Jan 19

RKD NewsNet January 2019

Compiled by: Adv. Sachi Kapoor & Adv. Aboli Kherde | Concept & Edited by: Dr. Mohan Dewan

New E-Commerce Laws In China

The economic dynamics of China is worlds apart from the rest of the world. China strives on its invincible manufacturing capacity, untiring workforce and economical advancements in technology to make up its robust economy. It has recently been reported that e-commerce retailing in China accounts for more than 20% of China’s retail sale of 2017. China is the home of some of the giant e-commerce platforms such as Alibaba, Taobao, B2C, etc. However, China is also infamous for the mushrooming of a huge market of counterfeit.

To regulate this issue with respect to e-commerce retail sale, China in August 2018, introduced a legislation which, inter alia, prescribes for the accountability of all stakeholders involved in the e-commerce transactions. This law has been enforced from January 2019.

Other than the provisions relating to protection of intellectual property, this comprehensive legislation also prescribes provisions for registration and licensing of e-commerce operators, taxation, electronic payment and e-commerce dispute resolution, online disclosure registration and licenses of the entity, of such information important contractual obligations between the sellers and the e-commerce entities, taking measures towards information security etc.

What is an ecommerce entity?

The law defines e-commerce as business activities of selling commodities or providing services via the Internet or any other information network. It does not apply to financial products and services, as well as news information, audio and video programs, publications, cultural products, and other content services provided via information networks.

Who are e-commerce operators?

The ‘e-commerce business operators’ refers to persons/ entities that engage in selling commodities or providing services via the Internet or any other information network. In other words there are 3 main types of e-commerce business operators i.e. a. the e-commerce platform operators, b. third-party merchants and c. those providing services on the e-commerce platform, online vendors operating their own websites or selling through other websites.

Regulations against infringement of intellectual property:

The law makes E-commerce platform operators jointly liable along with the sellers for selling counterfeit merchandise on their websites.

The proprietors of intellectual property in the products being sold on the e-commerce platforms can now notify the e-commerce operators to take measures such as deleting, blocking or disconnecting links and terminating transactions or services whenever they perceive sale of counterfeit goods or violation of their rights in trademarks etc. along with preliminary evidence of the infringement constituted.

Upon receipt of such notices, the on-platform business operators are to submit declarations of non-infringement of any intellectual property right to e-commerce platform business operators along with preliminary evidence of non-infringement within 15 days. Once these declarations are handed over to the intellectual property rights holders they are required to institute legal proceedings within 15 days, failing which the e-commerce operators shall promptly terminate all measures they have taken.

The law also prescribes heavy punishment for violators. Violators of these provisions related to intellectual property can be fined from 50,000 yuan to 5,00,000 yuan; or in case of serious and severe circumstances from 500,000 yuan to 2 million yuan.

Such legislation will be welcomed all over the world. Considering the already full-blown and relentless manufacturing capacity of China, will such a legislation drive Chinese local manufacturers and merchants towards building their own brands instead of selling the products as counterfeits remains to be seen!?

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Patenting The Dice Is Not A Child’s Play!

The US Court of Appeals for the Federal Circuit (US Court) recently rejected a patent application titled “Casino Game and a Set of Six-Face Cubic Colored Dice,” related to “dice games intended to be played in gambling casinos, in which a participant attempted to achieve a particular winning combination of subsets of the dice.” The subject-matter of the patent application was a set of three Dice wherein each Die (read singular for Dice) had a marking on only some of the faces. Only a single face of the first die had a first die marking, two faces of the second die had an identical second die marking, and three faces of the third die had an identical third die marking. A wager is to be placed on a particular combination that would appear face up once the Dice are rolled. The patent claims related to the steps of placing a wager, rolling the set of Dice, and paying a payout amount if at least one wagered outcome occurs.

The scope of patentability is analysed against the touchstone of 35 U.S.C. § 101(US Patents Act). Also, excluding laws of nature, natural phenomena and abstract ideas from the scope of patentability, is a long standing precedent in the US. In deciding the patentability, the US Court employed the 2-step test devised in the landmark case of Mayo Collaborations. According to the case of Mayo,, whether the claims are patent eligible is assessed first. Once this doubt is resolved, the Courts examine various elements of the claim to determine the presence of ‘inventive concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-eligible application. Here, the Court observed that the claims were directed to the abstract idea of “rules for playing a Dice game”. The Court also held that claims directed to dice, card, and board games are not patent eligible because they endeavour to influence human behavior rather than effect technological change.

