With India’s legal enforcement machinery hamstrung by lockdown, infringement activity has climbed to an all-time high. What can IP owners do to stay ahead? Vandana Chatlani reports
Producers of the gritty, gory crime thriller Mirzapur finally gave ecstatic fans what they had been anxiously awaiting when the second season premiered on Amazon Prime in late October. But just 24 hours after the first two episodes were released, Mirzapur 2 was available for download on torrent sites and platforms such as Telegram, according to several reports.
Digital piracy is nothing new in India, however the coronavirus pandemic has undeniably created a fertile ground for its rise.
In the last week of March, film piracy rose by 62% in India compared with the last week of February this year, according to MUSO, a tech company providing anti-piracy, market analytics and audience connection solutions that disrupt the piracy market for digital content. The statistics are broadly similar across Spain, Italy, the US and the UK.
Ashwin Julka, the Gurgaon-based managing partner of Remfry & Sagar, says that a large number of suits has been filed before the courts as a result. In response, he says the courts have been “very responsive in issuing quick decisions” to block: (1) illegal streaming on OTT (over-the-top) channels; (2) infringing content being distributed on messaging services such as Telegram; and (3) infringing domains, while also applying newly emerging remedies such as dynamic injunctions in a series of cases.
The proliferation of online counterfeiting has ignited another fire for intellectual property (IP) owners and lawyers alike, with the lockdown immobilizing the enforcement apparatus needed to extinguish it.
Although there has been a spike in the number of IP applications filed in the healthcare sector – particularly in the field of medical devices and pharmaceuticals – on account of the pandemic, Manisha Singh, a New Delhi-based partner at LexOrbis, notes a “corresponding increase in the counterfeiting of goods related to this sector,” including hand sanitizers, PPE [personal protective equipment] kits and protective face masks.
“In terms of enforcement actions, there was a complete freeze in the initial days of the lockdown,” says Julka. “Hardships continued for a while as state machinery used to conduct raids, etc., was busy in efforts to stem the spread of the pandemic. Restrictions also made it hard to conduct investigations in the market on account of closures and low footfall.”
Adopting new strategies
Although enforcement agencies are no longer entirely restricted by lockdown measures, limitations on their operations for several months have forced lawyers to tackle infringement using strategies they would not normally employ.
Vikrant Rana, a partner at SS Rana & Co in New Delhi, maintains that in a case of online counterfeiting prior to covid-19, he would be reluctant to suggest a takedown immediately because the infringer would likely spring up elsewhere using a different name, entity or e-commerce website. “At that time, we would have identified and gone after the source,” he says.
Now, the firm is looking at attacking the online presence, even if it is not able to track the source in every case. “Investigations have begun, even if it’s not to the full extent as before, and we are getting court orders for raids, however, due to covid-19 the scale and frequency of these raids is considerably lower,” says Rana. “Our focus as a result is to keep the online space cleaner. We act quickly now, starting with a trial purchase, so we have some evidence which we can use against them on the physical side, and at least we can shut down their online presence.”
Sumita Singh, an of counsel at Pier Counsel in New Delhi, says her team has spent considerable time in the past few months drafting cease and desist notices for vendors who have listed their products on Amazon. “We can’t write to Amazon and ask them to reveal details about these vendors, because they don’t have a physical address – they simply comply with Amazon’s vendor rules and upload their products, which are all counterfeits.”
She says her team is chasing down infringers as quickly as possible, but admits they have found new ways to continue their illegal activities. “Prior to the pandemic, we would have deployed an investigator and paid him for a day to assess the situation, pose as a buyer, get a phone number, etc,” she says. “But we can’t subject a person to that kind of exposure with the risks of covid-19. We have to rethink our approach.”
Sonal Madan, a partner at Chadha & Chadha in New Delhi, shares the same experience – a sharp focus on demand notices and cease and desist letters. “Initially the trend was to be aggressive, go to court and file a lawsuit,” she explains. “Now, even if clients come across counterfeits, they are keen on sending cordial letters. Even the adverse parties would agree to terms quickly, or take down products from their website. Not a lot of people want to go to court.”
Luxury brands are following the same process. “Where adverse parties pick up a very close mark and use it for an entirely different product – for example Prada being used to market a tobacco product – there is no real benefit they can derive in terms of recall value,” says Madan. “In these cases, parties are keen to let go of the applications. Obviously if we talk of actual counterfeits, the problem is more intense.”
Acknowledging these difficulties, clients are playing their own part in battling infringement. Rana says IP owners are being extra cautious, dedicating their energies to identifying and combating even the slightest possibility of a counterfeit or pirated product online. “They are following strict internal policies, like verification for listing a product on their online portal, constantly checking their portal for any possible counterfeit product, and easing out their complaint mechanisms for a third party to complain about a possible counterfeit product,” he says. “They are also teaming up with enforcement agencies by reporting instances of illegal downloads and sales of pirated goods online, so that they can be taken down immediately, with offenders strictly punished for their illegal actions.”
