RUPENDRA KASHYAP VS. JIWAN PUBLISHING HOUSE 1996 (38) DRJ 81

FACTS OF THE CASE:

The appealing party/appellant Rupendra Kashyap is the proprietor of M/S Som Sudha Prakashan and the arrangements in the distribution of books. He asserts that he is an exclusive licensee of Central Board of Secondary Education regarding the distribution of past year question papers for classes X and XII directed from 1990 onwards and in this way inside the significance of Section 54 of the Copyright Act of 1954, is the first and first proprietor of the copyright and nobody other than the plaintiff party could distribute or republish the previous year question papers of the particular classes of the tests led by CBSE. In any case, it is asserted that by distributing and repeating the inquiry papers, respondents (Jiwan Publishing House) have encroached on the petitioner’s copyright and subsequently have submitted a break of the privileges of the plaintiff party. The CBSE has totally on the side of the appellant/plaintiff on the equivalent.

ISSUE:

1. Whether the question paper set by CBSE, can be the subject matter of Copyright?
2. Who would be the owner of the Copyright matter?
3. Whether the respondent has infringed the plaintiff’s, right?
4. Whether the plaintiff has any cause of action against the respondent?

RULE OF LAW:

Section 2 (j) of the Copyright Act, 1957
Section 17 of the Copyright Act, 1957
Section 17 (dd) of the Copyright Act, 1957

JUDGEMENT:

The “original literary work” can be claimed under Section 13 of The Copyright Act, 1957. The condition for that is the work is totally original of the author and not copied from any source. Thus, the Court held that examination paper for students also comes under the purview of Section 13 of the Act and is considered as the subject matter of Copyright. Furthermore, the Court held that the examination papers were set by a body of Board (CBSE) and the work of printing and publishing was given to the appellant under a contract. The board (CBSE) is considered as “Public Undertaking” under section 28 of the Act because it’s functioning under the direction of the Central Government and for public purposes. The High Court held that the CBSE board is the first owner of the examination paper and examination papers are the subject matter of copyright under Section 17 9dd) of the Act. There was a contract between the board CBSE and the appellant to publish and printing of the examination paper. The Appellant is an “exclusive licensee” of the copyright matter. The word “exclusive licensee” defined under Section 2 (j) of the Copyright Act as a license which confers on the licensee or persons authorized by him to the exclusion of all other persons (including the owner of the copyright) any right comprised in the copyright in a work, and “exclusive licensee” shall be construed accordingly. Under Section 14, copyright means exclusive right in case of literary work to do the following acts (amongst others):
(I) to reproduce the work in any material form;
(ii) to publish the work.
(iii) to produce/reproduce or perform or publish any translation of the work and
(iv) to make any adaptation of the work. The above-said insignia of the copyright is found to have been licensed to the plaintiff to the exclusion of all other persons and therefore, the plaintiff is an ‘exclusive licensee’ entitled to maintain an action for infringement of copyright.
Thus, the appellant is also the lawful owner of the subject matter of the copyright and his right is infringed by the respondent by publishing and printing the question paper.
The Court held that the appellant has a valid cause of action against the respondent. The court granted an Interim Injunction against the respondent and restrained further infringement of the right of the appellant.

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Introduction

The unrivalled occupancy and rapid advancements of Computers, technology and the Internet has significantly shaped the world into an edified space. With the burgeoning demand and colossal utilizations, its access isn’t limited to a certain set or type of people anymore, instead appears, more or less, as an around-the-globe administration. The fast-paced growth of the web, outstanding reach over people and generation of a global surge of excitement are laudable.

Estimates vary as to the number of people connected to the net. But it’s widely believed that the number is over 60 million, and growing exponentially^[1]. Between 750,000 and 1 million people are caught up in the Internet phenomenon every month, and it is expected that by the end of the century, the total number of users will be at least 150 million and the value of goods, services and information traded globally over the internet will reach US $ 200 billion^[2].

This leads us to elucidating on the concept of cyberspace, which isn’t precisely defined anywhere, although it can be termed as an intangible space in which communication over various computer networks occur simultaneously.  This widespread interconnected digital technology [cyberspace] eventually means that a person sitting in one part of the world can access content of any kind uploaded by a server, oceans away on the other side. Due to these advancements it is apparent that any data and information can be availed in a digitised format—detached from the physical medium—since the internet transcends the physical dimensions of things.

