Intellectual Property Rights

An intellectual property right pertains to any original creation of the human intellect such as artists, library, technical or scientific creation. Intellectual Property Rights refers to the legal rights given by the state to the inventor/creator to protect his invention/creation for a certain period of time. These legal rights confer an exclusive right to the inventor/creator or his assignee to fully utilise his invention/creation for a given period of time.

Intellectual property rights illustrate the nation’s ability to translate knowledge and thereby creating social good and wealth through innovations. These innovations hold the key to any nations’ prosperity as well as processing of knowledge. It is very well settled that intellectual property play a vital role in the modern economy

Intellectual property rights as a collective term, according to the Trade Related Intellectual Property Rights (TRIPS) Agreement, include the following independent (ip) rights namely,

Patents, Copyrights, Trademarks, Registered (industrial) design, Protection of IC layout design, Geographical indications, and Protection of undisclosed information

These are different forms of IPR and are mutually exclusive; each being independent of the other and governed by a separate law. Their mutual exclusiveness and independence can be gauged by the fact that it is possible to protect different aspects of an original or inventive work with different rights.

All IP rights are awarded by a country and most of such rights are territorial in nature. A copyright generated in a member country of the

Berne Convention is automatically protected in all the member countries, without any need for registration in different countries, but will not be automatically available in non-member countries. Therefore, copyright may not be considered a territorial right in the strict sense. Like any other moveable or immoveable property, IPR can be transferred, sold or gifted. One of the main underlying principles of IPR is that protection is not given for an intellectual IP that is already known in the public domain. IPR are meant to benefit creators of work, inventions and designs. These rights are granted for a limited period of time, except that in the case of trademark, the protection period could be extended indefinitely by renewing the registration. IPR are monopoly rights and thus prohibit unauthorised use of the protected work/invention.

Kinds of Intellectual Property

A patent is awarded for an invention, which satisfies the criteria of global novelty, non-obviousness and industrial application. Patents can be granted for products and processes. the term of a patent is 20 years from the date of filing a patent application.

Copyright is awarded to literary, dramatic, audio visual and similar works. Computer programmes and databases are considered literary work and hence are protected by copyright; in fact, these are also considered copyrightable items under TRIPS. It may be noted that copyright protection extends to an expression of an idea but not to the idea itself. To get protection, the work should be in a tangible form, which means in a form that is capable of either visually or audibly recreating the representation of the original work.

A trademark is any word, name, symbol, or device or any combination thereof used by persons to distinguish their goods and services, including a unique product, from those manufactured or sold by others, and to indicate the source of goods / services. This gives an opportunity to consumers / buyers to assess the quality of the goods being bought by them. The purpose of awarding a trademark is also to benefit the public as it could then make an informed choice while choosing from a range of similar products and services.

Industrial design is connected with the protection of external shape, appearance and configuration of an article.. Geographical indication is a name given to a product identifiable with a specific geographical location for the uniqueness of the product. The product could be natural or manmade. Once a geographical indication has been legally registered in respect of a product then no similar or identical product made / produced elsewhere or other geographical area can be sold under that area.

Undisclosed information, generally known as trade secret / confidential information, includes formula, pattern, compilation, programme, device, method, technique or process. Protection of undisclosed information is least known to players of IPR and also least talked about, although it is perhaps the most important form of protection for industries, R&D institutions and other agencies dealing with IPRs

Need for Intellectual Property Rights (IPR)

IPR is a strong tool used to protect investments, time, money, effort and the like invested by the inventor/creator of an Intellectual Property, since it grants the inventor/creator an exclusive right for a certain period of time for use of his invention/creation. Thus IPR, in a way, aids the economic development of a country by promoting healthy competition and encouraging industrial development and economic growth

A spurt in interest about IPRstarted with a curiosity and an element of apprehension but it has now graduated to a need-based compulsion and desire to play the new game introduced with the formation of the World Trade Organisation (WTO) and the introduction of TRIPS. Globalisation, multilateral trade and new economic order are continuously reducing the geographical barriers to trade rendering the global trade very complex.. The current importance of IPRs is dictated by the following reasons:

(i) Technologies are changing rapidly,

(ii) Product life cycle is becoming shorter,

(iii) Investments on R&D, production, marketing have become very high,

(iv) Human resources should possess high level of skills, and

(v) The industry is becoming very competitive.

