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"Animated Works" : Jollity cum Chattels ?

IPRs in Animated Works 

An article written by Shobha Menon in 2007 read as “IPR to give industry an animated look”. It briefly discussed upon the then prospects and growth of the Indian Animation Industry with the then emerging technologies pertaining to VFX and others for making animated movies and cartoon shows. The article concluded on propitious marginalia about the opportunities for making India a hub for animation with the help of IPRs relating to animations. 

Fast-forward to the current era, the Indian Animation IP production (excluding animation services) has a year-on-year double digit growth - almost double of what it was in 2012. 

The Indian animation has grown to over 100 animation character brands today, some of them being Motu Patlu, Shiva, Little Singham, Krishna, Aryan, Dabang Girls, Krish Trish and Batliboy, Jr. Gol Mall, My Bhoot Friends, icko & Super Speedo, Sab Jholmaal, Honey Bunny, Pakdam Pakdai, Rudra, Keymon Ache, Roll No 21, Super Bheem, Andy Pirki, Oye Golu, Gattu Battu, Mighty Raju, Kalari Kids, Kumbha karan, Chotti Anandi, etc. 

With a technological boost like never before, Indian media, entertainment and technology companies are growing at an accelerated pace on the back of growing acceptance of our content, especially in animation, VFX, gaming and AR/ VR. The Indian animation and VFX have gained a lot of traction among the international producers and production houses. Top Indian companies have attained leadership to create content and distribute them in new markets. 

However, every producer needs to strategize their approach for their respective IPs based on the strengths and weaknesses of the show they are producing. India has become a creator of IP and this has led to the realization that we need to protect our Intellectual Property. IP in the animation and gaming industry are the legal rights over creations and are protected by copyrights, trademarks for making better margins. 

The following are the relevant IPRs with respect to animation industry in India :-

Copyright Protection 

The most effective way of IP protection for animations would be that in the form of Copyrights. Several sections (as follows) of an animated show or movie can be copyrighted either in conjunction or separately :-

The drawings and sketches for making the animated character.

The animated character itself.

The story and/or script of the show/movie, if any.

The dialogues and songs of the show/movie, if any.

Other marketing aspects.

The Indian Copyrights Act, 1957 covers all the aspects for obtaining a strong copyright protection for the animated shows/movies, with distinct animated characters in it. Along with the statutory provisions, various judicial cases have also assisted in strengthening the Copyright protection regime for animated works. In case of DC Comics v. Towle the court opined that the ‘bat-mobile’ (the animated work) has unique qualities that gives it a different identity and provides for a special element, making it eligible for being granted with copyright. In another case of Star IndiaPvt. Ltd. v. Leo Burnett, the court opined that the animated character must have public recognition in independent life.

While copyright registration is not mandatory, given the nuances in relation to animated works, it would be prudent for filmmakers to obtain copyright registration for their key animated characters. Registration of copyright is an effective way to enforce one’s economic rights. In case of any dispute, copyright registration helps with the availability of necessary records and has evidentiary value. Proper IP Asset Management will make certain that all showings of the animated work provide global revenue to the copyright holders.

Trademarks Protection

While the copyright in a cartoon character, would eventually expire (after 60 years beyond the life of the creator) and fall into the public domain, however, the trademark does not expire after a set period of time and can live on indefinitely. The Trademark law not only protects the cartoon character, but also extends the protection to the character’s name and likeness. Animated works are precisely protected under Section 2 of the Trademarks Act, 1999 which mentions that cartoon characters, names, logos etc. are protectable as a mark. 

Along with the statutory provisions, various judicial cases have also assisted in strengthening the Trademark protection regime for animated works. In case of Disney Enterprises Inc vs. Gurmeet Singh, the Delhi HC recognised mark ‘DISNEY’ as a well-known mark. In another case of Warner Bros. Entertainment Inc. vs. Harinder Kohli and Ors., Warner claimed to have secured trademark registration in India for the word mark “HARRY POTTER” and alleged infringement by the Defendant owing to Defendant’s act of naming their film “HARI PUTTAR”, which is visually and phonetically similar to their mark. The court rejected the prayer to injunct the Defendant on the ground that the trademark HARRY POTTER is different from HARI PUTTAR.

