Haldiram Bhujiawala: IPAB Order

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The IPAB on April 26, 2013 ordered for the removal of trademark registration made in favour of Kolkata based – Haldiram Bhujiawala. This order ended a long standing family dispute over the use of the trademark Haldiram Bhujiawala. (for IPAB order see here). 

Factual Matrix 

The trademark ‘Haldiram Bhujiawala’ was coined in the year 1941 by Mr. Ganga Bishan (whose nickname was Haldiram), for his business - the manufacture and sale of sweets, papads etc. Initially, the firm was a sole proprietorship. But in the year 1956, Mr. Bishan made his sons Mr. Rameshwar Lal (whose heirs are the respondents), Mr. Moolchand and Mr. Das partners in the firm trading as Haldiram Bhujiawala. In 1958, Mr. Rameshwar Lal retired from the firm and shifted to Kolkata. His father, out of love and affection, permitted him to use the trademark ‘Haldiram Bhujiawala’ only in Kolkata. In 1969, Mrs. Kamala Devi, wife of Mr. Rameshwar Lal, joined the partnership firm Haldiram Bhujiawala. 

In 1965, a trademark ‘Haldiram Bhujiawala HRB (logo)’ as represented in a ‘V’ shape was conceived by Mr. Ganga Bishan. In 1972, an application for registration of the said trademark was filed by the said firm under No.285062 for the whole of India. Use was claimed since 1965. The said mark was opposed by a third party and subsequently the application proceeded to registration with a territorial restriction to read as ‘for sale in India except for the State of West Bengal’. Therefore, the said mark was in the name of the four partners i.e.., Mr. Ganga Bishan, Mr. Moolchand, Mrs. Kamala Devi and Mr.Shiv Kishan. 

In 1974, the firm Haldiram Bhujiawala dissolved. On dissolution, Mr. Moolchand acquired the exclusive right to use the trademark ‘Haldiram Bhujiawala’ for the entire country except Kolkata. Mrs. Kamala Devi was given permission to carry on business at Kolkata alone. Thereafter, Mr. Bishan and Mr. Moolchand died and in 1985 Haldiram Bhujiawala was converted to a private limited company. 

Meanwhile, Mr. Rameshwar Lal was carrying on business under the trademark Haldiram Bhujiawala at Kolkata. In 1977, Mr. Rameshwar Lal and Mr.Prabhu Shankar Aggarwal (son of Mr. Lal) filed an application (this is being challenged) for registration of ‘Haldiram Bhujiawala’ claiming use since 1958. This impugned trademark No.330375 is identical to the applicants trademark No.285062. The mark was registered in 1980. 

Issues 

The applicants (legal heirs of Mr. Moolchand) primarily contended that the registration of trademark No. 330375 was wrongly made as it has been made by fraud, on a claim of false proprietorship and on a false claim of use since 1958. It was contented that Mr. Rameshwar Lal had been a partner in the firm Haldiram Bhujiawala and hence was aware of the existence of the trademark ‘Haldiram Bhujiawala’ but had still gone ahead to obtain registration for an identical mark which is nothing but non-disclosure of material facts. Moreover, the advocate who was also aware of the entire facts – adoption of the mark of the applicants since 1941 and the V shaped logo since 1965, had suppressed and concealed these material facts before the Registrar. 

The respondents, however, refuted these allegations. According to the respondents, Mr. Rameshwar Lal had adopted the trademark Haldiram Bhujiawala with the V-shape logo in the year 1958 and had been using the same in the course of trade. They also contended that due to extensive, continuous and uninterrupted use all over India, the said trademark had become very popular. In order to obtain statutory rights over this mark, Mr. Rameshwar and his son Mr. Prabhu applied for the registration of the trademark under No.330375 in Class 30 claiming use since 1958. 

IPAB 

The IPAB dismissed the contentions of the respondents. 

The Board held that Mr. Rameshwar was only a permitted user and could not be the proprietor of the said mark. This was because Mr. Bishan who was the proprietor of the mark had, out of love and affection, only permitted Mr. Rameshwar to continue using the mark in Kolkata. Therefore, Mr. Rameshwar being a permissive user could not claim to be the proprietor of the mark. It was also noted that Mr. Rameshwar had knowledge of the fact that it was Mr. Bishan who had first coined the name ‘Haldiram Bhujiawala’. Therefore, Mr.Rameshwar Lal who had admitted that Haldiram is the nickname of Mr. Ganga Bishan and that Mr. Ganga Bishan is the one who adopted and came up with the trademark cannot claim to be the inventor and adopter himself. Thus, he cannot claim to be the proprietor of the trademark. 

On the point of date of use, the IPAB held that the date of user (1958) claimed by the respondents was not substantiated by cogent evidence. Also, the Board observed that the date mentioned was based on a false statement as the respondents were aware that Mr. Bishan’s mark, which was identical, claimed use since 1965. 

Moreover, the trademark was found to be neither distinctive, nor capable of being distinguished as on the date of registration and therefore, the registration was held to be in violation of the Trademark Act. 

On the point of registration of the impugned mark, the IPAB observed that the Registrar had raised an objection to the registration of the said trademark on the ground that an earlier application under No.285062 i.e., a conflicting mark was already pending. However, the respondents deceived the Registrar by suppressing information and falsely stating that they were the only firm that was run under the name Haldiram Bhujiawala and no other similar application was pending. The application was therefore accepted on false representation and concealment of facts. The IPAB remarked – “We would also like to observe that the Registrar is duty bound to look into the Register before granting a registration. In fact, if the Registrar had verified and looked into the earlier application, this mistake would not have occurred. The marks under Nos.285062 and 330375 are identical for identical goods” 

On the basis on this reasoning, the IPAB held that the registration of the respondent’s mark was invalid.

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Guest Post: Impugning novelty the Novartis way

Carrying on with our lively debate on the merits of the Supreme Court's judgement in the Novartis case, Siva Thambisetty has sent us this reply to Darren's rejoinder, which we had published over here. This is the first time we've had such an extended debate on the blog and I hope we can have more such debate on other aspects of IP law. 

For the earlier exchange between Darren and Siva, please click over here, here and here.

Impugning novelty the Novartis way

by Siva Thambisetty

I am really grateful to the exchange here and for comments below each of the posts. My remarks below are a much more explicit response to the specific claim that I may previously have endorsed a ‘category error’.

There is a difference between support for claim scope and enablement for novelty defeating purposes, particularly for complex disclosures. In my post, my remarks are based on the specific case of a simple generic disclosure with very few possible alternatives, that then leads to specific implications for novelty defeating enablement.

