Sunday, December 22, 2013

Intellectual Property – Copyright, Patent, Trademark, Industrial Design, Geographical Indications

Intellectual property refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce. Intellectual property is protected in law by, for example, patents, copyright and trademarks, which enable people to earn recognition or financial benefit from what they invent or create. By striking the right balance between the interests of innovators and the wider public interest, the Intellectual property system aims to foster an environment in which creativity and innovation can flourish.

Intellectual property

Copyright is a legal term used to describe the rights that creators have over their literary and artistic works. Works covered by copyright range from books, music, paintings, sculpture and films, to computer programs, databases, advertisements, maps and technical drawings.

A patent is an exclusive right granted for an invention. Generally speaking, a patent provides the patent owner with the right to decide how - or whether - the invention can be used by others. In exchange for this right, the patent owner makes technical information about the invention publicly available in the published patent document.

A trademark is a sign capable of distinguishing the goods or services of one enterprise from those of other enterprises. Trademarks date back to ancient times when craftsmen used to put their signature or "mark" on their products.

Industrial designs
An industrial design constitutes the ornamental or aesthetic aspect of an article. A design may consist of three-dimensional features, such as the shape or surface of an article, or of two-dimensional features, such as patterns, lines or color.

Geographical indications
Geographical indications and appellations of origin are signs used on goods that have a specific geographical origin and possess qualities, a reputation or characteristics that are essentially attributable to that place of origin. Most commonly, a geographical indication includes the name of the place of origin of the goods.

Use of trademarks with same prefix by registered owners not infringement

The Bombay High Court has said if two parties got the registrations of trademarks done using identical prefix, they could use the same for all purposes and its exclusive use by only one owner was not allowed. While relying on the Trademarks Act, the court said use of such registered trademarks by another registered owner cannot be treated as "infringement".
The court was hearing a plea by Pune resident Pritikiran Katole against a district court's order restraining him from using the trademark of 'Godwa' tagged with his businesses. The lower court had observed that it was "breach of registered trademark" used by the applicant Harsha Katole. Pritikiran moved the High Court against the order.
Taking into consideration the Act's provisions, Justice Anoop V Mohta said, "The main objection with regard to the word 'Godwa' although both the parties got registration under the provisions of the Trademarks Act, 1999, just cannot be the issue to pass such injunction order against the registered trademark owner. Such two persons cannot prevent each other from using the same registered trademark. The section itself contemplates that such registered trademark need to be treated as in their individual capacity `the sole registered proprietor'."
Justice Mohta observed that both the parties had been using the word 'Godwa' for long and were aware of each other's usage in their respective publication businesses. The court observed that Harsha had been using the title since 2008 and Pritikiran since 2006. However, no steps were taken by the former.
Pritikiran's counsel gave an undertaking to the court that the his client would not use the word 'Godwa' in the style or the design of the words that he had been using and also the manner of writing. In addition, the emblem registered by Harsha would not be used.

Foreigners can edit Indian newspapers: Delhi high court

The Delhi high court refused to intervene on a PIL seeking Indian citizenship should be the "pre-requisite qualification" for a person to be appointed as the editor of a publication in the country.
The HC said the issue must be settled by Parliament and hoped it will find time to take it up for discussion.
A division bench of Justices Pradeep Nandrajog and VK Rao rejected the plea of Subramanian Swamy. "Hoping that Parliament would find some time to consider the Press and Registration of Books and Publication Bill, 2011, which is pending consideration now for over two years, we dismiss the writ petition declining relief as prayed for," the court said.
Swamy had approached HC seeking a direction to the central government to rectify a lacuna in the Press and Registration of Books Act regarding the definition of editor. But the HC said it is not for the judiciary to wade into the debate.
"It may be true that even the legislature has so opined evidenced by the fact that the Press and Registration of Books and Publication Bill, 2011 which has been cleared by the select committee and is pending before parliament has suggested amendment to the act by defining editor to mean a person who is not only an ordinary resident in India but is also a citizen of India. But it is for the legislature to consider the bill at the floor of the House and not for the court to legislate," it said.
Swamy had argued that the foreign direct investment policy of the Indian government, in the domain of publications, allows 74% stake with the precondition that in the print media, at least three-fourth of the board of a print media company must be Indians and all key editorial posts must also lie with resident Indians.

Monday, December 16, 2013

Intellectual Property Rights Contribution for Growth Of Foreign Direct Investment In India

India has become one of the sought after destinations for the investment in recent years due to the growing economy. As per reports, the Indian GDP is still growing at a rate of 6.5 percent in 2011-12 even after the recent slump in the economic growth. Being one of the biggest consumer markets in the world, it is always on the radar of investors and one of the sought after investment hub.
A new and growing brand is always looking for the market wherein its product has demand and India being a consumer market is always the best place to promote a new product. Many brands have established themselves in Indian market and are gaining out of it. Even with all these advantages, Indian markets also have certain challenges in terms of intellectual property rights which are required to be taken care of before entering the market.

Strong IP Regime Helps The Growth Of FDI In India:

A strong Intellectual Property rights regime would certainly lead to good market conditions for inviting FDI in India. The report 'India: International Outlier on IP' by the US chamber of Commerce said if India strengthens its intellectual property regime and increases its score on GIPC (Global Intellectual Property Centre) IP Index by 14.9 per cent, it can reach the level of FDI similar to Brazil, Russia and China. It has also been observed in the report that "India has been less able to attract FDI than its BRIC (Brazil, Russia, China) peers since the 1980s. Also in regards to FDI, India is noticeably weaker than other emerging economies, which started off at similarly low levels of investment and had similar IP rights environments to India's in the 1980s,"
A strong IP regime would certainly include realistic protection to intellectual property rights together with a mechanism for the enforcement of rights in case of misuse of the same. IP assets account for more than one-third of the net value of corporations in the United States and Europe, making protection of valuable IP critical for many would-be investing companies. In India the intellectual property like patents, trademark, copyright, design, geographical indication, plant variety, semiconductor and integrated circuits layout design have protection. Indian does not provide specific protection to trade secrets and also do not have a proper law for the data protection. These two are governed by the trademark law and information technology law and hence there is a requirement of specific law for these two as well in order to create a healthy environment wherein a creator of intellectual property right would feel comfortable to invest further. The current legislation on the IP laws should also be kept similar to the international standards in order to compete with other economies.

