IPAB revocation of Allergan’s Combigan patent: Viewing it through the lens of American patent doctrines

Recently Anubha had blogged about the IPAB decision revoking Allergan’s patent for Combigan. Combigan refers to a combination eye-drop product used for treating glaucoma comprising combination of Brimonidine tartarate and Timolol maleate. Media reports termed this decision as the latest in a series of intellectual property setbacks suffered by Western drugmakers. These skewed reports also portray this revocation decision as one of many tactics by India to remove an inconvenient patent out of the way to introduce affordable generic versions. What these reports failed to highlight was that several claims of patents covering Combigan were invalidated as being obvious even in major jurisdictions like US and EU. Also it wasn’t as though the Indian patent was invalidated by applying one of those sections (eg. Section 3) which is unique to Indian patent law. An analysis of US CAFC decisions and IPAB decision for Combigan is presented below. Longish post, but hope to make it worth your while.

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Combigan US patents: Background

The patents in question are 4 OB listed patents related to Combigan viz: the ’463 patent, the ’258 patent, the ’976 patent and the’149 patent. The claims of '463, ‘258, and '976 patents with the exception of claim 4 of ‘149 patent were generally treated as a single group.

Claim 1 of ‘463 patent was considered representative and it states: 1. A composition comprising about 0.2% timolol by weight and about 0.5% brimonidine by weight as the sole active agents, in a single composition.
Sandoz sought to market a generic version of Combigan thus triggering litigation under Hatch Waxman framework. The district court rejected allegations that claim 1 of ‘463 patent was invalid as obvious over prior art. On appeal, the Fed circuit reversed the district court's finding that the claims of the '463 patent were non-obvious.The CAFC decision can be found here

Prior art: what was known at the time of invention?

Both timolol and brimonidine were commercially available drugs in their claimed concentrations used for ophthalmic conditions at the time of the invention. At the time of the invention, it was known that the serial administration of brimonidine and timolol reduced intraocular pressure greater than either timolol or brimonidine alone. Moreover, DeSantis (US 5502052), the primary prior art reference, expressly provided a motivation to formulate fixed combinations of alpha2-agonists and beta blockers, including timolol, in order to increase patient compliance.

District court findings:Summary

• The court found that there would be no motivation to create the combination product because the FDA did not view patient compliance as a factor for approval.
• Second, the court found that the formulation arts are unpredictable.
• There were some teachings in the prior art that taught away from the claimed invention.
• Finally, the court observed that there were secondary considerations that support the finding of non-obviousness including long-felt need and unexpected results.

Federal circuit: Do secondary considerations outweigh motivation to combine?

The CAFC addressed each of the findings of district court as follows:

• Fed circuit opined that there is no requirement in the patent law that the person skilled in the art should be motivated to combine based on the rationale that forms basis for FDA approval. Motivation to combine may be found in many different places and forms; it cannot be limited to those reasons the FDA sees fit to consider in approving drug applications.
• While agreeing that formulation sciences inherently contain a certain degree of unpredictability, the opinion stated that “obviousness cannot be avoided simply by a showing of some degree of unpredictability in the art so long as there was a reasonable probability of success.”
• It also agreed that the prior art as a whole taught away from the invention.
• Previous attempts to treat patients twice per day with brimonidine resulted in a loss of efficacy eight to nine hours post administration. This loss of efficacy is referred to as the “afternoon trough.” The court found that a twice per day dosage regimen of Combigan® unexpectedly did not suffer from the afternoon trough issue. The Fed circuit concurred with district courts findings that that this result was unexpected. However the CAFC maintained that there was a motivation to achieve better patient compliance. Whether or not that combination also solved problems associated with the afternoon trough, we find the motivation to make the combination was real.

Thus the CAFC opined that unexpected results and prior art teaching away were NOT sufficient to outweigh the other evidence of obviousness with respect to these formulation claims.

Claim 4 of ‘149 patent: A different conclusion?

As mentioned above, claim 4 of ‘149 patent was analyzed separately by Federal Circuit. Claim 4 of the ’149 patent is directed to reducing the daily number of doses of brimonidine without loss of efficacy by administering fixed combination and reads as follows:

4. A method of reducing the number of daily topical ophthalmic doses of brimonidine administered topically to an eye of a person in need thereof for the treatment of glaucoma or ocular hypertension from 3 to 2 times a day without loss of efficacy, wherein the concentration of brimonidine is 0.2% by weight, said method comprising administering said 0.2% brimonidine by weight and 0.5% timolol by weight in a single composition

While the federal circuit held that the formulation of 0.2%wt brimonidine and 0.5%wt timolol was obvious, it came to a different conclusion with respect to claim 4 of the '149 patent. The CAFC reasoned that although the prior art shows concomitant administration of brimonidine and timolol, it does not establish that switching from 3 times a day to 2 times a day does not result in loss of efficacy. Hence it concluded that claim 4 was NOT obvious in light of prior art.

Avoiding loss of efficacy an inherent result of the formulation?: Judge Dyk’s dissent

Dissenting from the majority’s opinion holding that claim 4 of the ’149 patent is not invalid as obvious Judge Dyk observed that avoiding loss of efficacy is an inherent result of the claimed method. Since the formulation was held obvious, inherent result /property of the formulation is also obvious. Judge Dyk reasoned a newly-discovered result or property of an existing (or obvious) method of use is not patentable.

The majority differed and observed that the prior art evidence does not conclusively establish that dose reduction “from 3 to 2 times a day without loss of efficacy” limitation is an inherent property or a necessary result of the administration.

IPAB decision:

The IPAB concluded “We too are of the opinion like the Federal Court that there was a reasonable expectation of success in view of the DeSantis. Therefore for the above reason, we find that the invention is obvious."

With regard to non-compliance of Section 8, the IPAB noted that the applicant had failed to inform the Controller regarding refusal of corresponding EU patent and various stages of prosecution in the US counterpart patents (non-final rejections etc.). Curiously, Allergan tried to argue that Therasense like inequitable conduct standards should be set for Section 8. In Therasense, Inc. vs. Becton, Dickinson and Co (Fed. Cir. 2011) an en banc decision, the Federal Circuit held that inequitable conduct must be shown with clear and convincing evidence and that there was intent to withhold or misrepresent information and that the information was material. However, the IPAB reasoned that our law does not make any qualification regarding the failure to disclose nor does it say that the failure to furnish the S.8 details must be deliberate and willful. The IPAB opined that even if it was to assume Therasense like standards for the present case but for that the fact that the EP office action and/or US office action were kept away from the Controller, the patent may not have been granted. The IPAB decision itself can be found here and Anubha’s post on the same can be accessed here.

What was different in the Indian decision?

In India, Combigan was protected by only one patent viz IN219504. Since method of treatment claims are precluded from patentability in India, claim 4 of ‘149 wasn’t patented. Since the claims of IN219504 were invalidated by IPAB, it paved way for generic entry (read Ajanta pharma).

On the other hand in US, as discussed earlier Combigan was protected by several patents (patent thicket). Even though Sandoz succeeded in establishing that claims of ‘463 patent were invalid as obvious, the Fed circuit ruled that claim 4 of 149 as not obvious. Thus market entry for generics (Sandoz) in US is barred until expiry of ‘149 patent i.e. April 19, 2022. 