Trademarks:

Definition of trademark

According to Section of The Trademarks Act, [1] -A trade mark means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours;

A trademark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or services from those of other entities [2] .

A trademark may be one or a combination of words, letters and numerals. It is used by traders / companies/ firms etc to distinguish their goods and services from those of their competitors. A consumer associates some level of quality / price / prestige with the goods of a particular trademark. In other words the consumer uses the trademark for making a choice while buying a particular product. An examination of trademark laws and practices, as they exist today, must necessarily begin with a look at their origin and evolution. Trademarks originated as craftsmen’s marks that artisans and others put on their goods to distinguish them from those of other artisans. Such marks have been found in antiquity, in many societies and civilizations, including Persia, Egypt and China, as well as Greece and Rome. The trademark in its modern sense began to evolve in medieval Europe, where the craftsmen’s guilds developed a set of rules of usage governing maker’s marks.

The brand names that one sees today are the present incarnation of the old maker’s mark and often, after years of mass-marketing, have become so well-known that they acquire immense value themselves, not merely because of the value of the goods to which they are applied, but because of the goodwill created among consumers

The rise of the modern nation-state brought an expansion of competitive markets, covering the entire geographical region of a particular country. Governments adopted national trademark laws, intended to protect merchants and consumers in an entire nation. The most important feature of the national trademark law was a central, government-operated trademark registry that granted and established the scope of protection for a trademark.

As per the Indian laws, fragrances cannot be used as a trademark. According to the Indian system a trademark can also be used for goods or services for indicating a connection in the course of trade between the goods or services, as the case may be, and some person having the right as proprietor to use the mark. Further, a mark may be used for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right, either as proprietor or by way of permitted user, to use the mark whether with or without any indication of the identity of that person, and includes a certification trade mark or collective mark.

If you obtain a trademark, it is binding nationwide and others are not allowed to infringe upon it in an effort to swipe your customers or confuse the public. Trademarks help promote economic efficiency. If trademarks are not allowed to be registered with the manufacturers it may eventually take away the incentive of trademark owning manufacturers to make investments in quality control. There would be thus no healthy competition among the manufacturers leading to the loss of vitality of the economy. If we do not have a system of having trademark a manufacturer would get nothing by improving his products quality. And consumers would not be in a position to identify high or low-quality products. In such a situation a manufacturer who reduces its price by reducing quality may pocket the benefit of the market.

Fundamentals of Trademarks

Trademark is a symbol that allows a purchaser to identify goods or services that have been proved satisfactory and not to buy goods or services that have not been satisfactory. Trademarks serve mainly three purposes viz. (i) encourage the production of quality products; (ii) reduce the customer’s costs of shopping and (iii) help the customer to make decisions on purchasing products.. . Today the uniformity of quality of products in the marketplace is the result of the use of trademarks rather than the inherent nature of production or the reflection of altruistic motives of manufacturers or distributors. In a system wherein trademarks are allowed to be infringed, all may take a free ride on the successful seller’s trademark and reputation; there would be no incentive to distinguish one’s own goods and services.

Trademarks reduce the customer’s cost and agony of acquiring information about products and service. If a person knows by his experience or experience of others that a product is of good quality he would go for that brand without much search

Trademark infringement law and unfair trademark law are different. The essential element of a trademark is the exclusive right of its owner to use a word or device to distinguish his products. On the contrary a claim of unfair competition considers the total physical image given by the product and its name together. In giving protection to trademark, the law is imposing ethical and moral norms on the competitive process In a sense the law of trademarks reflects the societal view that certain forms of competitive behaviour in business practices are unfair.

It is argued by many that trademarks actually create a barrier to entry to the market. It does not appear to be correct. In fact when consumers have the benefit of price advertising retail prices are dramatically lower than without advertising. Advertising may reduce, not raise the cost of products/services. However, when such barriers exist it may be noted that they exist because consumers prefer the brand with the favourable representation and are willing to pay a higher price for them.

Domain Names:

With the advent and acceptance of Internet by people across the globe, the notion of trademark took a new turn. To access a website, one requires a web address. This web address comprises of domain names. As the number of Internet users increased, the importance of domain name increased. People started identifying the domain name with its owner. For example, if one is to access the website of, one would, in a natural process, presume the website to be. This gave the website address/domain name a further impetus and gave it an importance equivalent to that of a trademark. Domain names no longer were considered to be merely a tool to gain access to the website. Rather, they came to be used to identify the goods and services which a particular company is offering, be it online or offline. If a company has acquired a distinguishing mark (like) with respect to a particular product, the company would be entitled to acquire that domain name as well. Domain name has thus been given legal privileges of a trademark and anyone registering the domain name is required to show good faith use.