Virtual justice here to stay
The first few months of India’s lockdown saw an interruption to justice, as physical access to courts was greatly reduced. To complicate matters, the courts initially permitted only the listing of “urgent” matters, which many argue is defined subjectively, and thus a difficult benchmark to reach.
“This also meant that continuing pre-existing litigation, where interim orders had been obtained, were not entertained without showcasing urgency,” says Adithya Jayaraj, a senior associate at K&S Partners in Bengaluru. “IP enforcement was not considered within the category of ‘urgent matters’ in the initial period of lockdown.”
Sumita Singh, at Pier Counsel, adds: “From March to June, there were no filings unless you could show urgency – absolutely no filings”. However, she notes that during that period, courts at every level took the time to upgrade their systems. YouTube channel eCourts Services India even offers instructional videos on how to file a new case electronically, urging lawyers who haven’t yet registered to “join the new band of digital-era advocates”.
“This is a major change and a very positive development,” says Sumita Singh, referring to her own experience of accessing orders online from a district court in Alwar, a small town in Rajasthan. “District court lawyers who were always averse to technology would literally laugh at corporate lawyers and joke, ‘Don’t you go to court? Are you sure you’re a lawyer?’ Covid-19 has changed that. Now they are getting webcams, laptops, sitting at a desk and attending hearings. It’s an old adage, you adapt or you die. Until now, the digitization of [court] records was considered a gargantuan task. Finally, we realise it can be done.”
One of her own paralegals says her son taught her how to navigate the digital filing process on his phone. “The next generation is already tech savvy,” she says. “we just need to be open and receptive to change. If people can sit and make TikTok videos, and upload Instagram stories, they can very well learn how to do this.”
Julka, at Remfry & Sagar, says the IP Office deserves credit for its digitization efforts – both prior and during the lockdown – which ensured applicants faced no interruptions in filing applications or documents electronically. The trademark office is also slowly catching up with the patent office and the Intellectual Property Appellate Board in conducting hearings via video-conferencing, to improve proceedings on the prosecution side.
The trademark office has been criticized for reduced operational efficiency in comparison to the patent office. “We did well on the patent side, be it contentious or non-contentious matters, prosecution hearings, opposition hearings, pre or post-grant oppositions, etc.,” says Rana, at SS Rana & Co. “We didn’t feel the difference at all.” He adds, however, that the patent regime benefited from having electronic filing systems and virtual hearings in place well before the pandemic struck.
“The patent bar is a more mature bar,” says Mohan Dewan, the managing partner at RK Dewan & Co in Mumbai. He refers to the patent office in Mumbai, which was in a containment zone at the height of the pandemic and had arranged transport for people to come in. “Not a single patent officer was affected,” says Dewan. “The proactive attitude of the patent office and the controller general really made the patent system robust.”
At the same time, Dewan emphasizes the difference between the patent and trademark process in India, which has a knock-on effect on trademark hearings. “Before the pandemic, we filed around 100 patent applications and 1,000 trademark applications per month,” says Dewan.
“There were between three to five patent hearings per month versus 600 trademark hearings. The sheer number meant there was not enough physical time for trademark hearings. At present, we are attending three to five patent hearings per day at each of the patent offices. There are no trademark hearings scheduled. But, we are in close consultation with the trademark office. It will take another few months to find a solution.”
The trademark office had explored upgrades to its digital capacity, technology and processes, but Rana says it has encountered hiccups. As co-chair of the International Trademarks Association’s India Global Advisory Council, Rana and his team wrote to the Office of the Controller General of Patents, Designs & Trademarks suggesting ideas to improve current systems and processes.
One key proposal was to begin virtual hearings for trademark matters, which has become a reality, albeit in a limited capacity for now. The Trademarks Registry issued a notification on 28 August, announcing that it would begin to conduct show-cause hearings via video-conferencing.
“It’s a good start, considering that before the pandemic no hearings through video-conferencing used to take place in trademark matters,” says Rana. However, such hearings can only be scheduled in matters where applicants or their authorised agents have consented to attending virtual hearings, and confirmed their participation to the IP Office before 5 September. Matters where consent has not been given will remain pending until physical hearings resume.
While full-fledged virtual hearings have yet to take off, Rana says the trademarks office should be commended for the work it is doing. “It is amazing,” he says, “we are getting office actions within 20 days – marks are being accepted or refused with valid reasons. Even with limited strength, they have been quite active.”
Bottlenecks on the opposition side are, nevertheless, hard to ignore. “Opposition hearings must be taken up now, as there has been quite a backlog, and that has been a pain point for a number of our clients,” says Madan, from Chadha & Chadha. “They usually take up prosecution work in batches, so we see considerable office actions for six months and then suddenly a lot of opposition hearings. But there has been quite a lapse now. Once they start, I’m hopeful things will move quite swiftly.”
