Introducing Science, Technology and Innovation policy, 2013 - I

I shall introduce the ‘Science, Technology and Innovation Policy, 2013’ (“STI Policy, 2013”) which was recently unveiled by the Prime Minister at the 100th Indian Science Congress. I shall analyse the STI Policy, 2013 in a later post. [The STI Policy, 2013 is available here.]

Background

The STI Policy, 2013 sets out a significant shift in approach of the government. It is pertinent to take a quick look at the previous policies:

      a) Scientific Policy Resolution of 1958 (“SPR, 1958”)

The SPR, 1958 resolved to “foster, promote and sustain” the “cultivation of science and scientific research in all its aspects”. It was assumed that the technology would “flow” from the country’s established science infrastructure. 

b) Technology Policy Statement of 1983 (“TPS, 1983”)

The TPS, 1983 emphasized on the need to attain technological competence and self-reliance.

)     c) Science and Technology Policy of 2003

As evident from the title of the policy, it marked a shift from the earlier policies. It addressed science and technology together. It emphasized on Research and Development ("R&D") for addressing national problems. It called for integrating programmes of socio-economic sectors with the national R&D system. It also articulated upon the need for technological innovation and creation of a national innovation system.

“People for science and science for people”

The STI Policy, 2013 encapsulates a novel approach towards the science, technology and innovation framework in India. The policy comes in the light of the realization that treating innovation and S&T as two disconnected realms was a serious lacuna especially when the former already assumed centre stage in the developmental goals of countries around the world. The STI Policy, 2013 recognizes the synergistic linkages among them. Further, it is significant to vertically integrate all dimensions of STI into the socio-economic processes. The policy seeks to “focus on both people for science and science for people”.

“Science and technology for people”

 “Science and technology for the people” is the motto of STI Policy, 2013. It envisages ‘inclusive innovation’ viz., Indian society emerging as a major stake holder in the national STI system.  “The policy will thus drive both investment in science and investment of science-led technology and innovation in agriculture, manufacturing and services that lead to socio-economic benefits to a wide cross section of society. Emphasis will be laid on bridging the gaps between knowledge and the economic sectors. The STI policy would develop symbiotic relationship with economic and other policies.”

The STI Policy, 2013 inter alia aspires to:

• promote scientific temper;
• make careers in science, research and innovation attractive; 
• establish world class R&D infrastructure for gaining global leadership in some select frontier areas of    science;
• position India among the top five global scientific powers by 2020
• facilitate S&T-based high-risk innovations through new mechanisms; and
• trigger changes in the mindset and value systems to recognize, respect and reward performances which create wealth from S&T derived knowledge.

Investment in R&D

The policy notes that India’s R&D investment is less than 2.5% of the global investments. It has been under 1% of the GDP. It observes that increasing Gross Expenditure in Research and Development (GERD) to 2% of the GDP has been a national goal for some time. Achieving the aforesaid target in the next five years is realizable provided the private sector matches India’s public investment and the ratio of public to private sector investments in R&D improves from the current 3:1 to 1:1 within the next five years.

Attracting Private Sector Investments in R&D

The policy notes that supply side interventions have hitherto been the main strategy for public investment in R&D. The policy calls for equal emphasis on both supply side interventions and demand based investments. While public investments in R&D shall maintain the current rates of growth, private investment has to increase significantly for translating R&D outputs into commercial outcomes.

The STI Policy, 2013 sets out a new initiative - Public Private Partnership (PPP). A National Science, Technology and Innovation Foundation will be established as a PPP for investing critical levels of resources for innovative and ambitious projects.

The STI Policy, 2013 shall focus on:

• facilitating private sector investment in R&D centres in India and overseas;
• permitting multi stakeholders’ participation in the Indian R&D system;
• treating R&D in the private sector at par with public institutions for availing public funds;
• bench marking of R&D funding mechanisms and patterns globally;
• aligning Venture Capital and Inclusion Innovation Fund systems;
• modifying IPR policy to provide for marching rights for social good when supported by public funds and for co-sharing IPRs generated under PPP;
• exploring newer mechanisms for fostering Technology Business Incubators (TBIs) and science-led entrepreneurship; and
• providing incentives for commercialization of innovations with focus on green manufacturing.

Partnerships among Stake holders for Scaling Successes of R&D

The STI Policy, 2013 calls for special and innovative mechanisms for leveraging academia-research-industry partnerships. Further, the policy intends to put in place regulatory and legal framework for sharing of IPRs between inventors and investors and for closing gaps in the translation of new findings into the commercial space. The policy will inter alia focus on: a) promoting innovations through mechanisms including “Small Idea-Small Money” and “Risky Idea Fund” to support innovation incubators and b) supporting STI driven entrepreneurship with high scaling coefficients and viable business models.

