For assessment of damages in infringement matters, some of the factors to be considered are natural and direct consequences of the infringement and loss of goodwill and reputation due to the infringing activities. In order to get punitive/ monetary damages from the other party, it is required to produce the necessary legal evidence of such damage and a valuation thereof.

Whereas it is feasible to calculate the actual loss caused due to loss of business and loss of profit, courts often take the easier route to calculate the damage caused due to loss of goodwill and reputation. It has been seen in several cases that while the court does recognize infringement action and takes appropriate steps to prevent and stop abuse of someone else’s rights, damages for loss of reputation/goodwill are not often awarded. The court simply applies the ‘Double and Treble Formula’ to calculate damages for loss of reputation/goodwill. In the case of Time Incorporated vs Lokesh Srivastava And Anr. [1], for example, the High Court of Delhi, simply doubled the punitive damages to compensate for the loss of reputation and goodwill. But this formula is not justifiable in all cases.

It is important that we have specified and more sophisticated guiding principles or factors to calculate damages for loss of reputation and goodwill. We currently do not have any framework of clear principles for calculating damages in diverse and complex cases, especially for the damage caused due to the loss of reputation and loss of goodwill. From a practitioner’s perspective, there is uncertainty about what types of evidence are to be produced to enable the court to assess the monetary damages to compensate for the loss of reputation or goodwill.

Simply doubling or tripling the punitive damages of the actual loss may not be reasonable or sensible. Time, money and effort invested in building reputation and goodwill can hypothetically be less or more and even significantly less or more than the worth of the reputation and goodwill. The damage caused to reputation and goodwill by infringement or passing off can be a variable fraction of the worth of the reputation and goodwill. It is important that the computation of damages be alive to these subtleties. The application of mind to these various considerations is required for this jurisprudence to grow and mature and be equal to the demands of economy and society. Currently this jurisprudence is quite underdeveloped. Hence, there is a case for framing a fixed set of guidelines for calculation of damages for loss of goodwill and reputation.

End Notes:[1] 2006 131 CompCas 198 Delhi.  https://indiankanoon.org/doc/1152738/

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

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The Government of India’s Policy Think Tank, Niti Aayog released a Report – Moving The Needle – The Women Entrepreneurship Platform (WEP) in March 2021. The Report deals with the Women Entrepreneurship Platform which was formally launched on 8 March 2018, dedicated to promoting and supporting existing and aspiring female entrepreneurs in India. 

According to the Report, the majority of WEP users, 68 percent%, have sole proprietorships or private limited corporations as their business structure. Just a small percentage of WEP client users run other forms of businesses, with 11% running joint projects, 8% running limited liability partnerships, and about 3% running section 8 corporations and only 43% of WEP user-run businesses are registered businesses.

Three guiding pillars inform WEP’s 360-degree view of female entrepreneurship in the Report- 1) Ichha Shakti – to motivate aspiring entrepreneurs to kick-start their enterprise; 2) Gyan Shakti – to provide knowledge and ecosystem support; 3) Karma Shakti – to provide hands-on support in launching and scaling ventures.   

As explained in the Report, WEP connects with women entrepreneurs through its online platform, which provides them with useful information and services. Three modules on the platform that enable WEP partner organisations to host content in their areas of expertise are – 1) Website’s Community Module: Enable entrepreneurs to interact with other entrepreneurs, mentors, collaborators, and the WEP Team; 2) Information Bank Module: Enable users to host blogs, checklists, infographics, and videos; 3) Events Module: Can be used to host both WEP and partner events, where users can register and show interest in attending.

The Report informs that Flipkart became an early supporting partner with an aim to modernise the group module by using the WEP website and social media to promote the concept of ‘community, redesigning the Community module’s user interface and improving the website’s Chatbot. The future improvements for the platform include Conversational AI which will make the Chatbot available 24*7 with pre-fed FAQs and Intelligent design that will lead to a reduction of time and efforts, personalization, customization, etc.

The United Nations is identified by the Report as being a core supporter of the WEP and is stated to have aided in a variety of projects. The United Nations in India (led by UNDP and UN-Women) has partnered with WEP to create the UN India-NITI Aayog Investor Consortium (IC) for Women Entrepreneurs to accelerate opportunities for investing in women’s entrepreneurship. The platform brings together key ecosystem partners that are committed to mentoring and future funding opportunities for women entrepreneurs, as well as advocates for a reduction in gender gaps in start-up investments.

The report can be accessed at: http://niti.gov.in/sites/default/files/2021-03/MovingTheNeedle_08032021-compressed.pdf 

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

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The Design (Amendment) Rules, 2021 came into effect on January 25, 2021 with the notification in the Official Gazette by the Department for Promotion of Industry and Internal Trade. Prior to this, the design classification system in India was based on tenth edition of Locarno Classification, but now with the 2021 Amendment Rules, designs will be classified according to the latest edition of the Locarno Classification (Rule 10 (1)) i.e, the 13^th edition which contains 32 classes and 237 sub-classes. This is a positive move to keep India aligned with the evolving International Standards.

The 2021 Amendment Rules introduced ‘startup’ as a category of Applicants. Section 2(eb) defined “startup” as any Indian entity which is in turn recognized by a competent authority as a startup under the ‘Startup India Initiative’ of the Government of India. Any foreign entities that fulfill the turnover requirement, the registration criteria and have been established recently enough such that their date of incorporation is within the period specified by the ‘Startup India Initiative’ are also entitled to claim the status of a startup as under the new Amendment Rules, provided they submit a declaration to that effect.

