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Posted on November 2, 2020 Authored by Aditya Krishna* Image Source: Finance Monthly Introduction In the previous blog in the series on ‘AI and Authorship’, the author explored the discourse taken forward by the Tencent case and deliberated on its contributions towards the concept of Artificial Intelligence (“AI”) and authorship. This article will constitute the second blog of the series on ‘AI and Authorship’ and endeavours to analyse the current stance under Indian law with respect to the same. It highlights India’s approach to the concept of AI generated work and identifies the areas where the current laws are lacking. The article also identifies the current uncertainty and theorises the way forward by arguing for change in the judicial approach to solve the issues of AI and authorship. Knowing Your Artificial Intelligence Before getting into an analysis of the same it first becomes important to understand the distinctions in the types of AI that exist. For the purpose of this analysis we will be looking at the Type-1 distinctions which are based on capabilities of the AI systems. AI’s are accordingly categorised into three categories, namely (i) Weak/narrow AI, (ii) General/strong AI and (iii) Super AI. Weak/Narrow AI These are the most common and simplest forms of AI. Such systems are goal oriented and are used to perform specific tasks. It usually functions within narrow constraints and does not in itself display intelligence similar to that of human intelligence. Instead, it tends to imitate human behaviour. They are used for a variety of tasks such as text-to-speech, voice assistance, internet browsing, online product recommendation etc. Such AI tend to require a heavy human involvement in its functioning. General/Strong AI These are the more futuristic forms of AI which AI technology systems are beginning to move towards. It tends to exhibit human levels of intelligence and can understand and think in a similar manner to that of humans. It can also learn and perform tasks independent of human intervention. While currently, its applications remain theoretical, it is just a matter of time until AI reach this stage, especially considering most AI are already in the grey area between the weak and strong forms of AI. Super AI The last type of AI, that is at this point is still very far away from being developed is that of super AI. Such systems have only been created in theory and are theorised to completely surpass human intelligence. For the purposes of copyright law and authorship though, in the opinion of the present author, the stance would remain the same as that would apply to strong AI, as both would work independent of human intervention. An Analysis of Indian Copyright Law Having discussed the three main types of AI, we can now move on to analyse the state of the current laws in our country. The main point of focus for the article will be the Copyright Act, 1957 (“Act”). It can be seen that the same principle laid down in the Tencent case is also enshrined in Section 2(d)(vi) of the Act which provides authorship of works created by computer systems to the individuals who caused the same to be created. Much like the stance followed by many other countries, India too mainly provides for authorship based on a human centric model of authorship. This can be seen through the various judgments of the Indian courts, where it was held that the human involvement is what creates the basis of copyrightability of the works so created. Another example of the same is the fact that the copyright office tends to provide authorship only to juristic or natural persons. Having identified the importance given to “decisive” human intervention, it begs the question as to what extent the Indian law actually protects such AI generated content? From our understanding of the types of AI from the previous section, it can be inferred that the law could current protects only the simpler forms of weak AI that require a good amount of human intervention. This tends to be quite inadequate though especially in light of the current development in technology and the gradual movement towards strong AI. It remains to be seen how the courts will, in the future, interpret the aspect of human involvement to either include or exclude even such weak AI system, that require minimal human intervention, from its ambit. In the author’s perspective, the best way forward would be to interpret the human intervention requirement in the phrase “the person who causes the work to be created”, more liberally so as to cater for the diminishing importance of human involvement. Linked to the previous question is the question of whether the current laws could possibly be used to credit authorship for human independent AI creations to the individuals involved? In the author’s opinion, the answer to the current question can be found by perusing through Section 17 of the Act, which deals with authorship rights of the first owner of the copyright. While stating the same, the author is fully aware that currently, the same cannot be used for the purposes of AI (mainly in light of the narrow interpretation of ‘Author’ under Indian copyright jurisprudence). Nonetheless, the author opines that the same still has the capability of being used in the future to secure such rights upon a shift in the stance on authorship and employment in the context of AI systems. While it has been argued that the provisions of Section 17 (a) or (b) cannot find applications due to the judicial interpretations of employment, the current author believes a more liberal interpretation of the same, when it comes to AI systems, could possibly be an easier way forward. Doing so would future proof the current laws and allow for their application even to human free AI systems used by individuals and companies. That being said, it is quite clear that the current stance merely caters to weak AI which involves human intervention and Section 17 provides no relief in the case of such AI-created works. Overcoming the Paradox As has been highlighted through this article, the current state of laws is such that it could either be used to provide authorship for human independent AI-created works or could be used to maintain the human centric authorship model. Much like Schrodinger’s cat, the exact outcome is yet unknown as we are yet to open the metaphorical box and see what factors could possibly play a role to lead to either of the outcomes. With that being said, the current author believes that a shift in the approach of judicial interpretation of the key terms identified above could possibly play a pivotal role in moving India’s copyright jurisprudence and laws into the future. Doing so would be convenient and also cater for the changing times. While it can be seen that Indian laws are quite well situated, compared to that of many other jurisdictions, when it comes to AI-generated content, changes in the judicial approach could go a long way in future proofing our current laws. This requires a shift towards a non-traditional theoretical understanding of copyright law and authorship. Theorizing the same will form the main focus of the next piece of this series. *Aditya Krishna is a third-year law student from Jindal Global Law School and is currently pursuing his B.A. LL.B. (Hons.) degree. He has a keen interest in Intellectual Property Law, Technology Law and Constitutional Law. He currently serves as a Contributing Editor at IntellecTech Law.