To make it very clear, I agree that Imatinib Mesylate would infringe a generic disclosure of Imatinib even where Imatinib Mesylate has not been enabled explicitly in the patent for Imatinib. Generally such claim scope is accepted because several factors such as nature of the invention, level of predictability in the field and knowledge of a person skilled in the art step in to shore up the implicit content of supporting disclosures. I maintain that it is important to keep the basis of such claim scope in mind even when we follow the rules as legal precepts. [To understand some of the longstanding tension in UK law between granting patents for chemical products and requiring that the scope of monopoly rights equiparate with the disclosure in the specification see Pila on Chemical Products and Proportionate Patents]

It is also true that in general, a generic disclosure (such as of Imatinib base compound) does not impugn novelty of a more specific claim (such as of Imatinib Mesylate) - usually individualized description is needed to make it prejudicial to novelty. The only way in which a generic disclosure can impugn novelty is where the generic disclosure can only result in a small number of possible alternatives/ or low number of significant compounds, in which case limited disclosure of a small number of possible alternatives may itself be regarded as disclosure of each and every member of that group. Salts of compounds are rarely an enablement issue. Again this is because of what we know and assume from the predictability of the field and the nature of the invention.

The Imatinib patent specifically included respective salts because of the close relationship between ‘novel compounds in their free form’ and in the ‘form of their salts’. Further the patent states that ‘reference to free compounds must be taken to include corresponding salts where appropriate and expedient.’ Usually claims of compounds are set forth with one or more derivatised forms such as salts, and preparation of salts of compounds are often routine and predictable in the pharmaceutical arts. 

So while a product may be used (under patent or as infringing product) before the priority date, we cannot assume that such use amounts to disclosure and enablement enough to impugn novelty, without further enquiry based on common general knowledge. Given the close association between salts and the base compounds however, the court was justified in taking the generic disclosure of Imatinib as having impugned the novelty of specific salt – Imatinib Mesylate (but not the beta crystalline form; and stopping short here when polymorphism is known to exist, is a clue that the Supreme Court does actually, understand the context of novelty defeating disclosures. [para 124, and footnote]). 

In this sense, I do see and acknowledge why reference to the infringement action might have been a red herring, but the court refers to the a) Patent Term Extension Application for the Zimmerman patent in the US (showing that the sole active ingredient in the drug marketed under the patent is Imatinib Mesylate) b) the Board of Patent Appeals decision reversing the rejection of a patent application on the beta crystalline form of Imatinib Mesylate (as demonstration of the need for specific teaching to impugn novelty) and c) the alleged infringement by VEENAT 100, to evidence at least two aspects relevant to impugning novelty. First that Imatinib Mesylate was made available to the public before the priority date. Secondly to highlight the kind of invention, generic nature of the disclosure, the level of predictability in the field due to which support and enablement in each case (or respective ‘category’ of infringement and novelty destroying disclosures) is comfortably matched because of conventional assumptions made in the field. 

In terms of my comments on specialized nature of patent law, this is a question of institutional capability – we can disagree on whether there ought to be space for such diverging capability, and the difference in thinking that inevitably follows. If we regard the involvement of general appellate courts as unreliable/undesirable because they are prone to make ‘mistakes’ in a highly technical field, we risk losing valuable opportunities to test patent law against benchmarks of legitimacy that are different to the internal logics that we take for granted.

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Comparative Advertising: Reckitt Benckiser trumps Hindustan Lever Ltd again

The Delhi High Court in yet another order granted Reckitt Benckiser an interim injunction against Hindustan Lever Ltd (HUL). This is the second order granted in favour of Reckitt Benckiser against HUL recently (read the first one here).

The dispute may be traced back to Reckitt Benckiser’s (plaintiff’s)TV commercial and print campaign which compared the germ killing capabilities of its product Dettol Healthy Kitchen and HUL’s (defendant) Vim Liquid. These advertisements supposedly contained truthful statements about the germ killing capabilities of the two competing products. The defendant proceeded filed a suit against the plaintiff for disparaging advertisement before the Calcutta High Court. However, the Court passed a consent order in this matter allowing the plaintiff to continue with the impugned television advertisement subject to small variations.

The present dispute arose out of the following facts: The plaintiff alleged that in retaliation to the previous Calcutta HC order, the defendant came out with an advertisement published in the Sunday Times Edition in which the defendant disparaged the plaintiff and its brand Dettol. It contended that in the advertisement, the defendant maliciously equated its product to a “Harsh Antiseptic”. The question asked in the initial portion of the advertisement was:

“A Harsh Antiseptic or the power of 100 lemons – which one would you choose to clean your child’s tiffin?”

The plaintiff contended that the above question directly indicated the brand Dettol, and also misrepresented to consumers that plaintiff’s Dettol antiseptic liquid and Dettol Healthy Kitchen have the same ingredients. Furthermore, the advertisement went on to ask:

“An Antiseptic is for cleaning wounds and floors. Would you use to clean the utensils your family eats from?”

The plaintiff again contended that this particular question renders the target brand to be that of Dettol’s Antiseptic Liquid, which is used for cleaning wounds and floors. The advertisement thereafter mentioned with a disclaimer in fine print:

“NO ONE REMOVES GREASE BETTER*; NO ONE REMOVES GERMS BETTER*”

The defendant submitted that the campaign did not make any reference to the plaintiff’s products and only sought to inform the consumers that harsh antiseptics were not fit for cleaning utensils. It contended that the plaintiffs had themselves admitted that the antiseptics did not fall in the ‘harsh ‘category, and thus construing it as a reference to their brand was baseless and frivolous . Moreover, the plaintiff did not file any conclusive evidence to show that the overwhelming majority of consumers associate the term “harsh antiseptic” in reference to the plaintiff’s products. Further, HUL submitted that it was entitled to puff its products; and that the plaintiff was being hypersensitive to such puffery. It was also claimed that the campaign was purely intended to promote superiority of their product over other competitors, which was within their fundamental right of free speech and expression. The advertisement was also in line with the principles as postulated by Advertising Standards Council of India (ASCI). Thus, the defendants denied disparagement of the plaintiff’s product.

Whether the advertisements were disparaging -

Justice M L Mehta decided that prima facie the advertisement targeted the plaintiff’s brand Dettol and its product Dettol Healthy Kitchen. The Court relied on Dabur India Ltd v. Colortek Meghalaya Pvt. Ltd& ors; De Beers Abrasive; and Pepsi Co. Inc. &Ors vs. Hindustan Coca cola Ltd. & Anr, and reiterated the four pronged test for disparagement laid down in them:

(i) An advertisement is commercial speech and is protected by Article 19(1) (a) of the Constitution

(ii) An advertisement must not be false, misleading, unfair or deceptive.

(iii) There grey areas need not necessarily be taken as serious representation of facts but only as glorifying one’s product.

(iv) While glorifying its product, an advertiser may not denigrate or disparage a rival product.

