Legality Of Parallel Imports Vis-À-Vis Trade Marks Law

The term "parallel imports" strikes a chord of discord amongst brand owners and the general public today.
In fact, the moniker "grey market goods" is also very misleading, as the term in itself implies that the
goods are somehow "illegal" or "not original", when it is not so, as it is only the distribution channels and
the source that differs.

Definition

Parallel importation can be defined as the importation of goods outside the distribution channels
contractually negotiated by the manufacturer.1 In more simplistic and practical terms:

 Mr. A is an importer in India.

 A hypothetical product, say a book, is available for sale in India for INR 2,000, but the same is
available for sale in Bangladesh for INR 1,200.
 Mr. A legally imports the said book from Bangladesh and sells it at a profit margin in India.

The above example illustrates the basic concept of parallel importation. However, the concept in itself is
far from simple from a legal point of view. In order to look at the term "parallel importation" from a legal
point of view, it is imperative to be familiar with the concept of Intellectual Property Exhaustion of
Rights Principle of Exhaustion

Exhaustion herein refers to a "limit" to intellectual property vis-a-vis sale of an item. This limitation is
often referred to as the First Sale Doctrine. This limitation is predicated on the theory that the owner of a
good "A" (the name/logo for which is trademarked) loses control over the future sale of the good, whether
by further sale, rental, etc., the brand owner "exhausts" its exclusive right to sell the said good "A".

However, the above is only a general idea about the principle/doctrine as there are different types of
exhaustion –

i. International Exhaustion

Under this doctrine, the brand owner exhausts its rights when the product is legally sold (under
the brand holder's consent) in any part of the world. Therefore, this theory basically envisages the
world as one market, without any territoriality.
ii. National Exhaustion

As opposed to the above-mentioned international theory, this theory limits the "market" to the
national/domestic market. Therefore, under this doctrine, once the product is legally sold in the
domestic market, the brand owner exhausts its rights and cannot claim any further profit arising
out of the said product. However, in this regard, based on the country and its laws, the brand
owner may be able to prevent "unauthorised" import of its original goods into the country.
iii. Regional Exhaustion

This doctrine basically differs from the above two on the basis of the "market". In fact, this is
akin to national exhaustion, however the market herein refers to a specified region/or a group of
countries, rather than a single country. Such a "group" need not explicitly be bound by a specific
 geography. A group of countries such as the Commonwealth may also adopt such a doctrine.
The most prominent example of the doctrine of regional exhaustion is the European Union,
wherein exhaustion covers the European market.

The relationship between Exhaustion and Parallel Imports

The legality of parallel imports is largely governed by the doctrine of exhaustion being followed by
different countries. For example, a brand owner has more leeway/freedom in a country following the
principle of national exhaustion, as compared to international exhaustion, as the rights of the brand owner
are exhausted "internationally", therefore theoretically the brand owner would not be able to oppose the
import of its products into other jurisdictions.

Trade Marks Act, 1999, on Exhaustion

Section 30 (3) - Where the goods bearing a registered trade mark are lawfully acquired by a person, the
sale of the goods in the market or otherwise dealing in those goods by that person or by a person claiming
under or through him is not infringement of a trade by reason only of-

a. the registered trade mark having been assigned by the registered proprietor to some other person,
after the acquisition of those goods, or
b. the goods having been put on the market under the registered trade mark by the proprietor or
with his consent.

Section 30 (4) - Sub-section (3) shall not apply where there exists legitimate reasons for the proprietor
to oppose further dealing in the goods in particular, where the condition of the goods, has been
changed or impaired after they have been put on the market

The question in Section 30 is whether the word market refers to National Market or International Market.
You would also note from the above that the provisions are unclear about what principle of exhaustion
India adheres to vis-à-vis trademarks. However, it is evident that parallel imports are prima
facie permissible as per Section 30 (3) (b) of the Act.

Trade Marks Act, 1999, on such Infringement

Section 29(1) - A registered trade mark is infringed by a person who, not being a registered proprietor or
a person using by way of permitted use, uses in the course of trade, a mark which is identical with, or
deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark
is registered and in such manner as to render the use of the mark likely to be taken as being used as a
trade mark.

Section 29(6) - For the purposes of this section, a person uses a registered mark, if, in particular, he –

(a) affixes it to goods or the packaging thereof,

(b) offers or exposes goods for sale, puts them on the market, or stocks them for those purposes

(c) under the registered trade mark, or offers or supplies services under the registered trade mark.
(d) imports or exports goods under the mark, or

(d) uses the registered trade mark on business papers or in advertising.

However, such questions of exhaustion and infringement, as well as your question about how to restrain
such parallel importation, was largely answered by the Delhi High Court in the landmark case
of Samsung Electronics Co. Ltd. & Anr. v. Kapil Wadhwa & Ors.

A. Samsung Electronics Co. Ltd. & Anr. v. Kapil Wadhwa & Ors.

i. Brief Facts: Samsung had sued Kapil Wadhwa (a former authorized dealer of Samsung
products), for unauthorized import of genuine Samsung printers from a foreign market into India
and subsequent sale thereof. The said printers as sold by Kapil Wadhwa were cheaper than the
one sold by Samsung in India.
ii. Judgment of the Single Bench dated February 17, 2012: The Learned Justice Manmohan
Singh in his judgment held that India adheres to National Exhaustion, therefore such
importation by anyone who is not the right holder or is unauthorized to make such imports would
be culpable of infringement.
iii. However, the order of the Single Bench was set aside by the Division Bench of the High Court.

Relevant issues before the Court and findings (By the Division Bench, which overruled the Single
Bench's decision):

Issue Held vide Order dated October 03, 2012

Whether India adheres to International Exhaustion of Rights

National Exhaustion or
International Exhaustion?

Whether unauthorized Yes. However, the sale of such printers is

parallel importation of permissible under certain conditions –
genuine goods into India
is permissible? "the respondents shall prominently display in their
showrooms that the product sold by them have
been imported from abroad and that the
respondents do not give any warranty qua the
goods nor provide any after sales service and that
the warranty and after sales service is provided by
the appellants personally"

Is consent from the right No.

holder required to import
for the purpose of sale?
The above sums up the current law of the land. However, an appeal has been filed against the said order
of the Division Bench with the Supreme Court of India, and the same is pending with the Court.

The above law as it stands is being adhered to with respect to parallel importation, as evident in the case
of Western Digital Technologies Inc . vs Mr Ashish Kumar & Anr wherein the Plaintiff had obtained
trade mark registrations along with registering the said trademarks with the Customs Authorities under
the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007, under which the Plaintiffs
are entitled to specifically prevent the import of infringing goods bearing the said trademarks. The
Defendant was importing genuine goods from "unauthorized" channels. However, the parties agreed to
amicably resolve the matter and the Defendant agreed to affix a label on the imported products to show
that the goods have been imported and are not supported by an authorized warranty of the Plaintiff. The
said suit was decreed on the following terms –

"(1) Label on products and packaging: A clear, un-removable and prominent label on both the packaging
and product itself informing customers that the hard disk drives of Ambitious Marketing are:

(i) Parallel imports from ________________country;

(ii) Not supported by Western Digital warranty services or customer care;

(2) Invoices: All invoices issued by Ambitious Marketing as also by third parties who sell the products
must also contain (i) to (ii) above;

(3) Marketing materials: Any advertising, marketing, offers for sale etc. for the WD parallel imported
products - whether on a third party e-commerce site or in physical premises or in print matter must
contain (i) to (ii) above;

(4) Warranty and After Sales services:

(iii) After sales services provided by Ambitious Marketing to be prominently indicated in signage at
physical stores(whether the stores are run by Ambitious Marketing or by any authorized agent) as well as
on online portals (whether by Ambitious Marketing or by any third party) where the goods are sold;

(iv) Terms of service must be drafted so that there are no differences in services and warranties between
products offered by Western Digital and Ambitious Marketing;

(v) Terms to be printed on all invoices as also displayed in the online market places where the goods are
sold by the defendants;

(vi) The warranty should at least run for the same duration as Western Digital's warranty;"

The above case lends credence to the conclusion that even if a brand owner were to object to such parallel
importation of genuine goods into India, the importer may continue to import and sell the said products in
India by affixing the necessary labels on the goods.

CONCLUSION

In view of the above and as per the current Indian law on such matters, parallel importation is permissible
if certain compliances are adhered to, as is inferable from the case of Western Digital Technologies Inc .
vs Mr Ashish Kumar & Anr. However, a brand owner may certainly initiate action in case the goods
being imported are not original or are of such a nature that it damages the goodwill and reputation of the
trade mark.

Principles Of Passing Off In Trademarks: Wockhardt Limited Vs.

Torrent Pharmaceuticals Ltd.
Torrent Pharmaceuticals Ltd. (Plaintiff/ Respondent) owned a trademark a trade mark called
"CHYMORAL" and "CHYMORAL FORTE", which is a drug administered post-surgically for
swellings that may arise and/or wounds that may arise. They filed a suit for infringement and an
interlocutory application for passing-off against the rival, Wockhardt Limited (Defendant/
Appellants) for violating its trademark rights by use of the mark "CHYMTRAL FORTE". Single
Judge Bench of Bombay High Court refused to grant the interim injunction for passing-off in
favor of Torrent and against Wockhardt. The said order was challenged before the Division
Bench, the same was set aside and Torrent was granted interim injunction for passing-off. The
said Order of Bombay High Court was appealed, by Wockhardt, in Supreme Court.

Classical Trinity of Passing Off

 There 3-elements which are to be satisfied to prove a case of passing off are: a)
Goodwill and Reputation; b) Misrepresentation by the Defendant; and c) likelihood of
damages.
 The Court held "that though passing off is, in essence, an action based on deceit, fraud
is not a necessary element of a right of action, and that the defendant's state of mind is
wholly irrelevant to the existence of a cause of action for passing off, if otherwise the
defendant has imitated or adopted the Plaintiff's mark". Likelihood of damages is
sufficient. The bench quoted the judgment in Laxmikant V. Patel vs. Chetanbhai Shah.

