PepsiCo has sued four Gujarati farmers for infringement of its rights in the “Lay’s potato variety” under the Protection of Plant Varieties and Farmers’ Rights Act, 2001 (hereinafter referred to as “Plant Varieties Act”). The multibillion dollar conglomerate has registered the potato variety used in the making of the famous Lay’s chips under the Plant Varieties Act in India and has moved the court for infringement of its rights by the Gujarati farmers cultivating the said potato variety without license. The Ahmedabad commercial court has granted an ex-parte interim injunction against the said farmers and has appointed a commissioner to prepare an inventory, take samples and send them to a Government lab for analysis. The affected farmers have appealed to the Registrar appointed under the Plant Varieties Act to make submission in court on their behalf and fund their legal costs through the National Gene Fund, taking recluse for their actions under Section 39 of the Plant Varieties Act which states that a farmer is entitled to sow, share and sell his farm produce including seed of a variety protected under the Act so long as he does not sell “branded seed”. With farmers’ rights on one hand and breeders’ rights on the other, the case is treading on a thin line in between. It is yet to see if the Court can strike the right balance!

Christian Louboutin, the internationally renowned designer of high-end luxury footwear, famous for its iconic “red sole” shoes, sued webpage www.darveys.com (hereinafter referred to as “Darveys”), which dealt with the sale of luxury products to its customers including Christian Louboutin shoes. Christian Louboutin not only contended that its registered trademarks were infringed by Darveys, but it further alleged that the products sold were counterfeit. Darveys defended the claims by stating that they were just an intermediary and had no relation to the products sold online as the products were sourced directly through sellers from India and abroad. However, the Court observed that unlike “intermediaries” as defined in the Information Technology Act, 2000, Darveys plays an active role in the process of sale of its products on its website. The said website as such is a closed network where the products are sold exclusively to its members alone. On a closer perusal, the website guarantees the authenticity of the products sold, and stores them in its warehouses before delivery, which indicates that its role is more than a mere link between the vendor and the buyer. The role played by Darveys here is thus, not a typical role played by an online platform as an aggregator or facilitator of transactions. The Court opined that in order to claim immunity from liability as an intermediary, an online platform must inform upon knowledge of counterfeit products being sold on its website to its customers. Owing to this active role, the Hon’ble Court ruled in favour of Christian Louboutin. This ruling has been welcomed as it prevents e-commerce portals from escaping liability by claiming immunity as provided by the safe-harbour provision (Section 79) of the Information Technology Act, thereby protecting the interests of original manufacturers and buyers.

Turns out that it can’t! The European Court of Justice (ECJ) has recently given a preliminary ruling that "taste" cannot be a subject matter of copyright in the case of Levola Hengelo Bv v. Smilde Foods. Levola Hengelo is a Dutch cheese producer and owner of the "Heksenkaas", a cheese dip comprising of cream cheese and fresh herbs. The dip was originally created by a Dutch retailer of fresh vegetables and produce in the year 2007. By virtue of an agreement concluded in the year 2011, he transferred his intellectual property rights in his creation to Levola. Smilde on the other hand, has been manufacturing a product called "Witte Wievenkaas" for a supermarket chain since the year 2014. Levola alleged that its copyright in the taste of "Heksenkaas" has been violated by Smilde and subsequently initiated infringement proceedings before the Gelderland District Court, Netherlands. Levola contended that the particular taste of its product is its intellectual creation which fell within the meaning of "copyrightable work" under the Dutch Copyright Laws. However, the question as to whether a copyright can subsist in the taste of a spreadable cheese was referred to the ECJ by the Dutch Court.

The ECJ opined that protection of subject matter of copyright is based on the authority’s ability of clear and precise recognition, with the absence of subjectivity during identification of the subject matter. However, a food's taste is purely subjective and varies from person to person. Therefore, as such, the Court precluded taste of a food product from being copyrightable. Food manufacturers should now take note of this and consider other means of protection of intellectual property rights namely trade secrets and patents!

