an agreement which allows them to proceed, without the deceased inventor participating.

Whereas in the cases of Substitution/Addition of the applicant before the grant of the patent, the request has been made by using form-6 to the Controller to allow changes in the applicant name.

Role of controller evolve:

  • If the applicant had died before the grant of patent, but the patent was granted in his name, a person in whose name the patent ought to have been granted may make a request to the Controller for substitution. The Controller may amend the patent by substituting the name of the deceased applicant with the name of such claimant. Such a request has to be made in Form-10.
  • If the applicant dies after the patent has been granted, any person who becomes entitled to the patent or to a share in the patent, by operation of law, may make a request to Controller for registration of his title. Such a request shall be made in Form-16.
  • Wherein, in the case of Dispute between joint applicant regarding the Substitution/Changes in the applicant name. The Controller has given an opportunity of being heard to all the applicant, & Controller will take the decision after hearing the dispute parties as per proceeding under sub-section(5) of section-20.

No need of hardcopy of sequence listing:

  • Importance of Sequence listing

Firstly, we should understand the necessity of sequence listing. Generally, most of the Inventions related to biotechnology were involve with the isolation & purification processes, so for applying for the patent application they need the disclosure of Nucleotides and/or an amino acid sequence listing in the patent specification.

  • Guidance define for listing

In the application of patent discloses, sequence listing of nucleotides or amino acid sequences shall be filled in computer readable text format along with application form. No hardcopy needs to attach with the application form. The Specification of writing the Sequence number is defined as:

Nucleotides sequence shall be listed with a maximum of 60 bases per line; with a space between each group are 10 bases. The bases of coding part of the Nucleotide sequence shall be listed as triplets (codons). The base of a nucleotide sequence shall be listed in groups of 10 bases, except in the coding parts of the sequence.

  • Benefit

To make the practice of patent filling easier, then the sequence listing should be filed in a computer-readable format. By the help of it, Examiner/any other authorized body may easily carry out a sequence search on a database available to the office & freely available by using diverse tools. Any Sequence listing in the electronic document format as specified shall preferably be created by dedicated software such as Patent IN.

Conclusion

This latest notification has been able to tackle most of the issues raised in the past and made exemptions wider. It has simplified the entire process.

  1. The clarity on the concept of “non-obviousness” or the presence of the inventive step in a proposed invention which was still under debate among the patent office, courts, and patentees.
  2. The Rights of Death applicant were redefined by evolving the role of the Controller.
  3. The submission of nucleotide and amino acid sequences in computer-readable text format increases the correctness and presentation of nucleotide and/ or amino acid sequences which is helpful for the public at large to understand. And also Research institutions may have easy and uninterrupted access to the sequences for various purposes such as research, information, etc.

These are some points that highlighting the changes in the latest Draft Manual of Patent Office Practice and Procedure, 2019 as published by the office of Controller General of Patents, Designs, and Trademarks.

Author: Abhishek Sharma , Intern at Khurana & Khurana, Advocates and IP Attorneys. In case of any  queries please contact/write back to us atswapnils@khuranaandkhurana.com.

Reference:

[1]http://www.ipindia.nic.in/writereaddata/Portal/IPOGuidelinesManuals

[2]https://www.wipo.int/edocs/pubdocs/en/wipo_pub_941_2017.pdf

[3]https://www.wipo.int/export/sites/www/standards/en/pdf/03-25-01.pdf

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US healthcare giant Amgen has successfully defended two of its patents related to cholesterol-lowering drug Repatha® (evolocumab). Amgen announced on February 25, 2019 that a U.S. District Court jury in Delaware delivered a verdict in the company’s favor upholding the validity of two patents related to its anti-cholesterol drug, Repatha®. The patent challenge was brought by Sanofi and Regeneron, which had contended that Amgen’s patents on Repatha® were invalid “for lack of written description and enablement”. Sanofi and Regeneron make a competing anti-cholesterol drug called Praluent® that prevents PCSK9 binding to LDLR.

The Delaware jury verdict follows recent decisions in the European Patent Office and the Japanese Patent Office which also rejected challenges to the validity of the Amgen’s patents brought by Sanofi and Regeneron.

Praluent® and Repatha® belong to a category of drugs known as PCSK9 inhibitors, designed to help patients with ultra-high bad, or LDL, cholesterol who can’t get their condition under control with widely used statins such as atorvastatin. Praluent® is designed to reduce cholesterol levels without allowing them to go so low that they might be harmful.

Repatha® is a human monoclonal antibody that inhibits proprotein convertase subtilisin/kexin type 9 (PCSK9). Repatha® binds to PCSK9 and inhibits circulating PCSK9 from binding to the low-density lipoprotein (LDL) receptor (LDLR), preventing PCSK9-mediated LDLR degradation and permitting LDLR to recycle back to the liver cell surface. By inhibiting the binding of PCSK9 to LDLR, Repatha® increases the of LDLRs available to clear LDL from the blood, thereby lowering LDL-C levels. Repatha® is indicated to reduce the risk of myocardial infarction, stroke, and coronary revascularization in adults with established cardiovascular disease. It is also indicated as an adjunct to diet, either alone or in combination with other lipid-lowering therapies for treatment of adults with primary hyperlipidemia to reduce low-density lipoprotein cholesterol (LDL-C), and as an adjunct to diet and other LDL-lowering therapies in patients with homozygous familial hypercholesterolemia (HoFH) who require additional lowering of LDL-C. The drug is approved in more than 60 countries, including the USA, Japan, Canada and all 28 countries that are members of the European Union.

Amgen filed suit against Sanofi and Regeneron Pharmaceuticals on October 17, 2014. Amgen asserted that Sanofi and Regeneron’s manufacture and sale of Praluent, a drug that treats patients with high levels of low density lipoprotein cholesterol, infringes claims of Amgen’s U.S. Patent Nos. 8,829,165 and 8,859,741. The parties stipulated to infringement of certain claims on February 22, 2016. During trial, the Court issued two Rule 50(a) rulings. The Court determined that as a matter of law, the patent claims were non-obvious and Amgen had failed to meet the burden of showing that Sanofi and Regeneron’s infringement was willful. The case was submitted to the jury on the remaining issues: written description and enablement of the patent claims. The trial resulted in a judgment for Amgen that the patents are not invalid. After trial, Sanofi and Regeneron moved for renewed judgment as a matter of law on patent validity and for a new trial. Amgen moved for a permanent injunction. The Court denied Sanofi and Regeneron’s post-trial motions and entered final judgment in favor of Amgen under Rule 54(b) on January 3, 2017. The Court granted Amgen’s motion for a permanent injunction on January 5, 2017. Sanofi and Regeneron appealed. The Federal Circuit determined that the Court had erred in precluding post-priority date evidence relevant to written description and enablement, and had improperly instructed the jury on written description. The Federal Circuit remanded for a new trial on written description and enablement. The parties then moved for summary judgment. Sanofi and Regeneron moved for summary judgment that the asserted patents are “invalid on written description and enablement grounds.” Amgen moved for partial summary judgment to “estop Defendants from arguing that Amgen’s selected claims lack written description and enablement”.

Sanofi and Regeneron asserted that no disputes of material fact exist and that the patent is invalid for lack of written description. Amgen argued that there are genuine disputes of material facts under both the common structural features test and representative species test. The Court agreed with Amgen that genuine issues of material fact preclude summary judgment on the written description defense.

The parties disputed whether the specification discloses a common structural feature of the claimed antibodies. Sanofi and Regeneron argued that the Federal Circuit’s opinion in Amgen stands for the proposition that an antibody cannot be described by its function- binding to an antigen. However, in Amgen, the Federal Circuit recognized that it is “hotly disputed [whether] knowledge of the chemical structure of an antigen gives the required kind of structure-identifying information about the corresponding antibodies.” The parties’ experts continued to dispute whether the function of binding correlates to the structure of the antibody. Additionally, the defendants’ expert, Dr. Petsko, has testified that the pattern of hydrophobic and non-hydrophobic residues is a common structural feature of the claimed antibodies.

The Delaware jury found that genuine disputes of material facts exist under the representative species test. Amgen’s patents “describe at least 32 antibodies by sequence that fall within the claimed genus by binding to the fifteen amino acid sweet spot on PCSK9.” Sanofi and Regeneron argued that these patent claims do not meet the representative species test because 1) the patents disclose antibodies that bind to no more than eight PCSK9 residues, but claim antibodies binding up to fifteen residues, 2) the patents fail to disclose antibodies that bind to any of the combination of residues to which the competitor antibodies bind, and 3) the patents only disclose four antibodies that share sixty percent or more of its heavy or light chain CDR sequences with any of the competitor antibodies. However, Amgen’s experts, Dr. Petsko and Dr. Rees, testified that a person of ordinary skill in the art would understand the exemplary antibodies to be representative of the claimed genus due to common key sequence characteristics with post-priority antibodies. The Delaware jury found the disclosed antibodies to be sufficiently representative of the genus.

As regards enablement, Sanofi and Regeneron asserted that no dispute of material fact remains and that they have proven no enablement by clear and convincing evidence. Amgen argued that 1) the patent claims are enabled and 2) there are material disputes of fact as to whether the specification’s disclosed process is a “trial and error” process and whether Amgen practiced the full scope of the claims. Specifically, Sanofi and Regeneron argued that the post-priority evidence shows that Amgen were attempting to make more antibodies within the claimed genus and were unable to do so. Amgen asserted that this post-priority evidence shows their attempts to make novel antibodies with different properties from the claimed genus. The Delaware jury agreed with Amgen and concluded that the patent claims are enabled.