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SpicyIP Tidbit: Justice KN Basha to be new IPAB chairman

Justice KN Basha, a recently retired judge from the Madras High Court has been appointed as the new IPAB Chairman, according to the order issued on August 23 by Chandni Raina, the director of the department of industrial policy and promotion (IPR section) under the Union ministry of commerce and industry.

Justice Basha replaces Jusice Prabha Sridevan, who retired a few weeks back. In the interim period, Ms. S Usha had been the acting Chairman. The appointment order issued on August 23 stated that Justice Basha's conditions of service and salaries and allowances payable to him will be in accordance with the IPAB (salaries and allowances payable to, and other terms and conditions of service of chairman, vice-chairman and members), Rules, 2003.  A RTI filed by Prasanth regarding the same can be found here.

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Part II: IPAB revokes Allergan's patent on eye drugs Ganfort and Combigan

Patent II [ORA/21/2011/PT/KOL]

The  application was filed against  patent No.219504 “Combination of Brimonidine and Timolol” for topical Opthalmic use. The combination is commercially marketed as "Combigan." The revocation was sought for on various grounds viz., that the Patent was obtained on a false suggestion or representation, that it was obvious, that it did not sufficiently disclose and violated Section 8 of the Patents Act, 1970. The patent was successfully revoked. 

Applicant

According to the applicant, the only advantage of the ophthalmic pharmaceutical composition of the impugned patent is that the patient is exposed to lesser amount of benzalkoniuim chloride (preservative) (BAK) during daily treatment regimen.  Prior art suggested that a combination of brimonidine and timolol may have potential in the treatment of glaucoma. The only difference between the impugned patent and prior art was the combination in a single composition and combination as individual composition.   Therefore the mere fact that Brimonidine and Timolol were administered in a single installation was not indicative any inventive step. Also, it was obvious that the amount of BAK required for a combination in a single composition would be less than that required in when the two drugs are administered separately. 

Furthermore, the complete specification of the impugned patent merely disclosed the constituents of the composition and not about the prior art that lead to the proposed composition.  The invention was a mere admixture the benefit provided by the invention is additive where each of the two drugs caused the respective therapeutic effect independent of each other. The advantages of combination of two drugs were known in the state of the art.

According to the applicant, the invention was not patentable under S. 3 (d) either. There was no data in the specification to show that the invention had an enhanced efficacy. The applicant submitted that S. 3(d) included “combination” and that the respondent had only shown the advantageous effect of combination of the two active ingredients over the individual active ingredients.The respondent ought to have shown the advantages of the single composition over the serial administration of the two drugs. 

Further, the respondent also failed to disclose to the controller the information required by Section 8 of the Act, in particular, the European counterpart of the subject Patent- which was not granted by the EPO.

The applicant also cited the US  Court of Appeals judgment in respect of the US counterpart of the impugned patent Allergan Inc vs. Sandoz where the patent was invalidated:

"There is extensive evidence in the prior art showing the concomitant administration of brimonidine and timolor multiple times per day, that the combination had benefits over the administration of either alone, and that there was a motivation to combine the two achieve better patient compliance."

Respondents 

The Respondents contended that the combination of two drugs in a fixed combination was neither taught nor

suggested by the prior art. This combination was purely the result of an inventive step. Serial administration and combination were two different modes of administration. The most common form of treatment was serial or concomitant administration of two or more different medications provided in two or more separate bottles. According to the respondent the teachings and prior art were against such combination. Thus, the respondent overcame these challenges which would have discouraged the person skilled in the art from trying the invention combination. Further, BAK was known to be toxic to cells. Therefore the ingredients in the uptake were not desirable.  The combination reduced side effects, was more effective than its components and was approved by the FDA. The counsel pleaded dismissal of the revocation application for applicant's lack of evidence and failure to discharge the burden of proof. Also, according to the respondents S.8 (2) spoke of processing of the application in a country outside India and it meant that the patentee’s compliance was complete if one foreign application was filed. The Patentee could not be asked to furnish details regarding the proceedings in all countries, contrary to the statute.

Decision 

The Board examined the Canadian, US and EPO judgments on challenges of the same patent.

It held that there was definitely a reasonable expectation of success, and thus the invention was obvious. The Board stressed on the importance of adducing evidence in pharmaceutical patent revocation cases, and that it is not always sufficient to rest on prior arts. In this case the history of the state of the art showed that the two drugs were popular, and that the two drugs were combined serially, and that the serial administration showed advantages over single therapy, and that Brimonidine BID was not unknown and in fact except for USA Brimonidine was given BID elsewhere, and that composition of two drugs in one bottle was known, and the claimed preservative (it was optionally claimed in fact in Claim 3) was used, and so the invention was obvious. This may not be so clear in other cases.  Also, the respondent failed to show enhanced efficacy of 'Intra ocular pressure' lowering effect of the invention compared to the serial application of Brimonidine and Timolol. It was held that in view of non-compliance of S.8 and obviousness of the patent, it was not necessary for the Board to even delve into the issue of S. 3(e). 

The Board came down heavily on the patentee for non-compliance of S. 8 and reiterated the necessary aspects for fulfilment of S.8: 

• It must be pleaded and proved that the lapse was with regarding applications in respect of the same or substantially the same invention
• The documents to prove this must be filed at the earliest if they are filed belatedly , costs may be imposed.
• The law does not say that the failure to furnish the S.8 details must be deliberate and willful or that the failure must be in regard to material particulars.
• It has been introduced to facilitate examinations and therefore the patentee must be candid and fair.
• The Controller cannot deal with this ground casually. They must adhere to the law nor can they dilute it. 
• The Patentee has a statutory duty under S.8, he cannot say that the particulars are available on the website. Nor can the Examiner condone the non-disclosure by saying the details are on the website.
• It is not a penal provision and the object of the law is clear disclosure and there can be no dilution.
• Rule 12(3) is part of the statute and indicates why this provision has been introduced and reflects the sentiments of the Ayyangar Committee report.
• The article “a” in the law cannot be understood to mean only one. Once the S.8(1) detailed particulars are given, the Controller may ask for the details relating to ‘a’ country. This means any. The Controller May ask for the Rule 12(3) details regarding any application.

More interestingly, the Board remarked: 

"It is no response to say that standard must be more lax today because information is available on the internet. It is no defence to say that if the patent is valid otherwise then discretion should be exercised in the respondent‘s favour. In any event it has been brought to our knowledge that EPO has rejected the patent and it has become final. On appeal USA has also rejected the patent. So it is not as if the respondent held an infallible patent. Above all, it is clear that the respondent withheld information that ought to have been furnished under Section 8. The patent deserves to be revoked on this ground alone."

The patent was revoked. No order was made regarding costs. 

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Breaking News: GSK patents challenged: IPAB revokes one, upholds another

The IPAB recently decided upon revocation petitions of two GSK patents, applications for which were filed by Fresenius Kabi Oncology Limited, an Indian pharma company. The IPAB pronounced orders for both revocation petitions on the same day. 

The first revocation petition was filed for Patent No. IN221171 titled Quinazoline Ditosylate Salt Compounds[Patent 1], and the second one was for Patent No. IN221017 titled Bicyclic Heteroaromatic Compounds[Patent 2]. The IPAB revoked Patent 1, and dismissed the revocation petition for Patent 2. These decisions are a testament to a healthy Indian IP regime and snub US's repeated assertions that Indian IPR policies are detrimental to granting patents.