(To be continued..)

[For 'Introducing Science, Technology and Innovation Policy, 2013 - II, see here.

For 'Analysing Science, Technology and Innovation Policy, 2013, see here. ]

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SpicyIP Weekly Review: January (2013) Week 1

This new year Barry Sookman announced the most popular intellectual property and technology blogs. It gives us great pleasure to inform you that SpicyIP was ranked 8th best blog in the world. Dennis Crouch's Patenly-O was rated the best and Micheal Geist's blog was the best tech blog at 4th place. We thank our readers for their support!

Incentives through Recognition? Nobel Assembly Sued for Libel and Unfair Competition (Swaraj Paul Barooah)

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Dr. Rongxiang Xu instituted a suit against the Nobel Assembly, for libel and unfair competition in a California court, for the later's statements in relation to last year's Nobel Prize in Physiology or Medicine to Sir John Gurdon and Dr. Shinya Yamanaka. The prize was awarded for their work in 'showing that mature cells can be reprogrammed to become pluripotent, with the ability to grow into different tissues in the body.' Dr, Xu, however, claims to have discovered regenerative cells way back in 1984 and this discovery was useful in US patent 6991813B2. PR Newswire criticized the Nobel Prize jury for for ignoring Dr. Zu's pioneering work in regenerative medicine. Dr. Zu believes that the statements are detrimental to his reputation and requested a clarification from the Assembly on the 'pluripotency by reprogramming.' The Assembly, on the other hand, claims to have never heard of Dr. Xu.

Swaraj in this post raises a larger question on the importance of non-financial incentives in innovation policy.  Apart from scientific curiosity, peer recognition motivates scientists to work a lot and therefore he suggests that innovation systems should make use of these incentives to facilitate innovation more appropriately.

The Unfair Competition Act, 2011 and its Implications on Indian Manufacturers (SpicyIP Fellowship Guest Post Series)

L. Gopika Murthy (II Year, NLSIU) analysed the implications of the Unfair Competition Act, 2011 (UCA) passed in US's Washington and Louisiana on Indian manufacturers. The UCA is aimed at preventing manufacturers from stolen illegal or stollen IP (pirated or non-licensed software). Third party selling or offers to sell products which used stolen IT are liable under the Act. The IT right holder would be entitled to damages and other injunctive reliefs. The Act further mandates a 90 day written notice requirement on the right holder to allow the manufacturer to disprove allegations or cure defect. UCA is applicable to foreign manufacturers as long as the product is sold in Washington or Louisiana. In 2010-11, 60% of India's software exports were to the US and 64% of software used is pirated. Evidently, many Indian manufacturers using pirated software in their businesses are amenable under the UCA. The Act has received support from several quarters, including Anand & Anand which hoped that the law would ensure better respect for IP rights in India.

Plain Packaging Law for Tobacco Products (SpicyIP Fellowship Guest Post Series)

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L. Gopika Murthy (II Year, NLSIU) analyses the issues surrounding the plain packaging laws in light of the recent Private Bill on the Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Amendment Bill 2012 proposed by Shri. Baijayant Panda. Coincidentally, Austrian introduced plain packaging legislation on December 01, 2012 to dissuade youth from taking up smoking. In an attempt to de-glamorize consumption of tobacco products, the Bill seeks to impose restrictions on use of brand logos, colours and promotional text on packaging material.

Plain packaging laws already stood to a constitutionality challenge before the Australian High Court for grounds that the State acquired intellectual property on unjust terms. Seven judge bench of the High Court upheld the vires as the law does not 'involve the accrual of a benefit of a proprietary character to the Commonwealth which would constitute an acquisition.' Australia is also defending allegations of breach of WTO commitments of fair and equitable treatment. If the Bill ever becomes law, India too is likely to face WTO proceedings and defend a potential constitutional challenge under Article 300A for deprivation of IP rights without adequate compensation.

Colours as Non-Conventional Trademarks? (SpicyIP Fellowship Guest Post Series)

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Rupkatha Basu (IV Year, KIIT) in this guest post discusses the whether colours can be protected under the Trade Marks Act, 1999 in light of the Cadbury's successful claim for registration of purple colour in UK. The Birmingham High Court in September last year dismissed Nestle's appeal Cadbury's trademark registration over the use of purple colour as a trademark for its chocolates. The court categorically stated that the public generally associates purple color with the chocolates manufactured by Cadbury. In India, on the other hand, the Trade Mark Registry rejected Cadbury's application for registration of purple colour. The Colour Depletiton Theory bars registration of seven basic colours, however, shades of colours are permissible. The Registry does not seem to recognize the theory and permits registration of colours only in combinations.