Its celebration time for the farmers of lower Assam, for their Magical 'Boka saul' , a staple breakfast for centuries, gets a GI tag from the Government of India's Intellectual Property Office! In Assam, rice occupies a special place on dining tables, so much so that the Assamese have rice even for their breakfast. The boka saul (mud rice), kumol saul (soft rice), and bora saul (sticky rice) are some mentionable favourites.

'Boka saul' (Oryza sativa) is a paddy variety grown in parts of lower Assam. These crops are sowed in June and harvested in December. The 'Magical' element of this rice is that it requires no fuel, which makes it different from other varieties of rice. It does not require boiled water or any pressurised cooking for its preparation. A simple task of soaking the rice in cold water for an hour would make the rice grains swell up. The locals enjoy it best by mixing it with curd, jaggery and banana to fill up their stomach before an entire day out in the fields. It has a high nutrition content of 10.73% fibre and 6.8% protein, according to a study submitted by the Guwahati University's Biotechnology department.

The Boka saul rice is organic in nature and generates a cooling effect to the body when consumed. During flood times, this rice served the purpose of being an 'Emergency food'. This GI tag will help commercialise this special variety and expand its consumption beyond Assam. The GI is valid up to July 2026.

A former General Electric (GE) Engineer and a Chinese businessman were charged with economic espionage and conspiring to steal GE’s trade secrets surrounding turbine technologies to benefit People’s Republic of China. According to the indictment, Zheng, while employed at GE Power & Water in New York, exploited his access to GE’s files to steal GE’s proprietary design models, engineering drawings, configuration files, and material specifications related to GE gas and steam turbines. Zheng emailed these stolen GE files to his business partner in China. The stolen trade secrets were used to advance their own business interests in two Chinese companies which research, develop and manufacture parts for turbines. It was alleged that two perpetrators received financial and other support from the Chinese Government and coordinated with Chinese government officials to enter into research agreements with Chinese state-owned institutions to develop turbine technologies. They were therefore charged with economic espionage as well. The case is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant US Attorney Rick Belliss, and National Security Division Trial Attorneys Jason McCullough and Matthew Chang.

A dispute that arose between Hindustan Unilever’s (the plaintiff) “Fair and Lovely” and Emami’s (the defendant) “Fair and Handsome”, was decided by the Hon’ble Delhi High Court this March 2019. The plaintiff moved the Court when the defendant’s latest commercial for its product, Fair and Handsome was aired on television, pleading that the said commercial was damaging the reputation of their brand as well as infringing their trade mark. The impugned commercial denoted the plaintiff’s product as “Ladkiyon waali Cream” (“Cream for girls” in Hindi) although it was alleged by the plaintiff that 30% of its product’s users were men. One of the primary stances taken by the plaintiff to allege that the product termed “Ladkiyon waali Cream” was that of the Plaintiff’s, was the adoption of a “pink and white tube” in the commercial, which is unique to the plaintiff’s flagship product “Fair and Lovely”.

The defendant contended by stating that the plaintiff’s website contained an entire tenor of literature for the “Fair and Lovely” cream that had a positive impact on the skin of women.

The Hon’ble High Court, in its judgment, rejected the plaintiff’s plea of product disparagement and trade mark infringement, by stating that the defendant had rightly pointed out the fact that the plaintiff themselves projected their brand as that for women. The Court further noted that the plaintiff had admitted to selling “Men’s Fair and Lovely” which advanced the defendant’s case. With regard to the infringement of the plaintiff’s trade dress, the Court further stated that the defendant’s tube had a hazy tint of pink with the white being more dominant and also did not have a dual face logo, thereby resulting in no infringement.