The Division Bench in the Dabur-Colortek case had held that while hyped-up advertising may be permissible, it cannot transgress the grey areas of permissible assertion, and if it does so, it must have some reasonable factual basis for the assertion made and that it is not permissible for anybody to make an off-the-cuff or unsubstantiated claim that his goods are the best in the world or that his goods are better than that of a rival. Based on these principles, in the instant case the Court held that the defendant's claims did not fall with the purview of permissive comparative advertising.

The Court also stated that it is common knowledge that the plaintiff’s brand Dettol is synonymous with the term antiseptic in the FMCG market in India. In support it mentioned an older Delhi HC decision[1] wherein it was observed that the public carried an impression in their minds that all Dettol products are antiseptic. Further, it was held that the usage of the term ‘harsh antiseptic’ actually referred to an antiseptic (and not a particular brand) which is harsh, wherein the term ‘harsh’ is used as an adjective. Thus, the ad made a direct link between the antiseptic and Kitchen liquid, and connoted a similar strong effect of both liquids. Media reports in print and on social media also suggested that consumers drew the above-mentioned inferences. 

Thus, the Court passed an interim order restraining the defendant to the extent indicated above from publishing the impugned advertisement or any other similar advertisement or depiction aimed at disparaging the goodwill and reputation of the plaintiff’ s brand.

[1] Reckitt Benckiser (India) Ltd. v. Hindustan Unilever Ltd., 2008 (38) PTC 139 (Del.)

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The (Great) Gatsby Files: IPAB decides in favour of Fem Care Pharma Ltd.

The IPAB recently decided a trademark dispute with respect to use of the tradename ‘Gatsby'. The dispute here though was in relation to perfumeries and cosmetics products, not the recent cinematic reproduction of the novel ‘The Great Gatsby.’ 

Mandom Corporation, a Japanese company filed a rectification petition in 2005 to remove the trademark registration of Gatsby. The trademark was registered by a well known Indian cosmetics company Fem Care Pharma. The petition was filed on the grounds of alleged non-use of the trademark by Fem Care Pharma for a continuous period of five years, and no demonstrable bona fide intention to use it either. It stated that Fem Pharma’s claims of use since February 1994 were false. Further, the applicant claimed that they had been using the mark internationally since 1978, and entered the Indian markets in 1999. They also had registrations for the mark in several countries and spent a considerable sum in advertising the brand.

When the applicants filed for registration of the trademark, they learnt that there was a identical prior pending application for registration filed by Fem Pharma. Opposition to such cited mark can only be raised only after it is advertised in the TM Journal, therefore the applicant awaited the outcome of the earlier application. Later, they also filed a request in Form TM-58 in 2003 to the Registry, for intimation of the publication to enable them to oppose the same. The applicants conducted extensive market research, but did not come across products of Fem Care in circulation bearing the Gatsby mark. Thereafter, during the pendency of Fem’s application, they also filed a registration application in September 1999. 

In 2005, Mandom Corporation received an examination report stating that the mark had been registered, despite it having tendered form TM-58. Therefore, it claimed that the mark had been registered without notice to the applicant. The second application of the applicant was taken up for a Show Cause Hearing and ordered to be Advertised Before Acceptance by the Registrar subject to association with the earlier application.

The applicants stated that the continuance of the impugned mark in the register would cause embarrassment and harm to the business of the applicant and as such they are ‘person aggrieved’ within the meaning of the Section 57(1) of the Act. Further, Fem Pharma was fully aware of the trade mark Gatsby of the applicant and yet adopted the same in bad faith and with ulterior motive. The use of the impugned mark was likely to cause confusion and deception amongst trade and public and potentially affect the purity of the register.

The respondents refuted the above mentioned claims by stating that the mark was actually used with effect from 01.02.1994 which is at least 8 months prior to the date of registration. The respondent had also applied for FDA manufacturing license in April, 2004, demonstrating a bona fide intention to use the mark. Further, the mark entered the register in 2003, and the instant cancellation petition was filed in 2005 i.e within 28 months from actual date of registration and therefore the applicant’s allegation of non-use under Section 46 1(b) of the Act would fail. Fem Pharma further denied applicant’s claim of having used the mark in India since 1999, and that the mark enjoyed the status of a well known trademark. Documents produced in evidence of the applicant’s claimed were of dubious and unsubstantial nature. The applicant’s TM-58 application was filed 3 months after the respondents obtained bona fide registration of the mark in 2003- the applicant’s effort was merely an eyewash.

Further, Fem Pharma averred that the impugned trade mark has been in the Register for many years and the respondents are in the process of relaunching their products in a big way. Therefore, the removal of the impugned mark at this stage would cause irreparable loss and damage to the respondent. 

Whether the mark was liable for cancellation-

The Court stated that the main grounds for cancellation were based on 9,11, and 18(1) of the Act. Section 18(1) of both old and current TM Act provides that “any person claiming to be the proprietor of a trade mark” may apply for its registration. To claim proprietorship, the applicants had to establish that Gatsby was used by them since 15 years before 2003. The material question to decide the same was that whether had the respondent prior knowledge of the applicant trade mark Gatsby in 1994. The Court held there was no conclusive evidence to suggest that the respondents had prior knowledge in the voluminous averments presented by the applicants. The applicants failed to establish their case beyond reasonable doubt. Moreover, the details and exhaustive explanation for adoption of Gatsby by the respondent appeared to be reasonably justified and convincing to the Court. Applying for a licence with the FDA was an indication of bona fide intention to use the mark. It stated that the question of looking into objections under Section 9 and 11 only arises if a prima facie case to remove the impugned mark has been made out, which the applicants failed at. The filing of TM-58 form by the applicants was mala fide.

Thus, the petition was dismissed.

The Court also expressed its disapproval of the Registry’s outdated method of checking similarity of marks. It held that the veracity of claims to the proprietorship of marks must also be checked at the Examination and Show Cause Stage itself through a proper internet search to eliminate suspicious of copying someone else trade mark not in the register, with an objective to foster a robust trademark protection regime in India.

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SpicyIP Weekly Review (May 4th Week)

SpicyIP saw a very busy week with many interesting developments -

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The week started with Sai’s insightful post on Microsoft v Motorola. The 207 page judgment of Judge

James L Robart on fixing the FRAND (fair, reasonable and non-discriminatory) royalty rate, is significant as its sets out, for the first time, a framework for negotiating a FRAND royalty rate. The opinion adequately addresses the problems of patent hold-up and royalty stacking plaguing the industry and has been well received so far.

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Thereafter, Prashant blogged about the defamation notice served on me by the Times Publishing House. The notice and response have also been uploaded. Shamnad’s befitting response has caught the attention of many. This matter has spread far and wide and we have support coming in from all quarters! Thank you all for your support!
The Hindu and Sans Serif, among others, have covered this story here and here respectively.