Since the animated character being represented are mostly in a three dimensional or pictorial form on goods and services, such character can be protected under the trademark law. 

Animated works and cartoon characters are the most popular merchantable characters ever created thus fictional character merchandising is the use of fictional or cartoon characters in merchandising for commercial gains. 

Patent Protection

A considerable and significant amount of technological equipment and expertise is used to make an animated show/movie – the camera itself as well as equipment for lighting, editing, sound and special effects. Many of these technological advancements pertaining to animated works can be protected by patents. For instance, the Dolby sound system, 3D CGI imagery using revolutionary new motion-capture techniques, etc. have all been patented. However, the patent protection can be considered more of an indirect method to protect the animated work, given that it does not cover the abstract idea itself. 

With the growth of broadband, mobile technologies and emergence of digital media, the animation industry is witnessing a rapid transformation in a converging world. In this wake, IPRs and IP Asset Management is extremely important for its creators in the media and the entertainment sector, especially with respect to younger populations of India.

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CASE STUDY :- XEROX’S BATTLE WITH TRADEMARK GENERICIDE

CASE DETAILS

The Plaintiff for this case: B V Ilango 

The Defendant for this case: Rank Xerox Ltd. & Ors.

Court: IPAB

Decision Date: 21st September of 2012

INTRODUCTION

Bigger are the brands, greater is the need for protection from not just infringement and falsification but also “trademark genericide”. This concept isn’t much talked about but this problem exists more than it is thought to be. For example- nowadays if one wants to search something, “Google it” is a common phrase used in day to day conversations. Similarly Zipper, Aspirin, Frisbee, sellotape etc. they all share a common fate of being mistaken as the product itself rather than identifying the Source. This is exactly what trademark genericide is.

While “Google” has held on to their trademark and have avoided genericide in the case of “Elliott v. Google Inc.”. In 2017, Google had to actually face intense proceedings to prove that their customers in the market still identify them as search engine and that their mark is still relevant and hasn’t become synonymous to “surfing the internet”. In this case it was observed that a trademarks don’t become generic just like that. In fact only the courts can declare it to be generic. A certain David Elliot tried to register 763 domain names which included the search engine “Google”. He filed a suit stating that Google is primarily a substitute for “internet searching”. Thus, it’s generic.

Eventually the jury was not convinced that Google had become generic as Google won the UDRP proceedings. They won on various grounds including the evidence of that fact that the domains were being registered in bad faith. Google presented public surveys to the Court in order to show that that the public still perceived it as one of the search engines. In the Indian context “Xerox” happens to be a glaring example of trademark genericide. This article attempts to explore this case.

BACKDROP OF THE XEROX CASE

Xerox is actually a proper trademark and is not synonymous to photocopying process. The Company name is Rank Xerox Ltd. this company has faced a long running battle to stop its name from being declared as generic. This trademark is registered worldwide. But sadly it seems to have become a victim of its own fame as it was understood as a common verb in some parts of the world. This company actually just manufactured the machines used to photocopy and print material. However, in 2003 this company was faced with great deal of difficulty when it realised that its brand is diminishing in value. That is exactly what the early stages of trademark genericide looks like. 

Firstly, the brand value diminishes as the general public start using it in their everyday speeches and overtime there is an absolute decline in terms of recognition of the brand name at all. Finally, the brand name becomes synonymous to the product or process it used to identify the source of and loses its distinctiveness, the very character that made it distinct in the first place.

The most interesting part of this case was that the IPAB was faced with the issue that “Whether a seemingly generic term like Xerox remain a registered trademark under the Trade Marks Act, 1999 or not?”It is also rather imperative to note that the owners of the company put in legitimate efforts to prevent “Xerox” from being declared as generic. They made efforts since 2003. We shall find out in the course of this article that result of these efforts.

CASE FACTS

A few rectification applications were filed seeking the removal of “XEROX” as a trademark. The applicant went as far has filing several volumes of papers including rulings of various High Courts, cause lists etc. from foreign jurisdictions and even Indian circulars to show evidence of their claim that “Xerox” has become generic. The registered proprietor on the other hand filed various evidences to show that it had arrested the genericide by preventing the inappropriate use of the word “Xerox”. They issued a number of Cease and Desist Notices to various shops and even Government Departments.