Image Source: Washington Post On October 20, the Trump administration sued Google. The Department of Justice (“DoJ”), along with eleven state Attorney Generals, filed a civil antitrust lawsuit in United States. The participating state Attorneys General offices represent Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina, and Texas. The Complaint made sweeping allegations relating to Google’s preservation of its monopoly by abusing its dominance and stifling competition in order to maintain its position in the search engine and advertisement marketplace. The allegations include anti-competitive practices to harm competition and consumers, reduce the ability of innovative new companies to develop and compete. The complaint also dives into issues relating to data protection and dissemination. The press release by the DoJ summarises the allegations in the Complaint. It is alleged that Google has unlawfully maintained monopolies in search and search advertising by: Entering into exclusivity agreements that forbid preinstallation of any competing search service; Entering into tying and other arrangements that force preinstallation of its search applications in prime locations on mobile devices and make them undeletable, regardless of consumer preference; Entering into long-term agreements with Apple that require Google to be the default – and de facto exclusive – general search engine on Apple’s popular Safari browser and other Apple search tools; and Generally using monopoly profits to buy preferential treatment for its search engine on devices, web browsers, and other search access points, creating a continuous and self-reinforcing cycle of monopolization. This would be the largest antitrust case against a tech company in over two decades and would potentially set precedent for operation of big tech companies in the marketplace. Reported by Tanya Garg, Senior Editor & Board Member [ORIGINALLY REPORTED ON OCTOBER 23, 2020]

Posted on October 22, 2020 Co-authored by Shobana Iyer* and Tanya Garg* Image Source: WTX News Introduction On 26 August 2020, the UK Supreme Court (“Supreme Court”) delivered the much-awaited landmark decision in Unwired Planet International Ltd v Huawei Technologies (UK) Co Ltd; Huawei Technologies Co Ltd v Conversant Wireless Licensing SARL; ZTE Corporation v Conversant Wireless Licensing SARL[1] Lord Hodge gave the summary of the judgment by video; it can be seen here. The joint appeals raised issues that are important to the international market in telecommunications, and concern actions for infringement of UK patents said to be essential to the implementation of international standards for mobile telephony, such that it is not possible to make, sell, use or operate mobile phones and other equipment that is compliant with the standards without infringing the patents. Patents of this kind are called Standard Essential Patents (“SEPs”), an earlier analysis of which was covered here. The international standards in question are those set by the European Telecommunications Standards Institute (“ETSI”) for 2G (GSM), 3G (UMTS) and 4G (LTE). ETSI has over 800 members from 66 countries across five continents and is recognised as the standard setting organisation in the European Union telecommunications sector. Amongst other things, ETSI produces the technical standards needed to achieve a large unified European market for telecommunications, so that mobile phones and other telecommunications equipment can be used internationally. All members of ETSI must comply with its Rules of Procedure, which includes ETSI Intellectual Property Rights Policy (“IPR Policy”). Under its IPR Policy, ETSI then requires the SEP owner to give an irrevocable undertaking to license their patented technology on terms that are “fair, reasonable and non-discriminatory” (“FRAND”). This gives those implementing the standards access to the technology protected by SEPs, while also providing the SEP owners with a fair reward for the use of their SEPs. This also prevents owners of SEPs from disrupting the international telecommunications market by refusing to license their inventions or by charging excessively high royalties for their use. ETSI therefore requires its members to declare any patents which might be used in a telecommunications industry standard The judgment is a definitive statement from the Supreme Court that the English Courts are willing and able to determine the terms of global licences which are FRAND for portfolios of declared SEPs. Background to the Appeal The appeals consist of two parallel set of proceedings – Unwired Planet Appeal and Conversant Appeal. Unwired Planet Appeal In 2013, Unwired had acquired a portfolio of patents and patent applications from Telefonaktiebolaget L M Ericsson (“Ericsson”), a major developer of telecommunications technology and a participant in standard setting. The SEPs which are the subject of this case were licensed to Huawei by Ericsson. However, this license expired in 2012 but Huawei prolonged the usage of the technology covered by the patents, even