GSK disclosed Patent 2 as prior art in the complete specifications for Patent 1. Further, there were parallel revocation proceedings for Patent 2 also. The essential subject matter of the patents was Lapatinib and its compounds. These inventions were marketed as a product under the trademark TYKERB in the US and international markets, including India, and under the trademark TYVERB in Europe. 

Revocation petition of Patent 1

Contentions

The petitioner filed a revocation application on the grounds of of obviousness, S. 3(d) and, non-disclosure under S. 8 of the Patents Act, 1970. It argued that it did not require great skill to expect that the new crystalline form would have better stability. The invention was merely a result of routine testing. They submitted that the impugned invention was obvious to try with reasonable expectation of success in view of the combined teachings of the Exhibits read together. According to the petitioners Exhibit-B which was an admitted prior art, teaches the claimed compound (Lapotinib ditosylate salt) itself. Further, the use of tosylate salts has increased manifold( Sorafenib, the first CL drug in India is a tosylate salt). Thus, there existed a clear direction towards choice of tosylate.

Then, the petitioners raised an objection under S. 3(d) stating that the only improvement that invention had was that it provided superior moisture sorbing properties and enhanced stability. The two qualities were physicochemical and not related to therapeutic efficacy. Both these qualities can be expected by a person skilled in the art. Further, they argued that the respondents made no efforts to disclose the grants, rejection, abandonment of patent application in relation to the same subject matter in foreign jurisdictions, as required by law under S. 8. Thus, they were in clear violation of S. 8.

The respondents pointed out that the petitioners did not file any evidence to support their revocation petition, and on this ground alone the revocation application deserved to be dismissed. Further, the matter of selection of salts was very unpredictable and the choice cannot be made merely by trial and error. The invention was not the result of routine experimentation, there was an inventive step. In conclusion they submitted that the ditosylate salt of Lapatinib being thermodynamically more stable and less hygroscopic did not attract S. 3(d).

Also, the respondent’s defence was that it had complied with S.8, and that it had made divisional applications in respect of these patents in foreign jurisdictions. The records placed showed that the respondent submitted Form 3(details of only 3 applications) which were for the same/substantially the same invention.

IPAB decision

The IPAB held that regarding the S.3(d) bar, the respondent’s own statements and the expert’s affidavit demonstrated that this invention cannot be held to have enhanced therapeutic efficacy. Thus, the patent was revoked at the outset. 

However, the Board made pertinent observations on the issues of obviousness and S.8. Regarding obviousness, the Board held that the prior arts filed were clues sufficient enough for any person skilled in the art to arrive at these results. 

With respect to S.8, the Board indicated the principles behind the S.8 objection- how it should be raised, defended and decided. The Board observed that the petitioners did a shoddy job of making out a case of S.8. The petitioner's objection was rejected due to their failure to plead the facts and, state how the particular undisclosed application was for the same or substantially the same invention. It was not enough to just file the documents along with an affidavit. In the present case the IPAB rejected the S.8 objection only because the petitioner failed to make out the grounds of attack by stating the facts.

It came down heavily on the respondents for non-compliance of S.8. It observed that the object behind introducing S.8 was that the applicant should disclose all foreign applications so that the Indian examiner may know if it contained obviousness objections or any amendments and so on. The application outside India must be for the same invention or for substantially the same invention. Thus, the subject matter of the invention must be the same or almost the same. The IPAB has in its decisions clearly held that it is the duty of the Patentee to furnish the particulars under S.8.. A S.8 violation has severe consequences and may be a potential ground for a challenge to a patent grant. It cannot be said that the omission to comply with the requirement of Section 8 was not serious enough to affect the decision of the Controller to grant patents. The Board expressed its indignation at the Controller taking liberties to ignore and 'settle' non-compliance of S. 8 in this particular case( GSK and Asst. Controller settled that GSK will be required to submit the ‘prosecution‘ details of any one of the major Patent offices in respect of which Form 3 were to be submitted). Reiterating the Ayyangar Committee Report, the IPAB was of the opinion that if in any of the foreign offices the patentee had made a division or was required to make a division, in respect of the same or substantially the same invention or had amended or was required to amend in respect of the same invention or substantially the same invention such information regarding division or amendment would also be information required to be furnished under Section 8. 

Ultimately, the IPAB allowed the petition with costs of Rs. 50,000.

Revocation petition of Patent 2

In the second revocation petition, the application was made on similar grounds - S. 3(d), non-obviousness and S. 8. The Board upheld the respondent's pleadings with respect to S. 3(d) because the petitioners failed to show a known compound with equivalent therapeutic efficacy. With respect to obviousness, the Board after elaborate scientific examination of the prior arts concluded that the invention was non-obvious. Thus, the claimed New Chemical Entity was upheld as an invention. The IPAB expressed a similar opinion ( as in the petition discussed above) regarding S. 8 and held that violation of S. 8 was not proved by the petitioners, hence rejected this ground.

In this case, the IPAB noted that there were substantial discrepancies between the PCT application relating to this invention, and the complete specifications placed before the Board due to deletions made by the Controller, without specifying the reasons thereof. It observed that such sweeping and large scale deletions and changes when allowed must be cautiously done and not casually. 

The petition was dismissed with costs of Rs. 50,000.

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Section 3 (K)haos: IPAB on Patenting Mathematical Methods

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The IPAB recently upheld the Controller’s decision in a mathematical method application (here). In this case the petitioners claimed that they had invented “A Chaos Theoretical Exponent Value Calculation System” which was denied patent protection on the ground that since it was inherently a mathematical method it was excluded from protection under Section 3(k). 

The invention involved a system which used a mathematical formula that could calculate a chaos theoretical exponent value at high speed and on a real time basis. This method could even calculate time series signals of noise including speech which are not stable dynamics (stable physical disposition and length) but are temporarily changing dynamics (changing physical disposition and length. Eg. Different sounds have different lengths and the shape of the throat and mouth changes with each sound). Previously, such temporarily changing dynamics could not be calculated on a real time basis. 

The IPAB quoted the Yahoo decision “When the patentee explains that there is an inventive step which is a technical advance compared to the existing knowledge (state-of the-art) or that it has economic significance that would not give him the right to a patent as such. The ‘inventive step’ must be a feature which is not an excluded subject itself. Otherwise, the patentee by citing economic significance or technical advance in relation to any of the excluded subjects can insist upon grant of patent thereto. Therefore, this technical advance comparison, should be done with the subject matter of invention and it should be found it is not related to any of the excluded subjects”. It was held that in the present case since the invention was itself a mathematical method, even if there was technical advance, the subject matter being excluded under Section 3(k) could not be patented.

Rajiv has blogged about the Yahoo business method patent decision here. Madhulika recently wrote about the draft guidelines on computer programs and S. 3(k). For more on S 3 (k) and business methods see here, here and here.

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IPAB on Descriptive Trademarks

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The present case is Overseas Pvt. Ltd. v KRBL Ltd and Anr. The applicants sought to remove the respondent’s registered trade mark ‘BEMISAL’ (868081/class 30). The said mark has been registered in respect of rice as a “proposed to be used” trade mark. A prayer for stay under S. 95 from giving effect to the mark was also asked for. The IPAB denied removal and held in favour of the respondent’s descriptive mark. 