The latest court verdict said that Amgen’s patents on Repatha® are in line with the legal requirements of written description and enablement. On February 25, 2019, jurors in Wilmington, Delaware, rejected the argument of Sanofi and Regeneron that the Amgen’s patents didn’t adequately describe the invention or explain how to make the full scope of antibodies the patents cover, though they agreed that some aspects of one of the patents were invalid.

Commenting on the verdict, Sanofi and Regeneron said they strongly disagree with some aspects of the jury’s decision and intend to file post-trial motions to overturn the verdict and request a new trial.

In the Sanofi release, Karen Linehan, executive vice president and general counsel, said “We are disappointed in today’s verdict,” “It is our longstanding belief that all of Amgen’s asserted U.S. patent claims are invalid and we believe the law and the facts support our positions.”

Amgen’s chief executive officer, Robert A. Bradway, said “This decision protects intellectual property which is essential to innovators who are bringing forward new medicines for patients with serious diseases. Amgen scientists discovered and developed Repatha, which can play a key role in the fight against cardiovascular disease,”…”We are thankful that the jury weighed the evidence carefully and recognized the validity of Amgen’s patents.”

Author: Mr. Antony David, Principal Associate – Pharmaceutical-Life Sciences Practice Group, at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at antony@khuranaandkhurana.com.

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US healthcare giant Amgen has successfully defended two of its patents related to cholesterol-lowering drug Repatha® (evolocumab). Amgen announced on February 25, 2019 that a U.S. District Court jury in Delaware delivered a verdict in the company’s favor upholding the validity of two patents related to its anti-cholesterol drug, Repatha®. The patent challenge was brought by Sanofi and Regeneron, which had contended that Amgen’s patents on Repatha® were invalid “for lack of written description and enablement”. Sanofi and Regeneron make a competing anti-cholesterol drug called Praluent® that prevents PCSK9 binding to LDLR.

The Delaware jury verdict follows recent decisions in the European Patent Office and the Japanese Patent Office which also rejected challenges to the validity of the Amgen’s patents brought by Sanofi and Regeneron.

Praluent® and Repatha® belong to a category of drugs known as PCSK9 inhibitors, designed to help patients with ultra-high bad, or LDL, cholesterol who can’t get their condition under control with widely used statins such as atorvastatin. Praluent® is designed to reduce cholesterol levels without allowing them to go so low that they might be harmful.

Repatha® is a human monoclonal antibody that inhibits proprotein convertase subtilisin/kexin type 9 (PCSK9). Repatha® binds to PCSK9 and inhibits circulating PCSK9 from binding to the low-density lipoprotein (LDL) receptor (LDLR), preventing PCSK9-mediated LDLR degradation and permitting LDLR to recycle back to the liver cell surface. By inhibiting the binding of PCSK9 to LDLR, Repatha® increases the of LDLRs available to clear LDL from the blood, thereby lowering LDL-C levels. Repatha® is indicated to reduce the risk of myocardial infarction, stroke, and coronary revascularization in adults with established cardiovascular disease. It is also indicated as an adjunct to diet, either alone or in combination with other lipid-lowering therapies for treatment of adults with primary hyperlipidemia to reduce low-density lipoprotein cholesterol (LDL-C), and as an adjunct to diet and other LDL-lowering therapies in patients with homozygous familial hypercholesterolemia (HoFH) who require additional lowering of LDL-C. The drug is approved in more than 60 countries, including the USA, Japan, Canada and all 28 countries that are members of the European Union.

Amgen filed suit against Sanofi and Regeneron Pharmaceuticals on October 17, 2014. Amgen asserted that Sanofi and Regeneron’s manufacture and sale of Praluent, a drug that treats patients with high levels of low density lipoprotein cholesterol, infringes claims of Amgen’s U.S. Patent Nos. 8,829,165 and 8,859,741. The parties stipulated to infringement of certain claims on February 22, 2016. During trial, the Court issued two Rule 50(a) rulings. The Court determined that as a matter of law, the patent claims were non-obvious and Amgen had failed to meet the burden of showing that Sanofi and Regeneron’s infringement was willful. The case was submitted to the jury on the remaining issues: written description and enablement of the patent claims. The trial resulted in a judgment for Amgen that the patents are not invalid. After trial, Sanofi and Regeneron moved for renewed judgment as a matter of law on patent validity and for a new trial. Amgen moved for a permanent injunction. The Court denied Sanofi and Regeneron’s post-trial motions and entered final judgment in favor of Amgen under Rule 54(b) on January 3, 2017. The Court granted Amgen’s motion for a permanent injunction on January 5, 2017. Sanofi and Regeneron appealed. The Federal Circuit determined that the Court had erred in precluding post-priority date evidence relevant to written description and enablement, and had improperly instructed the jury on written description. The Federal Circuit remanded for a new trial on written description and enablement. The parties then moved for summary judgment. Sanofi and Regeneron moved for summary judgment that the asserted patents are “invalid on written description and enablement grounds.” Amgen moved for partial summary judgment to “estop Defendants from arguing that Amgen’s selected claims lack written description and enablement”.

Sanofi and Regeneron asserted that no disputes of material fact exist and that the patent is invalid for lack of written description. Amgen argued that there are genuine disputes of material facts under both the common structural features test and representative species test. The Court agreed with Amgen that genuine issues of material fact preclude summary judgment on the written description defense.

The parties disputed whether the specification discloses a common structural feature of the claimed antibodies. Sanofi and Regeneron argued that the Federal Circuit’s opinion in Amgen stands for the proposition that an antibody cannot be described by its function- binding to an antigen. However, in Amgen, the Federal Circuit recognized that it is “hotly disputed [whether] knowledge of the chemical structure of an antigen gives the required kind of structure-identifying information about the corresponding antibodies.” The parties’ experts continued to dispute whether the function of binding correlates to the structure of the antibody. Additionally, the defendants’ expert, Dr. Petsko, has testified that the pattern of hydrophobic and non-hydrophobic residues is a common structural feature of the claimed antibodies.

The Delaware jury found that genuine disputes of material facts exist under the representative species test. Amgen’s patents “describe at least 32 antibodies by sequence that fall within the claimed genus by binding to the fifteen amino acid sweet spot on PCSK9.” Sanofi and Regeneron argued that these patent claims do not meet the representative species test because 1) the patents disclose antibodies that bind to no more than eight PCSK9 residues, but claim antibodies binding up to fifteen residues, 2) the patents fail to disclose antibodies that bind to any of the combination of residues to which the competitor antibodies bind, and 3) the patents only disclose four antibodies that share sixty percent or more of its heavy or light chain CDR sequences with any of the competitor antibodies. However, Amgen’s experts, Dr. Petsko and Dr. Rees, testified that a person of ordinary skill in the art would understand the exemplary antibodies to be representative of the claimed genus due to common key sequence characteristics with post-priority antibodies. The Delaware jury found the disclosed antibodies to be sufficiently representative of the genus.

As regards enablement, Sanofi and Regeneron asserted that no dispute of material fact remains and that they have proven no enablement by clear and convincing evidence. Amgen argued that 1) the patent claims are enabled and 2) there are material disputes of fact as to whether the specification’s disclosed process is a “trial and error” process and whether Amgen practiced the full scope of the claims. Specifically, Sanofi and Regeneron argued that the post-priority evidence shows that Amgen were attempting to make more antibodies within the claimed genus and were unable to do so. Amgen asserted that this post-priority evidence shows their attempts to make novel antibodies with different properties from the claimed genus. The Delaware jury agreed with Amgen and concluded that the patent claims are enabled.

The latest court verdict said that Amgen’s patents on Repatha® are in line with the legal requirements of written description and enablement. On February 25, 2019, jurors in Wilmington, Delaware, rejected the argument of Sanofi and Regeneron that the Amgen’s patents didn’t adequately describe the invention or explain how to make the full scope of antibodies the patents cover, though they agreed that some aspects of one of the patents were invalid.

Commenting on the verdict, Sanofi and Regeneron said they strongly disagree with some aspects of the jury’s decision and intend to file post-trial motions to overturn the verdict and request a new trial.

In the Sanofi release, Karen Linehan, executive vice president and general counsel, said “We are disappointed in today’s verdict,” “It is our longstanding belief that all of Amgen’s asserted U.S. patent claims are invalid and we believe the law and the facts support our positions.”

Amgen’s chief executive officer, Robert A. Bradway, said “This decision protects intellectual property which is essential to innovators who are bringing forward new medicines for patients with serious diseases. Amgen scientists discovered and developed Repatha, which can play a key role in the fight against cardiovascular disease,”…”We are thankful that the jury weighed the evidence carefully and recognized the validity of Amgen’s patents.”

Author: Mr. Antony David, Principal Associate – Pharmaceutical-Life Sciences Practice Group, at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at antony@khuranaandkhurana.com.

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Introduction

As a child growing up in India, or even as an adult, each one of us has had a fair experience of how grandmothers in Indian households peculiarly happen to have herbal prescriptions for all the ailments that could come our way, famously known as ‘Daadi ke nuskhe’ and we have to agree, most of the time they are pretty effective too. India had had a long standing and ancient tradition of herbal medicines which were wildly prevalent until the onset of western medicines or as we know it, ‘allopathic’ medicines during the time of colonisation and henceforth, as India opened its doors to the world. This allopathic system of medicines quickly took over because they were industrially manufactured, easily available and were a cheaper alternative to the Indian system of Medicines. Nevertheless, as ancient our system of medicines is, it is equally as effective and with lesser or negligible side effects compared to its western counterpart. Further, it is still in practice in smaller segments throughout the country however, there remains a pressing need to standardise, regulate and promote the growth of this field as it is not only physiologically viable, but also aligns with our incorporeal and cultural identity.