The only novelty (though insufficient) lay in the fact that the Dice markings were ‘printed’ on particular faces of the Dice as opposed to markings on all the faces of a normal, conventional Dice. The Court also observed that merely printed information without a functional relationship is not patent eligible subject matter and falls outside the scope of patentability as per Section 101.

The Indian position related to the patentability of such dice/ dice games is covered under Section 3 (m) of the Indian Patents Act, 1971. It states that “a mere scheme or rule or method of performing mental act or method of playing game” cannot be patented.

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Scouts Go ‘Girls V. Boys’!!

It is a matter of pride among the young American girls and boys to enrol as “Scouts” and fulfil the duties of vigilant and responsible American citizens. It is the young American Dream to be a part of the Girl Scout USA (“GSUSA”) or the Boy Scout America (“BSA”). The Scouts have been bifurcated gender wise since the very inception of the concept- for over a century. They are known for imparting leadership skills and instilling a sense of responsible citizenship amongst their Scouts all over the world.

The GSUSA has registered “GIRL SCOUTS” trademarks while the BSA has registered “BOY SCOUTS” trademark. Thus, even though both GSUSA and BSA use the term SCOUTS as part of their core trademarks, the two Scouts, have always co-existed since they work for girls and boys separately.

However, recently this core gender-wise bifurcation was taken away, when BSA decided to become a gender neutral scout group which would function or both girls as well as boys of all ages for the first time in its long history. Hence the GSUSA filed a trademark infringement suit against BSA, in New York. The bone of contention was the standalone use of the word “Scout” by BSA alone which resulted in dilution of GSUSA’s marks.

GSUSA contended that the “GIRL SCOUTS” mark will be both blurred and tarnished as a result of consumers mistakenly associating the 2 organizations. The GSUSA contended that the incorrect and improper association is likely to be and has been harmful to GSUSA’s GIRL SCOUTS marks and the organization as a whole, resulting in the impairment in the distinctiveness of the GIRL SCOUTS mark.The suit alleges that a confusion among the names will “marginalize the Girl Scouts Movement” by causing the public to doubt the authenticity of GSUSA. A registration for a trademark in a generic word like “Scout” is unlikely to be granted, competing products are required to be differentiated to avoid confusion.

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Hurting Sentiments?

It is now a common trend or rather has become a ritual for various interest groups to raise their voice against a particular scene or a depiction of a character in a movie/web series. There are 2 scenarios: Cases are filed in remote jurisdictions of the country to create maximum harassment and inconvenience or violent rallies and demonstrations are held which go to the extent of destroying sets, mutilating posters and theatre furniture in an attempt to prevent the screening of a film unless a settlement takes place. Persons involved in these cases and rallies tend to ignore or overlook the ‘Disclaimer’ displayed right at the beginning of such movies/series and tend to search for similarities or references to persons living or dead which is exactly what is written in the Disclaimer! Ironic right?

A true artistic expression reflects the reality on a society. Often this reality is modified by film directors by virtue of their creative license in order to ensure that the final depiction of the film is entertaining for the audience. A feature film is a film produced for pure entertainment and should be treated like one, even if the film is loosely based on a historical event or mythology, sci-fi or contemporary issues in society. The sole purpose of a movie is ‘Entertainment’ and not to educate persons of events! In simple words, if an individual is keen on knowing the facts of a case or true events in history, the same cannot be gained out of a feature film. It is a work of fiction and should be treated like one. Interest groups are confused between a feature film and a documentary. Documentaries are non-fictional in nature and depict facts and true events. Documentaries are supposed to be educational and informative in nature. Interest groups seem to not understand the distinction between a feature film and a documentary meant for educational and information purposes. Several movies, such as Padmavat, Kedarnath, Zero, Uri, have gone through the process of justifying/modifying scenes/dialogues in the movies because of the chaos created by interest groups stating that their sentiments have been hurt. Don’t you think the Indian society is becoming aggressively touchy about these issues?

The popularity of cinema should not be misused by artists and directors. Films should not be used to make political statements and should never mislead the public about an event that has taken place. By misuse, it simply means that when a true event is depicted in the form of a motion picture or a web series, people are often unaware of the actual events and tend to believe the depiction blindly. Hence, there exists a certain responsibility on the artists to express selectively.