When the Internet was in its infancy, domain names were created to serve as useful means of locating specific computers on the Internet.  With the globalization and commercialization of the Internet, domain names have taken on a new significance as business identifiers.

Domain names are now highly visible in “real space” as well – showing up on television commercials, billboards, magazine ads, and even the sides of buses.  In these new guises, they sometimes conflict with trademarks and other traditional business identifiers.  Two factors elaborate this conflict.  First, domain names are global and must be unique – a particular string of letters can link to only one site – while trademarks may overlap in different industries or different geographical locations.  Second, it is common practice for many Internet users to guess at domain names.  Thus domain names based on intuition become valuable corporate assets [3] .

The very basis of Internet is Internet Protocol (IP) used for inter computer / inter server communication, each computer / server having its own unique all numeric IP address. The fact that these addresses are not catchy and are difficult to remember has had a major role to play in the development of the DNS and the emergence of domain names as corporate assets. Thus, a domain name is a popular substitute for the all numeric IP address of a particular server. To make an Internet address more user friendly, a unique numeric address may be matched with a mnemonic domain name (such as ‘mcdonalds.com’). This systematization of recognition of proxy names is categorized as the ‘Domain Name System’.

Domain names are simply the addresses of the Internet. E-mail is sent and web pages are found through the use of domain names

The growth of business from its traditional framework of retails shops to the cyber shops is through the advent of internet and its potential to touch any part of the world. Internet has touched everyday transactions and has become an indispensable part of electronic commerce. It has expanded the market infrastructure and has removed the barriers of traditional boundaries. Business or firms who have a registered trademark and have developed goodwill through thorough determination over long years are now required to enter the world of electronic commerce so as to touch the life of the customers extended all over the world. Electronic commerce is termed as the process of managing business occurring over networks, which uses non-proprietary protocols such as internet. It supplements the traditional selling channels and attracts customers that no one ever knew existed. The internet revolution is affecting every company, no matter its size. Business of all sizes can equally share in the benefits of e-commerce, but they are all equally vulnerable to being left behind if they do not adopt the new business models. The well known famous trademark holders under the trademark law, certainly wish to retain the same mark as domain name so as to be easily identifiable on the internet, as the first thing a customer, who logs on to net, assumes is that a well-known company will be maintaining the same name as its domain name. But the problem arises when someone other than the owner of well-known trademark, registers the domain name with bad intentions. The aim here is to discuss about the conflict between trademarks and domain names and also to suggest some possible remedies under the applicable law.

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Chapter 2

TRADEMARKS: INTERNATIONAL SCENARIO

Major trademark harmonization began with the Paris Convention in 1883 and springing from that the Madrid Agreement of 1891, but has continued apace particularly in the last thirty years. Attempts at harmonization began bilaterally or regionally but more recently involve accession to multinational treaties providing for equal treatment of trademark owners, both foreign and domestic, under the national laws of all member states, actually conforming national laws to a generally accepted model, or adopting a system wherein trademark rights are granted in many countries through a single “international” registration [4] .

What are the international treaties that affect trademarks?

Multilateral treaties and agreements such as the Paris Convention, the Madrid Agreement and Protocol, TRIPS, the Trademark Law Treaty, Vienna Agreement, and the Nice Agreement on International Classification

Regional agreements formed by countries of one region such as ARIPO and OAPI in Africa, the Andean Pact and MERCOSUR in South America, NAFTA, the Pan-American Convention and the European Community Trade Mark

Bilateral treaties and agreements between two countries or between a country and an intergovernmental organization (e.g., the European Union) on such issues as trade and intellectual property rights

The main purposes of these treaties affecting trademarks are the protection of rights, harmonization of laws and multilateral filing.

International Treaties

The Paris Convention, 1883

The Paris Convention is the oldest major international treaty concerning the protection ofIP. It was adopted in 1883 and has been revised several times. The Convention provides the following principles:

The creation of a union that is a legal entity in international law: The administrative bodies are the (WIPO), the Assembly (which comprises all member nations) and the Executive Committee.