The applicant contended:

• The word ‘Bemisal’ which means ‘matchless’ is a description of quality of goods hence cannot be trademarked as per S. 9 (2) of the Trademark Act. Section 9 lays down various categories of words that cannot be trademarked e.g. words that a devoid of distinct character, which designate kind, quality, values, geographical origins etc. 

• The applicant has been using the name ‘Bemisal’ since 1993 in respect of its rice trade, even before the Respondent adopted the mark in 1999. Hence registration is contrary to S. 11 and the respondent wrongly claimed to be the proprietor of the mark under S. 18 (1). 

The respondents contended: 

• They have honestly, continuously, openly and commercially been using the trade mark ‘Bemisal’ for the sale of their products including rice since 1999. The respondents have built goodwill throughout the world with respect to their rice trade. Also, apart from the impugned mark the respondents are also the proprietors of two other pending marks Bemisal under nos. 1120954 and 1482415. 

• It was contended that even though the mark was descriptive on the date of its adoption, it has acquired distinctiveness on the date of rectification and adjudication. This being the case, the objections raised under S. 9 fails as the mark is now protected by virtue of S. 32. S. 32 creates an exception whereby any mark which has been registered in breach of S. 9 will not be invalid if it has acquired distinctiveness after registration and before legal proceedings challenging its validity are initiated. 

• Further, the respondents did not know that the applicant existed in the market until 2010. In June 2010 it came to the knowledge of the respondents that the applicant who was engaged in the same trade was also conducting business under the name ‘Bemisal’. Being aggrieved by the activities of the applicant the respondent filed a civil suit C.S (OS)946/2010 for the infringement and passing off of their trade mark by the applicant before the District Court, Saket, New Delhi. The Court granted ex parte interim injunction against the applicant on 6th July, 2010 restraining the applicant from the using the trade mark Bemisal. 

• It was also contended that the documents produced by the applicants stating use since `1993 were forged and manipulated and the instant petition was initiated so that the applicant could wriggle out of the restraint order. 

IPAB 

The balance of convenience, according to the IPAB, was in favour of the respondents. The documents produced by them showing rice export to several countries including: Kuwait; Baharain; New Zealand; Saudi Arabia; Canada and the value of its aggregated domestic sale figure (over Rs. 69 crores) convinced the Board of its extensive sale in and outside India.

More importantly, these figures also helped the IPAB establish that the respondent’s mark had acquired secondary significance. Holding that the test under S. 9 has been relaxed as it is the market that determines a good trademark, it can be inferred that descriptive marks can be registered provided they acquire distinctiveness before legal proceedings are initiated. To quote “The old theory that some trademarks are incapable of distinguishing the goods/services and can never serve as a badge of origin has been now relaxed under the current Act. It is the market place that determines what is good trade mark subject only to the limitation that the name of goods or services can never be regarded as a trade mark – example apple for apple (goods) or hotel for hotel (services). The threshold test under Section 9 is very minimal indeed.”

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APAA succeeds in getting IPAB a new home in Delhi; also objects to Patent Office fee hike

The Asian Patent Attorney Association (Indian Group), represented by its Secretary, Prathiba Singh has succeeded in getting the Intellectual Property Appellate Board (IPAB) a new residence for its hearings in Delhi. This latest victory for APAA, is a part of a long running litigation which APAA initiated before the Delhi High Court back in 2011. This was the same litigation which led to the appointment of Justice Prabha Sridevan as the Chairperson of the IPAB in 2011. The latest order passed by Justice Bhat of the Delhi High Court, on 18 July, mentions that the Delhi bench of the IPAB may now be located at the new Intellectual Property Office building coming up at Dwaraka in New Delhi. 

APAA has been quite regular in taking the government to court over the lack of resources provided to IP institutions. Apart from the IPAB, APAA has also sued the government for the lack of resources with the Copyright Board. We had blogged about that petition over here. 

In other news from APAA, the organization has written to the Controller General of the Patent Office objecting to the proposed fee hike at the Patent Office. We had earlier blogged about the fee hike over here. The communications to the Controller General can be accessed over here and here. In pertinent part, APAA points out how patent applications filing in India have registered much slower growth than in other jurisdictions such as China and Malaysia and cautions that a hike in fees may lead to even those numbers falling. On the e-filing point, the organization informs the Controller General of the American experience with making the switch to the e-filing forms and cautions the IPO about the complexity of making the switch from a physical to electronic format. Another interesting proposition by APAA, is to reduce fees for patent applications filed by research organizations such as CSIR and for all universities. I think that is a great suggestion because as we explained earlier CSIR has been spending a pretty penny on just filing and maintaining its patents without really earning much. It would help if the Government could cut such costs. 

We don’t know of the feedback given by other organizations since the IPO has not made the feedback to the proposed rules public. Hopefully they will do so in the near future.

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IPAB directs removal of AYUR from the Registry

The IPAB, disposing four miscellaneous petitions in M/s. ITC Ltd v. M/s. Three-N Products Pvt Ltd (dated 28 June 2013) concerning goods in the classes 29 - 32, ordered for the removal of the mark “AYUR” from the Registry. Coming down heavily on the Registrar, the Order noted as follows: “18. It is indeed unfortunate that the Registrar who registered the first mark AYUR for the respondent, had not endorsed that the respondent will not have an exclusive right to AYUR. If he had done that, the respondent may have come up with modifications. Further, with such a registration, the respondent would not have ventured to launch an attack on anyone who ‘dared’ to use AYUR anywhere in their marks. If the respondent had not attacked others and had dealt with the mark as a label mark, claiming no exclusive right to the letters A, Y, U & R perhaps this mark would not have been challenged. The Registrars who are vested with the important duty of deciding which marks are registrable should make their decision wisely and correctly. We doubt if anyone in India can plead ignorance of the meaning of the words Ayu or Ayur. It is very unfortunate that by casually granting this registration, the Registrar has generated unwarranted litigation.” 

Facts and Arguments 

The applicant obtained registration for the marks "AYURVIBHA", "AYURUVAR" and "AYURBHO". In May 2004, the respondent instituted C.S. No. 124/2004 in the Hon'ble Calcutta High Court for restraining the applicant from using the above marks “or any other marks with the word "AYUR" as a prefix or suffix.” On 10th June, 2004, ex parte injunction was granted against the applicant. On knowing that the respondent had obtained registration for the trade mark "AYUR" in class 29, 30, 31 and 32 in Nos. 536257B to 536260B respectively, the applicant filed the petitions for rectification. 

The applicant contended that “AYUR” per se is generic. It is neither distinctive nor inherently capable of distinguishing the respondent’s goods. Further, the mark “AYUR” is not a well-known mark. It was submitted that the claim to a well-known mark must be proved by the production of evidence to satisfy the Court that the mark is a well-known mark 

The respondent filed his counter statement claiming that they had been engaged in the manufacture of cosmetic products, ayurvedic formulas, body case and health care products since 1984 under the trade mark "AYUR". According to the respondent, the trade mark "AYUR" is an invented word as there was no other mark "AYUR" when the respondent adopted the mark. Further, it was contended that the mark is a well-known mark. 

