Centre for Internet and Society

Consumers International IP Watch List 2009

pranesh — 2011-08-04T04:42:27Z

In response to the US Special 301 report, Consumers International brought out an IP Watch List. CIS contributed the India Country Report for the Watch List.

Every year the Office of the United States Trade Representative (USTR) publishes a report known as the Special 301 Report, documenting IP regimes in various countries, and publishing a list of those countries which do not afford 'adequate and effective' protection for US intellectual property. This year Consumers International, which set up the A2K Network, published a counter-report, the IP Watch List 2009 for which the India report [pdf here] was prepared by the Centre for Internet and Society. While the Special 301 Report labels India a "Priority Watch List" country (meaning that it has an IP regime least conducive to the trade interests of the United States), the Consumers International report holds India to have the most consumer-friendly and balanced IP regulation amongst the sixteen countries surveyed. The CI report lambasts the USTR's attempts to make countries comply with unreasonable demands which go over and above the countries' international obligations. For instance, the WIPO Internet Treaties, which have been criticised by many, is sought to be imposed on countries like Israel, India, and Canada. Prof. Michael Geist of the University of Ottawa even notes that piracy levels and accession to the WCT and WPPT do not seem to be correlated: "In fact, only five countries that have ratified the WIPO Internet treaties have software piracy rates lower than Canada." Still, the USTR has placed both India, whose IP laws are being praised by Consumers International and Canada, which has low piracy rates even by the accounts of the notoriously propagandist BSA, have both been placed in the Priority Watch List. The reasons for doing so are not all that unclear if we look at who really shapes the USTR's Special 301 report.

The India section of the USTR Special 301 report [pdf] (pp. 18-19) notes:
"India will remain on the Priority Watch List in 2009. India has made progress on improving its IPR infrastructure, including through the modernization of its IP offices and the introduction of an e-filing system for trademark and patent applications. Further, the IP offices have started the process of digitization of intellectual property files. In addition, the Indian ministerial committee on IPR enforcement has supported the creation of specialized IPR police units. Customs enforcement has also improved through the implementation of the 2007 IPR (Imported Goods) Enforcement Rules as well as by seizures of unlicensed copyrighted goods intended for export. However, the United States remains concerned about weak IPR protection and enforcement in India. The United States continues to urge India to improve its IPR regime by providing stronger protection for copyrights and patents, as well as effective protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical and agrochemical products. The United States encourages India to enact legislation in the near term to strengthen its copyright laws and implement the provisions of the WIPO Internet Treaties. The United States also encourages India to improve its IPR enforcement system by enacting effective optical disc legislation to combat optical disc piracy. Piracy and counterfeiting, including of pharmaceuticals, remain a serious problem in India. India’s criminal IPR enforcement regime remains weak. Police action against those engaged in manufacturing, distributing, or selling pirated and counterfeit goods, and expeditious judicial dispositions for IPR infringement and imposition of deterrent-level sentences, is needed. As counterfeit medicines are a serious problem in India, the United States is encouraged by the recent passage of the Drugs and Cosmetics (Amendment) Act 2008 that will increase penalties for spurious and adulterated pharmaceuticals. The United States urges India to strengthen its IPR regime and stands ready to work with India on these issues during the coming year."

Large chunks of it seem to have been 'borrowed' from the IIPA submissions. The IIPA (International Intellectual Property Alliance), which is made up of US-based IP-maximalist lobbyists like the Motion Picture Association of America, Recording Industry Association of America, National Music Publishers Association, Association of American Publishers, and Business Software Alliance, is a body that was created to lobby the USTR to impose trade sanctions on those countries which did not follow the path that IIPA thought best for those countries.
Interestingly, the IIPA submissions talk not of IIPA's concern about weak IPR protection and enforcement in India, but instead states: "the United States remains concerned about weak IPR protection and enforcement in India". This exact line even manages to finds itself in the USTR Special 301 report. Many IIPA complaints find themselves as USTR recommendations, including: a) fast-track judical dispositions of IP cases; b) special laws against optical disc piracy; c) ratification of the WCT and WPPT (the "WIPO Internet Treaties"); d) increased criminal enforcement of intellectual property.

Thus, the Special 301 report emerges as a discredited report that the US's trade partners should not (and by many accounts do not) pay attention to. Measurement of IP balance and consumer-friendliness such as the Consumers International IP Watch List are more important, and should eventually lead to a measurement index for Access to Knowledge.

For more details visit https://cis-india.org/a2k/blogs/consumers-international-ip-watch-list-2009

Civil Society Letter Against TRIPS-Plus IP Enforcement

pranesh — 2011-09-22T12:48:51Z

This open letter was sent to the president of Confederation of Indian Industry (CII) and high-level government officials on the eve of the Third International Conference on Counterfeiting & Piracy organized by CII. This conference aims to strengthen the enforcement of intellectual property rights and thus creating an imbalance in the protection that intellectual property offers to both those who own it as well as those who don't.

An Open Letter to the President of Confederation of Indian Industry (CII) on the Third International Conference on Counterfeiting & Piracy

To
Mr. Venu Srinivasan
The President
Confederation of Indian Industry (CII)
The Mantosh Sondhi Centre, 23,
Institutional Area, Lodi Road
New Delhi - 110 003

Dear Mr. Srinivasan,

We understand that Confederation of Indian Industry (CII) is hosting the Third International Conference on Counterfeiting and Piracy from 19-20th August 2009 in partnership with the Embassy of the United States and the Quality Brand Protection Committee (QBPC), China. As stated in the invitation letter the primary objectives of the conference are: 1) to initiate coordinated action for cross border enforcement; 2) to highlight the importance of protection of intellectual property rights (IPRs); 3) to combat the growing threat of piracy and counterfeiting; 4) to facilitate a global meeting of customs officials across the globe; 5) to recommend the creation and setting up of a governmental “National Brand Protection” group; 6) to serve as a forum to discuss legal guidelines related to the prosecution of IPR infringement and to eliminate ‘loopholes’ within the existing laws; and 7) to strengthen cooperation between enforcement agencies and chalk out strategies for enforcement agencies a industry action both at national & international level. We also understand that this international conference is part of CII Intellectual Property Division’s special initiative on enforcement of IPRs. As part of this special initiative CII aims at “engaging government to create conducive legislative measures, policy levels reform and impressing [upon them] to adopt stringent enforcement initiatives and exemplary punitive and monetary measures to further safeguard and secure the interest of industry”. CII also wants to “create a global partnership to synergise efforts of international community and to support and participate in India's efforts in combating counterfeiting both at domestic and international levels”. We, the undersigned, representing various civil society organizations in India, write this letter to express our strong reservation on the conference as well as on CII’s special initiative on IP enforcement. Without raising any question on CII’s right to organize events we would like to convey the following concerns with regard to the conference and CII’s initiative on IP enforcement.

Many of the above mentioned objectives of the conference and the special initiative are directed towards the enhancement of intellectual property (IP) standards like coordinated action on border measures, common guidelines for prosecution of IP infringement, exemplary punitive and monetary measures, etc. In other words, enhancement of IP standards means using more public money to protect private rights; very often protecting the monopoly over intangible property rights of multi-national corporations (MNCs).

As you may be aware, MNCs and their developed country hosts are currently engaged in the implementation of a multi-pronged strategy to enhance IP enforcement standards.[1] This is similar to the MNC’s initiatives in the mid 80s to enhance international IP protection, which resulted in the Agreement on Trade-Related aspects of Intellectual Property Rights (TRIPS). Unlike the 80s, now MNCs and developed countries use multiple forums to pursue the objective of enhancement of IP enforcement standards. Some developed countries have unilaterally enhanced their IP enforcement strategy to force other countries, especially developing countries, to accept the same through various multilateral organizations, namely the World Customs Organization (WCO), World Health Organization (WHO), Universal Postal Union (UPU), Interpol, WIPO and WTO. Developed countries are also using Free Trade Agreements (FTAs), Bilateral Agreements on IP Enforcements as well as financing lobbyist studies, conferences and policy recommendations to impose higher IP enforcement standards. These efforts for the enhancement of IP enforcement standards are a matter of grave concern for the people of developing countries and their governments. By partnering with the US Embassy and Quality Brand Protection Committee of China (QBPC)[2] in the organization of this conference, CII is allowing itself to play in the hands of MNCs and some developed countries, whose interests do not match with that of India industries and that of the Indian people.

As you are aware, the Government of India is taking a very strong position in resisting enhancement of IP enforcement standards in all the multilateral forums. India along with like-minded developing countries successfully pushed back TRIPS-plus[3] IP enforcement agenda at WCO and WHO. India is also trying its level best to convince other developing countries the need to stick to TRIPS-compliant standards rather than adopting TRIPS-plus enforcement standards. In the wake of the controversial generic drug seizures by EU customs authorities, India has also raised the issue of TRIPS-plus IP enforcement standards contained in the EU IP Enforcement Directive at least two times at the TRIPS Council.[4] The Indian political leadership has unequivocally raised its concern over the enhancement of IP enforcement standards at other forums also.[5] In adopting this stance, the Government of India has cited public interest as well as the operating freedom of Indian industry as its justifications.[6] By partnering at this vital stage with an MNC lobby group and a heeding to developed country governments, CII is not acting in furtherance of the legitimate public interests of Indian domestic industry and the Indian people.

It is a well-evidenced fact that TRIPS-plus enforcement standards adversely impact not only legitimate trade between nations (as shown by the EU seizures) but also the day-to-day life of millions of people especially in India and other developing countries.[7] Unfounded IP enforcement measures would adversely impact access to life saving medicines and educational materials. Thus the IP enforcement measures also have the potential to deny right to development to people in the global South. Hence an organization like CII should not view IP as only a business tool but should look at the larger scheme of things especially in the social and economic realities of India. In fact, by promoting enhancement of IP enforcement standards CII is advocating a policy, which would violate the right to health, the right to knowledge, as also the right to development.

We would also like to point out that Indian pharmaceutical industry is one of the victims of TRIPS-plus IP enforcement standards. In 2008 alone, 17 consignments[8] were seized in transit at Europe using the EU Directive on IP Enforcement, which allows seizure of goods in transit.[9] These consignments were being exported from developing countries (such as India and Brazil) to other developing countries, and the contents of the consignments are perfectly legal in both the exporting as well as the importing nations. These highly questionable seizures resulted in the crisis of health programmes as it resulted in delays in and prohibitive costs of access to life-saving medicines in developing countries of Africa and Latin America. CII can barely claim to be representative of the interests of Indian industry if it ignores such episodes and partners with self-promoting MNCs and developed countries’ governments to advocate for the enhancement of IP enforcement standards.

In the light of above-mentioned issues, we request you to consider the following:

Rejecting the TRIPS-plus enforcement agenda in toto. We demand CII, Federation of Indian Chambers of Commerce and Industry (FICCI), Associated Chambers of Commerce and Industry(ASSOCHAM) and other Indian business associations to reject any and all attempts of bringing in a TRIPS-plus enforcement agenda in India, in the interests of Indian industry and the Indian people.
Completely disengaging from any collaborative efforts with foreign institutions to further TRIPS-plus standards of IP protection in India and also abstaining from any engagements on the anti-counterfeiting efforts with foreign agencies. CII should attempt to engage with domestic institutions and build national consensus before engaging with foreign institutions with the claim of representatives of Indian industry.
Taking necessary proactive steps to safeguard the interests of access to medicine and access to knowledge along with interest of the Indian domestic industry.
Participating in a more creative discussion on IP and development rather than simply accepting the simplistic and largely discredited view that stronger IP regime leads to more innovation and is a necessary condition for socio-economic development.

CC:
Shri Anjan Das
Senior Director & Head
Technology, Innovation, IPR & Life Sciences
Confederation of Indian Industry (CII)
Plot No. 249-F, Sector-18; Udyog Vihar, Phase-IV,
Gurgaon-122015, Haryana

Shri. P. Chidambaram
Minister
Ministry of Home Affairs
Government of India
North Block, Central Secretariat
New Delhi 110001

Shri G. K. Pillai
Secretary Justice
Department of Justice
Ministry of Home Affairs
Government of India
North Block, Central Secretariat
New Delhi 110001

Shri Naresh Dayal,
Secretary, Dept. of Health and Family Welfare
Ministry of Health and Family Welfare
Government of India
149-A, Nirman Bhawan, New Delhi – 110 011

Shri Ajay Shankar
Secretary
Department Of Industrial Policy & Promotion
Ministry of Commerce and Industry
Room 153, Udyog Bhavan,
New Delhi – 110 011

Signatories to this letter

Centre for Trade and Development (Centad), New Delhi
Centre for Internet and Society, Bangalore
National Working Group on Patent Laws, New Delhi
Lawyers Collective (HIV/AIDS Unit)
All India Drug Action Network (AIDAN)
International Treatment Preparedness Coalition (ITPC), India
Consumers Association of India, Chennai
IndoJuris Law Offices, Chennai
All Indian People’s Science Network, New Delhi
Delhi Science Forum
Alternative Law Forum, Bangalore
Knowledge Commons
Moving Republic
IT for Change
Centre for Health and Social Justice(CHSJ), New Delhi
Navdanya, New Delhi
Support for Advocacy and Training to Health Initiatives (SATHI)
Centre for Enquiry Into Health and Allied Themes (CEHAT)
Initiative for Health Equity & Society
International Peoples Health Council (South Asia)
Drug Action Forum – Dharwad, Karnataka
Dr. Mira Shiva, New Delhi
Tina Kuriakose, PhD Scholar, Jawaharlal Nehru University, New Delhi
Dr Gopal Dabade, Dharwad
Dinesh Abrol, Scientist NISTADS, CSIR, New Delhi
Madhavi Rahirkar, Lawyer/Consultant, Pune
Gautam John, Bangalore
Achal Prabhala, Bangalore

Endnotes

[1] See Susan K Sell, The Global IP Upward Ratchet, Anti-counterfeiting and Piracy Enforcement Efforts: The State of Play.
[2] QBPC barely qualifies as a representative of Chinese interest, as it comprises more than 180 multinational member companies.
[3] ‘TRIPS-plus’ refers to any protection of IPRs that surpasses the standards and requirements spelt out in WTO-TRIPS provisions.
[4] See Jonathan Lyn, India Brazil raise EU drug Seizures issue at WTO, available at http://www.livemint.com/2009/02/04232721/India-Brazil-raise-EU-drug-se.html
[5] Indian Minister of State for External Affairs Broaches Seizures of Generics at ECOSOC, available at http://www.keionline.org/blogs/2009/07/08/india-ecosoc-seizures/#more-2404
[6] Indian Commerce Secretary’s Speech to the African Community Ambassadors. available at http://www.centad.org/focus_77.asp.
[7] For two very recent examples, see Intellectual Property Enforcement: International Perspectives, Xuan Li & Carlos Correa (eds.) (2009); Anand Grover, Report of the Special Rapporteur on the Right of Everyone to the Enjoyment of the Highest Attainable Standard of Physical and Mental Health, A/HRC/11/12 (2009).
[8] Jyoti Datta, 16 out of 17 drug consignment seizures in the Dutch were from India available at http://www.thehindubusinessline.com/2009/06/08/stories/2009060851700300.htm
[9] The EC Regulation No 1383/2003 allows for seizure of goods in transit.

For more details visit https://cis-india.org/a2k/blogs/civil-society-letter-against-trips-plus-ip-enforcement

Fallacies, Lies, and Video Pirates

pranesh — 2011-08-04T04:43:08Z

At a recent conference on counterfeiting and piracy, industry representatives variously pushed for stiffer laws for IP violation, more stringent enforcement of existing IP laws, and championed IP as the most important thing for businesses today. This blog post tries to show how their arguments are flawed.

The Confederation of Indian Industry (CII) organized its third annual conference on counterfeiting and piracy, with support from the United States Embassy and the Quality Brands Protection Committee of China (a body comprising more than 80 multinational companies). Last week we criticised the conference in an open letter. This week, we examine a few of the recurring themes that came up at the conference.

Something being substandard is not the same as something being counterfeit.

This was a mistake made by many whenever they invoked 'counterfeit' in the sense of something that is violative of one's patent and trademark rights. The Indian Drugs and Cosmetics Act itself distinguishes between 'misbranded', 'adulterated', and 'spurious' drugs, thus recognizing that something that is made without proper authorization from rights owners isn't necessarily of a bad quality. Indeed, this was substantiated by an audience member, a lawyer from Dr. Reddy's Lab. She spoke of a mandi in Agra where they seized medicines being sold under the Dr. Reddy's name, but produced by local manufacturers. Upon lab testing, it turned out, much to their surprise, that the medicines were of the highest quality and were not substandard. Similarly, many large companies including trusted FMCG companies like Hindustan Unilever and ITC are upbraided by authorities for violations of the Drugs and Cosmetics Act (for the cosmetics they produce) as well as the Prevention of Food Adulteration Act. Thus, even legitimate businesses can produce substandard products. Thus, a product can be unauthorized but not substandard, just as a product can be substandard but not counterfeit.

This distinction becomes very important when we talk about patents, and especially drug patents. A generic drug is by definition identical or within an acceptable bio-equivalent range to the brand name counterpart with respect to pharmacokinetic and pharmacodynamic properties. Thus, this entire category of high-quality drugs is often sought to be made illegal or counterfeit by large pharma companies. Some countries like Kenya have capitulated. But so far the World Health Assembly has been forced by developing countries to keep the issue of substandard medicines separate from patent-bypassing medicines.

The industry, for all their talk about "out of the box" thinking on the issue, still only consider metrics such the number of piracy raids conducted as measures of success. A question was put forth by Manisha Shridhar of the Intellectual Property & Trade Unit of the World Health Organization upon learning of the quality of the drugs seized at the Agra mandi: Why not cut a licensing deal with those manufacturers, who obviously have excellent production facilities? That kind of thinking, which helped HMV in India in the 1980s, and copying innovative features from video pirates and pricing their products competitively has helped an Indian company, Moserbaer, do extremely well.

Counterfeiters and pirates are not always seeking to fool consumers.