Notwithstanding the foregoing, this as a consequence, makes the notion of property and exclusivity irrelevant. Hence it can be understood that as soon as any information is released into cyberspace, it practically becomes of public use, without any specific ownership; it becomes publici juris. Therefore, it can be used by anybody.

The advantages and scope of publicity of business through e-commerce or business on the World Wide Web can reach the surfers very fast in any part of the world. Unfortunately this has also paved the way for the emergence of cyber crime^[3].

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  Cyber crime & The IT Act, 2000

Cyber crime—although an undefined term by an Indian statute—is a catchall attributed to any crime which includes as an essential requirement, a computer and a network. The National Cyber Crime Reporting Portal (a body set up by the government to facilitate reporting of cybercrime complaints) defines the term, as ‘any unlawful act where a computer or communication device or computer network is used to commit or facilitate the commission of crime’^[4]. Cyber crime isn’t confined to fraud, bullying or identity theft anymore. Various activities can be termed as cyber crimes like: CSAM^[5], Cyber bullying, cyber stalking, vishing, online fraud, identity theft, phishing, spamming, data breach, cyber-squatting, pharming, crypto-jacking, espionage, online drug trafficking etc. and several other in accordance with the statutes.

The meteoric rise of cyber crimes in the world is undeniable. But it wasn’t until much later that this quandary was even acknowledged by the general population or legislations. The fact of the matter is that with the breakneck speed of new digital technology build-out—which patently highlights the nifty uses—sadly, ends up shrouding the major drawbacks. Nevertheless, there has been much-needed awareness in the past few years regarding cyber offences; it’s not treated as a trifling matter anymore.   

To deal with the cyber-crimes, the parliament of India has enacted the Information Technology Act, an act based on UNCITRAL^[6] (which adopted model law on e-commerce advocating a shift from paper based environment to a computer based environment^[7]).

The IT Act, 2000 provides legal recognition to digital signatures and electronic records. It is a legal framework to facilitate and safeguard electronic transactions in the electronic medium.

Intellectual Property

The concept of Intellectual Property can be traced back to the Byzantine Empire where monopolies were granted. For instance, the granting of exclusive privileges to inventors of any machine/process to speed up silk-making by Venice’s statutory legislation, or one year monopoly to cooks for new recipes by Greece^[8] . Over time the concept has been given a clearer picture. The most important of this subject herein is the ability of an idea or creation—not necessarily tangible—is termed as a property and has the right to be protected by the law to support artists, creators and other prime movers. 

According to the World Intellectual Property Organization (or WIPO)—one of the 15 specialized agencies of the United Nations—defines Intellectual property as, “creations of the mind: inventions; literary and artistic works; and symbols, names and images used in commerce. Intellectual property can be further categorized into: industrial property and copyright”. 

Industrial Property deals with patents, trademarks, geographical indications and designs, etc. on the other hand, literary, recording, musical, dramatic, cinematographic films and other such artistic works fall within the ambit of Copyright. 

The primary legislations regulating Intellectual property in India are: The Patents Act 1970, The Trade Marks Act 1999, The Geographical Indications of goods (Registration and Protection) Act 1999, The Design Act 2000, The Semiconductor Integrated Circuits Layout-Design Act 2000 and The Copyright Act 1957. Even still, the biggest discrepancy present in our country’s situation is the lack of understanding regarding IPR and Cyber laws—one cannot be separated from the other if online content has to be protected. 

There’s absence of any provision dealing with Intellectual Property in the IT Act, 2000. There isn’t even a mention of the word ‘IPR’ or anything about Intellectual Property protection on its infringement, which currently is a very challenging area in cyberspace.  

IPR and Cyberspace 

Copyright

In hindsight, the internet has created a new, effortless and trouble-free medium for several artists—writers, musicians, authors, content creators, researchers, and other copyright holders—to display their art while working on a global level, creating data accessible to millions of people. 

Contrarily, it has also opened a Pandora’s Box by making it possible for any user to duplicate information and replicate it as his/her own, thereby facilitating ‘copyright’ infringement.

A copyright confers an exclusive right on the owner, for a finite period, to prevent others from exploiting its subject-matter—an invention, a design, or a literary or other artistic work.

Hence, the copyright owner is entitled to certain ‘exclusive rights’ subject to certain provisions, to do or authorise the doing of certain acts in respect of work or a substantial part of it like: (a) in case of literary, dramatic or musical work—its reproduction, issuing copies, performance, adaptation etc., (b) computer programming, (c) artistic work, (d) cinematography film, (e) sound recording; (emphasis supplied)^[9].