Rupkatha argues that the inclusive definition of trademark under Section 2(1)(zb) of the TM Act, 1999 includes unconventional marks such as single colour. Further, the Indian courts in Colgate Palmolive Company v. Anchor Health & Beauty Care Pvt. Ltd. and Cadbury Ltd. v. ITC Ltd have acknowledged colour as a part of trade dress. Moreover, the Draft Manual for Trade Mark Practice and Procedure (Para 5.2.1.2) provides for registration of colour mark if the 'proprietor has used the mark distinctively to educate the public that it is a trade mark.' Therefore, Cadbury deserve registration over the purple colour as the basic objective of trademark (i.e. identity of source) is fulfilled.

Online Certificate Course on Competition Law & Intellectual Property Rights

Federation of Indian Chambers of Commerce and Industry (FICCI) announced an Online Certificate Course on Competition Law & Intellectual Property Rights (IPComp). This course focuses on the interlinking between the competition law and IPR. Duration of the course is two month (February-March, 2013) and consists of six modules (Introduction, Competition laws in India, Main feature of competition law, IPR and competition: conflict / common goals of competition law and IPR, How to resolve the conflict between IPR and competition law and case laws). The course is open to students from law stream, lawyers, industry professionals and students pursing Company Secretary course. Last date for registration is January 25, 2013. For further details, please visit www.ficcipcourse.in or email at ipcourse@ficci.com

International Developments

Johnson & Johnson rolls out TB drug at 'affordable' prices (The Hindu, Financial Times & USA Today)

Johnson & Johnson (J&J) receive regulatory approval from the US Food & Drug Administration (FDA) for shipping supplies of bedaquiline, a drug to cure tuberculosis. Close to 1.4 million people die due to tuberculosis every year and this is the first drug developed in over four decades, reports The Hindu. To be sold under the brand name Sirturo, J&J has pledged to make it 'affordable' to everyone. J&J also obtained a 'priority review voucher' from FDA as an incentive for developing treatment for tropical diseases. This would give them priority in obtaining approvals for their future experiments and this could enable to enjoy patent monopoly for six more months.

UK to free-up its copyright laws (The Guardian)

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The UK Department for Business, Innovation and Skills (BIS) on December 20, 2012 announced measure to free-up its intellectual property and copyright laws to create greater freedom for consumers in usage of copyrighted works. The report recommends 10 major changes to copyright law including research, education, use of quotations and parodies. More importantly, the government proposed lifting of restrictions on 'format shifting'. With this user are legally entitled to make copies of songs from legally purchased CD to music players and laptops. The Government shot down the request from record companies to introduce a levy or tax on copying devices (music players, laptops, etc.) as compensation for legalizing format shifting. Furthermore, it noted that this move would have minimal impact on sales. The changes were recommended in order to bring the copyright regime in tune with people’s reasonable expectations. The other recommendations include the establishment of a digital copyright exchange,  a 'one-stop shop' for obtaining clearances for use of copyrighted content by 2013.

Cooperative Patent Classification (CPC) system launched (AG-IP-News)

The USPTO and EPO launched the Cooperative Patent Classification (CPC) system. The system aims to develop a common internationally compatible classification system for technical documents used in the patent granting process for an user community of over 20,000 patent examiners across 45 patent offices. With more than 250,000 classification symbols based on the International Patent Classification System (IPC), the new system aims to foster ‘patent harmonisation efforts’ and provide effective prior art searches.


Apple's tiff over Amazon's 'appstore' (IPKat)

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Apple sued Amazon for use of the term 'appstore' in relation with the sale of apps for android devices and Kindle Fire. Apple's action was on multiple grounds including trademark infringement, false designation of origin and false description. The US District Court for the Nothern District of California in a partial summary judgment evaluated and rejected the claim that this constitutes 'false advertising' under S. 43(a) of the Lanham Act. Reiterating the essential elements of the provision the court found that Apple failed to show that there existed a 'false statement of fact' which 'deceived or has the tendency to deceive a substantial segment of the audience' as Apple could not establish that consumers associated 'appstore' with the specific/ distinctive attributes of 'Apple App Store'.

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Google & Yahoo indirectly funds pirated websites: USC Report (International Business Times)

A recent study conducted by University of South California's Annenberg Innovation Lab revealed that search engine giants, Google and Yahoo place ads on pirate sites thereby supporting movie and music pirate sites. Google rejected the findings and stated that presence of Google code does not automatically entitle financial support from Google.