You may have heard of Ayurveda as the same is very popular, many of us have would have also seen nomads in tents selling Unani medicine but how many of you are aware of the other types/forms Indian system of Medicine . The Indian system of medicines is not a single form but consists various different forms of therapeutic sciences such as Ayurveda, Unani, Siddha and Sowa-Rigpa, systems of Medicine as well as Yoga and Naturopathy. Of which, Ayurveda is the most prevalent in our county and well, the Yoga discipline has taken the world by storm as people are tending to move towards a more natural and sustainable approach towards life. But the problem persisting in our country with regards to these systems of medicines is that, although they are being regulated by the Indian Medicines Central Council Act, 1970, the practice is alarmingly disorganized; thereby raising serious concerns regarding the quality of practice, provision of medicines and the standard of education imparted in the institutions concerned with the discourse of study of these systems. There have been various cases of reported of fake medicines being sold, there are numerous roadside (Indian Medicine) sellers which sell all sorts of medicines claiming it to be ayurvedic or unani and what not.

In order to cure this concern and address the lacunae, the Union cabinet has passed the ‘National Commission for Indian system of Medicines’ Bill, awaiting the report of the Standing committee, and is supposed to replace the older act in order to promote and ensure transparency in AYUSH practices. So before we set forth to know about what this proposed bill has in store for the Indian system of medicines, let us first get a brief idea about the various systems and what they are.

Ayurveda

Ayurveda literally translates to ‘Science of Life’. Atharva veda, the last of the four great bodies of knowledge contains 114 verses related to formulations for the treatment of different diseases. Knowledge gathered and developed over centuries finally gave rise to the ‘Charaka samhita- The book of Medicine’ and the ‘Sushruta samhita- The book of Surgery’ and alongwith Vagabhata’s ‘Ashtanga-hridaya’, these books form the conceptual basis of the science of Ayurveda and are also known as the “brihat trayees” or the major three. Ayurveda lays great importance on living in harmony with the Universe and harmony of nature and science. Its universal and holistic approach makes it a unique and distinct medical system.

Siddha

The Siddha system of medicine is mostly prevalent in the state of Tamil Nadu and is conceptually coherent with Ayurveda and yet maintains its own distinct identity. The materia medica of Siddha system of medicine depends to large extent on drugs of metal and mineral origin in contrast to Ayurveda of earlier period, which was mainly dependent upon drugs of vegetable origin. The Siddha system is extensive in nature but still nascent compared to the discourses of Ayurveda.

Unani

The Unani system of medicines is believed to have originated in Greece by the great physician and philosopher ‘Hippocrates’. According to the basic principles of Unani the body is made up of four basic elements i.e. Earth, Air, Water, Fire which have different Temperaments i.e. Cold, Hot, Wet, Dry. They give raise, through mixing and interaction, to new entities. Examination of the pulse occupies a very important place in the disease diagnosis in Unani and further Disease conditions are treated by employing four types of therapies: Regimental therapy, Dietotherapy, Pharmacotherapy and Surgery.

Sowa Rigpa

Sowa Rigpa is a centuries-old traditional medical system that employs a complex approach to diagnosis, incorporating techniques such as pulse analysis and urinalysis, and utilizes behaviour and dietary modification, medicines composed of natural materials (e.g., herbs and minerals) and physical therapies to treat illness. It traces back its origin to Tibet where along with the exportation of Buddhist culture from India, these traditional sciences were passed on too, and thereafter practiced and honed by the Tibetan community.

Yoga and Naturopathy

Naturopathy is a system of working towards the cure of diseases without using medicines. It is an ancient and traditional science which integrates the physical, mental, and spiritual aspects of our natural constitution. Naturopathy has the capacity to prevent and in some cases also cure the disease.;Yoga has had shared roots with Ayurveda and follows similar principles as that of naturopathy. These sciences concern with the art of ‘well being’ and motivate us to lead a healthier way of life. Yoga, in recent days, is the talk of the town and everybody wants to get on the Yoga caravan to head towards a healthier state of life and mind.

Now, since these branches of Indian medicines are on the verge of resurrection and rediscovery it is important to control and channelize the growth of  these systems of medicines. Although, There are rules and regulations as well as bodies to enforce such regulation but these have become outdated and need a fresher approach to successfully revive these Socio culturally important sciences. Therefore, this new bill has been put forth to advance the cause of these sciences, which is set to effectively control and manage these systems of medicines.

Salient features of the Proposed Bill

The bill is set forth to repeal the IMCC Act, 1970 and replace it with an education system that ensures:

  • Availability of High quality medical professionals of Indian system of Medicines
  • Induction of latest and cutting edge medical research by these professionals to foster and promote growth of these systems of medicines.
  • Periodic assessment of the quality of such medical institutions.
  • Effective redressal of grievances arising out of practice of these systems of medicines.
  • IN order to further these fundamental agendas, the bill proposes to establish a National Commission for Indian System of Medicines which shall be entrusted with the tasks of:
  • Framing policies for regulating medical institutions and medical professionals of Indian System of Medicine
  • Assessing the requirement of Healthcare related Human resources and Infrastructure
  • Ensure setting up of and compliance by, the State Medical Councils of Indian Systems of Medicines, of the regulations made under the bill
  • Ensuring coordination amongst the various autonomous boards set up under the bill

The to be established NCISM shall be composed of 29 members appointed by the Central Government on the basis of the recommendations of a search committee constituted by the Central government to that regard. These posts shall have a maximum tenure of Four years and the National Commission shall include (i) the Chairperson, (ii) the President of the Board of Ayurveda, (iii) the President of the Board of Unani, Siddha, and Sowa-Rigpa, (iv) the President of the Medical Assessment and Rating Board for Indian System of Medicine, (v) Advisor or Joint Secretary in-charge of Ayurveda, Ministry of AYUSH, and (vi) three members (part-time) to be elected by the registered medical practitioners of Ayurveda, and one member each by the respective registered medical practitioners of Siddha, Unani, and Sowa-Rigpa from amongst themselves from the prescribed regional constituencies under the Bill.

Furthermore, Four autonomous boards shall be constituted under the supervision of NCISM and these boards are:

  1. The Board of Ayurveda
  2. The Board of Unani, Siddha, and Sowa-Rigpa
  3. The Medical assessment and Rating Board for Indian System of Medicines
  4. The Ethics and Medical Registration Board

These boards shall be responsible for establishing standards, curriculum and guidelines for medical institutions and granting recognition at under graduate and post graduate levels, determining and assessment of the rating of such medical institutions and also granting permits for establishing new institutions, and maintaining a national register of practitioners and regulating their professional conduct respectively.

Also, an Advisory council will be constituted which shall be the podium for the states/union territories and other concerned parties to express their views before the National Commission

And finally, a National Eligibility cum Entrance Test, based on the lines of that conducted for MBBS and BDS courses, shall be organised for admissions into the under graduate and post graduate courses respectively. As an added method of screening there shall also be held, a National Exit Test for the graduating students in order to obtain licences to practice.

Assessment and criticism of the New Bill

Starting from the initial parts of the new bill, Section 3(2)(a & b) provides that the advisory council shall consist, as members, Vice chancellors from universities of each state and Union territories under which there are the maximum number of colleges for Indian system of Medicines which thereby may result in disproportionate representation of each branch of such systems of medicines as the member(VC) may be from any stream of Indian medicines. Therefore the state wise representation may be converted into subject wise representation from each state so that each branch of medicine is proportionately represented from that state/Union territory.

Further, it has been contended by the practitioners of these systems of medicines that the method of composition of the Advisory Council as well as the National Commission is highly undemocratic. In a sharp contrast to the outgoing act, in which forty percent of the members are elected from amongst the registered practitioners, thereby giving them a fair representation in the council, the proposed bill seeks for appointment of members recommended by the search committee thereby degrading the right to be represented of such practitioners.

Also, the Ayurvedic Medical Association of India, has contended that the most common system of Indian Medicines is Ayurveda, but it has a very disproportionate representation under the provisions of the new bill thereby resulting in loss to their interests.

Further, with regards to the terms of service of the Chairperson and other members of the commission as well as the various boards, Section 12 contains a contradictory provision wherein sub section (3) mandates that after discharging their official term, such members shall not hold any office in any private educational institution in Indian system of medicines, whose matter was dealt with previously by such member/chairman and subsequently sub section (5) empowers such ex members/chairman to accept any employment in any private educational institution in Indian system of medicine.

Also, regarding various AYUSH systems, each of them have various prevalent areas of usage amongst which Ayurveda is the most prevalent, but the proposed bill proposed bill fails to take this geopolitical factor into consideration and hence these systems of medicine are not proportionally represented as they should be.

Furthermore, a clear lacuna that is evident in the proposed bill is that it fails to address the issue of quackery in the practice of Indian system of medicines. The proposed bill under section 40(3)(d) has inculcated a provision that says that the commission may permit a medical professional to practice Indian Systems of Medicine without qualifying the NLEIM. The Commission shall submit a list of such permitted professionals to the Central Government in the manner prescribed. With this clause the Commission reserves the right to give permission to practice Indian medicine to any person as and when required. It will cause serious damage to the health care delivery system as well as particular system. The same thing is repeating in the case of foreign nationals.

Conclusion

These sciences are age old but the bill set to regulate them is brand new, therefore it is important that the two tangents must be harmonized in order to ensure proper growth of these systems of Indian medicines. The proposed bill is certainly ambitious towards achieving the same but there remain certain questions and issues that must be addressed to successfully balance the act. And further, the effectiveness of a new piece of legislation can only be judged on the basis of its interaction with the target subject matter and the society at large. As the gears brush up against each other and either harmonize or spew up troubles, it is something only time will tell.

Author: Mr. Shubham Borkar, Senior Associate – Litigation and Business Development  and Ashish Mishra – Intern, at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at shubham@khuranaandkhurana.com or at www.linkedin.com/in/shubhamborkar.

