Thursday, January 30, 2014

Google Takes Defamation Case to India’s Supreme Court

An Indian Supreme Court hearing starting Monday on whether the local unit of Google Inc. is liable for allegedly defamatory comments made on its blogging site, will help decide how Internet companies do business in the growing south Asian market.
The Supreme Court is scheduled to start hearing arguments from the U.S. tech giant on Monday in the case brought by Visaka Industries Ltd., a construction materials company, which claims an activist used the Google blogging site to spread false information about Visaka
Google lost the case in a High Court and appealed to the Supreme Court, saying it should not be held responsible for everything on its sites as it cannot control what users post.
Other search engines, blog sites, social media sites and even online retailers could be affected by the outcome of the case, lawyers said. The hearing could take months before a final judgment is delivered.
“People may not even roll out new products,” in India, depending on the outcome of the case, said an executive at a global technology firm. “It’s not worth the effort of investing.”
Google India argues that it can’t be held liable for content posted by users on a platform which is hosted by its parent company Google Inc.
Google Inc. didn’t immediately respond to an email seeking comment on the case.
India represents one of the last great untapped markets for Internet companies. The number of Internet users in Asia’s third largest economy is likely to jump to more than 500 million by 2015 from around 200 million today, according to an estimate by consulting firm McKinsey and Co. 
The case against Google was brought by Visaka Industries–a company based in the southern Indian city of Hyderabad which makes corrugated cement and asbestos fiber sheets—after an anti-asbestos blog hosted by Google’s contained allegations that Visaka was being protected because it was backed by leaders of the ruling Congress party.
The author of the post Gopala Krishna said he still stands by his post, though he hasn’t been formally informed of the charges or the case.
“Whatever Google has said (in court) has supported freedom of expression,” Mr. Krishna told The Wall Street Journal. “They have done the right thing by not removing the content.”
A spokesman for the Congress party could not be reached for immediate comment.
Visaka said it had no connection to the party and filed a case charging Google India with criminal conspiracy, defamation and publishing content which is defamatory.
Google India challenged the charges at the High Court in the Southern Indian State of Andhra Pradesh and lost in 2011. It appealed to the Supreme Court which is beginning hearings on Monday.
If Google loses again it will be “liable for criminal activities on its network,” and have to step up its monitoring of what goes on online in India “Exercising of due diligence is a critical aspect for limiting liability of intermediaries.”
Google managers could be punished with up to life imprisonment and fines from 100,000 rupees ($1,595) to 1.0 million rupees and could also be asked to pay damages of up to 50 million rupees per violation.
India has started restricting Internet freedom in recent years, raising concerns among free speech activists.
In 2009 it amended its laws to hold Internet firms liable for “offensive,” “defamatory” or “blasphemous” content.  The amendments have been challenged in the Supreme Court but it has yet to rule.
In 2011,  India’s technology and telecommunications minister Kapil Sibal urged Internet companies to take down derogatory content from their websites
India needs to loosen these rules, regulations and political pressures or risk missing out of the Internet revolution, said Mishi Choudhary executive director of the Software Freedom Law Center based in New Delhi.


Why India needs to take intellectual property seriously

Without reform of IP law, Indian companies - and broader economic growth - will remain stunted

DR. Reddy's Laboratories' chairman, called for the Indian pharmaceutical industry to move up the value chain from generics through investing in research and innovation, reported the Business Standard last week. Mr Prasad's aspirational call to action is, however, a sad reminder of how the government's policies create a hostile environment for investment and hobble Indian creativity. A salient example of these counterproductive policies are the attacks on some 15 medicine patents over the past 18 months. While hailed often as victories, these manoeuvres jeopardise the investment India needs to build intellectual capital, foster growth and employment, and develop medicines relevant to Indian needs.

The idea underpinning intellectual property (IP) protections is to encourage innovation. With an assurance of temporary exclusivity, people will invest resources to create new products and technologies, knowing that if they achieve a breakthrough their efforts will be rewarded. (It typically takes a decade and over $1 billion to develop a successful new drug.)