Acquiescence and Delay: Not the same

 The Court refused the Single Judge's injunction refusal ground of acquiescence and
stated that "We do not think that because the appellants stepped in the year 2014 with
notice of the first respondent's registration and use of the mark that means the appellant-
plaintiff has acquiesced in the same. That is not a positive act and which is required to
deny the relief on the ground of acquiescence." Reference was made to the SC
judgment in M/s Power Control Appliances and Ors. vs. Sumeet Machines Pvt. Ltd.
 "Acquiescence is a species of estoppel and therefore both a rule of evidence and a rule
in equity. It is an estoppel in pais: a party is prevented by his own conduct from enforcing
a right to the detriment of another who justifiably acted on such conduct."
 With respect to the point of acquiescence, the Division Bench held that 'Delay is not to
be confused with acquiescence. The latter implies knowledge, and where "knowledge of
the defendant's mark and product is shown and coupled with a long period of inaction
against the alleged invasion of an exclusivity claim",it is not enough to say that "there is
no positive act", as acquiescence explicit consent rather than silent.
Delhi High Court Provides Much-Needed Clarity On Parallel Imports
Issue
The parallel imports saga has seen many twists and turns, with conflicting views emerging from
the courts and the customs authorities. In Samsung Electronics Co Ltd v Kapil Wadhwa, a
single judge had held that Indian trademark law follows the principle of national exhaustion of
trademark rights (ie, any goods imported without the consent of the registered proprietor will
amount to infringement); however, the Central Board of Excise and Customs (CBEC), in a
circular issued on May 8 2012, stated that the Trademarks Act provides for the principle of
international exhaustion of rights, and clarified that parallel imports are allowed as long as the
goods are genuine and have not been materially altered or impaired.

In the meanwhile, an appeal filed by Kapil Wadhwa and other importers of Samsung printers
in Samsung Electronics Co Ltd v Kapil Wadhwa was heard by the Division Bench of Delhi High
Court. The court, in its decision dated October 3 2012, ruled that India follows the principle of
international exhaustion, thus taking the position advocated by the CBEC circular. The court
reversed the decision of the single judge in respect of the meaning of the word 'market' under
the act, stating that it meant "international and/or domestic market".

In particular, the court found that a conjoint reading of Section 29(1) and Section 29(6) of
the Trademarks Actsuggested that the sale of imported products constitutes 'use of the mark'
within the meaning this section; however, this did not mean that the sale of imported products
without the consent of the registered proprietor was prohibited.

The division bench interpreted Section 30(3) of the act as permitting the sale of imported
products without the consent of the registered proprietor based on the following findings:

 l The expression 'lawfully acquired' in Section 30(3) does not mean "acquisition by
consent for the purposes of import".
 l The situations in Section 30(3)(a) and Section 30(3)(b) are "distinct and operate in two
mutually separate areas". One section cannot be interpreted in a manner that renders
the other section otiose.

Thus, the further sale of "lawfully acquired" goods cannot be prevented just because the
trademark has been assigned to another entity.

 l The scope of the expression 'the market' in Section 30(3) is not limited to domestic
markets.
 l The international statutes are of no assistance in determining whether the principle of
international exhaustion applies in India.
 l The Statement of Objects and Reasons of the Trademark Bill 1999, India's
communications at the Uruguay Rounds and the report of the Standing Committee on
the Copyright (Amendment) Bill 2010 clearly showed that India supports parallel imports
and the principle of international exhaustion.
 l The difference in services and warranties is not sufficient to oppose further dealings
under Section 30 (4), as this does not constitute a material change or impairment of the
goods.
The Division Bench thus found that the appellants were not restrained from importing printers,
ink cartridges and toners bearing the trademark SAMSUNG, and selling them in India.
Nevertheless, the court held that: l the appellants were injuncted from metatagging their website
to that of Samsung; and l the appellants should prominently display in their showrooms that the
goods are imported and that Samsung does not provide any warranties or after-sales services.

Samsung had argued that, if India were to allow parallel imports, brand owners and consumers
would be disadvantaged. However, the court took the view that this argument touches upon a
matter of policy and, therefore, it was for the legislature to take a call on this issue. The courts
must interpret the law based on the objects and reasons of the statutes.

This judgment is welcome in that it provides much-needed clarity and consistency on the issue
of parallel imports.

Can the monkey selfie case teach us anything about copyright law?
On July 2011, British photographer David Slater travelled to a national park in North Sulawesi,
Indonesia, to take pictures of the local wildlife. Once there he followed a troop of monkeys, trying to get a
few unique pictures. Mr. Slater claims that he was specifically looking for a very close shot of a monkey’s
face using a wide-angle lens, but the monkeys were obviously shy, and didn’t allow him to get too close.
While he managed to take a few pictures, he didn’t get the shot he was looking for. He claims he placed
his camera on a tripod as the monkeys were curious about the equipment, and clicked a few shots. The
first pictures they took were of poor quality. He claims he then changed the camera settings and that one
monkey in particular, was drawn to the reflection of the lens. The monkey then went on to take a few
pictures.

Mr. Slater claims that one of these images was an astounding, once-in-a-lifetime shot that captured an
expression of pure joy and self-awareness on the monkey’s face. He imagined it appearing on the front of
National Geographic, so he sent it and a few others to his agent, who then circulated them to a number of
news sources. Eventually, it was first picked up and published by the Daily Mail as a feature story, and
then went viral.

The spat with Wikipedia and others

However, the popularity of the photos, came at a price. In 2014, it triggered a dispute between Mr. Slater
and Wikipedia when the online encyclopaedia uploaded the picture and tagged it as being in the public
domain, reasoning that monkeys cannot own copyright.

When Mr. Slater tried to get the picture removed, Wikipedia did not relent, and the so-called monkey
selfie is still listed on that site as public domain material.

Then, in September 2015, the campaign group People for the Ethical Treatment of Animals (PETA) sued
Mr. Slater in a California court on behalf of the monkey (named Naruto in the suit) to assert copyright
over the picture, claiming that the selfie “resulted from a series of purposeful and voluntary actions by
Naruto, unaided by Mr. Slater, resulting in original works of authorship not by Mr. Slater, but by Naruto.”
In January 2016, the trial judge dismissed the action on the basis that even if Naruto had taken the
pictures by “independent, autonomous action,” the suit could not continue as animals do not have
standing in a court of law and therefore cannot sue for copyright infringement.

Astoundingly, PETA appealed the dismissal, in the Court of Appeals of the 9th Circuit, and those
following the case were treated to the spectacle of US Federal Court judges and lawyers making monkey
jokes and discussing whether PETA had identified the right monkey.

Somewhat disappointingly, however, the drama was cut short as the parties reached a settlement out of
court. While the exact terms of the settlement are unknown, lawyers for PETA have said that the deal
includes a commitment from the photographer to pay 25 percent of all future royalty revenue to the
monkey sanctuary where Naruto lives.

This would seem to be the end of the monkey selfie case, but in a recent interview Mr. Slater hinted that
he is thinking of suing Wikipedia for copyright infringement. But where could this lawsuit take place?

Jurisdiction

The Naruto case took place in a California court because Mr. Slater has published a book called Wildlife
Personalities using the self-publishing service Blurb, a Delaware company that ships its printed material
from a San Francisco warehouse. The plaintiffs (PETA) claimed that this was enough to grant them
standing in the United States. However, as Mr. Slater is a British citizen, any future litigation could take
place in the United Kingdom.
The fact that the picture was shared online has been an important factor from the start of the case,
overshadowing even the physical elements of the story such as Mr. Slater’s nationality. Jurisdictional
issues in relation to the Internet are one of the most complex areas of cyber law because of the network’s
global nature.

Thankfully, jurisdictional questions in relation to copyright tend to be rather more straightforward.

Copyright law is strictly national in nature, but there is an international system in place that allows
creators to protect their works in other jurisdictions. As a general principle, Article 5(1) of the Berne
Convention for the Protection of Literary and Artistic Works states that copyright in a work subsists
wherever it originates, that is, in the country in which it was first published. In the monkey selfie case, the
picture was taken in Indonesia, and first published in the UK through Caters News Agency, a picture and
video licensing firm, which then granted permission for its publication in the British media.

In so far as the work can be said to have originated in the UK, and since Mr. Slater has repeatedly
claimed exercise of his rights in the UK (as per Article 5(2) of the Berne Convention), it would be more
than fair to assume that UK copyright law would apply in this instance.

Even if we ignore the place of publication, courts seem very keen to exercise jurisdiction over their
nationals. Courts in the UK have even heard cases from other jurisdictions, as was the case famously
in Pearce v. Ove Arup.
Moreover, the Court of Justice of the European Union (CJEU) has been erring on the side of the creator
when it comes to jurisdictional matters, and in particular when dealing with online infringement cases,
such as in Pinckney v. Mediatech and Hejduk v. EnergieAgentur.
In light of the above, an analysis of copyright authorship issues under English and EU copyright law is in
order.
Authorship issues under English and EU copyright law

As a British citizen, it is fair to assume that Mr. Slater would sue Wikipedia in the UK. Commentators in
the United States seem to agree that the photo does not enjoy copyright protection under US law.

While, the question remains open to debate, should Mr. Slater sue in a UK court, it would appear, given
existing case law and the position of leading authorities on copyright in relation to photographs, that he
has a very strong case in claiming that copyright subsists in the image and his ownership of the photo.

Take, for example, Painer v. Standard Verlags GmbH (C 145/10), an EU case involving Austrian
photographer Eva-Maria Painer and several German-language newspapers.
Ms. Painer, a professional photographer, had taken a portrait of teenager Natascha Kampusch, who
subsequently became famous for having been kidnapped and held for eight years in a basement. She later
escaped her captor.

At the time of her kidnapping, the only available picture of Ms. Kampusch was the photograph taken by
Ms. Painer. Several newspapers used a stylized digital version of the portrait to illustrate their stories of
Ms. Kampusch’s escape.