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Introduction

As a child growing up in India, or even as an adult, each one of us has had a fair experience of how grandmothers in Indian households peculiarly happen to have herbal prescriptions for all the ailments that could come our way, famously known as ‘Daadi ke nuskhe’ and we have to agree, most of the time they are pretty effective too. India had had a long standing and ancient tradition of herbal medicines which were wildly prevalent until the onset of western medicines or as we know it, ‘allopathic’ medicines during the time of colonisation and henceforth, as India opened its doors to the world. This allopathic system of medicines quickly took over because they were industrially manufactured, easily available and were a cheaper alternative to the Indian system of Medicines. Nevertheless, as ancient our system of medicines is, it is equally as effective and with lesser or negligible side effects compared to its western counterpart. Further, it is still in practice in smaller segments throughout the country however, there remains a pressing need to standardise, regulate and promote the growth of this field as it is not only physiologically viable, but also aligns with our incorporeal and cultural identity.

You may have heard of Ayurveda as the same is very popular, many of us have would have also seen nomads in tents selling Unani medicine but how many of you are aware of the other types/forms Indian system of Medicine . The Indian system of medicines is not a single form but consists various different forms of therapeutic sciences such as Ayurveda, Unani, Siddha and Sowa-Rigpa, systems of Medicine as well as Yoga and Naturopathy. Of which, Ayurveda is the most prevalent in our county and well, the Yoga discipline has taken the world by storm as people are tending to move towards a more natural and sustainable approach towards life. But the problem persisting in our country with regards to these systems of medicines is that, although they are being regulated by the Indian Medicines Central Council Act, 1970, the practice is alarmingly disorganized; thereby raising serious concerns regarding the quality of practice, provision of medicines and the standard of education imparted in the institutions concerned with the discourse of study of these systems. There have been various cases of reported of fake medicines being sold, there are numerous roadside (Indian Medicine) sellers which sell all sorts of medicines claiming it to be ayurvedic or unani and what not.

In order to cure this concern and address the lacunae, the Union cabinet has passed the ‘National Commission for Indian system of Medicines’ Bill, awaiting the report of the Standing committee, and is supposed to replace the older act in order to promote and ensure transparency in AYUSH practices. So before we set forth to know about what this proposed bill has in store for the Indian system of medicines, let us first get a brief idea about the various systems and what they are.

Ayurveda

Ayurveda literally translates to ‘Science of Life’. Atharva veda, the last of the four great bodies of knowledge contains 114 verses related to formulations for the treatment of different diseases. Knowledge gathered and developed over centuries finally gave rise to the ‘Charaka samhita- The book of Medicine’ and the ‘Sushruta samhita- The book of Surgery’ and alongwith Vagabhata’s ‘Ashtanga-hridaya’, these books form the conceptual basis of the science of Ayurveda and are also known as the “brihat trayees” or the major three. Ayurveda lays great importance on living in harmony with the Universe and harmony of nature and science. Its universal and holistic approach makes it a unique and distinct medical system.

Siddha

The Siddha system of medicine is mostly prevalent in the state of Tamil Nadu and is conceptually coherent with Ayurveda and yet maintains its own distinct identity. The materia medica of Siddha system of medicine depends to large extent on drugs of metal and mineral origin in contrast to Ayurveda of earlier period, which was mainly dependent upon drugs of vegetable origin. The Siddha system is extensive in nature but still nascent compared to the discourses of Ayurveda.

Unani

The Unani system of medicines is believed to have originated in Greece by the great physician and philosopher ‘Hippocrates’. According to the basic principles of Unani the body is made up of four basic elements i.e. Earth, Air, Water, Fire which have different Temperaments i.e. Cold, Hot, Wet, Dry. They give raise, through mixing and interaction, to new entities. Examination of the pulse occupies a very important place in the disease diagnosis in Unani and further Disease conditions are treated by employing four types of therapies: Regimental therapy, Dietotherapy, Pharmacotherapy and Surgery.

Sowa Rigpa

Sowa Rigpa is a centuries-old traditional medical system that employs a complex approach to diagnosis, incorporating techniques such as pulse analysis and urinalysis, and utilizes behaviour and dietary modification, medicines composed of natural materials (e.g., herbs and minerals) and physical therapies to treat illness. It traces back its origin to Tibet where along with the exportation of Buddhist culture from India, these traditional sciences were passed on too, and thereafter practiced and honed by the Tibetan community.

Yoga and Naturopathy

Naturopathy is a system of working towards the cure of diseases without using medicines. It is an ancient and traditional science which integrates the physical, mental, and spiritual aspects of our natural constitution. Naturopathy has the capacity to prevent and in some cases also cure the disease.;Yoga has had shared roots with Ayurveda and follows similar principles as that of naturopathy. These sciences concern with the art of ‘well being’ and motivate us to lead a healthier way of life. Yoga, in recent days, is the talk of the town and everybody wants to get on the Yoga caravan to head towards a healthier state of life and mind.

Now, since these branches of Indian medicines are on the verge of resurrection and rediscovery it is important to control and channelize the growth of  these systems of medicines. Although, There are rules and regulations as well as bodies to enforce such regulation but these have become outdated and need a fresher approach to successfully revive these Socio culturally important sciences. Therefore, this new bill has been put forth to advance the cause of these sciences, which is set to effectively control and manage these systems of medicines.

Salient features of the Proposed Bill

The bill is set forth to repeal the IMCC Act, 1970 and replace it with an education system that ensures:

  • Availability of High quality medical professionals of Indian system of Medicines
  • Induction of latest and cutting edge medical research by these professionals to foster and promote growth of these systems of medicines.
  • Periodic assessment of the quality of such medical institutions.
  • Effective redressal of grievances arising out of practice of these systems of medicines.
  • IN order to further these fundamental agendas, the bill proposes to establish a National Commission for Indian System of Medicines which shall be entrusted with the tasks of:
  • Framing policies for regulating medical institutions and medical professionals of Indian System of Medicine
  • Assessing the requirement of Healthcare related Human resources and Infrastructure
  • Ensure setting up of and compliance by, the State Medical Councils of Indian Systems of Medicines, of the regulations made under the bill
  • Ensuring coordination amongst the various autonomous boards set up under the bill

The to be established NCISM shall be composed of 29 members appointed by the Central Government on the basis of the recommendations of a search committee constituted by the Central government to that regard. These posts shall have a maximum tenure of Four years and the National Commission shall include (i) the Chairperson, (ii) the President of the Board of Ayurveda, (iii) the President of the Board of Unani, Siddha, and Sowa-Rigpa, (iv) the President of the Medical Assessment and Rating Board for Indian System of Medicine, (v) Advisor or Joint Secretary in-charge of Ayurveda, Ministry of AYUSH, and (vi) three members (part-time) to be elected by the registered medical practitioners of Ayurveda, and one member each by the respective registered medical practitioners of Siddha, Unani, and Sowa-Rigpa from amongst themselves from the prescribed regional constituencies under the Bill.

Furthermore, Four autonomous boards shall be constituted under the supervision of NCISM and these boards are:

  1. The Board of Ayurveda
  2. The Board of Unani, Siddha, and Sowa-Rigpa
  3. The Medical assessment and Rating Board for Indian System of Medicines
  4. The Ethics and Medical Registration Board

These boards shall be responsible for establishing standards, curriculum and guidelines for medical institutions and granting recognition at under graduate and post graduate levels, determining and assessment of the rating of such medical institutions and also granting permits for establishing new institutions, and maintaining a national register of practitioners and regulating their professional conduct respectively.

Also, an Advisory council will be constituted which shall be the podium for the states/union territories and other concerned parties to express their views before the National Commission

And finally, a National Eligibility cum Entrance Test, based on the lines of that conducted for MBBS and BDS courses, shall be organised for admissions into the under graduate and post graduate courses respectively. As an added method of screening there shall also be held, a National Exit Test for the graduating students in order to obtain licences to practice.

Assessment and criticism of the New Bill

Starting from the initial parts of the new bill, Section 3(2)(a & b) provides that the advisory council shall consist, as members, Vice chancellors from universities of each state and Union territories under which there are the maximum number of colleges for Indian system of Medicines which thereby may result in disproportionate representation of each branch of such systems of medicines as the member(VC) may be from any stream of Indian medicines. Therefore the state wise representation may be converted into subject wise representation from each state so that each branch of medicine is proportionately represented from that state/Union territory.

Further, it has been contended by the practitioners of these systems of medicines that the method of composition of the Advisory Council as well as the National Commission is highly undemocratic. In a sharp contrast to the outgoing act, in which forty percent of the members are elected from amongst the registered practitioners, thereby giving them a fair representation in the council, the proposed bill seeks for appointment of members recommended by the search committee thereby degrading the right to be represented of such practitioners.

Also, the Ayurvedic Medical Association of India, has contended that the most common system of Indian Medicines is Ayurveda, but it has a very disproportionate representation under the provisions of the new bill thereby resulting in loss to their interests.

Further, with regards to the terms of service of the Chairperson and other members of the commission as well as the various boards, Section 12 contains a contradictory provision wherein sub section (3) mandates that after discharging their official term, such members shall not hold any office in any private educational institution in Indian system of medicines, whose matter was dealt with previously by such member/chairman and subsequently sub section (5) empowers such ex members/chairman to accept any employment in any private educational institution in Indian system of medicine.

Also, regarding various AYUSH systems, each of them have various prevalent areas of usage amongst which Ayurveda is the most prevalent, but the proposed bill proposed bill fails to take this geopolitical factor into consideration and hence these systems of medicine are not proportionally represented as they should be.