Order ("Instant Order") 

IPAB considered the High Court judgments which held that "AYU" and "AYUR" cannot be said to be invented words. [We blogged on the Calcutta High Court judgment in Three-N Products v. Emami Ltd here.] IPAB also considered its earlier Order (TRA/138/2004/TM/DEL - IPAB Order No. 117 of 2012) in Hindustan Unilever Ltd v. M/s. Three – N Products (P) Ltd and Anr concerning Classes 3 and 5. IPAB noted that “We had held there that Ayur is a generic word and in public interest, it cannot be monopolized by anyone. We had held in that case that in public interest the respondent cannot be allowed to monopolise the words Ayu and Ayur. Ayush, in fact, is a Department of the Government under the Ministry of Health, exclusively devoted to alternative medicine and systems (Ayurveda, Unani, Sidha and Homeopathy). The words Ayu or Ayur cannot claim to have acquired secondary significance when there are so many traditional connotations signifying healthy long life, etc." IPAB re-affirmed the aforesaid position in the Instant Order. 

IPAB made some significant remarks regarding well-known marks. In the context of Section 11(8) of Trade Marks Act, 1999 ("Where a trade mark has been determined to be well-known in at least one relevant section of the public in India by any Court or Registrar, the Registrar shall consider that trade mark as a well-known trade mark for registration under this Act."), it was held that a reference or an observation in an interlocutory application by a Court will not amount to a determination under S. 11(8). Further, “the well known label cannot be granted for the asking. There must be strong evidence to prove the case of the person claiming that his mark is a well-known mark….Therefore, the determination that the mark is well known will be arrived at only on strong and unimpeachable evidence that the mark is in fact a well known mark.” 

The respondent offered to modify the impugned mark. Terming the aforesaid gesture as a late concession, the IPAB rejected it. The rectification petitions were, therefore, allowed. 

Comments 

I had earlier blogged on IPAB order in M/s. Three-N-Products Pvt. Ltd v. M/s. Alex Resorts and Hotels Pvt. Ltd. In the aforesaid Order, IPAB affirmed the removal of the mark “AYUR” while deciding on an appeal against the impugned Order of the Registry granting registration for the trademark “AYURTHEERAM” in favour of the respondent for the services “Ayurveda Hospital and Resorts” (included in Class 42) subject to confining the services in the States of Kerala and Karnataka. 

I agree with the position laid down by IPAB. In fact, the conclusion arrived at the Instant Order in M/s. ITC Ltd v. M/s. Three-N Products Pvt Ltd could have been predicted in the aftermath of IPAB order in M/s. Three-N-Products Pvt. Ltd v. M/s. Alex Resorts and Hotels Pvt. Ltd (dated 18 May 2012). As I had earlier stated in my post on Ayur, the Sanskrit word “AYUR” means ‘giving life’ or ‘giving longevity’. It is well-settled that a dictionary word cannot be registered as a trade mark unless it has acquired a distinctive character. The generic name of a product cannot function as a trademark. An acronym of a generic name, which still conveys the original generic connotation of the abbreviated name, is generic. Even misspelt generic name is generic if it does not change the generic significance to the buyer [Mc.Carthy on Trade Marks and Unfair Competition (Third Edn. Vol 2) cited by Delhi HC in S.B.L Ltd v. Himalaya Drug Co. AIR 1998 Del 126]. Considering this legal position, the mark "AYUR" in case of other classes of goods may also face a similar fate (if challenged). 

The Instant Order also serves as a stern warning to the Registry. In fact, the Instant Order went to the extent of saying that the casual grant of registration by the Registry resulted in an unwarranted litigation. Hopefully, this stern warning will preclude any further mindless grant of registrations.

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Part II: IPAB's Power to Grant Interim Orders

INTERIM ORDERS

Provisions: 

Section 95 of the Trade Marks Act, 1999 deals with conditions as to making of interim orders, and it reads as follows: “Notwithstanding anything contained in any other provisions of this Act or in any other law for the time being in force, no interim order (whether by way of injunction or stay or any other manner) shall be made on, or in any proceedings relating to, an appeal unless: […]” 

Section 92 (2), TM Act, 1999 : " (2) The Appellate Board shall have, for the purpose of discharging its functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908 ) while trying a suit in respect of the following matters, namely:- (a) receiving evidence; (b) issuing commissions for examination of witnesses; (c) requisitioning any public record; and (d) any other matter which may be prescribed.” 

Held 

The IPAB held that it has the power to grant interim orders at the application and appeal stage. However, before passing this order it would explore the possibility of deciding the main matter expeditiously. Additionally, no interim orders would be granted without hearing the other party, if the TM or patent has been in force for a considerable period of time that will be a condition against grant of such relief, factors such as prima facie case, balance of convenience and irreparable injury would be kept in mind and the order would only bind the parties and no one else. 

Arguments Against Granting Interim Orders 

It was argued that Section 92 (2) is only a procedural provision and cannot be stretched to include substantive powers (as held in the Super Cassettes Case). This was in contrast to the National Green Tribunal Act which under Section 19 (4) (i) specifically confers the power to grant interim orders on any application or appeal. Additionally, it was argued that S. 95 and the words ‘any other manner’ must be read ejusdem generis. In this regard, the scheme of Chapter XI showed that though the legislator had specifically provided the power to grant interim reliefs in cases of appeal, no such provision appeared after Section 97 which deals with procedure for rectification. Moreover, the words and phrases 'in any proceedings relating to an appeal' indicates specifically that the Appellate Board was authorized only to grant injunction or stay in appeals and not in applications, otherwise these words would be rendered unnecessary. It was also contended that Rule 2 (d) and 2 (f) of IPAB Rules dealt with appeals and applications separately. Therefore the meaning of appeal cannot be construed to include application. 

It was submitted that if interim orders are granted in trademark matters, the provision relating to the presumption of validity of registration created under Section 31 of the Act becomes otiose. 

On the point of S. 92 allowing the IPAB to grant such orders as may be required to adhere to the principle of natural justice, it was argued that granting interim orders would actually amount to granting final reliefs and would adversely affect the rights of the owner. The owner’s right to sue for infringement, pay renewal fees etc. coupled with the absence of a provision on extension of his patent term due to regulatory delays, would be curtailed to a large extent. Therefore, the IPAB should expedite the hearing of such cases instead of granting interim reliefs. 

Applicant’s arguments FOR interim orders and the IPAB’s decision 

The applicants cited several cases that had held that every Tribunal should be considered to have ancillary or incidental powers to grant interim reliefs in order to do justice in a case. Moreover, in cases of fraud, precedents showed that Tribunals are inherently clothed with jurisdiction to recall the orders obtained by means of fraud and to grant stay. 

Secondly, it was contended that nothing in the language S. 95 excludes the IPAB from granting interim reliefs at the stage of application. This section in addition to providing the power of granting interim orders, regulates the manner of interim reliefs in cases of appeal. 

Thirdly, it was submitted that the registration of the Trade Mark itself is not a complete right. Registration under Section 31 only establishes prima facie evidence of validity and therefore, the IPAB (exercising plenary powers under S. 28) hearing the rectification application has the inherent jurisdiction to decide the validity and invalidity. 

Fourthly, equity demanded that the IPAB must grant interim measures in order to prevent fraudulent Trade Marks, to avoid confusion and thereby protect public interest. 

Fifthly, it was argued that though the dividing line between appeals and applications is very thin, the power to issue reliefs in both cases is the same. Though the IPAB acknowledged the various consequences an interim order could have on the rights of the IP owner, it held that these could not be grounds for stopping the IPAB from granting such orders. Also, in relation to whether granting an interim order would amount to granting final relief, the IPAB held that ordinarily, interim orders that are given pending revocation or a rectification application are not equivalent to granting of main relief.