National treatment: This means that nationals of any country of the union enjoy in all other countries of the union the advantages that each national law grants to citizens within their own nations.

Convention Priority: Any person who has filed a trademark application in one of the signatory countries possesses a right to claim that filing date for priority purposes for trademark applications filed within six months in other signatory countries.

The Paris Convention is an international convention for promoting trade among the member countries, devised to facilitate protection of industrial property simultaneously in the member countries without any loss in the priority date. All the member countries provide national treatment to all the applications from the other member countries for protection of industrial property rights. The Convention was first signed in 1883. Since then, the Convention has been revised several times, in 1900 at Brussels, in 1911 at Washington, in 1925 at The Hague, in 1934 at London, in 1958 at Lisbon and in 1967 at Stockholm. The last amendment took place in 1979.

The principal features of the Paris Convention have been listed below:

· National treatment

· Right of priority

· Independence of patents

· Parallel importation

· Protection against false indications and unfair competition

The Madrid Agreement, 1891

The “Madrid Agreement concerning the International Registration of Marks” was adopted in 1891 and entered into force in 1892. The agreement was revised in 1900, 1911, 1925, 1934, 1957 and 1967, and amended in 1979. Any state being a party to the Paris Convention may accede to the Madrid Agreement. The nationals of any signatory country may secure protection of their trademark registered in the country of origin in all the other Madrid Agreement countries by registering the said mark as an international registration at the International Bureau of WIPO through the intermediary of the national office of the country of origin.

The Madrid Agreement was adopted on April 14, 1891 to facilitate protection of a trademark or service mark in several countries by means of a single international registration. As on July 15, 1999, 54 countries are party to this Agreement, these mainly belong to Europe, and others are countries of Africa and four countries in the Far East namely, China, the Democratic People’s Republic of Korea, Mongolia and Vietnam. The

United Kingdom, the United States of America, most Latin American countries, Japan and India are not signatories to this agreement. The Agreement covers both trademarks and service marks.

The main features of the Madrid Agreement are as follows:

1. An applicant must be a national of a member country. A person having his domicile or a real and effective industrial or commercial interest in such a country is also eligible. It may be noted that this would be governed by the national laws of the country in question.

2. A mark to be registered in member states should be first registered at the national level in the country of origin of the applicant. The first registration is called ‘basic registration’.

3. The country having given the basic registration can only transmit the request for international filing to the International Bureau of the World Intellectual Property Organization (WIPO) along with the list of the countries in which protection is being sought. There is no provision for directly filing a request under the Agreement.

4. It may be iterated that the country of origin has to be a member state. The role of the office of the country of origin is not only to send the application for international registration but also to certify that the mark, which is the subject of the international registration, is the same mark that is the subject of the basic registration.

5. For each application, fees has to be paid for each designated country and WIPO. The fee paid for the designated countries is called the ‘complementary fee’.

6. The International Bureau notifies the international registration to the offices of the designated countries and publishes it in a monthly periodical called ‘The WIPO Gazette of International Marks’.

If, during the first five years the basic registration is for some reason, cancelled in the country of origin, the international registration automatically stands cancelled in all the designated countries. This gives an advantage to a person to oppose the registration of a mark only in the country of origin and without the need to oppose it in all the designated countries. This possibility of challenging an international registration through a national registration is referred to as ‘Central Attack’ feature of the Agreement.

India is presently not a member of the Madrid Agreement. As the economy opens up and Indian companies start expanding their presence in foreign countries, India might also become a member thus it would be advantageous to know a little bit about this Agreement. A company from a member country can register his trademark in his own country and then can acquire the right in all signatory states by depositing the registration at an International Office in Berne. Once this is done the mark is valid in all those countries unless there is some conflicting mark on the register of one or more of those countries. The mark will however be valid in all the remaining countries. It may be clearly understood that the Madrid Agreement does not provide for a world trademark; it merely eliminates the need for filing multiple applications in Member countries to acquire a series of national trademarks. Obviously, India cannot take advantage of this Agreement as she is not yet a member of the Agreement.

The Madrid Agreement further obliges member countries to protect indications of source against false and misleading use and lays down that that such goods bearing false and misleading indications of use must be seized on importation by the contracting states.

