The Bombay High court has permitted an interim injunction in the favour of Tips Industries against Airtel-owned music streaming app Wynk. The Plaintiff sought a short-term order to limit Wynk from further downloading and streaming of Tips Music. Justice SJ Kathawalla has refuted the claim that online streaming service is authorized to grant a statutory license for internet broadcasting, under Section 31D of Copyright Act.

Background

The plaintiff is Tips Industries Ltd., owner of the music label in India, which has copyright over the considerable depository of popular music. In 2016, Wynk Music Ltd was given the license of this repository. The license was terminated in 2016,  and both the parties tried to reach an agreement of the terms and conditions for allowing Wynk to download and stream the music repository of Tips.

After the negotiation was dismantled, Wynk took refuge by advancing Section 31D of the Copyright Act. Under the Section 31D of a statutory licensing scheme as per any broadcasting organization, desirous of ‘communicating to the public’ any music recording, should obtain a statutory license for the same, by paying the royalty fee to the copyright owner, as per the charges fixed by the Intellectual Law Board.

Tips challenged the claim of Section 31D by the Wynk, and took legal action against Wynk for infringing their sound recording copyright under section 14 (1) (e).  Justice CJ Kathawalla turned down the accused’s claim for the violation of the copyright, and prima facie found Wynk guilty for two grounds- first, for selling the music under Section14) (e) (ii), secondly, for permitting the downloading and offline streaming of the plaintiff’s work, and for communicating the Tips’ work to the public through their streaming service, under Section 14 (1) (e) (iii).

The Bombay High Court addressed Wynk’s claim of copyright infringement, and ended the confusion related to online streaming and the statutory licensing  scheme under Section 31D:

1. Section 31D does not comprise the purchasing or downloading

The court stated that Wynk’s  music app’s feature of granting the customer the right to download song and store for the unlimited time period constituted a sale and not public communication, and consequently, did not include the broadcasting as per the Section 31D. Hence, Wynk did not have any right to claim a statutory license for the same.

2. Section 31D does not include Internet Broadcasting

Wynk argued that Section 31D encompasses online Broadcasting and its streaming service is also covered under the radio broadcasting.

The defendant also refers the inter alia, upon a DPIIT office memorandum from 2016, which entail that Section 31D does cover internet broadcasting.

 However, the court straight away declined this defence.

The court held that Section 31D was a deviation to copyright case, and must not be taken as a precedent for all the cases. Justice Kathawalla also claimed that section 31D clearly incorporates only radio and television broadcasting, and does not include internet broadcasting. Consequently, the defendant could not claim that the legislature intended on ‘radio’ broadcast to comprise the online broadcasts.

The court also denied the defendant‘s dependence upon the Government of India Office Memorandum, asserting that it was not in the ‘guidelines nature’ and needed statutory authority and consequently could not exist in the under Section 31D, statutory scheme.

3. Section 31D cannot be referred without the regulation of the prior rates by the IPAB

The court held that the Independent Payment Advisory Board, (IPAB) did not have the authority of directing the rates for internal broadcasting. Further, the  Court asserted that statutory scheme under Section 31D, consists of the Copyright Act’s Rules 29, 30, and 31,  specifying that prior regulation of royalty rate by the IPAB was extremely crucial for the statutory license citation, under Section 31D.

Wynk also tried to hold that Rules 29, 30, and 31 were ultra vires section which were meant for the royalty rate regulation, but this line of reasoning was rejected by Justice Kathawalla, who proposed that there is a huge difference between the statute and the rules.

Finally, the court granted an interim injunction to the Tips industries, considering the fact that they made a prima facie case, would have suffered a massive loss of revenue, and the balance of convenience was also granted in the plaintiff’s favour. For more visit: https://www.trademarkmaldives.com/

WHAT IS A WELL-KNOWN TRADEMARK?

A well-known trademark is a trademark which is widely known to the prominent section of the public and enjoys a relatively high reputation. If any other party uses that protected well-known mark on their products or services, it would be deemed a sign that the product or service is associated with the later service provider and hence would amount to infringement of trademark rights.

Any trademark which is not recognized as a well-known mark in India by the court or the trademark registrar makes it mandatory for trademark registry to fortify the well-known mark against any discordant marks, brand or any domain name.

