Deceptively Similar Marks: Registration Allowed If Services/Goods are Different Although Within the Same Class

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Brief Facts of the Case

Karnataka Co-Operative Milk Producers Federation Ltd. (KMF), has been producing and selling milk and milk products, since 1985, under their mark ‘NANDINI’ which had been registered under Class 29 and Class 30.

M/S. Nandhini Deluxe is in the business of running restaurants since 1989 under the name ‘NANDHINI’ and had applied for the registration of the same.

The Deputy Registrar of Trade Marks had the application submitted by the restaurant chain and allowed for the registration for their mark ‘NANDHINI’ as well. The Intellectual Property Appellate Board (IPAB), however, set aside Deputy Registrar’s order, and the High Court confirmed the IPAB’s decision on the following grounds:

  • The mark ‘NANDINI’ (KMF) had acquired a distinctive character and was a well-known mark;
  • Products sold under the infringing mark ‘NANDHINI’ (Restaurant) were of the same classes as those under ‘NANDINI’ (KMF).
  • The use of the infringing mark is different only in one alphabet but with no difference in spelling or pronunciation in the local language and would very likely to cause confusion in the minds of public if allowed to be registered for the commodities falling in the same class;

In 2015, the proprietors of ‘NANDHINI’ (Restaurant) appealed to the Supreme Court against the decision of the High Court.

Arguments by the Parties:

Proprietors of ‘NANDINI’ i.e. KMF objected to the use of the mark ‘NANDHINI’ by the Appellants (Restaurant) on the grounds that:

  • It was deceptively similar to the mark of the respondent and was likely to deceive the public or cause confusion.
  • KMF had long and sustained use by the ‘NANDINI’ and had acquired a distinctive character and was well-known to the public.
  • The public associates ‘NANDINI’ with ‘NANDHINI’ because of phonetic similarity.
  • ‘NANDHINI’ was adopted by the restaurant chain to ride on the goodwill of trade mark ‘NANDINI’ (KMF).

Proprietors of ‘NANDHINI’ Deluxe objected that:

  • It was running the business of restaurant since 1989 and KMF had started using mark ‘NANDINI’ since the year 1985 only for milk and milk products and not for other products.
  • Goods and services of ‘NANDHINI DELUXE’ were totally different from that of the KMF and, therefore, there was no likelihood of confusion or deception among the public.
  • The monopoly under a Trademark only extends to the goods which are falling in a particular class and not the entire class of goods and the trade mark which is similar in nature can be registered for the goods which are falling within the same class but are not identical to those of the previously registered mark.

Court’s Ruling:

The Hon’ble Supreme Court granted the registration of the mark ‘NANDHINI’ by the restaurant on the condition that registration will not be given to them for milk and milk products.

The court relied on the following reasoning to determine whether a similar trade mark in respect of similar goods would cause deception and confusion in the minds of the users:

  • While the goods of both parties fall under the same classes (i.e. 29 & 30), the goods of the parties differ from each other.

One (NANDINI) was concerned with the production of only milk and milk products while the other (NANDHINI) dealt in fish, meat, poultry and game, meat extracts, preserved, dried and cooked fruits and vegetables, edible oils and fats, salad dressings, preserves etc. Furthermore, ‘NANDHINI’ had also relinquished its claim for milk and milk products.

  • The nature and style of the business of the appellant restaurant and the respondent federation were altogether different. One (NANDINI) was a manufacturer of dairy products while the other (NANDHINI) ran a full-scale restaurant business.
  • There’s mere phonetic similarity as far as the word marks are concerned (i.e. NANDHINI/NANDINI). However, the trade mark with logo adopted by both parties are different.

The restaurant chain uses the word ‘NANDHINI DELUXE’ which is followed by the tagline ‘the real spice of life’ and a device of a lamp accompanying these words.

On the other hand, the milk federation only uses the word ‘NANDINI’ beneath a ‘Cow’ logo and is encircled by egg shape circle.

  • There is a difference in not just the visual appearance but even in their products. The manner of business is different. All of these factors make it difficult to imagine that an ordinary man would associate the goods of the Restaurant as that of the Milk Federation.
  • The restaurant had applied the trademark ‘NANDHINI’ in respect of goods which are used in the products/services of restaurant business. Said items do not strictly belong to Class 29 or 30. Other items necessary to run their business or render their services include stationery, furniture, utensils and crockery all of which do not fall under class 29 or class 30.

To quote the SC:

“One other significant factor which is lost sight of by the IPAB as well as the High Court is that the appellant is operating a restaurant under the trademark ‘NANDHINI’ and it had applied the trademark in respect of goods like coffee, tea, cocoa, sugar, rice, rapioca, sago, artificial coffee, flour and preparations made from cereals, bread, pastry, spices, bill books, visiting cards, meat, fish, poultry and game; meat extracts; preserved, dried and cooked fruits and vegetables; jellies, jams, fruit sauces, etc. which are used in the products/services of restaurant business. The aforesaid items do not belong to Class 29 or 30. Likewise, stationery items used by the appellant in the aid of its restaurant services are relatable to Class 16. In these circumstances, there was hardly any question of confusion or deception.”

Thus, the goods that are dealt with under the name ‘NANDHINI’ aren’t strictly under class 29 & 30. The milk and milk products, which are sold by the respondent under the trade mark of ‘NANDINI’, fall under Class 29 and Class 30 as per classification under Schedule IV to the Trade Marks Rules, 2002.