Record number of cyber squatting cases in 2012 (Domain Name Wire)

WIPO's Uniform Domain-Name Dispute Resolution (UDRP) received a record 2,879 cases in 2012 relating to 5,081 domains. This, however, does not indicate a rise in cyber squatting.  Many such matters are ruled invalid and most of the filings do not necessarily pertain to cyber squatting activity. Furthermore, many brand holders continue to resolve disputes through informal means. In comparison number of domain names registered, the number of cases filed is at an all-time low according to Domain Name Wire.

InterDigital sues Huawei, Samsung & ZTE for patent infringement (Bloomberg)

In 2011, InterDigital Inc. (IDCC) filed a complaint, with the U.S. International Trade Commission, against Huawei Technologies Co., ZTE Corp., Samsung Electronics Co. claiming that several of their products infringe up to seven of its patents. Through this complaint which is due for hearing in February, IDCC is seeking an order which would prevent import of such products into U.S. (and additionally cash compensation through a companion lawsuit in the Federal Court in Wilmington, Delaware). Building on this complaint, IDCC has filed a new patent-infringement claim against the said companies for using its technology related to the latest mobile-phone standards. In response to the earlier patent claim Huawei filed an antitrust complaint with European Union regulators and has further alleged that IDCC's licensing fees demands are 'unreasonable and discriminatory'.

Google off the FTC's hook (Wired)

A lengthy 19 month probe into Google's search and patent licensing practices, the Federal Trade Commission (FTC) failed to bring any charges against search engine giant's products and services. However, Google agreed to reduce restrictions on AdWords platform and license its patents in reasonable terms. Consumer groups are, however, were displeased with the FTC.

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Incentives through Recognition? Nobel Assembly sued for libel and unfair competition

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Incentives have generally proven troublesome in the context of the intellectual property regime. Right from questioning whether the correct amount of incentives are being given in terms of 20 year exclusionary periods (See for eg, 8th and 9th para of my previous post on Patents and Innovation here), to more fundamental questions of how much, if at all, external incentives are required in the first place. (See for eg, Eric Johnson's paper on IP and the Incentive Fallacy). While the IP regime mostly refers to methods of appropriation of financial incentives, it also in a more limited manner recognizes other incentives such as gains in reputation.

While trying to find panaceas for the laundry list of problems with the IP regime, various forms of the prize system are often touted as the most viable alternatives/parallels to incentivizing innovation. Unfortunately, it appears that prize systems too fall prey to the problems of recognizing and awarding non-financial incentives too. At least, the Nobel Assembly at Karolinska Institutet, Sweden seems to be facing such issues. 

One of the world's leading scientists, Dr Rongxiang Xu has recently filed a suit against the Nobel Assembly for statements it made while awarding the Nobel Prize in Physiology or Medicine to Sir John Gurdon and Dr Shinya Yamanaka in October 2012. The prize was awarded to them for 'showing that mature cells can be reprogrammed to become pluripotent, with the ability to grow into different tissues in the body'. 

However, apparently Dr Xu discovered regenerative cells in 1984 and "(t)his was confirmed to be keratin-19 positive stem cell after 2000 (US patent 6991813B2) during his study of burn treatments, which has benefited over 20 million burn victims in 73 countries." (See here for source). The suit has been filed in a California court, for libel and unfair competition. 

According to this website, "Dr Xu claimed that his good reputation in the community was defamed by the conduct and the statement published by the defendants (Nobel Assembly). The suit alleges that the Nobel Assembly has been successful in garnering media attention for their Nobel Prize announcements in essentially every major news organizations and publications world-wide, proving that they can affect the perception of an individual by misreporting information." In relation to the award, the Nobel Prize jury stated, "Their findings have revolutionised our understanding of how cells and organisms develop," and "created new opportunities to study diseases and develop methods for diagnosis and therapy." 

Dr Xu believes that this is detrimental to his own reputation as he already discovered this over a decade ago. He stated, "I am concerned about the statements made by the Nobel Assembly. I seek clarification regarding the issue of 'pluripotency by reprogramming' as it has been incorrectly stated and this can impact the safety of human life. I hope the Nobel Assembly can clarify what its 'pluripotency' means, is it completely conforming with the nature of human life? Or, is it the pluripotency of human cancer cells."

While my knowledge in this area is next to nothing, there's a certain compilation of statements that make this seem very curious to me. Firstly, Dr Xu describes himself as the founder of "human body regenerative restoration science". And then, the Nobel Assembly claims that they have never heard of him (!). 