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Part I: IPAB's Power of Review

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The IPAB recently decided two important issues – whether it has the power to grant interim reliefs at the application stage and whether it has the power to review its own orders. The Board held that it has both the power to grant interim reliefs as well as the power to review. Both these matters were heard and passed as two separate orders here and here. The members of the Bar acted as intervenors and amici curiae. And as the IPAB put it, they were really ‘friends of the court’. The IPAB also stated that in order to bring uniformity and certainty, these orders would apply not only to proceedings under the Trademark Act, 1999 but also to proceedings under the Patent Act, 1970, the Geographical Indications Act, or any other Act that is brought under the IPAB in the future. 

These issues have been discussed previously here, here and here.

Brief Background 

Before the IPAB came into existence it was the High Court that dealt with rectification applications and appeals under the Trade Marks Act, 1958 and Patent Act, 1970. When the new TM Act of 1999 and Patent Act, 1970 (amended) came into force all cases of appeals and rectification/revocation pending before any High Court were transferred to the IPAB. Therefore, both Original and Appellate jurisdiction of the High Court in relation to these matters now vests in the IPAB. 

This post will first discuss the order pertaining to the power of review and then go on to discuss the interim relief issue. 

POWER OF REVIEW 

Pertinent Provisions 

Section 92, TM Act, 1999:

“92. (1) Procedure and powers of the Appellate Board The Appellate Board shall not be bound by the procedure laid down in the Code of Civil Procedure 1908 (5 of 1908) but shall be guided by the principles of natural justice and subject to the provisions of this Act and the rules made thereunder, the Appellate Board shall have the powers to regulate its own procedure including the fixing of places and times of its hearing. 
(2) The Appellate Board shall have, for the purpose of discharging its functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908 ) while trying a suit in respect of the following matters, namely:- (a) receiving evidence; (b) issuing commissions for examination of witnesses; (c) requisitioning any public record; and (d) any other matter which may be prescribed.” 

Rule 23 of the IPAB (Procedure) Rules:

"23. Review petitions.- (1) A petition in triplicate for review of an order of the Appellate Board may be made to the Registry […] "

Arguments AGAINST the IPAB exercising the power of review 

Both the TM Act of 1999 and the Patent Act, 1970 (amended) (‘the Acts’) specifically provide the IPAB with Appellate powers. However, these Acts are silent on its power of review. Given that a substantive power of review cannot be implied and has to be explicitly stated in the statute, it was argued that the IPAB cannot exercise this power. Also, it was submitted that if such a power is conferred on the Board it would result in endless and protracted litigation. 

Interpreting Section 92 of the TM Act 

Section 92 of the TM Act, 1999 deals with the powers and procedure to be adopted by the IPAB. It was argued that the words ‘any other matter as may be prescribed’ in Section 92(2)(d) should be interpreted ejusdem generis. Since this provision deals with the power to regulate procedure such as fixing of time, receiving evidence etc., it cannot be expanded to include a power of review. 

Powers of IPAB not same as High Court 

In contrast to the powers of the High Court, Section 109(5) of the TM Act, 1999 had done away with the second appeal mechanism in relation to the IPAB and Section 95 of the Act restrained the IPAB from passing exparte interim orders pending appeal. Therefore, it was contended that the Parliament did not transfer all the powers of the High Court to the IPAB. Thus, even though the High Court may have the power of review, the same did not extend to the IPAB. However, it was submitted that the IPAB had a limited power to review procedural errors but could not review on merits. 

Arguments FOR review and the IPAB’s decision 

Remedilessness

A point that was continuously stressed on was that the IPAB is a not a quasi judicial or administrative tribunal but a Judicial Authority. It exercises both Original and Appellate jurisdiction. While exercising its Appellate jurisdiction, it is the last court of law and facts. After which, the aggrieved party has only one remedy - to approach the High Court under Article 226. However, this remedy is provided only at the discretion of the High Court. Therefore, there is no correctional mechanism, by appeal to a higher Tribunal (as in case of appeals from the State Consumer Forum to the National Consumer Forum). Therefore, if the power of review is also taken away, the party is left remediless.

The IPAB cited examples to strengthen its argument for substantive review - "It is possible that by a mistake the IPAB revokes a Patent relying on a “prior art” which is really not prior art but a post grant document. Should the litigant then be driven to the High Court by a writ petition? Interest of justice requires that it can be corrected in review. This is a substantive review. We are citing a fairly simplistic example only to drive home the point why we would not be crossing forbidden territory by recognizing the power of review."
The IPAB also reasoned that when cases were transferred to the IPAB from the High Courts, the IPAB could not take away any right the litigant had to any remedy in a pending matter and this included the right have the matter reviewed. 

Power of review exists by necessary implication- Rule 23 IPAB Rules 

It was held that the Acts and Rules framed thereunder form a composite whole. Rule 23 which deals with the power of review was been framed pursuant to Section 92/117-B of the TM and Patent Act and hence is a part of the Act. It was held that if the IPAB were to hold that it has no power to review its own order, then Rule 23 will become meaningless. This would go against the principle of harmonious construction which requires all provisions of an Act to be given full effect. Also, the IPAB observed that since the vires of this Rule and the Board’s power to frame Rules has never been challenged, the IPAB cannot now say it does not have the power to review. 

Interpreting Section 92(2)(d) 

As per Section 92(2) (d) of the T.M. Act, the IPAB has the same powers that a Civil Court has in respect of 'any other matter which may be prescribed'. It was held that since the Acts define 'prescribed' as 'rules made by the Appellate Body' and these Rules confer the power of review, this power falls under 'any other matter prescribed'. Secondly, it was held that ‘any other matter’ is an all encompassing term which takes into account extension of time, intervention by third parties, adjournments and review. In this regard, parallels were drawn with the Section 22(3) (a) to (c) of the Administrative Tribunals Act which deals with matters almost similar to Section 92(2) (a) to (c). But clause (f) of Section 22 (3) of the Administrative Tribunals Act speaks of review. The IPAB used this to show that law makers treat an order of review on par with provisions relating to collection of evidence etc. thus showing that ejusdem generis allows reading in the power of review to ‘any other matter’. 

Held 

The IPAB held that the IPAB has the power to review not only procedural errors but also substantive errors, however, this cannot extend to a rehearing of the matter since it was not an appeal.

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Gillette receives Rap on the Knuckle by IPAB

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Case Name: M/s Gillette India Ltd. (hereinafter Applicant) v. M/s Harbans Lal Malhotra & Sons Pvt. Ltd. (hereinafter Respondent) and The Registrar, Trade Marks Registry. [IPAB Circuit Bench at Delhi: ORA/51 & 52/2005/TM/KOL AND M.P.No.392/2012 IN ORA/51/2005/TM/KOL]

Date: June 21, 2013.

Advocates: Hemant Singh (for Applicant) and Debnath Ghosh (for Respondent).

Judges: Hon’ble Ms. S. Usha and Hon’ble Shri V. Ravi.

Facts: The Applicant, an Indian subsidiary of a U.S. Company is seeking the removal of two trademarks ‘CHAMPION’ from the Register, viz. trademark registration No. 223840 in Class 8 for “razor blades for export” (hereinafter TM 1) and trade mark registration No. 244109 also in Class 8 (hereinafter TM 2). If not removal, then Applicant seeks that the description “safety razors” be deleted from the description of goods that the trademark is registered for.