According to the statutes, Copyright work shall be deemed to be infringed when any person, without license granted by the owner of the Copyright/Registrar of Copyrights under the Indian Copyright Act, 1957 or in contravention of the conditions of a license so granted or of any condition imposed by a competent authority under the said Act, does anything which exclusive right to do is, by the Act, conferred upon the owner of the copyright^[10]. Furthermore, on distribution either for trade or to an extent to affect pre-judicially the owner (emphasis supplied)^[11].

As far as basic usage of artistic work for an individual is concerned, liability may be escaped by using the defence of private use^[12]. Despite, unauthorised home taping of radio and television programmes becoming rampant all over the world^[13], the courts heretofore, have termed, liability of the end-user depending upon the degree and extent of unauthorized use, according to circumstances^[14]. 

It has been opined in Helliwell v. Piggott-Sims^[15], a UK case that, ‘private and domestic use can be properly said to have been done if the contemplation of its use was only limited to enjoying the collection.’  

The liability for offence [copyright infringement] usually lies on the originator, or the first person to post the copyrighted information on the web regarding requisite knowledge and intention (of committing the crime) to be present. Therefore, if the person has knowledge (of violation of copyrighted work) then the defence of ignorance—regarding the existence of such a law protecting the same—isn’t tenable^[16]. As far as (ISP) Internet Service Providers are concerned due to its system design appears to commit literal infringement of distribution, display or performance rights^[17].

Computer software is also subject matter of copyright protection under the act. Defined in Section 2(ffc) of the Act is a ‘computer programme’ within its meaning. Computer Programmes are thence included in the definition of literary work in the Act^[18] and owners have the right to grant software licenses^[19]. Moreover, The Penal Code, 1860 also reserves the right to punish publication of copyrighted work as the offence of forgery^[20]. In India, the offence of Copyright infringements are pursued under section 63 of the Copyright Act, 1957 ‘whereby any person who knowingly infringes or abets it shall be punishable for term not less than 6 months extendable up to 3 years with fine not less than rupees 50,000.’

Trademark and Domain Name

The Trademark Act, 1999 defines the term as, “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”^[21]. Basically a trademark serves the purpose of identifying the product (and its origin), guaranteeing its quality, advertising it, and public (prospective consumer) image^[22]. Common examples can be: Pepsi, Sony, and Colgate etc.

A domain name may constitute a trademark if used for the purposes of identifying the source of goods or services^[23]. The most critical aspect of access to a particular website is the domain name.  Since inception of the domain name system, a domain name has been the identifier of an individual or entity operating within the worldwide web comprising cyberspace. On registration, they allow the owners of the domain names to mark their location in cyberspace by providing an identity and an exclusive mode of marketing products^[24].

‘Cybersquatting’ is a form of infringement of trademark laws. It involves the use of domain name by a person with neither registration nor any inherent rights to the name. These people register trademarks of others as domain names and sell those domain names back to the [trademark] owners or third parties at a higher price for profit. Since domain names establish a sense of online identity, they have major importance for creators. However, there’s more—an essential need to prove a dishonest intention, lack of legitimate rights and interest and similarity of domain name with the trademark in these petitions^[25]. ‘A domain name registrant doesn’t obtain any legal right to use that particular domain name simply because he has registered the domain name, he could still be liable for trademark infringement^[26].’

The Supreme Court was of the opinion that the use of similar domain name may lead to a diversion of users which could result from user’s mistaken access on one domain name instead of the other^[27]. This rationale was followed in succeeding judgements like of Tata Sons Ltd. & Anr. v. Arno Palem & Anr.^[28], as well.  

Furthermore, reverse domain name hijacking or reverse cybersquatting is when a trademark owner tries to secure a domain name by making false cybersquatting claims against a domain name’s rightful owner through legal action. Such issues usually arise with large corporations and wealthy individuals.’

Presently India doesn’t have any specific provision to stop violations as the aforementioned, there is a need for new legislation like the United States—U.S. Anti-Cybersquatting Consumer Protection Act, 1999. It protects the interest of owners of both registered and unregistered trademarks against use of their marks within domain names and also safeguards living persons against use of their personal name under certain circumstances.

Issues

Jurisdiction

The notion of jurisdiction is rooted in territoriality from the point of view of both the court which can properly assert jurisdiction and from the point of view of the law that should be applied while deciding the dispute^[29]. This concept of a ‘territorial space’ becomes complicated with the borderless and non-physical domain of the internet. Furthermore, these enforcement issues become more complex in cases of international transaction. In the case of, Banyan Tree Holding (P) Ltd. v. A. Murali Krishna Reddy^[30], the Delhi HC was dealing with an inter-state issue but the plaintiff was a foreign company which had invoked the jurisdiction of an Indian Court to seek an injunction against the alleged violator of trade mark. The court by large followed the development of common law with no indigenous law developed in India. 

