IP Litigation in India: Past, Present and Future
IP litigation in India has significantly evolved over the last two decades – right from the signing of the Trade-Related Aspects of Intellectual Property Rights Agreement by the Indian government, to the recent scrapping of the Intellectual Property Appellate Board Tribunal. With the gradual evolution of Indian IP litigation, the process has become fairly streamlined and highly effective. In this article, we will discuss the growth of IP litigation in India with a focus on its past, present, and future.
IP Litigation and Its Importance
IP Litigation enables the protection of intellectual innovations, which include creative works produced through the honest efforts of a human mind. These creations can be categorized into inventions, innovative designs, artistic, musical or dramatic works.
It is fair and appropriate that the person putting in the skills and efforts in an intellectual creation is provided some benefit as a result of his/her hard work. For this reason, the legislation in India safeguards these innovative, inventive and creative works in the form of the Trademarks Act, 1999, the Patent Act, 1970, the Copyright Act, 1957, the Designs Act 2000 and the Semiconductor Integrated Circuits Layout Designs Act, 2000. These laws provide exclusive rights to the IP holders with respect to their intellectual properties. When IP is protected by such laws, they become intangible assets and act as a catalyst in increasing the valuation of inventions, artistic creations, and brand names.
Meanwhile, over the years, many types of IP disputes have also come to light with the advent of information and technology. These disputes manifest in the form of patent infringement, trademark infringement and passing off, domain name disputes, copyright infringement and design infringement. This makes it imperative to understand IP litigation and its growth in India.
Understanding IP Litigation in India and its Growth
With regards to IP disputes, there are two types of lawsuits that can be filed against infringement activities depending on the requirement – civil litigation in courts of civil jurisdiction and criminal litigation in courts of criminal jurisdiction.
In civil courts, IP holders can enforce their rights either by registration of particular IP such as trademarks, patents, designs and copyrights, or via common law rights in trademarks and copyrights by the virtue of their long use and creation.
Furthermore, civil actions in IP can be categorized into two categories – infringement action and common law/passing-off action. While the former is commonly filed for trademarks, patents, designs and copyright disputes, the latter is a traditional recourse only in trademark actions.
With the growth of internet activity and trademarks being registered as domain names, another addition to the forms of civil action in IP disputes is domain name infringement. Apart from civil action, the top-level domain names such as .com, .org, .edu etc., may also be contested under the mechanisms of the Uniform Domain-name Dispute Resolution Process, that was established to resolve disputes related to registration of internet domain names. In India, specific domain names carrying the .in extensions may be contested under the Indian Domain-name Dispute Resolution Process mechanism.
Owing to the enormous amount of pending litigation in Indian courts, the IP stakeholders are underway to create a distinction between cases which may be resolved mutually through alternate dispute resolution methods like arbitration, mediation and conciliation.
IP Dispute – A Timeline
- Under the traditional procedure, the first stage in a civil proceeding conventionally lasts for 2-3 years. It is only after this stage that the written statements, framing of issues, admission of evidence or expert evidence takes place, thereby pushing the final hearing further down by 5-8 years from the filing of the suit.
- As per the current trend in India, IP infringement cases are disposed within 1-2 years. This is because, since 2016, IP disputes are considered commercial disputes by the virtue of the Commercial Courts Act, 2015. These commercial disputes are heard at High Courts known as commercial benches, which function under a stricter timeline for speedy disposal of suits. The High Courts have laid out strict timelines for each stage of the suit and the final hearing.
- The hearing of an interim application in the initial stages of a trial is regarded as a deciding factor in achieving the objectives of an infringement suit. The Commercial Courts Act, 2015, has enabled the courts to provide urgent relief to preserve the rights of IP holders. Resultantly, commercial courts in Mumbai, Chennai and Delhi have been successfully upholding IP holders’ rights.
Current Trends in IP Litigation
In the last few years, IP holders have been inclined towards taking civil action due to quick disposal of cases by the commercial benches in High Courts. The courts in these civil infringement cases have awarded compensatory, punitive and exemplary damages.