In 2007, Ms. Painer sued for copyright infringement for such unauthorized use. The defendants alleged,
among other things, that the portrait did not have copyright as it was simply a representation of Ms.
Kampusch and was not sufficiently original. The question was referred to the CJEU, which on the basis
of the prevailing law and case law declared that photographs are original if they are the author’s own
intellectual creation and reflect his or her personality.

In this instance, however, the Court of Justice went further. It stated that the photographer’s “free and
creative choices” in selecting a background and pose, adjusting lighting and employing different
developing techniques to produce a photo provide a “personal touch” that confers originality and makes a
photo worthy of protection as an intellectual creation which conveys the photographer’s personality.

This case is directly relevant to the monkey selfie case. While Painer deals with portrait pictures, the
court clearly lists the various actions that warrant originality, including the choice of angle, lenses and
even techniques for developing the photograph.
It is also important to note that nowhere in its definition – nor, for that matter, in any EU case law or
legislation – does the law require that the button be pressed by the photographer. The acts preceding and
following the taking of the photograph seem to be more important in establishing whether it is the
author’s own intellectual creation.

Temple Island Collection won a court action against English Teas to

protect their famous red bus image. The case outlines a series of acts
that can convey originality in determining the authorship of a
photograph (photo: © 2005Temple Island Collection Ltd).

In similar vein, the landmark English case Temple Island Collections Ltd v. New English Teas [2012]
EWPCC 1 case offers a strong indication that Mr. Slater may well be able to claim ownership of his photo
in UK courts. That case involved an iconic black-and-white picture of the Houses of Parliament with a red
 bus crossing Westminster Bridge. The photograph, which has become famous and is routinely licensed to
other companies, is owned by a firm that produces and sells London souvenirs. When negotiations with
Temple Island Collections Ltd to obtain a license to use the image on their tins broke down, the
defendants, New English Teas, went ahead and produced a different version of the Temple Island picture
featuring a different angle and setting, but the same monochrome background with the red bus.
While the case rested largely on whether a substantial part of the Temple Island image had been copied,
the defendants argued at some point that the copied picture did not have copyright as it was not an
original work.

Here, the judge relied heavily on Painer and other CJEU cases, and clearly stated that individual
decisions involving “motif, visual angle, illumination” and other similar creative choices can confer
originality. As long as the author has made decisions about the arrangement of the photograph, it should
have copyright.
But most important, the case discusses the issue whether “the mere taking of a photograph is a mechanical
process involving no skill at all and the labour of merely pressing a button,” or whether something else is
needed to convey originality.

The judge identified a series of acts that can convey originality in a photograph, as follows:

 the angle of shot, light and shade, exposure and effects achieved with filters, and developing
techniques;
 the creation of the scene to be photographed; and
 “being in the right place at the right time”.
Note that these three elements are to be considered more important than the mere physical act of pressing
a button when determining copyright ownership.

Of particular relevance to the monkey selfie case is the third situation – being in the right place at the
right time. If we accept Mr. Slater’s version of the story (and at present there are no witnesses other than
the monkeys), he set up the tripod, selected an angle, adjusted the lens aperture, checked the lighting, and
was in the right place at the right time.

To my mind, Mr. Slater did more than enough to be awarded copyright protection, irrespective of his
actions after the photograph was taken, including its development.

Another useful perspective

His case would appear to be further supported by an interesting contrasting example of what a picture
taken by an animal looks like without human intervention.

When wildlife photographer Ian Wood travelled to Borneo, he encountered a group of orangutans. He left
his camera in a spot where they could take pictures (perhaps following Mr. Slater’s lead), and one in
particular took several selfies. The difference in quality between these and Naruto’s selfie are astounding,
and lend credit to the version of events that has Mr. Slater making an important contribution to the final
shot.

While arguably not a commonly held view, there is in my opinion an extremely strong argument to be
made regarding originality of the monkey selfie in the UK based on these and other cases. It will be
interesting to see how this plays out.
Zatarain’s, Inc. v. Oak Grove Smokehouse, Inc
Brief Fact Summary. Zatarain’s (Plaintiff) claimed that its trademark was a “suggestive”� term and that
Oak Grove Smokehouse, Inc. (Defendant) should be liable for infringing it, but Oak Grove (Defendant)
claimed it was a “descriptive”� term subject to a fair use exception.

Synopsis of Rule of Law. Descriptive terms are not protected by trademark without a showing of
secondary meaning in the minds of the public.

Facts. Zatarain’s (Plaintiff) manufactured and distributed food products. It registered the terms “Fish-
Fri”� and “Chick-Fri”� as trademarks for its batter mixes used to fry foods. Oak Grove Smokehouse,
Inc. (Defendant) began marketing a “fish fry”� and a “chicken fry”� in packages similar to those used
by Plaintiff. Plaintiff brought suit for trademark infringement and unfair competition under the Lanham
Act. The district court held that Zatarain’s (Plaintiff) trademark “Fish-Fri”� was a descriptive term with
an established secondary meaning, but held that the alleged infringers had a fair use defense to any
asserted infringement of the term and that the registration of the term “Chick-Fri”� should be canceled
because it was a descriptive term that lacked any secondary meaning. Plaintiff appealed, claiming that its
trademark “Fish-Fri”� was a suggestive term that was automatically protected upon registration and
therefore not subject to the “fair use”� defense.

Issue. Are descriptive terms protected by trademark without a showing of secondary meaning in the
minds of the public?

Held. (Goldberg, J.) No. Descriptive terms are not protected by trademark without a showing of
secondary meaning in the minds of the public. The district court was correct in applying the four
prevailing tests of descriptiveness: 1) the dictionary definition, 2) the imagination test; usefulness of the
term to competitors, and 4) actual use of the term by other merchants, in finding that “Fish-Fri”� was a
descriptive term identifying a function of the product being sold. Proof of secondary meaning is an issue
only with respect to descriptive marks, and the burden of proof rests at all times with the plaintiff to
establish such a meaning. The district court found that Plaintiff’s evidence established a secondary
meaning for the term in the New Orleans area. However, Plaintiff has no legal claim to an exclusive right
in the original, descriptive sense of the term. Therefore, Defendant is still free to use the words “fish
fry”� in the ordinary, descriptive sense, so long as such use will not tend to confuse customers as to the
source of the goods. The record contains plenty of evidence to support the district court’s determination
that Oak grove’s (Defendant) use of the term was fair and in good faith. Affirmed.

Discussion. The trademark “fair use”� defense is different from the copyright law fair use doctrine. In
the trademark law, a junior user is not liable of infringement of a senior user’s established trademark
meaning if the mark is being used in its descriptive sense. This defense is only available to infringers of
“descriptive”� marks.

Satyam Infoway Ltd v. Sifynet Solutions (P) Ltd.;

FACTS

The Respondent (Sifynet Solutions (P) Ltd.) had registered domain

names http://www.siffynet.comand http://www.siffynet.net which were similar to the Plaintiff’s domain
name http://www.sifynet.com. Appellant (Satyam Infoway Ltd.) had considerable reputation in the
market and had registered the name ‘Sifynet’ and various other names with the Internet Corporation for
Assigned Names (ICANN) and WIPO. The word ‘Sify’ was first coined by the plaintiff using elements
from its corporate name Satyam Infoway and had a very wide reputation and goodwill in the market. The
Appellant was incorporated in the year 1995 and had registered its various domain names using the prefix
‘Sify’ in the year 1999. The Respondent started carrying on its business under the above stated domain
names since 5th June, 2001.

On coming to know of use of the word ‘Siffy’ by the Respondent, the Appellant filed a suit in the City
Civil Court against the Respondent on the basis that the Respondent was passing off its business and
services by using the appellant’s business name and domain name. An application for temporary
injunction was also filed.

The City Civil Court Judge decided in favour of appellants and allowed the application for temporary
injunction on the following grounds:

 Appellant was the prior user of the trade name ‘Sify’;

 Appellant had earned good reputation in connection with the internet and computer services under
the name ‘Sify’, and
 Respondent’s domain names were similar to the domain name of the appellant and that confusion
would have been caused in the mind of the general public by use of such deceptive similarity.

Aggrieved by the decision of the City Civil Court, the Respondent approached, the High Court, which
reversed the order of the City Civil Court, on the following grounds:

 The balance of convenience was in favour of the Respondent;

 The business of the Appellant and Respondent was dissimilar;
 The Respondent had invested a large amount in establishing its business and has enrolled 50,000
members,
 The Respondent would be put to greater hardship, inconvenience and irreparable injury.

Hence, the Appellant filed a Special Leave Petition before the Supreme Court.

ISSUES:

1) Whether a domain name can be said to be a word or name which is capable of distinguishing the
subject of trade or service made available to potential users of the internet.

2) Whether internet domain names are subject to the legal norms applicable to other intellectual
properties such as trademarks.

3) Would the principles of trademark law and in particular those relating to passing off apply?

HELD
ISSUE NO. 1

Issue No. 1 was answered in the affirmative and to come to the such conclusion, the Hon’ble Supreme
Court gave the following reasons:

 With the increase of commercial activity on the internet, a domain name is also used as a business
identifier;
 Domain name identifies the specific internet site;
 As more and more commercial enterprises trade or advertise their presence on the web, domain
names have become more and more valuable and the potential for dispute is high. Whereas a large
number of trademarks containing the same name can comfortably co-exist because they are
associated with different products, belong to business in different jurisdictions etc, the distinctive
nature of the domain name providing global exclusivity is much sought after,
 The fact that many consumers searching for a particular site are likely, in the first place, to try and
guess its domain name has further enhanced this value.

ISSUE NO. 2 & 3

Issue No. 2 & 3 were commonly answered in the affirmative as they were interlinked and to come to the
said conclusion, the Hon’ble Supreme Court gave the following reasons:

 The use of similar domain name may lead to diversion of users as ordinary customers seeking to
locate the functions available under one domain name may be confused with another domain name
which may offer dissimilar services. Thus, the customers may conclude misrepresentation, which
will result in loss of customers.
 Further, a use of similar domain name has all the ingredients of a passing off action, such as
preservation of reputation and goodwill, safeguarding the public, misrepresentation by the
defendant, loss or likelihood of loss. Thus, the Hon’ble Supreme Court held that that a domain
name may have all the characteristics of a trade mark and one can also file an action for passing for
the same.