The interesting turn came when the Government departments responded saying it was an “inadvertent mistake”. This shows how far the public didn’t know the background “Xerox” held. The owners of the mark held numerous campaigns in order to establish amongst the public that they hold trademark over “Xerox” and that it is not synonymous to photocopying.

ARGUEMENTS MADE

The applicant filed voluminous evidences to support their claims. The IPAB in fact appreciated the effort taken by the applicant as all evidences were legitimate and relevant. The applicant relied on the “Enrique Bernat FSA v. Guadalajara Inc.”, where a person wasn’t permitted to monopolise the term “Chupa”, which meant “lollipop” in Spanish.

The point they stated was that since Xerox’s situation corresponds to that of “Chupa”, it must be declared as generic. The proprietor objected to the same and stated that in no way this applied to the case as an alternative word “photocopy” was still understood and existed. Thus, failing the test of “Publici Juris”.

Additionally, the respondent also proved their sincere efforts to maintain the distinguishability of the mark. They produced various responses of their Cease and Desist Notices by Government departments and Port Trusts who agreed to delete the word “XEROX” and instead include “photocopy”.

IPAB’s DECISION

The IPAB came up with interesting views with regard to the applicant’s argument which included reliance on the Enrique Bernat case. It held that this case was inapplicable on facts. The IPAB stated that “Chupa Chups” case, giving exclusivity to ‘Chupa’ or lollipop would only prevent makers of lollipop in the market from entering the market with “chupa” as name of their company or product. On the other hand in the Xerox case none of the competitors ever complained about the existence of the mark till date. The IPAB actually accepted the arguments of the respondent regard the existing word (photocopy) and also noted that it was still used and understood separately by competitors which weighed against the arguments of the applicant.

Thus, it failed the test of “Publici Juris” which means the mark still sustains. There were 3 main points that gave Xerox a clear cut win. Firstly, the Exclusive rights of the trademark held by the Respondents (Xerox) were publicly accepted. Secondly, the mark existed on the Register for long which shows the efforts made to renew the trademarks from time to time. Lastly, the presence of the original names and its separate understanding amongst the public.

The IPAB also recognised the fact the Xerox had taken sincere efforts by using methods like “Trademark Policing”. Policing unauthorized uses of their trademark really helped their case.

The background of this case gives us an interesting proposition that Genericide can be battled through trademark Policing and prevention of naked licensing. However, does it guarantee a long term solution? This question still remains unanswered. However, on a personal note I believe there is no one time solution. As Xerox sets an example that only constant efforts to maintain a trademark can guarantee its distinguished recognition. Additionally companies must avoid naked policing and frivolous distributors who would misuse their mark and reputation. Cease and desist notices can also help greatly. Surveys and campaigns was a unique evidence placed by Xerox which worked well in their favour.

However, there is one thing that is quite baffling. The lack of legal provisions in the entire judgement. The framework of the Trade Marks Act, 1999 was not even spoken of once. This rather leads to an uncomfortable conclusion that perhaps the IPAB (now dissolved) only perused through the voluminous evidences and forgot to consider the provisions of law.

Yet on a brighter note XEROX sustained its status as a registered mark. But the reality today still remains close to what it was in 2012, i.e. there still exists local shops which simply use Xerox as a synonym to photocopying. A realistic perusal of the market today would probably render “Xerox” as a generic mark.

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TRADEMARK OPPOSITION PROCEDURE IN INDIA

The very first step to getting a trademark registered is to application for it. However, the trademark application has to go through stages of opposition in order to receive approval from the Registrar. It is important to clear and counter all the claims of the opposition (notice).

The Trade Marks Rules, 2017 provides for the procedure as an extension to Sections 20 to 23 of Trade Marks Act, 1999.

Section 20- provides for the “Advertisement of Application”. The Registrar has to advertise the application in the Journal, once accepted or after an error in the application has been corrected or amended.

Once the examiner has reviewed the application, and has allowed its advertisement, it is advertised in the Trademarks Journal. This advertisement can be seen as an invitation to opposition (if any).

Who can oppose a trademark application?