Our analysis: “ALL IS NOT ‘FAIR’ IN IP WAR”

It is well known that advertisers tend to compare the essential features of their products with those of their competitors while making advertisements. Such comparisons are conducted with an intention to secure a competitive edge in the market. Keeping in mind the growing competition and the importance of protection of one’s brand, it becomes necessary to showcase the fine line between comparative advertising and product disparagement. The former involves comparing certain essential attributes between rival/competitive products whereas the latter occurs when such comparative advertising goes a step further in the nature of a libel or a slander against the rival product. A tradesman is allowed to boast about the features of his product for the purpose of promotion by comparing his products with those of his competitors but at no circumstance can he use this opportunity to denigrate his competitor’s products.

Comparative advertising is only permissible if it satisfies certain parameters. The Advertising Standard Council of India (ASCI) has laid down few thumb rules stating that comparative advertising is permissible so long as they are in the nature of public enlightenment and vigorous competition.

The Trade Marks Act, 1999 (hereinafter referred to as “the Act”) has enumerated under Section 29(8) that an advertisement is said to infringe a registered Trade Mark if it is-

• contrary to honest practices in industrial or commercial matters; or
• detrimental to its distinctive character; or
• against the reputation of the Trade Mark.

Further, Section 30(1) of the Act provides a defence for the use of a Trade Mark in comparative advertising stating that an advertisement would not be considered as infringing if they -

• are in accordance with honest practices in industrial or commercial matters; or
• do not take an unfair advantage of or be detrimental to the distinctive character of a Trade Mark.

Advertisements that do not violate the above provisions and state facts that are true do not fall within the realm of product disparagement. The reason is simple, the consumer has the right to be aware of a product’s ingredients, nutritional information or any restrictions imposed on its consumption while purchasing a product. The Act permits comparative advertising by means of using another’s trade mark but restricts the advertiser from product disparagement as such act would fall under unfair trade practices.

Koninklijke Philips Electronics (“Philips”), a global electronic corporation, had filed two suits claiming infringement of its patent (Patent No. 184753) relating to channel (de)coding technology used for DVD video playback function in DVD players. Philips further claimed that the said patent is a Standard Essential Patent (SEP), initially adopted as a standard (DVD Video Standard and The DVD ROM standard) by the DVD Forum and subsequently adopted by the Standard Setting Organisations (SSOs) ISO/ IEC 16448 (2002) and ECMA (2001). As the suit patent is an SEP, any entity interested in manufacturing a DVD player has to seek license from Philips to use the invention protected by the patent.

In both suits, Philips alleged that the defendants, local Indian manufacturers of DVD players, utilised Philips’ SEP without obtaining a valid license, thereby infringing the said SEP. Philips claimed that the DVD players sold by the defendants’ employed decoders especially meant for decoding contents stored on optical storage media in accordance with the methods described in Philips’ Indian patent 184753. The two suits were consolidated and common evidence was led.

Points of contention in the suit and the corresponding analysis and judgement of the Court:

Validity of the patent IN-184753: The defendants challenged the validity of the suit patent, contending that the invention claimed is an algorithm, and therefore is not patentable as per section 3 (k) of The Indian Patents Act, 1970. However, as this was not pleaded by defendants in their written statement, the Hon’ble Court did not consider the argument. Also, Philips’ contended that the suit patent claimed a decoding device which is a physical object and not just an algorithm. During cross examination, the expert witness of Philips verified that the decoding device is a physical component, i.e. a chip, which works with an optical drive next to it, demonstrating that the patent claimed a circuit board comprising a chip and therefore valid within the meaning of section 3 (k) of the Act.

Essentiality of the patent IN-184753: The defendants challenged the essentiality of the suit patent by stating that there were no SSOs in India and also in the absence of an SSO, Philips’ invention was not recognised as an SEP by any Government Authority in India. The defendants further contended that DVD Forum is not an independent body and is largely influenced by Philips. However, to prove essentiality of the suit patent, Philips relied upon the ‘essentiality certificates’ granted to the suit patent’s corresponding US and European patents, the veracity of which was in turn questioned by the defendants. The Court, however, did not examine the validity of these ‘essentiality certificates’ holding that Philips had discharged its burden of proof by producing the evidence of essentiality. The Court further stated that the standard being adopted by ECMA and ISO, which are recognised SSOs, is sufficient to prove essentiality of the patent. With regard to the defendants’ contentions that there are no SSOs in India and that the patent was not recognised as an SEP by any Government Authority, the Court stated that the standards adopted by ECMA and ISO are available in public domain (their respective websites) and can be accessed easily even in India, and can therefore be read in evidence.