ON MERITS/FACTS

The matter was ruled in favour of the Appellant, on the following grounds:

 Appellant has lots of reputation and goodwill in the mark ‘Sify’

(Basis: 5 lac subscribers, 840 cyber cafes, 54 points of presence all over India, first Indian Co. To be
listed in NASDAQ, extensive coverage in leading national newspapers, sales figures, expenses incurred
on advertisement of the mark ‘Sify’, 40 Registered Trade Marks, with the prefix ‘Sify’)

 There is close visual similarity and phonetic similarity between ‘Sify’ and ‘Siffy’ and there is a
likelihood of confusion.
 No proper justification by the Respondent, as to its adoption of ‘Siffy’.
 Appellant was a prior adopter and prior user.
 The argument of separate business stood negated on account of exclusivity of domain name symbol
which is accessible to all internet users as well as on account of the fact that there were documents
 to the effect that the Respondent had advertised to be provider of software solution, software
development, Intranet and Extranet solutions, etc.
 The Balance of Convenience was also held to be in favour of the Appellant as it was a prior user
and the public associated the mark ‘Sify’ with the Appellant

Identical or Similar Trademark

A trademark cannot be registered if it is identical or similar to an earlier registered trademark or
trademarks. According to Section 11(1) of the Trade Marks Act 1999 – a trade mark shall not be
registered if, because of its identity or similarity with earlier trade mark(s) and because of identity or
similarity of goods or services covered by such trademarks, there exists a likelihood of confusion on the
part of the public, which includes the likelihood of association with the earlier trade mark. In this article,
we look at what is considered as an identical or similar trademark in detail.

Identical Trademark-A mark is identical with the trade mark where it reproduces without any
modification or additions, all elements constituting the trade mark or where, viewed as a whole it contains
differences so insignificant that they may go unnoticed by an average consumer. Hence, the criteria for
classification of a mark as an identical trademark is relatively straightforward and simple.

Similarity of Trademark- The terms similarity of trademarks is to be construed as “deceptively

similar” which expression has been defined “as so nearly resembling that other mark as to be likely
to deceive or cause confusion”.
For likelihood of confusion to exist it must be probable; it is not necessary that actual confusion has
arisen or should arise in the mind of public i.e. the average consumer. Hence, if if its is probable for
confusion to arise in the mind of the average consumer, as to resembling another existing trademark or
trademark for which application has been filed previously, then the mark can be considered similar.

Further, the three most relevant factors in examination of trade mark applications by the Trademark
Office will usually be:

1. The similarities and differences between the respective trademarks;

2. How distinctive the earlier mark is;
3. The degree of similarity between the respective goods or services.

Comparing Two Trademarks for Similarity- The rules for comparing two trademarks for
similarity has been developed over the years based on the Parker J. in Pianotist case:

“You must take the two words, you must judge them by the look and by the sound, you must consider
the goods to which they are to be applied, the nature and kind of customer who would be likely to buy
the goods. Consider all the surrounding circumstances, as to what is likely to happen if each of those
trademarks is used in the normal way as a trade mark for the goods, the respective owners of the mark.
If there is likely to be confusion, the application must be refused.”
Hence, some of the main principles for comparison of trademarks are:

1. Comparison should be made from the point of view of a person of average intelligence and of
imperfect recollection.
 2. The overall structural, visual & phonetic similarity and similarity of the idea in the two marks and
the fact as to whether it is reasonable likelihood to cause confusion should be taken into account.
3. The trademark must be considered as a whole. It is not right to take a part of the trademark and
compare it with part of the other trademark;
4. No meticulous or letter by letter comparison is required. Side by side comparison is not the
correct test.

Further, additional precautions are required where the goods are medicinal preparations as possibility of
confusion over marks on medicinal products – because the potential harm may be far more dire than that
in a confusion over ordinary consumer products.

SABEL V PUMA
In cases that don’t involve identical trademarks and identical goods and services (or a mark with a
reputation) it is necessary to prove likelihood of confusion between the two trademarks (section 10 (2)
TMA.
The court will examine whether confusion was likely at the time when the allegedly infringing goods
were first sold. The following rules apply:
It is necessary to consider not only the actual use that a claimant has made of its mark, but also a notional
and fair use of the mark in respect of all of the goods falling within the scope of the specification
A likelihood of confusion may be inferred from the surrounding circumstances. In an early case
concerning Montblanc pens, the High Court held that it was entitled to come to its own view on the risk
of confusion between the goods or services of one undertaking and another, even if there was no evidence
of confusion. The judge found that the similarity of the defendant’s symbol to that of the claimant’s, and
the fact that both parties sold pens and that the symbols were displayed in similar places on both goods,
were sufficient to support the claim
“Confusion” includes a likelihood of association, that is, that the relevant public would think that the
goods have the same origin or an associated origin. However, mere association on its own is not enough
to satisfy the requirement for a likelihood of confusion It does not include a “non-origin association” (the
situation where one mark calls another to mind, without any confusion as to origin)
There were several ECJ judgments between 1997 and 1999 which set out the test for assessing the
likelihood of confusion between a sign and an earlier trademark.
In Sabel BV v Puma AG.
Sabel BV, a Dutch company, sought to register the trade mark SABEL and a device of a bounding cat
(resembling a cheetah) for goods including jewellery, leather, clothing and fashion accessories. Puma AG
opposed this registration on the basis of its earlier registrations for the separate devices of a bounding cat
(a puma) and a leaping cat (also a puma), covering jewellery, leather and clothing.
Following a reference from Germany’s Federal Court of Justice, the ECJ gave a preliminary ruling to the
effect that:
• The mere fact that two trade marks are conceptually similar is not enough in itself to conclude that there
is a likelihood of confusion.
• The likelihood of confusion must be assessed by taking into account all factors relevant to the
circumstances of the case. An assessment of the visual, aural or conceptual similarity of the marks in
question must be based on the overall impression given by the marks, bearing in mind their distinctive
and dominant components.
The test of whether a sign is confusing is how the use of the sign would be perceived by the average
consumer of the type of goods in question. ‘The likelihood of confusion must therefore be appreciated
globally, taking into account all factors relevant to the circumstances of the case. That global appreciation
of the visual, aural or conceptual similarity or the marks in question, must be based on the overall
impression given by the marks, bearing in mind, in particular, their distinctive and dominant components .
. The average consumer normally perceives a mark as a whole and does not proceed to analyse its various
details.’ (A point noted by the Hearing Officer as I have said). ‘In that perspective, the more distinctive
the earlier mark, the greater will be the likelihood of confusion. It is therefore not impossible that the
conceptual similarity resulting from the fact that two marks use images with analogous semantic content
may give rise to a likelihood of confusion where the earlier mark has a particularly distinctive character,
either per se or because of the reputation it enjoys with the public.’
Canon V MGM
The degree of distinctiveness of the registered mark can be decisive. In Canon v MGM, Canon was the
registered owner of the trade mark CANON in Germany in respect of cameras. MGM sought to register
CANNON in respect of video film cassettes. Canon opposed MGM’s application, arguing (on the basis of
the equivalent under German law of s 10 (3) of the TMA) that the reputation and distinctive character of
its mark should be taken into account when assessing the similarity of the goods covered by the two
marks. MGM argued for an objective assessment of similarity. The ECJ held that the distinctive character
of a trade mark, and in particular its reputation, should be considered when assessing similarity of goods,
as there was a greater likelihood of confusion where distinctive marks are involved. As such, marks with
a highly distinctive character enjoyed greater protection than marks whose character was less distinctive.