Challenges Regarding Intellectual Property Rights:

Trademark infringement/passing-off:
In this electronic age, the brands have acquired altogether a different meaning. Now a brand famous in one country can easily be recognizable in a country wherein the products of the brand have not yet marketed. This feature of modern market has led to the problem of infringement and passing-off of the brands which are known across the world but have not entered a particular market. Local merchant for taking advantages of the established reputation of the international brand, start manufacturing their own products under the same brand. Hence in order to curb this problem international brands can take action against the local merchants under the provision of trademark law wherein trans-border reputation has been recognized as one of the ingredients for taking action against infringement and passing-off.
Indian collaborat or treating the brand as its own:
One of the most common problems faced by the foreign collaborators in India is regarding the misuse of the brands by the Indian counterpart in the collaborations. More often than not in case of collaboration between a foreign corporation and an Indian corporation is regarding the dispute related to brand use. After a period of time Indian party to the collaboration starts claiming the brand of the foreign collaborator as their own even though it is clearly mentioned in the Act that the use made by the licensee of a trademark would always be counted as use of the licensor. Hence it is required by the foreign investor to always be aware of the misuse of its brand and should take timely action against any misuse by collaborator or any third party.
Compulsory licensing:
The recent grant of compulsory licensing to the generic pharmaceutical Natco Pharma has created a lot of wrong publicity to Indian IP environment even though Indian Patent Office had its own reasons to provide the same. As Patent is provided for a limited period of time of 20 years and out of these 20 years only few years are fruitful years for a patent to make money. An environment wherein the investor has the fear of loosing its patent due to compulsory licensing would certainly not improve the FDI in India. There are certain other challenges which an investor would face in India like counterfeiting, piracy, and data theft etc for which there is a need for a strong IP regime. A strong IP regime would help in gaining the confidence of foreign investors for inviting the FDI's.

The Relationship Between FDI And Economic Growth:

The FDI influx is an influential factor for economic growth. With the recent move by the Indian Government to relax the norm FDI norms will help the revival of the economy which was growing at the positive rate during the period of 2005-2010.
FDI involves not only the purchase of capital assets, including mergers and acquisitions, joint ventures, buying property, and investing in plants and equipment, but, perhaps more important to developing countries, FDI can include the transfer of managerial expertise, technological skills, and access to the investing company's global network1. Technology transfers from developed to developing nations are one of the most important forces behind economic development2. Experts argue that FDI is "the most important channel through which advanced technology is transferred to developing countries3."
In a communication to the World Trade Organization (WTO), the Organization for Economic Cooperation and Development (OECD) noted:
Direct investment by MNEs [multinational enterprises] has the potential rapidly to restructure industries at a regional or global level and to transform host economies into prodigious exporters of manufactured goods or services to the world market. In so doing, FDI can serve to integrate national markets into the world economy far more effectively than could have been achieved by traditional trade flows alone. As with private sector investment more generally, the benefits from FDI are enhanced in an environment characterized by an open trade and investment regime, an active competition policy, macroeconomic stability and privatization and deregulation. In this environment, FDI can play a key role in improving the capacity of the host country to respond to the opportunities offered by global economic integration, a goal increasingly recognized as one of the key aims of any development strategy4.

The move to allow 100% FDI in telecommunication sector and changes in the preposition of FDI in other sectors is a positive step for inviting the investors to invest in India although for the same, the policies regarding the grant and safeguard of intellectual property rights should also need to be parallel with international standards.