Bullying tactics by the Times coupled with bad advice given by their lawyers seems to have landed Times in a sticky situation! As is clear, we are not going to take lightly to threats of legal action for acts which are absolutely constitutional. We need to put these bullies in their place for which we will fight/campaign and do what it takes to ensure that in future big companies do not misuse their power. People have tried to divert and detract from the focus of our fight towards irrelevant claims and gossip. However, we implore you to see through those frivolous comments and look deeper into the implications of such actions. The more support we can garner the stronger we will be, so if you are interested in supporting us, please do email/comment! 

SpicyIP is an extraordinary team and their support has been insurmountable!I cannot have imagined fighting this alone.

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Gopika’s post followed - the IPXI, is the world’s first financial exchange for licensing and trading intellectual property rights. They released a Rulebook with new additions which deal with the issuance of Unit License Rights, the trading and consumption of these URLs, hearings and sanctions for violations of the IPXI, as well as provisions for auditing and compliance by IPXI members in addition to their earlier rules of governance regarding conduct of the members’ transactions including issuance, trade, use and enforcement of the Unit License Rights that are offered through the IPXI.

Gopika covered the Micolube case (here). To put it in a nutshell, there were two close issues to the case of Micolube. The first issue framed by the Court was whether a suit for infringement could be filed against a defendant who was a registrant himself. On this point the court ruled that a registrant, who has a monopoly right over a design could sue the defendant, who has a registered design, on the grounds that his/her design was not new or significantly distinguishable as a natural corollary of his right to protect the monopoly of his design. The second issue discussed by the court, was whether the common law tort of passing off could be invoked by the holder of the registered design. The Court ruled that while simultaneous registration as a trademark and design is not permitted, there is no bar on a design post registration on being used as a trademark. Therefore, dual protection under design law and trademark law is permitted. The court also discussed as to whether a composite suit for infringement of a registered design could be filed along with an action for passing off.

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Madhulika then brought to the notice of our readers (here) that on May 15 the Department of Pharmaceuticals issued the new Drug Price Control Order, 2013 which will alter price regulation dynamics and substantially increase the number of medicines covered by price cap umbrella. This order does not cover patented drugs. In march this year, the DOP had issued a draft proposal on price negotiations of patented drugs. 

By the new pricing methodology, which has raked up a hornet’s nest amongst industrialists, manufactures selling medicines at a price higher than the ceiling price fixed by the government will have to down scale, whereas, manufacturers selling medicines at a price below the ceiling price will have to maintain status quo. The consumers can breathe easy. The DPCO 2013 also exempts price control for a period of 5 years on new drugs/new formulations which have been developed by domestic research.

Comment of the Week

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1. Shamnad Basheer - "Thanks for all your support in helping us take on corporate bullies hell bent on killing free speech in this country. Contrary to what some of you may think, this approach of ours and my rather strongly worded letter came after significant deliberation. Given the increasing propensity to issue frivolous notices and file frivolous suits with a view to intimidating writers into meek submission, we had to find a way to send a strong message. We were very keen on mainstreaming the issue and forcing right minded folks to see this plague for what it was and helping us fight the fight. 

Some of you may know that TOI managed to shut down at least one blogger in the past with a defamation threat. Natco tried its hand with us when it sued me for what was a self evident comment I made that it had lied to a court of law. Funnily enough, Natco itself admitted in one of its documents that it effectively lied to the court. And yet it proceeds to sue for defamation, completely oblivious to the fact that "truth" and "fair comments" are defences to charges of defamation. Thankfully our courts are sane and refused to grant them an injunction despite their lawyers screaming for it multiple times. However, Natco did succeed to some extent, in that none of our mainstream media bravehearts ever wrote anything on that case after that! One of them even told me that he had standing instructions from his boss to not touch the case after that! The shadow effects of these notices and these law suits are rather pernicious to the say the least. 

They represent an insidious threat for one of the cardinal freedoms that many of us cherish, namely the freedom to speak our mind. We need to fight to salvage this sacrosanct freedom....one that is constitutionally guaranteed to us in this wonderful democracy of ours. We just cannot afford to throw it away at the behest of corporate bullies who will stoop at nothing to achieve what they want.

Starting today, we'll effectively launch a sustained campaign to resuscitate free speech values in this country. This will include a variety of advocacy including a strong push to decriminalise defamation. I sincerely hope that if these values matter to you, you will join us in this fight. Please let us know either in the comments section or by emailing us. Many thanks again for your support!"

International Developments

World Health Assembly: Drafting Group Agrees On Health R&D Meeting Proposal  [IP Watch]– The World Health Assembly’s drafting group finalised a draft text which proposes to convene a technical meeting to help identify new health research and development projects for diseases that primarily affect poor communities.

The Top 150 Licensors List [IP Finance] – On May 1, 2013, the Global License publication released its annual list of the top 150 licensors. These global licensors account for approximately $230 billion in retail sales of licensed products and information.

International theft of U.S. intellectual property costs $300 billion per year: report [The Raw Story] – According to a 11-month study, led by former US officials, theft of software and other US-developed products is costing the US economy more than $300 billion each year.

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Comparative Advertising: Delhi HC (Reckitt Benckiser v. Hindustan Lever Limited)

Hindustan Lever Limited(HUL) aired a television commercial which depicted a child being sick because of the alleged use of Dettol as an antiseptic liquid in bathing water whilst promoting the superiority of Hindustan Lever Limited’s Lifebuoy Soap. The plaintiff, Reckitt Benckiser filed a suit for an ad interim injunction against the telecast of the television commercial of defendant Hindustan Lever Limited’s Lifebuoy Soap, which was disparaging and denigrating the reputation and goodwill of the plaintiff's product Dettol in the commercial market.  

Justice Kailash Gambhir of the Delhi High Court decided that the commercial telecast by the respondent indeed disparaged the product of the plaintiff and granted an interim injunction to the plaintiff against the telecast( for order read here).

The plaintiff’s primary grievance was with regard to the content of the advertisement that allegedly depicted the following: The plaintiff’s product was completely ineffective in warding off germs and emphasised that lifebuoy gives 100% germ protection. The TVC showed liquid of the same colour being poured from a bottle similar in shape to a Dettol bottle, producing a milky effect. Moreover, the language used by the father of the sick child in the advertisement emphasised on “nahane ke paani mein ‘do dhakkan’ antiseptic liquid” – a clear indication towards Dettol. These features were claimed by the plaintiff as exclusive features of the product. The disclaimer added was rather vague and blurred. 

The defendants refuted the claims by submitting that shape and colour of the bottle shown in the impugned advertisement were different from that of the plaintiff’s product. Furthermore, plaintiffs can’t claim exclusivity over the milky effect, as a huge number of products are capable of effecting the same. The advertisement also carried the disclaimer that “Graphic visualization does not represent any branded antiseptic liquid in the market. Characteristic of generic antiseptic liquid.” 

