Wimoweh –The Plaintiff Slept over his Rights

There is a person in your class/office whom you like, you have been contemplating about asking them out. This person likes you back yet you don’t ask him/her, rationally speaking it is a decided case both the parties like each other –it is a definite win. Instead, you keep postponing the confession meanwhile, another person comes by and asks him/her out,  your potential love interest says yes and what could have been an easy win is now a lost case. Now, returning to law this situation fits well when a battle almost won is lost due to the delay in filing/submitting relevant documents.

The delay in submitting documents is not by doctrine of limitation i.e.after expiry of certain time frame the party loses the right to file such documents unless a valid reason is given for such delay. Further, if the submission of such documents will materially affect the ongoing suit, the documents/amendment will not be accepted. This person was learnt the hard way by Anchor toothpastes in the case of Colgate Palmolive Company and Anr v Anchor Health and Beauty Case [FAO (OS) 131/2012].
In the year 2007 Anchor filed a suit against Colgate alleging that Colgate was using a carton packaging similar to that of Anchor. Anchor had introduced cartons using the phrase “All Around Decay Protection” and Colgate too started selling its product in a new carton using a similar tooth device and using the phrase “White Allround Protection”. Anchor sought an injunction against Colgate. The suit was titled for “declaration and permanent injunction restraining tortious acts of unlawful interference.” In 2008, the plaintiff for the mark “Allround” registered with the trademark registry (the application for registration had been filed in 2005). In 2011 Anchor sought to amend the application and changed the nature of the suit to one for “declaration and permanent injunction restraining infringement of registered trademark/passing off….” This amendment application was allowed by the Hon’ble Single Judge at the Delhi High Court and this order was contested by Colgate before the Division Bench.
The Division Bench agreed that the Single Judge had added in allowing the amendment application the reason being that such amendment would Materially alter the nature of the suit. The suit was initially for similarity in trade dress but if the amendment was allowed it would escalate to a suit for infringement of trademark. S. 29 of the Trademarks Act allows the proprietor of a mark to sue another party for infringement, the claim of infringement has more weight than a usual tortious claim. The court held that the plaintiff had let 3 years pass before applying for the impugned amendment and this was seen as a clear case of sleeping over one’s rights. The effect of allowing the amendment would date back to the time when the application for registration had been filed i.e 2005 and this would mean that the respondents would be charged for infringing the plaintiff’s rights since 2005. This scenario was seen as untenable by the Division Bench and the application for amendment was refused.
This decision of the Delhi High Court was very pragmatic, if the plaintiff would be allowed to amend their original suit then there would be a material alteration to the subject matter. That have been various Supreme Court judgments refusing/rejecting such material alteration and this decision correctly applies these precedents. This case I a reminder that a battle that might have been won can be lost of one does not exercise his right on time and this can cost dearly in the long run.

Image from Here

Protection in Distinctiveness

A Trademark is a simple reference to the origin of the source  from which the goods emanate for instance, golden arches instantly remind us of McDonald’s or Maggie Noodles instantly remind people of the noodles manufactured by Nestle. Trademarks need to be registered to be protected if they are not registered then a claim of infringement cannot be brought before the court. An alternative available to the proprietors of non-registered marks is to bring about a claim of ‘passing off’. The common law of passing off relies on establishment of three claims:

• Goodwill of the plaintiff’s brand
• Misrepresentation by the defendant; and
• Damages due to such damages.

The Trademark Act,1999 under S.34 clearly specifies that a prior use of the mark, even if unregistered,  would have an advantage over a subsequent registered/unregistered mark. This section has been cited in numerous instances of passing off claims however, a new flavor has been added to the interpretation of this provision by the Bombay High Court in the case of Pidilite Industries Ltd and Anr. Vs. Vilas Nemichand Jain. [Suit No. 2010 of 2013].

The plaintiff in this case is a well known Company Pidilite [popular for Fevicol], they claimed that they had been using the mark LEAKGUARD since 1999 for solvent cement as a liquid chemical. The defendants also claimed to have been using the mark LEAKGUARD for similar/identical products since 2005. The Plaintiff’s applied for registration of the Labelmark containing the words LEAKGUARD in 2008 and in the year 2009 the defendants too applied for the registration of the aforementioned mark. It is also interesting to note that it was in the year 2009 that the plaintiff gained awareness about the defendant using a similar/identical mark. Soon after, a cease and desist notice was sent to the defendants followed by a denial by the defendants and finally, a suit in 2010.

