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This article is written by Priyanka Saraswat, pursuing a Diploma in Intellectual Property, Media, and Entertainment Laws from Lawsikho.com.

Introduction

The Courts may have gone virtual during the pandemic, but that does not mean that they are resting. In the past six months, the Courts have adjudicated on various interesting topics ranging from whether intellectual property rights infringement cases are bailable or not to whether the right to privacy can survive post-death. This article attempts to recap the year 2021 so far in the intellectual property rights landscape by the means of interesting and precedential judgements given by the Indian Courts and those abroad.

The Indian Performing Rights Society Ltd. v. Entertainment Network (India) Ltd., Delhi High Court

Royalty rights in underlying works in sound recordings

The case before the Delhi High Court was for adjudication based on a claim of infringement by IPRS (brought before the Court in 2001) that stated that songs infringed upon involved rights in both the sound recordings and the underlying literary and musical works and therefore separate licenses were required to be taken for all the categories. A second suit Phonographic Performance Ltd. (PPL) in a similar infringement case with similar contentions was also settled along with the first one.

The Court considered the idea of whether underlying musical works come under the purview of ‘work-for-hire’ as under Section 17 of the Copyright Act, as adjudged by a 1977 Supreme Court judgment. For this purpose, the Court discussed whether communication of sound recording also amounts to the communication of underlying works.

In the final order, the Court has stated that underlying works are not utilized when utilizing a sound recording and therefore do not incur royalty when the sound recording is used and neither is any permission required to be sought from the authors of such underlying works.

The Court relied on the 2012 Amendment of the Copyright Act for the purpose of this case that introduced a proviso to Section 17 explicitly removing from the ambit of automatic assignment literary, musical, dramatic or artistic work incorporated in a cinematograph film, as a means of bringing economic justice to the authors of such works. However, the interpretation of the Court has severely limited the scope of commercialization of the underlying works leading to the question of whether that was the intention of the legislature in bringing the amendment in the first place.

Frank Peterson v. Google LLC & Ors. and Elsevier Inc. v. Cyando AG, European Court of Justice

Online platforms are not liable for infringing works uploaded to their sites

The German Federal Court of Justice (BGH) approached the European Court of Justice (ECJ) for interpretation of the 2001 Copyright Directive in a preliminary ruling regarding the liability of online platforms and operators in case of copyrighted material that is illegally uploaded on these sites by the users. 

The issue was brought to the forefront when YouTube was sued by Frank Peterson, a music producer, in 2008 for hosting his copyrighted works uploaded by users without permission. The order of the BGH in the matter in 2015 had stated that YouTube’s conduct cannot be classified as “communication” as under Article 3(1) of the Copyright Directive. This, therefore, left it to be determined whether YouTube could be exempt from liability as under Article 4(1) of the Directive of Electronic Commerce. Additionally, a matter between Elsevier Inc. and Cyando AG on similar contentions were also brought before the ECJ and clubbed together with the above matter for consideration.

The opinion of the ECJ was that the BGH was correct in adjudging that hosting of information on its site does not amount to “communication to the public” unless the platform operator contributes to providing access to such infringing works beyond the mere provisions of hosting, especially if the platform has the knowledge of the infringement and does not take measures to delete or block access to it, expeditiously so that the possible delay does not disproportionately harm the right holder. Additionally, the Court noted that the platform must take appropriate measures to combat infringement on the site in an effective manner.

This case has brought a long-running battle between the creative industry and online platforms to an interesting and decisive turn of events and stands to be compared to India’s take under the newly formed Intermediary Guidelines, 2021.

InterDigital Technology Corp. & Ors. v. Xiaomi Corp. & Ors., Delhi High Court

Anti-anti-suit injunction in a patent infringement case

InterDigital Corp filed a suit before the Delhi High Court on 29th July 2020 for infringement of their Standard Essential Patents by Xiaomi Corp praying to the Court for determining the fair, reasonable and non-discriminatory (FRAND) royalty rates. However, before the said suit was filed, Xiaomi Corp had filed a suit for setting royalty rates before the Wuhan Court on 9th June 2020 in which an anti-suit injunction was passed against InterDigital on 23rd September 2020. It is against this anti-suit injunction that InterDigital applied for relief before the Delhi High Court.

The question before the Court was whether this anti-suit injunction was restrictive of InterDigital’s right to seek prosecution on the ground of infringement (which was not a matter of contention before the Wuhan Court) and if in such a scenario the Delhi High Court could forgo the principle of Comity of Courts by granting an anti-execution or an anti-anti-suit injunction.

Answering in affirmative, the Court granted India’s first-ever anti-anti-suit injunction stating that the subject matter of the commercial suit before them and the suit before the Wuhan Court was different and the enforcement of foreign interest cannot be given precedence over that of a domestic forum.