“Any person can oppose a trademark application once it has been advertised”. It is not necessary for such a person to be a registered proprietor of any mark. He/she can be a purchaser, member of general public likely to use the mark or even a customer.

The only point for having such a light eligibility criteria or no eligibility criteria for that matter, is that the Opponent is responsible for representing not only himself/herself but the public at large and when there are “deceptively similar” in the market, it causes confusion to public, thus affecting the reputation of the existing trademark.

Rules Involved

·       Rule 9- deals with “Issue of notices”. It states that any notice related to application or proceeding must be issued by the Head of office or any person authorised by the Registrar.

·       Rule 39- deals with Manner in which the application must be advertised i.e. in the journal.

·       Rule 42- deals with Notice of Opposition which shall be filed through FORM TM-O. [As per Sub-rule 1]. This rule further states that a fee payment has to be made for each registration under each class of good (of the trademark).

A copy of the Notice of Opposition must be served to the concerned applicants within 3 months by the Registrar.

·       Rule 43- this is an important Rule as it deals with the essential requirements of an opposition Notice.

·       Rule 44- this is the next important step. This rule prescribes that a counterstatement must be filed through FORM TM-O within 2 months from the receipt by the applicant of the copy of the notice of opposition from the Registrar.

·       Rule 45- Within two months from service of the counterstatement, the opponent can leave evidence by way of affidavit as he may desire to adduce in support of his opposition, with the Registrar. He also has the right to waive this provision and not adduce any evidence.

·       Rule 46- the applicant can also adduce evidence to support his counterstatement within 2 months.

·       Rule 47- In case the applicant shows up with evidence then the Opponent must send a reply to the evidence within 1 month.

·       Rule 48- no further evidence can be submitted unless the Registrar deems fit.

·       Rule 50- once opportunity to place evidence is closed the Registrar can give notice of first hearing to the involved parties. Ana adjournment is also allowed if a party presents reasonable cause through FORM TM-M. (At least 3 days before hearing).

If applicant doesn’t show up at the hearing, the application is treated as abandoned and if the opponent doesn’t then application proceeds to registration subject to Section 19 of the Act.

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FORMS AND FEES OF TRADEMARK :- PART 2

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FORM AND FEES OF TRAFEMARK :- PART 1

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Fonts and Typefaces: Copyrightable?

The scope of Indian Copyright Law has expanded immensely with newer types of literary, dramatic etc. creations. Fonts and Typefaces are constantly under question with this regard. However, before we delve into the issue of whether Fonts and Typefaces are Copyrightable or not. Many wonder if typefaces and fonts are the same thing. To put more simply, font has become an umbrella term which is used and misused more often than not.

Typeface is a type of glyph or something that shares a common design. Example- Helvetica is a typeface. On the contrary, Font is a set glyphs within a typeface. Thus, An 8 point Helvetica is different from a 12 point Helvetica. Fonts can be big or small, bold or light etc. They are a subset of the same typeface.

Historically, the difference between font and typeface was quite essential considering the text was set by hand before it was printed. A typesetter would be used to set type letter by letter from a particular case. The same was stored in wooden drawers named job cases. Font was considered as a job case in itself.

Fast forward to today when we type letters on the Microsoft Word, the term font is more familiar to us than typefaces. Multiple fonts can be applied to a text while composing a document (such as Times New Roman, Calibri etc.). This happened due to desktop publishing, now the public treats font and typefaces as synonyms, if not completely unaware of the concept of “typeface” altogether.

Finally, to put these to concepts simply, Typefaces represent a family of fonts such as Times New Roman and font refers to the width, weight, shadow impact and style of a particular typeface giving it variation.

JURISDICTIONAL ANALYSIS ON COPYRIGHT PROTECTION FOR FONTS AND TYPEFACES

Copyright protection given to typefaces and fonts or its lack thereof isn’t really a core legal issue, yet it is significant to portray the extent of copyright protection and the technicality on which the criteria of copyright protection thrives on. To answer this question preliminarily, it is imperative that we mention Eltra v. Ringer decision passed in 1972. In this case the appellant sought to register fonts as works of art under the copyright law. The Copyright Office refused registration stating that “fonts have no elements, either alone or in a combination which can be separately identified as art work”.

