Intellectual Property Rights

The significance of intellectual property can be traced to the ancient use of stamps on bricks by Roman brick-makers for the purpose of identification, and even before that when the leaders of the ancient Greek city of Sybaris granted monopoly for one year on cooking a delicious dish to its creator. Obviously, much has changed since then with the advancement of science and technology and global business.

Intellectual property is a product of human intellect and the rights granted on it allow its owner to benefit from the fruits of this intellectual endeavour by creating a monopoly over it. Such benefit is not always a natural right but requires recognition by a statute.

In India, intellectual property rights recognised under statute are:

  • The Patents Act, 1970;
  • The Trade Marks Act, 1999;
  • The Copyright Act, 1957;
  • The Designs Act, 2000;
  • The Geographical Indications of Goods (Registration & Protection) Act, 1999;
  • The Semiconductor Integrated Circuits Layout Design Act, 2000;
  • The Biological Diversity Act, 2002;
  • The Protection of Plant Varieties and Farmers’ Rights Act, 2001.

Intellectual property rights (IPRs) play a key role in every sector and have become the basis for crucial investment decisions. IPRs are exclusive rights and therefore there is always a challenge to strike a balance between the interests of innovators and the interests of the society at large. Another important factor is having an adequate legal framework to protect the interests of innovators and inspire confidence that their intellectual property will be protected, in turn triggering further innovation.

IPR litigation in India is quite diverse owing to the large number of courts, varying degree of experience of the judicial officers in IPR matters and varying manners of practice. As a result, some courts have become preferred forums over others.

Most of the suits for infringement are filed in Delhi and Mumbai, especially in High Courts of these cities. Although these jurisdictions are preferred due to its courts’ extensive experience and greater understanding of IPR matters, their large volume of cases are also attributable to the fact that Delhi is the capital of India and Mumbai is the country’s economic capital. Thus, large volumes of commercial disputes are natural.

With the rapid growth of cases dealing with IPR laws – including patents, trade marks, copyrights and design laws – there has been a total number of 727 cases filed at the Delhi High Court and the Bombay High Court during the last year. Out of these, 531 cases related to trade marks, followed by copyrights (157), designs (14) and patents (42). There were approximately 532 cases in which ex parte injunctions were granted and there were 661 cases in which permanent injunctions were granted. Only 92 cases were settled in the last year.

The Indian Legislature established commercial courts in India by passing a new Act in 2015, which came into effect in 2016, with the objective of streamlining and expediting commercial lawsuits, including IP disputes. Under this act, commercial courts have been established at the district level and commercial divisions have also been established within High Courts having ordinary original civil jurisdiction. This new enactment has given a separate treatment to commercial cases, which include cases relating to intellectual property. Given the large volume and often tardy progress of cases, the new Act gives stringent timelines for different stages of a suit with almost no room for slow progress. Under the said Act, if any party feels that its opponent has no real prospect of succeeding in or defending a claim, and that recording evidence would be superfluous, then it may apply for a summary judgment. The endeavour is to hear and conclude oral arguments within six months of the time when the parties have finished reviewing all the documents. This procedure is meant to ensure the speedy disposal of suits.

Apart from changes in law to improve the speed of trials, the Government has taken initiatives for the training of judicial officers such that IPR matters are handled in an expedited manner. The Cell for IPR Promotion and Management (CIPAM), which is a government body, has been working in conjunction with WIPO and the National Judicial Academy, India (NJA) for organising training and sensitisation programmes on IPRs for High Court and district court judges. Two colloquiums on commercial laws for High Court judges were held at the National Judicial Academy of Bhopal. CIPAM, in association with NJA, included the discussion on intellectual property rights in the Colloquium on Commercial Laws for High Court Justices held in January 2017.

India is beginning to be recognised as a pro-innovator jurisdiction with courts having a greater understanding of IPR laws. Moreover, with a proper legal framework in place and no discrimination on the nationality of the entities asserting their IP rights, India has seen a manifold increase in the assertion of IP rights by innovators.

This is one side to the trends of litigation in India, especially for IPR matters. From the other side, the trend has been that once an ex parte injunction is granted, it takes a considerable amount of time to remove such injunction and also for the trial to conclude. Moreover, once an injunction is granted, the party in whose favour such injunction is granted tends to delay the proceedings and prolong the trial. As many as 9% of the cases have been completed more than 20 years after the date of the stay order. Approximately 21% of the cases have been completed more than ten years after the date of the stay order. As per the data available up to 2017, there are in excess of 3,000 cases that are still pending in different courts for a period of more than ten years.

In order to curb this misuse of the statutory right granted to the litigants, the Three Judges Bench of the Hon’ble Supreme Court in the landmark case of Asian Resurfacing of Road Agency Pvt. Ltd. and Ors. v Central Bureau of Investigation ((2018) 16 SCC 299) directed that in all pending cases where stay against proceedings of a civil or criminal trial is operating, the same will come to an end on expiry of six months, unless in an exceptional case by a speaking order such stay is extended. In cases where stay is granted in future, the same would end on expiry of six months from the day, unless in an exceptional case by a speaking order such stay is extended.

Courts in India, especially in IP matters, have recognised the importance of curtailing wilful infringement of IP rights and have been liberally granting punitive damages to the innovators. Although the amount of punitive damages granted by the courts is not very large, such damages are granted in addition to the real damages and act as a deterrent.

Thus, as can be seen from the above discussions, Indian litigation trends present a very balanced approach by the courts in IP matters. On one side, courts do not shy away from granting ex parte injunctions against infringers, and prolonged ex parte injunctions are also frowned upon. Moreover, with new laws in place, the time taken to complete a trial has been shortened significantly.

Patent Litigation – Trends and Development, India by Varun Sharma and Gautam Kumar

Article was 1st published in Chambers & Partners, Patent Litigation 2020 Guide.