  • "Nandini/Nandhini” is a generic name, representing a goddess and a cow in Hindu mythology, and it is not an invented or coined word attributed to one party.
  • Referring to the judgement in Vishnudas Trading As Vishnudas vs The Vazir Sultan Tobaccoco. Ltd. JT 1996 (6), 366 1996 SCALE (5)267, it is stated that the proprietor of a trade mark cannot enjoy monopoly over the entire class of goods especially if he is not using the said trade mark in respect of certain goods falling under the same class. Refusal under Section 11(2)(b) cannot be made because both the parties started using the marks within a span of 4 years of each other and both have built a considerable reputation with the state boundaries for themselves over the years.

 

Thus, on all these grounds, the Supreme Court laid down that the two marks are not deceptively similar.

Conclusion:

The Supreme Court thus allowed the mark ‘NANDHINI’ to be registered and used by the restaurant based on the ground that it (device/logo) is not deceptively similar to the mark ‘NANDINI’ (device/logo) used by the respondents.

On the face of it, this decision may seem logically sound because denying registration on grounds of mere phonetic similarity, when the marks are visually poles apart and the products under them are also different, would be a hindrance to a healthy competition.

However, it would also be pertinent to note that the court seems to have overlooked the fact that in this case, ordinary person would mean any person hailing from Karnataka or one who has lived here for a considerable amount of time. To anyone, from any other part of the country, these marks would most probably be similar and confusing.

The restaurant chain operated within Bangalore and no one outside Bangalore would have plausible reason to be aware of this chain. The Milk Federation sells its products within the region of Karnataka. Hence, any one residing here for a long time would not confuse them. But, to any ordinary person from outside the city or state limits, these marks would seem to be confusing or having the same origin.

To understand this conundrum better, we can look back at the case of London Dairy v Londonderry wherein the Bombay High Court ruled that mere phonetic similarity would not amount to infringement of any sort. One mark was famous for its ice cream products. The other for its boiled confectionary. Both were sweets, but one was not confused for the other because the former had built a reputation for itself nationally while the new one was distinctly viewed by the consumers as something different. The consumers were not confused because they could differentiate between the origin of the two marks and their underlying products.

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TRADE MARK DILUTION vis-à-vis THE JEEP-ROXOR DISPUTE

Roxor vs Jeep

Jeep-Roxor Trade Dress Issue

Fiat Chrysler Automobiles (FCA) has moved the US International Trade Commission (USITC) against Mahindra & Mahindra to stop the sale of Mahindra’s Roxor ATV, alleging that Mahindra is violating the Trade Dress of the Jeep Brand. FCA has complained that the off-road Roxor’s design is similar to that of Jeep's traditional design. FCA has stated that due to the manufacture of Roxor in India and its assembly in the US, the cost of Roxor is low and thus resulting in the underselling of Jeep. The FCA also claims that the Roxor infringes some of the design elements from the Jeep brand, such as the “boxy body shape with flat-appearing vertical sides and rear body ending at about the same height as the hood,” and has produced the photographic evidence to suggest similarities between the Jeep and the Roxor.

FCA’s Allegations

The allegations made by FCA against Mahindra and Mahindra could be summed up as two major issues:

  1. Mahindra has infringed Jeep’s trade Dress
  2. Mahindra has diluted Jeep’s trade mark

To establish whether there’s any such infringement or dilution, it becomes imperative that we first understand the concept of Trade Dress and the concept of dilution.

  1. What Is Trade Dress Infringement?

    1. What is a Trade Dress?

A Trade Dress is different from a Trade Mark[1]. Trade dress refers to the overall appearance of a product. It is an umbrella term and includes shape (Coca-Cola Bottles[2]), colour (Red Soles of Louis Vuitton Shoes[3]), design (Herme’s bag designs[4]), texture (use of braille markings on products), the packaging (Colgate’s Toothpaste Pack), labels (Levi’s Red Tabs on Jeans), presentation. It also encompasses the manner of promotion or advertisement including the use of distinctive graphics, configurations, and marketing strategies.

Courts have found a variety of trade dress to be distinctive – the bean shaped window used by Jelly Belly Candy Company, GOLDFISH’s fish-shaped crackers, Hershey's KISS chocolates, Taco Cabana’s restaurant décor, the number 007 as a reference to James Bond, etc. have all been held to be trade dresses, the infringement of which would result in legal action.

In the US, protection against trade dress infringement is provided for in the Lanham Trademark Act. Similar statutes and various common-law doctrines also provide protection to trade dress to ensure fair competition.

The law of trade dress generally serves four purposes[5]:

  • to protect the economic, intellectual, and creative investments made by businesses in distinguishing their products.
  • to preserve the good will and reputation that are often associated with the trade dress of a business and its merchandise.
  • to promote clarity and stability in the marketplace by encouraging consumers to rely on a business's trade dress when evaluating the quality of a product.
  •  to increase competition by requiring businesses to associate their own trade dress with the value and quality of the goods they sell.

While it is advantageous for businesses to register their trademarks, service marks, and trade names with the government, trade dress has no formal registration requirements and receives legal protection simply by being distinct and non-functional.

  1. How to Prove Infringement of Trade Dress?

To establish a claim for trade dress infringement, a company must demonstrate the distinctiveness of its product's appearance. However, such a protection cannot be granted for any feature that is functional in nature. Goods that are packaged or promoted in an ordinary, unremarkable, or generic fashion normally receive no legal protection under the law of trade dress. Simultaneously, something as simple as a grille on the front end of the Jeep automobile may be considered sufficiently original if the manufacturer takes deliberate and tangible steps to promote that aspect of the vehicle over a long period of time or if the public associates that grille with FCA.