The plaintiff filed the case on three principle grounds: (i) the advertisement was against the public interest, (ii) generic disparagement of all the antiseptic liquids of which the plaintiff has 85% market share, finally (iii) disparagement of the plaintiff’s Dettol antiseptic liquid. The plaintiff also drew attention to a South African court order directing HUL to withdraw the same advertisement aired on South African television. 

Whether the advertisements were disparaging – 

The Judge after analysing a number of leading cases[1] on the law of disparagement summarized them into the following principles: 

a) A tradesman is entitled to declare his goods to be the best in the world, even though the declaration is untrue. 

b) He can state that his goods are better than his competitors. 

c) He can even compare the advantages of the two goods. He, however, cannot, while saying that his goods are better than his competitor’s, say that his competitor’s goods are bad. If he says so, he really slanders the goods of his competitors and their goods, which is not permissible in law. 

e) If there is no defamation to the goods or the manufacture of such goods no action lies, but if there is such defamation, an action lies for recovery of damages for defamation, then the court is also competent to grant an order of injunction restraining them to perform such acts. 

Further, in order to satisfy the test of comparative disparagement, the plaintiff has to establish the following key elements: 

a) A false or misleading statement of fact has been made about his product; 

b) That the statement is deceiving or has the potential to deceive, the substantial segment of prospective consumer and; 

c) The deception is likely to influence consumer’s purchasing decisions. The court has to also bear in mind while deciding whether the displayed commercial is disparaging or not, the intent of the advertisement, its manner and the effect of the telecast of such a television commercial. The manner in which the same is telecasted is of prime importance, the same should not be in the manner to ridicule or condemn the product of the competitor, resulting in disparagement or disrupting them in the market. 

The Court held that the advertisement can be viewed in two parts: One part is where as the advertisement begins, it showing display of a few toys with the sick child which is a similar aspect to that of the plaintiff‟s advertisement. The other part is the “two dhakkans” of liquid is shown as being harmful and ineffective, which as per the visualisation of the television commercial, does lay an adverse connotation and a lady pouring a brown liquid in the bucket, in the same manner and display as that of the plaintiff‟s television commercial and where the defendant's product is shown as having the qualities of providing a 100 % germ protection. There can be no grievance in respect where the qualities of the defendant's soap are sought to be demonstrated: whether those qualities exist or not is not an issue. That part, even if untrue, would be mere puffery. However, the part of the advertisement, where the antiseptic liquid has been slighted and shown in bad light and in fact, as something which is ineffective, can be construed as disparagement and denigration of the antiseptic liquid shown in the advertisement. It is one thing to say that a person's product is the best or that his product is better than somebody else's product, but, it is entirely a different matter to say that his product is good whereas another's product is bad and harmful. 

If it were a case of mere promotion of superiority of the defendant's product, alone, the plaintiff would not have had a case as that would have only betokened a permissible "better" or "best" statement. The advertisement comprises of two parts; one which denigrates and disparages the product of the plaintiff and the other which promotes the purported superiority of defendant's Lifebuoy soap. There is thus a hint of some malice involved in the commercial in respect of the defendant’s product - indeed, it would be appropriate to delete certain relevant attributes of the defendant’s advertisement which clearly hits on the plaintiff’s product and portrays the same in bad light. 

The Court granted the plaintiffs an ad-interim injunction. 

It has allowed the defendant to air the advertisement only after making the following changes to it: 

(a)Removal of ‘toys’ in the advertisement. 

(b)Removal of the phrase “two dhakkans” and the particular portion featuring the lady showing pouring liquid in the bucket by holding the bottle of the antiseptic liquid in her hand. 

(c)Removal of the shot showing the cloud formation. 

(d) Since green is the colour majorly associated with ‘Dettol’, therefore to also change the colour scheme showing the comparison between the two products in the television commercial and change the green colour to a different shade. 

[1] Reckitt & Colman of India Ltd. v. Kiwi T.T.K. Ltd.; Pepsi Co. Inc. and Ors Vs. Hindustan Coca Cola Ltd.; Godrej Consumer Products Limited Vs. Initiative Media Advertising and Another; Colgate Palmolive (India) Limited V. Anchor Health & Beauty Care Pvt. Ltd.; Imperial Tobacco Co.v. Albert Bonnan

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Drug price control order (DPCO) 2013 : What's in store?

Last week on Wednesday, May 15 the department of pharmaceuticals issued the new Drug price control order 2013 (can be accessed here) which will alter price regulation dynamics and substantially increase the number of medicines covered by price cap umbrella. The earlier DPCO order regulated prices of only 74 bulk drugs whereas the current DPCO order will regulate prices of as many as 348 medicines. The DPCO 2013 will come into effect somewhere around July 1st i.e. 45 days from the date of issue of the order. Some say that 45 days is a very short time window for companies to comply. 

The DPCO will now allow National Pharmaceutical Pricing Policy NPPP 2012 to regulate the prices of 348 drugs which are covered under essential meds list 2011 thus effectively replacing the earlier DPCO 1995 order. Shan had previously blogged about draft NPPP over here.See here and here to read our previous posts on this. 

Bitter pill ?

Which drugs will come under price control? 

This order doesn't cover patented drugs. Earlier in March this year the Department of pharmaceuticals (DOP) had issued a draft proposal on price negotiation of patented drugs. Readers may remember that we had posted about this here.

Prices of 652 formulations spanning over 27 therapeutic classes are regulated by DPCO 2013.Prices of some additional anti-cancer drugs including the much talked about Imatinib, Carboplatin, Dacarbazine, Daunorubicn, Chlorambucil, Oxaliplatin and some anti-retroviral cocktails like Zidovudine-Lamivudine-Nevirapine and Stavudine- Lamivudine will now be regulated by the current order. 

New pricing methodology 

Previous DPCO order regulated drug prices based on the manufacturing costs stated by their manufacturers. In the current order however ceiling prices would be calculated by taking simple average of all the drug brands having a market share of more than 1%.The final MRP of the drug would factor in 16% to the retailer. This shifts the ceiling price calculation from a cost based to a market based method. 

But, critics (read patient groups) argue that the previous price regulation method i.e. manufacturing cost based method is important in cases where companies have a monopoly. 

Some industrialists contend that the ceiling price calculation should have been based on a weighted average of prices instead of the simple average formula as currently proposed as the simple average formula fails to provide a level playing field between different companies. 

The catch here is that all the existing manufacturers selling medicines at a price higher than the ceiling price fixed by thee Govt will have to revise their prices downward and all those manufacturers selling medicines at a price below the ceiling price will have to maintain their existing MRP and wouldn’t be allowed to increase their prices. 

After the DPCO 1995 many manufacturers withdrew from market and production levels of many essential drugs fell below critical levels. 

After some lessons learnt the hard way the Govt has incorporated sufficient provisions in the current DPCO to definitively preempt the possibility of an essential drug going off market. 