Delhi High court - pleadings in patent copyright infringement cases

In two interesting judgments, in two different cases, Justice Murlidhar of the Delhi High Court has ruled on the scope of pleadings in patent infringement lawsuits and the liability of Indian subsidiaries of global app-stores in copyright infringement lawsuits filed by a book publisher.
1. Telefonaktiebolaget LM Ericsson v. Mercury Electronics & Anr.
This is the famous Micromax case that we have blogged about previously on the blog overhere and here. Ericsson has sued Micromax for a sum of Rs. 100 crores for infringing 6 of its standard essential patents and even got an ex-parte interim injunction on the very first day.
This specific order of Justice Murlidhar, dated December 6, 2013 (available over here) was necessitated by an interlocutory application filed by Ericsson under S. 151 of the CPC requesting the Court to take on record certain affidavits by Ericsson’s executives and a claim-chart in a sealed envelope. The order is not very clear on why these affidavits were filed under S. 151 (which deals with the ‘inherent powers of the court and is supposed to be a provision of the last resort).
Micromax however did object to the attempt to bring on record the affidavits, with its counsel Akhil Sibal arguing as follows:
“Ericsson has failed to construe each of the suit patent claims in the body of the plaint itself. He submits that in a suit for infringement of patents, it was mandatory for the Plaintiff to set out, in detail, the claims under the patents as well as explain whether the patent covered a particular component/element/device/method etc. corresponding to a technical specification for a technology that forms a part of a standard. In other words, it was necessary for the Plaintiff to show that the suit patent was an essential patent for such standard. According to him, merely describing the function of each patent, as has been done in para 20 of the plaint, is insufficient. He stated that the plaint only described the net result that could be achieved by deploying the suit patents and not how that result was achieved.”
Sibal continued with the argument that “that the attempt to bring on record the affidavit of Mr. Olofsson ought not to be permitted. It would amount to indirectly permitting the plaint to be amended to make good an obvious defect. He submitted that Court should consider Ericsson’s prayer for interim injunction only on the basis of the existing pleadings without taking into account the affidavit of Mr. Olofsson.”
 Given the fact that Singh & Singh the law firm representing Ericsson, engaged three top-notch Senior Advocates to argue the matter, it was obviously a high-stakes issue for Ericsson.
Examining the precedents on the point, the High Court summarised the position of law as follows “In sum, the law explained in the above decisions is that the plaint itself must set out with sufficient clarity the specifications and the claims under the suit patent, the results they seek to achieve and in what manner the defendants have infringed the suit patents.”
After examining the affidavits, the Court concluded that the information disclosed in the affidavits was within the purview of the plaint & the documents filed along with the plaint and hence Ericsson was allowed by the High Court to bring on record the affidavits. Ericsson can therefore use these affidavits to argue even the interim injunction.
The decision could have been more nuanced. For example a plaint is supposed to contain only facts and the issue of claim construction, infringement etc. are mixed issues of law and fact. Indian courts should therefore give plaintiffs more leeway in drafting of their pleadings. Expecting plaintiffs to pack their plaints with the most intricate details of their patents is going to make matter very complicated.
2. Blueberry Books & Othrs v. Google India Pvt. Ltd. & Othrs
In this first of its kind lawsuit, Blueberry Books a publisher of children’s books had sued a web and mobile application developer for making available books on an app titled “Story Time for Kids”, whose copyright was owned by the Plaintiff, through various app-stores, without taking prior permission of the Plaintiff. The remaining defendants were Google Inc., Research in Motion, Apple and Amazon, along with their Indian subsidiaries (with the exception of Amazon), because the app in question was made available through these online stores.
The present judgment of Justice Murlidhar, issued on November 28, 2012 (available overhere) was with specific regard to Order 1 Rule 10 applications filed by the Indian subsidiaries of Google, RIM & Apple on the grounds that they had no control over the app-stores in question.
Blueberry, argued that the subsidiaries were necessary parties since they had assets within India unlike their parent companies. The Court declined to buy this argument concluding that “The mere fact that Defendant No.2 happens to be the subsidiary of Defendant No.1 and Defendant No.3 a subsidiary of Defendant No.4 would not be sufficient for making them parties to the suit, if they are not, in any way, involved in the infringing activities complained of.” As a result, the Court deleted the subsidiaries of Google Inc. and RIM.
Apple,  was not so lucky. The Court ruled that prima facie it appeared that the iTunes stores could be accessed through the website of Apple India Pvt. Ltd. thereby giving enough cause to retain Apple India as a party to the suit. The Court ruled that the issue of whether Apple India Pvt. Ltd. had control over iTunes, could be decided only after evidence was led during trial.
Amazon Inc.,  argued that it should be exempted on the grounds of lack of jurisdiction since the app in question could be downloaded only within the U.S. Hence Amazon argued that only the American Courts would have jurisdiction over the claims for copyright infringement. Justice Murlidhar agreed and deleted Amazon from the array of parties.

Woman cannot claim right over property of in-laws, rules court

A woman has a right over the property of her husband but she cannot claim a right to live in the house of her parents-in-law, a Delhi court has said. The court made the observation while dismissing an appeal of a woman, who is a doctor in a government hospital here, seeking right of residence in her mother-in-law's house in which her husband does not have any share.

"If it is anybody against whom or against whose property she (woman) can assert her rights, is the husband, but under no circumstances can she thrust herself on the parents of her husband or can claim a right to live in their house against their consult and wishes," Additional Sessions Judge Kamini Lau said. The court said she is a working woman and being a doctor, she is in a position to maintain herself. "Keeping in view the problems and disputes between the parties, allowing the woman to stay in her parents-in-law's house against their wishes would only aggravate the existing domestic problems and create numerous hassles for these senior citizens, which this court will not permit," the judge said. The court also said even if the woman was permitted by her parents-in-law to live in their house, it does not create any legal right, violation of which would be actionable. On the contrary, under no circumstances the parents can be made to suffer the burdens of their sons and their estranged daughters-in-law, it said. The court's observations came while dealing with the appeal of the woman who had contended that her mother-in-law had abused and misused the process of law by making false submissions. She challenged the trial court's order saying it did not appreciate the fact that her mother-in-law had in connivance with her husband dispossessed her from shared household accommodation in Pitampura. She had sought to set aside the trial court's order dismissing her plea seeking right to residence in the house owned by her mother-in-law. The sessions court noted that the woman's husband was working and residing separately in Chandigarh for the past several years.


Due Diligence - Purchasing a property

During the process of acquisition of property, taking a legal opinion is an important constituent of the due diligence exercise. Legal opinion is the opinion given by a legal expert on the property transaction. The knowledge of individuals on the nitty gritties involved in the property acquisition is limited. Property acquisition is a complicated process. There are number of laws, rules and regulations covering property transactions. An ideal and reliable source of legal opinion is an advocate who specializes in property matters.

Getting the legal opinion is all the more important in case you are planning to purchase an old property, that is a property from an existing owner rather than a property developer or builder. There may be many issues. The property may be held jointly, or the seller may not have proper title or authority to sell the property. The property may have already been sold by the seller or it may be encumbered, that is a charge already created on the property.

It is difficult for an individual purchaser to check out on all these areas. As such, it is better to take the services of an expert in the matter. Although a purchaser can do an initial review of the documents checked by legal expert.

Scanning through property documents is a complex process. Land records are generally in a local language. The purchaser needs to go through a number of documents to trace the ownership of the property. The legal experts are better placed to review and give their opinion on the status of the property.They can be asked to prepare a search report.

The search report traces the history of the property, that is who the original owners of the property were and how it has been transferred over time before reaching the present seller. It also traces out any charges or encumbrances created on the property and the present status, That is whether the charges have been paid and the property released or if there are some charges pending. This search on the title of the property is for a period of the past 30 years.

A seller should annex a copy of this report to the ‘agreement for sale’ with the intended purchaser of the property. It would state whether or not there is any existing mortgage, litigation, condition or claim, which is likely to affect the title of the buyer adversely.

A legal opinion covers details regarding the status of the property, such as who the legal owner of the property is, what has been the chain of holding and transfer of property, whether the property is free from encumbrances, whether the property has been already offered as a security for loan, is there any dispute on the ownership of the property, whether the seller has complied with all the requirements for getting the ownership of the property, whether the seller is competent to transfer the property etc.

In case you want to avail a housing loan, the title of the property should be clear and marketable, that is the seller should be the genuine and actual owner of the property. Also, the property should not be under any dispute or litigation.