Most jurisdictions don’t give copyright protection to fonts. Following are the 3 main jurisdictions where there exists a considerable level of Laws related to copyright protection.

The United Kingdom

In the UK typefaces are protected under the head of artistic works.

The “Copyright, Designs and Patents Act of 1988” enacted in the UK provides certain exceptions to copyright infringement w.r.t typefaces.

Section 54 of this Act gives three exceptions, which directs us to interpret that typefaces can be used in the ordinary course of typing or printing and it won’t be counted as copyright infringement.

Interestingly enough scholars have stated that this provision is mainly directed towards the protection of users against unnecessary liability.

The exceptions only exempt users using the typefaces as it should be in its ordinary course of typing and not people who try to sell, manufacture or distribute them.

Moreover, another significant observation is that the protection of typefaces is limited to 25 years only.

The United States

On a cursory reading of Section 101 of the Copyright Act, 1976 of USA, it is observed that extending copyright protection to typefaces is a dicey area and there is a complete lack when it comes to the language used by the drafter.

In fact the US submitted the same stance to WIPO. The US government stated that typefaces don’t enjoy copyright protection under municipal law.

However, the related software code to the typeface is copyrightable.

The Indian scenario

The Copyright law followed in India was established in 1957 and it is silent on the copyright entitlement of typefaces-designs.

On a presumptive analysis of the Copyright Act, 1957, it would seem that typefaces and fonts are not protected whatsoever.

In 2002, in the “Re Anand Expanded Italics Case”, this exact question was raised.

In this case the Copyright Board didn’t recognize fonts and typefaces as being copyrightable.

Thus, the legal position in India is clear that typefaces and fonts don’t have any copyright protection.

Copyright Board’s Reasoning

Fonts have an aspect of utilitarianism; they are the essence of letters, numbers which ultimately are the building blocks of the words that are formed using the same.

The basis for this argument relies on the established principles of copyright protection.

The main point being that fonts can only be copyrightable when the artistic aspect is separable from the it’s functional aspect. This case applied the same concept to the issue raised, further stating that no matter how artistically a text has been written, if the aesthetic embellishment is inseparable from the functional aspect, which is the letter itself then the font is cannot be granted copyright protection.

Another argument put forth is that none of the international treaties that place international standards of copyright protection such as Berne Convention, TRIPS Agreement, Rome Convention, make any explicit attempt to mention fonts and typefaces.

This point was adopted as a valid ground for denying copyright protection to fonts in the Anand case (by the Copyright Board).

One of the other arguments was that since the rights and liabilities related to copyright emerges from the Copyright Act, 1957 in India, adequate attention must be paid to Section 16 of the Act.

In the above mentioned Scaria and George article as well, the authors mentioned that any right or subject matter or its scope thereof not specifically enumerated or mentioned under the Copyright Act is to be considered as beyond its purview.

After going through a brief international perspective and the Copyright Board’s argument in the Re Anand Case, it is clear that in most jurisdictions fonts and typefaces are not protected. The UK provides a very limited protection to Typefaces. The arguments placed by the Indian Copyright Board are also quite logical. The extent of “artistic craftsmanship” and its eclipsing concept of Utilitarian theory which is the basis of copyright protection directs us to the fact that it has to be interpreted to the extent of the law unless there is an absolute need to protect typefaces. The question posed is simple but its implications have been very well discussed by the Copyright Board.

OUR STRATEGY

Filing of a Copyright Form by the applicant based on which we will be filing Form IV at the Copyright Office.

Once, the forms and the copies of the work are received we can go for e-filing.

Once form IV is prepared online, we will be sending it to the client for signatures Submitting the signed Form IV online.

Sending hard copies of 1 hard copy (print) of “Acknowledgement Slip” and 1 hard copy (print) of “Copyright Registration Form copyright work to the Copyright office.

Receiving a dairy number from the Copyright office and 30 days mandatory waiting time for any objections.

Prosecution of the Copyright. In case of Objections: In the case of any objection, a letter is sent to both the parties and are heard in front of the Registrar of Copyright.

If the objection is suspended then a verification is done by the Examiner.

Finally, the application is approved by the registrar, after which a certificate is issued.

Note: All kinds of literary and artistic works, computer program, and even websites can be copyrighted. Computer Software or program can be registered as a ‘literary work’.