  1. Distinctiveness

While the Lanham Act does not mention the requirement of a showing of distinctiveness, courts have universally imposed that requirement. Thus, the plaintiff must show that consumers perceive the particular trade dress as identifying the source of a product. Even if a mark is found to be not inherently distinctive, it still can be said to be distinctive if it has acquired a secondary meaning. Thus, the mark should be such that the consumer has created an association between the trade dress and the source of the trade dress (the company).

In the present case, Jeep has acquired recognition for its overall appearance and the general reaction to Mahindra’s Roxor was to associate it with FCA’s Jeep[6]. The FCA owns all rights for Jeep Trade Dress and has standing to bring an action for trade dress infringement under the United States Lanham Act and additionally, has strong rights in its Jeep Design Marks based on use and recognition of them, under Section 43(a) of the United States Lanham Act. These factors will make it difficult for Mahindra to prove that they are not infringing upon Jeep’s trade dress.

  1. Functionality

The Lanham Act doesn’t provide for protection of a trade dress of a functional nature. If trademarks were allowed for the functional features of a product, then the owner of such a trademark would end up achieving a monopoly over these features regardless of whether they qualify as patents, thereby affecting competition.

In the case of Qualitex[7], the court says that a manufacturer could not use the shape (special illumination-enhancing shape) as a trademark because, after the patent expired, this would be a hindrance to competition.

A quick review of the jeep’s history[8] would highlight that the jeep was built in the manner in which it was to serve a functional purpose[9] – to serve the US Army. Mahindra might hold on to this straw to prove that the features are functional and hence not protectable as trade dress. The Roxor is an off-road vehicle and is therefore suitable rugged terrains which other vehicles might not be able to tread. But other features, such as the use of the grille and the boxy shape would be difficult to justify and thus this argument would be weak at best.

FCA has stated that Roxor dilutes its brand and has thereby sought an injunction against Mahindra. To determine whether there is a dilution of brand, we need to understand the concept of dilution.

  1. What Is Trade Mark Dilution[10]?

    1. Dilution as a Concept

The Federal Trademark Dilution Act 1995 prohibits marks that dilute the distinctiveness of famous marks in the United States. Under this statute, the owner of a famous mark can stop others from commencing use of a mark in commerce which is likely to dilute his own famous mark, even in the absence of actual or likely confusion, competition or actual economic injury. The goods and services for which the mark will be used are irrelevant in determining likelihood of dilution.

To qualify as famous, a mark must be “widely recognized by the general consuming public of the United States, and must satisfy, inter alia, the duration, extent and geographic reach of advertising and publicity for the mark; the amount, volume and geographic extent of sales of goods or services offered under the mark; the extent of actual recognition of the mark; whether the mark is registered in the United States

There are 2 limitations to a mark being declared famous in the United States – Firstly, it must be distinctive (whether acquired or inherent). Secondly, fame in a limited geographic market in the United States or in a specialised market is insufficient.

There are two ways by which a famous mark can be said to be diluted: blurring and tarnishing.

  1. Blurring applies when a person uses a trademark in a manner which diminishes the uniqueness of a famous trademark. It is an association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark. To illustrate, if someone adopts the famous mark Sony to provide goods and services unrelated to electronics, such as shoes, then such a use may dilute or blur the distinctiveness of the Sony mark such that it becomes associated with additional sources instead of a single source.
  2. Tarnishing happens when the use of the mark is such that it would negatively impact the reputation of the famous mark. It is an association arising from the similarity between a mark or trade name and a famous mark that ends up harming the reputation of the famous mark. Thus, if someone adopts the tradename Patanjali to produce and sell liquor, the use may dilute the Patanjali mark by tarnishing the goodwill and reputation associated with the Patanjali mark. If the mark becomes associated in the eyes of consumers with liquor, the goodwill attached to the family-friendly, environmentally-positive brand will presumably be damaged.

In the present factual matrix, Mahindra has not made any use of Jeep’s brand name or trademark in any form whatsoever. So, the claim that Mahindra’s sale of Roxor dilutes the Jeep brand name is baseless and holds no ground. While the impression is that Roxor looks similar to Jeep, there seems to be no evidence to show that Roxor rides on the Jeep brand name or attempts to tarnish it negatively.

  1. Proving Dilution[11]

In March 2003, in a case[12] the US Supreme Court laid down that the federal dilution law, unlike traditional trademark law, was intended to protect the famous marks and not the consumers. It stated that to claim dilution, the owner of a famous mark must demonstrate that actual dilution, and not the likelihood of dilution, has occurred. Thus, dilution can only be proven by evidence of actual harm to the famous mark.

FCA claims that consumers will attribute any defects or negative impressions of the Roxor to FCA thereby harming FCA’s reputation and the intangible goodwill associated with its brand. It also claims that there is a substantial threat that consumers will perceive the Roxor as having quality issues, as not being as durable and off-road capable as expected for Jeep brand vehicles, or as simply not worth the price being charged for them. It must be noted that FCA does not provide any substantial evidence to show any such negative impact. Instead, they have stated what could bee termed as mere speculations as to dilution thus, not providing enough grounds for remedy.

  1. Remedies Against Dilution[13]

Generally, the only remedy available is an injunction against further dilution. However, if the plaintiff can prove that the defendant wilfully intended to ride on the reputation of the famous mark or to cause dilution of the famous mark, then other remedies such as attorney’s fees, damages, defendant’s profits would also be available.

Should the FCA, despite the odds, be able to prove that there’s any trademark dilution, the only remedy they could get is an order of injunction asking Mahindra to stop the sale of Roxor in the US. FCA’s sale of Jeep products has been on the decline before Roxor was even introduced to the market. Thus, any claim for damages should not be entertained.