The Madrid Protocol, 1989

The “Protocol relating to the Madrid Agreement” (“Madrid Protocol”) was adopted in 1989 and entered into force on December 1, 1995. Any country being a party to the Paris Convention may join the Madrid Agreement or the Madrid Protocol or both. Under the Madrid Protocol the application for international registration can be based on a pending trademark application filed in the country of origin. It is administered by the International Bureau of WIPO.

In October 2004, the European Community joined the Madrid Protocol system, thus including the possibility to use Community Trade Marks as a basis for international trade mark applications and for Community Trade Marks to be applied for via the international route [5] .

The Madrid Protocol was formed to remove some of the features of the Madrid Agreement, which posed obstacles to accession by several countriesbut retains the basic features of the Madrid Agreement. As on July 15, 1999, 39 countries have acceded to the Protocol.

These features are:

1. For an international registration, it is essential to first register a mark at the national level. The time required for obtaining a mark at the national level varies from country to country. Hence some parties do suffer.

2. Within one year, a designated member country has to examine and issue a notice of refusal by giving all the grounds for refusal..

3. A uniform fee is paid for the designation of a member country. This was found to be inappropriate for countries with high level of national fees.

4. An international registration is linked to the basic registration during the initial five years and the former gets cancelled if latter is cancelled. The fact that grounds under which a mark is cancelled in the country of origin need not necessarily exist in every other designated country is overlooked.

5. The only working language of the Madrid Agreement is French.

Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), 1994

The “Agreement on Trade-Related Aspects of Intellectual Property Rights” (TRIPS) is one of the sections of the Final Act of the Uruguay Round of trade negotiations under GATT auspices. TRIPS came into force on January 1, 1995. The Agreement:

Deals with all intellectual property rights.

Defines the standards concerning the availability, scope, and use of intellectual property rights, including copyright and related rights, trademarks, geographical indications, industrial designs, patents, layout designs of integrated circuits, protection of undisclosed information and control of anti-competitive practices in contractual licenses.

Specifies the enforcement procedures.

The TRIPs Agreement, which came into effect on January 1, 1995, is the most comprehensive multilateral agreement on IP. The Agreement is a minimum standards agreement, which allows Members to provide more extensive protection of IP if they so wish. Members are free to determine the appropriate method of implementing the provisions of the Agreement within their own legal system and practice. The GATT established the WTO and promulgated various trade related agreements including TRIPS.

Relevant features of the TRIPS Agreement Standards.

Standards. The Agreement sets out minimum standards of protection to be provided by each member. Each of the main elements of the protection is defined, namely the subject matter to be protected, the rights to be conferred and permissible exceptions to those rights, and the minimum duration of protection.

Enforcement. The Agreement lays down certain general principles applicable to all IPR enforcement procedures. In addition it contains provisions on civil and administrative procedures and remedies, provisional measures, special requirements related to border measures and criminal procedures, which specify in a certain amount of detail, the procedures and remedies that must be available so that right holders can effectively enforce their rights.

The Agreement provides for certain basic principles, such as national and most favoured nation treatment, and some general rules to ensure that procedural difficulties in acquiring or maintaining IPR do not nullify the substantive benefits that should flow from the Agreement.

Article 40 of the TRIPS Agreement recognises that some licensing practices or conditions pertaining to IPR, which restrain any competition, may have adverse effects on trade and may impede the transfer and dissemination of technology. In other words, the Article 40 aims at controlling of anti-competitive practices while licensing of IPR takes place.

The final section of the TRIPS Agreement deals with criminal procedures. According to the Article 61 of the Agreement, provision must be made for these to be applied at least in the case of wilful trademark counterfeiting or copyright piracy on a commercial scale.

Nice Agreement, 1957

The Agreement establishes a classification of goods and services for the purposes of registering trademarks and service marks (the Nice Classification). The trademark offices of the contracting States must indicate, in the official documents and publications in connection with each registration, the numbers of the classes of the Classification to which the goods or services for which the mark is registered belong.

The Classification consists of a list of classes—there are 34 classes for goods and eleven for services—and an alphabetical list of goods and services. The Nice Agreement created a Union, which has an Assembly. Every State member of the Union which has adhered to the Stockholm Act or the Geneva Act of the Nice Agreement is a member of the Assembly. Among the most important tasks of the Assembly is the adoption of the biennial program and budget of the Union.

Vienna Agreement

The Vienna Agreement establishes a classification for marks which consist of, or contain, figurative elements (the Vienna Classification). The competent of