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ETHICAL CAUSE OR EXPLOITATION ? The curious case of Merck Sharp & Dohme Corp & Anr Vs. SMS Pharmaceuticals Limited. Dated 20.07.2021

In India, by virtue of Section 48 of the Patents Act, 1970, a granted patent enables a patentee to exclude others from making, using, selling, offering for sale or importing their patented invention without their consent. The patentee is entitled to seek suitable relief measures in case of infringement of his/her patent.

However, in terms of the very idea of granting a patent (a major part of it being to foster innovation by research and development) certain acts of making, using, selling or importing a patented invention by a third party, even without the consent of the patentee, are not considered to be an act of infringement.

In this aspect, the Bolar Exemptions is a safeguard against patent infringement, especially significant to pharmaceutical drugs. It derives its name from the US case of Roche Products v Bolar Pharmaceuticals, wherein it was held that Bolar’s use of the patented compound for federally mandated testing was an infringement of the patent. However, soon after this judgment, the US Congress overturned the decision by enacting a law permitting the use of patented inventions in research to seek Food and Drug Administration approval.

The watershed context of the Bolar exemption in India emerged from India adopting the product patent regime in 2005. The provision subsumes research exemption as a defense, according to which, the use of a patented invention in research to generate clinic trial data for regulatory approval is not considered an act of infringement. Before the expiry of the patent term, pharmaceutical patentees have, in general, monopolistic rights over patented drugs to restrain competitors from launching generic versions of the drug in the market. This monopolistic exclusion in effect provided an opportunity to innovator companies to extend the term beyond 20 years until generic versions are launched in the market.

The generic drugs market in India has largely flourished because of the Bolar exemption which permits the manufacturers to formulate generic drugs prior to patent expiration of branded drugs.

The current case is one of the many instances where this provision of Bolar exemption has been sought as a defense against purported patent infringement.

CASE DETAILS

The Plaintiff for this case: Merck Sharp & Dohme Corp & Anr The Defendant for this case: SMS Pharmaceuticals Limited The Respected Court for this case: The Delhi High Court Coram: HON’BLE MR. Justice C. Hari Shankar Date of Pronunciation: 20th Huly, 2021

OVERVIEW OF THE CASE

Sitagliptin, an anti-diabetic drug (which is commonly sold under the brand name Januvia and Janumet) is used to lower blood sugar levels in adults with type 2 diabetes.

It is in a class of medications called dipeptidyl peptidase-4 (DPP-4) inhibitors.

It works by increasing the amounts of certain natural substances that lower blood sugar when it is high.

Sitagliptin is not used to treat type 1 diabetes (condition in which the body does not produce insulin and therefore cannot control the amount of sugar in the blood).

Sitagliptin patent has been granted to Merck Sharp and Dohme Corporation (Indian Patent Application No. 209816).

The Delhi High Court have previously adjudged that the patent Sitagliptin granted to Merck Sharp and Dohme Corporation has been infringed.

The plaintiff sought injunction against infringement by the defendant, of the plaintiff’s invention, Sitagliptin.

The plaintiff contended that the defendant by advertising, for sale, Sitagliptin Hydrochloride in its Active Pharmaceutical Ingredients (APIs) and Analytical Standards has infringed its patent.

In the present case, the Delhi High Court observed that the defendant is advertising the sale of drug Sitagliptin. The defendant affirmed the availability of Sitagliptin Phosphate for a sum of Rs. 1 lakh for 1 Kg to the investigator during an inquiry.

Further, the court opined that the plaintiff has a valid and subsisting patent for which a certificate of validity has already been granted by the court.

The court later granted an ex-parte ad-interim injunction in the favour of the plaintiff and against the defendant and the ex-parte ad-interim order continues to remain in force till date.

SUBMISSIONS ON BEHALF OF THE PLAINTIFF

The plaintiff contended that the disclaimer is merely in the nature of a tactic to enable commercial exploitation by the defendant.

The plaintiff further said that once the drug is permitted to be exported, it is impossible for the plaintiff to verify or investigate whether it is ultimately being used for the research and development purposes or is being exploited.

The plaintiff also contended that the exports of Sitagliptin by the defendant have been continuing since 2016 and almost 800 kg have been exported till now.

