Prawn seeds to trademarks, here are a few key court orders from last week

Technical members missing in IPAB

Though the Intellectual Property Appellate Board (IPAB) was established in 2003, it has not been functional for quite some time. The board deals with matters under the Patents Act, the Trade Marks Act, the Copyright Act and the Plant Varieties Protection Act. In each of these cases, it requires a technical member apart from a judicial member. According to a status report submitted to the Delhi High Court this month, no technical member (copyright) has been appointed so far. Concerning patents, the post has been lying vacant since May 2016. Similarly, the post in trademarks has been vacant since December 2018. The board has been receiving Geographical Indication appeals since 2009 but so far, only 12 appeals have been disposed of. All these facts came to light in the high court judgment in a patents appeal, Mylan Laboratories Ltd vs Union Of India. After reproducing the status report, the court remarked: “The inaction on the part of the government in filling up the vacancies is glaring. This has led to a large number of litigants approaching this high court for urgent hearings. In many cases, such as the one at hand, the appeals are not even being numbered. This is in complete violation of the right to access to justice as guaranteed under Article 21 of the Constitution of India.” The court further remarked that this was a recurring state of affairs in tribunals. As a result, nearly 4,000 cases are pending before the board. In the cases of patents, some patents in disputes have expired due to delay. The court cut the Gordian knot by allowing the chairman, IPAB, and the technical member (plant varieties protection) to hear urgent matters relating to patents, trademarks and copyright until the vacancies are filled up. Their orders would not be invalid on the ground of lack of Coram.

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Government denied special treatment

The Supreme Court has emphasised that according to the Arbitration and Conciliation Act, there cannot be any special treatment given to the government as a party. No distinction is made nor any differential treatment is to be given to the government while considering an application for grant of stay of a money decree under the Arbitration Act, the court stated in its judgment in Pam Developments Ltd vs State of West Bengal. The government had given certain highway projects to the company. Disputes arose and they were referred to arbitration, in which the state was ordered to pay a certain amount to the contractor. The state moved against it in the Calcutta High Court, seeking a stay of the award invoking the Civil Procedure Code (CPC). The high court granted an unconditional stay. Setting it aside, the Supreme Court stated that the arbitration law treated all parties alike and a provision in the CPC incorporated during the British Raj, giving certain safeguards to the government, would not be applicable in today's time when we have a democratic government.

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Jharkhand levy on spirits upheld

The Jharkhand government has the legislative power to levy tax/fee on the import of rectified spirit, as it is a non-potable liquor, ie alcohol which is not fit for human consumption. The Supreme Court stated so in its judgment in State of Jharkhand vs Ajanta Bottlers & Blenders, while setting aside the judgment of the Jharkhand High Court which allowed the challenge to a state notification by liquor manufacturers. The high court had also opined that the state had failed to justify the levy on rectified spirit based on services provided by it in the nature of quid pro quo. That was also reversed.

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Award set aside for wrong calculation 

The Delhi High Court last week set aside the award of the arbitrator in a dispute between Shiel Trade Venture Ltd and Samsung India Electronics. The arbitrator, while calculating the amount payable by Shiel to Samsung, “committed patent illegality by ignoring the relevant and vital material placed before him", the judgment said. It observed that the parties were free to go in for fresh arbitration. Samsung, which is in the business of manufacture and sale of electronic gadgets and home appliances, appointed Shiel as its distributor in eastern UP. After one year, disputes arose and they were referred to arbitration. According to the award, Shiel was to pay Rs 94,38,327.13, along with interest at the rate of 7 per cent per annum from 2010, plus Rs 7.5 lakh as costs. 

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Nestle allowed to sell ‘a+’ yoghurt

In a trademark dispute between Société Des Produits Nestlé and Kaira District Coop Milk Producers Union, the Delhi High Court changed its earlier order to the benefit of Nestle. The suit pertained to the trademarks A+ and a+ used by the parties. Nestle is selling milk and dahi (yoghurt) under the sub-brand 'a+' in conjunction with their brand 'Nestlé'. Kaira Union was applying the mark 'A+' to cheese slices in combination with their brand name 'Amul'. According to Nestle, it launched its milk products in 2011 with a+. Soon thereafter, it received notice from the opposite party that it owned the A+ brand. This claim led Nestle to move a suit in the high court and a plea for a permanent injunction. The single judge ordered status quo on both parties regarding the use of A+. In the new application, Nestle argued that it was not only the registered proprietors of the trademark 'a+', but also its prior user. The high court modified the order and allowed Nestle to use its mark while the status quo order shall continue against Amul. The judgment observed that the earlier judge had incorrectly applied the tests of the balance of convenience and irreparable loss while passing the status quo order.

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Prawn farmers win compensation

A group of traditional agriculturists engaged in prawn farming in Kerala won compensation from the sellers of prawn seeds for losing their investments by getting the wrong seeds. The seeds were to be supplied from government-approved private hatcheries. These farmers bought seeds and released them in ponds specially prepared with high costs. However, they found that the seeds were not the right type for the ponds. A large quantity of the seeds also perished. The hatchery contended that there was no evidence that the farmers had properly maintained the farm. Rejecting these arguments, the Kannur district consumer forum asked the hatchery to compensate the farmers for unfair practice and deficiency in service. The state commission and the National Commission dismissed the appeals in its judgment in Sea View Prawn Hatcheries Ltd vs K Karthyani.