Only lawyers hired by the industry would think that a consumer aspiring towards a Rolex watch would actually think that the one he purchased off the streets for one-hundredth the original's price was in fact original. Street-side DVD hawkers are not thought by the general public to be selling original wares. Still, despite knowing the difference between the original and the fake, consumers many times opt for the latter.

Having said that, counterfeiting, by using someone else's trademark and trying to pass off fake goods as real ones, is quite obviously wrong. It harms customers, and it harms the manufacturers. Thus, a distinction deserves to be made here between the counterfeiters who try to deceive consumers (for instance by copying authenticity marks, like holograms, etc.) and those who are just providing them with highly cheaper alternatives (pirated DVDs, etc.). In this light, it is also important here to distinguish between counterfeiting, traditionally taken to be trademark violation, and piracy, traditionally taken to be a violation of international law, but now generally meaning a large-scale violation of copyright law. While the former can lead to consumer confusion, the latter scarcely ever does. This is ignored by industry people who evoke the image of the consumer quite often, but only when it helps them, and not in any meaningful manner. They negate consumer choice when it comes to consciously purchasing pirated goods, and consumer freedoms when it comes to usage of copyrighted materials.

While commercial film piracy funds terrorists, so does pretty much every business activity.

A favourite of the MPAA (and by association, the MPA) is the RAND report on Film Piracy and its Connection to Organized Crime and Terrorism. This report, which was funded by the MPAA, predictably concludes that film piracy funds organized crime and terrorism. Even if we are to believe its findings wholesale, it leaves us wondering whether all business activities from which terrorists derive funds should be banned.

In India, there is a substantiated link between organized crime and film and music production, and terrorists have been said to make money off the stock market. If the MPA's arguments are taken to their logical conclusions, then film production and equity trading should also be prosecuted. Furthermore, while the mafia and terrorists are the ostensible targets, the laws that are brought about to tackle it affect poor roadside vendors and non-commercial online file sharers. To tackle the funding of terrorists, roadside piracy shouldn't become the target just as film production per se shouldn't. The invocation of the RAND report is thus only meant for rhetorical effect, as it is hard to find logic in there.

"To copy without authorization is to steal", the death penalty, and drug peddling.

At the conference, Dominic Keating of the US Embassy pointed out that "to copy without authorization is to steal" and David Brener of US Customs and Border Protection kept emphasising, on at least two occasions, that "drug peddling merits an automatic death sentence in many countries". There are numerous arguments one can make to show the lack of thought in the former. One could point out that 'stealing' and 'theft' are things that happen to tangible property, and that not only is copyright not tangible, but it is barely property. Copying without authorization creates one more of what existed, without depriving the authorizer (usually a corporation) of its original. This goes against our notion of 'stealing'. If the argument is to be shifted to the terrain of control over one's property/copyright, Mark Lemley in an illuminative article shows how the economic theories behind externalities in property and copyright are vastly different, and that complete control over either has never been, nor should it ever be, an aim of the law. Simply put, someone free riding on your property leaves you worse off than earlier, while someone free riding on your copyright usually doesn't.

One could also point out that 'stealing' is endemic in activities involving human creativity. T.S. Eliot notes that "Immature poets imitate; mature poets steal; bad poets deface what they take, and good poets make it into something better, or at least something different". He does not even consider the possibility that artistic borrowing, whether by imitation or by 'stealing' does not happen. Even Y.S. Rajan, Principal Adviser to CII recognized this when during the conference he noted that "imitation and innovation have an interesting and intertwining philosophical history". If we are to take Mr. Keating's admonishment seriously, we would indeed have a very illustrious list of thieves on our hands, including the Walt Disney Corporation, William Shakespeare, Vladamir Nabokov, Public Enemy, and pretty much every creative person who has ever lived. Books can be written about this (and indeed, numerous books have been), so we shall not dwell on this issue.

Mr. Brener's repeatedly spoke of how drug peddling attracts death penalty in many countries (though in neither the US nor in India has anyone ever received capital punishment for drug peddling), but he also clarified that he is not advocating for the death penalty for copyright violations. That made one wonder why he was bringing up the death penalty at all. He also made the dubious, non-substantiated claim (noting it as "true fact") that pirating movies is more profitable than selling heroin. This claim appears in an article about a report produced by the Australian Federation Against Counterfeit Theft (AFACT), but the original report is nowhere to be found. The article about the AFACT report also claims that the pirates are using their illicit profits promote drug smuggling. The seeming contradiction of film pirates investing in something that is riskier and less profitable doesn't seem to have caught the eye of the writers. One version of the 'drugs are less profitable than pirated DVDs' claim (with marijuana taking heroin's place) was debunked on the Commons Law mailing list. Pirated DVDs are sold for a fraction of the cost of the original. It would be obvious to anyone that DVDs that are typically sold for Rs.30-50, where the cost of manufacture alone may be estimable to be around Rs. 10, cannot be more profitable than heroin peddling. That apart, most online file sharing (deemed to be "piracy") is non-commercial. Thus the question of profit does not really arise. Still, for the industry, absence of a profit is equal to a loss.

Thus, the rhetoric of crime, and that too heinous crime, is continually used, despite its being completely inapposite. Why does used to try to make IP enforcement a matter of state concern, rather than a matter of private, and civil, interest. This way, illegitimate statistics and factoids are used to make individual file-sharers who earn no money get lengthy prison sentences. This and other ways in which IP enforcement has expanded are carefully documented in this paper by Susan Sell.

Repeating false 'statistics' does not make them true.

Again, we were subjected to a number of dubious claims during the conference: If only counterfeiting and piracy were eliminated, India's fiscal deficit would disappear; the Indian entertainment industry loses 16000 crore (USD 4 billion) yearly to piracy; 820,000 direct jobs are lost due to film piracy; software piracy costs the industry USD 2.7 billion annually, etc. These reports' methodologies have been thorougly discredited. Even The Economist, a very conservative and pro-industry newspaper, believes that the BSA-IDC annual reports on software piracy are utterly distorted. Similarly, in the U.S., the figure of 750,000 jobs (around 8% of the U.S. unemployed in 2008) being lost due to piracy were touted by everyone from the Department of Commerce, the Chamber of Commerce, U.S. Border and Customs Protection, and the MPAA, RIAA, and BSA. The amount of money lost each year in the U.S. due to IP infringement has been estimated to be between USD 200-250 billion (that's more than the combined 2005 gross domestic revenues of the movie, music, software, and video game industries). In a lengthy piece in Ars Technica, Julian Sanchez traces back the history of both these figures, and shows how they are just large numbers used for lobbying, and are not based on actual studies. The industry-commissioned Ernst & Young report ("The Effects of Counterfeiting and Piracy on India's Entertainment Industry") was never made available to the public at large, thereby making it impossible to judge the methodological soundness of the survey and the veracity of the figures.

IP expansion and more stringent enforcement is counter-productive.

Chander Mohan Lall, copyright lawyer to various film studios (including Warner Bros.) in India, used a number of short film clips in presentation during the conference. Upon being questioned about it, he admitted that he did not have permissions of the copyright holders, but claimed that his use fell under "the education exception" in Indian copyright law. While I wish he were correct (because what he was doing was indeed educational use), as per the law he is wrong. Section 52(1)(i) of the Copyright Act only exempts educational usage of cinematograph film recordings when "audience is limited to such staff and students [of an educational institution], the parents and guardians of the students and persons directly connected with the activities of the institution". While there are other arguments he could seek to use to make his usage of the film clilps non-infringing, being excepted by the educational fair dealings clauses isn't one of them. Thus, more stringent enforcement of IP rights actually engenders such unauthorized, but perfectly legitimate copying and communication to the public such as that done by Mr. Lall.

Another way in which IP enforcement is being sought to be increased is by way of the so-called Goonda Acts. These are generally statutes aimed at criminals and lumpen elements in society. The Maharastra version, the Maharashtra Prevention of Dangerous Activities of Slumlords, Bootleggers, Drug-Offenders and Dangerous Persons Act, 1981, just became the Maharashtra Prevention of Dangerous Activities of Slumlords, Bootleggers, Drug-Offenders, Dangerous Persons and Video Pirates Act. The term "video pirate" is very widely defined, to include any copyright infringement-chargesheeter who is "engaged or is making preparations for engaging in any of his activities as a video pirates, which affect adversely or likely to affect adversely, the maintenance of public order". Public order is deemed to be disturbed by "producing and distributing pirated copies of music or film products, thereby resulting in a loss of confidence in administration". Thus video pirates can possibly be interpreted to include individual sitting at home and using P2P networks to share films. The only requirement is that they should have had a chargesheet lodged against them previously -- they needn't even have been convicted; being chargesheeted suffices. Thus, non-commercial activities of file-sharing are equated to bootleggers and drug smugglers, and preventive detention (an anti-civil rights relic of India's colonial past) is applicable to them.

IP expansion is happening without the ostensible justifications for IP being kept in mind. That Tirupathi ladoos are going to get GI (geographical indicator) protection was announced at the conference with great pride. Geographical indicators are used to protect consumer interests, to ensure that no one outside a particular region (Champagne) can lay claim to be producing that product (Champagne) if the production of that product is intrinsically linked to special features found in that region (climate, etc.). However, no devout person would want to purchase anything advertised as "Tirupathi ladoo" if it were produced outside the Venkateswara temple at Tirupathi, thus the question of consumer confusion does not arise. What if someone malignantly advertises something as Tirupathi ladoo and claims it was made in Tirupathi (and not just that it tastes like the ladoo made there)? Such a person can be taken to task for deceptive advertising, and there is no need for something to have IP protection to do so. This represents a senseless expansionism of IP. It is now IP for IP's sake.

One of the speakers, Mr. V.N. Deshmukh, who though pro-stringent IP enforcement, astutely noted that, "When local demand is not met, they [consumers] turn to counterfeiters and pirates." Local demand can be unsatisfied because of lack of supply, or because the supply is overpriced, or because the supply is not easy to access, or because what is supplied is inferior to what is demanded. At the end of the day, as William Patry, Google's lead counsel, has noted, what companies sell to the public are products and services, and not IP. It would thus be wise for businesses to be innovative and compete rather than trying to extend their monopolies and engaging in rent-seeking behaviour that is economical harmful to consumers. They would also do well to remember that IP is not only a product but an input as well, so they are ultimately consumers themselves. All the harsher laws and enforcement mechanisms that they push for right now will have unintended consequences, and come to affect them adversely.

For more details visit https://cis-india.org/a2k/blogs/fallacies-lies-and-video-pirates

World IT Forum 2009

pranesh — 2011-08-04T04:44:33Z

At the World IT Forum, Pranesh Prakash made a brief presentation on intellectual property rights, how ill-suited they are to be considered "property" rights, and how they have been foisted upon the developing world.

At the recently-concluded World IT Forum, 2009, the Commission on Social, Ethical, and Legal Issues organized three sessions. One on 'Digital Intellectual Property Rights and Digitisation of Divides', a second on 'Employment of ICTs Toward Effective Realization of Millenium Development Goals' and a third on 'E-Governance and Biometrics: Evaluating Opportunities and Threats'. The individual sessions had K.M. Gopakumar of Third World Network ("Digital Technology and Access to Knowledge: Policy Space for the Third World), Naveen Thayyil ("Digital IPRs: Implications for Divides in New and Emerging Biotechnologies"), Anita Gurumurthy of IT for Change,("Reimagining the Digital Opportunity" ), Chat Garcia Ramilo of APC Women's Networking Support Programme ("Gender Dimensions of ICT Development"), Ajit Narayanan of AUT ("What Does Your Passport Say About You?"), Sohel Iqbal of Korea University ("Obligation and SWOT of E-Governance in Developing Countries") and Dinh Ngoc Vuong of the Institute of Lexicography and Encyclopedia of Vietnam ("Legal Aspects and Role of E-Governance in Vietnamese Reforms") speaking. As part of the first session, I spoke on how IPR as a property regime leads to mischaracterisation, and how IPR is a foreign system for developing countries.

Amongst the many reasons that IPR should not be regarded in the same light as property (even though that conceptual framework is supported by the likes of Eugene Volokh) are to be found in David Levine's rejoinder to Volokh that IPR are analogous to property, along with the two rejoinders by Larry Solum. Volokh's main point is that not only control of use and excludability, but incentives to create are also part of property law, for both tangible property and intangible "property". This is questioned not only by David Levine and Larry Solum, but by Mark Lemley, Wendy Gordon, and a host of other scholars. Three simple points to note: (1) IP deals with internalisation of positive externalities, which is not something we normally associate with property law -- thus, IP actually does not give me control over my 'property', but over yours; (2) IP deals with a truly non-exhaustable, non-rivalrous good -- ideas -- which, as shown in the articles linked above, are not suited to being governed by property regimes; (3) IP goes much beyond what property law does with tangible property, since it not only governs the sale of IP and exclusion of others from my IP, but also governs the subsequent usage of IP.

Another relevant consideration is the way that IP law has been spread through the globe through means like colonisation and modern-day unbalanced trade treaties.  India got its first copyright law in 1914 and signed the Berne Convention in 1928, much before its independence. The TRIPS Agreement of 1995 mandated things like product patents for pharma products for all countries, even though an industrialised Western country like Spain only started recognizing them in 1992, and even though Italy, which was then the fifth largest manufacturer of pharmaceutical products, was forced to introduce product patents by a petition of foreign pharma companies in 1978. The benefits of product patents for pharma products have not been empirically proved, but the harms caused by patents to production of newer medicines have been well documented. Given these, it is imperative that developing countries push back against IP expansionism that is knocking on their doors through instruments like Free Trade Agreements.

For more details visit https://cis-india.org/a2k/blogs/witfor-2009

Don't Shoot the Messenger: Speech on Intermediary Liability at 22nd SCCR of WIPO

pranesh — 2012-06-01T15:01:08Z

This is a speech made by Pranesh Prakash at an side-event co-organized by the World Intellectual Property Organization and the Internet Society on intermediary liability, to coincide with the release of Prof. Lillian Edwards's WIPO-commissioned report on 'Role and Responsibility of the Internet Intermediaries in the Field of Copyright'.

Good afternoon. I've been asked to provide a user's perspective to the question of intermediary liability. "In what cases should an Internet intermediary—a messenger—be held liable for the doings of a third party?" is the broad question. I believe that in answering that question we can be guided by two simple principles: As long as intermediaries don't exercise direct editorial control, they should not be held liable; and as long as they don't instigate or encourage the illegal activity, they should not be held liable. In all other cases, attacking Internet intermediaries generally a sign of 'shooting the messenger'. General intermediary liability and intermediary liability for copyright infringement share a common philosophical foundation, and so I will talk about general intermediary liability first.

While going about holding intermediaries liable, we must remember that what is at stake here is the fact that intermediaries are a necessary component of ensuring freedom of speech and self-expression on the World Wide Web. In this regard, we must keep in mind the joint declaration issued by four freedom of expression rapporteurs under the aegis of the Organization of American States on June 1, 2011:

Intermediary Liability

a. No one who simply provides technical Internet services such as providing access, or searching for, or transmission or caching of information, should be liable for content generated by others, which is disseminated using those services, as long as they do not specifically intervene in that content or refuse to obey a court order to remove that content, where they have the capacity to do so (‘mere conduit principle’).

b. Consideration should be given to insulating fully other intermediaries, including those mentioned in the preamble, from liability for content generated by others under the same conditions as in paragraph 2(a). At a minimum, intermediaries should not be required to monitor user-generated content and should not be subject to extra-judicial content takedown rules which fail to provide sufficient protection for freedom of expression (which is the case with many of the ‘notice and takedown’ rules currently being applied).

It is useful to keep in mind what the kind of liability we affix on offline intermediaries: Would we hold a library responsible for unlawful material that a user has placed on its shelves without its encouragement?

Ensuring a balanced system of intermediary liability is also very important in preserving the forms of innovations we have seen online. Ensuring that intermediaries aren't always held liable for what third parties do is an essential component of encouraging new models of participation, such as Wikipedia. While Wikipedia has community-set standards with regard to copyright, obscenity, and other such issues, holding the Wikimedia Foundation (which has only around 30-40 people) itself responsible for what millions of users write on Wikipedia will hamper such new models of peer-production. This point, unfortunately, has not prevented the Wikimedia Foundation being sued a great number of times in India, a large percentage of which take the form of SLAPP ('strategic lawsuit against public participation') cases, since if the real intention had been to remove the offending content, editing Wikipedia is an easy enough way of achieving that.

While searching for these balanced solutions, we need to look beyond Europe, and look at how countries like Chile, Brazil, India and others are looking at these issues. Unfortunately, this being Geneva, most of the people I see represented in this room are from the developed world as are the examples we are discussing (France and Spain).

In India, for instance, the Internet Service Providers Association made it clear in 2006 (when there was an outcry over censorship of blogging platforms) that they do not want to be responsible for deciding whether something about which they have received a complaint is unlawful or not.

With respect to copyright and the Internet, while the Internet allows for copyright infringement to be conducted more easily, it also allows for copyright infringement to be spotted more easily. Earlier, if someone copied, it would be difficult to find out. Now that is not so. So, that balance is already ingrained, and while many in the industry focus on the fact of easier infringement and thus ask for increased legal protection, such increase in legal protection is not required since the same technological factors that enable increased infringement also enable increased ability to know about that infringement.

On the Internet, intermediaries sometimes engage in primary infringement due to the very nature of digital technology. In the digital sphere, everything is a copy. Thus, whenever you're working on a computer, copies of the copyrighted that show up on your screen are automatically copied to your computer's RAM. Whenever you download anything from the Internet, copies of it are created en route to your computer. (That is the main reason that exceptions in the copyright laws of most countries that allow you to re-sell a book you own don't apply to electronic books.) In such a case, intermediaries must be specially protected.

Additionally, online activities that we take for granted, for instance search technologies, violate the copyright law of most countries. For online search technology to be reasonably fast (instead of taking hours for each search), the searching has to be done on a copies (cache) of actual websites instead of the actual websites. For image searching, it would be unreasonable to expect search companies to take licences for all the images they allow you to search through. Yet, not doing so might violate the copyright laws of many countries. No one, or so one would think, would argue that search engines should be made illegal, but in some countries copyright law is being used to attack intermediaries.