Trademark Infringement: Factors Considered in Consumer

Confusion
Earlier this month, the shoe company Skechers defeated a preliminary injunction brought by the shoe
company ASICS. The injunction against Skechers sought to prevent Skechers from making and selling
their shoes. ASICS brought this action against Skechers for trademark infringement claiming that
Skechers hijacked the ASICS brand image and goodwill by using a similar stripe mark that ASICS has
used on its shoes over its 40 year history. The two shoes both use a stripe mark, but the ASICS shoe uses
two horizontal stripes while the Skecher shoe has only one stripe. The court found that the design of these
shoes were dissimilar and would not likely create consumer confusion. Since ASICS was not likely to
succeed in its trademark infringement action, the court denied the injunction against Skechers. This case
is just a sampling of the many trademark infringement claims that are brought in court each month. The
purpose of this article is to examine the test that courts use to determine if trademark infringement exists.
Many courts have developed a balancing test to determine if a mark infringes on another. This
balancing test has largely grown from the seminal case Polaroid Corp. v. Polarad Elect. Corp., 287 F.2d
492 (2nd Cir. 1961). In that case, the court identified several variables to consider when assessing if a
mark is infringing on another mark. This balancing test seeks to determine if consumers would likely be
confused as to the source of the marks. If the test favors that confusion would likely result, then the court
will likely rule that infringement exists. On the other hand, if confusion is unlikely or minimal, the court
will likely rule against infringement.
The following are factors used by courts to assess the possibility of trademark infringement by
looking at the likelihood of consumer confusion. Not one of these factors is dispositive to the issue of
consumer confusion, and each factor must be examined in the context of the ultimate likelihood of
confusion.
 The first factor the court will look at is the strength of the marks in question. The strength of the
marks is determined by distinctiveness of the mark. The more unique and distinct the mark, the more
likely the mark will be protected against junior users. On the hand, the more descriptive and generic the
mark, the less protection courts will provide to these marks. For example, the mark KODAK will receive
more protection than a similar product that uses the mark FAST PHOTO.
Another factor examined is the similarity between the marks. Similarity of marks is tested based on
sight, sound and meaning. The marks will be considered in their entirety to determine any similarities. A
mark that looks different from another but gives off a similar commercial impression might be considered
similar and thus weigh in favor of confusion. For example, a trademark that consisted of the word
MONEY might be confused with the mark $$$ because the marks have similar commercial impressions.
The courts will also look at the proximity of the goods in the marketplace. This test relates to the
channels of trade used by the goods. The more related the goods the greater the likelihood that they would
exist together in the marketplace. Similar marks that are also are related would likely cause confusion as
to the source of those goods. Highly related goods are more likely to cause confusion compared to
unrelated goods.
The above three factors weigh heavily in determining likelihood of confusion. A mark will not be
found confusingly similar with another mark if the two are not found similar in one of these areas, and the
complaining mark is considered a weak mark.
After reviewing these, the courts will examine the likelihood that the prior owner will “bridge the
gap” in the marketplace. This factor addresses the possibility that a mark will expand into other product
lines. The more likely expansion will occur, the more likely consumer confusion will exist.
Next the courts examine evidence of actual confusion. When a case is brought to trial, the evidence
is usually in the form of consumer surveys done by the parties. Survey evidence of this nature is often
critical in determining likelihood of confusion in infringement cases.
The courts will also look to the sophistication of the buyers of the goods or services to determine
likelihood of confusion. Courts have found that sophisticated buyers, such as those who have expertise in
a specific area, are less likely to be confused by similarities in marks. In addition, courts have held that
consumers of goods and services that are expensive exercise a higher degree of care in making these
expensive purchasers. For example, a consumer would exercise a higher degree of care when purchasing
a car compared to when that consumer purchases a piece of candy.
The last factor courts examine in a trademark infringement case is the intent of the defendant. If the
defendant copies an existing trademark in bad faith to capitalize on that trademark’s goodwill, the courts
will lean in favor of finding infringement. The likelihood of confusion, however, is the main
consideration in determining infringement regardless of intent. If an individual copies a mark that does
not lead to consumer confusion, the courts will likely not find infringement.
The above are not a rigid set of factors used by the courts. Most jurisdictions use some form of the
above factors to determine if a likelihood of confusion exists. Regardless of the different variations,
courts ultimately are seeking to discover if marks, as they are used in commerce, cause consumer
confusion and lead to trademark infringement.

Factors Determining the Infringement of Trademark

Trademark infringement most commonly involves the issues such as likelihood of confusion; counterfeit
marks and dilution of marks. Likelihood of confusion occurs in situations where consumers are likely to
be confused or mislead about marks used by two different parties. This issue was brought forth for
deliberation in the case Khurshid Ahmed Bhat v. Haji Bashir Ahmed Bhat 2010(42)PTC 248 (J& K) ,
which appealed an order by the Trial Judge, allowing temporary injunction. The case holds prominence
since it reiterates that registration of a trademark is not the sole criteria to determine infringement of
trademark.
Haji Bashir Ahmad Bhat claimed to be a proprietor of a small scale unit namely M/s Haji Bashir Ahmad
Bhat and Sons involved in maufacturing, processing, packing and sale of tobacco and allied products
(Naswar), with its head office located at Jamalata, Srinagar. Haji Bashir Ahmad Bhat further contended
that Khurshid Ahmed Bhat had been maufacturing, storing and selling inferior quality products in the
market, and marks/packing have been fraudently tailor made to be deceptively similar to that of
marks/packings of Haji Bashir Ahmad Bhat and causing immense damage and loss to them. In this
endeavour, the learned trial judge had passed an ex parte ad interim order imposing temporary injunction
on Khurshid Ahmed Bhat to restrain them from using the marks "New Mour Marka", "Green Star Brand"
and "Green Star Marks".

Khurshid Ahmed Bhatt contended that the order under appeal was illegal because the trial judge failed to
consider the contentions raised by them in the application seeking vacation of the ad interim order. They
further contended that there existed no resemblance between the packaging and Trade Marks of the
products being manufacured and sold in the market by the two parties. Further, it was contended that the
interim relief granted by the learned trial judge is beyond the the relief sought for the main suit and the
trial judge could not pass the order impugned in the appeal.

However Haji Bashir Bhatt contended the trademark adopted by the Khurshid Ahmed Bhatt to be
deceptively similar to those of the trademark adopted by them and registered by the competent authority
under the Trade Mark Act, 1999. They further averred that they wee registered user of trade mark "Mour
Marka", "Star Brand" and "Star Marks"as under the provisions of Trade Mark Act 1999.

The Court held that whenever there is a case of infringement of trademark, the Court should not only
consider the factum of registration of trade mark with the competent authority under Trade Marks Act,
1999 but should also consider the relative strength of the case of competing parties. The court stated that
due consideration to the similarities and dissimilarities of the trademarks was also necessitated. In viw of
the trial Judge's decision, he opined that the two trademarks had not been comapred except making
reference to the words "New or Green" and also he had not examine the similarities and dissimilarities.

The court also observed that the court in such cases the test of to phonetical, visual and ocular similarity
must be applied. It was opined thatorders which have potential of affecting right to carry on trade,
occupation and business and right to earn livelihood, such orders cannot be passed, without approaching
the problem projected in the strict compliance of law occupying the field as these rights are Fundamental
Rights guaranteed under article 19(1) (g) and 21 of the Constitution. In this view, the impugned order was
set aside by the court and the trial judge was directed to re consider the matter in view of the observations
made in the judgment and to pass orders in accordance with law after hearing the parties, within a period
of one month.

BRITISH AIRWAYS V RYANAIR

The claimant alleged that disparaging adverts by the defendant infringed its trade marks and amounted to
the tort of malicious falsehood.
Held: There was no dispute that the mark had been used. The Act could not be used to prevent any use of
another’s trade mark in comparitive advertising. In this case the advertisement, though possibly
ambiguous was not misleading: ‘the use was honest comparative advertising. I suspect the real reason BA
do not like it is precisely because it is true.’

VODAFONE V ORANGE
The court examined the development of the law in relation to comparative advertising. Jacob J said:
"Prior to the coming into force of the Trade Marks Act 1994 comparative advertising using a registered
trade mark of a competitor was, subject to minor exceptions involving the use of a company name,
forbidden by section 4(1) of the Trade Marks Act 1938. But in an increasingly pro-competitive
environment there was virtually a moratorium on enforcement of section 4(1) rights in a number of trades
- for instance comparative advertising in the field of motor cars was very common for a number of years
before the 1938 Act was repealed. The 1994 Act now positively permits fair competitive advertising by
section 10(6). This provides:
"Nothing in the preceding provisions of this section shall be construed as preventing the use of a
registered trade mark by any person for the purpose of identifying goods or services as those of the
proprietor or a licensee.
But any such use otherwise than in accordance with honest practices in industrial or commercial matters
shall be treated as infringing the registered trade mark if the use without due cause takes unfair advantage
of, or is detrimental to, the distinctive character or repute of the trade mark."
In this case it is common ground that there is no infringement unless the use of Vodaphone in the
comparison falls within the qualification of section 10(6). This qualification was considered by Laddie J
in Barclays Bank Plc v. Advanta [1996] RPC 307. He held that it is for the plaintiff to show that the use
falls within the qualification and that the test of honesty is objective (ie. would a reasonable reader be
likely to say, upon being given the full facts, that the advertisement is not honest?). Laddie J gave as an
example the case where the advertisement is "significantly misleading". In trade marks, as [Counsel]
rightly submitted, there is no "one meaning rule". If a comparison is significantly misleading on an
objective basis to a substantial proportion of the reasonable audience, it is not an "honest practice" within
the section."
"The meaning of the words concerned is the first matter to be considered, for their truth or falsity is to be
tested against that meaning. The meaning is for the court to determine when a judge sits without a jury.
Evidence of the meaning to others is inadmissible. The question: �is not one of construction in the legal
sense. The ordinary man does not live in an ivory tower and he is not inhibited by the rules of
construction. So he can and does read between the lines in the light of his general knowledge and
experience of worldly affairs . . What the ordinary man would infer without special knowledge has
generally been called the natural and ordinary meaning of the words. But that expression is rather
misleading in that it conceals the fact that there are two elements in it. Sometimes it is not necessary to go
beyond the words themselves, as where the plaintiff has been called a thief or a murderer. But more often
the sting is not so much in the words themselves as in what the ordinary man will infer from them, and
that is also regarded as part of their natural and ordinary meaning�, per Lord Reid in Lewis v The Daily
Telegraph"
Jacob J discussed obiter the application of the 'one meaning rule' in malicious falsehood cases: "As a
comparative stranger to this branch of the law I find the "one meaning rule" strange, particularly for
malicious falsehood. Without authority, I should have thought it would be enough to satisfy the criterion
of falsity for the plaintiff to prove that the defendant made a statement which was false to a substantial
number of people. That, for instance, is the position in passing off (a tort also concerned with false
representations): for that tort it is enough to show that the representation fools some of the people, even if
not most of them. The reason for the libel rule in part relates to the entitlement of jury trial for libel (as
Diplock L.J. explained in Slim). Save in exceptional circumstances the right to jury trial remains for libel
and slander (see section 69(1) of the Supreme Court Act 1981) but there is no such right in relation to
malicious falsehood. So it by no means follows that that historical reason for the rule in libel should apply
to malicious falsehood. Another reason for the rule relates to the function of a jury in awarding damages
for defamation: unless one has settled on a particular meaning one cannot judge the extent of the
defamation. But in malicious falsehood damages are rather different: they are essentially compensatory
for pecuniary loss as for most other torts. So again it does not seem necessarily to follow that the libel rule
 should apply to the tort. However, as I say, the parties were agreed that I should proceed on the basis that
I am a notional jury identifying the single meaning of the words complained of. That is what I will do,
and, as will be seen, in this case the point is academic."
Jacob J looked at the question of meaning in marketing cases: "This is a case about advertising. The
public are used to the ways of advertisers and expect a certain amount of hyperbole. In particular the
public are used to advertisers claiming the good points of a product and ignoring others, . . and the public
are reasonably used to comparisons� "knocking copy" as it is called in the advertising world. This is
important in considering what the ordinary meaning may be. The test is whether a reasonable man would
take the claim being made as one made seriously, the more precise the claim the more it is likely to be so
taken� the more general or fuzzy the less so."