A search report and title certificate can be obtained from an advocate who will conduct a survey of the title of the property by visiting the office of registrar. A legal opinion reduces the chances of getting into disputes at later stage. It acts as a safety device for purchasers.

In case you are getting the property purchase financed by bank, generally the bank will obtain a legal opinion before sanctioning the loan. The bank will have its own legal experts who specialize in this field. The cost is nominal and is built up in the processing and administration charges applicable for sanctioning and disbursing the loan.

Intellectual Property

India is a member of the World Trade Organisation (WTO) and a signatory to the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). In the last few years India has modified its IP laws to ensure adequate protection for IP owners. Both the legislature and the judiciary are active in enacting and enforcing IP rights.
Pursuant to the TRIPs Agreement, India has amended its patent legislation on three occasions. The Patents Amendment Act 2005 and the Patent Rules 2005 have incorporated several changes to the patent legislation to fulfil India’s WTO obligations to allow, for example, product patents. Some of the key changes introduced by the act are outlined below.
Introduction of product patents
The act introduced product patents for inventions relating to food, drugs and chemicals by replacing the process patent regime which existed under the old Patents Act.
Restrictions on new use
The act provides that the mere discovery of a new form of a known substance that does not enhance the known efficacy of the substance cannot be patented. It must involve one or more inventive steps resulting in a new product or one new reactant to fit the criteria of patentability.
Software patenting
The act does not provide for the patenting of a computer program which is an algorithm per se, or mathematical methods or business methods.
Exclusive marketing rights
The act repealed the provisions concerning exclusive marketing rights and mailbox applications as a result of the introduction of the product patent regime. However, there are transitional provisions in this regard.
Pre-grant and post-grant opposition
The act provides for both pre-grant and post-grant oppositions. Furthermore, it specifies a time period for both – one year from the date of publication in the case of post-grant opposition and six months in the case of pre-grant opposition.
Compulsory licensing
Previously, compulsory licensing was confined to India. However, the act now provides for compulsory licensing for the export of pharmaceutical products to countries that do not have the requisite manufacturing facilities. For this, the recipient countries should also provide for compulsory licensing or should issue a notification to that effect.
Patent infringement
The new act provides that an applicant enjoys the same rights and privileges as a patent holder in the period between publication of the application and grant of the patent. However, infringement proceedings can be initiated only after the grant of a patent.
Request for examination
Under the act, when an application is published, a request for examination must be filed within 36 months of the date of priority of the application or of the date of filing of the application, whichever is earlier (as specified under the Patent Rules 2005). In the case of WTO or mailbox applications, the deadline to file the request for examination is 36 months from the date of application or date of priority, or 12 months from January 1 2005.
Publication of applications
Eighteen months after the date of application or the date of priority, whichever is earlier, all patent applications are published as per the provisions of the act and the rules. The act provides for expediting publication upon request.
Under the old act, it was mandatory to register with the patents office all transactions concerning a patent (eg, assignments, mortgages, licences, shares in the patent, creation of any interest in patent) within six months of the date of execution of the document concerning the transaction. The new act requires only that such transactions be executed in writing, and sets out no registration requirements.
Approval for foreign filing
The act requires an Indian resident to obtain written permission from the controller of patents six weeks prior to filing a foreign patent application, unless a corresponding application is filed in India.
The new act clarified various ambiguities that existed under the earlier patent law and simplified some of the procedural requirements.
In cases of patent infringement, an infringement suit can be filed. A court may grant an injunction, award damages, direct an account of profits to be produced or order seizure, forfeiture or destruction of the infringing goods, materials and tools used to create the infringing goods.
India enacted the Trademarks Act 1999 and the Trademarks Rules 2002 (effective September 15 2003) to ensure adequate protection for domestic and international brand owners, in compliance with the TRIPs Agreement. Pursuant to the Trademarks Act, service marks can be registered. The act states that a trademark includes the shape of goods, their packaging and colour combinations. Further, the Trademarks Act gives protection to well-known trademarks and provides for the registration of convention applications, for which the priority deadline is six months. The term of a trademark has been increased to 10 years, renewable upon expiration.
As a measure to protect international proprietors, the Trademarks Act has defined a ‘well-known mark’ as a mark well known to a substantial segment of the public using such goods or receiving such services. Further, the Trademarks Act has increased the grounds on which trademark infringement can be claimed, such as likelihood of confusion, likelihood of dilution or disparagement of a registered trademark, comparative advertising and spoken use. The term ‘use’ has been expanded for the purpose of ascertaining infringement. If a trademark is not registered in India, a foreign trademark owner can initiate a passing-off action against the potential infringer.
The Trademarks Act provides statutory protection to well-known trademarks, which were protected under the common law.
The Trademarks Act defines a ‘well-known trademark’ as follows: “‘Well-known trademark’, in relation to any goods or services, means a mark which has become so well known to the substantial segment of the public which uses such goods or receives such services that the use of such mark in relation to other goods or services would be likely to be taken as indicating a connection in the course of trade or rendering of services between those goods or services and a person using the mark in relation to the first mentioned goods or services.” (Section 2(1) of the Trademarks Act.)
Furthermore, this definition should be read in conjunction with Sections 11(6) to 11(10) of the Trademarks Act, which specify the relevant factors to be considered by the registrar of trademarks when determining whether a particular mark is well known.
Relevant factors to be considered
While determining whether a trademark is well known, the registrar should consider any relevant facts, including the following:
•   the knowledge or recognition of the alleged well-known mark in the relevant section of the public, including knowledge obtained as a result of promotion of the trademark;
•   the duration, extent and geographical area of any use of that trademark;
•   the duration, extent and geographical area of any promotion of the trademark, including advertising or publicity and presentation at fairs or exhibition;
•   the duration and geographical area of any registration or any publication for registration of that trademark, to the extent that it reflects the use or recognition of the trademark; and
•   the record of successful enforcement and the extent to which any court or registrar has recognised the trademark as well known (Section 11(6) of the Trademarks Act).
These criteria are not exhaustive, but are indicative and illustrative guidelines to assist the registrar in determining cases. The decision will depend upon the facts and circumstances of each case.