Creating incentives for innovation is an idea reaching back hundreds of years. In the 18th century the framers of the US Constitution included a provision that calls on the Congress to grant authors and inventors "the exclusive Right to their respective Writings and Discoveries" in order to promote progress in science and the arts.

In the intervening years, robust IP rights have helped spark innovation and growth in countries - both developed and developing - throughout the world. As much as 40 per cent of US growth in the 20th century was a result of innovations, according to Nobel laureate Robert Solow. And one of India's most successful companies - Tata - has prospered on the strength of its IP. As of 2012, Tata Motors held 833 patents and Tata Steel had 1,230 patents.

Just as countries with strong IP rights have a foundation for prosperity, countries lacking such protections find innovation and growth more daunting. It is sadly unsurprising that India receives low marks on innovation scorecards. As President Pranab Mukherjee pointed out in his National Technology Day speech in May, "India's innovation bottom line is not very encouraging." He observed that the US and China receive 12 times as many patent applications as India.

Regrettably, he did not elaborate on how IP rights foster innovation - nor did he dwell on how these protections encourage foreign direct investment (FDI). It is well established that such investment brings with it new technologies, higher productivity and wages, and spillovers to other firms that spur modernisation. International businesses also bring R&D to countries that provide supportive environments. That increased R&D is often aimed at unmet local needs, such as drug company investment in tropical disease research. Weak IP protection directly discourages such R&D.

While India did revise its IP laws in 2005, enforcement has been inconsistent, at best, and carve-outs for generic drugs have compromised its integrity to the short-term benefit of the owners of generic companies. These shortcomings help explain why India attracts a mere three per cent of global R&D spending. (China, with its stronger IP law, attracts about 14 per cent and Japan about 11 per cent, reports the Battelle Institute.) These data reinforce the World Bank's findings that multinational firms locate R&D in developing countries with effective IP rights.

As noted, corporations consider IP protections when making decisions about where to direct their FDI. The Organisation for Economic Cooperation and Development has found that a one per cent change in the strength of a country's IP rights environment is associated with a 2.8 per cent increase in FDI inflows. That's bad news for India. From 2010 to 2012, the United Nations reports, India's stock of FDI totalled just 11.8 per cent of its GDP. The average for all developing economies was 30 per cent.

While these data underscore India's failure to attract foreign investment, some argue that IP conflicts with Indian interests. The reality is quite different, as explained by Kiran Mazumdar-Shaw, chairman of Bangalore-based Biocon. "We must understand that intellectual property is important for India to embrace and respect and protect," she told the Press Trust of India. "If you cannot demonstrate that IP is safe in the country, I think you are not sending the right message, you are not going to find people investing in India."

Moreover, IP is not the obstacle to access to healthcare that some officials and activists allege. The Supreme Court's recent decision denying Novartis's rights to Glivec, a patent recognised in over 40 countries, has been acclaimed as an advance in patient access. However, Novartis was already ensuring that 95 per cent of the Indians who were prescribed Glivec received the cancer medicine for free.

The very real obstacles to medical access in India stem principally from the government's failings. It devotes a mere 1.2 per cent of GDP to health care, a level lower than in Haiti, and India lacks the insurance, doctors, clinics and hospitals necessary to make use of the full potential of modern medicine. These monumental challenges won't be addressed by headline-catching patent revocations, but will require sustained investment and reform.

If India is serious about attracting FDI and becoming an innovation hub, it should reform its IP law to ensure the protections that are a mainstay of the world's advanced economies. Absent such protections, R&D will regrettably go elsewhere, India's "innovation bottom line" will continue to disappoint, and, most troubling, the Indian people will be denied new opportunities, new knowledge, and new medicines.

Protecting patents: India worst in world

Despite the current decade being called Indias “decade of innovation”, the country has been ranked at the bottom of the list of 25 countries in terms of its intellectual property (IP) environment. According to the 2014 International Intellectual Property (IP) Index by the US Chamber of Commerce’s Global Intellectual Property Center (GIPC), India’s percentage score has fallen from 25 per cent in 2012 to 23 per cent.