Furthermore, a clear lacuna that is evident in the proposed bill is that it fails to address the issue of quackery in the practice of Indian system of medicines. The proposed bill under section 40(3)(d) has inculcated a provision that says that the commission may permit a medical professional to practice Indian Systems of Medicine without qualifying the NLEIM. The Commission shall submit a list of such permitted professionals to the Central Government in the manner prescribed. With this clause the Commission reserves the right to give permission to practice Indian medicine to any person as and when required. It will cause serious damage to the health care delivery system as well as particular system. The same thing is repeating in the case of foreign nationals.

Conclusion

These sciences are age old but the bill set to regulate them is brand new, therefore it is important that the two tangents must be harmonized in order to ensure proper growth of these systems of Indian medicines. The proposed bill is certainly ambitious towards achieving the same but there remain certain questions and issues that must be addressed to successfully balance the act. And further, the effectiveness of a new piece of legislation can only be judged on the basis of its interaction with the target subject matter and the society at large. As the gears brush up against each other and either harmonize or spew up troubles, it is something only time will tell.

Author: Mr. Shubham Borkar, Senior Associate – Litigation and Business Development  and Ashish Mishra – Intern, at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at shubham@khuranaandkhurana.com or at www.linkedin.com/in/shubhamborkar.

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Introduction

India is one of the world’s fastest growing online commerce markets with multi-national giants like Amazon and Walmart’s Flipkart fighting for dominance. Recently, the Indian Government came up with new regulations on e-commerce  which require these e-commerce websites to treat all vendors equally, owning inventory, effectively barring foreign companies from featuring exclusive products on their platforms and thus being able to influence pricing by offering huge discounts. All of which threatens the interests of these corporations in Indian market. One of the issues not covered by these regulations was the widespread presence of counterfeit products on these websites. Amazon which is the largest e-commerce marketplace and cloud computing platform in the world as measured by revenue and market capitalization has come up with innovative measures anyway.[1] These innovative measures under the program named ‘Project Zero’ are currently an invite-only experience available in the U.S, but most likely will be introduced in India as a report from Citi Research reveals that after disappointing results from China Amazon founder and CEO Jeff Bezos is determined to win in India.[2]

Background

Worldwide counterfeit products are an increasing menace for the consumers. In India, a survey by Local Circles conducted among 6923 consumers revealed that 38 percent of these consumers had received counterfeited product from an e-commerce site in last one year, while survey by Velocity MR conducted among 3000 consumers revealed that one out of three online shoppers has received fake products from e-commerce websites in last 6 months.[3] According to RedSeer e-commerce industry suffered $3.4 billion loss due to product returned in 2017. In 2013 an OECD analysis revealed that global trade in counterfeit and pirated goods was valued at $461 billion.[4] So it is a problem that cannot be ignored.

This isn’t the first step of Amazon towards battling counterfeit products on its website, Amazon already has Anti-Counterfeiting Policy in US which states “Products offered for sale on Amazon must be authentic. The sale of counterfeit products is strictly prohibited. Failure to abide by this policy may result in loss of selling privileges, funds being withheld, and destruction of inventory in our possession”[5]. In India under the ‘Prohibited Content’ section of policies applicable to Indian sellers it is stated that two kinds of products are prohibited from sale; first, the prohibited content meaning items not intended for distribution within India, Illegal and potentially illegal products, offensive material, nudity, items that infringe upon an individual’s privacy etc., and secondly, Intellectual property violations which includes counterfeit merchandise, unauthorized and unlicensed merchandise, recopied media etc. The Counterfeit merchandise policy states “Products offered for sale on Amazon.in must be authentic. Any product that has been illegally replicated, reproduced or manufactured is prohibited”. [6]

Under the current infringement reporting mechanism the owner of the Intellectual property or his agent who had seen fake versions of their products would have to submit a request to Amazon, which would evaluate the claim and remove it, something similar to YouTube’s copyright takedown process.

Reporting Infringement To submit a notice of IP infringement, you must be the Rights Owner who owns the IP being reported or an agent with permission from the Rights Owner to submit notices on his or her behalf. Do not forget to provide your contact details (name, address, phone number, email address, secondary contact details) when you report infringement. If your brand is enrolled in Amazon Brand Registry, you can submit a report via the Report a Violation (RAV) tool or through our Report Infringement form. Rights Owners who do not have a brand enrolled in Amazon Brand Registry can submit via the Report Infringement form. In addition, it is a requirement that a notice submitter be logged into an Amazon account in order to use the Report Infringement form or Brand Registry’s RAV tool. For India marketplace, the Grievance Officer can also be contacted via email to report infringement. You can submit a trademark, copyright, patent, or other IP claim. You should include the following information in your report: • Specific identification of the IP you believe is infringed: trademark, copyright, or patent registration number; written description of or link to copyrighted work; etc. Identifying the specific ASIN/listing which is the subject matter of violation would be very useful. • Nature of infringement (whether infringement occurs on the physical product, physical product packaging, image on the product detail page, or text on the product detail page). Note: A product detail page allows customers to view a specific product available on Amazon with information common to all sellers’ offers for that product, such as the product’s title, brand, images, bullet points, descriptions, variations (such as size or colour) and customer reviews. It can include one or more offers from both sellers or Amazon. • List of infringing products (either Amazon Standard Identification Numbers (ASINs) or URLs for the product detail page of the specified product). If you believe that only a subset of sellers are infringing, and you are not accusing the entire product detail page, click the checkbox next to the name of each seller you are reporting in the Report Infringement form or RAV. • Any additional information that will help Amazon in processing your complaint (such as order IDs for any test buys on the products you are reporting). • Your contact details (name, address, phone number, email address, and secondary contact details that we can share with affected sellers). Source:https://sellercentral.amazon.in/gp/help/external/help.html?itemID=U5SQCEKADDAQRLZ&language=en_IN&ref=efph_U5SQCEKADDAQRLZ_relt_201361070

But, this report and take-down mechanism has some issues: It is quite a prominent practice by rival sellers to get innocent legitimate sellers suspended just before the busiest shopping events in the year such as Black Friday sale.  In the past Amazon has been tricked by a fake law firm to remove/suspend a seller from its website just before the Amazon Prime Day (the busiest shopping event of the year) claiming the seller was involved in intellectual property violation. The seller had to take multiple steps to get reinstated, but by the time Amazon did it the seller had incurred loss of $200,000.[7] The fraud could have been discovered easily within few minutes by analysing the facts of the complaint, but such analysis wasn’t conducted by Amazon. The reason being that the Amazon’s internal teams are overwhelmed with these complaints and are very slow to react to fake submissions. Another reason could be that Amazon profits from these counterfeit products.[8]

Amazon’s growing dominance in commerce brings with it plenty of collateral damage, the counterfeit problem in particular. News reports reveal that despite there being anti-counterfeiting policy, Amazon in order to attract customers via discount offers /flash sales and making the products available at lowest price in the market allowed sellers from across the globe who have little respect for or compliance with the IP rights of IP holders to sell on its platform.[9] Floodgates of such cases have opened due to Chinese manufacturers selling fake products to unsuspected consumers because some of these appear legitimate as they are Amazon fulfilled. The presence of counterfeit products forces the brands to lower their prices in order to compete with the counterfeit versions of their products. If the legitimate sellers cannot offer the product at a price counterfeited products are being offered it brings small businesses and IP holders to their knees. Internet is awash with narratives by these legitimate businesses describing their plights[10] but the story of Forearm Forklift a small business involving product that reduces potential injuries due to heavy and repetitive lifting. Plight of Forearm Forklift is that Amazon is flooded with counterfeit Forearm Forklift products due to which it is struggling financially. It has been forced to self-police the site and take action to get unauthorized listings removed. They need to constantly look for infringers then send a cease-and-desist letter.  If a product appears to be a counterfeit they have to buy it, examine it, and then prove to Amazon through a formal complaint that the listing should be taken down, and just keep doing this again and again. Then, these businesses suffer loss of goodwill as well when the buyers who buy counterfeit products thinking them to be legitimate give the product poor review. So, despite anti-counterfeiting policy of Amazon it keeps diverting business of legitimate business owners to the counterfeiters.

So what is Project Zero?

With Project Zero Amazon intends to take zero tolerance to counterfeiting. It has three different tools to facilitate businesses fight counterfeiting:

  • Self-service counterfeit removal

Under this facility brands no longer need to contact Amazon to remove counterfeit listings from our stores. Instead, they have the unprecedented ability to do so themselves by using Amazon’s new self-service tool. Amazon will then use this data generated by Self-Service counterfeit removal to strengthen its second facility i.e., the automated protections.

  • Automated protections

Under this facility Amazon uses AI powered by Amazon’s machine learning to continuously scan Amazon stores and proactively remove suspected counterfeits. Here the companies provide Amazon with their logos, trademarks, and other information about their brand, which Amazon then uses to scan its listings and remove fake products.  Amazon says it scans over 5 billion daily listing update attempts, looking for suspected counterfeits.  According to Dharmesh Mehta Amazon’s vice president of Consumer and Brand Protection,  “We(Amazon) have been testing these automated protections with a number of brands, and on average, our automated protections proactively stop 100 times more suspected counterfeit products as compared to what we reactively remove based on reports from brands”[11]

  • Product serialization service

This is an optional facility under which products are given a unique identifier that’s scanned upon each purchase. If the number doesn’t match up with the listing, Amazon may be able to prevent someone from buying a counterfeit product. Unlike the automated copy protection system and the self-serve option to delete listings, which are free for brands that are accepted to Project Zero, the serialization service will cost between $0.01 and $0.05 per unit, depending on volume.

These steps by Amazon have been welcomed by both consumers and brands as Amazon in the past has been criticized for treating counterfeit products on its website as blind spot.[12] The technology being in its nascent stage is likely to take some time before becoming widespread. Especially, the automated removal using an AI would require adjustments for instance feeding of data for different brands and their trademarks which is likely to take time. So, in the meantime what are the existing legal remedies available to the brands and companies to tackle counterfeiting?