after expiry. Unwired subsequently commenced proceedings in 2014 against Huawei, Samsung and Google alleging infringement of five SEPs to ETSI standards. After a number of technical patent trials, and with Samsung and Google both having reached settlements, the UK High Court (“High Court”) held two of Unwired’s SEPs as both, valid and essential. The High Court also observed Huawei’s infringement of one or more of Unwired’s SEPs in Germany and subsequently, dismissed Huawei’s challenge to two Unwired’s patents in China. The judgment settled the terms of a FRAND licence, notably holding that the only licence that Unwired was required to offer was a global licence. Huawei would not commit to take the global licence which had been determined by the High Court and appealed to the Court of Appeal. The Court of Appeal upheld the High Court Judgment[2]. Hence, Huawei appealed to the Supreme Court. This forms the backdrop to Huawei’s appeal against Unwired Planet. Conversant Appeal Conversant had brought proceedings in 2017 against Huawei and ZTE alleging infringement of four UK SEPs, which it had acquired from Nokia Corporation in 2011. It sought declarations that the licensing offers made to Huawei and ZTE were FRAND. In the alternative, a declaration was sought to determine what licensing terms would be FRAND. These SEPs form part of a portfolio of about 2000 patents and patent applications, covering 40 countries. Huawei and ZTE both issued applications challenging the jurisdiction of the English Courts to determine the validity of foreign patents or, in the alternative, for a stay of proceedings on the ground that the English Courts were not the appropriate forum for trying the case. The trial judge, Mr Justice Henry Carr[3] determined that the action was accurately characterised as a patent infringement claim and that consequently, the English Courts should exercise jurisdiction to enforce the undertaking made under ETSI’s IPR Policy; and to determine the terms of a FRAND licence. Huawei and ZTE appealed to the Court of Appeal which upheld the High Court Judgment[4]. Huawei and ZTE then appealed to the Supreme Court, with the appeal being listed to be heard together with the appeal in Unwired Appeal. Supreme Court Judgement The Supreme Court unanimously dismissed both appeals. Having set out the legal and policy background to the disputes, the Supreme Court considered five distinct issues which are of prime importance to the international market in telecommunications, and possibly spread to other sectors involving SEPs. Issue 1 – Jurisdiction Issue Whether the English Courts have jurisdiction, without the agreement of the parties, to: Grant an injunction to restrain infringement of a UK SEP unless the implementer of the patented invention enters into a global licence under a multi patent portfolio? Determine the royalty rates and other terms of such a licence? Declare that such rates and other terms were FRAND? The Supreme Court held that the contractual arrangements created by ETSI’s IPR policy gave the English Courts jurisdiction on all three questions, i.e. to determine a global FRAND licence even without the specific consent of the parties involved. The questions as to the validity and infringement of a national patent usually fall to be determined by the courts of the state which had granted the patent. However, the contractual arrangements ETSI has created under its IPR Policy gave the English Courts jurisdiction to determine the terms of a licence of a portfolio of patent which included foreign patents[5] In reaching this finding, it noted that it was common industry practice for parties to agree global licences, and endorsed the view of the lower court which had “looked to the commercial practice in the industry of agreeing to take a licence of a portfolio of patents, regardless of whether or not each patent was valid or was infringed by use of the relevant technology in the standard, and construed the IPR Policy as promoting that behaviour”[6]. The Supreme Court concluded that setting global FRAND terms did not involve the English Courts purporting to rule on the validity and infringement of foreign patents, which would have been beyond their jurisdiction. Whilst dismissing the implementers’ arguments, the Supreme Court noted that ETSI’s IPR policy established a clear balance between the interests of SEP owners and those of implementers. Failing to strike such balance could result either in: (a) Holding up, whereby the advancement of technological standards can be delayed due to refusal by the SEP owners to licence their technology or the delay is communication acceptance; or (b) Holding out where implementers continue to infringe SEPs during the period in which SEP owners were required, by ETSI’s IPR policy, to refrain from seeking an injunction. The Supreme Court emphasised that the IPR Policy is intended to have an international effect and thus, confers the Courts to rule on this issue. Further, the Supreme Court found that the approach by the lower courts was consistent with several