The Respondent had applied for registration of TM 1 on August 18, 1964. This mark is liable to be removed under Section 47(1)(b) of the Trade Marks Act, since no such razor blades have been exported for a continuous period of five years from the date on which the said mark was actually entered into register up to 3 months before the date of filing of this petition. Similarly, TM 2 (applied for registration on September 7, 1967) is also liable to be thus removed as there has been allegedly no bona fide use thereof for more than a continuous period of five years up to a date of three months before the date of filing of the present petition.

Arguments:

The Applicant argues that the trade mark GILLETTE is a household international brand and some of its products carries it supplementary brand like MACH 3 and MACH 3 TURBO in relation to safety razors that enjoys formidable goodwill and reputation, being technically the most advanced safety razor available in the market. CHAMPION was adopted by the GILLETTE Co., USA which is the licensor and parent company of the Applicant in September, 2003. It is used as a laudatory term for brand imagery and used extensively as such in TV commercials worldwide. Thus, the mark CHAMPION used upon packaging of the applicant is merely to indicate a co-relation between the product and the TV commercials for brand imagery. This product and TV Commercial was launched in India in May, 2005 promoting the trade mark GILLETTE MAC 3 Turbo. Thus the Applicant contends that the word CHAMPION is public juris. However, the Applicant has subsequently been served with a Legal Notice on June 14, 2005, by the Respondent for the alleged infringement of its registered trade mark CHAMPION. Therefore, being the ‘persons aggrieved’ by the continuation of both the impugned marks in the register, the Applicant has sought to pray for the removal of the same.  

 

The Applicant alleged that CHAMPION is a laudatory epithet exclusively consisting of a mark which may serve in the trade to designate the kind, quality and value of the goods produced. The OXFORD English dictionary defines it “as a person or thing that has defeated and surpassed all rivals”. Similar, the WEBSTER dictionary defines it as “anything that takes first place in competition and who defeated in a competition or a series of competition so as to hold his place”. Thus the word aptly conveys the message that a manufacturer wants to put across and cannot be allowed to be monopolized by a single manufacturer. Nor can the impugned marks be capable of acquiring any distinctiveness and hence it ought not to have been registered in the first place as per Sections 9(1)(a) & (b) of the TM Act. Section 9(1)(C) also prohibits registration of the mark as it consists exclusively of a mark that has become customary in the current language and established trade practice to be used as “brand imagery” to puff or allow the quality of the product marketed.

The Respondent argues that it is the first user and adoptor of the mark CHAMPION in relation to goods falling in Class 8. It was registered back in 1964 and has been continuously and extensively used since then. The mark has been duly renewed from time to time and is valid up to date. The Respondent has been a well-known manufacturers of razor, safety razor blade etc. in India since long. An A.C. Nielsen Retail Audit Data from 2005 in respect of safety razors and razor blades was also cited to prove that the respondents are the market leaders with a volume share of 46% and valued at 38.7% compared to Gillette’s market volume of 9.7% and a market share of 18%. A letter from GILLETTE, USA written to the Chairman, FIPB, was also cited that acknowledged the Respondent as the market leader in India in this field.

What would have been a usual TM battle then takes a surprising hue when the Respondent alleges the Applicant’s present action as a repercussion of Respondent’s refusal to the unreasonable and malafide offer of the Applicant to take over Respondent’s business! GILLETTE had apparently sought earlier to enter the Indian market by way of a proposed foreign collaboration with the Respondent. After the talks failed, GILLETTE floated its own Indian subsidiary.

To prove continuous use of the mark, the Respondent has also produced old records and export invoices relating to goods exported to various foreign countries under the mark from 1965 up to 5th April, 2012. Respondent further argues that the said mark has due to such continuous usage acquired secondary significance and distinguishes the goods of the Respondent.

Another significant allegation made by the Respondent was regarding the “lack of interest” of the earlier counsel engaged by the Respondent, the firm named M/s Daswani & Daswani. The Respondent stated that the additional documentary evidence for effective and proper adjudication of the dispute could not be tendered on time due to “the mishandling of the case” by the said counsel. This was the reason the Respondent had to file a miscellaneous petition through their subsequent counsel, M/s Khaitan & Company, Kolkata, to take on record said evidence.

Respondent contended that the given that the Applicant is bringing the rectification petition after as long as 40 years since the marks have been registered, the Respondent can seek the protection of Section 32, which protects marks that have acquired a distinctive character in relation to the goods or services for which they have been registered, before commencement of any legal challenge to their validity. Also, while Respondent was the first entity to register the mark regarding razors and razor blades, there are other entities that have done so in relation to diverse goods for distinguishing their products and such registrations are still valid and subsisting.

The Applicant countered these arguments by saying that the Respondent by its own admission has stated that the said mark is not exclusively used by the Respondent, but also by other traders relating to various goods –hence no acquired distinctiveness is possible in this case. Also, the goods in question being of daily use, the evidence of use of such goods must be of exceptionally high volume for the court to draw an inference of acquired distinctiveness. No such evidence has been produced by respondent in the present case.

Judgment:

The IPAB decided to admit the additional evidence introduced by the Respondent, overruling the technical objections made by the Applicant in the interest of justice and so that the Respondent will not be unduly prejudiced. Apart from referring to precedents allowing such admission, the fact was also referred to that the said documents have already been produced in other proceedings between the Applicant and the Respondent and therefore the former couldn’t be said to be caught in a surprise by them. The Applicant’s locus standi to seek the removal of the impugned marks as an aggrieved party was also duly recognized.

With regard to the merits of the case, the IPAB considered whether there exists sufficient evidence to establish any use of the impugned marks (between August 18, 1964 and August 17, 1969 for TM 1 and between September 7, 1967 and September 6, 1972 for TM 2). After going through the documents establishing sale of goods bearing such mark, the IPAB agreed that there has indeed been such use. Hence the objections raised by the Applicant both under Section 49(1)(a) and (b) failed.

With regard to the grounds of objections raised by the Applicant under Section 9, the IPAB had some harsh words for the Applicant, questioning its behaviour and business ethics. It said that the Applicant has admitted to have attempted taking over Respondent’s business in 1996 unsuccessfully, and the Respondent being the largest manufacturers of blade in India, it is rather obvious that the Applicant had foreknowledge of the Respondent’s mark. The parent company of the Applicant decided to promote the word ‘CHAMPION’ as brand imagery only in 2003 and also started its Indian campaign in 2005.

In what appears to be an even sterner tone, IPAB went on to chastise the Applicant in the following manner: “Business ethics have both formative and descriptive dimensions. The conduct of the applicant to oust an Indian trade mark owner in this particular instant is not in conformity with international commercial behaviour…[I]n the instant case the applicant are lacking in commercial scruples and are attempting to crush a relatively small time Indian player from playing its rightful role in the Indian market.”

The expression ‘CHAMPION’ may prima facie be a laudatory expression but can qualify for registration, if and when, it acquires secondary meaning. In this case, IPAB dubbed Applicant’s actions as “a process of electronic and TV blitz and related information protocols,” using which “an established mark is sought to be booted out of the register.” Nor did the IPAB find any justification for the Applicant’s silence on the protection offered to the Respondent by Section 32 of the Act.

Order: Both rectification petitions were dismissed without cost and the Respondent was allowed to retain ownership of said marks.