Legal liability of e-commerce websites in sale of counterfeit products on their platform

As the e-commerce websites are intermediaries their liability for the hosted content will be determined by Section 79 of The Information Technology Act, 2000.

Section 79 of Information Technology Act,2000: (1) Notwithstanding anything contained in any law for the time being in force but subject to the provisions of sub-sections (2) and (3), an intermediary shall not be liable for any third party information, data, or communication link made hosted by him. (2) The provisions of sub-section (1) shall apply if – (a) the function of the intermediary is limited to providing access to a communication system over which information made available by third parties is transmitted or temporarily stored; or (b) the intermediary does not – (i) initiate the transmission, (ii) select the receiver of the transmission, and (iii) select or modify the information contained in the transmission (c) the intermediary observes due diligence while discharging his duties under this Act and also observes such other guidelines as the Central Government may prescribe in this behalf (3) The provisions of sub-section (1) shall not apply if- (a) the intermediary has conspired or abetted or aided or induced whether by threats or promise or otherwise in the commission of the unlawful act. (b) upon receiving actual knowledge, or on being notified by the appropriate Government or its agency that any information, data or communication link residing in or connected to a computer resource controlled by the intermediary is being used to commit the unlawful act, the intermediary fails to expeditiously remove or disable access to that material on that resource without vitiating the evidence in any manner. Explanation:- For the purpose of this section, the expression “third party information” means any information dealt with by an intermediary in his capacity as an intermediary

Possible legal actions against counterfeiters In essence, Section 79 acts as a ‘safe harbor provision’ for intermediaries and protects intermediaries against third party information, data or communication link since they do not have any control over the information stored or transmitted. Under the Section (i) An intermediary must warn sellers against violation of others’ IPR or proprietary rights, (ii) It must not knowingly allow any such violation to take place, (iii)And if such a violation comes to light the intermediary is legally obliged to take down the information or product within 36 hours. The Delhi High Court in Christian Louboutin SAS v. Nakul Bajaj & Ors[13] hasheld that e-commerce websites, actively participating in the sale of goods/ services, are not intermediaries and can be held liable for misuse of trade marks on counterfeit products. So, the Act extends “safe harbor protection” only to those instances where the intermediary merely acts a facilitator and does not play any part in creation or modification of the data or information, provided the intermediary removes any unlawful content on its computer resource on being notified by the appropriate Government or its agency or upon receiving actual knowledge. In U.S too in the case of Milo & Gabby, LLC v. Amazon.com[14] the court adopted the jury’s finding that Amazon.com was not liable for “offering to sell” the alleged infringing products at issue.

Trademark infringement suit

At the international level, the ‘Paris Convention for the Protection of Industrial Property’ that came up in 1883 was the foundation of the modern IP law laying down minimum global standard for protection of IP rights. Article 6bis of this convention provided protection to trademarks even in countries other than their countries of registration. World Trade Organization would then go on to adopt Trade-related Aspects of Intellectual Property Rights (TRIPs) which has further enhanced uniform IP protection, but a need for uniform legal framework against counterfeiting beyond the traditional IP law is still being felt. Anti-counterfeiting Trade Agreement (ACTA) is a multinational treaty which sought establishment of uniform international standards for enforcement of intellectual property rights and combating counterfeit goods which under the elaborate Article 27 provides ways and measures for enforcement of IP rights in the digital environment. But, ACTA is regarded by many NGOs and consumers as a threat to individual privacy and democracy. Even the negotiations for the agreement were undertaken with a lack of decisional transparency. In 2012 the European Parliament invoked the Lisbon Treaty to reject ACTA. However, other countries such as the United States and Japan ratified it in the same year and seem to have a continued interest in implementing it. International development of trademark law resulted in the possibility of brands or companies to take recourse of courts for the enforcement of their trademark against the counterfeiter.

Under Section 28 of the Trademark Act, 1999 once a person registers a trademark for particular goods or services he gets exclusive right to use that trademark with respect to such goods or services and to obtain relief in respect of infringement of the trademark in the manner provided by the Trademark Act, 1999. Such a suit for infringement by a registered trade mark owner/proprietor is maintainable even against another registered trade mark owner/proprietor.[15] Although under Section 27(1) No person is entitled to institute any proceeding to prevent, or to recover damages for the infringement of an unregistered trade mark. Section 29 of the Trademarks Act, 1999 lays down what constitutes infringing acts.

Under the concept of well known trademarks given in Section 29 (4) of the Trademark Act, 1999 infringement suit can be filed even when the goods/services with respect to which identical/similar trademarks are used are entirely different, if the trade mark for which the suit is filed has acquired reputation and goodwill in India.[16]

Passing off An unregistered trademark of a business or goodwill of a business can be protected by the law of passing off which is a tort actionable under common law. Sections 27(2), Section 134(1) (c), and Section 135 of The Trademark Act, 1999 govern the passing off actions. The Hon’ble Supreme Court of India in the case of N.R. Dongre and Ors. Vs.Whirlpool Corporation and Anr[17] observed that “The concept and principle on which passing off action is grounded is that a man is not to sell his own goods under the pretence that they are the goods of another man. A trader needs protection of his right of prior user of a trade mark as the benefit of the name and reputation earned by him cannot be taken advantage of by another trader by copying the mark and getting it registered before he could get the same registered in his favour. We see no reason why a registered owner of a trade mark should be allowed to deceive purchasers into the belief that they are getting the goods of another while they would be buying the goods of the former which they never intended to do. In an action for passing off if should not matter whether misrepresentation or deception has proceeded from a registered or an unregistered user of a trade mark. He cannot represent his own goods as the goods of some body else.”

The essential elements to establish Passing off Action are: (i) Goodwill: the plaintiff has to establish goodwill of his business, or goods, or services with which the trade or public will associate the defendant’s activities. Goodwill need not be established in the mind of every member of the relevant public, but in a significant section of it;

(ii) Deceptive Similarity: This element has to be approached from the point of view of a man of average intelligence and of imperfect recollection. In the case of Cadila Health Care Ltd. vs Cadila Pharmaceuticals[18] the apex court observed, in an action for passing off on the basis of unregistered trade mark generally for deciding the question of deceptive similarity the following factors to be considered:

  1. The nature of the marks i.e whether the marks are word marks or label marks or composite marks i.e. both words and label marks.
  2. The degree of resemblances between the marks, phonetically similar and hence similar in idea.
  3. The nature of goods in respect of which they are used as trade mark.
  4. The similarity in the nature, character and performance of the goods of rival traders.
  5. The class of the purchasers, who are likely to buy the goods bearing the marks they require, or their education or intelligence and a degree of care they are likely to exercise in purchasing goods.
(iii) Loss due to passing off

Finally, it is very important that the party claiming benefit under passing off might incur loss due to other party’s action of passing off their goods / services as of the goods / services of the first party.

As per Section 27(2) of the Act, an action for passing off by an anterior user of a trade mark against a registered user of the same is maintainable. Priority in adoption and use of a trade mark is superior to priority in registration[19].

According to Section 134 of the Trademarks Act, 1999 no suit (a) for the infringement of a registered trade mark; or (b) relating to any right in a registered trade mark; or (c) for passing off arising out of the use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiffs trade mark, whether registered or unregistered, shall be instituted in any court inferior to a District Court having jurisdiction to try the suit.

A brand or company cannot approach court every time an infringement takes place. It will have to do cost-benefit analysis as approaching court involves heavy financial implications. Due to this an out of court counterfeit prevention tool like ‘Project Zero’ will be invaluable for brands and companies. Since the counterfeiters won’t be able to sell their stocks online they will have to establish physical stores which will make them more vulnerable to the search and seize ‘Anton piller’ orders.

The issues to consider

There are things to be considered with ‘Project Zero’ as well because it’s likely to affect trademark law too. How accurate the AI will be in determining the similarity of trademarks? What’s the guarantee that genuine products are not being flagged as counterfeits? Is there a mechanism for sellers whose products will be marked as counterfeit or infringing to raise objection against this? Since the project so far has been tested for limited brands how would it cope up with complex trademarks or trademarks which have similar designs?  There are much serious complexities involved as far as Artificial Intelligence and Trademarks Law is concerned. We are working on an article elaborately dealing with the  Issues of AI in respect to Trademarks Law and will upload the same soon

Should ‘Project Zero’ be brought to India?

As pointed out in previous paragraphs, the surveys conducted in India reveal one of every three products bought from an online retailer..

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Introduction

US-based semiconductor company Xperi Technologies had sued Samsung Electronics on the grounds that the South Korean tech conglomerate made unlawful usage of 24 patented technologies owned by the Xperi company. According to earlier reports, the allegedly infringed patents comprise a extensive variety of semiconductor processing, bonding, and packaging technologies which had been used by the Samsung in the making of numerous smartphone models over the past few years, including the flagship Samsung Galaxy S6, its sequels, and even the Galaxy Note 8.

Samsung Electronics had entered a partnership with the company in 1997. This partnership revolved around several licenses authorizing Samsung to engage some of the company’s semiconductor patents; though, the most recent license obtained by the Samsung Company had already expired in December 2016. Despite this, Xperi alleges that Samsung constantly continued to use its patented technologies without sanction or paying fair compensation to the Xperi. These patents have allegedly been used for the making of several smartphone models including the Samsung Galaxy S6 and Galaxy S7 series, as well as the flagships including Samsung Galaxy S8 and Galaxy Note 8 .After that, Xperi Technologies sued the OEM and the legal proceedings were filed at three US federal district courts, with the U.S. International Trade Commission, and with “certain international jurisdictions” that have not been outright specified.