According to PR Newswire, this is difficult to believe as this would mean the Nobel Assembly not only missed the US patents involved here, but also completely missed his exclusive interviews by Sweden's Ministry for Education and Science and Sweden's national television covering human body regenerative science. They say, 'The Nobel Assembly's lack of acknowledgment is difficult to fathom considering the fact that Dr. Xu has a lifetime achievement in in situ regeneration research and is known worldwide as a pioneer in the field of regenerative medicine."

While this may be the first suit against the Nobel Assembly, this is certainly not the first time that the award has been controversial. In fact, we've covered a controversy by the same committee just a few years ago here. Brij Agarwal gives some more examples over here. (And of course, this is without going into the more controversial Nobel Peace Prize awardees) 

Controversy aside, this does raise a question in my mind with regard to incentive structures in innovation policy. If true, this means that for one of the world's most important discoveries, reputation turns out to be a big factor in terms of how the scientist would like to be 'rewarded'! It's no surprise that scientists do a lot of work for peer recognition as well as for scientific curiousity -- but perhaps we should start focusing on how to tweak innovation systems to make more use of these incentives and felicitate them more appropriately.

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Guest Post: Plain Packaging Laws for Tobacco Products

L. Gopika Murthy submits her second piece for the SpicyIP Fellowship with a guest post on Plain Packaging Laws. The submission discusses the purpose of plain packaging laws as well as the effect of these laws on the intellectual property rights of the tobacco companies. Gopika is a 2nd year student at NLSIU, Bangalore and her first submission can be viewed here. 

PLAIN PACKAGING LAWS

Recently, a Private Members Bill seeking amendment to the present Cigarettes and Other Tobacco Products Act (COTPA), 2003 was introduced in the Lok Sabha. The proposed Bill, namely, The Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Amendment Bill 2012,[1]asks for plain packaging of cigarettes and other tobacco products. This essentially aims to de-glamourize tobacco packets by restricting tobacco industry logos, colours, brand logos and promotional texts from the packets of tobacco products. Brand and product names would be permitted in a standard colour, position, font and size in a predefined area on the packet. Therefore, if the Bill gets passed, all packets of tobacco products will be similar with 60% of the front and the back cover occupied by graphic health warnings. This is an attempt to reduce the appeal of cigarettes and tobacco products for the youth and especially to deter their initiation into tobacco use.[2]

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This Bill has been proposed immediately following the enforcement of mandatory plain packaging laws in Australia on December 1. Australia has thus become the first county to pass legislation making plain packaging of tobacco products compulsory. Tobacco products in Australia now are all sold in brown packets with most of the packets covered with graphic images that convey the hazards of tobacco use. These images vary from those of a skeletal man dying of cancer, a sick baby in a hospital with an oxygen tube going to its nose to those of mouth cancer and a sick child affected by the cigarette smoke. Surveys conducted among consumers in Australia indicate that many of them find these images extremely off-putting and that it does influence their decision to buy a tobacco product.[3]While some smokers state that they continue to buy the packets despite their discomfiture, some have switched to cigarette cases to avoid buying the packets. However, some smokers have answered that they do not really notice the packets and therefore it does not influence their decision to purchase the packets at all. The major purpose behind this legislation is to make the health hazards of smoking more visible and therefore, to render tobacco products as drab and unattractive as possible. It is especially aimed at the youth as in Australia 80 percent of the smokers start before the age of 18 and 99 percent before the age of 26. The health authorities in Australia expect that the plain packaging laws would help reduce the number of people taking up tobacco use.

The constitutionality of the plain packaging law was challenged in Australia by tobacco companies including British American Tobacco, Imperial Tobacco and Philip Morris on the ground that their intellectual property was being acquired by the State on other than just terms. [4]However, the seven judge bench of the Australian High Court has ruled that the plain packaging laws are not unconstitutional on that ground. The Court held that although the IP rights and other related rights of tobacco companies may be restricted as a result of the plain packaging laws, the restriction imposed by this law does not "involve the accrual of a benefit of a proprietary character to the Commonwealth which would constitute an acquisition.”[5] 

Legal arguments against plain packaging laws have been raised on the grounds that it violates Art 20 of TRIPS, 1994. Art 20 of TRIPS specifies that the use of a trademark should not be restricted to such an extent that is detrimental to its capability to distinguish the goods or services of one undertaking from that of another. However, the Parliament of Australia has rebutted this argument using Art 8(1) and Art 17 of TRIPS which allows member states to adopt measures that are necessary for protecting the public health provided that those measures do not take away the legitimate interests of the owner of the trademark. The restriction placed by the plain packaging laws which allows the brand logo of the tobacco companies to be displayed only in accordance with a pre-defined setting on a particular area of the packet, according to the Parliament does not take  away the IP rights of the tobacco companies. Philip Morris Asia has also instituted proceedings against Australia under the 1993 Bilateral Investment treaty between Australia and Hong Kong[6]on the ground that this law expropriates its IP rights and denies it fair and equitable treatment. Moreover, three countries have instituted proceedings against Australia under the WTO for breach of their commitment to global trade rules.