  1. Exceptions to Dilution

The Act makes clear that certain actions will not deemed as dilution. Fair use (whether in advertisement or parody), non-commercial use, and all forms of news reporting and news commentary would not constitute dilution under the Act.

Mahindra need not claim any defence because prima facie, FCA does not have enough evidence to back their claim for Trademark dilution.

Conclusion

A careful perusal of the complaint made by FCA and a quick glance over Mahindra’s Roxor would show that, there is no trademark violation per se because the logos and the names of the vehicles are not similar at all. The word “Mahindra” is clearly and boldly visible on Roxor’s body. Thus, FCA’s claim of Trademark Infringement does not seem to hold good. And essentially, the Roxor and the Jeep have different specifications that end up causing a difference in how these two operate off road[14].

In the end, it boils down to infringement of Trade Dress. To determine whether the Roxor is an infringement of Jeep’s Trade Dress, the question that needs to be addressed is whether the Roxor looks so much like a Jeep that the public, instead of finding it similar, confuses it entirely with a Jeep model. And it would seem like Mahindra would have a tough time proving their case[15]. Thus, the test for likelihood of confusion[16] becomes important.

Section 43(a) does not state in expressive terms as to in whom the likelihood of confusion must exist. As a rule, an appreciable number of ordinarily prudent purchasers of the products in question should have been misled or confused. However, section 43(a) does not always require that the likelihood of confusion be among the actual consumers or the potential consumers of a manufacturer or business. The Fourth Circuit Court has laid down that a trade dress infringement could be based on a likelihood of confusion among the general public if such public confusion will adversely affect the plaintiff’s reputation with all the parties it interacts with.[17]

The likelihood of confusion is determined on the basis of the overall visual impression of the parties’ products or services in terms of a number of factors[18] (such as strength of dress; proximity of goods; similarity of dresses; evidence of actual confusion; marketing channels used; type of goods and degree of care likely to be exercised by purchaser; defendant’s intent in selecting dress; and likelihood of expansion of product line). Confusion, however, must be likely among a substantial number of consumers. Only a few misled consumers are insufficient to maintain a cause of action.

The Second Circuit Court has also extended the likelihood of confusion to the general public based on an adverse impact on the trademark user’s reputation[19]. Actual confusion is not the standard for trade dress infringement; rather, it is enough to show that confusion is likely among consumers. This is different from trademark dilution where the plaintiff would require actual evidence to show harm caused by dilution. Thus, FCA could claim that Mahindra’s Roxor is likely to cause confusion amongst the general public with respect to its apparent counterpart Jeep. However, this could be a tall claim because while most magazine and journal reports point out to the similarity between the Roxor and the Jeep, none of them mention that the Roxor is being mistakenly confused for Jeep or vice versa. Additionally, FCA would have to prove that its goodwill/reputation suffers an adverse impact because of Roxor.

We hope this article was a useful read. 

Please feel free check our services page to find out if we can cater to your requirements. You can also contact us to explore the option of working together. 

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[12] Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003).

[17] Communications Satellite Corp. v. Comcet, Inc., 429 F.2d 1245, 1251 (4th Cir. 1970).

[18] Adidas-Salomon AG v. Target Corp., 228 F. Supp. 2d 1192 (D. Or. 2002).

[19] Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200, 205 (2d Cir.1979).

Monsanto Vs Nuziveedu Patent dispute: Brief Analysis of Judgement

Hands hold and protect scales of justice and law concept vector illustration

The recent advancements in the field of plant biotechnology has promoted multifold growth of agro-biotech industry. The recent research in the plant genomics has resulted in producing sustainable varieties of plants and crops. The increase in the number of patents stands as a witness for the paradigm shift in the field of plant biotechnology.

However, enforceability of these patent rights remains a challenge. The increase in the number of patent infringement litigations in the agro-biotech industry in the recent times, is an indication of said challenge. A brief analysis of patent litigation between agro-biotech based companies, Monsanto and Nuziveedu Seeds is presented below.

Background of the case

Monsanto is an American multinational agrochemical and agricultural biotechnology corporation, whereas Nuziveedu Seeds is an Indian agribusiness company, known to be among the largest hybrid seed companies in the country. Monsanto had licensed its patent IN214436 relating to Bt. Cotton technology to different Indian companies including Nuziveedu Seeds, for which a lifetime fee of Rs. 50 lakh was charged along with a recurring ‘trait value’ as compensation. The Indian companies utilized said patented technology to produce cotton seeds that are resistant to boll-worm attacks.

The Indian companies demanded Monsanto to reduce the trait fee as the State Governments were passing new price control orders to fix the trait fees. Monsanto refused to reduce the trait fees. Consequently, the Indian companies stopped paying royalties to Monsanto since October 2015. Subsequently, Monsanto sent a notice to Nuziveedu in November 2015 regarding the termination of their sub-license. Nuziveedu and few other Indian companies approached Competition Commission of India (CCI) against Monsanto and alleged Monsanto of anti-competitive practices including “the abuse of dominant position” and “anti-competition agreements”.

Monsanto terminated its contract and initiated arbitration proceedings for the recovery of the due amount of Rs. 400 crores from the Indian companies. Additionally, a lawsuit was initiated by Monsanto before Delhi High Court against Nuziveedu Seed Ltd., Prabhat Agri Biotech Ltd. and Pravardhan Seeds Pvt. Ltd, seeking an injunction for patent and trademark infringement.  

As a response to the infringement allegations, the defendants filed a counter-claim for the revocation of the plaintiff’s patent. The defendant urged to revoke the patent as per the provisions of Section 8, Section 10(4) and argued that the patent is invalid, as it falls within the scope of Section 3(j) and 3(h) of Patents Act.