Prior Use

The plaintiffs claimed that since they had been the prior users of the mark they were the sole proprietors of the mark LEAKGUARD. The plaintiffs produced invoices from 1999 to show their use of the mark it was also claimed that the mark had gained distinctiveness in the sense that the consumers on hearing LEAKGUARD would automatically be reminded of the plaintiff’s product. Further, the advocate for plaintiff discussed two types of distinctiveness:

1. Distinctiveness in law: Obtained by registration; and
2. Distinctiveness in fact: The advocate for the plaintiffs cited an example of BEST trademark for buses. It was stated that the mark BEST per se would not have qualified the test of distinctiveness under S. 9 of the Trademark Act, 1999 but due to its extensive use it has acquired the status of being a mark that is distinctive in fact.

Court’s verdict:  The invoices produced by the plaintiff show that there has been prior use but the mark in question is a descriptive one i.e. it clearly spells out the purpose of the product which is generally one of the barriers for registration of trademark. It was ruled that for a descriptive mark it is necessary to establish that such mark has become distinctive and acquired a secondary meaning, along with a prior use claim (For a passing off action).The court noted in its decision that the mark LEAKGUARD was being used along with the mark HOLDTITE by the plaintiff, in some places it was simply referred as LG. The court stated that while deciding upon a mark being distinctive and having a secondary meaning there are certain factors that need to be taken into consideration such as:

• Whether the mark being objected to is a surname, geographical name, descriptive word, letters or numerals;
• Whether the mark is inherently distinctive in nature;
• What are the goods in relation to which the mark is sort to be registered [Apple for computers is distinctive];
• Whether the mark has acquired a distinctive meaning in itself that can displace the original meaning of the mark.

The court took into consideration all these factors and concluded that irrespective of the invoices submitted, the profit earned by the use of such mark, or even figures to prove increased use of the product using the mark, it is of primary importance to prove that such a mark has acquired a secondary meaning in the market and is recognized by the consumers as such. The court made a reference to the decision of the Delhi High Court in the case of Cadila Healthcare Ltd. vs. Gujarat Co-operative Milk Marketing Federation Limited where the mark in dispute was ‘sugar free’ and the court correctly ruled that for a descriptive mark it was of primary importance to prove the distinctiveness acquired by such mark and the plaintiff of such mark “must be prepared to accept and tolerate some degree of confusion that is inevitable owing to use of such an expression”. In light of this case the Bombay High Court ruled that in a case of passing of it was necessary to show that the defendant’s goods were being purchased by the consumers due to confusion between the plaintiff’s and defendant’s goods. The court was not satisfied by the evidence produced by the plaintiff’s to establish the distinctiveness in fact, it was quite convinced that the evidence of use and promotion submitted by the defendant was equally convincing. The Defendants had no qualms accepting that they had been using the mark since 2005 (plaintiffs were using since 1999) and the plaintiff gained awareness in 2009 i.e. 4 years since the mark was already being used this pointed towards a case of possible acquiescence however, this issue was not dwelled upon in greater detail by the court. The court finally ruled that the plaintiff had failed to make out a stringent case to prove irreparable damage being caused to its reputation due to such use by the defendant hence, there was no balance of convenience in their favor.

Conclusion

This case is indeed very interesting considering that it was quite a David vs. Goliath situation with Pidilite being a well known company in India. The requirement of a secondary meaning is an important condition for a descriptive mark to be registered as a trademark, but the applicability of the same in a passing off claim is a refreshing change. The common law of passing off has essentially been argued on the grounds of a mark being used prior to the other subsequent registered/unregistered mark; it was correctly argued by the counsel for the plaintiff that it was a common practice that even if a mark was being used a day earlier (an exaggeration) than that of the defendant’s they will have a better claim to the mark. The Cadila decision of the Delhi High Court was correctly cited and applied in the present case considering that one cannot be permitted to use a descriptive mark and expect it to be protected absolutely, in this case the mark was not a registered one hence, the level of protection will be lesser than the one afforded to a registered mark. The decision is very well balanced and seeks to ensure no misuse of provision of proving prior use, it is indeed necessary to show that only if a mark has genuinely gained distinctiveness can a claim of passing off succeed.

Merk(el)ing Around

A careful reading of the past can open the doors to a better future. The German Chancellor Ms. Angela Merkel is on an India tour and is pushing forth for the EU – India Trade Agreement also known as Broad based Trade and Investment Agreement (BITA). The talks for BITA have been on the cards since 2007 but there has been no conclusive agreement that has been signed between EU and India. Earlier this year, the Indian government had cancelled on the BITA due to a ban imposed on 700 (almost) Indian generics by the EU based on the recommendation of European Medication Agency (EMA)[1].