Reckitt & Colman of India Ltd. v Kiwi T.T.K. Ltd.1 the court held that –

“I.)A tradesman is entitled to declare his goods to be best in the words, even though the declaration is
untrue. II) He can also say that my goods are better than his competitors', even though such statement is
untrue. III) For the purpose of saying that his goods are the best in the world or his goods are better than
his competitors' he can even compare the advantages of his goods over the goods of others. IV) He,
however, cannot while saying his goods are better than his competitors', say that his competitors' goods
are bad. If he says so, he really slanders the goods of his competitors. In other words he defames his
competitors and their goods, which is not permissible. V) If there is no defamation to the goods or to the
manufacturer of such goods no action lies, but if there is such defamation an action lies and if an action
lies for recovery of damages for defamation, then the Court is also competent to grant an order of
injunction restraining repetition of such defamation.”

In Mr. Anil Gupta and Anr. v. Mr. Kunal Dasgupta and Ors
the Court granted an injunction and held that the concept developed and evolved by the plaintiff was the
result of the work done by the plaintiff upon the material which may be available in the public domain.
However, what made the concept confidential was the fact that the plaintiff had used his brain and thus
produced a unique result applying the concept. The plaintiff conceived the idea of 'Swayamvar', a reality
television show concerning match making. The plaintiff shared a concept note on this with the
defendants. Later on the plaintiff came across a newspaper report informing that the defendants were
planning to come out with a big budget reality matchmaking show using the plaintiff's concept. The
plaintiff sought injunction.

Issues Considered

1) Can there be a copyright in an idea, subject matter, themes, and plots, which existed in the public
domain?

2) Could there be a violation of copyright if the theme is the same as that which existed in the public
domain but is presented and treated differently?

1
1996 PTC (16) 393
The Court held that the concept developed and evolved by the plaintiff was the result of the work done by
the plaintiff upon the material, which may be available in the public domain. However, what made the
concept confidential was the fact that the plaintiff had used his brain and thus produced a unique result
applying the concept. The Court granted an injunction.

The effort to maintain secrecy may be undertaken through adoption of an appropriate policy, adequate
documentation and legal instruments such as non-disclosure agreement. To prevent the misuse of trade
secrets, it is generally a prudent business practice to enter into non-disclosure agreements. Trade secrets
are considered the owner's property and therefore there is no rule of public interest, which invalidates an
agreement that prevents their transfer against the owner's will.

EMERGENT GENETICS INDIA PVT LTD V. SHALENDRA SHIVAM

Copyright law protects the expression and not an idea. The idea-expression dichotomy under copyright
law has another aspect when the dichotomy melts and idea is the expression and vice-versa. In other
words, the idea and the expression of the idea become inseparable, as there is only one way to express or
depict an idea. This is known as Merger doctrine under which no one may claim a copyright in that single
manner of expression or depiction because that would evict everyone else from the right to express or
depict that idea. The expression, if copyrightable, would necessarily give the author a monopoly on the
expression of the underlying idea. In the instant case [Emergent Genetics India Pvt. Ltd vs. Shailendra
Shivam & Ors I.A. Nos. 388/2004, 1267/2004&1268/2004 in CS (OS) 50/2004], the court elaborated on
the Merger Doctrine.

Emergent Genetics alleged copyright infringement over reproduction of its seed's unique DNA
sequencing in the hybrid seeds of Shailendra Shivam. It contended that Shailendra Shivam by repeating
the DNA sequence has made the products of both the plaintiff and defendant genotypically identical,
resulting in copyright infringement of the plaintiff's literary work in the unique DNA sequencing of the
hybrid seeds. The issue thus framed by the Court was - Whether Copyright protection is granted under
Indian law, in respect of the work, for which the Plaintiff claims relief?

Copyright law does not grant the author of a literary work, protection on ideas and facts (R.G. Anand vs.
M/s Delux Films, (1978) 4 SCC 118). It is the creative expression of an idea or fact, which gets copyright
monopoly for a specified period. Section 2(y) of the Copyright Act, 1957 defines 'work' as any of the
following works namely: (i) a literary, dramatic, musical or artistic work, (ii) a cinematographic film, (iii)
sound recording. Section 2(o) of the Act defines 'literary work' to include computer programmes, tables
and compilations including computer databases and a copyright can be claimed on a 'literary work' under
Section 14 of the Act. The compilation of databases is entitled to copyright protection, however the law
mandates that the work claiming protection ought to be original. Section 13 of the Copyright Act provides
that a Copyright shall subsist in "(i) Original literary, dramatic, musical and artistic works; (ii)
cinematograph films and (iii) sound recordings. The law thus grants such recognition and protection to
expressions that are "original". A literary work, in order to qualify as work in which copyright can subsist,
must therefore be original.

The standard for judging "originality" has undergone a radical change. The Supreme Court of India
in Eastern Book Company vs. D B Modak 2008 (1) SCC 1, following the approach adopted in CCH
Canadian Ltd vs. Law Society of Upper Canada (2004) SCC 13 rejected the sweat of the brow doctrine,
(which conferred copyright on works merely because time, energy, skill and labour was expended) and
held that the work must be original "in the sense that by virtue of selection, co-ordination or arrangement
of pre-existing data contained in the work, a work is somewhat different in character is produced by the
author". Pertinently the Indian apex court noticed that the two positions i.e. the "sweat of the brow" on the
one hand and "modicum of creativity" on the other, were extreme positions and thus preferred a higher
threshold than the doctrine of "sweat of the brow" but not as high as "modicum of creativity". Thus the
Indian law mandates that not every effort or industry or expending of skill, results in copyrightable work
but only those which create works that are somewhat different in character, involve some intellectual
effort and involve a minimum degree of creativity.

The Court thus opined that 'the sequence for a gene' obtained from nature cannot per se be original. A
scientist while constructing a DNA sequence "discovers" facts from nature and thus there is no
independent creation of a "work" essential for matching the originality requirement. The Court also
reasoned that the processes by which these gene sequences are created to develop a unique variety are
expressly denied patent protection under section 3(j) of the Patent Act 1970, therefore it is inconceivable
that the observation and compilation of the consequences of that process, which is a natural consequence,
can receive an extremely wide protection as a "literary work". The "Merger doctrine" was applied to hold
that the idea of combining various gene components or constituents can only be expressed in limited
ways, therefore granting copyright protection would mean that the others are precluded from expressing
such ideas. The Court found unfavourable the analogy of computer programmes for copyright protection
of DNA sequences because the manner of stating the process or method of protein production is confined
to only one expression or programme. A specific sequence expressed in a manner, is the only way to
express the underlining idea of the gene; therefore there is a merger of the idea with the expression, which
precludes the copyrighting of DNA sequences that are codes for proteins.

FORTUNE FILM V DEV ANAD

The earliest cases on Performer’s rights, owing to the non-recognition of Performer’s rights under
the Indian copyright law, completely denied the existence of rights of Performers. In Fortune Films
International v. Dev Anand [AIR 1979 Bom 17], the Honourable Supreme Court stated that an actor
in a film has no rights over his performance in the film. However, this position changed in 1994 with
the Indian Copyright Act, 1957 extending recognition to Performer’s Rights with the inclusion of
Sections 38 and 39. In 2003, the Delhi High Court, in Super Cassettes Industries v. Bathla Cassette
Industries [107 (2003) DLT 91], while establishing that performer’s rights were different from
copyright, held that re-recording of a song without the authorization of original performer
constituted an infringement of the performer’s rights. This decision marked an important step
forward by the Indian judiciary, with respect to the recognition of Performer’s rights in India. As
‘performance’ under the Indian Copyright Act has been defined as any visual or acoustic
presentation made live by one or more performers, the Delhi High Court, in Neha Bhasin v. Anand
Raj Anand [2006 (32) PTC 779 Del.], addressed the question of what would constitute a ‘live
performance’. The Court observed that “Every performance has to be live in the first instance
whether it is before an audience or in a studio. If this performance is recorded and thereafter
exploited without the permission of the performer, then the performer’s right is infringed.”

SONY CORP OF AMERICA V UNIVERSAL STUDIOS

Sony Corporation of America manufactured and sold the "Betamax" home video tape recorder (VTR).
Universal City Studios owned the copyrights to television programs broadcast on public airwaves.
Universal sued Sony for copyright infringement, alleging that because consumers used Sony's Betamax to
record Universal's copyrighted works, Sony was liable for the copyright infringement allegedly
committed by those consumers in violation of the Copyright Act. Universal sought monetary damages, an
equitable accounting of profits, and an injunction against the manufacturing and marketing of the VTR's.
The District Court denied all relief, holding that the noncommercial home use recording of material
broadcast over the public airwaves was a fair use of copyrighted works and did not constitute copyright
infringement. Moreover, the court concluded that Sony could not be held liable as contributory infringers
even if the home use of a VTR was considered an infringing use. In reversing, the Court of Appeals held
Sony liable for contributory infringement.

Does Sony's sale of "Betamax" video tape recorders to the general public constitute contributory
infringement of copyrighted public broadcasts under the Copyright Act?

No. In a 5-4 opinion delivered by Justice John Paul Stevens, the Court held that "[t]he sale of
the VTR's to the general public does not constitute contributory infringement of [Universal's]
copyrights." The Court concluded that there was a significant likelihood that a substantial
number of copyright holders who license their works for free public broadcasts would not object
to having their broadcasts time-shifted by private viewers and that Universal failed to show that
time-shifting would cause non-minimal harm to the potential market for, or the value of, their
copyrighted works. Justice Stevens wrote for the Court that "[t]he sale of copying
equipment...does not constitute contributory infringement if the product is widely used for
legitimate, unobjectionable purposes, or, indeed, is merely capable of substantial noninfringing
uses." For the dissenting minority, Justice Blackmun expressed the views that taping a
copyrighted television program is infringement and that the recorder manufacturers were guilty
of inducing and materially contributing to the infringement.