As noted above, intermediaries are a necessary part of online free speech. Current methods of regulating copyright infringement by users via intermediaries online may well fall afoul of internationally accepted standards of human rights. Frank La Rue, the UN Special Rapporteur on Freedom of Opinion and Expression in his recent report to the UN Human Rights Council stated:

While blocking and filtering measures deny access to certain content on the Internet, States have also taken measures to cut off access to the Internet entirely.

The Special Rapporteur is deeply concerned by discussions regarding a centralized “on/off” control over Internet traffic. In addition, he is alarmed by proposals to disconnect users from Internet access if they violate intellectual property rights. This also includes legislation based on the concept of “graduated response”, which imposes a series of penalties on copyright infringers that could lead to suspension of Internet service, such as the so-called “three-strikes law” in France and the Digital Economy Act 2010 of the United Kingdom.

Beyond the national level, the Anti-Counterfeiting Trade Agreement (ACTA) has been proposed as a multilateral agreement to establish international standards on intellectual property rights enforcement. While the provisions to disconnect individuals from Internet access for violating the treaty have been removed from the final text of December 2010, the Special Rapporteur remains watchful about the treaty’s eventual implications for intermediary liability and the right to freedom of expression.

With respect to graduated response, there is very little that one can add to Prof. Edwards's presentation. I would like to add one further suggestion that Prof. Ed Felten originally put forward as a 'modest proposal': Corporations which make or facilitate three wrongful accusations should face the same penalty as the users who are accused thrice. The recent US strategy of seizing websites even before trial has been sufficiently criticised, so I shall not spend my time on it.

I still have not seen any good evidence as to why for other kinds of primary or secondary liability incurred by online intermediaries the procedure for offline copyright infringement should not apply, since they are usually crafted taking into account principles of natural justice.

The only 'international' and slightly troublesome issue that a resolution is needed to is that of problems relating to different jurisdiction’s laws applying on a single global network. However, this question is much larger one that of copyright and a copyright-specific solution cannot be found. Thus WIPO is not the right forum for the redress of that problem.

For more details visit https://cis-india.org/a2k/blogs/intermediary-liability-wipo-speech

Problems Remain with Standing Committee's Report on Copyright Amendments

pranesh — 2011-09-06T07:50:12Z

The Rajya Sabha Standing Committee on Human Resource Development (under which ministry copyright falls) recently tabled their report on the Copyright (Amendment) Bill, 2010 before Parliament. There is much to be applauded in the report, including the progressive stand that the Committee has taken on the issue of providing access by persons with disabilities. This post, however, will concern itself with highlighting some of the problems with that report, along with some very important considerations that got missed out of the entire amendment debate.

Fair Dealings and Intermediary Liability

The amendments make a number of changes to s.52(1) of the Act, including to the fair dealing provisions under s.52(1)(a), and introduction of two new sub-sections (s.52(1)(b) and (c)) with s.52(1)(c) introducing a modicum of protection for intermediaries involved in "transient and incidental storage for the purpose of providing electronic links, access or integration" (but only if the copyright holder has not expressed any objections, and if the intermediary believes it to be non-infringing). The provision allows the intermediary to ask the person complaining against it to provide a court order within 14 days, since the intermediary is in no position to determine the judicial question of whether the copyright holder holds copyright and if the third party has violated that copyright. However this provision was opposed tooth and nail by the copyright holders' associations that dominated the representations, while intermediaries and consumers remained woefully under-represented before the Standing Committee.

Predictably, the Standing Committee dealt a blow against intermediaries and consumers by asking the government to review the "viability of the duration of 14 days... by way of balancing the views of the stakeholders as well as the legal requirement in the matter". They recommended a relatively minor change of changing the phrase "transient and incidental" to "transient or incidental". By doing this, they failed to address the concerns raised by Yahoo India, Google India, and also failed to acknowledge the submissions made by 22 civil society organizations (available here: http://cis-india.org/advocacy/ipr/upload/copyright-bill-submission).

Technological Protection Measures and Rights Management Information Provision

The amendments aim to bring about two new criminal provisions, and seek to make circumvention of technological protection measures (digital locks) and alteration of rights management information (which are embedded into digital files and signals) illegal.

The Standing Committee heard a number of organizations on technological protection measures, which we had argued are harmful as they a) cannot distinguish between fair dealing and infringement, and b) are harmful even if a legal right to circumvent for fair dealings is provided because the technological means to circumvent doesn't necessarily exist. (Imagine a law that says that breaking a lock using lock-breaking implements isn't a crime if it is done to enter into your own house. Such a law doesn't help you if you can't get your hands on the lock-breaking implements in the first place.) The Indian Broadcasting Federation, the Business Software Alliance, and the Motion Picture Association (which represents six studios, all American), the Indian Music Industry, and the Indian Performing Right Society Limited all felt that this provision did not go far enough. The Motion Picture Association, for instance, wants not just controls over that which copyright covers

Yahoo India and Google India on the other hand thought that provision went too far. Google made it clear that they thought having criminal repercussions for circumvention was clearly disproportionate. Thus, a clearer split is established between old media companies; the old media companies clutching on to straws that they feel will save them from adapting their business practices to the digital environment, and online companies that understand the digital environment better having a markedly different idea.

Currently section 65B (read with the definition of "Rights Management Information" in section 2(xa)) of the proposed amendments ensures that Rights Management Information cannot be used to spy on users. The Indian Reprographic Rights Organization however believes that this is wrong: it believes that copyright owners should have the ability to track users without their consent. Yahoo India, on the other hand, believes that this is a harmful provision, and state that "the imposition of criminal and monetary liability could adversely affect consumers", and cites the instance of difficulties that would be faced by "entities engaged in creating copies of any copyright material into a format specially designed for persons suffering from disability" because of the language of the provision that requires knowledge instead of intention. The committee responds to this by summing up with a tautology, stating:

The Committee is of the view that the parties responsible for distribution or broadcasting or communication to the public through authorized licence from the author or rights holder and who do not remove any rights management information deliberately for making unauthorized copies need not worry about this provision as long as their act is as per the framework of this provision.

Implications of Standing Committee's Report Unclear

Many of the comments made by the Standing Committee are unclear. On compulsory licensing, the committee states:

The Committee also takes note of the proposed amendments in section 31 A relating to compulsory licence in unpublished Indian works. The provision of compulsory licence for orphaned works available under this section is proposed to be extended to published works as well. Like in the case of section 31, extension of applicability to all foreign works (including film, DVDs, etc.) could be violative of Berne Convention and TRIPS Agreement and seem to fall short of the minimum obligations imposed by such instruments. The Committee is of the view that future implication of proposed amendment in Section 31A vis-à-vis India's commitment to international agreement needs to be free from any ambiguity so as to prevent any negative fallout.

However, the usage of the phrase "could be violative" leaves it unclear whether the Standing Committee believes the proposed amendments to be violative of the TRIPS Agreement or not. All that the Standing Committee says is that the provision needs to be unambiguous, and that TRIPS compliance must be ensured. That word of caution does not directly rebut the government's contention that the proposed amendment is TRIPS-compliant.

Similarly, the Committee's views on increase of copyright term for cinematograph films is unclear. While commenting on the clause that introduces the term increase (as part of the proposal to include the principal director as an author of the film along with the producer), the Committee states:

It, therefore, recommends that the proposal to include principal director as author of the film along with producer may be dropped altogether.

While this presumably means that the proposal to increase term is also being rejected, that is not made clear by the Committee's comments.

Increased Copyright Duration, Expansive Moral Rights and Other Negative Changes

In the submission of CIS and twenty-one other civil society organizations to the Standing Committee, we highlighted all of the below concerns. However, our submission was not tabled before the Standing Committee for reasons unknown to us.

WCT and WPPT compliance: India has not signed either of these two treaties, which impose TRIPS-plus copyright protection, but without any corresponding increase in fair dealing / fair use rights. Given that the Standing Committee has recommended against some aspects of WCT compliance (such as the move to change "hire" to "commercial rental") and that without such changes India cannot be a signatory to the WCT, it is unclear why other forms of WCT compliance (such as TPMs) should be implemented.
Increase in duration of copyright: The duration of copyright of photographs and video recordings is sought to be increased. The term of copyright for photographs is being increased from sixty years from creation to sixty years from death of the photographer. This will significantly reduce the public domain, which India has been arguing for internationally, especially through its push for the Development Agenda at the World Intellectual Property Organization.
Moral rights: Changes have been made to author’s moral rights (and performer’s moral rights have been introduced) but these have been made without requisite safeguards.
Version recordings: The amendments make cover version much more difficult to produce, and while the Standing Committee has addressed the concerns of some in the music industry, it hasn't addressed the concerns of artists and consumers.

Criminal Provisions, Government Works, and Other Missed Opportunities

The following important changes should have been made by the government, but haven't. While on some issues the Standing Committee has gone beyond the proposed amendments, it hasn't touched upon any of the following, which we believe are very important changes that are required to be made.

Criminal provisions: Our law still criminalises individual, non-commercial copyright infringement. This has now been extended to the proposal for circumvention of Technological Protection Measures and removal of Rights Management Information also.
Government works: Taxpayers are still not free to use works that were paid for by them. This goes against the direction that India has elected to march towards with the Right to Information Act. A simple amendment of s.52(1)(q) would suffice. The amended subsection would except "the reproduction, communication to the public, or publication of any government work" as being non-infringing uses.
Copyright terms: The duration of all copyrights are above the minimum required by our international obligations, thus decreasing the public domain which is crucial for all scientific and cultural progress.
Educational exceptions: The exceptions for education still do not fully embrace distance and digital education.
Communication to the public: No clear definition is given of what constitute a ‘public’, and no distinction is drawn between commercial and non-commercial ‘public’ communication.
Internet intermediaries: More protections are required to be granted to Internet intermediaries to ensure that non-market based peer-production projects such as Wikipedia, and other forms of social media and grassroots innovation are not stifled.
Fair dealing and fair use: We would benefit greatly if, apart from the specific exceptions provided for in the Act, more general guidelines were also provided as to what do not constitute infringement. This would not take away from the existing exceptions.

For more details visit https://cis-india.org/a2k/blogs/sc-report-on-amendments

CIS Submission on Draft Patent Manual 2010

pranesh — 2014-05-29T06:47:32Z

The patent office has released a revised version of the Draft Manual of Patent Practice and Procedure. Section 8.03.06.10 of the Manual deals with patenting of computer programmes. CIS is happy to note the many improvements in this draft of the Manual from the previous version. CIS made its submission along with a few suggestions that it thinks would make the document even better.

The section has been entirely reformulated and a few of the changes made to the previous version are welcome.

Positive changes in the Manual

The provisions relating to making software with “technological features” and “technical applications” which were present in the previous version have been completely eliminated. Thus, the “technical applications”of a computer programme will not make an otherwise unpatentable computer programme patentable subject matter. This also eliminates the need to arrive at a definition of “technical applications” or “technological features”.
The term “computer implemented inventions” which found no place in the Patent Act, 1970 but was introduced in the previous version of the manual without proper explanation or definition has been eliminated.
The Manual expressly states that mathematical methods (8.03.06.10.b) and business methods (8.03.06.10.c) are not patentable irrespective of the language in which they claims are couched or the form in which they are claimed.
Computer programme products which were considered to be patentable subject matter in the previous version of the manual are considered to be unpatentable subject matter in the new version. The Manual clearly explains computer programme products to be nothing but computer programme per se stored in a computer readable medium. (8.03.06.10.d)
The Manual recognises that no computer programme can be functional without hardware to execute the programme. This means that any computer programme cannot become patentable subject matter merely because it is associated with some hardware. (8.03.06.10.g)
A computer programme which runs on a general purpose known computer is expressly held to be unpatentable subject matter. This is undoubtedly a welcome inclusion since it helps eliminate claims relating to a mere computer programme which may have been considered patentable simply because such computer programme is run using a general purpose computer. This is one of the common ways in which Section 3(k) is circumvented to obtain patent for claims which are for a computer programme per se.

Contentious provisions of the Manual which require amendment/explanation are as follows:

Clause 8.03.06.10.a

Under this provision, mathematical methods, business methods, computer programmes per se and algorithms are not considered as patentable inventions. In relation to computer programs, the law provides a qualification that what is not patentable is only computer program per se.

While this restates the statute correctly, it does so without offering any explanation, which would be preferable. The Manual should explain the scope of the term “per se” and clear the ambiguity surrounding it. The Manual should clearly provide reasons for any computer programme to fall in either category.

We suggest using the following definition of computer programme per se, which has previously been submitted to the Patent Office1:

Computer programme per se in the relevant clause means (a) any computer programme in the abstract, (b) any computer programme expressed in source code form, including source code recorded on an information storage medium, or (c) any computer programme that can be executed or executes on a general purpose computer,2 including computer programme object code designed for execution on a general purpose computer that is recorded on an information storage medium.3

Clause 8.03.06.10.e

If a claim in a patent application is not directed at a computer programme per se it could be patentable, if all other patentability conditions are met. This provision thus necessitates distinguishing computer programmes per se from other types of inventions that use or implement computer programmes.

The clause, while seeking to distinguish computer programmes per se from inventions which use or implement computer programmes, does make clear what “implement computer programmes” means, nor does it clarify what “computer programme per se” is. A relevant suggestion for a definition for “computer programme per se” has been provided above, which would address this problem.

Clause 8.03.06.10.f

The computer programmes are often claimed in the form of algorithms as method claims or system claims with some ‘means’ indicating the function of flow charts or process steps. The algorithm related claims may be even wider than the computer programme claimed by itself, for a programme represents a particular set, the algorithm expresses the principles .

We find that this clause has no relevance to explaining patentability of computer programmes and thus suggest that the same be deleted from the Manual. The Manual should however make it clear that in algorithm-related claims, if the function claimed to be performed by the invention can be done only by means of a computer programme, such claims are not patentable.

Clause 8.03.06.10.g

Essentially, all computer programmes need a combination with some hardware for their functionality. In an application for patent for a new hardware system, the possibility of a computer programme forming part of the claims cannot be ruled out. It has to be carefully considered as to how integrated is the novel hardware with the computer programme. Further, it is also to be considered whether the machine is programme specific or the programme is machine specific. A computer programme which may work on any general purpose known computer does not meet the requirement of patentability.

With regard to cases of computer programmes being combined with hardware, the Manual seems to suggest that the patentability of the combination is dependent on “how integrated the novel hardware [is] with the computer programme.” This language is very vague and ambiguous. In case of an application for patent for a new hardware system, the Manual should make it clear that such claim is eligible only if the inventive conribution resides entirely in the hardware. The Manual should also require the patent applicant to demonstrate exactly how the inventive step resides in the hardware separable from the computer programme.
We propose a new part to the above test to make the clause clearer. The Manual should specify that “the computer programme portions of any claimed invention should be treated as if it were covered by prior art and patentability should thus be determined with respect to the other features of the invention”. This way, we can ensure that an invention which merely uses or implements a computer programme is not granted patent on the basis of the inventiveness of the computer programme per se.
It is indeed laudable that the Manual makes it clear that a computer programme which may work on any general purpose known computer does not meet the requirement of patentability. This should make it clear that a computer programme cannot be patentable simply because it is executed by a special purpose computer as long as a general purpose computer can also execute the same. We suggest the following definition of a general purpose computer, which has already been proposed to the Patent Office, be used:4

A general-purpose computer here means a device capable of running multiple unrelated programs, often simultaneously for different purposes. It will comprise at least of: (1) one or more central processing units, (2) one or more input devices that are not specific to any one program, (3) memory, (4) one or more non volatile mass storage devices, and (5) one or more output devices. However, a general-purpose computer does not include a device that itself represents an inventive contribution to the art.

Clause 8.03.06.10.h

Method claims, whether independent or dependent, reciting computer programs without process limitations in the form of hardware features are not allowable. For a method reciting computer programme to be patentable, it must clearly recite into it limiting hardware integers that enable the program to function .

The Clause dilutes the standard set in the previous clauses. It seems to suggest that any method claim is patentable as long as it is connected to hardware which enable the program to function and define its limitations/scope. This position is untenable since no method claim can be purely a computer programme and use of computer programmes for any specific task would necessarily require hardware to implement the same. Therefore the requirement of hardware limitation to make a computer programme patentable is essentially allowing for any computer programme to be patentable. Not only is such a limitation redundant but it also renders the “per se” requirement in Section 3(k) meaningless. Further, the meaning of the term “hardware integers” in the Clause is unclear. For the purpose of this comment, we assume that it refers to hardware features. The Manual should ensure that the method claim has significant per or post processing activity and is not merely combined with hardware to be patent-eligible. This ensures that any computer programme is not granted patent merely because it has certain trivial pre or post processing activities associated with it.

Clause 8.03.06.10.i

Claims directed at computer programs coupled to hardware, enabling the hardware to perform a certain function may be allowable, if such an invention meets all other conditions of patentability.

The Clause is restating the content of Clause 8.03.06.10.e and our comments on this Clause remain the same as our comments for Clause 8.03.06.10.e.

Requirement of Disclosure

We suggest that the Manual require that an application claiming patent for a computer programme (which does not constitute computer programme per se) necessarily disclose the entire source code. This ensures that the invention can perform exactly all those functions that are described in the patent application. Since different computer programmes can be written (with each having different source code) to perform the same function, it is of utmost importance that the applicant demonstrate the workability of the invention described in the application and such proof can be provided only by disclosing the source code.

Purpose of the Manual

There is no clarity on the purpose and authority of the Manual. We do not know if the Manual attempts to explain the provisions of the Patent Act, 1970 to an applicant or is meant to provide guidance to patent examiners or be binding upon them. If a patent official acts in a manner contradictory to the Manual, the consequences of such action is unclear. The Manual should clarify these questions.

