In the matter of Dhaval Diyora vs. Union of India & Others [Writ Petition (L) No.3718 of 2020], a two-judge bench (Hon’ble Nitin Jamdar J., Milind N. Jadhav J.) of Bombay High Court vide an order dated November 4^th 2020 held that a pre grant opposition to a patent application cannot be filed after the Controller has given its final decision.

In this matter, the Controller had rejected the patent application of Pfizer Inc. (Respondent No. 4), against which Pfizer filed an appeal before the Intellectual Property Appellate Board (IPAB). The IPAB concluded the hearing in appeal on August 10, 2020. The Petitioner filed pre-grant opposition on August 18, marking copy to IPAB. On August 21, the IPAB pronounced order granting patent to Pfizer. The Petitioner filed a writ challenging IPAB’s order of August 21. Petitioner contended that Section 25 (1) of Patents Act, 1970 permits any person to oppose the grant of patent by way of pre-grant opposition “where an application for a patent has been published but a patent has not been granted”, and that unless a patent entered in the Register it is not granted. Petitioner argued that IPAB, being aware of the pre-grant opposition, could not have ordered the grant of patent without first hearing and disposing the opposition on merits. The Respondents argued that the filing and adjudication of pre-grant oppositions is restricted to the stage when the application is pending before the Controller, and the appeal is not a continuation of such proceeding.

The Court observed that the scheme of pre-grant opposition under the Act is limited to the Controller and held that “the right under section 25(1) of pre-grant opposition starts when the Patent is published and continues till the matter is decided by the Controller but no further”. As per the Court, the Controller was functus officio on the date of filing of the pre-grant opposition. The Court also upheld an earlier finding that “sealing of patent and entry of patent in the register are ministerial acts.”

The Court took notice of the fact that the petitioner had not filed any pre-grant opposition before the Controller’s final order in 2015 and observed that “if after the order of the tribunal, which is to be implemented by the Controller, the Controller entertains pre-grant applications; it may give rise to an endless series of oppositions”. The Court dismissed the writ petition with costs and held that the pre-grant opposition is not maintainable in law.

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In the matter of Engineering Analysis Centre of Excellence Private Limited v. The a Commission of Income Tax and Anr (2021 SCC OnLine SC 159)[i] a full bench (R.F. Nariman, J., Hemant Gupta, J., B. R. Gavai, J.) of the Hon’ble Supreme Court of India vide its order dated March 2^nd 2021, held that the amount paid by a resident Indian end user/distributor to a foreign software manufacturer for a License to resale/use of such Software is not ‘royalty’ and thus is not taxable.

The Appellant is a resident Indian end-user of shrink-wrapped computer software, directly imported from the United States of America. The Respondents were of the view that since the sale of the software included a license to use the same, the payment made by the appellant(s) to foreign suppliers constituted “royalty” which was deemed to accrue or arise in India and, therefore it was required that tax be deducted at source by the Indian importer and end-user (Appellant) under Section 195(1) of the Income Tax Act, 1961.

The Court considered, inter alia, the relevant provisions under the Copyright Act, 1957 and its amending acts in detail and observed that- “The transfer of the ownership of the physical substance, in which copyright subsists, gives the purchaser the right to “do with it whatever he pleases, except the right to reproduce the same and issue it to the public, unless such copies are already in circulation, and the other acts mentioned in section 14 of the Copyright Act.”

The Court further observed that the license between the parties was not a ‘Licence’ in terms of section 30 of the Copyright Act, which transfers an interest in all or any of the rights contained in sections 14(a) and 14(b) of the Copyright Act, but is in fact the sale of a physical object which contains an embedded computer programme, and is therefore, a sale of goods. Thus, the Court held that any amount paid for such license cannot be construed as ‘Royalty’ and is not taxable under the Section 195(1) of the Income Tax Act, 1961.

The Court concluded in its Judgement that- “The amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India.”

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[i] https://main.sci.gov.in/supremecourt/2011/38137/38137_2011_33_1501_26629_Judgement_02-Mar-2021.pdf

In the matter of the Indian Performing Right Society vs Entertainment Network and others [CS (OS) 666/2006], a single Judge [ Hon’ble Rajiv Sahai Endlaw] of the High Court of Delhi vide an order dated January 4^th  2020, held that royalties for  underlying works are not payable when utilized in sound recordings.

The Plaintiff  (IPRS) contended that by virtue of being the exclusive owner of the public performance right of the literary and musical works in dispute, they are authorized to license the public performing rights of literary and musical work created by its members. Further, as it is the owner who exclusively enjoys the right as set out in Section 14(a) of the Indian Copyright Act 1947, broadcasting organizations that play music belonging to IPRS infringe on this right unless a license has been obtained. Thus, the Plaintiff argued that the broadcast of music by the Defendant in three new cities, without procuring a license, amounts to infringement of the public performance rights of the Plaintiff.