Decision by Single Judge of the Delhi High Court

The Single Judge of the Delhi High Court reinstated the sub-licence that was terminated by Monsanto. It allowed Nuziveedu Seeds and other Indian companies to continue using the patented technology till the suit is disposed, wherein, the trait fee must be paid in accordance with the government set rates. The Single Judge also rejected the arguments of the defendant about the validity of the patent.

Appeal to Division Bench of Delhi High Court

Both the parties appealed to the Division Bench of Delhi High Court against the order of Single Judge. Monsanto challenged the decision of the Single Judge to re-instate the licence terminated by them. The defendants challenged the rejection of their arguments about the validity of plaintiff’s patent.

 Decision by Division Bench of the Delhi High Court

The Division Bench concluded that the subject patent falls under the provisions of Section 3(j) of the Patent Act and held that the claims of the patent are unpatentable. The Division Bench upheld the order of Single Judge regarding the trait fee payable by the Indian companies to Monsanto. The court gave a time period of three months to Monsanto to seek protection for its invention under “The Protection of Plant Variety and Farmers Right Act, 2001”. 

Analysis on the Judgement

The order of the Division Bench to invalidate the patent under Section 3(j) is not convincing in our view. The court appears to have arrived at the judgement without adequate claim construction and expert witness.  The claim construction is the primary requirement in deciding the validity of a patent, which in the present case, appears to have been inadequate. The misinterpretation of Section 3(j) to invalidate the patent is a major setback to innovation in the field of plant biotechnology.

According to Section 3(j), following inventions are not patentable:

“(j) plants and animals in whole or any part thereof other than micro organisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals”

According to Section 3(j), plants and animals per se or any part thereof are not patentable. Moreover, ‘essentially biological processes’ to produce plants and animals are also not patentable. Though the definition of ‘essentially biological processes’ was not defined in the Patents Act, Rule 26(5) of the EPC states that “a process for the production of plants or animals is essentially biological if it consists entirely of natural phenomenon such as crossing or selection”.

In the present case, the court made an observation that:

“The conclusion that the court draws therefore, is that transgenic plants with the integrated Bt. Trait, produced by hybridization (that qualifies as an “essentially biological process” as concluded above) are excluded from patentability within the purview of section 3(j), and Monsanto cannot assert patent rights over the gene that has thus been integrated into the generations of transgenic plants.”

It is to be observed that, Monsanto got a patent for the introgression of specific Bt. bacteria genes into the cotton genome with human intervention. This cannot be considered as an essentially biological processes. So, the court’s observations in considering the claims of the Monsanto’s patent as essentially biological processes appears to be inappropriate.

Monsanto had alleged infringement of Claim 25 of the patent; claim 25 is recited below:

“A nucleic acid sequence comprising a promoter operably linked to a first polynucleotide sequence encoding a plastid transit peptide, which is linked in frame to a second polynucleotide sequence encoding a Cry2Ab Bacillus thuringiensis 8-endotoxin protein, wherein expression of said nucleic acid sequence by a plant cell produces a fusion protein comprising an amino-terminal plastid transit peptide covalently linked to said 5- endotoxin protein, and wherein said fusion protein functions to localize said 5-endotoxin protein to a subcellular organelle or compartment.” 

The claim deals with the extraction of a specific nucleic acid sequence from Bacillus thuringiensis (Bt bacterium) and inserted into a plant cell.  The modified nucleic acid sequence produces toxins that are resistant to boll-worm attacks.

Better claim construction and expert witness would have helped the court to prevent the misinterpretation of Section 3(j).

Monsanto has appealed before the Supreme Court and challenged the decision of Division Bench. We wish the apex court pronounces a judgement with reasoning, such that companies can continue to innovate and seek protection within the framework of the Patents Act and international obligations, which India has agreed to by way of TRIPS, and the like.

We hope this article was a useful read. 

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Monsanto Challenges High Court Judgement Adversely Affecting Patentability in the Field of Agricultural Biotechnology

Paddy rice field landscape and blue sky and white cloud.

The Delhi High Court on April 11, 2018 pronounced its judgement in a litigation between Nuziveedu and Monsanto. The judgement held one of Monsanto’s important patents invalid. The patent was critical to Monsanto for protecting its business interest in their hugely successful Bt cotton seed variety Bollgard II.

The patent was held invalid under Section 3(j) of the Patents Act. Section 3(j) disallows patenting of “plants and animals in whole or any part thereof other than micro organisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals.” The Court held that the subject matter covered by the patent is “essentially biological process”, and therefore not patentable.

In the general sense, the patent in question claimed a selected sequence of a specific bacteria placed at a specific location in the plant genome, to produce a specific type of fusion protein. In practice, the resulting fusion protein would adversely affect pest(s) that are common to cotton plants.

The judgement is specifically important because it was common practice of the agro-biotech industry to protect key genetic material by claiming the same in a manner similar to the approach explained above, to work around the provisions of Section 3(j). Especially, the strategy enabled patent applicants in similar situations to argue that the claims are not directed at protecting plants and animals in whole or any part thereof, including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals. Instead, the claims are directed at micro-organisms, which is not a subject matter barred from patenting. However, given the present judgement, the above discussed strategy, and in most cases the only available strategy, will not work anymore in securing patent protection for “inventions” of similar nature in the agro-biotech industry.

Monsanto has appealed to India’s Supreme Court against the ruling by the Delhi High Court. The agro-biotech industry and patent professionals will be closely watching this space given the far-reaching consequences of the outcome.  

We hope this article was a useful read. 