The DPCO 2013 states that “Any manufacturer of scheduled formulation, intending to discontinue any scheduled formulation from the market shall issue a public notice and also intimate the Government in Form-IV of schedule-II of this order in this regard at least six month prior to the intended date of discontinuation and the Government may, in public interest, direct the manufacturer of the scheduled formulation to continue with required level of production or import for a period not exceeding one year, from the intended date of such discontinuation within a period of sixty days of receipt of such intimation.” 

Incentivizing Innovation: 5 year relaxation from price control 

The DPCO 2013 strives to incentivize indigenous R&D by allowing new drug/new formulation/new processes developed by domestic research and development and patented to be exempted from price control for a period of 5 years. Well this ought to trigger innovation in pharma industry! 

Relevant excerpts from the order: 

Non–application of the provisions of this order in certain cases:

(i) a manufacturer producing a new drug patented under the Indian Patent Act, 1970 (39 of 1970) (product patent) and not produced elsewhere, if developed through indigenous Research and Development, for a period of five years from the date of commencement of its commercial production in the country. 

(ii) a manufacturer producing a new drug in the country by a new process developed through indigenous Research and Development and patented under the Indian Patent Act, 1970 (39 of 1970) (process patent) for a period of five years from the date of the commencement of its commercial production in the country.

(iii) a manufacturer producing a new drug involving a new delivery system developed through indigenous Research and Development for a period of five years from the date of its market approval in India: Provided that the provision of this paragraph shall apply only when a document showing approval of such new drugs from Drugs Controller General (India) is produced before the Government. 

The manufacturers aren’t amused about the price margin erosion, but it seems like a win-win situation for consumers. Here again the key factor will be effective enforcement of the order. Past record of enforcement paints a sorry picture with blatant disregard and open violations of the DPCO provisions.

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Micolube: Dual Protection and the Doctrine of Election

On 15th May, 2013 a three judge bench of the Delhi High Court delivered its decision on the Micolube case that was reserved to it by a single Judge Bench of the Delhi High Court in 2011. The plaintiffs in the case were registered owners of  designs who claimed that the defendants were infringing on their registered designs,  and sought the remedies of suing for infringement, even when the defendant is a registrant as well as that of passing off against the defendants. The issues framed by the Court were whether the two remedies were possible and that whether these remedies could be sought under a single suit.

The first issue framed by the Court was whether a suit for infringement could be filed against a defendant who was a registrant himself. This issue rises in the context where two registrants, might successfully establish  and agree that their designs are new and significantly distinguishable from known or existing designs while disagreeing about the newness and distinguishability between their two designs. Registration of a design creates a monopoly in favour of the registrant and the Designs Act under Sections 19 and 22 seeks to protect that monopoly. The Delhi High Court ruled that a composite reading of the provisions of the Design Act indicated that a registrant, who has a monopoly right over a design could sue the defendant, who has a registered design,  on the grounds that his/her design was not new or significantly distinguishable as a natural corollary of his right to protect the monopoly of his design. 

The second issue discussed by the Court was whether the common law tort of passing off could be invoked by the holder of  registered design. This question arises as an action for passing off usually arises in the context of trademarks when the other party is misrepresenting, intentionally or otherwise, that his goods are that of the plaintiff and such misrepresentation causes or is likely to cause substantial damage to the reputation/ goodwill of the plaintiff and his/her goods. The 2011 decision of the Delhi High Court in the same case, had come into criticism for its decision that an action for passing off could not be intiated by the holder of a registered design as, such a remedy of passing off was not available under the Designs Act. This argument was discarded by the three judge bench of the Delhi High Court. The Court, in 2013, relying on McCarthy on Trademark and Unfair Competition noted that dual protection may exist under the two IPR regimes of design law and trademark law, especially as shape which was a relevant consideration in this case, is protected under trademark and design laws in India. The Court ruled that while simultaneous registration as a trademark and design is not permitted, there is no bar on a design post registration on being used as a trademark. Therefore, dual protection under design law and trademark law is permitted.

The final issue discussed by the Court was whether a composite suit for infringement of a registered design could be filed along with an action for passing off. The Court noted that the basis for a suit for infringement under the Designs Act was based on the" uniqueness,newness and originality of the design" while an action for passing off is opted for when a party is misrepresenting using the plaintiff's trademark, the consequences of which includes damage to the reputation and goodwill of the plaintiff and his/her goods. Therefore, as the two remedies stem from different causes of action, the Court ruled that they cannot be combined in the same suit. The Court, however, noted that for convenience, if the two matters are instituted in the court at close proximity to each other and if the Court has jurisdiction in both matters, then they could be heard together, albeit as separate causes.

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SpicyIP Tidbit: IPXI releases latest edition of its Rulebook.

The IPXI (Intellectual Property Exchange International) is the world's first financial exchange for licensing and trading intellectual property rights. My previous post on this can be found here.  The IPXI, last week, released the Rulebook that is to govern its first offerings.  This Rulebook is the product of interactions among  the various members of the IPXI which includes many IP owners as well. This Rulebook, which includes the additions recommended by the IPXI Rules Committee,(which is composed of the representatives of the founding members of IPXI) to the first Working Edition of the rulebook, will govern the conduct of all of IPXI members with respect to all their transactions on the floor including issuance, trade, use and enforcement of the Unit License Rights that are offered through the IPXI. The first Working edition of the Rulebook was approved by the Rules Committee in May 2012. These new additions include new chapters which deal with the issuance of the Unit License Rights, the trading and consumption of these ULRs, hearings and sanctions for violation of rules of the IPXI as well as provisions for auditing  and compliance by IPXI members, as reported on the IPXI website. The Rulebook can be freely downloaded from here.

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The Times Publishing House threatens to sue our blogger for alleged defamation - we ain't going down without a fight!

Aparajita Lath - SpicyIP Blogger

Take a good hard look at the photograph on the right. It’s a photograph of one of our youngest bloggers – Aparajita Lath, an innocent 22 year old gifted law student at the National University of Juridical Sciences (NUJS), one of the top law schools in India. Do you think this girl is capable of hurting anybody much less defame one of the largest media companies in India?

Well, apparently there is somebody either at Times Publishing House Ltd. or in their lawyer’s office i.e. K. Dutta and Associates, who clearly think Aparajita is capable of defaming them because they recently served her with a legal notice threatening both civil and criminal action. She received the notice on April 23, 2013 for a post she wrote on SpicyIP on February 12, 2013 on the 19 year dispute between the Financial Times Ltd. and the Times Group over the “Financial Times” trademark – apparently it took them a few months to figure out that were feeling defamed.

The Times Publishing House Ltd, is a part of the Times Group which includes companies like Bennett Coleman which publishes what they claim to be one of the largest circulating English newspapers in the world – The Times of India. Other components of this media empire include the television channel – Times Now and the radio company – Entertainment Network India Ltd. (ENIL) which runs the Mirchi brand of radio stations across the country. The entire empire is owned and run mainly by these two men pictured below.