“The continued use of compulsory licences, patent revocations, and weak legislative and enforcement mechanisms raise serious concerns about India’s commitment to promote innovation and protect creators,” the report said.

The index, titled Charting the Course, gives a snapshot of the IP environment of 25 countries.

David Hirschmann, president and Chief Executive Officer of GIPC, said: “Nations – big and small – are wrestling with domestic legislation, judicial proceedings, criminal proceedings, and other processes regarding IP. These are all opportunities to chart a course toward a strong IP environment.”

He said along with these opportunities, some countries are taking backward steps on IP. “India, which again finished last in the second edition of the Index, continues to allow for the deterioration in its IP climate.”

The US is the highest-ranking country, followed by the UK and France. The five BRICS economies — Brazil, Russia, India, China, and South Africa — continue to face serious challenges.

According to the report, several factors led to the deterioration of the IP environment in India. For instance, in the biopharmaceutical sector, “Indian policy continued to breach international standards of the protection of innovation and patent rights, revoking patents generally accepted around the world and announcing that other patented medicines are being considered for compulsory licences.”

The report also mentions the Supreme Court’s April 2013 ruling on the patentability of the anti-cancer drug, Glivec, that the drug does not meet patentability standards imposed by the Indian Patent Act.

India scored poorly in the areas of patents, copyrights, enforcement, membership and ratification of international treaties (in which it scores zero), among others.

“The continued use of compulsory licences, revocation of patents, and weak legislative and enforcement mechanisms across all IP rights raise serious concerns about India’s commitment to promoting innovation,” the report said.

Most high-income economies — with notable exceptions such as Canada, New Zealand, Chile, and the United Arab Emirates (UAE) — have robust national IP environments in place. The weakest national IP environments are in the lower-middle-income countries such as Vietnam, Indonesia, Thailand, and India.

Some of the developments, which are expected to improve the IP climate globally include the fact that currently 12 countries — the US, Japan, Australia, Peru, Malaysia, Vietnam, New Zealand, Chile, Singapore, Canada, Mexico, and Brunei Darussalam — are negotiating the Trans-Pacific Partnership Agreement, which is expected to set a higher standard in the Pacific region, and help in protecting and enforcing IP.

Moreover, the US is currently negotiating with the European Union on a trade and investment partnership agreement, which is supposed to promote competitiveness, growth, and jobs.

China continues to show strength in the patents arena, earning the highest score of all middle-income countries and even outperform high-income countries such as Chile and the UAE. While progress is being made, China’s overall IP environment continues to see challenges, particularly with regard to trademark and trade secrets as shown by its overall score.

According to a 2013 study by the European Patent Office and the Office of Harmonization for the Internal Market on the impact of IP rights and IP-based industries on the EU economy, IP-intensive industries generated almost 26 per cent of all direct and 35 per cent of indirect jobs.

The report also found that IP-intensive industries produced almost 39 per cent of EU-wide gross domestic product (GDP), worth almost euro 5 trillion.


IPAB refers opposition to anti-cancer drug to patent office

The Intellectual Property Appellate Board (IPAB) has asked the patent office to consider afresh a matter related to the patent application of US-based Abraxis BioScience for its anti-cancer drug Abraxane, following pre-grant opposition by Hyderabad-based Natco Pharma.

Natco has developed a generic version of the drug under the brand name Albupax. Emails sent to Celgene, which acquired Abraxis BioScience in 2010, and Natco Pharma for comment on the order didn’t elicit a response till the time of going to press.

IPAB set aside an order of the Assistant Controller of Patents & Designs, saying it was passed in “flagrant violation of principles of natural justice”. An order issued by IPAB Chairman K N Basha and technical member (patents) DPS Parmar said it remanded the matter to the Assistant Controller of Patents & Designs for fresh consideration. It also directed the procedure be completed within three months from the date of the IPAB order.

On July 24, 2009, the assistant controller of patents & designs had refused to grant a patent to US-based Abraxis BioScience’s albumin-bound paclitaxel for an injectable suspension that had the brand name Abraxane and was used in the treatment of breast, lung and pancreatic cancers.