This definition was formulated and submitted by Knowledge Commons, Delhi to the Indian Patent Office in response to the earlier version of the draft manual. The definition was formulated through the collective efforts of Prabir Purkayastha, Richard Fontana of Red Hat, Venkatesh Hariharan, Tahir Amin, Mishi Chowdhury of Software Freedom Law Centre and Jaijit Bhattacharya. See http://osindia.blogspot.com/2009/04/computer-programme-per-se-conundrum.html
We propose the following definition of a general purpose computer - A general-purpose computer here means a device capable of running multiple unrelated programs, often simultaneously for different purposes. It will comprise at least of: (1) one or more central processing units, (2) one or more input devices that are not specific to any one program, (3) memory, (4) one or more non volatile mass storage devices, and (5) one or more output devices. However, a general-purpose computer does not include a device that itself represents an inventive contribution to the art. See also Infra n. 3.
An information storage medium means any disc, tape, perforated media or other information storage device, which, if fed into or located in a computer or computer based equipment is capable of reproducing any information, other than an information storage medium that itself represents an inventive contribution to the art.
This definition was formulated and submitted by Knowledge Commons, Delhi to the Indian Patent Office in response to the earlier version of the draft manual. See http://osindia.blogspot.com/2009/04/computer-programme-per-se-conundrum.html

For more details visit https://cis-india.org/a2k/blogs/cis-submission-draft-patent-manual-2010

New Release of IPR Chapter of India-EU Free Trade Agreement

pranesh — 2011-09-22T12:34:05Z

A draft of the IPR chapter of the EU-India FTA, made publicly available now for the first time, provides insight into India's response in July 2010 to several EU proposals on intellectual property protection and enforcement.

A draft of the IPR chapter of the EU-India FTA, made publicly available for the first time (PDF, 296Kb), provides insight into India's response in July 2010 to several EU proposals on intellectual property protection and enforcement. The consolidated draft which was prepared to serve as the basis of talks that took place from July 12-14, 2010, in New Delhi, reveals parties' negotiating stances in response to preliminary positions put forth earlier (see IPR Chapter May draft).

In particular, this draft reflects India's rejection of many EU proposals that would require India to:

exceed its obligations under the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), e.g by providing data exclusivity for pharmaceutical products;
impose radical enforcement provisions, such as liability of intermediary service providers, border measures for goods in transit, and raised norms for damages and injunctions; or
require legislative change, e.g., on data protection, and to accommodate the full EU demands on geographical indicators.

A chart compiled by CIS comparing proposed language by India and the EU in several provisions with TRIPS can be found here (PDF, 402 Kb).

Sources close to the negotiations have also confirmed that during the July talks India reiterated its refusal to go beyond TRIPS, and its refusal to discuss issues that require changes to Indian law. India appears to have also reiterated that it could not finalise FTA copyright provisions before passage of the Copyright Amendment Bill in the Indian Parliament.

It is hard to assess the current state of the negotiations on IP or to measure the outcomes of subsequently held talks without access to recent drafts, a public record of deliberations, or the schedule of full and intersessional rounds taking place. However, from press and other statements attributed to the European Commission and Indian officials after the December 2010 EU-India Summit in Brussels, it appears that:

both parties plan to conclude the FTA, the biggest ever for the EU, by Spring 2011;
the EU has not relaxed its pursuit of at least some "TRIPS plus" provisions such as data protection for pharmaceuticals
a mutually agreed solution to India's WTO case against the EU over the seizure of generic medicines may be round the corner. Its impact on the FTA is open to speculation.

Because the India-EU FTA is likely to set a new precedent for future trade agreements between developed and developing countries, and with enormous stakes for patients across the globe, India and the EU need to get it right and ensure no provision runs counter to the interests of millions of citizens.

For further information about the text, contact Malini Aisola <malini.aisola@gmail.com> or Pranesh Prakash <pranesh@cis-india.org>

For more details visit https://cis-india.org/a2k/blogs/july-2010-ipr-india-eu-fta

Why Parallel Importation of Books Should Be Allowed

pranesh — 2019-02-01T17:41:26Z

There has been much controversy lately with some publishers trying to stop the government from amending s.2(m) of the Indian Copyright Act, clarifying that a parallel import will not be seen as an "infringing copy". This blog post argues that the government should, keeping in mind the larger picture, still go ahead and legalise parallel imports.

[Updated Wednesday, February 2, 2011, to respond to Thomas Abraham's extensive and thoughtful rebuttal of the earlier version this post.]

First off, here is the controversial clause, with the proposed amendment (the insertion of a "proviso", in legalese) being emphasised in bold font-face:

The amendment

2(m) "infringing copy" means,—

    (i) in relation to a literary, dramatic, musical or artistic work, a reproduction thereof otherwise than in the form of a cinematographic film;

    (ii) in relation to a cinematographic film, a copy of the film made on any medium by any means;

    (iii) in relation to a sound recording, any other recording embodying the same sound recording, made by any means;

    (iv) in relation to a programme or performance in which such a broadcast reproduction right or a performer's right subsists under the provisions of this Act, the sound recording or a cinematographic film of such programme or performance, if such reproduction, copy or sound recording is made or imported in contravention of the provisions of this Act;

Provided that a copy of a work published in any country outside India with the permission of the author of the work and imported from that country shall not be deemed to be an infringing copy.

Some claim that this amendment to s.2(m) ("provided that... copy") has the potential to destroy the publishing industry. The most lucid explanation of this was in a recent op-ed by Thomas Abraham in the Hindustan Times, very ominously titled The Death of Books. However it seems to us that the publishing industry—especially foreign publishers with distributorships in India—don't want to open themselves up to competition in the distribution market, and are opposing this most commendable move.

What is parallel importation?

Before getting into explanations of why allowing for parallel importation is good, and how the arguments otherwise fall short, we should examine what parallel importation is.

"Parallel import, insofar as copyright is concerned, involves an “original” copyright product (i.e. produced by or with the permission of the copyright owner in the manufacturing country) placed on the market of one country, which is subsequently imported into a second country without the permission of the copyright owner in the second country. For instance, the copyright owner of a book produced in India places the book on the market in India. A trader buys 100 copies of the book from India and imports them to China without the permission of the copyright owner of the book in China. This act of the trader bringing the books into China is called parallel import, the legality of which depends on the copyright law of the importing country (namely China in this example)." (Consumers International, Copyright and Access to Knowledge: Policy Recommendations on Flexibilities in Copyright Laws 23 (2006).)

Some fear-mongers try to equate parallel importation with 'anarchy' in markets, and some confusedly claim that this amendment would allow infringing copies of books would be permitted. That is simply not true. For parallel importation to be said to happen, the sale must itself be legal. If it is an an illegally sold copy (a pirated copy of a book, for instance) that is imported, then it will count as a black market import—not as a parallel import. Allowing for parallel imports will only dismantle monopoly rights over importation, and the amendment makes that amply clear.

Harms on existing books of not allowing parallel importation

Libraries/second-hand bookshops/consumers have no way of knowing if a book was originally imported legally or not, since there is no easy way of telling a parallel-ly imported copy apart from a exclusively imported copy. If one of them, even unknowingly buys/sells a foreign edition about which they am not sure and it turns out it was not legally imported (and there are literally thousands of such books, and I personally own at least a couple dozen foreign editions bought from various second-hand bookshops) then they are committing copyright infringement.

This precisely was argued by the library associations and others in amici briefs to the US Supreme Court in the Costco v. Omega case. For instance, the brief for the the American Library Association, the Association of College and Research Libaries, and the Association of Research Libraries in Support of Petitioner argues that:

By restricting the application of [the first sale doctrine] to copies manufactured in the United States, the Ninth Circuit’s decision threatens the ability of libraries to continue to lend materials in their collections. Over 200 million books in U.S. libraries have foreign publishers. Moreover, many books published by U.S. publishers were actually manufactured by printers in other countries. Although some books indicate on their copyright page where they were printed, many do not. Libraries, therefore, have no way of knowing whether these books comply with the Ninth Circuit’s rule. Without the certainty of the protection of the first sale doctrine, librarians will have to confront the difficult policy decision of whether to continue to circulate these materials in their collections in the face of potential copyright infringement liability. For future acquisitions, libraries would be able to adjust to the Ninth Circuit’s narrowing of [the first sale doctrine] only by bearing the significant cost of obtaining a “lending license” whenever they acquired a copy that was not clearly manufactured in the United States.

and, the brief for the Public Knowledge, American Association of Law Libraries, American Free Trade Association, the Electronic Frontier Foundation, Medical Library Association, and the Special Libraries Association in Support of Petitioner states:

The uncertainty created by the Ninth Circuit’s holding [against parallel importation] will harm used bookstores, libraries, yard sales, out-of-print book markets, movie and video game rental markets, and innumerable other secondary markets. Owners of copyright works or goods containing copyrighted elements manufactured abroad will be unable to dispose of these products without authorization at the risk of liability under copyright law’s extensive damages provisions. Furthermore, the chilling effects of the Ninth Circuit’s holding will extend beyond works manufactured abroad. Owners of copies of works will be unable to determine whether they are protected by [the first sale doctrine], as they will not always know where their goods were manufactured. Copyright holders will have little incentive to make clear the location of manufacturing of their copyrighted works,3 as greater uncertainty means a greater ability to sell the right to distribute the goods within the United States. Secondary market sellers who cannot afford to purchase this right will be unable to do business unless they are prepared to engage in lengthy and expensive litigation with an uncertain result. A wide variety of important secondary markets in copyrighted works and goods with copyrighted elements will suffer without the protection of the first sale doctrine.

Benefits of parallel importation

Dismantling distribution monopoly rights

The benefits that will accrue from allowing for parallel importations are huge. Currently a large percentage of educational books in India are imported, but with different companies having monopoly rights in importation of different books. If this was opened up to competition, the prices of books would drop, since one would not need to get an authorization to import books—the licence raj that currently exists would be dismantled—and Indian students will benefit. This is especially important for students and for libraries because even when low-priced editions are available, they are often of older editions.

Allowing people to import goods without permissions (with appropriate duties) is taken for granted in all other areas, so why not copyrighted works? After all, it is not the act of publication that gets affected, but the right of exclusive distribution. And if that goes away after first sale internationally, that's not a bad thing at all.

Generally, there are two main benefits of allowing for parallel importation: faster introduction of the latest international releases into the domestic country, and lowered prices by decreasing the costs imposed by a monopoly right over distribution.

All the foreign books that an online bookseller like Flipkart delivers in India are procured from international sources. Without parallel importation, Flipkart will have to ask for permission from the book publishers for each foreign book each time it makes a sale. This would cripple Flipkart's business model.

Helping book publishers

Book publishers will be benefited by parallel importation, just as they are benefited by the existence of libraries and second-hand book stores. Libraries and second-hand book stores help with market segmentation, providing access to people who can't afford expensive books at much lower rates, often free. However, the existence of second-hand book stores in almost every city in India—I have personally bought second-hand books everywhere from Jhansi (Leo Tolstoy's War and Peace) to Delhi's Darya Ganj market (Edmund Wilson's Letters on Literature and Politics)—does not prevent me from buying books first hand. Indeed, Wilson's Letters is out of print, and cannot be bought in a store like Crosswords or Gangaram's.

Why do I emphasise second-hand books and libraries? They are artefacts of something variously known as the "first sale doctrine" or the "doctrine of exhaustion" in copyright law: After the first sale of a book, subsequent sales, rentals, etc., cannot be controlled by the copyright owner. Parallel importation is simply a matter of applying this doctrine to the first sale of the book internationally rather than its first sale in India.

Thus we see that the existence of second-hand books, libraries, and parallel imports, are all dependent on the same rule of copyright law: the first sale doctrine. This doctrine is enshrined in s.14(b)(iv) of the Indian Copyright Act, and has been interpreted by the Delhi High Court to mean first sale in India. The present amendment changes that to mean first sale internationally.

The introduction of the modern "public library" in the mid-19th century led to a surge in literacy, readership, and book sales, and not a decline. Similarly, there is no reason to suppose that allowing parallel importations will lead to a decline in book sales.

Helping libraries and the print-disabled

Even currently, many people buy books directly from abroad and have them shipped to India. This is especially necessary for libraries whose patrons—scholars and students—very often need access to the latest books. Currently, libraries often buy books from abroad from Amazon, Flipkart, Alibris, etc. Such acts, within a strict reading of the law, are not legal, since they fall afoul of s.51(b)(iv), since the import is not for the "private and domestic use" of the libraries. This is also of especial concern for organizations working with print-disabled individuals, since the number of books legally available domestically in formats accessible by the print-disabled is very small, and often need to be imported.

Helping all consumers

An excellent report was prepared in 2006 by Consumers International, in which they studied the costs of textbooks in eleven countries, including India, by average purchasing power of each country's citizens, instead of absolute cost. Based on that study, and a detailed investigation of international treaties on copyright and the flexibilities allowed in them, Consumers International recommended that India should amend our law to make it clear that parallel importation of copyrighted works is legal (on page 51 of the report).

Rebutting objections

I will address a few specific objections raised by Mr. Abraham, Nandita Saikia, and others.

1. Authors' won't lose out on royalties

Authors do not lose out on royalties because of parallel importation, just as they do not lose out on royalties because of libraries, nor because of second-hand book stores. For parallel importation to take place, the books have to be purchased legally, and that first sale itself ensures that authors are paid royalties.

Of course, publishing contracts often have a clause that remaindered books will not garner royalties. But in that case, the problem is not parallel importation, but the overstocking and subsequent remaindering of books. The authors wouldn't be paid (or would be paid very little) for remaindered books even if the books weren't imported into India. Parallel importation does not in any way change that.

Indian authors

There is a worry that an Indian author would be hit if remaindered copies of his/her books started entering the Indian market. That would mean that foreign publishers had overstocked that Indian author's book, i.e., that the expectation from the book was much higher than the actual demand. If this happens infrequently, then the author hasn't much to worry about (since remainders aren't a big problem). If it happens frequently, then firstly the publisher should re-adjust to the market and realize that demand is low. Secondly, the author needs to worry more about quality of the book (and whether it caters to foreign audiences) than the possible effects that the availability of cheaper copies of that book would have.

2. Remaindered books are in publishers' control

India has amongst the cheapest book prices in the world. Then why would book publishers be wary of even cheaper books overrunning the Indian market? The reason, Mr. Abraham tells us, is remaindered books. He believes that remaindered books have the potential to destroy the Indian book market. Remaindering of books has been happening for decades. If remaindered books haven't already destroyed all book markets worldwide, then it is unlikely that they will do so suddenly just because parallel importation of books is permitted in India.

Remainders happen because of a miscalculation by the publisher: expecting more demand than was actually present. What happens with that excess stock is controlled by the publishers. They can choose to pulp them, burn them, or even push them into other channels of commerce that Mr. Abraham points out exist in the mature, frontline markets where remaindering happens:

And the reason why they have not destroyed book markets worldwide is because the mature markets exist with multiple strands (chains and high street stores, independents, direct sellers, online sellers, and supermarkets)—so a direct seller will sell the same book a high street store is selling at a much reduced price without it affecting the business of each strand. Each strand is discrete and price sensitivity does not matter the same way.

Since those multiple strands of commerce exist, each of which would enable the seller to get a better profit (being in a developed country) than in India, there is no reason to fear overrunning of the market with remainders.

3. Dumping of books should be tackled separately

An extension of the remaindered books concern is that of India becoming a land where all books will be dumped. This hasn't happened in case of countries like New Zealand, Mexico, Chile, Egypt, Cameroon, Pakistan, Argentina, Israel, Vietnam, South Korea, Japan, and a host of other countries, all of which allow for parallel importation of books. In a 1998 judgment, the United States Supreme Court, some parallel imports of copyrighted goods were legal. That ruling did not cause the downfall of the US book market, despite cheaper books being available outside the US. Australia has allowed for parallel importation of books in one form or another since 1991 (when the law was changed to allow for all parallel of all books that weren't introduced in the Australian market within 30 days of it being released elsewhere in the world). New Zealand did a study after removing the ban on parallel importation, and declared that cheaper books were available on a more timely basis than previously. None of these countries have been overrun by grey market books.

Customs laws are better suited

Even assuming that this fear is well-founded, copyright law is not the best way to deal with the problem. Dumping of books should be regulated by customs laws (anti-dumping and countervailing duties). Using copyright law to regulate apprehended book dumping practices (which might not even happen) is like using a trawler hoping to catch only shrimp: it is naive to think that there won't be unintended bycatch, and the consequences can be disastrous for the knowledge environment in case of books.

Customs laws are more flexible because they are imposed by the executive, and unlike copyright law, can be more easily changed as per requirements. So even if copyright law allows for parallel importation of copyrighted works, a special case can be made out by publishers in case of trade publishing, for instance, and that can be targetted specifically by imposing duties. However, the inverse cannot happen, since we are not aware of any mechanism whereby libraries, consumers and others can get to 'override' the provision in the Copyright Act.

Additionally, these duties can be made to operate only if the book is already being sold in India; these duties can be made to operate only on new books. A ban on parallel importation, on the other hand will apply equally to books that are out of print, to books that the original copyright owner has not even granted an exclusive Indian distributorship and are not even being sold in India. It goes right to the heart of freedom of speech, which the Supreme Court has held includes the right to receive information.

4. Non-printing of low-priced editions for India because of "unsecure" market won't happen

Parallel importation, which is what the amendment to s.2(m) allows for, affects only importation. It does not in any way affect publication in India or exports. Exporting low-priced Indian editions to countries which allow for parallel importation of books, is currently of doubtful legality. [Update: Earlier an incorrect claim was made in this post that such export was legal. The legal status is not that clear. While there is a Delhi High Court case that makes exports of low-priced editions illegal in the context of sale to the United States, it specifically states that the decision does not depend on whether India allows for parallel importation or not.] The amendment does not change that position, for reasons explained at greater length in a separate post. The incentives to print low-priced editions hence does not decrease. If anything it will increase because currently books that are not available as low-priced editions cannot be imported without exclusive licensing, and with a change in this position, the incentive to compete in the form of low-priced editions will increase.

Indeed, even before that 2009 Delhi High Court judgment prohibiting exports to the United States, many low-priced editions were being printed in India. And even before the 2005 Bombay High Court judgment prohibiting parallel imports, many low-priced editions were being printed in India. This won't change, regardless of the law, because India is an increasingly profitable and expanding market, and low-priced editions are a necessity in this market due to lower average income.