Based on the foregoing, it will be the responsibility of a trademark owner to prove that the mark is well known. One way to prove this would be by demonstrating the degree of knowledge or recognition of the mark in the relevant section of the public using consumer surveys or opinion polls. In addition, awareness of a trademark in India can be proved by promotion of the mark through advertising in print and electronic media.
In a recent case in which a foreign trademark owner that had filed a trademark application initiated action against an Indian party whose trademark application was pending registration for the same mark, the Supreme Court observed that the mere fact that the foreign mark owner had not been using its trademark in India would be irrelevant if it were the first in the world market. In deciding the case, the court also observed that the intention of the foreign proprietor to use the trademark in India will be a decisive factor in such situations (Milmet Oftho Industries v Allergan Inc, MANU/SC/0512/2004).
In a suit alleging trademark infringement or passing off, a court may grant an injunction, award damages, direct an account of profits to be produced or issue an order requiring delivery of the infringing labels and marks for destruction or erasure. In addition, in respect of an infringement or passing-off action, a court can grant an ex parte injunction along with an interim order for discovery of documents, preservation of infringing goods or other evidence. Furthermore, the court can restrain the defendant from disposing of or dealing with assets in a manner that may adversely affect the plaintiff’s ability to recover damages or avail of any other pecuniary remedies that may be finally awarded to the plaintiff in the suit.
The Trademarks Act has implemented criminal remedies over and above the civil remedies that were previously available. It has also given more powers to the courts. As a result, applying false trademarks or trade descriptions and selling goods or providing services with such descriptions is an offence under the Trademarks Act. Any police officer (not below the rank of deputy superintendent of police or equivalent) can search and seize articles bearing infringing trademarks or labels without a warrant. Further, the Trademarks Act has increased the punishment for these offences to a term of not less than six months up to a maximum of three years. Moreover, offenders may be subject to a fine of between Rs50,000 (US$1,087) and Rs200,000 (US$4,348).
In India, if a trademark owner does not use a trademark in respect of the goods or services for which the mark has been registered, it may lose its rights over the trademark. This is even more significant since the introduction of service marks registration. The Trademarks Act provides for removal of a registered trademark for continuous non-use for a period of five years and one month in respect of the goods or services for which it was registered.
As a result of these new grounds for infringement, in a recent case the Delhi High Court prohibited Colgate Palmolive India Ltd from broadcasting an advertisement that disparaged a similar product sold by Dabur India Limited. The court held that an advertisement which was contrary to honest practices in industrial or commercial matters, and which also challenged the reputation of the registered trademark of the plaintiff, amounted to infringement of the plaintiff’s registered trademark under the provisions of the Trademarks Act. The court also held that even an indirect reference to another proprietor’s trademark in a disparaging advertisement would constitute infringement of that trademark.
Domain names
As a result of the Internet’s popularity, the Indian courts have dealt with a large number of domain name disputes in the last few years and the courts have consistently applied the law relating to passing off to domain name disputes.
In a recent case the Supreme Court of India held that domain names are subject to the legal norms applicable to other intellectual property. While restraining a subsequent proprietor from using another proprietor’s registered domain name, the Supreme Court considered various definitions under the Trademarks Act and held that a ‘domain name’ is a word or name that is capable of distinguishing the subject of trade or service made available to potential users of the Internet. Satyam Infoway Ltd, a leading IT services company and one of India’s largest internet service providers, has been the registered proprietor of several domain names, including ‘’, ‘’ and ‘’, since June 1999. It claimed that the word ‘sify’ was a word invented by using elements of its corporate name. Another company, Sifynet, which started an internet marketing business using the domain names and in June 2001, was restrained from using these domain names (Satyam Infoway Ltd v Sifynet Solutions Pvt Ltd, 2004 53 SCL 26 (SC)).
In India, copyright exists only in the form or expression of a work and not in the idea. The term of copyright is the lifetime of the author plus 60 years from the calendar year following the year of the author’s death.
India is a signatory to both the Berne Convention and the Universal Copyright Convention. Therefore, in the event of copyright infringement of a work that is not copyrighted in India, authors in member states of the aforesaid conventions will benefit from protection on a reciprocal basis in India.
A copyright holder is entitled to the remedies of injunction, damages and account of profits against an infringer. A sub-inspector of police who suspects the infringement or possible infringement of copyright can seize all copies of a work and the materials used to make infringing copies without a warrant, and produce them before a magistrate.
If a person knowingly and for gain or in the course of trade or business infringes or abets in the infringement of the copyright in any work or other right conferred by the copyright law, he is liable to be imprisoned for a term of between six months and three years, and to pay a fine of between Rs50,000 (US$1,037) and Rs200,000 (US$4,150). Where an offender uses an infringing copy of a computer program, he is liable to be punished with imprisonment of between seven days and three years and a fine of between Rs50,000 (US$1,037) and Rs200,000 (US$4,150). If the offender proves that the infringement was not for gain or in the course of trade or business, the court may not impose imprisonment but can order a fine of up to Rs50,000 (US$1,037).
If a person knowingly makes or possesses plates to make infringing copies, or publishes a sound recording or video film without the required particulars, he or she can be fined and imprisoned for up to two years.
Most multinational companies actively pursue these criminal options. As a result, software piracy in India has fallen from 90 per cent to 60 per cent, and music piracy has also been reduced.
Copyright comes into existence together with the work, and registration of a copyright is the only clear evidence of acceptance of a copyright.
Although the Indian courts do not usually award very high damages, the Delhi High Court recently awarded damages of about Rs2 million (US$46,500) to the Microsoft Corporation in a software piracy case, which is one of the highest damages awards in this type of case. In addition, the court permanently stopped the defendants from carrying out any infringement or passing-off activities of Microsoft products, copyrights or trademarks. The court also ordered the defendants to deliver up all pirate copies of Microsoft software, including the equipment used to copy the software and all other infringing materials in the defendant’s possession.
Furthermore, in awarding damages the court observed that it would be futile to direct the defendants to render accounts because they were carrying on this business surreptitiously. This is a new trend in the Indian judiciary, as opposed to the usual practice of issuing directions to render accounts, which are generally ineffective as the infringers do not maintain proper accounts. This case is a landmark in India’s software piracy case law, not just because of the very high damages awarded, but also because the court decided the case very quickly and based on evidence adduced by affidavits; this is unusual as litigation proceedings are generally lengthy in India.
Although India does not have specialised IP courts, Indian civil courts are pro-IP rights owners and have handed down landmark rulings in trademark and patent cases. Further, on September 15 2003 India set up the Intellectual Property Appellate in Chennai, which decides registration-related matters involving IP rights.