Infringement of the patent IN-184753: Philips proved infringement of its suit patent by the defendants’ DVD players through tests devised specifically for the purpose of determining the presence of EFM (eight to fourteen modulation) + demodulation technique and confirmed that the defendants’ DVDs were using the said technique, thereby infringing the suit patent. However, the defendants claimed that they assembled DVD players with parts, including the chip, purchased from legitimate sources and therefore, by the doctrine of exhaustion, did not cause infringement. The Court rejected the application of the doctrine of exhaustion in the present case as the defendants had failed to establish that the vendors they purchased the chips from are licensees of Philips.

Defendants’ knowledge of Philips’ patent and its licensing programs in respect of use of the SEP: The authorised representative of the defendants’ was an ex-employee of Philips and therefore the Court decided this issue in favour of Philips.

Anti-competition and Philips exercising monopoly to earn exorbitant profits by creating patent pools: The defendants contended that the manner of fixing royalty/ license fee by Philips is an anti-competitive practice and therefore could not be decide by the civil court as per Section 61 of the Competition Act, 2002. Philips disputed the same by stating that the royalty is determined on globally accepted FRAND (Fair, reasonable, and non discriminatory) principles. The Court rejected this argument, as it has already been settled in Telefornaktiebolaget Lm Ericsson (PUBL) vs. Competition Commission of India (CCI) and Ors. that the CCI and the civil court operate in different spheres and offer different remedies, therefore, an abuse of dominant position under Section 4 of the Competition Act is not a cause that can be made a subject matter of a suit or proceedings before a civil court.

Determining license fee and decree of damages and other reliefs: Philips argued that the value of royalty must be based on the entirety of the patent pool and not just based on the suit patent as the rate is not fixed based on the suit patent but on the basis of sale of the DVD player as a whole. Defendants stated that the royalty rates fixed by Philips was a breach of FRAND licensing terms as there is no evidence in respect of determination of the royalty. There was no analysis in the judgement about the scope of FRAND terms and how the court should determine royalty rates based on FRAND terms. The court relied on the US Federal Court’s decision in Commonwealth Scientific and Industrial Research Organization vs. Cisco Systems, Inc. to conclude that the royalty rates may be based on informal negotiations, and in the absence of a countervailing methodology by the defendants, allowed the royalty rate to be fixed at USD 3.75 from the date of institution of the suits till 27th May, 2010 and from 28th may, 2010 at USD 1.90 till 12th Feb, 2015.

Punitive damages: The Court, considering the conduct of the defendants as well as the fact that the authorised representative of the defendants was an ex-employee of Philips, held that he is liable to pay INR 5,00,000 as punitive damages. A decree of actual costs incurred by Philips including Court fee, the Local Commissioner’s fee and lawyer’s fee was also passed in favour of Philips. However, no injunction was granted considering that the suit patent’s validity expired in 2015.

The petitioner, M/s. Khushi Ram Behari Lal filed an appeal at the Delhi High Court, challenging an order passed by Intellectual Property Appellate Board (IPAB). The impugned order by IPAB had upheld the rejection of the petitioner’s application to register its trade mark “TRAIN” under Class 30 before the Registrar of Trade Marks.

Brief background of the case:
The petitioner had been using the mark “TRAIN” with a device of a train to sell its rice since 1978. In order to acquire statutory rights in the said trademark, the Petitioner filed a trade mark application for the same in 1993, which was later advertised in the Trade Mark Journal in 2000. The respondent filed a notice of opposition objecting the registration of the said mark on the ground that the respondent has been engaged in the business of selling rice under the trade mark “TRAIN”. The opposition was decided in favour of the respondent (by virtue of prior adoption) by the Trade Marks Registry and the registration was refused. The Petitioner then appealed to the IPAB on the main ground that the respondent’s invoices to prove use of the mark “TRAIN” were fabricated. The IPAB opined that although the invoices did seem to be suspicious prima facie, the validity of the respondent’s trademark was not in question in the present case and therefore this discrepancy did not further the case of the Petitioner that its mark can be allowed registration. The IPAB therefore upheld the decision of the Trade Marks Registry and dismissed the appeal.