There is a simplification of the fee structure regarding transfer of rights and an overall reduction in fees for small entities as under the Amendment Rules of 2021. Now, all applicant entities whether small entities under the MSME Act, startups or natural persons are supposed to pay the same fees without any differentiation. This in turn specifically has led to about 50% reduction in the fees to be payable for small entities.

The 2021 Amendment Rules provides for e-service of documents by means of email and mobile phones. The Designs Office has been mandated to keep a record of the mobile numbers which are to be given along with the address as a mode for the service of documents.

Another change is in the templates of Form 1 and Form 24 to implement the new categories of start-ups and small entities. Form 1 now features four different categories of Applicants i.e, (i) natural person (ii) start-up (iii) small entity and (iv) others. The revised Form 24 specifically mentions ‘start-ups’ along with ‘small entities’ as permissible distinct categories of Applicants.

The Design (Amendment) Rules, 2021 can be accessed at : https://ipindia.gov.in/writereaddata/Portal/Images/pdf/The_Designs__amendment___Rules__2021.pdf 

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

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The Office of the United States Trade Representative (USTR) on April 30, 2021 released the 2021 Special 301 Report (the ‘Report’) which is an annual review of the state of IP protection and enforcement in US trading partners around the world. India has again been included in the Priority Watch List in the Report which means that there will be extensive discussions regarding the Indian IP regime between the two countries in the coming year.

In relation to India, the Report highlights the challenges with regard to IP enforcement and protection. It lists certain long-standing issues of particular concern which inter alia include the narrow patentability criteria, costly & time-consuming pre-and post-grant oppositions and potential threat of patent revocations. The Report also lays down concerns with regard to the pharmaceutical sector such as restriction on patent-eligible subject matter in Section 3(d) of the Patents Act, lack of an effective system for protection of classified test data generated for marketing approval of products, etc.

The Report further takes note of issues pertaining to IP enforcement in India such as the absence of a centralized IP enforcement agency, presence of several counterfeit markets, etc. The Report also identifies certain issues pertaining to trademarks like excessive delays in opposition proceedings and lack of quality in examination. To address what it describes as  the lack of legal means to protect trade secrets, it recommends adoption of a comprehensive trade secret legislation. While discussing issues which according to the Report raise serious concerns for copyright holders, the Report also analyses the draft Copyright Amendment Rules of 2019 favored for broadening the scope of statutory licensing to include online streaming. It also lists pertinent copyright issues which inter alia include high level of online piracy and signal theft by cable operators. The Report mentions the jurisdictional challenges and inadequate resources plaguing the effectiveness of Commercial Courts Act, 2015, and takes note of the recent abolishment of IPAB as a matter of concern.

Finally, the Report highlights the efforts made for promotion of IP enforcement and protection and lists India’s accession to WIPO Internet Treaties in 2018 and Nice Agreement in 2019 as positive steps. It praises efforts of proposing amendments to the Copyright Act and the Cinematograph Act, while also acclaiming the adoption of the revised Manual of Patent Office Practice and Procedure in November 2019 and revised Form 27 on patent working in October 2020. Lastly, it compliments India’s measures for promoting IP awareness and cooperation along with the partnership for COVID-19 vaccine manufacturing under the Quad Vaccine Partnership as well as WHO and COVAX.

The Report can be accessed here: https://ustr.gov/sites/default/files/files/reports/2021/2021%20Special%20301%20Report%20(final).pdf

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

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Intellectual property (IP) is a form of intangible property and therefore outside the ambit of the conventional definition of a property. Nevertheless, the role of IP rights in the growth of a business concern is indisputable. While the modern business world realizes the importance of IP, its scope as a business asset is usually limited. Traditionally, businesses used financing tools such as licensing or assignment of IP rights to build a steady revenue stream. The modern business community has found new ways to exploit their IP rights and raise funds. IP is increasingly being used by companies as a collateral against loans taken from financial institutions. Unlike tangible assets, whose value depreciates with time, IP rights are intangible assets the value of which could potentially even increase with time. They also indicate a business’s capability to generate value in the future. While use of IP as a security is not commonplace, it has gained traction over the years, with more and more institutions and businesses realizing its significance.

The Department of Industrial Policy and Promotion had released the National IPR Policy of 2016 to outline the roadmap for the future of IPRs in India. [1] This vision document of the Government highlighted the necessity for the valuation and the securitization of IP rights as one of its main objectives.

While securitizing IP rights can be a complex process, it proceeds on the same principles as with other asset-based securities. Courts in India have, however, not been particularly favorable towards the use of IP as a collateral. This was brought to light in a 2018 decision of the Supreme Court in Canara Bank v. N.G. Subbaraya Setty, [AIR 2018 SC 3395] [2] wherein the Court held that a trademark cannot be assigned to the bank by a borrower/defaulter. Further, the bank cannot generate royalties from third parties through the use of such a trademark as the same would be outside the scope of legally defined banking practices. The judgment runs contrary to the government’s IPR policy and is also detrimental to subsequent endeavors towards securitization of IP.

In light of the prevalent practices, creation of a legislative framework for enabling the securitization of IP rights can prove to be beneficial for providing credit to all IP holders and owners thereby enhancing the overall value of IP rights as a collateral against loans.

References:

[1]https://dipp.gov.in/sites/default/files/national-IPR-Policy2016-14October2020.pdf , last assessed on May 12, 2021.

[2] Canara Bank v. N.G. Subbaraya Setty [AIR 2018 SC 3395]

Disclaimer: Views, opinions, interpretations are solely those of the author, not of the firm (ALG India Law Offices LLP) nor reflective thereof. Author submissions are not checked for plagiarism or any other aspect before being posted.

Copyright: ALG India Law Offices LLP