Duties of Director of a company

A company is a legal entity and does not have any physical existence. It can act only through natural persons to run its affairs. The person, acting on its behalf, is called Director. A Director is any person, occupying the position of Director, by whatever name called. They are professional men, hired by the company to direct its affairs. But, they are not the servants of the company. They are rather the officers of the company.
The definition of Director given in this clause is an inclusive definition. It includes any person who occupies the position of a director is known as Director whether or not designated as Director. It is not the name by which a person is called but the position he occupies and the functions and duties which he discharges that determine whether in fact he is a Director or not. So long as a person is duly, appointed by the company to control the company's business and, authorized by the Articles to contract in the company's name and, on its behalf, he functions as a Director.
The Articles of a company may, therefore, designate its Directors as governors, members of the governing council or, the board of management, or give them any other title, but so far as the law is concerned, they are simple Directors.
Duties of a Director
There is no exhaustive list defining the duties of the Board of Directors towards the company and shareholders. But based on the analysis of the provisions of the Companies Act, 1956 with regards to a director, some general duties of a Director are mentioned herein:
To file return of allotments: a company must file with the Registrar, within a period of 30 days, a return of the allotments, stating the specified particulars. Failure to file such return shall make the Directors liable as 'officer in default'. A fine, up to Rs.500 per day, till the default continues may be levied.
Not to issue irredeemable preference shares or shares, redeemable after 20 years: A company cannot issue irredeemable preference shares or preference shares, redeemable beyond 20 years. Directors, making any such issue, may be held liable as 'officer in default' and, may be subject to a fine, up to Rs.1, 000.
To disclose interest: A Director, who is interested in a transaction of the company, must disclose his interest to the Board. The disclosure must be made at the first meeting of the Board, held after he has become interested. This is because a Director stands in a fiduciary capacity with the company and, therefore, he must not place himself in a position in which his personal interest conflicts with his duty.
A company is not debarred from entering into a contract in which a Director is interested. It only requires that such interest be disclosed. An interested Director should not take part in the discussion on the matter of his interest. His presence shall not be counted for the purpose of quorum for that item. He shall not vote on that matter. If he does vote, his vote shall be void. Non-disclosure of interest makes the contract avoidable and not void. However, the concerned Director may be subjected to fine, up to Rs. 5,000.
Duty to attend Board meetings - A number of powers of the company are exercised by the Board of Directors in their meetings, held from time to time. Although, a Director may not be able to attend all the meetings, but, if he fails to attend three consecutive meetings or, all meetings for a period of three months, whichever is longer, without permission of the Board, his office shall, automatically, fall vacant.
A Director's duties also include the following:
• To convene Statutory, Annual General Meeting (AGM) and also Extraordinary General Meetings;
• To prepare and place at the AGM, along with the balance sheet and, profit and loss account, a report on the company's affairs, including the report of the Board of Directors;
• To authenticate and approve annual financial statement;
• To appoint first auditor of the company;
• To appoint cost auditor of the company;
• To make a declaration of solvency in the case of a Members' voluntary winding up;
It is difficult to describe the duties of directors in general terms, whether by way of analogy or otherwise. The nature of duties of director would depend not only on the nature of the company's business but also on the manner in which the work of the company is distributed between directors and other officials. A director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience.
In case of a Non Executive DirectorA director is not bound to give continuous attention to the affairs of his company. His duties are of an intermittent nature to be performed at periodical board meetings, and at meetings of any committee of the board upon which he happens to be placed. He is not, however, bound to attend all such meetings, though he ought to attend whenever, in the circumstances, he is reasonably able to do so. However an Executive Director needs to give constant attention and take active interest in the affairs of the Company.
In respect of all duties that, having regard to the exigencies of business, and the articles of association, may properly be left to some other official, a director, is in the absence if grounds for suspicion justified in trusting that officer to perform such duties honestly. A director must of necessity trust the officials of the company to perform properly and honestly the duties allocated to those officials.
When presenting their annual reports and balance sheet to their shareholders and when recommending the declaration of a dividend, directors ought not to be satisfied as to the value of their company's assets merely by the assurances neither of their chairman, nor with the experience or the belief of the auditor howsoever competent and trust worthy he is. All in all, there is no difference between legal and equitable duties of directors. If the directors act within their power with such care as is reasonably to be expected from them, having regard to their knowledge and experience, and if they act honestly for the benefit of the company. They discharge both their legal as well as equitable duty to the company. The directors are not liable for all mistakes they make, although if they had taken more care they might have avoided them.
What are the Liabilities of the Directors of a company towards the company?
The liability of a Director to the company may arise from:
Breach of fiduciary duty: Where a Director acts dishonestly to the interest of the company, he will be held liable for breach of fiduciary duty. Most of the powers of Directors are powers in trust and, therefore, should be exercised in the interest of the company and, not in the interest of the Directors or, any section of members. Thus, in a case where the Directors, in order to forestall a take-over bid, transferred the unissued shares of the company to trustees, to be held for the benefit of the employees, and an interest-free loan from the company was advanced to the trustees to enable them to pay for the shares, it was held to be a wrongful exercise of the fiduciary powers of the Directors.
Ultra vires acts: Directors are supposed to act within the parameters of the provisions of the Companies Act, Memorandum and Articles of Association, since these lay down the limits to the activities of the company and, consequently, to the powers of the Board of Directors. Further, the powers of the Directors may be limited in terms of specific restrictions, contained in the Articles of Association. The Directors shall be held, personally, liable for acts beyond the aforesaid limits, being ultra vires the company or the Directors. Thus, where the Directors pay dividends or interest out of capital, they will be liable to indemnify the company for any loss or damage, suffered due to such act.