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Way Forward for the Critical Requirement of Furnishing Statement Regarding Working of Patented Invention in India

statementofwokingofpatent.invntree

Statute corresponding to patents in India has provisions that mandate furnishing of information that attempts to establish the extent to which patented technology is being worked on a commercial scale in India. The nature of the information sought is such that compliance with these provisions is onerous, if not impossible, given the changing dynamics of business and inventions. Consequently, one could argue that most of the patent owners have in-principle failed to comply with these provisions. Further, although there are penal provisions applicable for noncompliance, such provisions have never been exercised.

Concerns regarding the above discussed provisions always existed among patent professionals and other stakeholders. However, these provisions are now being discussed extensively because of a public interest litigation, and the order that followed. The provisions, which are at the centre of the controversy include Sections 146(1), 146(2), 122, Rule 131 and Form 27.

146. Power of Controller to call for information from patentees

(1) The Controller may, at any time during the continuance of the patent, by notice in writing, require a patentee or a licensee, exclusive or otherwise, to furnish to him within two months from the date of such notice or within such further time as the Controller may allow, such information or such periodical statements as to the extent to which the patented invention has been commercially worked in India as may be specified in the notice.

(2) Without prejudice to the provisions of sub-section (1), every patentee and every licensee (whether exclusive or otherwise) shall furnish in such manner and form and at such intervals (not being less than six months) as may be prescribed statements as to the extent to which the patented invention has been worked on a commercial scale in India.      

122. Refusal or failure to supply information.

(1) If any person refuses or fails to furnish

(a) to the Central Government any information which he is required to furnish under sub-section (5) of section 100;

(b) to the Controller any information or statement which he is required to furnish by or under section 146, he shall be punishable with fine which may extend to ten lakh rupees.

(2) If any person, being required to furnish any such information as is referred to in sub-section (1), furnishes information or statement which is false, and which he either knows or has reason to believe to be false or does not believe to be true, he shall be punishable with imprisonment which may extend to six months, or with fine, or with both.

131. Form and manner in which statements required under section 146(2) to be furnished.

(1) The statements shall be furnished by every patentee and every licensee under subsection (2) of section 146 in Form 27 which shall be duly verified by the patentee or the licencee or his authorised agent.

(2) The statements referred to in sub-rule (1) shall be furnished in respect of every calendar year within three months of the end of each year.

(3) The Controller may publish the information received by him under subsection (1) or subsection (2) of section 146.

(Emphasis added)

 

Section 146(1) recited above gives power to the Controller to call for information describing the extent to which the patented invention has been commercially worked in India. In practice, the Controller can exercise the power conferred by the referred section to decide request for compulsory licence to a patent, which may not be sufficiently worked in India.

On the other hand, Section 146(2) read with Rule 131 requires every patentee and licensee to furnish, every year, information describing the extent to which the patented invention has been commercially worked in India. Failure to comply with either of the above referred sections attracts penal provision as recited in Section 122.

In our view, Section 146(1) is an extremely useful provision, which may be exercised in specific circumstances, as explained earlier. However, an amendment to the section to explicitly recite the circumstances under which the Controller may/shall exercise the power to call for information, may prevent arbitrary use of such power.

The real problem, in our opinion, lies with Section 146(2), which requires voluntary submission of information, on a yearly basis, describing the extent to which the patented invention has been commercially worked in India. In our view, Section 146(2) should be amended to require at least one among patentee or licensee to state whether the patented invention is commercially worked or not in India, instead of requiring information concerning the extent of working of patented invention in India.

Our proposed amendment to Section 146(2) is based on the very purpose of having this provision in the Act, and the practical usage of the information furnished under this provision. The information submitted under Section 146(2) may be used to adjudicate request for compulsory licence to a patent, request to revoke a patent, or request for injunction. However, the proceedings concerning each of the listed requests may typically involve extensive submission, by parties involved in the dispute, of information describing the extent to which the patented invention is commercially worked in India, and the eventual judgement may rely of such information, and not on the information submitted under Section 146(2) on a yearly basis. In case the listed topics were to be adjudicated purely based on information collected under Section 146(2), then the efforts involved in putting together such information is colossal, if not impossible for large patent portfolios. The legislature also recognises the same, and its intent is expressed by the very fact that Section 146(1) exists. In view of all this, the information sought under Section 146(2) is redundant, and unnecessarily burdensome.  

In conclusion, in our opinion, Section 146(2) should be amended such that, it should suffice if the patentee submits whether the patented invention is worked or not commercially in India, on a yearly basis. In case the patented invention is not worked, then the patent may be considered for license or compulsory licence, by third party. On the other hand, if the patented invention is marked as worked, then in all probability, detailed proceedings would follow when the patent is the subject matter of a challenge, in which case the Controller has the power to call for information under Section 146(1).

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India working towards disposing pending patent applications in the next two years

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Minister for Commerce and Industry, under which the Department of Industrial Policy and Promotion (DIPP) functions, has been taking several initiatives for substantive improvement of IP environment in India. The recent initiatives include comprehensive National IPR policy, relocation of Copyright Office to DIPP, merger of the Copyright Board with the Intellectual Property Appellate Board (IPAB), establishment of Cell for IPR Promotion and Management (CIPAM) and launch of Start-up Intellectual Property Protection (SIPP) scheme, among others.