It has a net sales of $649 million and is expected to reach $1.5-2 billion by 2017, said the company's counsel. Abraxis Bioscience was acquired by New Jersey-based Celgene Corporation during 2010 and the upfront payment value of Abraxis BioSciences was at around $2.9 billion.

Natco Pharma complained that they were not offered a copy of an affidavit from Anindy Sircar who was a representative from Biocon, which was filed by Abraxis to establish enhanced efficacy. The bench ordered that the Assistant Controller should provide a copy of a particular affidavit to the generic manufacturer and they shall be given opportunity to give reply.

Justice Basha said that the bench is not going into the merits of the claim and contention of both the sides on merit and the order is only on the contention that there is a violation regarding principles of natural justice.

The first priority application for patent on the drug was filed by Abraxis on December 9, 2002 and the application was published under section 11 (A) on April 1, 2007, after which Natco Pharma has filed a pre-grant opposition against giving approval of patent to the drug. Natco has developed the generic version of the drug, under the brand name Albupax.

The originator firm argued in IPAB that the decision of Assistant Controller of Patents was wrong, and the order in dispute is liable to be set aside for gross violation of principles of natural justice. It contested that the Assistant Controller has heard and put in order on the grounds of insufficiency (which means the claims are not supported by the examples and description), which was not pleaded by Natco.

It also argued that the controller did not provide opportunity to the company to argue the dispute as per provision under Section 14 of the Patent Act, 1970, which is appealable. Instead, the petition was argued under section 25(1), which was not appealable during 2009. The counsel appeared for Abraxis informed that it was only after a Delhi High Court order observing that the pre-grant opposition is appealable, that the company could file an appeal with the IPAB.

The company also argued that during the procedure in the patent office, on March 10, 2009 Natco Pharma filed additional document and Abraxis objected taking this into consideration through an interlocutory petition. Without even looking into the said petition the controller proceeded to hear the matter, it alleged.

The counsel appeared for Natco argued that the impugned order does not cause any violation of principles of natural justice and said that the patent official was right in refusing patent for the drug.

The IPAB bench said that the finding and consideration on the ground of insufficiency, especially when it was not pleaded, “is illegal”.


No copyright or trademark in Yoga, pranic healing asanas, rules HC

Exclusive rights over yoga and pranic exercises, which are derivatives of ancient technique of yoga in India, cannot be claimed under the Copyright Act, the Delhi High Court has held.
The court made the observations while rejecting the plea of Philippines-based Institute for Inner Studies seeking to restrain some persons from teaching the 'asanas' (postures) claimed to be developed by the founder of the institute.
The court relied upon the position of law on the matter in the US and noted that the court there had denied protection to Yoga asanas in case of Bikram Choudhary who is also teaching modern yoga techniques in the US.
A bench of justice Manmohan Singh also held that the expression 'Pranic Healing' cannot be monopolised as trademark by the institute.
"The expression 'Pranic healing' as on the date of the application for the registration was prima facie non distinctive and was the name of the art or technique of doing exercise which was a facet of Yoga.
"The expression was not capable of distinguishing the services of the plaintiff from others due to its wide spread use in the field dating back from centuries ago," the bench said in its 150-page judgement.
The court delivered the judgement on a petition filed by the Institute, which was established by Late Samson Lim Choachuy, Master Choa Kok Sui, on April 27, 1987 and has trusts in various cities in India and the sub-continent.
The institute had moved the high court seeking prohibitory orders against one Charlotte Anderson and others from practicing pranic healing and conducting courses of the asanas adapted by the Master "without proper guidelines and issuing certificates or using literature" of the Master.
"The trade marks which have secured by the plaintiffs in India are all secured post the year 2000 as is evident from the list.
"If the expression Pranic Healing was the name of the art or technique of Yoga in the year 1906 finding place in the books in the field of Yoga, it prima facie appears to be highly doubtful as to how the expression is either inherently distinctive or for that matter capable of distinguishing the goods of one person from that of another.
"Having not made a truthful statement as to proprietorship of the mark pranic healing, the plaintiffs have secured the registration of the expression from the Registrar of the trade mark without informing about the correct proprietorship of the mark applied for on the date of the application."