Samir Jain and Vineet Jain - Picture from here

The legal notice served on Aparajita by the Times Publishing Houses Ltd. and Shamnad’s fitting response can be accessed over here and here.

According to the legal notice, served on Aparajita, the publication of her post, “caused an irreparable injury and loss of reputation” to Times Publishing House Ltd. The following paragraph is even better: “Pursuant to the publication of the impugned article our Client has been contacted by several persons, inquiring about the same. Our client has been questioned and subjected to contempt and ridicule and has suffered immense prejudice and loss of goodwill, reputation, standing and goodwill in the industry”. Oh my! And I guess the sky is going to fall on our heads next because of one post on this blog.  

The allegedly defamatory post by Aparajita can be accessed here. In the post, she carried an excellent summary of the 19 year old litigation between Financial Times Ltd. and Times of India Group over the trademark “Financial Times” & “FT”. Aparajita’s post had very carefully referenced and summarized a number of articles which appeared in the Mint about the dispute and from the information we have, the Mint has not been sued as yet.

The first article was written by Paranjoy Guha Thakurta one of India’s finest independent journalists. You can see an interview with him over here. In his article, Paranjoy covers the litigation between FT and TOI extensively and from what I understand he too has received a legal notice from Times Publishing House Ltd. for alleged defamation.

Paranjoy Guha Thakurta - Image from here

There is some history of simmering tension between Paranjoy Guha and the Times Group. A few years ago, Paranjoy Guha was one of the authors of a damning Press Council of India report which brilliantly documented the scourge of ‘paid news’ in India. At the time Press Council of India, which is run by the media itself, refused to allow the report to be released to the public and the only reason it became public was because the Central Information Commission ordered the release of the report under the Right to Information Act, 2005. It can be accessed over here. Turns out that the report had documented extensively the practices of Times Group and whether or not these practices would qualify as “paid news”. The report is well worth a read and I’m guessing that it upset the Times Group to no end.

The second article referenced by Aparajita was an interview by well-known lawyer Harish Salve who is representing FT in this dispute. Salve’s interview is quite candid and he is hardly appreciative of TOI’s strategies in this litigation. We don’t know whether even Salve has received a notice for defamation. Given

Harish Salve - Image from here

that the notice served on Aparajita has taken objection to Salve’s comment, he too should have received a legal notice otherwise they really can’t sue Aparajita. A third article referenced by Aparajita was by a Mint reporter.

For those of you who have read Aparajita’s post, you will agree with me that there is nothing in her post which even remotely qualifies as defamatory. She has taken care to base each and every assertion on the Mint articles, which them-selves were a fair comment on an issue of public importance. The comments which were not based on the Mint article were also fair comments based on valid facts.

Even presuming, for sake of argument, that some facts were wrong in the post, the remedy is to send us a clarification, more so when the party making such an allegation, is a part of a media conglomerate that claims to publish one of the most circulated English papers in not just India but the world. It is not like the Times of India has never made an error in reporting and if they were to be sued for defamation every time they made a mistake they would have been bankrupt by now. Let me just point out to a few instances of poor reporting by the Times of India which we have documented on this blog. In November last year, we carried this post on how a particular news report in the Bangalore edition of the Times of India was nothing but an unattributed reproduction of a press release. We also carried other posts over hereand herewhere we pointed out the inaccuracy in ToI news reports.

The most egregious portion of the legal notice however is the threat of criminal action against Aparajita for alleged defamation. Egregious, since this comes from a newspaper. The Editors Guild of India has been campaigning for the abolition of criminal defamation laws because their reporters were constantly being threatened under these outdated laws and yet Times Publishing House thinks nothing of threatening criminal action against a 22 year old law student. What makes things worse is the fact that the move to have criminal defamation laws abolished was reported in the Times of India itself over here.

As our readers may know, last year, Shamnad was sued by NATCO for alleged defamation (you can read his defence here) and now Aparajita receives a legal notice threatening legal action – clearly blogging is becoming a riskier activity and the tragedy with increasing risk, is the possibility that bloggers will try to self-censor in the fear of offending giants like the Times Group.

We may not be as big as the Times Group but we are not going down without a fight. We are 100% behind Aparajita in this fight against the Times Group and if she is sued we will provide her with all support. If we submit to this defamation notice today, every Tom, Dick and Harry will be sending us defamation notices every time they are ‘hurt’ and in a country like this it does not take too much for eggshell egos to be hurt at the drop of a hat.

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Microsoft v. Motorola: A FRAND-ly formula for fixing royalties?

The ‘FRAND wars’ hit India earlier this March with Swedish based Ericsson suing Mircomax Informatics Ltd. for alleged infringement of their standard essential patents (SEPs) relating wireless technology standards. As an interim arrangement, Micromax agreed to pay Ericsson 1.25% to 2% on the sale price as royalty to Ericsson, an incredibly high rate as Prashant pointed out earlier over here. The fixing of FRAND (fair, reasonable and non-discriminatory) royalty rate has been most contentious in the telecom industry with numerous lawsuits and anti-trust complaints filed all over the world. The Microsoft v. Motorola decision of the US District Court for the Western District of Washington delivered on April 25, 2013, is the first authoritative guidance on fixing FRAND royalties. 

Judge James L. Robart delivered a rigorous 207 page findings of facts and conclusion of law on fixing of FRAND royalty rate over Motorola’s SEPs on wireless local area network (WLAN) (802.11 Standard) and video compression technology (H.264 Standard). The suit was instituted by Microsoft in 2010 for breach of FRAND commitment as Motorola (now a subsidiary of Google Inc.) sought 2.25% of net sale price on their products. As per the findings, Microsoft has to pay a total of USD 1.8 million as opposed to Google’s initial demand of USD 4 billion. This decision is significant as its sets out, for the first time, a framework for negotiating a FRAND royalty rate. The opinion adequately addresses the problems of patent hold-up and royalty stacking plaguing the industry and has been well received so far.   

[Those familiar with SEPs and FRAND obligations can skip over to ‘Nature of FRAND negotiations’.] 

STANDARD ESSENTIAL PATENTS (SEPs) & FRAND OBLIGATIONS 

Ever wondered why USB ports in all PCs and laptops adhere to uniform specifications? (or why USB device (a dongle) connects to all PCs and laptops?) A bunch of tech giants in 1994 formed USB Implementers Forum Inc. to replace, simplify and improve usability of numerous ports that existed at the back of a computer. The Forum is a standard setting organization (SSO) which defines and prescribes standards for the industry to ensure interoperability between USB devices. Likewise, you don’t always need Google Chrome to open your Gmail account! To ensure interoperability and optimal usability of devices, companies voluntarily participate in standard setting organizations (SSOs) to develop, define, revise, amend and coordinate standards and protocols to be followed in manufacturing devices. 