judgments in other jurisdictions, which contemplate that in an appropriate case, the court would determine the terms of a global FRAND license[7]. If an implementer is concerned about the validity or infringement of a particularly significant patent in a portfolio, it could seek to reserve the right to challenge those patents and to require that the royalties payable under the licence should be reduced if the challenge is successful[8]. Issue 2 – Appropriate Forum under the Doctrine of Forum Non Conveniens Issue (Action Limited to Conversant Appeal) Under what circumstances is it reasonable and proportionate to grant an injunction to stay proceedings as opposed to damages? Huawei and ZTE argued that England was not the proper forum for such a claim in the circumstances of the Conversant Appeal. The parties argued that the jurisdiction on their Chinese entities should be set aside and the proceedings against their UK entities be permanently stayed as China is considered a more appropriate forum as per the doctrine of forum non conveniens. In the alternative, the Appellants argued that the broad case management powers afforded the Court by the Civil Procedure Rules to be engaged so as to temporarily stay the English proceedings pending the outcome of the parallel Chinese litigation. The Supreme Court held that a plea for staying proceedings on the ground of forum non conveniens can only be sustained if the court is satisfied that there is another tribunal, having competent jurisdiction, where the case may be tried more suitably for the interests of all the parties and for the ends of justice.[9] In doing so, the Supreme Court noted that challenging a jurisdiction on the footing of forum non conveniens places a positive obligation on the challenging party to identify another more appropriate forum. In the instant appeal, Huawei and ZTE relied on evidence as to prove that the Chinese courts had jurisdiction to determine the terms of a global FRAND license. On the basis of such evidence, the Supreme Court held that the Chinese courts, the only alternative courts suggested by Huawei and ZTE, did not have such jurisdiction in the absence of agreement from the parties to set the terms of a global FRAND license; whereas the English Courts did have such jurisdiction. Accordingly, no alternative forum was available, and so England was the proper forum. Consequently, the appeal on the basis of forum non conveniens failed. The Supreme Court found no fault in the reasoning of the courts below and therefore, refused to stay the proceedings and held that the English Court has the authority to decide on the matter before it. Issue 3 – FRAND and Non-Discrimination Issue (Limited to Unwired Planet Action) What is the nature of the requirement that the FRAND licence “non-discriminatory” limb? Under the IPR Policy, an SEP owner is required to give an irrevocable undertaking to license patented technology on terms that are FRAND. This serves a two-fold objective of allowing access to the technology protected by SEPs and also, providing the SEP owners with a fair incentive for the use of SEPs. Following the trials in the Unwired proceedings, a settlement was reached between Samsung and Unwired Planet, that included a license granted to Samsung. This license was the yardstick Huawei sought to rely on. Huawei contended, the terms of any license to be granted by Unwired Planet should be no less favorable than those offered to Samsung. The Supreme Court affirmed the reasoning of the Court of Appeal, in favor of Unwired Planet. According to the Supreme Court, the undertaking made by SEP owners comprised “a single unitary obligation” and the FRAND requirements should be construed “as a composite whole”. Thus, Huawei’s argument failed. The fact that prospective licensors might offer different royalty rates was a true reflection of commercial reality and would not necessarily result in harm to either public or private interests. As noted by the Court of Appeal, provided an offer of a royalty rate is fair and reasonable, it could not be deemed discriminatory simply because a lower rate had been offered to another party. Non-discrimination under the ETSI contract was general in nature rather than hard-edged. That meant, an SEP holder had to offer a royalty rate set by reference to the true value of the SEPs being licensed. Issue 4 – Competition Issue Should an injunction be refused in circumstances where it is alleged that the SEP owner has breached Article 102 of the Treaty of the Functioning of the European Union (“TFEU”) by failing to comply with the conditions, for pre-litigation conduct, set out in the Court of Justice of the European Union (“CJEU”) decision in Huawei Technologies Co. Ltd v ZTE Corp. and ZTE Deutschland GmbH [10]? The antitrust concern concerning SEPs arises from the immense market power held by the SEP holder as their patented technology is now a part of the essential standard. The pre-action conduct complained of by Huawei was Unwired’s failure to make a FRAND licence offer before issuing proceedings