NegligenceAs long as the Directors act within their powers with reasonable skill and care, as expected of them as prudent businessmen, they discharge their duties to the company. But, where they fail to exercise reasonable care, skill and diligence, they shall be deemed to have acted, negligently, in discharge of their duties and, consequently, shall be liable for any loss or damage, resulting there from. However, error of judgment will not be deemed as negligence. The Directors cannot be absolved of their liability for negligence by any provisions in the Articles of Association.
Mala fide acts: Directors are the trustees for the money and property of the company, handled by them, as well as for exercise of the powers, vested in them. If they dishonestly or in a mala fide manner, exercise their powers and perform their duties, they will be liable for breach of trust and, may be required to make good the loss or damage, suffered by the company by reason of such mala fide acts. They are also accountable to the company for any secret profits they might have made in course of their performance of duties on behalf of the company. Directors can also be held liable for their acts of 'misfeasance', i.e., misconduct or willful misuse of powers. However, misconduct, which is not willful, shall not amount to 'misfeasance'.
Where a Director misapplies or misappropriates the money or properties of the company or, has been guilty of breach of trust or misfeasance, the Court may order him to repay the money or, restore the property or, to pay compensation.
Can a Director be made liable for the acts of his Co-Directors?
A Director is the agent of the company, except for matters to be dealt with by the company in General Meeting and, not of the other members of the Board. Accordingly, except in one instance, nothing done by the Board can impose liability on a Director, who did not participate in the Board's action or, did not know about it. To incur liability, he must either be a party to the wrongful act or, later acquiesce (consent) to it. Thus, the absence of a Director from a meeting of the Board does not make him liable for the fraudulent act of a co-Director, on the ground that he ought to have discovered the fraud, except where he had the knowledge or, he was a party to confirm that action.
Where a Director is made liable for the acts of a co-Director, he is entitled to contribution from the other Directors or co-Directors, who were a party to the wrongful act. However, where the Director, seeking contribution alone, benefited from the wrongful act, he is not entitled to contribution.
Board's powers and restrictions thereon
General powers of Board
(1) Subject to the provisions of this Act, the Board of directors of a company shall be entitled to exercise all such powers, and to do all such acts and things, as the company is authorised to exercise and do:
Provided that the Board shall not exercise any power or do any act or thing which is directed or required, whether by this or any other Act or by the memorandum or articles of the company or otherwise, to be exercised or done by the company in general meeting
Provided further that in exercising any such power or doing any such act or thing, the Board shall be subject to the provisions contained in that behalf in this or any other Act, or in the memorandum or articles of the company, or in any regulations not inconsistent therewith and duly made thereunder, including regulations made by the company in general meeting.
(2) No regulation made by the company in general meeting shall invalidate any prior act of the Board which would have been valid if that regulation had not been made.
Certain powers to be exercised by Board only at meeting.
(1) The Board of directors of a company shall exercise the following powers on behalf of the company, and it shall do so only by means of resolutions passed at meetings of the Board :-
(a) the power to make calls on shareholders in respect of money unpaid on their shares;
(b) the power to issue debentures;
(c) the power to borrow moneys otherwise than on debentures;
(d) the power to invest the funds of the company; and
(e) the power to make loans
[Provided that the Board may, by a resolution passed at a meeting, delegate to any committee of directors, the managing director, the manager or any other principal officer of the company or in the case of a branch office of the company, a principal officer of the branch office, the powers specified in clauses (c), (d) and (e) to the extent specified in sub-sections (2), (3) and (4) respectively, on such conditions as the Board may prescribe:
Meetings of Board
Board to meet at least once in every three calendar months
In the case of every company, a meeting of its Board of directors shall be held at least once in every [three months and at least four such meetings shall be held in every year] :
Provided that the Central Government may, by notification in the Official Gazette, direct that the provisions of this section shall not apply in relation to any class of companies or shall apply in relation thereto subject to such exceptions, modifications or conditions as may be specified in the notification.]
Notice of meetings
(1)   Notice of every meeting of the Board of directors of a company shall be given in writing to every director for the time being in India, and at his usual address in India to every other director.
(2)   Every officer of the company whose duty is to give notice as aforesaid and who fails to do so shall be punishable with fine which may extend to 100[one thousand rupees].
General meetings of the Company
Annual general meeting
[(1) Every company shall in each year hold in addition to any other meetings a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it; and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next:
Provided that a company may hold its first annual general meeting within a period of not more than eighteen months from the date of its incorporation; and if such general meeting is held within that period, it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation or in the following year;
Provided further that the Registrar may, for any special reason, extend the time within which any annual general meeting (not being the first annual general meeting) shall be held, by a period not exceeding three months.]
(2) Every annual general meeting shall be called for a time during business hours, on a day that is not a public holiday, and shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate:
Provided that the Central Government may exempt any class of companies from the provisions of this sub-section subject to such conditions as it may impose:
Provided further that-
(a)    a public company or a private company which is a subsidiary of a public company, may by its articles fix the time for its annual general meetings and may also by a resolution passed in one annual general meeting fix the time for its subsequent annual general meetings; and
(b)   a private company which is not subsidiary of a public company, may in like manner and also by a resolution agreed to by all the numbers thereof, fix the time as well as the place for its annual general meetings.]
Contents and manner of service of notice and persons on whom it is to be served
(1) Every notice of a meeting of a company shall specify the place and the day and hour of the meeting, and shall contain a statement of the business to be transacted thereat.
(2) Notice of every meeting of the company shall be given-
(i) to every member of the company, in any manner authorised under the Act
(ii) to the persons entitled to a share in consequence of the death or insolvency of a member, by sending it through the post in a prepaid letter addressed to them by name, or by the title of representatives of the deceased, or assignees of the insolvent, or by any like description, at the address, if any, in India supplied for the purpose by the persons claiming to be so entitled, or until such an address has been so supplied, by giving the notice in any manner in which it might have been given if the death or insolvency had not occurred; and
(iii) to the auditor or auditors for the time being of the company, in any manner authorized under the Act in the case of any member or members of the company:
Provided that where the notice of a meeting is given by advertising the same in a newspaper circulating in the neighbourhood of the registered office of the company, the statement of material facts referred to need not be annexed to the notice as required by that section but it shall be mentioned in the advertisement that the statement has been forwarded to the members of the company.
(3) The accidental omission to give notice to, or the non-receipt of notice by, any member or other person to whom it should be given shall not invalidate the proceedings at the meeting.
Explanatory statement to be annexed to notice
(1)   For the purposes of this section-
(a)    in the case of an annual general meeting, all business to be transacted at the meeting shall be deemed special, with the exemption of business relating to (i) the consideration of the accounts, balance sheet and the reports of the Board of directors and auditors, (ii) the declaration of a dividend, (iii) the appointment of directors in the place of those retiring, and (iv) the appointment of, and the fixing of the remuneration of the auditors; and
(b)    in the case of any other meeting, all business shall be deemed special.
(2) Where any items of business to be transacted at the meeting are deemed to be special as aforesaid, there shall be annexed to the notice of the meeting a statement setting out all material facts concerning each such item of business, including in particular [the nature of the concern or interest], if any, therein, of every director and the manager, if any:
Provided that where any item of special business as aforesaid to be transacted at a meeting of a company relates to, or affects, any other company, the extent of shareholding interest in that other company of every director and the manager, if any, of the first mentioned company shall also be set out in the statement if the extent of such shareholding interest is not less than twenty per cent of the paid-up share capital of the other company.]
(3) Where any item of business consists of the according of approval to any document by the meeting, the time and place where the document can be inspected shall be specified in the statement aforesaid.
Quorum for meeting
(1)     Unless the articles of the company provide for a large number, five members personally present in the case of public company, and two members personally present in the case of any other company,shall be the quorum for a meeting of the company.
(2)     Unless the articles of the company otherwise provide, the provisions of sub-sections (3), (4) and (5) shall apply with respect to the meetings of a public or private company.
(3)     If within half an hour from the time appointed for holding a meeting of a company, a quorum is not present, the meeting, if called upon the requisition of members, shall stand dissolved.
(4)     In any other case, the meeting shall stand adjourned to the same day in the next week, at the same time and place, or to such other day and at such other time and place as the Board may determine.
(5)     If at the adjourned meeting also, a quorum is not present within half an hour from the time appointed for holding the meeting, the members present shall be a quorum.
Chairman of meeting
(1) Unless the articles of the company otherwise provide, the members personally present at the meeting shall elect one of themselves to be the chairman thereof on a show of hands.
(2) If a poll is demanded on the election of the chairman, it shall be taken forthwith in accordance with the provisions of this Act, the chairman elected on a show of hands exercising all the powers of the chairman under the said provisions.
(3) If some other person is elected chairman as a result of the poll, he shall be chairman for the rest of the meeting.
(1)   Any member of a company entitled to attend and vote at a meeting of the company shall be entitled to appoint another person (whether a member or not) as his proxy to attend and vote instead of himself; but a proxy so appointed shall not have any right to speak at the meeting:
(2)   The instrument appointing a proxy shall-
(a)    be in writing; and
(b)   be signed by the appointer or his attorney duly authorised in writing or, if the appointer is a body corporate, be under its seal or be signed by an officer or an attorney duly authorised by it.
(3)   An instrument appointing a proxy, if in any of the forms set out shall not be questioned on the ground that it fails to comply with any special requirements specified for such instrument by the articles.
(4)   Every member entitled to vote at a meeting of the company, or on any resolution to be moved thereat, shall be entitled during the period beginning twenty-four hours before the time fixed for the commencement of the meeting and ending with the conclusion of the meeting, to inspect the proxies lodged, at any time during the business hours of the company, provided not less than three days' notice in writing of the intention so to inspect is given to the company
Voting to be by show of hands in first instance
At any general meeting, a resolution put to the vote of the meeting shall, unless a poll is demanded under section 179, be decided on a show of hands.
178. Chairman's declaration of result of voting by show of hands to be conclusive.
A declaration by the chairman in pursuance of section 177 that on a show of hands, a resolution has or has not been carried, or has or has not been carried either unanimously or by a particular majority, and an entry to that effect in the books containing the minutes of the proceedings of the company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes cast in favour of or against such resolution.
Minutes of proceedings of general meetings and of Board and other meetings
Every company shall cause minutes of all proceedings of every general meeting and of all proceedings of every meeting of its Board of directors or of every committee of the Board, to be kept by making within [thirty] days of the conclusion of every such meeting concerned, entries thereof in books kept for that purpose with their pages consecutively numbered.
(1A) Each page of every such book shall be initialled or signed and the last page of the record of proceedings of each meeting in such books shall be dated and signed-
(a) in the case of minutes of proceedings of a meeting of the Board or of a committee thereof, by the chairman of the said meeting or the chairman of the next succeeding meeting;
(b) in the case of minutes of proceedings of a general meeting, by the chairman of the same meeting within the aforesaid period of [thirty] days or in the event of the death or inability of that chairman within that period, by a director duly authorised by the Board for the purpose.
(1B) In no case the minutes of proceedings of a meeting shall be attached to any such book as aforesaid by pasting or otherwise.]
(2) The minutes of each meeting shall contain a fair and correct summary of the proceedings thereat.
(3) All appointments of officers made at any of the meetings aforesaid shall be included in the minutes of the meeting.
(4) In the case of a meeting of the Board of directors or of a committee of the Board, the minutes shall also contain-
(a) the names of the directors present at the meeting; and
(b) in the case of each resolution passed at the meeting, the names of the directors, if any, dissenting from, or not concurring in, the resolution.
(5) Nothing contained in sub-sections (1) to (4) shall be deemed to require the inclusion in any such minutes of any matter which, in the opinion of the chairman of the meeting-
(a) is, or could reasonably be regarded as, defamatory of any person;
(b) is irrelevant or immaterial to the proceedings; or
(c) is detrimental to the interests of the company.
Explanation.- The chairman shall exercise an absolute discretion in regard to the inclusion or non-inclusion of any matter in the minutes on the grounds specified in this sub-section.
A resolution will be taken to be passed at the Board meeting if a majority of the Directors give their consent to the same.