In developing these standards, companies agree to license their patents, on terms that are either royalty-free (RF) or FRAND conditions, if the standard incorporates patented technologies. As a bargain, companies get access to one another’s technologies on FRAND terms, a phenomenon known as ‘reciprocity’. The SSOs, however, leave the specifics of the FRAND terms for patentees and implementers to negotiate on a case to case basis. These negotiations assume greater importance as the implications could affect ordinary consumers in accessing interoperable technologies. Unfortunately, the industry hasn’t been successful so far in arriving at a consensus on the scope and nature of FRAND license. 

NATURE OF FRAND NEGOTIATIONS 

Image from here

The concept of ‘hypothetical’ negotiations has been widely used in the US in in fixing ‘reasonably royalties’ in awarding damages in patent infringement suits. The negotiations of this kind adopt a ‘willing licensor-willing licensee’ approach which ‘attempts to ascertain the royalty upon which the parties would have agreed had they successfully negotiated an agreement just before infringement began’. Applying the 15 factor analysis laid down in the seminal Georgia Pacific Corporation v. U.S. Plywood Corporation, Judge Robart modified the factors to fit the FRAND framework i.e. to promote ‘widespread adoption of the standard’. 

The following are few key distinguishing features of FRAND negotiations from ordinary patent licensing negotiations: Firstly, past royalty rate for an SEP is relevant only if the licensing conditions are comparable to FRAND circumstances. Secondly, SEP holders’ established policy of safeguarding its monopoly reflected from its past licensing practices is irrelevant. It doesn’t matter if the SEP holder is Apple or Google, the standard should be accessible to all seeking implementers. Thirdly, the SEP holder is stripped off any negotiating power against its competitors. Whether it’s Galaxy Ace or iPhone, Motorola cannot discriminate between Samsung or Apple. 

PATENT HOLD-UP & ROYALTY STACKING 

Judge Robart throughout the analysis was conscious of patent ‘hold-up’ and ‘royalty stacking’ in the industry. A patent hold-up occurs when the patentee discloses information on their patented technology only after its incorporation into a standard to command higher royalties. Consequently, the SEP holder demands the value created in the technology by its adoption as a standard (‘hold-up’ value) and the implementer ‘locked-in’ to the standard and is ‘held-up’ due to the patent. Under the ‘willing licensor-willing licensee’ approach, the ‘reasonable’ royalty is determined from the date of infringement. Judge Robart rightly modified this to the time just before the adoption of patent as a standard. Secondly, the reasonable royalty rate is based the ‘contribution of the patented technology to the capabilities of the standard, and in turn, the contribution of those capabilities of the standard to the implementer and the implementer’s products’. Both these essentially take out the ‘hold-up’ value created as a result of adoption as a standard. 

The second problem facing SEP licensing is that of ‘royalty stacking’ (Prashant’s post briefly touches on this problem here). The problem occurs when a standard incorporates several patents held by distinct right holders. Judge Robart addressing this issue stated that the ‘hypothetical negotiation almost certainly will not take place in a vacuum: the implementer of a standard will understand that it must take a license from many SEP owners, not just one, before it will be in compliance with its licensing obligations and able to fully implement the standard.’ Therefore, FRAND royalty rate should necessarily account for other SEPs encumbered in complying with a standard.

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Guest Post: A rejoinder from the IPKat

Continuing with our debate, between Darren Smyth of IPKat fame and Siva Thambisetty, on the merits of the Supreme Court's decision in the Novartis case, we have for our readers a rejoinder from Darren in response to Siva's last post on this issue.

The two previous posts on this issue can be accessed over here and here. 

A Rejoinder from the IPKat, 

by Darren Smyth 

I was very interested to read the thoughts of Siva Thambisetty. However, with the greatest of respect I think that she is also committing a category error, this time in relation to enablement. 

What a patent must enable is the invention. It most emphatically does not have to enable every possible infringement. The invention of the Zimmermann patent is (for the present purposes) Imatinib. Not the particular salts. It is imatinib which must be and was enabled. 

Consider two possible salts of imatinib (leaving aside for the time being, for the purposes of clarity of argument, the mesylate). One is the hydrochloride salt which was explicitly disclosed in Zimmermann. The other is a salt of a new acid, which I shall call thaumatic acid, because of its miraculous properties. This is not disclosed in Zimmermann. Nor in fact in any document until I came along and invented it just now. It is completely clear to me that both imatinib hydrochloride and imatinib thaumatate infringe the Zimmermann patent. In the infringement analysis, it does not matter what inventive extra features are added, the infringement test is the same. Whether the infringed patent “enables” those extra features is intrinsically irrelevant. 

I would actually put the position more boldly if pushed. The Zimmermann patent claims ended “or a pharmaceutically acceptable salt thereof”. If they had not so ended, so that the relevant claim effectively simply recited “Imatinib”, I consider that Novartis would have been quite correct to argue that it was infringed by imatinib mesylate (and imatinib hydrochloride and imatinib thaumatate). The invention, imatinib, would have been reproduced in the infringement, so why should it not be considered to infringe? But then there would have been no question of the Zimmermann patent “disclosing” the salt, because it would not have done so. 

Siva Thambisetty then refers to, and rather appears to endorse, yet another category error by the Supreme Court, this time in relation to “elastic” claims. Paragraphs 140 to 157 of the Supreme Court judgment take a passage from Terrell which is about interpreting a term in the claim one way for infringement and another way for validity, and then wrongly use this to say that the coverage (scope in relation to infringement) and the disclosure of a patent are the same. The point that Terrell is making is a quite different one – it is not permissible to construe a term (such as in the present case “salt”) one way for validity and another for infringement. But Novartis construed “salt” in relation to the Zimmerman patent at all times in only one way – to mean “salt”, no more and no less. Again by carelessly mixing up concepts (each of which is perfectly valid in itself) fundamental errors are committed. Incidentally, a much more vivid illustration of the “elastic” claim concept is the “Angora Cat” analogy. But this has nothing to do with the case before the Supreme Court. 

At the risk of alienating any sympathy that I may still have in the hearts of your readers, I really don’t accept that the problem is that “Patent lawyers live in a bizarre world where we are used to inverted categories of thought that makes little sense to external observers. Other lawyers, even other IP lawyers, often struggle to understand the pretzel shaped law that we have come to take for granted here. So we find ourselves in a position where patent law institutions huddle together seeking content-free legitimacy in mere uniformity.” I do not consider that the precepts of patent law are intrinsically any more arcane than other fields of law such as tort or contract. The problem is that generalist lawyers have not spent anywhere near as much time and effort grappling with patent law as they have with the other fields of law that they have come to feel familiarity with. So naturally they find it confusing, as no doubt they found the concept of estoppel when they first encountered it. But then they blame the law, not their own lack of understanding.

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