5. Rhetoric flourish and the law: Open and closed markets

Mr. Abraham asks how many authors one can name from open markets like Malaysia, Singapore, and Hong Kong, as a sign of the 'history of creativity' in each of these countries and territories. It might be just as well to ask how many authors he can name from closed markets like Bhutan, Kazakhstan, Cambodia, Papua New Guinea, Indonesia, Jordan, and Ukraine. One's ability to name authors from a country has less to do with the open/closed nature of its market and more to do with one's general knowledge.

Additionally, the 'mature' markets which he wishes India to emulate—United States, the United Kingdom, and Australia—are more ambiguous on parallel importation than he would have us believe. In the United States, the legality of a segment of parallel importation of copyrighted goods reached the United States Supreme Court in Quality King v. L'anza in 1998, in which the court held in favour of the importer.

The question reached the US Supreme Court again last year in Costco v. Omega, but the court split on it 4-4, and did not deliver a binding precedent on parallel importation. Thus, for all intents and purposes, under copyright law, the United States is an open market.

In the United Kingdom, as per European Union law, parallel importation is permitted from anywhere within the EU. And in Australia, parallel importation of parallel goods is largely allowed, with some conditions to encourage faster publishing in Australia of foreign books.

Most importantly, none of the markets held up as role models are developing countries. India is. This makes all the difference, as the Consumers International report underscores.

Standing Committee consultations

Lack of wide consultation

On one point we are in complete agreement with Mr. Abraham, which is his point regarding lack of adequate consultation. While there was a good amount of consultation during the drafting stage, when a wide-ranging public consultation was held in 2006, this was not repeated in 2010 by the Standing Committee. Further, the Standing Committee only gave fifteen days for responses to its call for comments.

Publishers were represented

While Mr. Abraham states that only the Authors Guild was represented before the Standing Committee, by going through the report prepared by it, we see that the Federation of Indian Publishers and the Association of Publishers in India were also called to testify before the Standing Committee.

Libraries, students, consumers were not represented

However, while the authors supported it, and the publishers opposed it, no one got to hear the voice of the readers, the students, the libraries, the book buyers. For instance, not a single consumer rights organization or library association was called before the Standing Committee. Internationally, organizations like Consumers International, the International Federation of Library Associations, and EIFL (an international library organization) are invited to meetings of the World Intellectual Property Organization and their views are taken with seriousness as they are a very important part of the copyright environment.

Department's and Standing Committee's reasoning

We reproduce below four paragraphs from the Standing Committee's report, which elucidate many of the reasons for going in for this particular amendment.

7.10
All the reservations/objections raised by the various stakeholders [including the Federation of Indian Publishers and the Association of Publishers in India, whose objections are quoted in an earlier paragraph of the report -ed.] were taken up by the Committee with the Department with the intent of having full understanding of the background necessitating the proposed amendment and its exact impact on the various stakeholders. As clarified by the Department, the main purpose of this amendment was to allow for imports of copyright materials (e.g. books) from other countries. It was in accordance with Article 6 of the TRIPS Agreement relating to exhaustion of rights whereunder developing countries could facilitate access to copyright works at affordable cost. Exhaustion of rights (popularly called as parallel import) was a legal mechanism used to regulate prices of IPR protected materials. This was viable only if the price of the same works in the Indian market was very high when compared to the price in other countries from where it was imported to India.

7.11
Committee's attention was drawn to the fact that majority of educational books used in India were imported from other countries particularly from US and EU. There was an increasing tendency by publishers to give territorial licence to publish the books at very high rates. The low price editions were invariably the old editions than the latest ones. This provision would compel the Indian publishers to price the works reasonably so that it would not be viable for a distributor to import same works to India from other countries. This would also save India foreign exchange on the payment of royalties (licence fee) by the Indian publishers to foreigners.

7.12
Committee was also given to understand by the representatives of the publishing industry that Scheme of the Copyright Law was entirely different from the Trade Marks Act, 1999 and the Patent Act, 1970. The application of the standards and principles of these two laws through the proposed amendment of section 2(m) would completely dismantle the business model currently employed, rendering several industries unviable. On a specific query in this regard the Department informed that the concept of international exhaustion provided in section 107 A of the Patent Act, 1971 and in section 30 (3) of the Trademarks Act, 1999 and in section 2 (m) of the copyright law were similar. This provision was in tune with the national policy on exhaustion of rights.

7.13
After analysing the viewpoints of all the stakeholders along with the clarifications given thereupon by the Department, the Committee is of the view that proposed inclusion of the proviso in the definition of the term 'infringing copy' seems to be a step in the right direction, specially in the prevailing situation at the ground level. The present practice of publishers publishing books under a territorial license, resulting in sale of books at very high rates cannot be considered a healthy practice. [Emphasis added.] The Committee also notes that availability of low priced books under the present regime is invariably confined to old editions. It has been clearly specified that only those works published outside India with the permission of the author and imported into India will not be considered an infringed copy. Nobody can deny the fact that the interests of students will be best protected if they have access to latest editions of the books. Thus, apprehensions about the flooding of the primary market with low priced editions, may be mis-founded as such a situation would be tackled by that country's law. [emphasis added.] The Committee would, however, like to put a note of caution to Government to ensure that the purpose for which the amendment is proposed, i.e., to protect the interest of the students is not lost sight of.

Conclusion

It is clear that allowing for parallel imports is not likely to hurt publishers, but will result in an expansion of the reading market. It is mainly foreign publishers' monopoly rights over distribution which will be harmed by this amendment, while Indian publishers, Indian authors, and Indian readers, especially students, will stand to gain. Furthermore, in the long run, even foreign publishers will stand to gain due to market expansion. Any legitimate worries that publishers may have are better dealt with under other laws (such as the Customs Act) and not the Copyright Act.

For more details visit https://cis-india.org/a2k/blogs/parallel-importation-of-books

Indian Law and "Parallel Exports"

pranesh — 2011-08-04T04:47:07Z

Recently, a lawyer for the publishing industry made the claim that allowing for parallel importation would legally allow for the exports of low-priced edition. Here we present a legal rebuttal of that claim.

Recently, on publisher/editor/writer Divya Dubey's blog, Saikrishna Rajagopal, a highly respected copyright lawyer and founding partner of Saikrishna & Associates, claimed that we had misconstrued the law with regard to export of books from India, and that allowing for parallel importation would harm that.

Mr Rajagopal writes:

The fundamental legal infirmity that I find in Mr. Prakash’s argument are twofold:
1. That current Indian Law allows export of low priced editions;
2. That the proposed proviso would not include within its scope 'exports'.

1. As regards the argument that current Indian Law allows export of low priced editions, the two John Wiley cases of the Delhi High Court of May 2010, make it abundantly clear that current Indian Copyright Law precludes export of low priced editions. Pertinently, an appeal was preferred in one of the Wiley cases and was dismissed. These judgments are therefore final now and therefore authoritatively, interpret Indian Copyright Law as it stands today.

I was wrong regarding the question of export of low-priced editions. There are are two Delhi High Court judgments which came out in May 2010 on export of books, holding that export of Low-Priced Editions meant for India to countries outside is unlawful (John Wiley & Sons Inc. & Ors v. Prabhat Chander Kumar Jain & Ors and John Wiley & Sons Inc. & Ors v. International Book Store & Anr). However, in the first judgment Justice Manmohan Singh clearly held that it would be unlawful to export without permission of the rights owner regardless of whether we followed the doctrine of national exhaustion (disallowed parallel importation) or the doctrine of international exhaustion (allowed parallel importation), and the "the question of exhaustion of rights of owner in copyright does not arise at all".[1] Thus Mr. Rajagopals's fears are, thankfully, unfounded.

Mr. Rajagopal continues:

2. As regards Pranesh’s argument that the proposed amendment does not cover ‘exports’, this argument is completely specious. In order to determine at what stage a copyright owner loses its right to control further sale and distribution of a copyrighted product, the statute itself needs to be looked into to determine what standard of exhaustion of rights has been contemplated. If the proposed proviso becomes law, it would be a clear indicator to a Court that Indian Copyright Law follows international exhaustion, namely, that once a product is legitimately sold anywhere in the world market, the copyright owner loses/exhausts the right to control further distribution and sale, including export and import. It is because the copyright owner exhausts rights globally that the proposed amendment is allowing for genuine copies of books sold in the international market, to be legally imported into India. This being the case, there is almost unanimity amongst IP Lawyers that export of low priced editions would also be considered legal, in view of the proposed amendment. This is not just our Indian view, but also the view of other international IP experts who have had an opportunity to look at the implications of this proviso.

The copyright owner, under a proper appreciation of the Indian law, never has the right to control "further sale and distribution" (as per s.14(a)(ii) of the Copyright Act), contrary to Mr. Rajagopal's assertion. Once a copy is in circulation (e.g., is sold), the copyright owner no longer has the exclusive right to put that copy into circulation, nor to control its further sale / distribution in any manner. This is the limitation on the owner's right that allows libraries exist. This is how second-hand book shops exist. If this limitation of the copyright owner's right did not exist, libraries and second-hand book shops would need to take permissions from the owner for each copy of each book that they lend or sell.

Imports and exports are two distinct things. India's following of the principle of "international exhaustion" means that the right to first sale is exhausted in India, when the work is legally published anywhere internationally (i.e., regardless of where that copyrighted work is legally published). The principle of international exhaustion doesn't not exhaust the right of first sale internationally—the word "international" is used to indicate where the publication has to take place for exhaustion to occur, and not where the exhaustion takes place. After all, Indian law on a matter cannot determine whether a book can or cannot be sold anywhere else in the world (which is precisely what it would do if it is to hold that rights are exhausted internationally by virtue of a book being printed in India).

Having done research on this point for the past week, I have not been able to come up with any legal articles or cases to directly oppose Mr. Rajagopal's claim that the legality of book exports from a country can depend on whether it follows national or international exhaustion. It is such a novel claim that no one has made it so far, and so no one has thought to oppose it. I know of no other IP lawyers in India or internationally who agree with Mr. Rajagopal's claim that allowing for parallel importation in India will have an impact on the exports of low-priced editions from India.

Most pertinently, when the Wiley judgments which related to export of low priced editions, were being pronounced in Court, the Hon’ble Judge casually remarked that the law laid down in cases may soon become redundant if the proposed legislation comes into force.

As noted above, the judge specifically stated in the written judgment itself that as per the court's reasoning, the question of whether the export of low-priced editions is legal is not related to the question of exhaustion of rights of the owner: ". . . as the express provision for international exhaustion is absent in our Indian law, it would be appropriate to confine the applicability of the same to regional exhaustion. Be that as it may, in the present case, the circumstances do not even otherwise warrant this discussion . . . the question of exhaustion of rights of owner in the copyright does not arise at all".

To get a little bit more technical, Justice Singh rules that there is a difference between first sale (exhaustion) vis-a-vis the owner and first sale vis-a-vis the licensee. He states that only rights of the licensee have been exhausted, and that the rights of the owner being exhausted do not even arise. But he is quite clear that this difference would apply regardless of whether we follow international exhaustion or national exhaustion.

Update (2011-02-15): For the tabularly inclined, here's a summary of what it means for a country to follow "national exhaustion" or "international exhaustion":

Where copyrighted work is first circulated	Where right of circulation is exhausted	What this is termed
	What "Exhaustion" Means
In any country	In all countries	[- Not possible. - Law in one country can't dictate law in another. - Exhaustion of right of circulation "in all countries" can only be declared so through an international treaty (e.g., the way TRIPS makes a book copyrighted in all countries if it is copyrighted in any country) - Art. 6 of TRIPS doesn't allow for this interpretation.]
In any country	Domestic territory	International exhaustion
Domestic territory	In all countries	[- Not possible. - Law in one country can't affect law in another. - Exhaustion of right of circulation "in all countries" can only be declared so through an international treaty (e.g., the way TRIPS makes a book copyrighted in all countries if it is copyrighted in any country) - Art. 6 of TRIPS doesn't allow for this interpretation.]
Domestic territory	Domestic territory	National exhaustion

Thus it is seen that the "national" or "international" exhaustion only determines the question of where the book has to be first circulated for exhaustion to happen. It can never change where the right of first circulation is exhausted (which in either case can only happen at a territorial level).

The implication of the right of circulation being exhausted world-wide is that no country can by law prevent parallel importation. The TRIPS Agreement, via Article 6, decided to give each country the right to choose to allow or disallow parallel importation. This was despite a great effort by developing countries to get international exhaustion codified as the worldwide norm.

To make this even more clear, I propose the following thought experiment.

X - national of New Zealand, which follows international exhaustion.
Country 1 - a country that follows national exhaustion / doesn't allow parallel imports
Country 2 - a country that follows national exhaustion / doesn't allow parallel imports
Country 3 - a country that follows international exhaustion / allows for parallel imports

Example 1: If X buys a book from Country 1 and sells that book in Country 2, he is in violation of Country 2's laws, regardless of the laws in New Zealand and Country 1.
Example 2: If X buys a book from Country 1 and sells that book in Country 3, he is not in violation of the law (either in New Zealand or in Country 3).
Example 3: If X buys a book in New Zealand and sells that book in Country 2, he is in violation of Country 2's laws, regardless of the laws in New Zealand.
Example 4: If X buys a book in New Zealand and sells that book in Country 3, he is not in violation of the law (either in New Zealand or in Country 3).

If one takes "international exhaustion" to mean that the right is exhausted in every country, then Example 3 would be wrong. But that would be absurd, since we know from experience that it is correct: Buying a book in New Zealand and selling it in the United Kingdom (which follows national/regional exhaustion) is unlawful. So obviously "international exhaustion" doesn't mean that.

Similarly, if one takes "national exhaustion" to mean that after sale a book cannot be exported, that would imply that Example 2 is faulty. But we know from experience that this is not so: Buying a book in the United Kingdom and selling it in New Zealand is lawful. So obviously "national exhaustion" doesn't mean that.

Thus, it is only the act of import that is ever affected by the question of national vs. international exhaustion, and never exports.

Notes

[1]: Justice Manmohan Singh writes: "As per my opinion, as the express provision for international exhaustion is absent in our Indian law, it would be appropriate to confine the applicability of the same to regional exhaustion. Be that as it may, in the present case, the circumstances do not even otherwise warrant this discussion as the rights if at all are exhausted are to the extent to which they are available with the licensees as the books are purchased from the exclusive licensees who have limited rights and not from the owner. In these circumstances, the question of exhaustion of rights of owner in the copyright does not arise at all." (Para 104).

For more details visit https://cis-india.org/a2k/blogs/indian-law-and-parallel-exports

Thomas Abraham's Rebuttal on Parallel Importation

pranesh — 2011-08-04T04:47:12Z

We engaged in an e-mail conversation with Thomas Abraham, the managing director of Hachette India, on the issue of parallel importation of books into India. We thought it would be in the public interest to publish a substantive part of that conversation. In this post he points at great length how our arguments are faulty. While we still believe that he doesn't succeed, we hope this will clarify matters a bit.

Nature of disagreement

There is essentially fundamental disagreement on principle and definition-and I guess there will always be if you knock actual knowledge and see things as abstract philosophical (and legal) points. Why I think detailed knowledge is necessary is precisely illustrated at the logic (or lack thereof actually) employed by the Ministry. And then there is to me the fundamental problem of disregarding the author's wishes (for no greater good).

Second hand books and libraries

The comparison is not the same. Both (second-hand and libraries) have had a first sale where the copyright holder has got his/her basic right-the designated royalty. (I have explained earlier how export royalties and remainder royalties are much lower and results in losses to the author.) So here we come back to the basic philosophy-who has greater right on deciding on creative works? The creator or the government? A just answer would be the creator provided commercial dissemination fulfilled society's needs-which in India's case would be availability and right pricing keeping in mind socio-economic needs. Both are happening through local publishing and pricing of imports. But parallel imports would take away that right an author has of deriving a rightful income as per existing norms in all mature markets (including India so far). We are heading towards being a mature market and this has come about only because we are in the self-perpetuating framework of publishing, writing, and cultural development.

So the argument is that second hand books and libraries foster reading without depriving the author of rightful royalty or ruining the market.

Parallel importation does both. There is every reason to know that this will happen-that's exactly the substantiation we are offering. And the advocates of parallel importation have none to offer-pricing (where is it high, and by how much should it come down?), what is not freely available and at special prices? So for what reason do we want the existing law-also made by lawmakers-to change the stated remit of exhaustion from national to international.

No book publisher objects to libraries or even second hand books. But they are objecting to parallel importation. So leave it to them to decide. It is a tad patronizing to tell us what will help us, without having a shred of actual knowledge.

Helping libraries and disabled

This is completely false. No library needs to import from Amazon. And if it is a public library then they are wasting taxpayer money. Almost any book in the world they will still get at a special price through Indian publishers or distributors. There are societies for the disabled to whom publishers give rights at almost no cost. The UK has a law that a copy must be made available at near cost for disabled. By all means have such a law here. Why try and use parallel importation as an excuse for this?

Flexibility in the law

To your point: "Even if prices don't fall, it is good to have the flexibility for libraries to import four copies of a book that students need and isn't being made available in India. That flexibility is crucial, for availability, and just on principle, and not just for the sake of prices". By all means pass the law that gives the libraries the right to import 5 copies of any book they want. Publishers won't gripe at that. Libraries would still get it cheaper here than Amazon but that's the libraries' call.

Law should promote fairness and equity, not perpetuate a particular business model

No disagreement here. But the contention is that it will result in exactly the opposite. Sure, so let the lawmakers demonstrate they have done due diligence and outline evidence for their assumptions and how it will promote fairness and equity. What is unfair right now and what is not equitable? And how this law will address that. Why do other markets have it, and why should we not? On no count is there any detailing-just three false assumptions-availability, pricing and current editions.

Equally one can't have the law being made the proverbial ass because the lawmakers won't do their homework.

Export and remainder royalties are lower

I explained export vs domestic royalties in my first rebuttal. Not just remainders. Remainders are near zero royalties. Export surplus even pre-remainders are low royalty-against the author's wishes. And parallel importation will result in further loss of royalties from loss of sales of the hitherto legitimate edition.