In January 2015, the EMA had issued its recommendation to impose a ban on certain generic drugs being imported from India; a re-examination of the bio-equivalence testing was conducted after the request of marketing authorities of some of the medicines being banned. The result of the re-examination also concluded that there had been certain data manipulation with regard to the generics, for instance, the Electrocardiogram (ECG) had revealed certain manipulation according to the report submitted by French Medicines Agency (ANSM). It was stated that due to the anomalies of the clinical studies made available, on the generics (by Indian companies), a ban was recommended. It was categorically stated that there was no harm or lack of effectiveness reported in these drugs and the same could be made available in certain countries where there was a requirement of patients in that country.  The importance of a bio-equivalence testing cannot be ignored; it is the usual practice to examine the quality of the generic drugs being imported in to a country. It is an essential requirement for a country to examine the drugs to ensure that quality drugs are made available to the citizens, a high level of precaution is observed in case of drugs because a minor miscalculation could turn out to as life threatening. While the EU was acting according to its usual policy of examining the drugs, the ban did not go down very well with the Indian government and it called off the trade negotiations in August. The officials of the generic drugs stated that their clinical practices confirmed with the FDA requirements (USA) when it had been examined; this claim was later supported by the FDA as well[2]. However, it is possible that each country/region sets up its own procedure to determine good clinical trial before approving the generics. A red flag can be raised only when there has been any evidence of discrimination between generics of one country and other as the same would be a violation of Most Favored Nation clause in the WTO.

It has been estimated that this ban could cost India a loss of $1-1.2 billion worth of drug exports[3], in the year 2014-15 the net worth of drugs export from India to EU was said to be close to $3 billion and the generics itself accounted for $1 billion[4]. The suspension of these generics for a period of two years will be a great loss of revenue for the Indian government and hence, a major cause of concern and discussion between EU and India. The German Chancellor is now hoping that there can be an amicable solution to this concern raised by India while the generic industry in India is hoping that the Indian government sticks to the stance of defending them. The issue at hand is a dicey one as one cannot exactly condemn the EU’s practice of requiring good clinical trial, it will be interesting to see how the same gets resorted.

It is important for the Indian government to act now since, a lot of regional pacts are in midst of or already have been drawn up, for instance, the Transatlantic Trade and Investment Partnership (between the EU and U.S.), and the Trans Pacific Partnership (between 12 countries). In the wake of these developments it is imminent that the Indian government enters into an agreement with the EU without much delay since it is one the largest trading partners for the country[5]. It is of course, necessary that there should be no hasty decisions made that would compromise with the generic industry prevailing in India (the prevalence of generics ensure that certain drugs are affordable to an average Indian.) In the coming few days it will be apparent whether the issues raised in the past between EU and India will be resolved in an amicable fashion. I will update this space very soon!

Footnotes:

[1] Ema.europa.eu, (2015). European Medicines Agency – News and Events – GVK Biosciences: European Medicines Agency confirms recommendation to suspend medicines over flawed studies. [online] Available at: http://www.ema.europa.eu/ema/index.jsp?curl=pages/news_and_events/news/2015/05/news_detail_002338.jsp&mid=WC0b01ac058004d5c1  [Accessed 6 Oct. 2015].

[2] Silverman, E. (2015). European Union Bans Hundreds of Drugs Over Clinical Trial Studies. [online] WSJ. Available at: http://blogs.wsj.com/pharmalot/2015/07/27/european-union-upholds-ema-recommendation-to-ban-hundreds-of-drugs/ [Accessed 6 Oct. 2015].

[3] Vijayakumar, S. (2015). Ban on Indian drugs based on scientific reasons: EU. [online] The Hindu. Available at: http://www.thehindu.com/business/ban-on-indian-drugs-based-on-scientific-reasons-eu/article7508551.ece  [Accessed 6 Oct. 2015].

[4] Krishnan, V. (2015). India cancels trade talks after Europe bans 700 generic drugs. [online] The BMJ. Available at: http://www.bmj.com/content/351/bmj.h4387  [Accessed 6 Oct. 2015].

[5] Sasi, A. (2015), India –EU Trade Pact: Antibiotic for Common Cold. [online] The Indian Express, Available at: http://indianexpress.com/article/india/india-others/india-eu-trade-pact-antibiotic-for-common-cold/ [Accessed 6 Oct. 2015].