Ostensibly, it is difficult to treat these activities of the defendant as being aimed at research and development.

The plaintiff also stated that there is no material available which can claim that Chemo and Verben are sister concerns of the plaintiffs.

They, therefore, are third party entities, located outside the jurisdiction of this Court, against whom it would be quite impossible for the plaintiffs to proceed.

Subsequently, the plaintiff also contended that there is no compliance, by the defendant, with the conditions laid down by the Division Bench of this Court in Paras 112 and 113 of the report in Bayer Corporation.

SUBMISSIONS ON BEHALF OF THE DEFENDANT

In response to the allegations made by the plaintiff, the defendant contended that the dealings of the defendant are the result of a joint venture between the defendant and M/s Cheo AG Lugano (“Chemo” in short), for development and manufacturing of certain products, so that the products could be launched in the market after patent terms expired.

Further, the defendant also claimed that they have already obtained the due permission from Governmental and Drug Control Authorities and all the dealings of them are within the scope of patent laws.

Additionally, the defendant claimed that there is absolutely no manufacturing or production of these drugs for commercial purposes.

The sole intent of the defendant is to launch these drugs in a generic form at an affordable price after the patents granted in respect of the APIs in the said drugs expired.

The defendant further stated that it has only supplied Sitagliptin Hydrochloride as a means to conduct research and development purposes after getting the due approval by the Drug Control Authorities.

The defendant also contended that they have never sold Sitagliptin Hydrochloride in commercial quantities or to any clients who are using it for commercial purposes. Every sale of the defendant was duly licensed by the Drug Control Authorities.

Further referring to Section 107A of the Patents Act, along with the judgement of the court in Bayer Corporation v. U.O., the defendant contended that their activities and working were permissible, as the defendant was only engaged in sale and export of Sitagliptin Hydrochloride for the purposes of research and development.

The defendant in the written statement (Para 53) marked attention to the disclaimer, that is mentioned on the defendant’s website, which reads: “Some of the products may have patent rights in one or more countries and any such product having an existing patent will not be offered/sold for commercial requirements. The final responsibility with respect to the third-party patent rights lies exclusively with the buyer.”

In the end, by the present application under Order XXXIX Rule 4 of the CPC, the defendant has sought modification/vacation of the ex parte interim order dated 21st October, 2020, citing in their favour Section 107A of the Patents Act.

The defendant has also relied on the following order passed by a coordinate Bench of this court on 27th August, 2020 in CS(COMM) 195/2020, which is also related to Sitagliptin.

In the said order, the Court modified the earlier injunction order granted against manufacture and dealings in Sitagliptin, by allowing usage of the Sitagliptin API by the defendant for research and development purposes, subject to compliance with the directions, in that regard, contained in the judgement in Bayer Corporation.

THE COURT’S OPINION AND JUDGEMENT

The court stated that there can be no restraint of export of a patented invention, provided such export is for research and development purposes.

Further, it opined that the defendant’s prayer for being extended the benefit of section 107A of the Patents Act deserves to be allowed.

The court has allowed the defendant to export the API Sitagliptin to Chemo and Verben, as prayed.

For this purpose, the defendant has to file, before such export, an affidavit before this Court by clearly stating the quantities of Sitagliptin/ Sitagliptin Hydrochloride.

The affidavit shall also contain an undertaking that the exports are intended only for the purposes of research and development by the foreign buyers Chemo and Verben.

The court also gave instructions to the defendant to comply with all the safeguards contained in the judgement of the Division Bench of this Court in Bayer Corporation.

The ex parte ad interim injunction granted by the Court on 21st October 2020 stands modified accordingly.

FURTHER READING

https://iprlawindia.org/case-summary-merck-sharp-and-dohme-corp-anr-v-sms-pharmaceuticals-limited-dated-20-07-2021/

https://indiankanoon.org/doc/56196795/

https://ipindia.gov.in/writereaddata/Portal/IPOAct/1_113_1_The_Patents_Act_1970_-_Updated_till_23_June_2017.pdf

https://www.mondaq.com/india/patent/851804/indian-perspective-of-bolar-exemption

https://www.iam-media.com/patent-infringement-defences-indias-bolar-story-so-far

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