for injunctive relief. Whilst reaffirming the decisions by the lower Courts, the Supreme Court observed that the CJEU laid emphasis on striking a balance between maintaining free competition and safeguarding the SEP holder’s IP rights, and its right to effective judicial protection guaranteed by Article 17(2) and Article 47 of the EU Charter of Fundamental Rights. The only mandatory condition was the requirement for the SEP holder to notify or consult with the alleged infringer before bringing a claim for an injunction, and the nature of that notice or consultation depended on the circumstances of the case. Therefore, the Supreme Court concluded, the numerous steps required in relation to a positive obligation on SEP owners to give notice to and consult with alleged infringers before applying for an injunction, are not prescriptive nor intended to establish a set of conditions. Consequently, the failure to comply with any or all such steps may not result in a breach of competition law. Issue 5 – Remedies: Injunction or damages Relying on One Step (Support) Ltd v. Morris-Garner[11], Huawei’s the final dispute revolved around whether the injunction granted by the Supreme Court would be a disproportionate or inappropriate remedy. As endorsed by previous judgments[12], Huawei stated that in the present case, damages rather than an injunction, would be considered as a more appropriate remedy. While analysing this issue, the Supreme Court noted: An award of damages in lieu of an injunction is a classic exercise of judicial discretion and an equitable remedy; and Huawei had not argued this issue in either of the previous disputes in the lower courts. Therefore, there was no basis to effectively substitute the injunction that those courts had granted, with damages. Consequently, the Supreme Court concluded that an injunction “is likely to be a more effective remedy, since it does not merely add a small increment to the cost of products which infringe the UK patents, but prohibits infringement altogether[13]”. Thus, the grant of an injunction against Huawei was valid and necessary. Practical Implications The biggest takeaway from this judgment is the definitive statement that the English Courts are willing to determine the terms of global FRAND licenses for portfolios of declared SEPs. The Supreme Court has established UK as a very attractive hub for SEP/FRAND telecom dispute resolutions. This judgment along with others will give SEP owners greater confidence that the English Courts will accept jurisdiction of disputes with global ramifications. Provided SEP owners can demonstrate why a global license is FRAND with respect to their portfolio and the operations of each potential licensee, this judgment offers them a means of achieving the complete resolution of the global licensing deal. The Supreme Court laid emphasis on the extremely high costs and prolonged timeline of bringing enforcement proceedings on a case-by-case and jurisdiction-by-jurisdiction basis. This would defeat entire objective of swift enforcement and protection afforded to patent owners or assignees. While reiterating the findings of the lower court, the Supreme Court held, “It may be wholly impractical for a SEP owner to seek to negotiate a licence of its patent rights country by country, just as it may be prohibitively expensive for it to seek to enforce those rights by litigating in each country in which they subsist.”[14] Therefore, a SEP which has been the subject of litigation in the UK and subsequently declared essential and valid will be easier to enforce against third parties. The judgment offers certainty to the UK jurisdiction and SEP holders can be expected to take advantage of this route to resolution of global licensing disputes but there is a high possibility that other jurisdictions, notably China and the USA, will attempt to follow in these steps and adopt a similar approach. More importantly, other cases may have differing arguments under the doctrine of forum non conveniens too. Hence there may well still be more contested jurisdictional disputes in the near future. The finding that the non-discrimination limb of FRAND is not a stand-alone obligation, which does not mean that all similarly situated implementers have to be offered the same royalty rates, provided it does not unjustly distort competition. Royalty rates are just one factor to the terms which should be considered in a composite whole form, which gives a degree of flexibility to the FRAND negotiations. There may be an increased emphasis on negotiations based on the strength of the patent portfolio in key jurisdictions where the implementer has most sales or activities which affects the royalty rate. The Supreme Court’s focus on the fairness of the negotiation process and the possibility of implementers to reserve the right to royalty adjustments is likely to affect negotiating the terms of global FRAND licences and on the drafting of these ‘adjustment’ terms. Conclusion This landmark decision has taken a progressive step in shaping the future of patent