Why anti-dumping laws will not be practical

Firstly there will be 40,000-plus titles to track, and the damage would have been done by the time you invoke the law. And assuming we want to invoke anti-dumping law, what parameters will be fixed? what discount are you going to fix? What quantity? I'll explain why this will never work. There are no real averages to draw lines and say this much and no more for either discount or price or quantity. To understand why we need to understand cost to price structures. Indian publishing (both publishing and imports) is low margin. Our books are priced to market; that means from cost our mark up is 2.5 times for imports and about 3-4 on average for local publishing-to enable the prices you see. Abroad it is 8-10 times from cost. To enable low pricing in India, we already have overseas terms that exceed 70% discounts, going into 'net pricing' for the ones that we pick to push big. Once the market is opened up, you will have two things-(a) targeted remainders as against the minor trickle now and (b) surplus clearance or even targeted sale to undercut the existing lawful edition. And I repeat the point that these remainders and 'targeted exports' can still end up undercutting the local edition. Not significantly enough to cause a change in pricing pattern (no benefit to consumer), but enough to undermine existing industry structures.

And yes, parallel importation (the current trickle) does see enforcement the logical way (by which I mean that the intensity of the problem merits the level of redressal). So far (believe me, each of us keeps tabs) we have 'unaware imports' and 'deliberate imports'. It is an irritant but is gradually reducing as the market matures. And the unaware ones are easily remedied by a simple letter asking for infringing stock to be withdrawn. In fact 8 out of 10 cases this simple letter works. For the deliberate ones, as I said earlier, it's just one or two where the impact is not worth the cost. Our margins do not allow us to hire expensive lawyers. But the moment it touches key brands or high revenue, legal action is taken.

Market expansion

Again the inherent assumption that this is some 'fat cat' lobbying protest. For once the lawmakers need to apply themselves-why is everybody from Penguin & Hachette (biggest) to Zubaan and Yatra (amongst smallest) all opposing it? Similarly from Crossword (large chain) to 'The Bookshop' in Jor Bagh (small independent), nobody wants this. Why? Surely that must speak for something? The only ones it will benefit are the remainder stalls you see (of which there must be about 25-30 all over the country). But over time every bookshop will be forced to keep this kind of stocking eroding current shelf space (they will have no choice). This is not market expansion.

Pricing drop

The other thing being ignored is that it's not just short term spoiler pricing. When one thinks in purely theoretical terms and says "open up, prices will drop", one is also not factoring in that the composition of what is stocked will changed. It's no longer status quo at reduced prices. That's the key to a mature market, that what the market needs is available-from bestsellers to literary works to philosophical works-balancing commercial and cultural needs and at prices the market can afford. So sure we can sit back and say we don't care if the history and philosophy shelves are eroded, if local publishing shrinks, let market forces prevail and let there be just foreign mass market novels and old editions (which will flow in by the thousand). But I'd like to hear the government say that.

Not just about copyrighted books but about all copyrighted materials

Yes, and we're not commenting about the others (other materials, i.e.) because we do not know enough. But we cannot have one size fits all if there are legitimate grounds to think about otherwise. Why is there a redressal of authors' needs in the music and film industry and a total disregard of books? Why were there panels created to discuss and thresh the whole thing through for films, and no detailed consultation at all for the books industry?

For more details visit https://cis-india.org/a2k/blogs/parallel-importation-rebuttal

Exhaustion: Imports, Exports and the Doctrine of First Sale in Indian Copyright Law

pranesh — 2014-05-29T06:18:31Z

This article by Pranesh Prakash was published in the Manupatra Intellectual Property Reports, February 2011, Volume 1, Part 2, pp. 149-160. In this short note, the author argues that Indian courts have fundamentally misunderstood the doctrine of first sale, and consequently have wrongly held that parallel importation is disallowed by Indian law. He further looks at the ingenuity displayed by a court in prohibiting export of low-priced editions from India, and comes to the conclusion that this is also wrong in law. He believes there is a way out of this quagmire that we find ourselves in due to judicial inventions: that of accepting a proposed amendment to the Copyright Act.

Can foreign works be copyrighted works?

Section 13(2) of the Indian Copyright Act states that insofar as published works go, copyright only subsists if the work is first published in India or if the work is by an Indian citizen. It does except the application of this section to all those works to which sections 40 and 41 of the Act apply. Section 40 allows for the provisions of the Act to be extended to foreign works and foreign authors by special order of the government. The government is required to do so, being a member of the Berne Convention, the Universal Copyright Convention as well as the TRIPS Agreement, and has fulfilled its requirement via International Copyright Order, the latest such order having been issued in 1999.

Thus, for purposes of our law, we protect not only Indian works, but foreign works as well. It expressly places foreign authors and works published in a foreign country in the same shoes as Indian authors and works published in India, respectively.

Import of copyrighted works

Thus having established that foreign books enjoy protection under Indian law, we now turn to the question of whether import of foreign works into India is permissible under Indian law. There is no provision of the Copyright Act by which the owner or licensee of copyright given the exclusive right to import a copyrighted work into India. Section 51(b)(iv) does, however, makes it illegal to import infringing copies of a work.[1];It is clear that illegally published copies are infringing copies, and thus cannot be imported. But are legally published copies that are legally purchased outside of India also ‘infringing copies’ and is their import also prohibited by the section 51?

This question is laid out as:

We now arrive at one of the most difficult topics in copyright law. It is our ambition to expound this subject as clearly as possible but inevitably this involves exposing some troublesome problems which lurk not far beneath the surface. The basic idea is simple. It has long been the policy of copyright law in the UK and other countries which follow our system that as a rule, mere selling or other secondary dealings with articles manufactured in the home market shall not be treated as copyright infringement unless their marking was piratical in the first place. Further, it is policy that traders should be free to buy and sell goods without getting involved in copyright proceedings, so long as they do so in good faith. Do not deal in pirate copies where you can tell they are probably such” is a law anyone can understand. Dealing in pirate copies where you know or have reason to believe that they are such is called secondary infringement in contrast to primary infringement (e.g. manufacturing) where liability is strict.

This idea works fine as long as one does not need to examine too closely, what one means by pirate copies; it is usually pretty obvious. However, when it comes to parallel imports it is not so obvious, and one has to know precisely what is meant. It is plain that the test cannot be whether the copy was made piratically in its country of origin because the copyright laws of foreign states are irrelevant so far as rights in the UK are concerned, and in some cases these laws may not even exist. Since foreign copyrights are separate and distinct rights, and since it is commonplace for these to be assigned so as to be exploited by different hands, it cannot matter whether a copy imported from Britannia was lawfully made in its country of origin; this principle has been recognized from an early date.

According to section 2(m) of the Act, a reproduction of a literary, dramatic, musical or artistic work, a copy of a film or sound recording is an "infringing copy" if such reproduction, copy or sound recording is made or imported in contravention of the provisions of this Act. So section 2(m) does not clarify matters either, because it applies only to that importation that is “in contravention of the provisions of” the Copyright Act. So we look to section 14 which lays down the meaning of copyright and is read with section 51 when determining what does and does not constitute infringement. Nowhere, in section 14 of the Act is a right to import granted to the copyright owner. However, section 14 does clearly lays down that insofar as literary, dramatic or musical works go; it is the copyright owner’s exclusive right to issue copies of the work to the public not being copies already in circulation”. The explanation to this section goes to clarify that for the purposes of this section, a copy which has been sold once shall be deemed to be a copy already in circulation.”What this means and how this has been construed by various courts shall be seen in the following sections.

Judicial history on importation

The Penguin case [2]

The issue of parallel importation first reached the higher judiciary in 1984 when the Delhi High Court was called upon to pronounce judgment on whether import by a third party without the express authorisation of the copyright owner constitute infringement. The court, bizarrely, ruled that it constituted infringement because it constituted a violation of the owner’s right to publish:

While publication generally refers to issue to public, importation for the specified purpose may be a necessary step in the process of issuing to the public, and therefore of publishing. It appears to me that the exclusive right of the copyright owner to print, publish and sell these titles in India would extend to the exclusive right to import copies into India for the purpose of selling or by way of trade offering or exposing for sale the hooks in question. This is the true meaning of the word “publish” as used in section 14(1)(a)(4).

It is also an infringement of copyright knowingly to import into India for sale or hire infringing copies of a work without the consent of the owner of the copyright, though they may have been made by or with the consent of the owner of the copyright in the place where they were made.

It should be noted that prior to the 1994 amendment of the Copyright Act, the first two clauses of section 14 read: “(i) to reproduce the work in any material form; (ii) to publish the work”. Thus, this judgment extends the right to “publish the work” (or in the words of the judge, “print, publish and sell”) to include a right of importation out of thin air, simply by stating that it appears so. While the judge notes that “publication” under the Act (in 1984) was defined as meaning the issue of copies of the work, either in whole or in part, to the public in a manner sufficient to satisfy the reasonable requirements of the public having regard to the nature of the work”, he does not explain how importation is subsumed under that definition contrary to a plain reading of the law. Finally, the judge does note that, “It is true that India Distributors are not printing these books and are not guilty of what is called primary infringement”, but goes on to state however, that “when they issue copies of these titles for public distribution they are guilty of secondary infringement”. These categories are created, but neither explained nor explored in the judgment. One other legal nuance that was examined was the allowance granted to the Registrar of Copyright under section 53 to “order that copies made out of India of the work which if made in India would infringe copyright shall not be imported. The judge noted that the words infringing copy as contained in section 53 could not be different in meaning from the same words contained in section 51(b). The implication of this shall be demonstrated shortly.

Importantly, the judgment does not look into section 16 of the Act which states that there shall be no copyright except as provided by the Act, and how this should prevent a judge from expanding the rights provided in the law to include a new judicially created right to prevent imports.

Privity of contract

Nowhere in the judgment does the judge explain how an exclusive distribution contract between two parties can affect a third party in violation of the well-held principle of privity of contract. This is an important issue because in effect, the judgment makes a third party bound by the contract entered into by two private parties. The parties agree inter se (for example) to ensure that the India distributor does not sell the book outside of India and that the owner of rights will not give the right to sell in India to any other person. How could this contract between those two parties come in way of a third person buying from a foreign market and importing into India? If it was the case of an exclusive UK licensee selling in India, then both the exclusive Indian licensee as well as the owner of the copyright would have cause of action in India on the basis of both violation of contract as well as violation of copyright (for exceeding his territorial licence). However, a third party who buys from a stream of commerce cannot be bound by these contracts because he becomes the owner of the book and not a licensee. Thus, the judgment makes a contract between two private parties, which merely creates a right in personam, applicable to the entire world. By doing this it allows a contract to create a right in rem without any express provision of the law doing do. Indeed, this issue was examined by the United State Supreme Court in 1908 in the case of Bobbs-Merrill Co. v. Straus,[3] in which the doctrine of first sale was judicially evolved.

Doctrine of first sale/exhaustion

Importantly, nowhere in the judgment does the judge bother to go into the details of the interaction between the sale of a copy of a book (upon the occurrence of which no further conditions can be laid) and the Copyright Act. If I sell you a bicycle laying down a condition that you cannot re-sell it, such a condition cannot be upheld in a court of law because by sale I divest all saleable interest I have in the bicycle. This principle is what is embodied in sections 10 and 11 of the Transfer of Property Act. Section 10 states–“Where property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void, except in the case of a lease where the condition is for the benefit of the lessor or those claiming under him. In the same vein, section 11 states–“Where, on a transfer of property, an interest therein is created absolutely in favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and dispose of such interest as if there were no such direction.” Thus, by selling of a copy of a book (as opposed to a licensing the book), I divest myself of all saleable interests in that particular copy of the book (though not copyright). I cannot prevent you from re-selling that book. However, copyright law would require that you can only re-sell a copy of a book without the owner’s permission, and cannot sell it without the owner’s permission. This is known as the doctrine of first sale, which evolved as a via media between copyright law, which gave the owner of copyright rights in a book, and property law, which gave the buyer of a book rights in her particular copy of the book.

The best appreciation of this doctrine of first sale (also known as “exhaustion of rights”) has come in a judgment by Justice Ravindra Bhat, who states the meaning of the doctrine very clearly:

The doctrine of exhaustion of copyright enables free trade in material objects on which copies of protected works have been fixed and put into circulation with the right holder’s consent. The exhaustion principle in a sense arbitrates the conflict between the right to own a copy of a work and the author’s right to control the distribution of copies. Exhaustion is decisive with respect to the priority of ownership and the freedom to trade in material carriers on the condition that a copy has been legally brought into trading. Transfer of ownership of a carrier with a copy of a work fixed on it makes it impossible for the owner to derive further benefits from the exploitation of a copy that was traded with his consent. The exhaustion principle is thus termed legitimate by reason of the profits earned for the ownership transfer, which should be satisfactory to the author if the work is not being exploited in a different exploitation field.

Exhaustion of rights is linked to the distribution right. The right to distribute objects (making them available to the public) means that such objects (or the medium on which a work is fixed) are released by or with the consent of the owner as a result of the transfer of ownership. In this way, the owner is in control of the distribution of copies since he decides the time and the form in which copies are released to the public. Content wise the distribution rights are to be understood as an opportunity to provide the public with copies of a work and put them into circulation, as well as to control the way the copies are used. The exhaustion of rights principle thus limits the distribution right, by excluding control over the use of copies after they have been put into circulation for the first time.

1994 Amendment to the Act

Interestingly, the Penguin judgment was sought to be overturned by an amendment to section 14 in 1994. That amendment removed the right to “publish”, and instead made it a right to “to issue copies of the work to the public not being copies already in circulation”. It stands to reason that this not only ensures the centrality of the doctrine of first sale in India, but also allows for international exhaustion, thus allowing for parallel import. This is clear from the fact that we, in Indian law (as per section 40), makes it clear that “all or any provisions of this Act shall apply to work first published in any class territory outside India to which the order (under section 40) relates in like manner as if they were first published within India.

Thus, even books published internationally are, under the legal fiction under section 40, akin to books published in India. Since we are granting foreign works all the protection under the Act as though they had been published in India by Indian authors, it is but natural that they should be subject to all the same limitations as well (such as the doctrine of first sale).

As one commentator puts it, “with amendments, the decision of the Penguin case is no more the law. Like most other nations, we have also accepted the principle of international exhaustion. This seems to be after taking into view the public interest angle.”[4]

Unfortunately, legal commentators seemed to have paid greater attention to legislative changes than did the courts.

Eurokids case[5]

In 2005, the same issue of parallel importation in literary works arose before the Bombay High Court. Highly unfortunately, the decision by the Bombay High Court was even more ill-reasoned than that of the Delhi High Court in the Penguin case. Nowhere in the judgment is the issue of the first sale doctrine, on which the issue of parallel importation rests, even cursorily examined. Nowhere is the amendment to section 14 of the Copyright Act even noted. Indeed, the only time that section 14 is even mentioned is when the section is quoted to establish it as providing the meaning of “copyright” in Indian law. The implications of section 14 in terms of exhaustion of rights are simply not examined. Section 2(m) of the Act, which it is necessary to examine (as shown above) to understand what to make of the phrase “infringing copy” in section 51, is not even mentioned once. As per the logic of the judgment, any copy that is sold in India by a third party in contravention of an exclusive licence contract is automatically assumed to be infringing. Thus, once again, copyright law magically overrides the concept of privity of contract without so much as an explanation.

Most importantly, because the case relies on the Penguin decision without having noticed and accounting for the subsequent change in the text of the law because of the 1994 amendment, it should be held to be per incuriam, and should not act as a precedent.

Warner Bros. case [6]

In 2009, the Delhi High Court pronounced yet another verdict on parallel importation in the case of Warner Bros. v. Santosh V.G. However, this was a case on DVDs, and not on books. While the Court correctly understands the meaning of the first sale doctrine in terms of literary works (and thus becoming the first judgment to explicitly talk about this doctrine), it is open to debate whether it was correct in its ruling on the inapplicability of the doctrine when it came to cinematograph films. The reasoning of the court (in paragraphs 77 and 78) as to why parallel importation is not allowed under Indian law is faulty, and is worth quoting in extenso:

In this case, the copies that are being let out for rent/hire by the defendant are not made in India. Rather, they have been made in the US and imported into India. As noticed earlier, copyright in a work published abroad, in a Berne Convention country, like the United States, entitles its owner to assert copyright in India; such rights are “as if” the works were published in India (section 40 and provisions of the order). An infringing copy is one “made or imported in contravention of the provisions of this Act”. In this context, the proviso to section 51(b)(iv), in the court’s view, provides the key to Parliamentary intention. It carves only one exception, permitting “import of one copy of any work for the private and domestic use of the importer”. The plaintiffs’ argument is that there would have been no need to enact this exception, if there were no restriction on import of cinematograph films, genuinely made outside India. The effect of the proviso to section 51(b)(iv) is plainly, not to relax the importation of genuinely made cinematographic films but to allow for the importation of one copy of any work “for the private and domestic use of the importer.” This would mean that the proviso allows for the importation of an infringing work, for private and domestic use of the importer, and not commercial use.

Quite obviously, there are some glaring problems in the court’s reasoning. The proviso to section 51(b)(iv) does indeed carve out an exception, but that exception is for infringing copies of a work, and not for non-infringing or “genuine” copies. The plaintiffs’ argument, according to the judge, is: If all genuine copies of the cinematograph film could be legally imported, there would be no need to enact this exception. However, there could well be a need to enact this exception to cover a single non-genuine copy of a cinematograph film. It is precisely because of this that the exception is so very narrow, being for not only private use, as in section 52(1)(a), but of a single copy of a work and that too only for “private and domestic use”. This possibility of allowing import of a non-genuine copy is completely overlooked by the judge. The judgment continues:

The defendant’s argument that the plaintiffs lost the power to deal with the copy, once placed in the market place, in the United States, is also unsupportable as too broad a proposition. In the context of the Act, the argument is more hopeful, than convincing. Even in the United States, it has been held (United States v. Wise, 550 F.2d 1180, 1187 (9th Cir. 1977)) that though, after “first sale", a vendee “is not restricted by statute from further transfers of that copy”, yet a first sale does not, however, exhaust other rights, such as the copyright holder’s right to prohibit copying of the copy he sells. The Federal Appellate Court noted that “other copyright rights (reprinting, copying, etc.) remain unimpaired”. It is clear therefore that the copies in question are infringing copies. Therefore, their importation, and more importantly, use for any of the purposes under section 51, other than the one spelt out in it the proviso is in contravention of the Act. The question, however, is whether the action of the defendants amounts to infringement of the copyright of the plaintiffs. This must be answered independently of the question of whether parallel importation of copyrighted goods is permissible under Indian copyright law.