Like many other companies of this standard, Samsung is no stranger to litigations and claims of patent infringement, but as usual, There was a period when Samsung and Apple were mocking each other with litigations every year, but both the companies ultimately decided to set aside their legal matters some years ago in courtesy of a healthier market. Nevertheless, litigations still happen, Samsung along with Qualcomm and GlobalFoundries have all been prosecuted by the US branch of the Korea Advanced Institute of Science and Technology for prejudicial use of the FinFET manufacturing process.

Now Xperi Corporation has reached an agreement with Samsung to settle and terminate all pending litigation between the companies and entered into a new patent license agreement.

Here is the official Press Release by the Xperi:

Xperi Corporation (NASDAQ: XPER) (“Xperi” or the “Company”) today announced that it has reached an agreement with Samsung Electronics, Co., Ltd. (“Samsung”) to settle and dismiss all pending litigation between the companies. In connection with the settlement, the companies have entered into a new patent license agreement.

“We have a long-standing relationship with Samsung and are pleased to put this dispute behind us,” said Jon Kirchner, CEO of Xperi. “We are hopeful that the settlement and license agreement will open the door for our two companies to work together on a number of new technologies going forward.”

The terms and conditions of the agreement are confidential.

Xperi Corporation (Nasdaq: XPER) and its brands, DTS, FotoNation, HD Radio, Invensas and Tessera, are dedicated to creating innovative technology solutions that enable extraordinary experiences for people around the world. Xperi’s solutions are licensed by hundreds of leading global partners and have shipped in billions of products in areas including premium audio, broadcast, automotive, computational imaging, computer vision, mobile computing and communications, memory, data storage, and 3D semiconductor interconnect and packaging. For more information, please call 408-321-6000 or visit www.xperi.com.

Xperi, DTS, Invensas, FotoNation, Tessera and their respective logos are trademarks or registered trademarks of affiliated companies of Xperi Corporation in the United States and other countries. All other company, brand and product names may be trademarks or registered trademarks of their respective companies.

Safe Harbor Statement

This press release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ significantly from those projected, particularly with respect to the Samsung legal proceedings, settlement, and license agreement, and potential collaboration between the Company and Samsung on new technologies. Material factors that may cause results to differ from the statements made include the plans or operations relating to the businesses of the Company; market or industry conditions; changes in patent laws, regulation or enforcement, or other factors that might affect the Company’s ability to protect or realize the value of its intellectual property; the expiration of license agreements and the cessation of related royalty income; the failure, inability or refusal of licensees to pay royalties; initiation, delays, setbacks or losses relating to the Company’s intellectual property or intellectual property litigations, or invalidation or limitation of key patents; fluctuations in operating results due to the timing of new license agreements and royalties, or due to legal costs; the risk of a decline in demand for semiconductors and products utilizing our audio and imaging technologies; failure by the industry to use technologies covered by the Company’s patents; the expiration of the Company’s patents; the Company’s ability to successfully complete and integrate acquisitions of businesses; the risk of loss of, or decreases in production orders from, customers of acquired businesses; financial and regulatory risks associated with the international nature of the Company’s businesses; failure of the Company’s products to achieve technological feasibility or profitability; failure to successfully commercialize the Company’s products; changes in demand for the products of the Company’s customers; limited opportunities to license technologies due to high concentration in applicable markets for such technologies; the impact of competing technologies on the demand for the Company’s technologies; failure to realize the anticipated benefits of the Company’s recent acquisition of DTS, Inc., including as a result of integrating the business of DTS; pricing trends, including the Company’s ability to achieve economies of scale; the expected amount and timing of cost savings and operating synergies; and other developments in the markets in which the Company operates, as well as management’s response to any of the aforementioned factors. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this release.

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and elsewhere, including the Risk Factors included in the Company’s recent reports on Form 10-K and Form 10-Q and other documents of the Company on file with the Securities and Exchange Commission (the “SEC”). The Company’s SEC filings are available publicly on the SEC’s website at www.sec.gov. Any forward-looking statements made or incorporated by reference herein are qualified in their entirety by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company or its business or operations. Except to the extent required by applicable law, the Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

Author: Lakshay Kewalramani, Intern at Khurana & Khurana, Advocates and IP Attorneys. In case of any  queries please contact/write back to us at swapnils@khuranaandkhurana.com.

References:

[1] https://investor.xperi.com/news/news-details/2018/XPERI-Announces-Settlement-and-New-Patent-License-Agreement-with-Samsung/default.aspx

[2] https://www.sammobile.com/2017/10/03/samsung-tessera-lawsuit/

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What is a Trade War?

Trade war is one of the issues that may affect the associated alliances and eventually lead to influence the other sectors as well. As noted above trade war can result from protectionist penchant. Protectionism represents actions of the Government and policies made by it to restrict international trade, generally having the intention of protecting local businesses and jobs from foreign competition. In 2017 and 2018, President Donald Trump had started a protectionist campaign, which an attempt to restore the manufacturing jobs back to the United States from other nations, such as China and India.[1]

History of Trade Wars

In past also there were many trade wars happened between many countries and in some trade wars both China and USA were party to it. These are some examples of past traded wars,

(1) Opium war: The First Opium War fought between the Qing dynasty and the British Empire in 1839 and 1842 over the ban on trafficking of Opium by the British East India Company into China. Due to this incident China lost Hong Kong to Britain during the second Opium war in 1856-1860. Britain with France coerced China to allow all of China to foreign merchants for the trade of Opium and exempt foreign import duties. These two wars weakened the Qing dynasty and led to modernization of China.

(2) The Smoot-Hawley Tariff Act, 1930: To protect the down-streaming of stock market and domestic industry, US president Herbert Hoover signed the Smoot-Hawley Tariff Act which was brought by Senators Reed Smoot and Willis C. Hawley. The objective of the Act was to protect the US farm sector. However, president Hoover expanded the scope of the Act to include about 20,000 products from various sectors. When the US became successful in reducing its import dependency in few years, the retaliatory measures from other countries led to 61% dip in US exports by 1933. This trade war brought the Great Depression. However, the act was repealed with an enactment of the Reciprocal Trade Agreements Act of 1934, the US Congress gave the authority to its President to negotiate bilateral trade deals without prior Congress approval.

(3) Chicken wars: In early 1960s, France and Germany imposed high tariffs on chickens imported from the USA as the demand for European chickens among people which was cheaper in price. The US retaliated with imposing higher tariffs on a bunch of commodities including French brandy and Volkswagen buses. US even threatened to bring back NATO troops to Europe. However, France and Germany didn’t change the tariff price under the pressure of USA, but consumers from both sides of Atlantic Ocean were the real losers.

(4) The Pasta War: When the Regan administration was in power in US, it raised tariffs on Pasta from Europe in 1985 as it’s complains of discrimination against its Citrus products. Europe retaliated in kind with higher tariffs on lemon and walnuts imported from America. In August 1986, both sides signed an agreement ending the citrus dispute and in October 1987 ended the pasta dispute.

The US-China Trade war

President Trump in his “America First” approach in way of protectionist thought decided that by imposing an extra tax or tariff on imported product mainly Chinese products and making the goods of the US companies he will make life easier for US companies.

On March 23, 2018 the US imposed new tariffs on steel and aluminium. Most of the largest steel exporters to the US were exempted at least until May 1, but Chinese companies were not being exempted in this relaxation period.

On April 2, 2018 China retaliated with new tariff rates on 128 categories of products, including pork, fruit and nuts, steel pipe for the oil industry, and ethanol. On April 3, 2018 the US administration announced a new list of 1,333 Chinese product categorised under that will come under 25 per cent tariffs. On April 4, 2018 China set out its list of products for possible retaliation, including soya beans and cars which are mainly exported from US. On April 5, 2018 President Donald Trump issued, a statement saying that, “In light of China’s unfair retaliation, he has instructed the US trade representative to consider whether $100bn of additional tariffs would be appropriate, and to identify which products should be affected.”

On June 15, 2018 President Donald Trump decided to impose $50bn worth tariff on the products imported from China. The White House claimed the new restrictions were justifiable by Beijing’s old practice of stealing US companies’ intellectual property. US tariffs on a $34bn tranche of 818 product lines, mainly consists of agricultural products was effected from July 6. On June 16, 2018 Beijing announced it would retaliate against new US tariffs, with the Commerce Ministry saying that it would “immediately introduce countermeasures of the same scale and strength”. China’s finance ministry said, “It would begin imposing its own 25 per cent tariffs on 545 categories of US products worth $34bn including soya beans, beef, whiskey and off-road vehicles from July 6”. It also threatened to add a further $16bn later, targeting US energy exports such as coal and crude oil. On June 18, 2018 President Donald Trump ordered US trade officials to identify a further $200bn in goods from China which can be subjected to 10 per cent tariff, if Beijing follows through on the retaliation measures it announced on June 16. Mr Trump added that, “He was also prepared to impose tariffs on an additional $200bn beyond that”.