In terms of civil actions, the spectrum of reliefs that may be claimed ranges from injunction orders, search and seizure orders, to accounts of profits, damages and costs. In criminal actions, search and seizure orders and destruction of infringing goods orders are easily obtained.
In 2019, in the case of Utv Software Communication Ltd. & Ors. v. 1337x. To. & Ors., the Delhi High Court appropriately molded the current relief method to adapt to the challenges of the evolving internet age. In domain name disputes, an injunction prohibiting the use of a domain name is granted immediately against the identical variants of the banned websites which were used in large numbers, wherein the infringers were usually back with a variant of a website.
Therefore, to tackle the situation, the courts now grant dynamic injunctions under which the IP holder is only required to notify the court of the new variant websites. Moreover, the earlier order prohibiting the domain names is immediately applicable on the subsequent variants of the same. This highlights that the present IP regime in India is witnessing a reform in the protection of Intellectual Property Rights.
Rise of Complex Disputes and Evolving Solutions
- After the emergence of e-commerce businesses in India, more complex disputes are arising every day. Previously, the e-commerce websites did not monitor the legitimation of goods and services being sold and/or provided on their websites. It was only upon a complaint from the IP holder that the intermediary websites such as Amazon and Flipkart took cognizance of the illegitimate/infringing goods and services being sold to the unaware customers.
- Consequently, the Supreme Court was of the opinion that various internet intermediaries such as e-commerce giants Amazon and Flipkart have taken a safe harbor of liability with respect to infringement in the past. However, through several cases, the court has ordered these websites to take greater responsibilities in cases of trademark infringement, wherein infringing items listed on their websites incur a monetary loss for the original IP holder.
For instance, the Delhi High Court in Amazon Seller Services Pvt Ltd v. Amway India Enterprises Pvt Ltd and others, held that it was the intermediaries’ responsibility to check what may be uploaded on their websites and what may be taken down. The judgement came as a relief to sellers listed with e-commerce platforms as it watered down the protection granted to these e-commerce giants.
- With respect to faster disposal of lawsuits under the Commercial Courts Act, post-grant oppositions under patents which were pending for a long time due to the late filing of evidence and extensions have been resolved in the case of Pharmacyclics LLC v. Union of India, wherein J. Pratibha Singh gave a narrow interpretation to those rules speeding up Post-Grant Oppositions.
- The law on damages concerning IP infringement suits is also developing at a rapid pace. Recent developments also indicate a change in the landscape of conventional IP dispute mechanisms. The alternate ways of dispute resolution like arbitration, mediation and conciliation in IP are giving way to quick relief to the concerned IP right holders where they do not have to go through the hefty court procedures.
- It has also been observed that parties in an IP dispute are themselves opting for an alternate dispute resolution process to resolve their dispute outside the court itself.
Abolition of Intellectual Property Appellate Board
With the Tribunals Reforms (Rationalization and Conditions of Service) Ordinance, 2021 abolishing the Intellectual Property Appellate Board (IPAB), the pending cases are going to be listed before the commercial benches of various High Courts. This new development has received mixed reviews from various eminent legal personalities; while some criticized the abolition of the tribunal, others welcomed the move.
The tribunal was set up in 2003 under Trade Marks Act, 1999, and was exercising original and appellate jurisdiction under the provisions of the Patents Act, 1970, Trade Marks Act, 1999, the Copyright Act, 1957 and the Geographical Indications of Goods (Registration and Protection) Act, 1999.
The rapidly evolving IP litigation in India ensures that IP owners’ rights are duly acknowledged and effectively enforced by courts. These trends indicate that the outlook is favorable for IP owners in the times to come.
With the abolition of the IPAB, it is found that due to the absence of a tribunal, an increasing number of parties will opt for alternate dispute resolution processes. This new wave of resolution processes will pave the way ahead for IP litigation in India.
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- Akash Dudhwa (IP Drafting, Filing & Prosecution) and the Editorial Team