While the reading of the law is correct (i.e., the first sale doctrine does not exhaust all rights, but merely the right to prevent further transfers), the application of the law to the facts is incorrect. In this case, the fact situation before the court was not of “reprinting, copying, etc.” but of the physical transfer of copies of a work bought in the US into India. As is noted in United States v. Wise, “after first sale,” the buyer “is not restricted by statute from further transfers of that copy”. Indeed, this was case can be seen as exactly such a “further transfer” (of the rights over that copy from a shop in the US to the buyer in India). How the judge misreads the argument as being about something other than transfer of property rights in a copy (and more as something akin to reproduction), and concludes that “it is clear therefore that the copies in question are infringing copies,” is not clear.

However, the verdict of the court does not proceed on this ground alone, and involves discussion of the doctrine of first sale with regard to cinematograph films, the provisions of section 53, which apply only to cinematograph films, none of which are applicable in case of literary works.

Export of copyrighted works

Now, that we have dealt with the traditionally contentious part on imports, we may now examine the rare, but even more contentious issue of exports. Barring a few exceptions, notably the United States, the copyright law in no country regulates exports. Even in the United States, section 602 of their Copyright Act regulates only the export of infringing works, and not the export of legitimate works. In India, though, there are two judgments of the Delhi High Court that seemingly make illegal export from India of legal copies of a copyrighted work. As one of these decisions is an ex parte order without any reasoning—indeed calling the reasoning “bare minimum” would be doing that phrase a disservice—we shall focus only on the other judgement: the one pronounced by Justice Manmohan Singh in John Wiley & Sons v. Prabhat Chander Kumar Jain [7]. The facts of the judgment are rather simple. John Wiley & Sons Inc., based in New York, exclusively licensed the rights over certain books to Wiley India Pvt. Ltd. (all the other plaintiffs follow the same model, so we shall restrict ourselves to the case of the Wiley corporation). These books were sold at a reduced cost in the Indian market and were clearly labelled as being “Wiley Student Edition restricted for sale only in Bangladesh, Myanmar, India, Indonesia, Nepal, Pakistan, Philippines, Sri Lanka and Vietnam”. Another label on the same book read: “The book for sale only in the country to which first consigned by Wiley India Pvt. Ltd and may not be re-exported. For sale only in: Bangladesh, Myanmar, India, Indonesia, Nepal, Pakistan, Philippines, Sri Lanka and Vietnam.”[8]. Quite clearly, John Wiley & Sons, being the owner of the rights, had given exclusive license to Wiley India Pvt. Ltd. to publish and print an English Language reprint edition only in the territories entailed in the agreement and not beyond that. Further, they wished to impose this restriction on all buyers of the book by way of that notice and attached conditionality, and thus prevent exports to the United States.

At this stage, it would do us well to dwell into the facts of the 1908 US Supreme Court case of Bobbs-Merrill Co. v. Straus[9]. In this case, the plaintiff-appellant sold a copyrighted novel with a clear notice under the copyright notice stating that, “The price of this book at retail is $1 net. No dealer is licensed to sell it at a lower price, and a sale at a lower price will be treated as an infringement of the copyright”. Macy & Co., a famous retailer, purchased large lots of books both at wholesale prices and at retail prices, and re-sold the books to its customers at 89 cents a copy. This was quite clearly in violation of the condition imposed by the notice.

It may be seen that the facts in this case quite clearly mirror the fact situation in John Wiley & Sons v. Prabhat Chander Kumar Jain. It is only the nature of the conditionality that differentiates the two cases: in the one it was a restriction on price at which the book could be further sold, in the other it was a restriction on where the book could be further sold. How did the judge rule in Bobbs-Merrill Co. v. Strauss? The court ruled that it was on the record that Macy & Co. had knowledge of the notice. However, despite that, the notice was held not to be binding on Macy & Co. The court noted:

The precise question, therefore, in this case is, “Does the sole right to vend secure to the owner of the copyright the right, after a sale of the book to a purchaser, to restrict future sales of the book at retail, to the right to sell it at a certain price per copy, because of a notice in the book that a sale at a different price will be treated as an infringement, which notice has been brought home to one undertaking to sell for less than the named sum?” We do not think the statute can be given such a construction copyright statutes, while protecting the owner of the copyright in his right to multiply and sell his production, do not create the right to impose, by notice, such as is disclosed in this case, a limitation at which the book shall be sold at retail by future purchasers, with whom there is no privity of contract …To add to the right of exclusive sale, the authority to control all future retail sales, by a notice that such sales must be made at a fixed sum, would give a right not included in the terms of the statute, and, in our view, extend its operation, by construction, beyond its meaning, when interpreted with a view to ascertaining the legislative intent in its enactment.

This judgment proceeded on privity of contract, the factum of a sale having occurred, and created what is now known as the doctrine of first sale–an established principle that the exclusive right to sell, distribute or circulate a copy of the copyrighted work exhausts the moment the item is placed into a stream of commerce through a sale. This can, of course, be contradicted if explicitly stated so in a statute.[10] However, as we noted earlier, the Indian statute explicitly notes that the right to issue copies of a work to the public, guaranteed to the owner of the copyright over a literary, dramatic, or artistic work is restricted to copies not already in circulation. Thus, it might seem to one to be quite clear how the court would in the John Wiley & Sons case. One would then be wrong.

In fact, Justice Manmohan Singh, in a very detailed and circuitous judgment, rules that the activity done by the defendant is a violation not of some implied contract between Wiley India Pvt. Ltd. and him, but that it constituted a violation of the Indian Copyright Act, and notably section 51 of the Copyright Act. How does he reach this conclusion?

His reasoning rests on 3 dubious pillars:

that the rights of the licensee are distinct from that of the owner, and that the former may get exhausted without affecting the latter;
that the licensee cannot pass on better title to those that buy from him than he himself has;
that sale or even offer for sale or taking of orders for sale are all forms of putting into circulation or issuance of copies.

First, through a close reading of the various provisions of the Copyright Act he notes that the Act creates a clear difference between the rights of the owner and the rights of the licensee (para 47-50). He then finally comes to noting that,

“A logical corollary drawn from above analysis which needs reiteration at this stage is that for the purposes of section 51 which is in the preceding chapter, the term owner of the copyright does not include exclusive licensee. Thus, the rights of the owner although may include rights of the exclusive licensee but the court cannot read the term owner of the copyright as that of the exclusive licensee and their rights are different as per the allocation by the owner.” (para 62).

Thus, he establishes that some rights of the licensee may be extinguished (as per the doctrine of exhaustion) without extinguishing that same right of the owner. In other words, while the right of circulation of the licensee get exhausted, the right of circulation of the owner remains unaffected. Justice Singh doesn’t go into the implications of this, but there can be two ways of interpreting what this means. It could mean that by virtue of the circulation rights of the licensee getting exhausted, the circulation right of the owner gets exhausted in those nine countries for which the licensee had been granted rights of circulation. Else, it could mean that the exhaustion of the licensee’s circulation rights does not at all affect the owner’s circulation rights. This latter one is obviously an absurd idea, since that would, in all cases, leave the owner with a cause of action in case of all sales even when the owner is in India. Thus, one is left considering the former the only logical meaning.

However, that this cannot possibly be right is demonstrated by the fact that this can easily be applied to an all-in-India transaction as well. Thus, for instance, the owner of rights can decide never to directly sell any book, but only allow its licensees to sell. Thus, it can contractually bind a licensee to sell only in Andhra Pradesh and hold that because of that license contract any buyer who buys from the Andhra Pradesh licensee and decides to re-sell to a second-hand bookstore in Karnataka is actually violating the terms of the license (because the circulation right gets extinguished only insofar as the licensee is concerned, and that licence only allows sales in Andhra Pradesh).

That is obviously cannot be held to be the purpose of the law. Thus, the privity of the contract between the owner of the right and the licensee must be upheld and may not be held to bind a third party purchaser.

The second ground on which Justice Singh rules is on the general property law principle that a person cannot pass on a better title than she herself has. Thus, Justice Singh holds that when the licensee sells a book to a person, that person only receives as much of the title to that book that the licensee has. Thus, since the licensee only has title in the book insofar as those nine countries go, the person who buys that book cannot get better title.

The plain fault in this reasoning is the very founding basis of the doctrine of first sale: the differentiation between property rights in a copy of a book and the copyright in the book. No one has contended in this case that the transaction between the licensee and the book purchaser is not a sale. Once a sale happens, all property rights in that copy of the book are alienated to the book purchaser. It must be remembered that this transaction is not the case of the licensee sub-licensing the right to circulate the book. The licensee cannot sub-license to another party the right to sell the book in, say, Australia, because she does not have that right in the first place. However, in this case, the licensee is invoking the right to sell the book in India, and is not passing on that right. The right of a book buyer to re-sell comes from the statute— from the doctrine of first sale and not from a passing on of that right from the licensee.

The last pillar of the judge’s reasoning is that the sale—or even offer for sale, or taking of orders for sale—of a book online are all forms of putting into circulation or issuance of copies. Section 40 does not work two ways. It only deems a foreign work “Indian”, and does not deem a sale in a foreign land the same as sale in India. Thus, even if we are to accept the other two pillars of Justice Singh’s reasoning, it is unclear how an offer made online to sell a book is equated to actually placing a book in circulation in India. How can an India law prohibit circulation on the streets of Bogotá? This is only possible if a separate right of export is recognised. But Justice Singh is extremely clear that he is not creating such a distinct right.

A notice to the buyer that re-exports are prohibited cannot be held to constitute a valid contract because the Transfer of Property Act clearly makes such a prohibition invalid (sections 10 and 11) after all, it is a sale that takes place and not a license as does the Copyright Act (section 14).

Amendment to Section 2(m)

There has been much controversy lately with some publishers trying to stop the government from amending section 2(m) of the Indian Copyright Act, clarifying that a parallel import will not be seen as an “infringing copy”. Some lawyers for the publishing industry have made the claim that allowing for parallel importation would legally allow for the exports of low-priced edition and overturn the basis of the Wiley judgment. This is false.

The amendment itself merely adds the following proviso at the end of section 2(m) (which itself defines what an “infringing copy” means):

Provided that a copy of a work published in any country outside India with the permission of the author of the work and imported from that country shall not be deemed to be an infringing copy.

It seems that this is in fact a provision introduced solely to clarify that this (i.e., following international exhaustion) is the position that India holds, and not to change the statute itself. It is merely to clarify that the courts have misread the provisions of the law, or that they have indeed not read the provisions of the law (as in the Eurokids case).

This provision will have no effect whatsoever on the Wiley ruling. While the Wiley ruling deserves to fail on its own merits, the reasoning in that case does not depend on whether we follow international or national exhaustion. Indeed, in para 104, the judge states:

As per my opinion, as the express provision for international exhaustion is absent in our Indian law, it would be appropriate to confine the applicability of the same to regional exhaustion.

Be that as it may, in the present case, the circumstances do not even otherwise warrant this discussion as the rights if at all are exhausted are to the extent to which they are available with the licensees as the books are purchased from the exclusive licensees who have limited rights and not from the owner. In these circumstances, the question of exhaustion of rights of owner in the copyright does not arise at all.

Thus, the argument that following the principle of international exhaustion will upturn this judgment is faulty. Imports and exports are two distinct things. India’s following of the principle of “international exhaustion” means that the right to first sale is exhausted in India, when the work is legally published anywhere internationally (i.e., regardless of where that copyrighted work is legally published). The principle of international exhaustion does not not exhaust the right of first sale internationally—the word “international” is used to indicate where the publication has to take place for exhaustion to occur, and not where the exhaustion takes place. After all, Indian law on a matter cannot determine whether a book can or cannot be sold anywhere else in the world (which is precisely what it would do if it is to hold that rights are exhausted internationally by virtue of a book being printed in India).

Conclusion

I think the best way of concluding this are by quoting, in extenso, a passage from a book on the Indian intellectual property law by Prof. N.S. Gopalakrishnan & Dr. T.G. Agitha:

Under the Indian law there is no express provision recognising the right of importation. This would in fact enable parallel importation of works. “Parallel importation” means transportation of “legitimate” goods which are available at a cheaper rate in one country by independent buyers (e.g. book sellers), for sale in another country. This could act as an effective check on creating monopoly in the market. Hence, it is an important aspect to be borne in mind for a developing country like India. Since there is no international obligation against parallel importation, nothing prevented the court from taking the stand that unless there is an express provision conferring importation rights on the owner of copyright or prohibiting parallel importation, it need not be considered to be prohibited in India. It is pertinent to note that India supported the principle of international exhaustion and not the national exhaustion principle. [11]

However, it is submitted that the court (in Penguin v. India Book Distributors) failed to take note of these aspects while deciding this case.”[12]

One can only hope those words by these leading experts on IP law in India are paid heed to, and that the arguments otherwise will fail to convince both the government as well as future court decisions.

* Please do not cite this note in an academic paper. Feel free to cite elsewhere. This note is still very much a work in progress. However, given the urgency of this issue and the importance of ensuring debate on the legal ramifications of the proposed amendment to s.2(m), this note should prove useful.

Notes

[1]. Section 51(b)(iv) states: “Copyright in a work shall be deemed to be infringed (b) when any person (iv) imports into India, any infringing copies of the work.” A proviso to the section reads: “Provided that nothing in Sub-clause (iv) shall apply to the import of one copy of any work for the private and domestic use of the importer.”

[2]. Ed.: MANU/DE/0402/1984: AIR 1985 Delhi 29, 26 (1984) DLT 316”

[3]. 210 U.S. 339 (1908).

[4]. Arathi Ashok, Economic Rights of Authors under Copyright Law, 15 J. Intell. Prop. Rights 46 (2010) at 50.

[5]. MANU/MH/0938/2005.

[6]. MANU/DE/0406/2009.

[7]. MANU/DE/1142/2010: MIPR 2010 (2) 0247.

[8]. While the exact countries were different in the case of each of the plaintiffs, there were all restricted to sale in India and a few of its neighbouring countries.

[9]. 210 U.S. 339 (1908).

[10]. All signatories of the TRIPS Agreement have to ensure a right of rental, over and above a right of first sale, for all video (or what are known as cinematograph films in the Indian law).

[11]. R.V. Vaidyanatha Ayyar, The Process and Politics of a Diplomatic Conference on Copyright (1998) 1 JWIP 3 at 17, cited in N.S. Gopalakrishnan and T.G. Agitha, Principles of Intellectual Property 256 (2009).

[12]. N.S. Gopalakrishnan and T.G. Agitha, Principles of Intellectual Property 256 (2009).

Also see SSRN

Download the file here.

For more details visit https://cis-india.org/a2k/blogs/exhaustion

Comments to the Ministry on WIPO Broadcast Treaty (March 2011)

pranesh — 2012-12-14T10:29:20Z

As a follow up to a stakeholder meeting called by the MHRD on the WIPO Broadcast Treaty, CIS provided written comments on the April 2007 Non-Paper of the WIPO Broadcast Treaty, emphasising the need for a signal-based approach to be taken on the Broadcast Treaty, and making it clear that India should continue to oppose the creation of new rights for webcasters.

On February 22, 2011, the Ministry of Human Resource Development held a meeting to decide on the Indian position on the WIPO Broadcast Treaty. The Ministry asked the participants at the meeting to send in written submissions on four matters. We sent in submissions on those four issues, as well as a few others.

Comments on the non-paper for the WIPO Broadcast Treaty by the Centre for Internet and Society

On February 23, 2011, the Ministry of HRD had asked for comments on four matters:

Article 3 of the Non-paper which was circulated earlier
Term of protection for signal
Nature of limitations and exceptions
Protection of signal and retransmission

We have made submissions on those and a few other matters as well. Unless noted otherwise, all comments made in this note pertain to the final non-paper (April 2007) and not the draft non-paper (March 2007).

Article 3

Article 3 of the draft non-paper that was circulated (March 2007) for comments from country delegates stated:

3. Scope of Application

The provisions of this Treaty shall not provide any protection in respect of

(i) mere retransmissions;

(ii) any transmissions where the time of the transmission and the place of its reception may be individually chosen by members of the public (on-demand transmissions); or

(iii) any transmissions over computer networks (transmissions using the Internet

Protocol, “webcasting”, or “netcasting”).

A number of people present at the recent MHRD-organized meeting noted that “mere retransmissions” is a confusing term. In the revised non-paper (April 2007), it has been clarified that protection is not granted to third parties for merely retransmitting another’s signal (Art. 3(4)(i)).

3. Specific Scope and Object of Protection

(4) The provisions of this Treaty shall not provide any protection

(i) to retransmitting third parties in respect of their mere retransmissions by any means of broadcasts by broadcasting organizations;

(ii) to any person for transmissions where the time of the transmission and the place of its reception may be individually chosen by members of the public (on-demand transmissions); or

(iii) to any person for transmissions over computer networks

In addition, Art. 3(4)(iii) is currently ambiguous since it is not clear whether “retransmissions” are subsumed under the word transmission. By allowing for separate rights for retransmission over computer networks, the Treaty allows for the creation of two classes: traditional broadcasters who will have rights over retransmissions over computer networks, and all other persons who will have no rights over transmissions. Thus, if “retransmission” is not subsumed under the word “transmission”, it would be advisable to alter that clause to read “to any person for transmissions or retransmissions over computer networks”.

Lastly, Art. 3(4) should additional prevent protection for persons broadcasting materials for which they have not acquired copyright, or for broadcasting materials in the public domain.