The Bill proposed by Shri. Baijayant Panda is likely to be introduced in the winter session of the Parliament. If this bill is passed, WTO proceedings as well as a constitutional challenge under Art 300A by the tobacco companies for deprivation of their IP rights without adequate compensation may be instituted. However, considering that the Bill only places restrictions on the display of the brand logo and brand name and does not completely disallow it, the constitutional challenge is unlikely to hold ground.

[Editor's note: For a broader discussion on whether 'intellectual property' falls within the definition of 'property' as understood in Art. 300A of the Constitution, please see Prashant's previous post here] 

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[1]See, http://www.indiaenvironmentportal.org.in/files/file/the%20cigarettes%20and%20other%20tobacco%20products%20bill%202012.pdf

[2]Independent surveys conducted across the world attest to this fact. See, http://www.cancer.org.au/content/pdf/CancerControlPolicy/PositionStatements/TCUCCVBkgrndResrchPlainPak270511ReEnd_FINAL_May27.pdf

[3]http://www.dnaindia.com/world/report_australia-strips-glamour-off-cigarette-enforces-plain-packaging-law_1772119

[4]The Australian Constitution allows the Parliament to acquire property only “on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws”.

[5]JT International SA v Commonwealth of Australia, [2012] HCA 43 (5 October 2012)

See, http://www.hcourt.gov.au/cases/case-s409/2011?Itemid=62&qh=YTo0OntpOjA7czo1OiJwbGFpbiI7aToxO3M6OToicGFja2FnaW5nIjtpOjI7czo3OiJwYWNrYWdlIjtpOjM7czoxNToicGxhaW4gcGFja2FnaW5nIjt9

[6]See, http://www.austlii.edu.au/au/other/dfat/treaties/1993/30.html

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Guest Post: Colours as Non-conventional Trademarks

Rupkatha Basu, a 4th year student at KIIT School of Law, Bhubaneswar, brings us a guest post on a topic that we seem to have not managed to discuss enough on the blog - that of non-conventional  trademarks. Using Cadbury's famous purple branding as an example, Rupkatha looks into whether colours can be given protection as trademarks in India. This is Rupkatha's first submission piece for the SpicyIP Fellowship. For those interested in more on the topic, we've earlier noted that Dev Gangjee, of LSE, has written this excellent paper on Non-Conventional Trademarks in India.

CELEBRATIONS FOR CADBURY: KUCHH MITHA HO JAYE……IN INDIA?

1^stOct, 2012 proved to be a day of celebrations at the Headquarters of Cadbury.  Judge Birss’ judgment after three years of legal battle[i] gave an occasion to the company to rejoice with Dairy Milk Bars.  The registration of the shade of purple (pantone 2865c) used by Cadbury in its logo and more importantly on the packaging of its chocolates has been upheld by the High Court in London. Pantone 2865c is held to be registrable although it is a non-conventional trademark. 

A non-conventional or non-traditional trademark is a mark used in the course of trade by a company which may not in itself be capable of being perceived and distinguished visually. In case of colour trademarks i.e. when a colour per seis going to be registered, the problem is it is subjective, since the manner in which a common man distinguishes two similar shades of colour varies with different individuals. The difficulty in registering colour per se in EU is because one needs to prove distinctiveness and graphically represent that colour trademark. While graphical representation of colour is possible by referring to any international system of colour viz., Pantone, Focoltone or RAL it is hard or rather impossible for a colour to be inherently distinctive. Thus, the owner needs to prove that the colour has acquired the distinctiveness through continuous use. The UK-based chocolate company – acquired by the food business Kraft in 2010 – applied for the trademark in October 2004, registering its right to use the colour purple (Pantone 2685c). But its rival Nestle argued that colours could not be practically trademarked for commercial advantage[ii]. Rejecting Nestle's appeal, Judge Colin Birss said in the high court in London: "The evidence clearly supports a finding that purple is distinctive of Cadbury for milk chocolate."

The result is that, after the Libertel case[iii], single colour is registerable as trademark provided it can be represented in accordance with the conditions laid down by the ECJ in Ralf Sieckmann’s case[iv].  By allowing registration of Cadbury’s purple colour, the High Court has made it clear that in UK, single colours can be given the protection of a trade mark.