Recognition of marks as well-known marks drift from its primary objective of trademark registration; as trademark registry is given orders to not register any marks which are virtually identical or similar to the registered well-known trademark.

FOR REGISTRATION OF A WELL-KNOWN TRADEMARK

• Relevant provisions of Trademark Act and Rules, 2017:

• Sections 11 (6)-11 (9), Trademarks Act, 1999: The Registrar shall, while determining whether a trademark is a well-known trademark, take into account any fact which he considers relevant for determining a trademark as a well-known trademark including:
• The knowledge or recognition of that trademark in the relevant section of the public, including knowledge in India obtained as a result of promotion of the trademark;
• The duration, extent and geographical area of any use of that trademark;
• The duration, extent and geographical area of any promotion of the trademark, including advertising or publicity and presentation, at fairs or exhibition of the goods or services to which the trademark applies;
• The duration and geographical area of any registration of, or any application for registration of that trade mark under this Act to the extent they reflect the use or recognition of the trademark;
• The record of successful enforcement of the rights in that trademark; in particular, the extent to which the trademark has been recognized as a well-known trademark by any court or Registrar under that record.

Section – 11 (7): The Registrar shall, while determining as to whether a trademark is known or recognized in a relevant section of the public for the purposes of sub-section (6), take into account, the number of actual or potential consumers of the goods or services;

• The number of persons involved in the channels of distribution of the goods or services;
• The business circles dealing with the goods or services, to which that trademark applies.

Section – 11 (8): Where a trademark has been determined to be well-known in at least one relevant section of the public in India by any court or Registrar, the Registrar shall consider that trademark as a well-known trademark for registration under this Act.

Section – 11 (9): The Registrar shall not require as a condition, for determining whether a trademark is a well-known trademark, any of the following, namely:—

• that the trademark has been used in India;
• that the trademark has been registered;
• that the application for registration of the trademark has been filed in India;
• that the trademark:
  1. is well known in; or
  2. has been registered in; or
  3. in respect of which an application for registration has been filed in, any jurisdiction other than India; or
• that the trademark is well-known to the public at large in India.
• Rule 124, Trademarks Rules, 2017: Determination of well-known Trademark by Registrar:
• Any person may, on an application in Form TM-M and after payment of fee as mentioned in the First Schedule, request the Registrar for determination of a trademark as well known. Such request shall be accompanied by a Statement of the case along with all the evidence and documents relied on the applicant in support of his claim.
• The Registrar shall while determining the Trademark as well-known take into account the provisions of subsections (6) to (9) of section 11 of the Trademarks Act, 1999.
• For the purpose of such determination, the Registrar may call such documents as he thinks fit.
• Before determining a trademark as well known, the Registrar may invite objections from the general public to be filed within thirty days from the date of invitation of such objection.
• In case the trademark is determined as well known, the same shall be published in the trademark journal and included in the list of well-known trademarks maintained by the Registrar.
• The Registrar may at any time if it is found that the Trademark has been erroneously or inadvertently included or is no longer justified to be in the list of well-known trademarks, remove the same from the list after providing the due opportunity of hearing to the concerned party.

Required Documents as per the Guidelines issued by TM registry in 2017:

• TM-M Form with payment of Rupees 1 Lakh. (ONLY E-filing allowed);
• A statement of the case describing the applicant’s rights in the trademark and describing the applicant’s claim that the trademark is a well-known trademark;
• Evidence of the use of the mark and annual sales turnover of the business using the mark;
• Evidence of advertisements and publicity using the mark and related costs;
• Evidence of actual or potential users of the mark;
• Evidence of knowledge or recognition of the mark in India and overseas; and
• Details of successful enforcement of rights with respect to the mark, if any, especially with respect to the mark being well known, including a copy of the judgment of an Indian court or registrar of trademarks determining the mark as being well known.
• The size of the document submitted along with a statement of the case as evidence / supporting document should be in PDF format with a resolution of 200 X 100 dpi on A4 size papers and total file size shall not exceed the limit of 10 MB.
• Any person who wants to object to the inclusion of the trademark in the list of well-known trademarks may file his objection in writing to the Registrar of Trademarks stating out the reasons for his objection with supporting documents if any.
• A copy of the objection may be communicated to the applicant for comments within the stipulated time.
• The office will communicate the decision in respect of the objections to the parties concerned.
• The final decision of the office regarding the inclusion of the trademark in the list of well-known trademarks will be communicated to the applicant.
• In case the mark is determined as well-known, the same will be notified in the Trade Marks Journal and included in the list of well-known trademarks made available on the official website. For more visit: https://www.trademarkmaldives.com/