Term of Protection of Signals

No term of protection should be provided. As was noted by the US government in its response to the draft non-paper, it is questionable “whether a 20-year term of protection is consistent with a signal-based approach”. The Brazilian delegation also states: “Article 13 should be deleted. A twenty-year term of protection is unnecessary. The agreed “signal-based” approach to the Treaty implies that the objected of protection is the signal, and therefore duration of protection must be linked with the ephemeral life of the signal itself.” Thus, a term is only needed if we stray away from a signal-based approach. As we do not wish to do so, there should be no term of protection.

Limitations and Exceptions

The limitations and exceptions (L&E) currently provided for allow for mirroring of copyright L&E limited by a Berne-like three-step test.

However, reasons for providing protection over broadcasting are not the same as those for copyright. For instance, a country may wish to make exceptions to signal protection for cases such as broadcast of a national sport, as India has done with the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act.

This might well afoul of the three-step test proposed in Article 10(2). Furthermore, a country may wish to limit the application of broadcasters rights for national broadcasters (whose programming is paid for by taxpayers, and thus should be available to them), but may not be able to do so under the provisions of Article 10(2). Thus, Article 10(2) should be deleted, and Article 10(1) should be expanded to include issues of national interest and for free-to-air broadcast signals.

Protection of Signal and Retransmission

It should be a sine qua non condition of India’s that that this be a purely signal-based treaty with no fixation or post-fixation rights. Thus, it should restrict itself to protection of signals, and simultaneous retransmission.

As a result, no separate right to prevent unauthorized “decryption” should be granted, since signal-theft is already a crime. For instance, this provision would also cover decrypting an unauthorized retransmission without authorization from the retransmitter. This provides the unauthorized retransmitter rights, even though s/he has no right to retransmit. This leads to an absurd situation.

As stated by the Brazilian government:

“[Article 10 of the draft non-paper and Article 9 of the non-paper] is inconsistent with a “signal-based approach”. It creates unwarranted obstacles to technological development, to access to legitimate uses, flexibilities and exceptions and to access to the public domain. It does not focus on securing effective protection against an illicit act, but rather creates new exclusive rights so that they cover areas unrelated with the objective of the treaty, such as control by holder of industrial production of goods, the development and use of encryption technologies, and private uses. The prohibition of mere decryption of encrypted signals, without there having been unauthorized broadcasting activity, is abusive.”

Other comments

Article 7

Article 7 of the non-paper provides broadcasters rights post-fixation (“Broadcasting organizations shall enjoy the exclusive right of authorizing … the deferred transmission by any means to the public of their fixed broadcasts. ”). This is contrary to a signal-based approach. A signal-based approach would necessarily mean that it is only signal theft (which happens only via unauthorized simultaneous retransmission) that should be protected. Deferred transmission should implicate the rights of the owner of copyright, but not of the broadcasting organization.

Article 4

As suggested by the Brazilian government, Article 4(1) which proposes a non-prejudice clause should be amended to add the words “and access to the public domain” at its end. This is consistent with the WIPO Development Agenda.

Article 5

India should re-iterate its suggestion to add the following to the definition of “broadcast” under Art. 5(a): “‘broadcast’ shall not be understood as including transmission of such a set of signals over computer networks. ”

Further, the phrase “general public ” should be retained in Art.5 (as was present in the draft non-paper), and should not be made into “public”. The danger is that a limited public (say family members) could possibly be covered by the term “public”, while they will be excluded from “general public”, which in any case is the target audience of all broadcast.

For more details visit https://cis-india.org/a2k/blogs/wipo-broadcast-treaty-comments-march-2011

CIS-TWN Analysis of WIPO Treaty for the Print Disabled (SCCR/22/15)

pranesh — 2011-10-12T08:29:01Z

CIS and the Third World Network (TWN) conducted a quick analysis of the "Consensus document on an international instrument on limitations and exceptions for persons with print disabilities presented by Argentina, Australia, Brazil, Chile, Ecuador, Mexico, Paraguay, and the United States of America" presented as WIPO document numbered SCCR/22/15.

SCCR/22/15

ORIGINAL: English

DATE: June 20, 2011

Standing Committee on Copyright and Related Rights

Twenty-Second Session Geneva, June 15 to 24, 2011

Consensus document on an international instrument on limitations and exceptions for persons with print disabilities presented by Argentina, Australia, Brazil, Chile, Ecuador, Mexico, Paraguay, and the United States of America

PREAMBLE

Recalling the principles of non-discrimination, equal opportunity and access, proclaimed in the United Nations Convention on the Rights of Persons with Disabilities,

Mindful of the obstacles that are prejudicial to human development and the fulfillment of disabled persons with regard to education, research, access to information and communication,

Emphasizing the importance of copyright protection as an incentive for literary and artistic creation and enhancing opportunities for everyone to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits,

Recognizing the importance of both accessibility to the achievement of equal opportunities in all spheres of society and of the protection of the rights of authors in their literary and artistic works in a manner as effective and uniform as possible,

Aware of the many barriers to access to information and communication experienced by persons who are blind or have limited vision, or have other disabilities regarding access to published works,

Aware that the majority of visually impaired persons/persons with a print disability live in countries of low or moderate incomes,

Desiring to provide full and equal access to information, culture and communication for the visually impaired persons/persons with a print disability and, towards that end, considering the need both to expand the number of works in accessible formats and to improve access to those works,

Recognizing the opportunities and challenges for the visually impaired/persons with a print disability presented by the development of new information and communication technologies, including technological publishing and communication platforms that are transnational in nature,

Recognizing the need to seek, receive and impart information and ideas through any media and regardless of frontiers,

Aware that national copyright legislation is territorial in nature, and where activity is undertaken across jurisdictions, uncertainty regarding the legality of activity undermines the development and use of new technologies and services that can potentially improve the lives of the visually impaired/persons with print disabilities,

Recognizing the large number of Members who, to that end, have established exceptions and limitations in their national copyright laws for visually impaired persons/persons with a print disability, yet the continuing shortage of works in ~~special~~accessible formats for such persons,

Recognizing that the preference is for works to be made accessible by rightholders to people with disabilities at publication and that, to the extent that the market is unable to provide appropriate access to works for visually impaired persons/persons with a print disability, it is recognized that alternative measures are needed to improve such access,

Recognizing the need to maintain a balance between the rights of authors and the larger public interest, particularly education, research and access to information, and that such a balance must facilitate effective and timely access to works for the benefit of visually impaired persons/persons with a print disability,

Emphasizing the importance and flexibility of the three-step test for limitations and exceptions established in Article 9(2) of the Berne Convention and other international instruments,

Considering the discussions within the WIPO Standing Committee on Copyright and Related Rights on the issue of exceptions and limitations for the benefit of visually impaired persons/persons with a print disability and the various proposals tabled by Member States,

Prompted by a desire to contribute to the implementation of the relevant recommendations of the Development Agenda of the World Intellectual Property Organization,

Taking into account the importance of an international legal instrument/joint recommendation/treaty both to increase the number and range of accessible format works available to visually impaired persons/persons with a print disability in the world and to provide the necessary minimum flexibilities in copyright laws that are needed to ensure full and equal access to information and communication for persons who are visually impaired/have a print disability in order to support their full and effective participation in society on an equal basis with others and to ensure the opportunity to develop and utilize their creative, artistic and intellectual potential, for their own benefit and for the enrichment of society,

Have agreed as follows:

ARTICLE A

DEFINITIONS

For purposes of these provisions

"work" means a work in which copyright subsists, whether published or otherwise made publicly available in any media.

"accessible format copy" means a copy of a work in an alternative manner or form which gives a beneficiary person access to the work, including to permit the person to have access as feasibly and comfortably as a person without a print disability. The accessible format copy must respect the integrity of the original work and be used exclusively by beneficiary persons~~persons with print disabilities~~.¹

[Possible enumeration of different formats.]²

"authorized entity" means a governmental agency, a non-profit entity or an~~non-profit~~ organization³ that has as one of its ~~primary missions~~activities to assist persons with print disabilities by providing them with services relating to education, training, adaptive reading, or information access.

An authorized entity maintains policies and procedures to establish the bona fide nature of persons with print disabilities that they serve.

An authorized entity has the trust of both persons with print disabilities and copyright rights holders. It is understood that to obtain the trust of rightholders and beneficiary persons, it is not necessary to require the prior permission of said rightholders or beneficiary persons.⁴

~~If an authorized entity is a nation-wide network of organizations, then all organizations, institutions, and entities that participate in the network must adhere to these characteristics.~~

"reasonable price for developed countries" means that the accessible format copy of the work is available at a similar or lower price than the price of the work available to persons without print disabilities in that market.

"reasonable price for developing countries" means that the accessible format copy of the work is available at prices that are affordable in that market, taking into account the humanitarian needs of persons with print disabilities.

References to 'copyright' include copyright and any relevant rights related to copyright that are provided by a Contracting Party in compliance with ~~the Rome Convention, the TRIPS Agreement, the WPPT or otherwise~~any applicable international treaties or otherwise.⁵

ARTICLE B

BENEFICIARY PERSONS

A beneficiary person is a person who

is blind;
has a visual impairment or a perceptual or reading disability, such as dyslexia, which cannot be improved by the use of corrective lenses to give visual function substantially equivalent to that of a person who has no such impairment or disability and so is unable to read printed works to substantially the same degree as a person without an impairment or disability; or
is unable, through physical disability, to hold or manipulate a book or to focus or move the eyes to the extent that would be normally acceptable for reading.

ARTICLE C

NATIONAL LAW EXCEPTIONS ON ACCESSIBLE FORMAT COPIES

Member State/Contracting Party should/shall provide in their national copyright law for an exception or limitation to the right of reproduction, the right of distribution and the right of making available to the public, as defined in article 8 of the WCT, for beneficiary persons as defined herein.
A Member State/Contracting Party may fulfill Article C (1) by providing an exception or limitation in its national copyright law such that
1. Authorized entities shall be permitted without the authorization of the owner of copyright to make an accessible format copy of a work, supply that accessible format copy or an accessible format copy obtained from another authorized entity to a beneficiary person by any means, including by non-commercial lending or by electronic communication by wire or wireless means, and undertake any intermediate steps to achieve these objectives, when all of the following conditions are met:
  1. the authorized entity wishing to undertake said activity has lawful access to that work or a copy of that work;
  2. the work is converted to an accessible format copy, which may include any means needed to navigate information in the accessible format, but does not introduce changes other than those needed to make the work accessible to the beneficiary person;
  3. copies of the work in the accessible format are supplied exclusively to be used by beneficiary persons; and
  4. ~~4. the activity is undertaken on a non-profit basis.~~ ⁶
  5. A beneficiary person or someone acting on his or her behalf may make an accessible format copy of a work for the personal use of the beneficiary person where the beneficiary person has lawful access to that work or a copy of that work.
2. A Member State/Contracting Party may fulfill Article C (1) by providing any other exception or limitation in its national copyright law that is limited to certain special cases which do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the right holder.
3. The Member State/Contracting Party may limit said exceptions or limitations to published works which, in the applicable ~~special~~accessible format, cannot be otherwise obtained within a reasonable time and at a reasonable price.
4. It shall be a matter for national law to determine whether exceptions or limitations referred to in this Article are subject to remuneration.
ARTICLE D

CROSS-BORDER EXCHANGE OF ACCESSIBLE FORMAT COPIES
1. Member States/Contracting Parties should/shall provide that if an accessible format copy of a work is made under an exception or limitation or export license in their national law, that accessible format copy may be distributed or made available to a beneficiary person in another Member State/Contracting Party by an authorized entity ~~where that other Member State/Contracting Party would permit that beneficiary person to make or import that accessible copy~~.⁷
2. A Member State/Contracting Party may fulfill Article D(1) by providing an exception or limitation in its national copyright law such that:
  1. Authorized entities shall be permitted without the authorization of the owner of copyright to distribute or make available accessible format copies to authorized entities in other Member States/Contracting Parties for the exclusive use of persons with print disabilities, where such activity is undertaken on a non-profit basis.⁸
  2. Authorized entities shall be permitted without the authorization of the owner of copyright to distribute or make available accessible format copies to persons with print disabilities in other Member States/Contracting Parties where the authorized entity has verified the individual is properly entitled to receive such accessible format copies under that other Member State/Contracting Party's national law.⁹
The Member State/Contracting Party may limit said distribution or making available to published works which, in the applicable ~~special~~accessible format, cannot be otherwise obtained within a reasonable time and at a reasonable price, in the country of importation.
1. Without prejudice to other exceptions to the exclusive rights of authors that are otherwise permitted by the Berne Convention or the TRIPS Agreement, a Member State/Contracting Party may fulfill Article D(1) by providing any other exception or limitation in its national copyright law that is limited to certain special cases which do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the right holder.
ARTICLE E

IMPORTATION OF ACCESSIBLE FORMAT COPIES

To the extent that national law would permit a beneficiary person or an authorized entity acting on the beneficiary person’s behalf to make an accessible format copy of a work, the national law should/shall permit a beneficiary person or an authorized entity acting on that person's behalf to import an accessible format copy.¹⁰

ARTICLE F

CIRCUMVENTION OF TECHNOLOGICAL PROTECTION MEASURES

Member States/Contracting Parties should/shall ensure that beneficiaries of the exception provided by Article C have the means to enjoy the exception where technological protection measures have been applied to a work.

In the absence of voluntary measures by rightholders and to the extent that copies of the work in the accessible format are not available commercially at a reasonable price or via authorized entities, Member States/Contracting Parties should/shall take appropriate measures to ensure that beneficiaries of the exception provided by Article C have the means of benefiting from that exception when technical protection measures have been applied to a work, to the extent necessary to benefit from that exception.¹¹

~~ARTICLE G~~

~~RELATIONSHIP WITH CONTRACTS~~

~~Nothing herein shall prevent Member States/Contracting Parties from addressing the relationship of contract law and statutory exceptions and limitations for beneficiary persons.~~

ARTICLE H

RESPECT FOR PRIVACY

In the implementation of these exceptions and limitations, Member States/Contracting Parties should/shall endeavour to protect the privacy of beneficiary persons on an equal basis with others.

[End of document]
1. This change must be replicated everywhere where appropriate. ↩
2. Formats should not be enumerated, since even the disabilities are not enumerated. ↩
3. Non-profit organizations alone cannot cope with the needs of visually impaired people in the developing world. Thus, while it may sound like the ideal, it is impractical given the realities of the situation in the developing world. ↩
4. A "trust" system would make it impossible for developing countries to actualize these provisions. If despite this, copyright infringement happens, then national remedies exist for such infringement. ↩
5. To clarify: what is the purpose of these and not mentioning WCT, Berne, etc.? ↩
6. To be deleted for the same reasons as above. Non-profit basis, if insisted upon, can be retained in Article D(2)(A), but not here. ↩
7. Import law provisions are already there in Article E, and should remain there. In Art. E, it states, “shall permit” import, and here, “would permit”. ↩
8. This instance of "non-profit basis" may be retained if necessary. ↩
9. To clarify: what would such verification require? Would self-certification suffice? ↩
10. It should be clarified, possibly through an agreed statement, that nothing in this article shall derogate from the flexibility provided in Art. 6 of the TRIPS Agreement, which allows for countries to provide international exhaustion.
  
  Thus, if the principle of international exhaustion is in place (i.e., parallel importation is allowed), then importation can be carried out by anyone, and not just by a beneficiary person or an authorized entity. ↩
11. This second paragraph weakens the principle established in the first by adding more conditions. They are almost phrased as alternatives, and the first alternative (paragraph) is the better one. ↩

For more details visit https://cis-india.org/a2k/blogs/cis-analysis-july2011-treaty-print-disabilities

Statement of CIS on the WIPO Broadcast Treaty at the 23rd SCCR

pranesh — 2011-11-30T06:55:43Z

The twenty-third session of the Standing Committee on Copyright and Related Rights is being held in Geneva from November 22, 2011 to December 2, 2011. Pranesh Prakash delivered this statement on a new proposal made by South Africa and Mexico (SCCR/23/6) on a treaty for broadcasters.

The Centre for Internet and Society would like to thank the South African and Mexican delegations for their hard work on this text before us.

We wish to reiterate the statement on principles provided last SCCR by many civil society non-governmental organizations, cable casters and technology companies opposing a rights-based Broadcasting Treaty, and would like to associate ourselves with the statements made today by Public Knowledge, Computer & Communications Industry Association, Knowledge Ecology International, International Federation of Library Associations, and the Canadian Library Association.

Broadcasters Already Protected Online

Broadcasters make two kinds of investments for which they are protected. They invest in infrastructure and they invest in licensing copyrighted works. The first investment is protected by 'broadcast rights', and the latter investment is protected by copyright law.

Broadcasters, being licensees of copyrighted works, generally already have rights of enforcement insofar as their licence is concerned. Therefore there is no need to provide for additional protections with regard to broadcasters in order to enable them to proceed against acts that violate existing copyright laws: they already have those rights by way of licence. This is often forgotten when talking about rights of broadcasters.

The investments to be made in infrastructure in traditional broadcast and in IP-based transmission are very different, even if it is the same 'traditional broadcasters' who are indulging in both. Given that this investment is the basis of additional protection for broadcaster over and above the rights provided to underlying copyright, IP-based transmissions should not be covered in any way even if it is traditional broadcast organizations that are engaged in them.

Providing new and separate rights to large broadcasters for their online transmission, as is currently being done via the provision on 'retransmission' while excluding small webcasters will create a hierarchy and a class distinction without any basis in either principle or existing laws.

Support Countries' Concerns

We also wish to support the amendments suggested by the Indian delegation. As we were reminded by the Indian delegation, the General Assembly mandate of 2007 only extends to traditional broadcasting and to a signal-based approach. In this regard, we also wish to support the question posed by the United States delegation between signal-based and rights-based approaches, as also the strong statement by the Brazilian delegation on the need to ensure that cultural diversity and competition are protected and promoted by any international instrument on broadcasting, and we would like to add 'preservation of a vibrant public domain' as provided by Paragraph 16 of the WIPO Development Agenda.

Thank you, Chair.

For more details visit https://cis-india.org/a2k/blogs/sccr-23-broadcast-cis-statement