Cadbury’s application for registration of its purple colour with the Trade mark Registry was rejected in India. The registration of non-traditional trademarks is still in its infancy in this country. Only a few sound marks like the Yahoo! and ICICI tune have been successfully registered. The main reason for not allowing single colours but only combination of colours to be registered in India is the fear of colours to be depleted. But the Indian courts and the Trade Mark Registry need to remember that the Colour Depletion Theory only bars the registration of the seven basic colours but not any shade of them. Shades of those colours are very much registerable if they can be represented by an international system of colours. When the colour has become synonymous with the brand, it should be allowed to be registered for better protection.

The definition of trademark under section 2(1)(zb) of the Trade Marks Act, 1999 includes combination of colours and packaging. Thus, there is a scope of colour to be included as a trade mark. The Indian judiciary in some instances has acknowledged colour as a part of trade dress and provided protection to it in Colgate Palmolive Company v. Anchor Health & Beauty Care Pvt. Ltd.[v] and Cadbury Ltd. v. ITC Ltd[vi]. Moreover, Trade Marks Act gives an inclusive definition of trade mark. It does not exclude anything capable of distinguishing any product. 5.2.1.2 of the Draft Manual for Trade Mark Practice and Procedure provides that subjective examination is to be done for non traditional trademarks like colour. The Manual further states that for a colour mark to be registerable“The key issue will usually be whether the proprietor has used the mark distinctively to educate the public that it is a trade mark.”[vii]

Cadbury has no doubt become a well-known mark in India and anybody can relate its purple colour with Dairy Milk. The way the High Court has given protection to the red and white combination which is a unique feature of Colgate, the inimitable trait of Cadbury, its purple colour should also be given protection, may be as an associated mark.

What better way to celebrate the New Year than with Cadbury when the brand has made the 1^st day of every month a celebration day with its iconic slogan? The basic function of a trademark is to identify its source and I think when a mark can very well fulfill that obligation, whether it is traditional or non-traditional should be immaterial

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[i] Nestle S.A v. Cadbury UK Ltd.[2012] EWHC 2637 Ch

[ii][ii]Rebecca Smithers, The Guardian, Tuesday, 2^nd October, 2012, available at http://www.guardian.co.uk/business/2012/oct/02/cadbury-purple-legal-victory-trademarkvisited on 21.12.2012

[iii] Libertel Groep v Benelux Merkenbureau (case C-104/01) dated May 6, 2003

[iv] Ralf Sieckmann v. German Patent Office [2002] ECR I-11737laid down that graphical representation of any mark should be clear, precise, self content, accessible, intelligible, durable and objective.

[v] 108 (2003) DLT 51

[vi] Decided by the Gujrat High Court on 20^thJuly, 2005

[vii] Available at http://ipindia.nic.in/tmr_new/TMR_Manual/DraftManual_TMR_23January2009.pdfvisited on 24.12.2012

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FICCI announces online certificate course on Competition law and IPR

Federation of Indian Chambers of Commerce and Industry (FICCI) has started an Online Certificate Course on Competition Law & Intellectual Property Rights (IPComp).  The objective of the Course is to make students and professionals learn about complex international legal environment in which multinational corporations and businesses operate.

Through several case studies, the course introduces some practical legal concepts, pitfalls and compliance  issues that are needed by today’s businesses to comply with Competition Law, IPRs and their legal linkage. This advance course provides dual benefits of learning Competition Law & IPRs challenges faced by Corporations when they expand in an organic or non-organic manner into new territories, markets and products.

This is first of its kind of course introduced with specific focus on the interlinking between the competition law and IPR. The Course is of two months duration and consists of Six (6) modules i.e. introduction, competition laws in India, main features of competition law, intellectual property rights (IPR) and competition Law: conflict / common goals of competition law and IPR, how to resolve the conflict between IPR and competition law and case laws.

The Course may be pursued by any student from law stream, lawyers, industry professionals and students pursuing Company Secretary Course.

Features like Online FORUM for query resolution and Weekly updates on IPR to registrants make the course interactive.

Registration Start Date:              Registration Open

Registration Closing Date:          25^th January 2013

Conduct of the Course:              February – March 2013

Course Duration:                             2 Months

Online Examination:                      Last week of March 2013

For further details, please visit the website - - www.ficciipcourse.in or e-mail at ipcourse@ficci.com . 

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Guest Post: The Unfair Competition Act, 2011 and its Implications on Indian Manufacturers

In yet another interesting submission to our SpicyIP Fellowship applicant series, L. Gopika Murthy, a 2nd year student at NLSIU, Bangalore sends us this well written post on a new IT specific competition legislation being implemented in USA and the implications it may have on Indian software manufacturers. 