Artistic license or rather dramatic license involves the glamorization of real-world incidents for the sake of a cinematic experience. A cinema artist has the license to express his/her artistic/dramatic side just like a poet expresses his/her imagination through poems. This depiction is interpreted and criticized by interest groups stating that it is offensive to their beliefs, however, it is necessary to understand that this depiction has to be viewed only on – artistic merit. Our film fraternity has over the years gained immense laurels and has been acclaimed for its work worldwide. Indian cinema produces over 1,600 films every year. This industry continues to grow every single day.

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Monetising the Digital Space

- Adv. Parag Kamani*

With the world having shifted gears from the physical format to the digital space – barring vinyl records that have shown a surprising resurgence in sales – monetisation opportunities, while they will always exist for content creators, appear to be miniscule, in comparison, in terms of making money in absolute terms. Nevertheless, with every individual now being provided a possibility of becoming a content creator, if the digital space is considered as ancillary income then, in a sense, the digital space serves a useful purpose of revenue enhancement.

While one can argue, virtually forever, about the scope of monetisation opportunities, let us consider such avenues that we tend to utilise now as a way of life: Google; YouTube; Facebook; YouTube; Instagram; Twitter; and LinkedIn, to name a few. With a combined subscription/viewership running into billions, most of these platforms provide users an opportunity of monetising content. While each platform has their own policy for doing so, the point of commencement is to fall under the category of “eligible creator” [or as defined by a similar nomenclature] and set up your very own channel. Once your channel meets the platform threshold, and your application adheres to platform policies and the inevitable Terms of Service, the process is usually complete.

Content creators can commence earning money through advertisements that appear alongside their content, from subscribers watching their content and, in some instances, through viewer-purchased “goods” such as channel memberships. Monetisation in the digital space has certainly gone beyond artificial intelligence.


(*The author has been part of the global Media & Entertainment industry for 30 years.)

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The Seed of Contention 2.0

Do you remember reading our article titled – ‘The Seed of Contention’1 published in June 2018? If not, here’s a brief on the same - The Delhi High Court in April, 2018 held that items such as seeds, plants and animals can’t be patented under Indian laws. We concluded the article by stating that - The Supreme Court’s decision in the Monsanto case is eagerly awaited as several other biotech patents may be invalidated on similar grounds.

Well, the much awaited Supreme Court verdict is now out. Before we jump into the judgment let us give you a brief background. The entire case saw its inception back in 2015, when Monsanto Technology LLC terminated the sublicense agreement entered into with an Indian based company Nuziveedu Seeds Ltd. in 2004. As per the terms of the agreement, Nuziveedu could develop - Genetically Modified Hybrid Cotton Planting Seeds with the help of technology provided by Monsanto and also commercially exploit the same subject to some limitations. Further, Nuziveedu was to pay a license fee to Monsanto for the access to Monsanto’s technology. The patent held by Monsanto deals with Bollgard-II Bt cotton seed technology, which is a Genetically Modified variant that resists the bollworm pest. However, due to disputes relating to payments of license fee, the agreement was terminated in late 2015 by Monsanto. The matter was then heard by the trial court which resulted in a win for Monsanto however, in its appeal at the High Court, the decision of the lower court was reversed.

The Supreme Court earlier this month reversed the judgment passed by the Delhi High Court stating that:

1. The Supreme Court restored Monsanto’s patent claim on genetically modified (GM) Bt cotton until its validity is decided by a Single Judge of the Delhi High Court. As a result of this decision the patent will be enforceable in India for now. Hence, it is important to note that the Patentability of the (GM) Bt cotton has not been decided yet.

2. The Single Judge in March, 2017 had dismissed Monsanto’s plea against Nuziveedu Seeds Ltd alleging that it was using technology patented by Monsanto even after termination of license. The two judge bench of the Supreme Court restored this plea.

3. The Supreme Court also set aside the order stating that plant varieties and seeds cannot be patented under Indian law.

4. The court further directed Monsanto to continue with its obligations under the sub-license agreements and allowed “the suit to proceed with respect to the claim for damages and other reliefs”, in the light of the sub-license termination notices issued by Monsanto.

This however, is not the end of the story, since there is certainly going to be a ‘Seed of Contention 3.0’ as the matter with regard to the validity of the patent has now been allotted to a Single Judge at the Delhi High Court for adjudication.


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