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.

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Virtual Reality (VR) places users in a simulated environment where users can engage themselves in  computer-generated 3-D experiences. VR replicates the look, sound and feel of the real world, using specialised equipment such as VR headsets or goggles. Primarily used in video games, the post-pandemic “new normal” world has seen a surge in the use and popularity of VR across various industries, including by museums, art galleries, etc. by allowing immersive virtual tours for their audience.

The increased popularity of VR technology has prompted deliberation over the intellectual property (IP) implications in the virtual world. Since VR seeks to immerse users in a life-like experience, the platform developers might choose to include IP-protected content in virtual worlds to make user-experience more realistic. Such inclusion is a cause of concern when it is done without authorisation from the IP owners.

The IP owners’ rights in their creations subsist in the physical as well as the virtual spaces equally. Any unauthorised use of IP in the virtual world should attract a liability for the VR platforms under the applicable IP statutes. However, one may also argue that the use of IP, in particular trademarks, within a video game may be considered as descriptive/nominative fair use. In other words, VR platforms may seek a defence on the ground that the use of the trademark is a direct reference to the owner of the mark and its goods, thereby causing no confusion in the minds of the users of the platform. A parallel can be drawn to the product placement marketing technique where references to specific brands are incorporated into movies or television shows. The only difference is that product placement is done with a specific promotional intent and in furtherance of a valid contract. Reportedly, for instance, recently Krafton Inc., owner of the popular game PUBG inked a deal with Warner Bros and Legendary Pictures, wherein the main characters from the movie Godzilla v. King Kong, will become playable characters in the game.[1] Had this been done in absence of a contract, Krafton would have faced severe legal consequences.

That being said, the Indian courts are yet to face this issue and it would be interesting to see whether the argument regarding nominative fair use would hold ground. Until then, it would be advisable for brand owners to be vigilant in both physical as well as virtual spaces and for the VR platform developers to be careful and avoid stepping on the “real” rights of the IP owners in the virtual world.

[1] https://www.sportskeeda.com/esports/news-pubg-mobile-releases-teaser-godzilla-vs-kong-collaboration (Last accessed on April 13, 2021 at 19.44)

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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In January 2021, the Ministry of Science & Technology released the 5^th draft ‘Science, Technology, and Innovation Policy’. The draft policy was open to comments from stakeholders till January 31, 2021. The draft was finalized and released on the Ministry’s website after nearly 300 rounds of consultations with thousands of stakeholders distributed in terms of region, age, gender, education, economic status, etc. Part of the Government of India’s ‘Atmanirbhar Bharat’ vision, the aim of the draft policy is to build a self-reliant and strong indigenous ecosystem in the fields of Science, Technology, and Innovation (STI).

The draft policy proposes to inter alia strengthen R&D infrastructure in the country by setting up Higher Education Research Centres (HERCs), a central repository for information on the STI landscape, an open access system for scientific data and resources, and a uniform research and innovation framework at par with international standards.

Notably, the draft policy has recognized the need for Intellectual Property (IP) and suggested relevant measures to boost innovation, viz. IP creation by promotion of such innovation as well as by addressing the challenges in IP protection mechanisms. One such measure is the development of innovation clusters and technology parks which it proposes to leverage for collaborative activities and cost sharing. The second such measure is that of raising mass awareness and sensitizing young innovators and researchers about IP, and in specific, Patent filing and commercialization.

The priorities and framework of the policy have been stated to have a close cross-link with those of the National IPR Policy. In doing so, the draft policy has proposed to identify and address the current challenges in IPR protection and seeks to strengthen the IP regime by streamlining regulatory framework and addressing issues relating to patent management and filing, IP ownership, licensing, sharing, commercializing and transfer.

Another interesting proposal included in the Policy is that of integrating the Traditional Knowledge Systems into the overall education, research and innovation system to promote grassroot and sustainable innovations. Such innovations have also been encouraged by proposing institutional assistance in obtaining or asserting any legal claim (including Intellectual Property) in the said innovations. While the draft policy has gone in depth and included various aspects such as data governance, financial backing for the STI ecosystem, connecting entrepreneurship with research and innovation, etc., the instant summary has largely focused on the aspects addressing IP protection and related measures.

The draft policy can be accessed here:

https://dst.gov.in/sites/default/files/STIP_Doc_1.4_Dec2020.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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Blockchain has since its invention been an intriguing technological innovation. The recent application of this digital information storage system is the Non- Fungible Tokens (“NFTs”) which can prove to be a game changer for the Digital Arts Industry. Fungible simply means something which is mutually interchangeable. NFTs are non interchangeable (unique) cryptographic tokens which can represent digital assets (music, images, tweets, videos, etc.) and are useful in determining the authenticity and ownership of such digital assets.

In the era of digitalization, piracy of digital content and its misappropriation largely undermine the economic potential of such assets. Moreover, claims of ownership and authenticity pose further challenge to monetization of digital assets. These challenges are being taken care of by the NFTs.

Since NFTs are unique tokens, each such token can represent only one digital asset, thereby forming a unique identity to that digital creation. Though the digital content may be reproduced, the token identifies that digital asset is not reproducible. Moreover, the technology enables the creator of digital content to track all the subsequent transactions and make provisions for royalties in the form of a Blockchain enabled contract to be executed at the time of first sale.

The draft bill proposing to ban cryptocurrencies in India- ‘Banning of Cryptocurrency and Regulation of Official Digital Currency Bill, 2019’, under section 2(a) defines tokens generated through cryptographic means as cryptocurrency; whereas section 3 seeks to criminalise dealing in cryptocurrencies within the territory of India. Therefore, the draft bill, if passed in its present form, would lead to complete banning of all types of NFTs in Indian Digital Market. The Government should reconsider the draft bill to exclude NFTs at least partially from its ambit.

The primary motivation of the Government for being harsh on cryptocurrency seems to be the technological challenges in regulating virtual currency. However, NFTs can serve a useful purpose.  Being merely an application of the Blockchain technology to generate a unique token on cryptographic databases, a limited use of NFTs for digital arts has the potential to bring about a revolution in the digital arts market. Thus, the government should reconsider its policy for cryptocurrency. 

While globally, artists are getting “unimaginable monetary returns” for their digital art [1], there seems no justifiable reason why Indian Digital Artists should be denied making the most of this technological innovation. No matter the Government’s stance over its proposed ban on cryptocurrencies, the applications of blockchain and cryptocurrencies continue to evolve.

References: 

[1] https://www.thehindu.com/sci-tech/technology/interview-anand-venkateswaran-vignesh-sundaresan-metakovan-twobadour-nft-beeple-christies/article34318045.ece

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