OXFORD UNIVERSITY V RAMESHWARI PHOTOCOPY &Or.

Inside Rameshwari Photocopy Service, a persistent, rhythmic whirr is audible above the din of
students who crowd the shop. The sound is reassuring – it suggests business as usual within this tiny
shop, located on the campus of the Delhi School of Economics. It portends smoother days filled with
the buzz of machines that emit white paper with black lettering – photocopied course material, stacked
in neat bundles and disseminated to the students waiting in the shop.

In 2012, publishers Oxford University Press, Cambridge University Press United Kingdom,
Cambridge University Press India Pvt. Ltd., Taylor & Francis Group, United Kingdom and Taylor &
Francis Books India Pvt. Ltd. sought to restrain the photocopy shop from supplying photocopied
course packs to students. The lawsuit against the Rameshwari Photocopy Service and Delhi University
accused the defendants of “infringing the copyrights of the plaintiffs in their publications by
photocopying, reproduction and distribution of copies of plaintiffs’ publication on a large scale and
circulating the same…” The publishers sought a ban on all course packs, in an aggressive
interpretation of the Indian Copyright Act, 1957.

“If a student needs 33 readings for a course like Agrarian Sociology, it could take three to four month
to collect the readings from different books in the library. I make life easier for students – I get the
readings and compile them in course packs,” says Dharam Pal Singh, owner of Rameshwari
Photocopy Service. In August 2012, his shop was raided. Acting on an order issued by the Delhi high
court on August 14, a commissioner visited the premises, without prior intimation, to seize and make
an inventory of ‘infringing’ or ‘pirated’ copied of course material. “It was shocking – I felt like a
criminal,” recalls Dharam Pal, sitting between towers of duplicated syllabi in his shop. Subsequently,
the decision of the trial judge, Justice Rajiv Sahai Endlaw, which was in favour of a progressive
copyright frame and dismissed the suits filed by the international publishers, lends the 45 -year-old
photocopier the blazing conviction of a crusader. “I have not broken the law; this case isn’t about that.
It’s about foreign publishers losing their revenues to someone like me,” declares Dharam Pal.

Exceptions within the law make provisions for the copying of chapters within books for the purpose of
education. Section 52 (1) (a), the ‘fair use’ exception, allows any fair dealing with a copyrighted
work – literary, dramatic, musical or artistic – for the purpose of research and private study. Section
52 (1) (i) allows the reproduction of any copyrighted work, during the course of educational
instruction. Dharam Pal’s insistence that he did not violate the law was echoed by students and
academics who were galvanised into campus activism by the raid and chose to become co -defendants
in the case. Over 300 authors and academics petitioned against the lawsuit in an open letter to the
publishers. Of these, 33 were authors mentioned in the suit, whose books the publishers claimed had
been copied in the course packs. The letter stated, unequivocally:

“As authors and educators, we would like to place on record our distress at this act of the publishers,
as we recognize the fact that in a country like India marked by sharp economic inequalities, it is often
not possible for every student to obtain a personal copy of a book. In that situation th e next best thing
would have been for multiple copies of the book to be available in the library so that students are able
to access these books without any difficulty. But given the constraints that libraries in India work
with, they may only have a single copy of a book and in many instances, none at all.”

Forums like ASEAK, a society of students, and SPEAK, a collective of academics, rallied against the
lawsuit. Recently, the publishers filed an appeal against Justice Endlaw’s verdict. Student
representatives and academia bristled yet again with collective ire. The judge has, only a few days
ago, refused to grant an injunction against Rameshwari Photocopy Service.

“Higher education in India will be impossible if we have an over-zealous copyright law,” says Satish
Deshpande, author and professor of sociology at Delhi University. “It is a low-volume market in terms
of sales and a very dynamic one. Buying course material for even a single course or semester is
expensive, making an ordinary MA cost several lakhs of rupees.”

Academics argue that making bundles of course material available to students is in the interest of
publishers, as it allows for a wider dissemination of the literature and may even prompt some students
to buy the book. “No author writes to be hidden away in copyright laws,” says Aditya Nigam, a fellow
of the Centre for the Study of Developing Societies (CSDS). “May of us have petitioned to
fundamentally reject the idea of intellectual property ownership or the so-called “divine right” of
authors as creators. We can’t claim exclusive ownership of anything really – all our ideas are
renditions of ideas we have been exposed to through the work of others.” He mentions the peer-
reviewed Hindi journal Pratiman: Samay Samaj Sanskriti – brought out by the CSDS – which is
protected under the Creative Common licence and made available to readers for the purpose of sharing
and dissemination. “PDF versions are available online, but we retain the copyright,” he explains.

Activists and writers like Nivedita Menon also reject the publishers’ claim that academic publishing is
sustained by the investment made by them. “These big corporations could not have made profits if
they paid us royalties for services rendered as referees and editors. We write books because we work
for universities and are paid a salary. So, effectively, it is the taxpayer’s money – say a cycle
rickshawwala’s money – that contributes to the profits made by academic publishers.”

Students too, lash out at what they describe as “big capital worried about their depleting coffers”.
Apoorva Gautam, a 25-year-old who has completed her MA in sociology from the Delhi School of
Economics, mentions the fact that students and faculty opted to become defendants in the lawsuit
against Rameshwari Photocopy Service and its employer, Delhi University. “Students and teachers
were adamant about not being left out of a decision that influences how reading material is dispersed,”
she says.

Usman Javed, who teaches sociology at Hindu College, recalls the month of the raid – August 2012 –
when he had just acquired a master’s degree and had enrolled for an MPhil. “It was an affront to the
dignity of Dharam Pal and his employees – people who work with the utmost camaraderie and
affection. In fact, one of the staffers in the shop could tell whether an MA student would clear his
exam or not, just by looking at the readings the student was getting copied; ‘He hasn’t read Langsdorf,
he won’t pass!’ – such remarks would make us laugh. To watch these people being roughed up by the
cops was distressing, to say the least.” Usman also describes the Indian Reprographic Rights
Organisation (IRRO) – a society formed under the Copyright Act 1957, for the distribution of licenses
– as “the opening of a new revenue stream for the publishers”. The licensing arrangement, whereby
collecting societies can raise their licensing fees arbitrarily, is something Deshpande also warns of. “A
licensing system that presents photocopying as an infringement of copyrights, is detrimental to the
interest of both authors and students.”

The IRRO, which legal scholar Shamnad Basheer calls “an opaque organisation,” proposed to the
courts the option of limiting the photocopying to 15% of the copyrighted work, which, Basheer writes
in his blog, SpicyIP, “…in many cases, could be said to constitute a free “fair use”, even in the
world’s largest capitalist economy, namely the US”. Basheer is vehement about the fact that the
ecosystem of academic publishing relies heavily upon the work generated by academics. “The rules of
intellectual property must yield to larger social goals like access to educational material for all,” he
says. He urges publishers to review their pricing methods for developing economies: ‘The latest
editions of these foreign publishers are exorbitantly priced. Clearly, their market is the institutional
buyer, and not the student. Perhaps the time has come for publishers to introspect, and review their
revenue models.”

While Rameshwari Photocopy Service bustles with students, eager for a parcel of photocopied sheets
that will make the literature of expensive books available to them, the lawsuit and the recent appeal
against Justice Endlaw’s verdict raise tantalising issues. The right to intellectual property then is one
that must comply with the demands of crowded universities, as the verdict states: “It cannot be lost
sight of that we are a country with a bulging population and where the pressure on all public resources
and facilities is far beyond that in any other country or jurisdiction”.

Indiana Gratings Private Limited & Anr v. Anand Udyog Fabricators Private
Limited

Deciding upon a dispute dealing with copyright in drawings and their theft is the case of Indiana
Gratings Private Limited & Anr v. Anand Udyog Fabricators Private Limited & Ors.[2009 (39)
PTC 609 (Bom)]. Indiana Gratings claim to be the manufacturers of certain gratings used for
industrial purposes. In this pursuance, they imported a second hand Electro Fold machine in the
assembled form from a European manufacturer, which they found unsuitable to Indian
conditions. They incorporated certain improvements and modifications to those machines and
claim copyright in the drawings as an artistic work. Anand Udyog are accused of having
obtained these drawings unlawfully and hence were alleged of theft and criminal conspiracy.
The cause of action arose as Anand Udyog reproduced those drawings into finished products
which they use for their business, competing with that of Indiana Gratings. Anand Udyog
however contended that Indiana Gratings did not have any copyright over the drawings,
because they had copied it from a second hand European machine they had imported. They
further stated that if Indiana Gratings' work qualified as an artistic work being a product of their
original effort there was no infringement by reproduction of those works in their finished
products vis-à-vis the 3 dimensional objects as against Indiana Gratings' 2 dimensional
drawings. Further the drawings were stated not to have a copyright in them as they were
registrable under the Designs Act, 2000

Looking at the definition of "artistic work" as under Section 2(c) (i) of the Copyright Act, 1957,
the Court opined that a drawing in the form of a diagram would qualify as an "artistic work" even
if it did not portray any artistic quality to a layman. The Court stated that although Indiana
Gratings had borrowed the idea from European manufacturers, the expression is in the
drawings which carried a copyright with it. On the question of qualifying under the Designs Act,
2000, the Court took notice of Section 2(d) dealing with the definition of a "design" and the
criteria considered to qualify as a design, the Court noted that the drawings, did not reflect
finished articles, let alone appealing finished articles, but served a mere functional purpose, thus
falling out of the purview of being a "design". The Court took notice of the case West vs.
Francis (1822) 5. B & Ald. 743 whereby it was held that a drawing of an industrial product,
which could be multiplied by an industrial process, would not qualify as a design under the
Designs Act but a copyright as an artistic work.