The Defendants contended that no separate license fee is payable with respect to the copyright vested in the underlying literary and musical works, as they had obtained a license from Phonographic Performance Limited, which is the assignee of the IP rights related to the songs broadcast on its radio channels. The Plaintiff in turn has claimed to be the only assignee of the rights in the literary and music compositions of the songs. The counsel for the Defendants argued that as per Section (y) of the Act, copyrighted works are considered as mutually exclusive. Accordingly, a sound recording is an independent work consisting of separate and independent copyrights and thus the Defendants contended that the licenses for broadcasting purposes of the sound recording have been obtained.

The contention of IPRS that there exists a copyright in the sound recording and the underlying musical and lyrical work, is contrary to law. Accepting this argument, the Delhi High Court held that utilization of a sound recording does not amount to utilization of its underlying works, thereby there exists no requirement for obtaining permission from the creators of the underlying works. Neither is any royalty owed to them. The court stated that “‘It is the owner of the sound recording who transforms the literary work which otherwise is a mere collection of words into a sound, capable of phonetic pleasure and who gives the composition of music a sound of various musical instruments”. The Plaintiff suit was thus dismissed.

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In the matter of Aktiebolaget Volvo & Ors v.Vaishali Travels & Anr [CS(COMM)6/2021], a Single Judge [J.R. Midha, J.] of the High Court of Delhi issued an ex-parte ad interim order dated January 11, 2021, restraining Defendants from using Plaintiff No. 1’s trademark VOLVO in relation to its services and as a part of domain name, meta-tags, email ID, third party listings, references in social media etc.

Plaintiff No. 1 (viz. Aktiebolaget Volvo) is an international automotive and transport vehicle group, providing a diverse range of goods and services related to transportation. The Plaintiffs instituted the instant suit for infringement, passing off and tarnishment of trademark VOLVO after coming across Defendant’s use of an identical mark VOLVO in respect of operation of bus travel services, online bus ticketing and live tracking services. The Plaintiffs’ main contention was that it was aggrieved by misappropriation caused by Defendant’s use of the mark VOLVO as a part of its domain name, online trading name, email id and meta-tags on the source code of the website. The Plaintiffs submitted that Plaintiff No. 1 adopted the mark VOLVO as its trademark/corporate name in May 1995 and used the same in relation to manufacture and sale of goods. Plaintiffs claimed that pursuant to Aktiebolaget Volvo of Sweden vs. Volvo Steels Ltd. of Gujarat, 1998 PTC (18) 47 the mark VOLVO has been declared as a well-known mark and that Plaintiff No. 1’s mark deserves to be protected. 

The Court ruled in favor of Plaintiffs and held that “The Defendants…are hereby restrained from using the Plaintiffs’ name/trademark ‘VOLVO and/or any name/mark confusingly or deceptively similar thereto, in relation to online booking of bus tickets, live tracking of buses, telephonic booking of bus tickets or in relation to any other goods or services, in any manner, including…domain name…meta- tags associated with the impugned domain name, as a part of the email id…third party listings, references in social media and/or any representation made by the Defendants…amounting to infringement…and passing off…”

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In Re: Smuggling and illegal trading of endangered species of birds [WPA 10138 of 2020 With IA No.: CAN 1 of 2020], a Division Bench [Thottathil B. Radhakrishnan, CJ. and Arijit Banerjee, J.] of the High Court of Calcutta (“Court”), by its order dated December 8, 2020, prohibited capture of birds without mature flight feathers.

The Court, in its suo motu case, took note of the provisions of Prevention of Cruelty to Animals (Pet shop) Rules, 2018 (“Pet Shop Rules”) which prohibit sale of certain pet animals. The Court noted that ‘pet birds’ fall under the definition of ‘pet animal’ under Rule 2(1)(j) of the Pet Shop Rules. The Court further noted that from a conjoint reading of the Pet Shop Rules, it can be inferred that pet shops could be operated only for those pet animals whose ownership and trade is not prohibited under any other law. The Court pointed out that these provisions reinforce the constitutional and legislative command which prohibits unlawful capturing of birds.

In respect of protection of migratory birds, the Court observed that “The geographical territories or terrain from which the migratory birds may move would not at all be relevant to provide protective umbrella of the Constitution of India and the Statues falling under it for the succour to and management of the fauna which fly in of their own. This is how the provision of the Constitution will have to trickle down and operate”.

In view of the above, the Court observed that “The Pet Shop Rules, particularly the different clauses in sub-rule 2 of Rule 7 read with Rule 2 (1)(p) read with Clauses (a) & (c) of Section 2 of the Prevention of Cruelty to Animals Act, 1960, clearly establish that an offspring of a bird that has not attained the age at which it clearly acquires independent survival skills to meet its basic needs like food, warmth and safety and, further, birds without mature flight feathers cannot be captured for the purpose of trading in any form”. The Court also directed the state authorities to ensure compliance with laws dealing with prevention of cruelty to animals and birds, in particular, those birds whose capture and utilization is prohibited under the Pet Shop Rules

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