The Unfair Competition Act, 2011 and its Implications on Indian Manufacturers

The Unfair Competition Act, 2011[1]is a statue that aims to deter unfair competition by penalizing manufacturers who use stolen Information Technology in the design, manufacture, distribution, marketing or sale of their products. The statute aims to support the interests of the manufacturers who suffered economic harm as a result of being in direct competition with cheaper products manufactured using stolen IT. The UCA has been passed in the states of Washington and Louisiana in 2011. However, the significant point is that the UCA includes foreign manufacturers within its ambit, thereby including Indian manufacturers as well. The place of manufacture of the product using stolen IT is irrelevant under the UCA provided the sale of such product is in Washington/ Louisiana.

In a scenario where the Attorney- Generals of 36 states and 3 territories in USA have written to the Federal Trade Commission requesting a better enforcement of the existing Federal Trade Commission Act to prevent such unfair competition at the federal level, the implications of this Act on Indian manufacturers must be discussed. The UCA is based on two broad concepts- protecting the IP rights of the legal IT right-holder and the prevention of unfair competition and unjust enrichment through such competition. The UCA aims to foster respect for the IP rights in the IT sector and tries to incentivize such respect for IP rights by establishing a level playing field for all manufacturers.

The relevant provisions of the UCA must be analysed in order to understand the implications of the UCA on Indian manufacturers. S. (1)(7)(a) of the UCA defines stolen IT as hardware or software acquired, appropriated or used by a manufacturer without the authorization of the legal IT right holder. The penalties under the UCA include damages, injunctive relief and in rem attachment for the manufacturer who violated the UCA. It prescribes liability for third parties who sell or offer to sell products which used stolen IT in states where UCA is applicable, to a limited extent. The UCA also mandates that the legal IT right holder (the owner, the exclusive licensee or the owner’s agent) must give the allegedly violating manufacturer ninety days’ written notice to disprove the allegations or to cure the defect. In instances where such manufacturer has started making attempts to cure the defect,c the time period to cure has to be extended by another ninety days. This requirement of notice has to be fulfilled by the legal IT right holder before the affected manufacturers can file a lawsuit.

The relevant question for the Indian market stems from two sets of statistics. First, 60% of India’s software exports in 2010-2011 were to the USA. Secondly, 64% of the software in India in 2010 was pirated. In such a scenario, Indian manufacturers who use such pirated software in their business operations as defined under S. (1)(7)(b) of the UCA and who sell those products in the states of Washington or Louisiana are presently vulnerable to liability as prescribed by the UCA. This is not to imply that persons who pirate software or use stolen IT are not punishable under the Indian legal system. Section 63-B of the Indian Copyright Act, 1957 provides for financial penalty in the range of Rs.50,000 to Rs. 2,00,000 and prescribes imprisonment terms ranging from a week to three years. The Indian Penal Code, 1860 also prescribes penal liability for selling counterfeited software to the public as genuine software. However, with the advent of the UCA, Indian manufacturers can be held liable by the US courts as well.

The response to the UCA has been generally positive from most quarters. In the Indian context, the American Chamber of Commerce in India has issued a public statement urging Indian manufacturers to fully comply with the UCA in its business practices.[2]Law firms such as Anand and Anand have applauded the UCA as a welcome step that will ensure better respect for IP rights in India as well as contribute to a better economy, owing to the increased tax returns from the small and medium enterprises sector.[3] The issue of running a clean, ethical business in all respects which has been rising to prominence in the past few years is also an argument used in the favour of the UCA.

It is my opinion that the fostering of greater respect for IP rights in the IT sector in India is a welcome step and that the UCA is a good law for IP rights in general. Although the UCA involves questions of holding Indian manufacturers liable in US courts, the ninety day notice period which is given prior to the filing of a lawsuit as well as the mandatory extension given to the manufacturers who attempt to cure the defect is a valuable safeguard against the misuse of the law through frivolous lawsuits by disgruntled competitors. However, the manufacturers would be expected to ensure compliance with the UCA along their entire supply chain in order to abide by the UCA. Although this is likely to lead to additional costs, including increased litigation expenditure, and hardship for the manufacturers, I believe that such a step is necessary to protect the IP rights of the legal IT right holder and to protect the manufacturers from unfair competition.

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[1]The text of the Washington Act can be found at http://apps.leg.wa.gov/documents/billdocs/2011-12/Pdf/Bills/House%20Passed%20Legislature/1495-S.PL.pdf

[2] See http://www.amchamindia.com/AMCHAM-UCA-Member-Advisory.pdf

[3] See http://www.martindale.com/government/article_Anand-Anand_1433598.htm

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