The Delhi High Court imposed a whopping fine of Rs. 87lacs on Pure Play in the case of Skechers USA, Inc and Ors v. Pure Play sports for violating the Intellectual Property Rights of Skechers by manufacturing and distributing rip-offs of a Skechers’ GoWalk3 series shoe range. Skechers filed a case against Pure Play for which it was permitted interim injunction in May 2016. The order for the fine was decided by the Joint Registrar Raj Kumar Tripathi, according to Chapter 23 of the Delhi High Court Rules, 2018. After the order in 2015, the High Court again passed the summary judgement, even when there was no application filed for such a judgment.

Overview

Skechers filed a case against Pure Play proclaiming that Pure Play was imitating the distinctive and unique features of their footwear that were sold under the GoWalk3 series brand. They also claimed that Pure Play was trying to deceive and confuse the customers and the members of the trade with regard to the footwear’s origin and to establish a false association with the Skechers to sell their product under the name of Skechers.

Skechers not only claimed their exclusive trademark ownership but also showed GoWalk 3 series has unique elements which also included their trade dress. They provide many evidences to the court to prove the similarity and showed the deliberate attempts made by Pure Play to use their product. On the other side, Pure Play tried to prove the difference in both the company’s marks and logos, to vindicate their stand that both the products are not identical, and should not be confused as one. The defendant argued that customers tend to prefer high-ranged products by considering the price factor. They also averred that the plaintiffs haven’t registered their trade dress and designs.

Judgment

The Court passed the judgment in favor of the Skechers by granting the interim injunction. The court also stressed upon the ignorance on the part of the customer while purchasing any product. The court accepted that the GoWalk 3 series has a trade dress and unique elements, which acted as a source identifier. An injunction was granted by the court to avoid any kind of prejudice to the Skechers’ products.

Analysis

This is one of the few Intellectual Property Right cases, wherein the court passed the summary judgment. As per grounds lay in Rule 3, any party can seek for summary judgment at any time by serving the summons to the defendant. As per the Order 13A, summary judgement is passed to avoid lengthy court trials in the following case:

1. When a claim pertaining to commercial disputes is decided without the recording of the oral evidence.
2. When both the parties have no prospects of succeeding and the Court doesn’t find any reasons for not disposing of the case.

Order 13A was the latest addition to the Commercial Court Act, approved by the Cabinet, and the President on October 23, 2015. The most fascinating part of the case was that none of the parties filed an application for the summary judgement. However, Skechers wanted to file the application for the summary judgement under the Order 13A of the Code of Civil Procedure but were unable to do so because of the absence of its signatory. However, the court decided to go forward and passed the decree

This summary judgment on Skechers USA, Inc & Ors v. Pure Play overruled the previous judgement passed by the same Delhi High Court in the Bright Enterprise Private Ltd. & Anr. v. MJBizcraft LLP & Anr., passed on 4 January 2017.

It was the first case related to the proceeding of summary judgement, trademark infringement and goodwill dilutions. The court stated that “From the provisions laid out in Order XIIIA, it is evident that the proceedings before the court are adversarial in nature and not inquisitorial. It follows, therefore, that summary judgment under Order XIIIA cannot be rendered in the absence of an adversary and merely upon the inquisition by the Court. The Court is never an adversary in a dispute between parties”. The court also addressed how the summary judgement proceeding cannot happen without the filing of the trademark application under CPC, Rule 4  of Order 13 and the importance of the accused replied. The court also stressed upon that “a court may feel that the case of a Plaintiff is weak, but that is no ground whatsoever for throwing out the suit log, stock and barrel without giving the Plaintiff an opportunity of proving and establishing its case”.

Conclusion

This case was a watershed moment in the history of the summary judgement passed under Order 13A  for two reasons, first, the defendants weren’t given the chance to prove his side, and secondly, no applications were filed by the either of the plaintiffs. For more visit: https://www.trademarkmaldives.com/