A common point of dissatisfaction with this order says that the Court overlooked the fact that even the infringement suit if proven, would result in the determination of FRAND royalty rates which is already the subject matter of the Wuhan case thereby overlapping the two because of which the anti-suit injunction was given and would lead to further confusions in the matter.

Golden Tobie Pvt. Ltd. v. Golden Tobacco Ltd., Delhi High Court

Arbitrability of trademark disputes

This matter examines Section 8 of the Arbitration and Conciliation Act, 1996 that talks about the power to refer the parties to arbitration where there is an arbitration clause in the agreement. Arbitrability of Trademark is a question of dispute here due to the Supreme Court’s decision in the Vidya Drolia matter that declares the issue and registration of patents and trademarks as exclusive matters of governmental functioning. The Delhi High Court in the present matter has therefore examined the same with reliance on the facts of the case.

A dispute that arose upon the termination of a trademark licensing agreement was to be referred to arbitration as per the explicit clause in the said agreement. When Plaintiff, Golden Tobie Pvt. Ltd. took the matter to Court upon termination, Defendant Golden Tobacco cited the arbitration clause, leading to the Court deliberating on arbitrability.

The Court found that, while in the Vidya Drolia matter, the Supreme Court had specifically stated that matters which directly arise from issues of Intellectual Property would not be arbitrable, the current matter was concerning the terms of the agreement and not the trademark itself. The Court concluded the right in question was a right derived from the licence agreement and not from the law on trademarks. Trademark assignment, in this case, was by agreement rather than by law, and it, therefore, did not involve any exercise of governmental functions. 

This judgment attempted to clarify the uncertainty that had arisen over the arbitrability of any disputes related to Intellectual Property Rights and clarified that the Supreme Court’s view was only to impose a limitation over matters concerning the grant or registration of a trademark.

Engineering Analysis Centre for Excellence Pvt. Ltd. v. Commissioner of Income Tax, Supreme Court

Applicability of doctrine of copyright exhaustion on computer programmes

To be able to correctly ascertain the status of a sale in this matter, the Court had to examine and interpret the Doctrine of Exhaustion of Copyrights or the Doctrine of First Sale with respect to software and other digital products and whether it can be restricted by the means of an End-User Licensing Agreement (EULA).

The Supreme Court considered two appeals arising out of High Court judgments that adjudged that the sale of software included an interest in its Copyright, which would be deemed to be income as under Income Tax Act requiring deduction of tax at source.

The Court answered in affirmative regarding the applicability of the Doctrine of Copyright Exhaustion to computer programmes by examining the legislative intent for removing the phrase “regardless of whether such copy has been sold or given on hire on earlier occasions” from Section 14(b)(ii) in the Copyright Amendment Act, 1999 as a statutory recognition of the doctrine of exhaustion specifically concerning computer programmes. However, the Court also stated that a EULA can impose reasonable restrictions, therefore overriding the doctrine of exhaustion. Additionally, the Court held that conveying the product to a distributor does not amount to the first sale.

The recognition of the doctrine in software aligns India with the rest of the world and also sheds light on the effect of EULA on it.

Patent Case G01/19 Applicant: Bentley Systems (UK) Ltd., European Patent Office Enlarged Board of Appeal

Patentability of simulation software

Under Application No. 03793825.5, Bentley Systems applied for a system of computer-implemented simulation of the movement of an autonomous entity such as a pedestrian crowd through environments. The said application was rejected on grounds of lacking an inventive step since simulations do not contribute to the technical character of an invention.

In an appeal, the Enlarged Board of Appeal considered the application based on the exclusion of patentability of computer programmes as per Article 52(2)(c) of the European Patents Convention (EPC), if the computer simulation creates a problem-solving technical effect that goes beyond the simulation’s implementation to a computer.

The Board in its decision agreed to apply the COMVIK approach to computer-implemented simulations in the present dilemma which adjudges the inventions that have both technical and non-technical features in it by only considering the technical or structural parts for assessment of inventive steps. The technical effect can also occur by the means of computer-implemented processes and does not always require a link with physical reality.

The decision of the Board is important for the Indian perspective due to the similarity in wording of Section 3(k) of the Patents Act, 1957 to the EPC provision in question and can be taken into context for patent claims related to simulations under the Indian laws as well.

Google LLC v. Oracle America, Inc., United States Court of Appeals

The doctrine of fair use triumphs over copyright ownership

In a dispute that lasted for more than ten years, coming to a fruitful end in April 2021, Google, in developing its Android system, had made use of a substantial amount (over 11,500 lines) of the Application Programming Interface (API) of the Java Programming language that is currently owned by Oracle America.

The contentions before the Federal and District Courts that finally led to a Certiorari writ before the Supreme Court was whether due to the global nature and extensive use of the Android systems, this act infringement could be considered under the Doctrine of Fair Use for public interest and further innovations of smartphone technology. Another question that was deliberated upon during the early years of this dispute was whether APIs, being computer software, was copyrightable. The answer was later assumed to be in the affirmative to answer the greater fair use question.