Adding to the above initiatives, the office of Controller General of Patents, Designs and Trade Marks (CGPDTM) is making efforts to clear the backlog of about 2.3 lakh pending patent applications. DIPP has hired substantial number of examiners and is likely to dispose these pending applications in next two years. The introduction of expedited examination and the recruitment of around 450 patent examiners to add to the pool of existing 130 examiners at the Intellectual Property Office (IPO) is witness to such efforts of the DIPP. This recruitment has increased the speedy disposal of pending patent applications. In the year 2016-17, about 9,847 patents were granted by the IPO, as against 6,326 in the previous year. IPO has improved its count in issuance of examination reports, which has increased to 6,000 patent applications a month from the earlier 1,500 applications.

Suresh Prabhu, Minister for Commerce and Industry, while addressing the Leadership Summit on Anti-Counterfeiting and Brand Protection at New Delhi last month, highlighted the efforts and initiatives of DIPP and IPO to dispose off the pending applications at the earliest. He announced that the Ministry is working to come up with an effective plan by which patent applications will be disposed in the least possible time. These initiatives are expected to bring down the pendency of patent applications and targeted at final disposal of patent applications from the present 5-7 years to less than 18 months.

We welcome the initiatives and efforts of the ministry in establishing a strong IP regime, and more importantly a time bound one, which is likely to boost innovation in the country.

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India begins sharing search strategies in International search report

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International Searching Authorities (ISA) are appointed by the World Intellectual Property Organization (WIPO) for conducting prior art searches on Patent Cooperation Treaty (PCT) applications. There are currently 22 patent offices, including the Intellectual Property Office (IPO) of India, which are recognized as ISA. Applicants can choose from a list of ISA, typically based on their nationality. As an example, currently applicants from India and Iran can select IPO as the ISA.

ISA have the core objective of establishing International Search Report (ISR) on PCT applications. An ISR typically identifies one or more prior art references, categorizes the references based on their relevance, and may include a written opinion. However, among the 22 ISA, 6 ISA also used to include search strategies, which were used to conduct prior art searches while establishing the ISR. The IPO has now become the seventh ISA, which will be making public search strategies while establishing ISR.

In our view, sharing of search strategies is a wonderful initiative at least on three counts. Firstly, in the absence of search strategy, patent applicants had to blindly trust the ISR, and assume that the references cited in the ISR are likely to be the most relevant references. In the event of a poor quality ISR, an applicant may end up making investments into filing national phase applications, which may not get granted. Now that search strategies are being shared, applicants or their consultants may be in a better position to gauge the quality of ISR and take informed decisions.

Secondly, patent offices that subsequently receive national phase applications can examine the search strategies and calibrate their efforts. Additionally, examiners at national offices can build over the search strategies and avoid duplication of efforts.

Thirdly, and most importantly, the decision to share search strategies is particularly important from an Indian context. It may be worthwhile to acknowledge that India has significant backlog of patent applications, which are pending examination. In an effort to reduce backlog, the patent office has recruited a large number of examiners, who are fresh out of college, with very little experience in the patent domain. Sharing of search strategies in public domain has a psychological impact on examiners, and may be motivated to improve their work quality, and thereby end up establishing ISR are at least at par with patent office that are know for their superior quality of search.        

We welcome this initiative of the IPO that promotes transparency in terms of the work process and motivates examiners to perform at par with their global peers.

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India becomes part of WIPO’s Digital Access Service

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WIPO’s Digital Access Service (DAS) is an electronic system that allows easy transfer of certified copies of documents, which are typically required during filing patent applications in multiple countries. WIPO’s DAS allows applicant(s) to request a first patent office/office of first filing to make the certified copies available to other patent office’s/accessing offices where applicant(s) wishes to file the patent application. This certified copies exchange happens electronically between the patent offices. At present, there are nearly 20 patent offices that are using the WIPO DAS.

Considering recent events, a WIPO-India cooperation agreement was established between WIPO and IPO on 31 March 2018, stating that the IPO will now start using the WIPO’s DAS. IPO is now a depositing office, where the certified copies of documents are uploaded using the WIPO DAS.

The applicant(s) must make a request to the patent pffice stating that they require certified copies of documents to be submitted to the WIPO DAS. The request is made along with an applicable fee as per entry no. 49 in the First Schedule of the Patents Rules 2003. In case of Design Patents, the applicant(s) should submit Form 16 along with the applicable fee as per The First Schedule of The Designs Rules, 2001. Once the request is submitted to the depositing office, DAS sends an access code for authorization through email to the applicant(s). A separate access code is received for each certified document that the applicant(s) has requested from the depositing office. The applicant then sends a letter mentioning the patent application number along with the access code received through email from DAS to the receiving patent office(s). The certified copies are then successfully provided to the receiving patent office(s).

WIPO DAS is easy and quick as the system provides a mechanism for the office of first filing to add the certified copies of documents, and the accessing offices to receive the documents. The process is paperless, as the exchange between the patent offices happens electronically. DAS is secure as it’s hosted and administered by WIPO authorities. DAS is also reasonable in terms of cost as the applicant(s) need not pay for multiple sheets/copies of paper certified copies of documents. Also, WIPO does not charge the applicant(s) for using the system. Since all the exchange is done online, applicant(s) also save money on courier/postal charges. According to recent statistics, IPO ranks among top 20 countries for yearly numbers of PCT application filings. Hence, based on the above-mentioned details and statistics, IPO has definitely taken a wise decision in opting for WIPO DAS.

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Toyota Vs. Prius Auto – Analysis On Permeation Of Goodwill And Reputation Of Foreign Marks Into India And Passing Off Such Marks

Trademark infrignement

The judgment of The Supreme Court of India in the matter of Toyota Jidosha Kabushiki Kaisha Vs. Prius Auto Industries Ltd. & Ors is worth bookmarking for IP practitioners in India. The tussle between Toyota and Prius Auto has been going on since the year 2009. The initial matter concerned several trademarks, viz., TOYOTA, TOYOTA INNOVA and TOYOTA (device mark) and PRIUS. While the judgement (largely in favour of Toyota) of the lower court concerning the first three listed marks are not appealed in The Supreme Court, the judgment, which was in favour of Prius Auto and others (“Defendants”), concerning PRIUS, was appealed. The Supreme Court held in favour of Defendants, Prius Auto and others.