Battle of the Eagles

It has recently been reported that  U.S. based Retail Royalty Company had filed a suit for trademark infringement by popular Indian retail clothing brand Pantaloons. Pantaloons is owned by the Aditya Birla Group which in itself goes on to show its powerful reputation in the Indian market and among the consumers. It had been alleged that the Indian company had adopted a logo deceptively similar for the same line of business as its American counterpart.

Facts 

The defendants were using the name ‘URBAN EAGLE AUTHENTIC OUTFITTERS’ with the logo of an URBAN EAGLE whereas, the plaintiff was selling its clothing line under the brand ‘AMERICAN EAGLE OUTFITTERS/AMERICAN EAGLE’ with the logo of AMERICAN EAGLE. The defendants intended to settle the matter as soon as possible and proposed that they would remove the phrase ‘AUTHENTIC OUTFITTERS’ and retain ‘URBAN EAGLE’ word mark along with a new Eagle device as logo. The Defendants further proposed that for the goods already available in the retail stores the labels would be removed and only the term URBAN EAGLE would be used. The Plaintiffs contented that the defendants should be prevented from even making use of the mark URBAN EAGLE since it was deceptively similar to the plaintiff’s AMERICAN EAGLE.

Decision 

The court disagreed on the aspect of the plaintiff stating that there was deceptive similarity between the two marks owing to the use of the word EAGLE, it was observed that the plaintiff could not claim monopoly over the word ‘EAGLE’ since it was a word used in common parlance, it would be a different case if monopoly was claimed on AMERICAN EAGLE since this was the trademark registered by the plaintiffs in the trademark register. A comparison of the two logos showed that the plaintiff’s depicted an Eagle on the verge of landing/descending whereas that of the defendant’s showed an eagle taking a flight/ascending hence, there was a distinction between the two marks. The court stated that since the decision was almost at an exparte stage, and the defendant had not been given an opportunity to file return statements and replies because they had only been granted two days time for the same hence, the views of the court were only prima-facie. The plaintiff had alleged that there had been a case of trademark infringement under Section 29(1) by the defendant; also, there was a case of deceptive similarity. The court was of the view that with the removal of ‘AUTHENTIC OUTFITTERS’ by the defendant there existed only URBAN EAGLE and it was not similar to AMERICAN EAGLE, the two were sufficiently distinct in nature. The court reiterated that the plaintiff had a trademark claim for the use of the word AMERICAN EAGLE, it could not restrain others from using ‘EAGLE’ as a part of their mark. The court failed to find any public interest in the present litigation since the goods in question were clothing not pharmaceuticals which demanded extra caution to prevent deceptive goods from flooding the market. Also, the court was convinced that if the defendant would only use URBAN EAGLE there would be no confusion whatsoever among the consumers. The court rejected the plaintiff’s copyright claim over ‘swooping eagle’ mark and stated that copyright protection under Section 13 was granted only to original artistic works and the same would not qualify within that criteria. Finally, the court stated that the plaintiff could be given monetary compensation if it is shown that there is a balance of convenience in its favor however, no interim injunction order was granted by the court citing the same as prima-facie observation of the court.

Conclusion

This is an ongoing litigation so the verdict is not final for either of the parties but Pantaloons can take a breather for now. While the observations with regard to logo of the two brands might be acceptable, considering that the two depict an Eagle in a different positions (ascending/descending), but the fact that URBAN EAGLE and AMERICAN EAGLE don’t sound confusingly similar can be disputed -considering that while purchasing clothes not everyone has a discerning eye, people can mistake between the two products as well as the logo. The sophistication of the consumer is often an important test resorted to when deciding cases of trademark infringement and in the present case it can be stated that literate, semi-literate, and illiterate people all purchase these goods and the probability of confusion can be reasonably high. Also, the two operate in the same market of goods as well the price of the goods are quite close (based on the information available online) which further increases the possibility of confusion. The defendants did not give any argument to explain their adoption of the phrase ‘AUTHENTIC OUTFITTERS‘ , it is understandable that ‘outfitters’ is a descriptive term but when used with the EAGLE logo and name it can be a cause for confusion among the purchasers regarding the origin of the goods (it can be assumed that there has been a licensing agreement between the two companies hence, similarity of name.) Another issue on which I do not agree with the Hon’ble Delhi High Court is regarding the copyright claim under Section 13, an important condition for copyright claim is that the work must be original but it does not set a very high bar for creativity the work of the plaintiff might not be new and reinforcing the known image of the American Eagle but it has been adopted in a unique fashion such that it invokes the identity of the plaintiff’s brand itself. An Artistic work under the Indian Copyright Act doesn’t have to qualify as a very high quality of work, it can be random scribbling but still be protectable under copyright. It is important to note that the defendant has agreed to make certain amends which a great move to settle the issue soon but regarding the previous conduct, questions can be raised (unless there is a settlement.)