Other Issues

Neither is there a legal compensation under the IT Act nor any provision to punish Cybersquatters; the only relief available is to take the domain back. As already mentioned before, there is lack somewhere in respect of jurisdiction issues, cyber stalking, cyber defamation etc. in the said statute.

Similarly, in the Indian Trademark Act, 1999 and Copyright Act, 1957 there’s a silence on cyber infringement issues. Additionally even with the computer programmes being protected under the copyright act, there’s no remedy for online software piracy^[31]. 

Conclusion

Intellectual Property Rights are a very important aspect in today’s time. There is a massive need for attention in the field for safeguarding the rights of developers, creators, and other artists. In India, although the legislations are going through steady changes there is still a certain requirement for a level of awareness regarding the crimes committed in cyberspace. As the internet provides a massive platform to performers—blatant, unchecked and continuous IPR violations on the internet—pushes intellectual property of people in a downslide motion which isn’t a good thing for the creative process and empowerment of this country. There is an urgent need for stricter laws in this field to avoid further infringements. And hopefully there will be.

^[1] Tan Tee Jim, Net Effect Copyright Conundrum in Cyberspace, 9 SAcLJ 229, 229 (1997).

^[2] See “The Business Times”, 22 September 1997 and “Business Week”, 5 May 1997. 

^[3] Harish Chander, Cyber Laws and IT Protection, 14 (PHI learning Private Ltd. Publication 2012).

^[4] Aprajita Rana & Rohan Bagai, Cybersecurity in India, Lexology (Feb. 24, 2020), https://www.lexology.com/library/detail.aspx?g=4cd0bdb1-da7d-4a04-bd9c-30881dd3eadf

^[5] Child Sexually Abusive Material/Child Pornography

^[6] United Nations Commission on International Trade Law

^[7] Vakul Sharma, Information Technology, 15 (Universal Law Publishing Company 2013).

^[8] Mr. Atul Satwa Jaybhaye, Cyber Law & IPR Issues: The Indian Perspective, Bharat Law Rev., Apr.-June 2016, at 166, 168. 

^[9] Indian Copyright Act, 1957 § 14.

^[10] Ibid, § 51(a)(i)

^[11] Ibid, § 51(b)(ii)

^[12] Ibid, § 52.

^[13] Dr. Gupta & Agarwal, Cyber Laws, 148 (Premier Publishing Company 2010)

^[14] Prosieben Media A.G. v. Carlton U.K. Television Ltd. [1999] FSR 610, 619.

^[15] [1980] FSR 582.

^[16] Rodneyd Ryder, Intellectual Property and the Internet (Lexis Nexis – Butterworths 2002) 320.

^[17] Ryder supra note 15, 320. 

^[18] Indian Copyright Act, 1957 § 2(o)

^[19] Jaybhaye supra note 8, 171.

^[20] Indian Penal Code, 1860, § 463, 464.

^[21] The Trademark Act, 1999 § 2(1)(zb)

^[22] Dr. B.L. Wadhera, Law relating to Intellectual Property, 134 (Universal Law Publishing Company 2009)

^[23] Raymond Limited v. Raymond Pharmaceutical Pvt. Ltd., 2016 SCC OnLine Bom 5159.

^[24] Ibid. 

^[25] Chander supra note 3.

^[26] Yahoo Inc. v. Aakash Arora & Anr.,78 (1999) DLT 285.

^[27] Satyam Infoway Ltd. V. Sifynet Solutions Pvt. Ltd., AIR 2004 SC 3540. 

^[28] 2013 (54) PTC 429 (Del).

^[29] S Muralidhar, Jurisdictional Issues in Cyberspace, 6 IJLT 1, 2-3 (2010).

^[30] 2009 SCC OnLine Del 3780.

^[31] Jaybhaye supra note 8.

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What is Grey Market?

Grey market/parallel market is where genuine or authentic products are sold through unauthorized distribution channels usually at a lesser price without the consent or knowledge of the manufacturer/owner. The purpose of grey market or parallel import is to take unfair advantage of the price arbitrage. It is referred as ‘grey market’ as the goods manufactured and sold are legal but the distribution channels through which they are sold are unauthorized or illegal. There are usually two types of grey markets: The one where imported goods are expensive; they are unavailable or there is shortage with respect to the same and the second where unissued securities are traded in the market. 