The road ahead
As India’s courts and its stakeholders continue to embrace technology, virtual hearings may become a permanent feature of proceedings, even after the pandemic dies down. While many litigators miss the satisfaction that comes with a physical hearing, being live in the buzz of a courtroom, most agree that the flexibility, time saved and reduced costs (for both clients and their counsel) associated with virtual hearings are attractive, and crucial in the current situation.
While the virus continues to linger, IP owners and their lawyers face a difficult road ahead. As a second wave cripples Europe, operational and financial challenges remain high. Businesses in the hospitality, travel, tourism and luxury goods sectors are struggling, facing a resource crunch, and negotiating discounts and deferments on legal fees.
Companies in badly affected sectors may seek to trim their budgets, to protect only key IP in key markets, says Julka. In contrast, those in the e-commerce sector, tech, education and health sectors stand to benefit from demand relating to new lifestyle patterns brought about by the pandemic.
“For businesses that have not faced a huge resource crunch, it may not be wise to slacken IP protection in the near term, for the worth of their rights could be eroded in the long term,” warns Julka. “IP is an asset with a two to three-year lifecycle. Anything filed today – a patent, trademark or design – will mature into a protected right a few years into the future, and that may be the time when the world economy is on the upswing again.”
New partnerships and collaboration to find a vaccine and solve other pandemic-related problems also raise important questions about IP protection. “Certain companies, in particular the pharma/diagnostic sector, found themselves suddenly engaged in new relationships, possibly even with others that have been competitors prior to the pandemic,” says Saurabh Anand, a senior associate at K&S Partners in Bengaluru. “These stakeholders are likely to face IP-related challenges.”
Anand says companies will need to find a way to balance the need of the hour – helping society in the face of Covid-19 – while also ensuring they generate profits to stay afloat. He recommends identifying and focusing on the principle spheres of covid-19-related innovation in order to build and protect a health portfolio.
“This would naturally also result in cutting costs associated with an overly expansive R&D formula, thus balancing the existing short-term pinch with a long-term vision, and the flexibility to expand when appropriate.”
Bursting with ideas
The pandemic has fuelled a wave of creative problem solving and associated IP gains
The creativity unleashed by the threat of the coronavirus is a perfect illustration of the phrase “necessity is the mother of innovation”. In India and beyond, the pandemic has forced individuals, public and private institutions to come up with novel strategies and solutions to develop a new normal, a way to survive and move while somehow being on hold.
“The pandemic has seen several companies pivot from their usual manufacturing expertise to enter newer domains associated with public health,” says Adithya Jayaraj, a senior associate at K&S Partners in Bengaluru. “Given the resource constraints, companies found themselves in a unique situation, faced with the option to infringe, collaborate, revise or innovate.”
Vikrant Rana, a partner at SS Rana & Co in New Delhi, has received work from regular clients who had moved on to things they had never contemplated in the past. “They changed overnight for their own benefit and for society – it was encouraging to see their versatility, and the way they adapted to changing circumstances.”
In addition to the immediate focus on pharmaceuticals, hand sanitizers, masks and ventilators, there was also a surge of ayurvedic (Indian traditional medicine) and homeopathic preparations relating to preventative medicine and post-operative care, says Mohan Dewan, the managing partner at RK Dewan & Co in Mumbai. “We have been working with inventors, companies and colleges on everything from cleaning aids to artificial intelligence, with a greater demand for machine learning and new methods of training and teaching.”
Sonal Madan, a partner at Chadha & Chadha in New Delhi, notes rising demand for healthcare and wellness products such as multivitamins, nutraceuticals, immune-boosting pills, etc. “A lot of people are exploring products for the first time online, and the authenticity of those products can’t be verified all the time,” she says. “Clients are becoming more sensitive towards this new consumer base for non-essential goods.”
Rana illustrates the level of innovation by startups such as Nocca Robotics, Aerobiosys Innovations, and AgVa Healthcare, which are developing low-cost, easy to use and portable ventilators that can be deployed even in rural areas of India. KlinicApp and Practo are providing covid-19 tests at home and online consultation with doctors through their platforms, while Mylab Discovery is making and selling testing kits – the first Indian company granted approval to do so.
Manisha Singh, a New Delhi-based partner at LexOrbis, says the healthcare industry “will take the lead in innovation and IP filings in the coming years, with increased investment in the area funded by private and public capital”.
Government-led initiatives have taken root, too. The Office of the Principal Scientific Adviser to the government, in partnership with Invest India, invited companies and individuals to take part in a “waste to wealth” innovation challenge. The mission was looking for solutions to address the safe collection, disposal and treatment of large volumes of medical waste (masks, gloves, PPE, etc.) being generated by the pandemic. The Startup India programme is focused on innovation in other connected areas, including providing solutions for large area sanitization, crowd tracking and fake news detection.