Discussing the Punjab and Haryana High Court order quashing the charges of copyright and trademark infringement on substantive and procedural grounds, SpicyIP intern Bharathwaj Ramakrishnan assesses the Court’s findings on copyright infringement and explains the procedural requirement under Section 115 of the Trademarks Act. Bharathwaj is a 3rd year LLB Student at RGSOIPL, IIT Kharagpur, and loves books and IP. His previous post can be accessed here.
Counterfeit Goods and Criminal Sanctions: Assessing P&H Order on Procedural Irregularities in Arun Kumar vs State of Punjab
By Bharathwaj Ramakrishnan
In a recent judgment, dt. November 25, the Punjab and Haryana HC quashed the FIR and additional charges filed under the Copyright and Trademark Act against Arun Kumar (the Petitioner). The case provides interesting insights into how criminal sanctions provided under the Trademark and Copyright Act are used to deal with Counterfeit goods, and how procedural requirements that are to be followed while filing criminal charges can play spoilsport in otherwise straightforward cases. I will first briefly discuss the judgement and point out the lack of clarity as to how the Court dismissed infringement charges under Sections 63 (infringement of copyrights) and 65 (offence of possession of plates to make infringing copies) of the Copyright Act (see here and here for some interesting discussion surrounding section 63). I will discuss the precedents, which also entailed similar fact situations, and show how the Court’s reasoning might break down in the context of a device mark. Finally, I discuss the relatively strict procedural requirements under section 115(4) of the Trademark Act, which might make filing an FIR by the police under sections 63 and 65 of the Copyright Act instead of the Trademark Act tempting.
The Brief Facts and the Judgment
The Petitioner was accused of selling “fake garments having the label of Puma“, and the police seized the same through a raid. The Petitioner was arrested, and an FIR was filed with infringement charges under sections 63 and 65 of the Copyright Act. Subsequently, the Trial Court added additional charges of using false trademarks/trade descriptions under Sections 103 and 104 of the Trademark Act. The Petitioner filed a petition before the High Court under Section 482 of the Criminal Procedure Code arguing that the act of selling fake garments with a “Puma” label affixed to it does not attract the offences under Sections 63 and 65 of the Copyright Act and that there were procedural defects in the manner in which the raid was conducted. Hence, in violation of Section 115(4) of the Trademark Act, and prayed that the charges be quashed. The Court agreed and quashed the FIR, stating that there was “no Copyright in the manufacture and sale of garments.” Likewise, it quashed the additional charges that were framed against the Petitioner under the Trademark Act, stating that the case was not investigated by the Deputy Superintendent of Police as required under Section 115(4) and that the opinion of the Registrar was not sought and thus leading to violation of the procedural requirements provided under the Trademark Act.
In Whose “Work” Does Copyright Do Not Subsist?
The primary question before the Court was whether an offence under Sections 63 and 65 would be made out if a person was selling goods by falsely affixing marks of which he is not a proprietor nor has a license to do so. Section 63 of the Copyright Act penalizes and provides criminal penalties for acts that would constitute infringement under the Copyright Act. As the Section states, “Any person who knowingly infringes or abets the infringement” of Copyright in a work or any right provided under the Act would be liable under the section. Section 51 of the Copyright Act tells us when Copyright in a work is infringed. Simply put, the performance of any act involving exercising the rights vested with the copyright owner under Section 14 of the Act without his permission will constitute infringement.
Now, coming to the case, the question before the Court was whether Petitioner had infringed any such rights by affixing the “Puma” label on garments and selling them in the market. Interestingly, the Court did not answer this question and merely reproduced Section 13 of the Copyright Act and stated as follows: “As per Section 13 of the Act of 1957, Copyright could subsist with regard to the afore-stated classes of works. There could be thus, no Copyright in manufacture and sale of garments”. It’s unclear whether the Court was referring to the act of manufacture and sale of garments by the Petitioner or to the act of manufacture and sale of garments by the owner of the mark “Puma”. If the Court is referring to the act of the Petitioner against whom the FIR has been filed then it does not resolve the issue as the question is irrelevant to deciding whether the Petitioner has engaged in copyright infringement. Thus, it is slightly confusing as to what basis the Court has decided on the question of copyright infringement without looking at the existing precedent.
Counterfeiting and Copyright Infringement
The Court had cited Deepak V Vs. State of Haryana, wherein the case also involved similar facts wherein the Petitioner was accused of selling spurious pipes with the mark “Supreme” affixed on them. The owner of the mark Supreme Industries had authorized individuals to go after such individuals selling counterfeit products, and an FIR was filed with charges under Sections 63 and 65 of the Copyright Act. The Court concluded that pipes with the mark “Supreme” affixed on them are not works in which Copyright subsists as defined under Section 13 of the Copyright Act, and hence, no offence was made out. Likewise, the Court in Bikaner Steel Mills vs the State of Punjab, which also included an FIR being filed with charges under Sections 63 and 65 of the Copyright Act, had concluded that Copyright did not subsist in steel bars produced by Tata with its mark “Tata” on it. Hence, it does not follow that an FIR can be filed under Sections 63 and 65 of the Copyright Act (similar conclusions were reached in other cases (see here). Thus, the Court has decided that the product with the marks affixed on it cannot claim copyright infringement as it does not constitute a work under the Copyright Act and hence has no copyright protection.
But it is important to note here that this reasoning hits a wall in the context of a device mark. If a device mark is involved, it can be a registered trademark and an artistic work in itself. Hence, affixing a device mark on a product would constitute reproduction and give rise to copyright infringement. To illustrate this further, in a recent case before the Bombay HC Skechers South Asia Pvt. Ltd. & Ors. v Wardrobe & Ors, one can notice that the Plaintiff is asserting both his Trademark and Copyright in relation to the device mark. Thus, it’s unclear why the Court has precluded any claim against counterfeit goods under the Copyright Act by adopting such a broad rule.
Section 115(4) of the Trademark Act and its Procedural Requirements:
With regards to the quashing of charges under the Trademark Act, there are procedural requirements provided under Section 115(4) wherein only a police officer “not below the rank of deputy superintendent of police or equivalent” may if he thinks an offence under Section 103 and 104 is taking place can search and seize without a warrant. This provision has to be contrasted with Section 64 of the Copyright Act, where similar powers are vested with the Sub-Inspector itself. The fact that the offence was added during the trial and not during the stage of filing FIR doomed the case from the start. The facts clearly show that the inspector has taken cognizance and seized the alleged infringing goods and since this was in violation of Section 115(4) the court had no qualms in quashing the charges under the Trademark Act. This is something that has happened in previous cases wherein it was not the DSP who took cognizance of the issue but someone lower in rank thus making the entire investigation infructuous as it is beset with procedural irregularities. It also makes one wonder if maybe due to the additional procedural burdens required under Section 115(4) which are not present in the Copyright Act, like the cognizance being taken only by the DSP and seeking the opinion of the Registrar as to the question of infringement, makes filing the case under the criminal provisions provided under the Copyright Act tempting. Thus even though the complainant could have had a just cause of action, the original sin lies in the police filing the FIR with charges under the Copyright Act without taking into account existing precedent wherein such charges have been quashed by the HC. Likewise adding charges under the Trademark Act at the trial stage does not save the case when the procedural requirements under Section 115(4) are not followed.
The author wishes to thank Swaraj and Praharsh for their valuable input.