Parallel importing is generally considered as a trade practice and Indian legal regime provides for parallel importing under different legislations of Intellectual Property rights and Competition law. Grey market/Parallel importing is explicitly prohibited under Designs Act, 2000. India still follows principle of national exhaustion with respect to Copyrights Act. Under the Patents Act, 1970 Section 107A (b) deals with parallel imports and Section 30(3)(b) of the Trade Marks Act, 1999 also provides for the issue of parallel importing. Grey market is mostly prevalent with respect to Trademark and Copyright. The practice of Grey market/Parallel Importing is intricately linked to the doctrine of exhaustion. Principle of exhaustion states that owner/manufacturer of a product ceases to have exclusive control over the further sale after the first legitimate sale of the product subsequently. According to this principle, the owner/manufacturer cannot prevent further sale of his product and cannot claim any profits with respect to the same. National Exhaustion is wherein rights of the owners/manufacturers are exhausted for a specific territory or domestic market where the goods have been put for its first valid sale with the consent of the brand owner in that specific territory or domestic market. International Exhaustion is based on the assumption that the entire world is one market and once the owner/manufacturer has put his goods for sale anywhere in the world, his rights as to exclusivity are exhausted. International Exhaustion system is adopted by India.^[1]

The principle related to exhaustion is provided under Article 6 of Trade-Related Aspects of Intellectual Property Rights (TRIPs), which provides discretion to the states whether to permit or prohibit parallel importing within its legal framework. In “Xerox Corporation v Puneet Suri” ^[2]The Court observed that import of second hand goods does not amount to infringement as there was no impairment with respect to the machines and proper documentation was adduced. Thus, protection under International exhaustion covered under the ambit of Section 30(3) was provided to the defendants. Provisions under Copyright Act are not explicit as to the application of international or national exhaustion principles. The Courts have delivered ambiguous interpretations with respect to same.^[3] Courts have upheld certain principles with respect to import of foreign goods such as prominently display that the goods being sold by them are imported from abroad and the warranty is provided by them personally without any affiliation with the brand owner so as to protect the reputation of the brand owner.^[4] Thus, it has been settled through various judgments that parallel importing amounts to infringement only when it has been acquired through illegal means and there has been material alteration or modification in the quality of the product. 

How to combat grey market?

• Consistent surveys to be carried out by the owner/manufacturer in order to keep a track of the stock and locate suppliers.
• Manufacturers can use various techniques such as – bar coding, DVD region codes so as to differentiate their goods from the goods sold in the grey market.
• The manufacturers have to constantly keep a track on the local counterfeiters in the domestic market.
• To keep a track of their products through serial number monitoring and the wide network of distribution channels diverted throughout the country.
• To carry out random test purchases from similar markets in the domestic market so as to identify unauthorized distributors. 
• To create awareness among their consumers about the grey market, its consequences etc – by displaying on their website.
• Manufacturers can create an intelligence platform where all the data, visual images, reports, documents, emails, websites and other form of unstructured data can be stored and compiled. Constant update of the same will reveal suspicious date if any.
• It is also important that manufacturers aggrieved by such activities initiate legal proceedings against the people involved in grey marketing/parallel importing and adduce evidence with respect to the same.
• It is also essential that the Government takes necessary steps to enhance regulatory mechanisms like increase of penalties. It is also essential that more powers are vested with the investigative agencies to carry out their activities efficiently. 

Grey marketing/parallel importing has both economic and legal ramifications. Economically it is helping the customers by supplying goods at lower prices but on the other hand there is no quality assurance which causes damage to both manufacturers and customers. Legally, it is imperative to prevent deception/confusion among customers and protect the rights of the manufacturer/owner. Thus, the practice of grey market is not healthy for the overall functioning of the economy. In near future, due to the paradigmatic shift in the economy towards protection of IP rights grey market investigations will play a prominent role in combating the menace of grey market. Therefore, it is essential for manufacturers to take necessary steps to combat grey market.

^[1] Kapil Wadhwa v. Samsung Electronics 2013 (53) PTC 112 (Del.)

^[2] CS(OS) No. 2285/2006

^[3] Warner Brothers Entertainment Inc. v. Santosh V.G MANU/DE/0406/2009

^[4] Kapil Wadhwa v. Samsung Electronics 2013 (53) PTC 112 (Del.)

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