Then, China and the US embarked upon a full-scale trade war as both sides threated each other over new trade tariffs. On Tuesday July 10,2018 President Donald Trump’s administration released a list of proposed tariffs on $200bn worth of goods, ranging from auto parts to food ingredients to construction material. On August 1, he asked his trade tsar to consider increasing the tariff on these goods to 25 per cent.[2]

Impact of Trade War on Global Economy

The Trump’s trade war is not only between China and US, but it also creating new impetus for the EU and Asia to speed up the opening of their markets to forge closer economic ties. This will lead to even faster growth in trade between the EU and Asia rise in trade and investment.[3]

Recent Developments

The latest round of China-US trade talks made some important progress and China has agreed to make key concessions to expand American imports in agriculture, energy, manufacturing and services which was the main demand of President Donald Trump. The two sides had candid, specific and constructive discussions among themselves. In Argentina two countries discussed on the topics of trade balance, technology transfer, protection of intellectual property rights (IPR), non-tariff barriers, service sector, agriculture and enforcement mechanism, as well as certain issues of particular concern for the Chinese.[4]

Changes in the IP Laws of China

After the last talk between the two Government officials, they have tried to end the war of the Chinese theft of American intellectual property which was going on for decades. China previously used to force companies for a free technology transfer in order to carry out business inside China. Chinese officials passed an IP law that would ban companies that are caught stealing technology from issuing bonds or accessing other financing. The government also said that it will accelerate the passage of a new foreign-investment law which will include administrative measures to protect the IP of foreign companies and ease pressure on them to transfer technology to local partners. In addition to this, The Chinese government has  emphasized on trademark enforcement cases and big foreign brands such as Lego, Alfred Dunhill and New Balance will be benefitted out of this new enforcement. Though many steps are being taken but the International business groups are still sceptical about the environment of IP protection in China. [5]

The significant change can be seen in the case of Hubei Gezhouba Sanlian Indus. Co. v. Robinson Helicopter Co.[6] ,where the Wuhan court of China recognised and enforced the U.S. Judgement. The Wuhan court in its judgement cited that the U.S. Judgement did not violate basic principles of PRC (People’s Republic of China) laws, state sovereignty, security or the public interest. It also dismissed the appeal by the Defendant to trail the case again as the Court observed that the merits of the case have been adjudicated before the US Court. This judgement became a landmark judgement and open gates for new possibilities where parties can enforce their foreign Court judgements in PRC without re-litigating the merits of the dispute.[7]

Conclusion

From the above situation, it clear that China had very strict and biased IP laws, which was making foreign companies to do business in China market. However, due to the trade wars between US & China, there has been a relaxation in the laws of the country resulting in liberalization of its market and allowing foreign players to participate in its domestic market. Few of the significant steps were taken by the Chinse Government for the protection and enforcement of IP laws. Not only the Chinese Legislatures, but also the Chinese Judiciary is helping the country in this process by recognising and enforcing foreign judgements in its national territory. This is a gradual process and will take its own time for both China and US to settle down the matters and grow their business, as in the end should think about their country’s economy and consumers.

If we analyse the situation, we observe that the basic principles of economics, i.e., demand and supply, has once again come into play. The shortage of supply of a good, either finished material or raw material, will increase the final consumption price for the consumer. Moreover, the burden of increased tariff will also be borne by the final user.

Author: Rohan Dalbehera, Intern at Khurana & Khurana, Advocates and IP Attorneys. In case of any  queries please contact/write back to us at swapnils@khuranaandkhurana.com.

References:

[1] https://www.investopedia.com/terms/t/trade-war.asp

[2] https://ig.ft.com/us-china-tariffs/

[3]https://www.forbes.com/sites/yuwahedrickwong/2018/07/13/how-the-u-s-china-trade-war-will-transform-the-global-economy/#2dd4be7e1c09

[4]https://economictimes.indiatimes.com/news/international/china-pledges-to-expand-us-imports-ip-protection-for-deal-to-end-trade-war/articleshow/67794582.cms

[5]https://www.bloomberg.com/news/articles/2019-01-21/u-s-china-trade-talks-falling-short-on-make-or-break-ip-issues

[6] 425 Fed. Appx. 580 (9th Cir. 2011)

[7]China: PRC Court Recognizes A U.S. Court Judgment For First Time Based On Principle Of Reciprocity

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What is Patent Licensing?

Licensing is a process where the owner of the product gives permission to another entity who can extract benefit from the licensed product. Same as that licensing a patent means the owner is giving access to another individual or organisation to make, use and sell etc. with his patented invention. Usually license agreement comes with some terms and condition agreed by the parties, which have binding effect on them. Few of the content of the agreement consists of definition of the product, mode of the payment between parties, purpose of the license and many more.[1]

Why Patent Licensing is being done and how it differs from Patent Transfer?

A patent owner can license his invention for many reasons, such as, he may not have enough money to or manufacturing facilities, so he gives license to third party to make, sell and distribute his patented invention in return of ‘royalty’. Alternatively, the owner of the patented invention may have a small manufacturing facility which might not be able to fulfil the demand of the consumers, so he may license another party to manufacture his product and sell which will create another stream of income for him. The case may be such that, the patent owner has his business in only one geographical location and he wishes to expand it to other areas. So, he will license his product to another party on that location to manufacture and distribute the product and pay royalty to the owner to his profits. Entering into a licensing agreement can help to build a mutually-beneficial business relationship. Unlike selling or transferring a patent to another party, here the licensor continues to have property rights over the patented invention.[2]

Types of Patent Licensing

Type of license to be issued to a patent is the sole business of the patent owner depending on his requirement.

1. Exclusive Licensing In an Exclusive License, there is the transfer of ownership by the patent holder. The only thing which the owner has is the title. This is just like stepping into the shoes of the patent owner and acquiring all the responsibility of it. The only thing which the licensee cannot do is that he cannot license the patent to anyone else. It is exclusively granted to him and he cannot further license it to anybody else. Upon grant of the exclusive license even the patent holder cannot sell the goods in the territory where the licensee has acquired exclusive license. In this type of licensing the risk of infringement is less as it is being less exploited and the licensee will have monopoly over the market, so the cost of the product will be higher than the usual price and the revenue will also be higher. So, this will also lead to the higher royalty payment to the Licensor who has assigned the license.

For example, a person gets a patent over a particular drug which cures a disease and no other medicine is capable of doing so. But he doesn’t have enough money and infrastructure to produce, distribute and sell the medicine on a mass scale. So, the patent owner gives exclusive licensing to a pharmaceutical company who will produce, distribute and sell that particular drug. Except for title of the patent, rest all rights are vested with the licensee. This will lead to generation of high revenue and payment of high royalty.

But the difficulty here is that if the patented product is in relation with the reasonable requirements of public and it is in huge demand and the price too high, so it is unable to produce the needed demand and the price is not affordable by many people then without the permission of the patent owner, paying him royalty the Government can issue also Compulsory licensing if it fulfils the condition under Section 84 of the Patents Act, 1970.

2. Non-exclusive Licensing It gives the same right to more than one licensee. This implies that one licensee may exploit the invention but along with him others who have been given the license for the same product may be eligible for equal exploitation. In this scenario, more than one person/entity can exploit the patented product. But the product is of such a nature that to generate more revenue you have to licensee it to as much as entities possible.

For example, a company dealing with the steering technology of the cars came up with a patented invention. Rather than giving license to just one car manufacturer to produce and use it, if it gives permission to different car manufacturers for specific territory to produce and use it for those territory then he can generate more royalty from the companies.

Recent Case Study of the Patent License Agreement between Oppo and Ericson

Ericsson is a company that mainly deals with communication service. The company portfolio consists of Network, Digital Services, Managed Services and Emerging business. It helps its customers to be digitalised which will increase their efficiency.

Oppo being a global leading smart device brand, has been relentlessly working towards in the pursuit of aesthetic satisfaction and innovative technology. It has total number of 40,000 employees, and it is working in 30+ countries and regions and has 6 research institutions and 4 R&D centers worldwide.

Recently they entered into a Global Patent license agreement. This agreement covers cross license covering 2G, 3G and 4G patent portfolios from both the companies. Besides, cross-license, the agreement also includes business cooperation on a number of projects related to 5G such as device testing, customer engagements.

Conclusion

Though various market players, multi-national companies, research institutions and universities invest a huge R&D to invent new product and get it patented in an expectation to generate more and more revenue out of the patented product. The above case study of ‘Oppo and Ericsson’ is clearly a business agreement and the sharing of the patented invention between the two companies has the sole purpose to generate money only by this sharing. Both companies are major players in the market and they invest a huge amount in their R&D for creating new technologies, so if any other person uses their technology and if it gets leaked then it will be a heavy loss for the companies.

But there are some market players who offer free license of their patented product for the use of mass public. One such entity is billionaire Elon Musk who provided free license of all the patented products of Tesla to be used by anyone who has good faith. He had quoted that, “No patent against people who use our tech in good faith”. He said that the inventions were patented to be protected from the other big car manufacturers, but by doing so the ultimate goal of Tesla which is to lessen down the global warming by emitting zero Carbon Dioxide in transport sector. But 100 million fossil fuel powered internal combustion engine are being produced it was impossible to achieve its goal. Though there are many companies from China, Japan and Germany who are producing e-vehicles but they are very costly and not affordable by people to use on day to day basis. So, by free licensing these patents he is giving a chance to all the car manufacturers to use his technology more efficiently to create affordable e-vehicles which has more driving range and can be used by mass people.

If we consider the scenario in India, companies like Tata, Mahindra are trying to produce e-vehicles but they are not able to capture the mass market. However, some companies such as Ether a Bengaluru based start-up has come up with a proper e-scooter though the price of it is on the high-end side which is inaccessible by most of the people. Even the Government of India has declared that all vehicles on Indian roads to be e-vehicles. Recently, the Kerela Government had declared that all its Government vehicles and mass transport buses will also be e-vehicles. Thus, it is need of hour to convert our transport medium through e-vehicles and abandon the internal combustion engines. So, this free license of the Tesla will serve the public at large and help them improving the e-vehicles more and more.

We can say that if any invention which will help the world to be a better place and improve the life-quality of people then it should be free licensed for more development condition it should be done in good faith having no malice intention to infringe the patent.

Author: Rohan Dalbehera, Intern at Khurana & Khurana, Advocates and IP Attorneys. In case of any  queries please contact/write back to us at swapnils@khuranaandkhurana.com.

References

[1] https://www.wipo.int/patents/en/faq_patents.html

[2]Ibid

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