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Legalising the IPAB: The Madras High Court Vindicates!

In an earlier post, we bemoaned the fact that an unconstitutional IPAB continues to surf the IP wave in India, rendering one IP judgment after another, despite being cocooned in a shell of structural illegality. Unfortunately our writ petition questioning all of us continues to languish at the Madras High Court without progress. 

Ammini Karnan vs IPAB

In a vindication of sorts, a Division Bench of the Madras High Court recently agreed with our assessment and opined that the composition of the IPAB (as laid down in the statutory scheme) is unconstitutional. In an order dated March 27, 2013, the Bench comprising Justice Dharma Rao and Justice Aruna Jagadeesan stated that Sections 2(k), 85 and 87 of the Trade Marks Act, 1999 fell foul of the law relating to tribunal appointments laid down by the Supreme Court in Union of India v. R. Gandhi (2010) (popularly called the NCLT case, since it pertained to the National Company Law Tribunal [NCLT]). 

However, the Bench declined to offer a final ruling on this aspect, given that the matter was pending in other writs including our writ before the Madras High Court. 

The current writ had been filed by Ammini Karnan, a person involved in the business of rice and rice based products in Kerala. Karnan was aggrieved by an order of the IPAB allowing an appeal filed by M/s Nirapara Roller Mills Private Limited for the grant of registration of the mark ‘NIRPALA’. Karnan had earlier successfully opposed the mark before the Registrar claiming prior use of the mark. After the IPABs order reversing the Registrars’ order and granting the registration of the mark to Nirapara Roller Mills, Karnan moved the Madras High Court in a writ petition. 

She argued that the composition of the Board was unconstitutional, as both members lacked “judicial” experience. The impugned IPAB order had been delivered on October 6, 2006 by Vice-Chairperson Mr. Z. S. Negi and Technical Member Ms. S. Usha. The Petitioner questioned the vires of the composition as contrary to the law laid down by the Supreme Court in L. Chandrakumar v. Union of India (1997) and prayed for invalidation of Sections 2(k) and 87 of the Trade Marks Act. Unfortunately, the IPAB website does not carry this order. In fact, it does not carry any order delivered in 2006! Any of you accessing the IPAB website will know how incredibly difficult it is to find orders! 

Clearly the IPAB website needs a lot of revamping if they are serious about transparency and ensuring that their pronouncements are made easily accessible to the public. Given that India is often touted as an IT super power, this is a shame and the government must immediately make resources available to the IPAB to revamp its shoddy website! 

From "Technical" To "Judicial": Whither Constitutionality?

Back to the composition of the IPAB and a faulty legislative framework for eligibility and appointment. Strangely enough, the statutory scheme enables a "technical" member who may not possess any adequate “judicial” qualification to effectively serve as the Chairman of a high profile tribunal! Here's how:

i) As per Section 85(3) of the Trademarks Act, only an Indian Legal Service (ILS) Officer or a civil judge can be appointed as a ‘judicial’ member to the IPAB. 

ii) As per Section 85(4), only a Joint Registrar or an advocate with relevant IP experience can be appointed as a ‘technical’ member. 

iii) As per Section 2(k), the Chairperson and Vice-Chairperson can preside over the Bench as a ‘judicial’ member. 

Interestingly, Section 85(2)(a) allows a technical member, upon two years of service, to be elevated as the Vice-Chairperson. Furthermore, the Vice-Chairperson after two years of his or her appointment is eligible to become to Chairperson (as per Section 85(1)(b)). 

Net result: a technical member who may not possess any “judicial” qualification gets to serve as the Chairman of the IPAB. And this is not merely a theoretical conjecture, but has played out in practice. 

The present Vice-Chairperson, Ms. Usha was initially appointed as a “technical” trademark member to help adjudicate trademark matters. As of December 31, 2010, Ms. Usha had adjudged over 30 patent matters as a ‘judicial’ member. On the other hand, Mr. Negi was a government servant, having served as a Secretary to the Ministry of Law and justice. We are not certain of the extent of IP expertise he possessed prior to coming on board the IPAB as a judicial member. He rose to become Vice-Chairperson and then finally the Chairman! Without having served as a judge or practiced as an advocate, Mr. Negi effectively presided over the IPAB as its top judge! 

The statistics below contain decisions delivered by Ms. Usha and Mr. Negi as ‘judicial’ members from 2005 till December 31, 2010: 

Shri. S. Chandrashekar & Ms. S. Usha (Vice Chairman): 32 decisions

Shri. S. Chandrashekar & Mr. Z. S. Negi (Chairman): 19 decisions

Shri. Syed Obeidur Rahaman & Mr. Z. S. Negi (Chairman): 136 decisions 

Note: The statistics are based on orders available on the IPAB website (which as many of us know is not fool proof, but shoddy in several particulars). 

This is in complete defiance to the Supreme Court’s norms in Union of India v. R. Gandhi (NCLT). In paragraph 56(i) of the NCLT decision, the Supreme Court held that only persons who are/were either a High Court judge or had served as a District Judge for at least 5 years or an advocate who had practiced for ten years were eligible to be appointed as "judicial" members. 

Despite the Supreme Courts clear guidelines, the Ministry of Commerce and Industry, one of the respondents in the above writ filed by Karnan, contended that the provisions were constitutional and that the composition was not faulty. Although the Division Bench refrained to rule on the matter and declare the relevant provisions of Trade Marks Act as ultra vires, it categorically asserted that: 

"The Hon'ble Supreme Court specifically stressed that only if continued judicial independence is assured, Tribunals can discharge judicial functions and that they should resemble courts and not bureaucratic boards and that even the dependence of Tribunals on the sponsoring or parent department for infrastructural facilities or personnel may undermine the independence of the Tribunal.

Therefore, applying the principles laid down in Union of India V. R. Gandhi (cited Supra) the definition for the judicial member under Sec. 2(k) of the Act, has to be reconsidered, otherwise, it will become unconstitutional. Likewise, the qualification of Vice Chairman, Judicial Member and Technical member under Sec. 85 of the Act has also to be reconsidered." 

Our Fervent Plea Again

Given the change of captaincy at the Madras High Court, we plan to urge the court to give serious consideration to our writ filed more than 2.5 years ago and help move it forward so that it is not relegated as a piece of legal relic. In the meantime, we request all those in the IP fraternity, particularly those interested in building a robust IP ecosystem to please petition the powers that be in the government to desist from delaying the matter in court, but to work towards a speedy resolution. Better still if the government simply followed the NLP (National Litigation Policy) ushered in by Shri Veerappa Moily and withdrew the matter, since this is effectively a slam dunk case and the IPAB constitution is in blatant violation of norms propounded by the Supreme Court in the NCLT case. 

At the very least, the government ought to provide enough resources to enable a decent functioning of the IPAB. And most importantly, one hopes that with Justice Sridevans’  retirement in another month or so, the chosen successor will be someone as capable, if not better! 

All of this is however premised on the assumption that all of us wish the IPAB to continue performing this role as a key IP dispute resolution body. As our SpicyIP poll (still accessible  on the left hand side of the home page of the blog) indicates, this may not be true, for there are many of us who are keen to have these functions revert to the High court and are of the view that special benches at the High Court will do a far better job of IP dispute resolution than the IPAB. Even if this is the case, we still need to move and advocate for this. If history is any judge, apathy will not help!

By Sai Vinod and Shamnad Basheer

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