Analysis and Judgement of the Delhi High Court:
The Hon’ble High Court pointed out that both the Registry as well as IPAB missed certain fundamental flaws in the case:

• the respondent tried to prove his use of trade mark through forged and fabricated documents;
• while the respondent’s mark was a word mark, the petitioner’s mark was a label mark having several distinguishing features – the likelihood of confusion was decided without comparing the competing trade marks as a whole;
• special circumstances exist in favour of the petitioner as the petitioner has already accumulated goodwill and reputation in the mark, thereby attracting the Registrar’s discretion under Section 12 of the Trade Marks Act, 1999 for honest concurrent use;
• the goods of the petitioner had goodwill and reputation in domestic as well as the international market on account of superior quality while the respondent was a dealer based in Amritsar;
• the IPAB solely relied on a copyright registration of the respondent for its competing mark, for proof of use of the said trade mark.

Therefore, in view of the above facts and the legal position in relevance to the same, the Hon’ble Single Judge set aside the impugned order of IPAB and ordered the petitioner’s trade mark application to proceed for registration. This case has helped answer the question “if a copyright registration of an artwork alone can serve as proof of usage of a trade mark” in the negative.

The Plaintiff, Travel Blue Products India Pvt. Ltd., filed a suit for design infringement under the Designs Act, 2000, against the Defendant, Siddhivinayak Enterprises, in the High Court of Bombay, for infringement of design and passing off of the Plaintiff’s "Travel Blue Tranquillity Neck Pillow" (hereinafter referred to as “Tranquillity Pillow”).

Brief facts of the case:
The Plaintiff’s Tranquillity Pillow was designed to be a first of its kind ergonomically styled foldable pillow. The ergonomic design could be described as a smooth dipping curve at the head of the pillow to cradle the nape of the human head, with raised sides to support the face below the chin. It helped distinguish the Tranquillity Pillow from the generic neck pillows available in the market. The Plaintiff has obtained design registrations for the Tranquillity Pillow in India (vide design registration #281315), Europe, Republic of China, and Australia.

The Defendant started selling its product, which was a fraudulent imitation of the Tranquillity Pillow on Amazon as well as its own online portal, from around December 2018. The Plaintiff noted that the striking similarity of the impugned product to Tranquillity Pillow, led to confusion in the minds of the consumers, as many consumers took to the Amazon portal to comment that the impugned product was a replica of the Tranquillity Pillow. The Plaintiff immediately issued a cease & desist notice as its design rights in the Tranquillity Pillow were blatantly infringed. However, neither did the Plaintiff receive a reply to the notice nor did the Defendant cease to sell the infringing product. Therefore, the present suit was filed. The Defendant’s chief contention in the suit was the Plaintiff’s design was “functional” and therefore the design cannot be accorded protection under the Designs Act, 2000.

Analysis and Judgement of the Bombay High Court:
The Hon’ble Judge noted that the Defendant had not disputed the similarity of the impugned product to the Plaintiff’s Tranquillity Pillow, and on prima facie examination of the two products, it was noted that the impugned product was indeed a replica of the Tranquillity Pillow.

The Hon’ble Judge further stated that the Defendant’s contention that the design was “functional” was misplaced as for a defence of functionality in a design case to succeed, the Defendant is required to show that the function can be performed by that design alone, i.e.,if the same function can be performed by other designs as well, it is not sufficient to prove the functionality of the said design. Therefore, as there was no merit in the defence raised by the Defendant, the Hon’ble Court granted an interim injunction pending the hearing and final disposal of the suit.