The judgment that was divided 6 to 2, was of the view that the Android system was never supposed to be a market substitute for the Java SE and therefore did not contribute to any market harm to Oracle America. Additionally, even though the number of lines copied was substantial, it could still be covered under the doctrine of de minimis. Therefore, focusing on the creativity-related harm that could be caused to the public, the Court ruled the case in favour of Google by declaring the act as fair use.

The dissenting minority ruling in the judgement is important in its stance on the legality of the copyright laws and the focus on the copyrightability of software. The fact that the judgement skews in favour of innovation instead of rights could lead to a reinterpretation of the intellectual property rights involved.

Jorawar Singh Mundy v. Union of India, Delhi High Court

Right to be forgotten versus the right to be informed

The Right to Erasure or the Right to Forgotten gives a person the right to delete personal data related to them from the public domain. Statutorily, the first law to recognise this was the EU General Data Protection Regulation under Article 17. Indian Courts have attempted to define and interpret this law, balancing between the right to be de-linked from a source of information and the right to information of the general public.

In the present case, a person acquitted in a case under the Narcotics Act, 1985 applied before the Court for the judgment to be removed from online platforms in the exercise of his right to privacy. Therefore the Court deliberated upon whether the removal of the Court order infringed upon the duty to maintain transparency in judicial records.

In an interim order, the Court observed that the petitioner had been ultimately acquitted of all charges in the case and references to a narcotics case could lead to irreparable prejudice in his life. Therefore, agreeing on his entitlement to interim relief while the case was argued further, the Court ordered Google to remove the judgment from the search results while India Kanoon was ordered to block the judgment from being accessed by using search engines such as Google or Yahoo.

The opinion of various Indian Courts on the Right to Be Forgotten swings in both directions with no consistent outtake and therefore will be dependent on the observations of the Courts before which the matters come. With the Personal Data Protection Bill, 2019 still being in the pipeline, the statutory fate of the right remains unstable with the conflicting observations of the judiciary.

Krishna Kishore Singh v. Sarla A. Saraogi & Ors., Delhi High Court

Right to privacy and post-mortem personality rights

In a petition filed by the father of late actor Sushant Singh Rajput, relief was sought against the defendants to injunct them from using the late actor’s name, likeness, lifestyle or any similar thing in any forthcoming films or ventures as they would be violative of his personality rights and no permission had been taken from his legal heirs. The prayers also included a request for an Ashok Kumar order against any such future acts by any persons.

In coming to a decision the Court combined privacy rights and personality rights since the personality rights arise out of the right to privacy. The Court also considered whether these rights are perpetual and transcend the event of death. Relying on the opinion in the landmark Puttaswamy v. Union of India case, which states that the right to privacy emerges with the individual and extinguishes upon his death, the Court extended the rule to personality rights. Therefore, no injunctive relief was granted in the case, and an appeal has been favoured on this order by the plaintiff.

The existence of post-mortem personality rights has been argued and adjudicated upon by many forums in the country in various cases such as Jayalalitha’s biopic case, along with various important cases on the right that create a wide network of rules in the matter. In the presence of such extensive material, the Court seemed to have overlooked the factual arguments in favour of the legal ground these rights currently stand on.

Piyush Subhashbhai Ranipa v. The State of Maharashtra, Bombay High Court

Intellectual property infringement cases non-bailable

The Court in this matter deliberated whether offences under the Copyright Act and the Trademark Act that are punishable with imprisonment which “may extend to three years” were bailable or not. The basis of the issue was the statutory provision under CrPC that classifies non-IPC offences punishable with “imprisonment for less than 3 years” as non-cognizable and bailable while offences punishable with “imprisonment of 3 years and upwards” as cognizable and non-bailable.

In December 2020 Jain Irrigation System (Complainant) accused Piyush Ranipa, CEO of Tera Flow Pipes (Applicant) of infringing their trademark “Jain HDPE” and dealing with products bearing the mark. The present case arose when Piyush Ranipa filed an anticipatory bail application in the matter. 

The Bombay High Court relied on the decision in Nathu Ram v. State of Rajasthan where it was held that offences, where the punishment may extend up to three years, would fall in the category of cognizable and non-bailable, declaring that the matter was no longer res-integra.

However, the Court does not take into account the impact of such a judgment on cases where free speech could lead to possible infringement of copyright and trademark-based rights leading to stifling of creativity and legitimate criticism.

Conclusion

The year is only halfway through and the Courts have come up with some very interesting judgments, some of which have the making of really opinable debates. What is now left to see is how these precedents and persuasive opinions of the Courts are taken and analyzed by their peer forums and the higher Courts, and whether they will stand the test of the times to come. Laws and regulations are always balanced on a tightrope between the intentions of the creator and the understanding awarded to them over the years by use and deliberation, and sometimes the distance between the two becomes a wide chasm. The need of the hour in these situations becomes clear and indisputable interpretations that do not harm the right holders and the citizens.

References


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