Of course, the above decision is not a final verdict and is merely a prima-facie observation it can be subject to change in the upcoming proceedings after the defendant files a written response to the plaintiff’s allegations. Do you agree with these observations or hold another view for this case? decide for yourself you can access the judgment  here.

Image From: https://en.wikipedia.org/wiki/American_Eagle_Outfitters

Of India’s (IP) concerns with U.S.

On 22^nd September, the Center for Internet and Society (CIS) India wrote an open letter to Prime Minister to look into certain IP law related concerns for India ahead of the U.S. – India talks this week (ongoing). There were two major IP issues addressed:

1. The U.S. should ratify the Marrakesh Treaty for visually impaired persons; and
2. The Indian government should not enter into the Trans Pacific Partnership Negotiations (TPP).

Marrakesh Treaty

India is a signatory to the Marrakesh Treaty which calls for a balance between Copyright Laws and Limitations, Exceptions for People with Visual and Print Disability. The Indian Copyright Amendments, 2012  also witnessed the inclusion of an exception for reproducing published works into Braille for the convenience of such visually disabled individuals. The World Blind Union had earlier released[1]in its ‘Right to Read’ Campaign that almost 90% of all the published works was inaccessible to the visually impaired individuals, and the same has been cited by the CIS in its letter.[2] India’s Copyright Amendment 2012 allows room for compulsory licensing of works for the use of visually impaired individuals (prior to Marrakesh Treaty it had been introduced in India.) The Marrakesh Treaty can come into effect only after 20 countries ratify it; currently the number is stuck at 9 countries which does not include the U.S. The letter requests that the U.S. should also sign the treaty since it is home to some of the largest publishing houses and would encourage a proper implementation –of the treaty and India’s new amendment.

Trans Pacific Partnership

The TPP is undoubtedly one of the most controversial regional agreements in the current times. It has included provisions which call stringent IP laws leaving lesser rooms for exceptions and limitations and stand to the benefit of mostly U.S. based authors, Entertainment Industry and dangerously their pharmaceuticals. The TPP discussions have been very cryptic till date and hence, raised the bar for suspicion. Member countries like Australia and New Zealand have faced protests by citizens against adopting TPP provisions which hamper public health and are solely lead by the U.S. (for its Corporate houses)[3]. The CIS letter raises concerns about the U.S. making an attempt at including India in the TPP Agreement, it also makes a reference to the report of Hon’ble Ambassador Shri Arun  K. Singh where he has disagreed with the U.S. report suggesting TPP is beneficial for India and U.S. both (clearly the benefit is unilateral). India is currently in the stage of using and developing technology and cannot afford to lose out on limitations and exceptions of IP enforcement. Also, it is necessary to reiterate that India is currently the largest manufacturer of generics and compliance with U.S. dominated patent laws will inadvertently hit the pharma generics really hard. The letter simply requests the PM not to accede to the U.S. intent of making India a party to the TPP.

On a slightly different note it is interesting to note that owing to the high price of  cancer drugs in the U.S. ,at the time when they are close to losing patent protection, has lead to the U.S. government looking for alternatives. In a recent article it has been stated that New Delhi will be providing cheaper ‘off-patent’ drugs to the U.S. to benefit the American citizens.[4] It will be interesting to see how the U.S. intends to continue with its stringent Patent enforcement regime even in the future when it is clearly beginning to affect the public health concerns (affordability and accessibility).

It can be stated that the CIS has pointed out two major IP issues that the government needs to be aware of at the time when it is negotiating with the U.S. for better bilateral relations (inevitably dealing with IP issues as well). It is worth looking out for how the negotiations pan out!

Image Courtesy: http://www.bilaterals.org/?leaked-investment-chapter-of-the 

Footnotes

[1] Worldblindunion.org,. ‘Marrakesh Treaty – Right To Read Campaign’. Web. 26 Sept. 2015.

[2] Prakash, Pranesh. ‘Open Letter To PM Modi On Intellectual Property Rights Issues On His Visit To The United States Of America In September, 2015’. The Centre for Internet and Society. N.p., 2015. Web. 26 Sept. 2015.

[3] It’s Our Future,. ‘It’s Our Future – Kiwi Voices On The TPPA’. N.p., 2015. Web. 26 Sept. 2015.

[4] Rajghatta, Chidanand. ‘India To Supply Generic Cancer Drug To U.S.’. Times of India. N.p., 2015. Web. 26 Sept. 2015.