An overview of the recent developments and advances in India’s patent and trademark regulations
As India marches on its endeavour to attract higher foreign direct investment, catapulting the recognition of intangibles in wealth creation and stimulating a digital economy that also empowers small and medium-sized enterprises, a lot of changes are underway to strengthen the intellectual property (IP) system. This article captures a snapshot of several initiatives made in this direction.
IPR in a digital world
There has been a massive influx of technology into the legal system. From digitization of records at the tribunals and courts, to e-hearings and online documentation and e-receipts, a lot of IP has moved online.
The entire process of uploading documents is now digital, which basically empowers better compliance with deadlines and ensures comfort in knowing all that was to be pleaded is on record.
This digital shift has also brought a far bigger level of transparency within the process as the documents, when uploaded, are accessible to the other side. This has also boosted diligence and search processes, as much information is now accessible to deliberate on conflicts, extent, claims and defences.
At the same time, an idea is being explored of whether some categories of documents may be treated as classified, so that the ability of brand owners to limit any confidential information, like a licence or its terms, is secured from a third-party look-in.
In several aspects, the evidentiary burden of proving receipt of documents, or lack of receipt, or their incompleteness or inadequacy, has also been reduced in the process. India is still one of the countries with five trademark offices and different jurisdictions, and with a digital focus a lot of time and costs are saved in accessing information online.
Easy contact points
In most matters, the contact details are easily available or indicated online, which has made it easier for the parties to personally converse and reach resolutions. As a result of this, there has been a phenomenal number of settlements even before opposition orders are passed, or, for that matter, even before they are lodged.
Parties have been able to arrive at settlements either by amending marks or goods, or by overcoming limitations in terms of case backlogs. Amendments being filed online are easier to track for compliance as well.
Owing to the digital shift, backlogs have been addressed, to a large extent. There was a time when trademark registration in India would take up to 15 years. The process now can have registrations granted within seven months, which is inclusive of the four months of statutory opposition period.
Accelerated exam process
The issuance of office actions has become extremely fast. They are usually issued within two months of filing and the result of this is that brand owners now are aware of the absolute or relative grounds of objections to their mark well in time, enabling them to make faster business decisions and have well-planned product launches with little risk.
Strong document archive
All documents of evidence now have to be uploaded online, which enables a strong archive available for strategy making and brand positioning. Looking at issues such as anti-dilution or expansion of the business from one product category to the other requires only a click. Moreover, digital records are readily accessible and cannot become destroyed records.
Vitality of well-known marks
Social and digital media have made the world a well connected place, and a brand’s reach to unknown parts has never been better.
India already had the concept of well-known trademarks, but has intensified its process and practice on declaration of trademarks as well known. A recent example of this was the declaration of the trademark “TCS” as well known.
The courts in India recognized the power available to proprietors to obtain a declaration, and directed that the option of filing petitions to seek a well-known declaration must be availed, and also issued a direction to the registrar of trademarks to decide on the same expeditiously. A committee on well-known marks has been set up, which has been meeting regularly to evaluate the evidence filed by the parties for consideration of marks as well known. The committee meets and hears the application akin to a semi-judicial proceeding.
Sensitizing the owners
This process of well-known declarations in turn is educating business owners on the kind of documentation or process for consideration of a mark as well known, and on a parallel footing facilitating brand owners to evaluate, value and enhance the commercial value of their brands. Thus, brand valuation is going hand in hand with a well-known process, even though accounting guidelines for valuation are still not in place.
Registrar of companies. There is a growth in inclusion of other factions for the protection of marks, such as the registrar of companies, which has provisions not to register company names that conflict with prior rights of trademark owners. The Companies Act already contains the process to be followed to this effect.
Drug controller. Similar provisions are now being incorporated by the drug controller with respect to pharmaceutical medicines. The health ministry has proposed an amendment in the Drugs and Cosmetics Rules, restricting companies from using identical names for different drugs.
Securities and Exchange Board of India (SEBI). Even capital markets regulator, SEBI, has made it mandatory for promoters to disclose the status of IP rights in their IPOs or follow-on offers, to indicate the schedule of trademarks, impact of protection or lack of it, and of disputes or challenges in any way that may enhance or deplete brand or business value or earnings.
The same applies for the status of licences and technology transfers and issues of ownership being consistent to arm’s-length, related party transactions, transfer pricing and issues of corporate governance. Royalties are also included and schedules of subsidiary or associate companies and their material effect, if any, on such intangibles. Disclosures of ongoing grants of patents or trademarks, or court actions, or changes in royalties, need to be communicated, along with resolutions to buy, sell or mortgage them. There seems to be a trend where companies are filing disclosures on their well-known marks before the stock exchanges.
Similarly, whenever there are any instances of misuse, guidelines have been formulated prohibiting the misuse of names. It is likely that similar guidelines will be formulated for the misuse of marks that are against public interest, or that mislead, such as those hovering around COVID-19, or cures or preventions.
IT Act amendments
As a reflexive instinct to crack down on fake news and rumours, such as control on sponsored content circulated on online platforms like Facebook, WhatsApp, etc., India is amending its Information Technology (IT) Act. Intermediary liabilities, including of e-commerce platforms, are also being introduced, making them accountable. This will be massively beneficial for the IP regime because the intermediary platforms will now have to remove counterfeit goods.
Delhi High Court, in Swami Ramdev and Anr v Facebook and Ors, held that Indian courts can grant a global injunction in respect of offending material or content, in order to disable or block content on a global basis. This is a welcome move and will benefit in case of infringing content, too. Admissibility of electronic evidence has also been affirmed under various scenarios.
Design, copyright overlap
There has been an express need from the design and fashion trade regarding issues of overlap between design and copyright law, which at times hit the interests of the fashion industry to enforce or seek damages. As per the law, any design not registered under the Designs Act, and that is produced more than 50 times through any industrial process, loses both the right to copyright and design (protection). Therefore, various associations are sending their representations to the government to consider amending the law.
Increase in alternate resolution
The courts’ system of expedited trials has begun, as has the system of pre-litigation mediation, which is resulting in a great degree of comfort for brands, bringing down the costs of disputes and reaching faster solutions.Similarly, the damages culture has picked up and is quite robust, with damages being awarded and more precedents setting in.
Huge productivity is being seen on the customs side, with so many custom officials undergoing training across all ports, and online, to become better versed with how to detect counterfeit goods or issues of infringement, and that is also enabling a higher degree of protection to brand owners.
A working paper was submitted at the behest of a leading trade association for imposing huge penalties on counterfeiting as an anti-counterfeiting tax, where, instead of imposing a penalty as prescribed under the Indian Penal Code or other corresponding legislation with or without imprisonment for counterfeiting, taxes of 200%-300% or more are imposed on the counterfeiters. Imposition of this tax, if allowed and considered, will be a huge deterrent on counterfeiters and benefit brand owners by cleaning up the market. The author recommends also including the eventuality of the attachment of a counterfeiter’s assets and property, to realize the counterfeit tax value, in the event the counterfeiter refuses to pay.
The Advertisement Code has been made stricter in terms of celebrity endorsement and liabilities of false representations. The issue of disparagement and false claims has been addressed by the development of the law and the need to protect brand owners. SMEs have also been given fee rebates to encourage more trademark and patent filings.