By way of background, the Defendants had obtained registration of the mark, PRIUS, in the year 2002, and has been using the mark since 2001. Toyota (“Plaintiff”) on the other hand launched the world’s first commercial hybrid car called Prius in Japan in the year 1997. In India however, the car was released in the year 2009, and the Plaintiff applied (as “proposed to be used”) for registration of the PRIUS mark on December 03, 2009, and followed it up with institution of suit against the defendants on December 21, 2009.

In the appeal, the Supreme Court set out to determine whether the defendants, by using the mark, PRIUS, to market the automobile spare parts manufactured by them, are guilty of passing off their products as those of the plaintiff, thereby injuring the reputation of the plaintiff in the market.

In order to address the issue at hand, Division Bench of the High Court considered two largely differing doctrines that have an impact on scope of trademark protection, viz., Universality Doctrine and Territoriality Doctrine. Universality Doctrine posits that a mark signifies the same source all over the world. In contrast, Territoriality Doctrine posits that a mark has separate existence in each sovereign country. In other words, under the Territoriality Doctrine, prior use of the trade mark in one jurisdiction would not, by that very fact, entitle its owner or user to claim exclusive rights to said mark in another dominion. The Division Bench held that Territoriality Doctrine holds, and the Supreme Court concurred.

In view of territoriality principle, the court had to determine whether there has been a spill over (by the time the Defendants started using the mark) of the reputation and goodwill of the mark used by the claimant who has brought the passing off action. The court considered the evidence, dated prior to first use of the mark by Defendants, supplied by the Plaintiff to assert spilling over of the reputation and goodwill of the mark to India.

The court noted that the car itself was introduced in the Indian market in the year 2009-2010. Further, the advertisements in automobile magazines, international business magazines; availability of data in information-disseminating portals like Wikipedia and online Britannica dictionary and the information on the internet, even if accepted, would not be a safe basis to hold the existence of the necessary goodwill and reputation of the product in the Indian market at the relevant point of time, particularly having regard to the limited online exposure at that point of time, i.e., in the year 2001. In view of these observations, among others, the Supreme Court agreed with the conclusion of the Division Bench that the brand name of the car Prius had not acquired the degree of goodwill, reputation and the market or popularity in the Indian market so as to vest in the Plaintiff the necessary attributes of the right of a prior user so as to successfully maintain an action of passing off even against the registered owner. The Supreme court further held that if goodwill or reputation in the particular jurisdiction (India) is not established by the Plaintiff, no other issue really would need any further examination to determine the extent of the Plaintiff’s right in the action of passing off that it had brought against the Defendants.

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Indian Patent Office stakeholders’ meeting and action taken

Statekholders meeting IPO

The Office of the Controller General of Patents, Designs & Trade Marks (CGPDTM), which is commonly referred to as the Intellectual Property Office (IPO), periodically invites stakeholders to share suggestions and issues concerning the operation of the IPO. Typically, IP practitioners attend such meetings and share meaningful views and suggestions. The IPO has been receptive of these suggestions, and in many cases act upon them.

One such stakeholders’ meeting was held on December 07, 2017. Several issues were raised, suggestions given, and clarification provided in the meeting. Subsequently, the IPO has summarized the issues raised and suggestions received from stakeholders, and the response from the Office of the CGPDTM. The summarizing document can be downloaded 

A total of 116 issues and suggestions have been listed with regards to patents and industrial designs, and a total of 37 issues and suggestions have been listed with regards to trademarks. Some of the noteworthy issues and response from the IPO are summarized below.

There were issues concerning examination reports not being emailed to the correct email address. The IPO has been sending examination reports and hearing notices via email. However, there were instances where these reports and notices were not sent to the correct email addresses. The IPO has acknowledged occurrences of such errors and has begun reissuing examination reports and hearing notices to rectify the errors that have occurred previously.

In case of industrial designs, there have been instances where line diagrams of the industrial design have not been accepted, and examiners have insisted on photographic representations. The IPO accepts that, in-principle, photographic representations are not mandatory to be filed, and has requested stakeholders to cite specific cases where photographic representations are being sought.

Further, in case of industrial designs, at present response to the examination reports must be filed offline. The IPO has informed that portal for submitting responses to examination reports has already been developed and is in the process of being implemented. Hence, we can assume that provision for online filing of responses is just around the corner.

With regards to examination of patent applications, the Act and Rules have been amended to enable expedited examination in certain scenario. One such scenario is when the patent application is filed by a legal entity, which can be considered a start-up. However, we have received contradicting opinion from Controllers of the IPO with regards to whether or not a Non-Indian entity can be considered a start-up. We are of the opinion that a Non-Indian entity can be considered a start-up. We have previously submitted exhaustive arguments in support of our views, and had a patent application from a Non-Indian entity examined under the expedited examination provision by the virtue of the applicant being a start-up. The IPO has now clarified that, applicants, irrespective of country of origin, are eligible for expedited examination under rule 24 (C).

The stakeholder meetings being organised by the IPO has had a significant role in refining the operations of the IPO and standardization of views and opinions across Controllers and offices of the IPO. We welcome suggestions or issues our readers would like to raise with the IPO, and we shall consider raising them in the next stakeholder meeting.

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