Further, addressing the question of whether Anand Udyog's product constituted an infringing
copy under section 2(m) of the Act, the Court noted that the depiction is in Anand Udyog's
finished products of Indiana Gratings' drawings make it an infringing copy. Anand Udyog
claimed that Indiana Gratings' drawings were commonplace shapes, based on basic principles
of engineering mechanics. Indiana Gratings retorted stating that the various drawings taken as a
whole for various parts of the machinery would fit into one another and when used together did
not show commonplace drawings. The case of L.B. (Plastics) Limited vs. Swish Products
Limited, (1979) RPC 551, was also referred whereby The House of Lords laid down a twin test
to determine the infringement :

i. There was a striking general similarity between the Plaintiffs and the Defendants'
product with proof of access to the Plaintiffs' productions.
ii. The Defendants had not provided any alternative to copying.

It was also held therein that that once the similarity was shown between the object/drawing in
contention was found, the next step was to consider whether this inference could be displaced
by evidence from the Defendants showing how in fact they had arrived at their designs and had
not done so by copying. A similar judgment was also noted to have been passed in Escorts
Construction Equipment Ltd. & other vs. Action Construction Equipment Pvt. Ltd. & anr.,
AIR 1999 Delhi 73.

The Court noted, that in the present scenario, there was a case of theft coupled with recovery of
the drawings, which revealed Anand Udyog' access to Indiana Gratings' drawings. Moreover,
Anand Udyog neither relied upon nor produced their own drawings. The specific dimension of
the drawings submitted by other co-defendants was found to be identical to the drawings of
Indiana Gratings', which the Court held to prove beyond doubt that the drawings were copied.

Further, the Court found that Indiana Gratings' drawings had their specific identifiable marks
alongside the copies recovered from some of the defendants, including distinctive alpha-
numerals as also the logo, complete name and description of the product along with the legend
for the various items in the drawings and a warranty. Taking note of the findings, the Court
concluded that the drawing were stolen and copied.

In view of the facts of the case, the Court restrained Anand Udyog from using Indiana Gratings'
drawings and thereby infringing their copyright in their drawings or making any 3 Dimensional
objects of machine parts amounting to the reproduction of Indiana Gratings' drawings.

Safe Harbour For Intermediaires

1. "There is only one boss. The customer. And he can fire everybody in the company from
the chairman on down. Simply by spending his money somewhere else" – Sam Walton.
2. World has moved from Brick and Mortar to online in all forms of assimilation right from
mom and pop stores to electronics and medicines. From selling limited wares in a shop,
an online store can sell unlimited wares. The business is scalable without limits. Online
platforms or intermediaries like Flipkart, eBay, Amazon have given access to many
vendors through their platforms. However, it may not be feasible to keep an electronic
watchman to filter everything the vendor intends to sell on the site. The power of
intermediary can be deciphered from the fact that on 29 March 2017, Amazon founder
Jeff Bezos became the second richest person on earth, few billions short of Bill Gates.
3. India has sought to regulate electronic transactions through Information Technology Act,
2000. Section 2(w) of the Information Technology Act, 2000 defines intermediary as "any
person who on behalf of another person receives, stores or transmits that record or
provides any service with respect to that record and includes telecom service providers,
 network service providers, internet service providers, web-hosting service providers,
search engines, online payment sites, online-auction sites, online-market places and
cyber cafes"
4. Section 79 of the Information Technology Act, 2000, is a non-obstinate clause which
provides immunity from liability under all laws provided the intermediary has not
conspired or abetted or aided or induced in commission of the unlawful act or upon
receiving actual knowledge through any notification about a computer resource in the
control of intermediary being used for unlawful act fails to expeditiously remove or
disable access to that material. Section 79 reads as below:

79. INTERMEDIARIES NOT TO BE LIABLE IN CERTAIN CASES

1. Notwithstanding anything contained in any law for the time being in force but
subject to the provisions of sub-sections (2) and (3), an intermediary shall not be
liable for any third party information, data, or communication link made available
or hasted by him.
2. The provisions of sub-section (1) shall apply if—

a. the function of the intermediary is limited to providing access to a

communication system over which information made available by third
parties is transmitted or temporarily stored or hasted; or
b. the intermediary does not—

i. initiate the transmission,

ii. select the receiver of the transmission, and
iii. select or modify the information contained in the transmission;
c. the intermediary observes due diligence while discharging his duties
under this Act and also observes such other guidelines as the Central
Government may prescribe in this behalf.
3. The provisions of sub-section (1) shall not apply if—

a. the intermediary has conspired or abetted or aided or induced, whether

by threats or promise or othorise in the commission of the unlawful act;
b. upon receiving actual knowledge, or on being notified by the appropriate
Government or its agency that any information, data or communication
link residing in or connected to a computer resource controlled by the
intermediary is being used to commit the unlawful act, the intermediary
fails to expeditiously remove or disable access to that material on that
resource without vitiating the evidence in any manner.

Explanation.—For the purposes of this section, the expression "third party information"
means any information dealt with by an intermediary in his capacity as an intermediary.

5. Section 81 again reiterates that the provisions of IT override all other acts except the
rights under Copyright Act, 1957 and Patent Act, 1970. Could it be analogous to the
Safe Harbour provision under the US Digital Millennium Act. Section 81 reads as below:

81. Act to have Overriding effect: The provisions of this Act shall have effect
notwithstanding anything inconsistent therewith contained in any other law for the time
being in force.
 Provided that nothing contained in this Act shall restrict any person from exercising any
right conferred under the Copyright Act 1957 or the Patents Act 1970 (Inserted Vide
ITAA 2008)

6. However, intermediaries have been made parties to large number of law suits
considering that many of the infringing products are easily sold in large numbers through
these portals. There has been a push to enrol as many vendors as possible to provide
diverse product and price options to the buyers.
7. In a case titled Super Cassettes Industries Ltd. vs. MySpace Inc. & Anr., the Single
Judge of the Delhi High Court had restrained Myspace from permitting any person to use
its space for infringement of Plaintiffs copyright. In that case, the Plaintiff was the
developer and producer of various musical and cinematographic work. Myspace was a
subscriber based free social networking site enabling content sharing. Myspace added
advertisements to the uploaded content. The Single Judge held that in view of Section
81 of the Information Technology Act, the liability of intermediary is not saved when
there is violation of Copyright Act. The after the fact inquiry by the Defendant was not
enough to overcome the rights granted to copyright owner under the Copyright Act.
8. In a recent case Kent RO Systems Ltd. vs. Amit Kotak & eBay India Pvt. Ltd, the
Delhi High Court reiterated the position that the intermediary is not required to make a
self-determination of infringing products sold on its website but is required to take down
the same only after recipt of complaint. The Court felt that an intermediary will not be
possessed with prowess to detect each case of infringement unless their attention is
drawn to a particular instance.
9. In the case of Sabu Mathew George Vs. Union of India, before the Supreme Court of
India three intermediaries viz. Google, Yahoo and Microsoft agreed to auto block
advertisement with specific words which are in violation of The Preconception and Pre-
natal Diagnostic Techniques (Prohibition of Sex Selection) Act, 1994 (PNDT Act) which
prohibited detection of the gender of the child during the conception stage. This
interpretation could arise on account of the great social problems for which this Act had
been framed to address. The Court also directed the Government to form a nodal
agency which will alert the intermediaries about any site so that the same could be
blocked by the intermediary and not be accessible. Repelling the contention of
Intermediaries that blocking of content which are not advertisement on pre-natal
diagnosis would violate their freedom of speech, the Court reiterated that freedom of
speech cannot be in violation of law.
10. In the landmark decision of Shreya Singhal vs. Union of India, the Supreme Court of
India while dealing with the case in the context of Article 19 (2) of the Constitution of
India viz. situation in which the right to Freedom of Speech could be regulated, held that
under Section 79 of the Information Technology Act, intermediaries are exempt from
liability if they fulfil conditions of the section. The Court refrained from striking down
Section 79 by reading down Section 79 (3) (b) and Rule 3 of the Information Technology
(Intermediary Guidelines) Rules, 2011 to hold that the knowledge referred to in this
section must be only through the medium of a court order or through an agency
established by the Government. The Court observed that it would be otherwise very
difficult for intermediaries to go through all the requests they receive and judge which
requests are legitimate and which are not.
11. In the appeal filed before the Division Bench of the Delhi High Court in Myspace Inc.vs.
Super Cassettes Industries Ltd., the Court held that:
 i. It cannot be said that Myspace had knowledge of the infringement as it is
technically not feasible to identify streaming content which infringes.
ii. When insertion of advertisements and modifications to any content is carried out
by Myspace through automated systems, it cannot be said that Myspace had
knowledge of infringement. It is not enough that there is suspicion of knowledge
of infringement but should be actual knowledge.
iii. The take down notice by Plaintiff gave its entire repertoire without actually
identifying the infringing works available on Myspace portal, which was not good
enough notice.
iv. The argument of constructive knowledge and secondary infringement by
Myspcace was rejected.
v. The safe harbour provisions of the Indian Information Technology Act is similar to
that under the European Copyright Directives.
vi. Section 79 of The Information Technology Act read along with the Information
Technology (Intermediary Guidelines) Rules, 2011, provided an affirmative
defense to the intermediary if the associated conditions of due diligence under
Section 79 are followed.
vii. Section 79, Section 81 of Information Technology Act has to be read
harmoniously with Section 51 (a) (ii) of Copyright Act, 1957.
viii. Plaintiff was directed to provide the URL of the infringing works to Myspace and
Myspace was directed to remove it within 36 hours.

Conclusion:

The decision of the Division Bench in Myspace case is a welcome step. It recognizes that
intermediary should be allowed to conduct business without any fetters but should act with
diligence. The Court had done the delicate act of a harmonious construction between Section
79 and Section 81 of the Information Technology Act. However, an intermediary should block or
remove access to an infringing material once it has been issued with the take down notice. This
is a fine balance between growth of technology and protection of Intellectual property rights.

The intermediary should also place a gatekeeper before its enables any person to use its
platform to disseminate information so that the person on its platform can be traced and be held
accountable for its acts. This would reinforce the trust users place on intermediaries and their
online platforms.