licensing. Additionally, it cements the attraction of doing business and resolving SEP disputes in the UK and gives the hopes of an excellent return on investment. It also has a degree of flexibility in negotiating FRAND licenses. Even though, FRAND disputes have popularly focused on the telecom industry, it is anticipated that with the advent of the fourth industrial revolution and the Internet of Things, the scope of such disputes shall expand. *Shobhana Iyer, Advisor at IntellecTech Law, is a practicing Commercial Barrister and Arbitrator (FCIArb) based in London with specialized experience in complex commercial and corporate cases in the Technology-Media-Telecom, Finance, Energy and Creative Sectors. *Tanya Garg, Senior Editor & Board Member at IntellecTech Law, completed her B.B.A. LLB. (Hons) degree from Symbiosis Law School, Pune (Batch of 2020) with specialization in Dispute Resolution, Intellectual Property, Technology and Antitrust Laws. [1] Unwired Planet International Limited and another company v. Huawei Technologies (UK) Co. Limited and another company; Huawei Technologies Co Ltd and another company v Conversant Wireless Licensing SARL; ZTE Corporation and another company v Conversant Wireless Licensing SARL [2020] UKSC 37 [2] Unwired Planet v Huawei [2018] EWCA Civ 2344 [3] Conversant v Huawei and ZTE [2018] EWHC 808 (Pat) [4] Conversant v Huawei and ZTE [2019] EWCA Civ 38 [5] §58, Supra n 1 [6] §63, Supra n 1 [7] §66-84, Supra n 1 [8] §64-65, Supra n 1 [9] Sim v. Robinow (1892 Sess. Cas. 665 (Scot. 1st Div.) [10] Huawei Technologies Co. Ltd v ZTE Corporation and ZTE Deutschland GmbH Case C-170/13 [11] One Step (Support) Ltd v Morris-Garner [2018] UKSC 20 [12] Lawrence v. Fen Tigers Ltd [2014] UKSC 13, Also see eBay Inc v. Mercexchange LLC 547 US 388 (2006) [13] Para 167, Supra n 1 [14] Para 168, Supra n 1

Image Source: The Fashion Law The competition between Nike & Adidas – two of the most renowned names in the sports accessories business – has slowly spilled over from the market into the courtroom. It is not surprising that these two brands, responsible for changing the face of the sports industry through their products, have a clash of conceptual ingenuity. The latest example of this clash being with respect to knitted footwear. In a petition filed before the Patent Trial and Appeal Board, Adidas contested for the invalidation of two of Nike’s patents pertaining to their Flyknit technology. After hearing the contention and Nike’s defense, the board decided to reject Adidas’ claim. Subsequently, Adidas appealed to the United States Court of Appeals for the Federal Court, the motion was granted. Court of Appeals In the present case, Adidas AG v. Nike Inc, the representatives of Adidas contended that Nike had failed to meet the requirements of patentability on account of the invention being obvious. Nike sued Adidas for patent infringement. The appeal was challenged by Nike stating that Adidas had no ground to appeal due to lack of injury in fact. That is, a legal injury suffered by the plaintiff upon his legally protected interest can be either economic, non-economic, or both. The Court held, in order to qualify as a ground of appeal, it is sufficient to show engagement or likelihood of engagement in activities which could lead to infringement. It was further observed that in making such a claim, the burden of proof lies on Adidas and failure to prove such obviousness of the invention vitiated Adidas’ claim. The additional and supplementary claims raised by Adidas, were not backed with adequate evidence or proof. Thus, the Court did not find substance in their arguments. The Court upheld the validity of Nike’s patents and thus, the latter emerged victorious. Reported by Anishka Vaishnav, Student Ambassador [ORIGINALLY REPORTED ON OCTOBER 22, 2020]

Posted on October 21, 2020 Authored by Aditya Krishna* Image Source: Venturebeat Introduction “AI” or Artificial intelligence has been developing in leaps and bounds over the past decades. With many applications emerging, and a multitude more on the horizon, it is inevitable that the legal field is bound to undergo drastic changes to cater for the changing technology and times. Most AI theorists believe this is more a question of “when” rather than “if”. These legal changes, when brought about, would not just change the way our laws function but also our understandings of their underlying rationales. One such emerging field of speculation is that of authorship and copyrights with respect to original works created by such AI systems. This article forms the first part of a three-part series analysing authorship and copyright of such AI generated works. This article, the first part, endeavours to study the recent Chinese case of Shenzhen Tencent v. Shanghai Yinxun, in order to examine how the said ruling has contributed to the global discourse on the issue at hand. This article aims to, firstly, break down the ruling in the said case and, secondly, argue how the said ruling has led to development within the confines of the current conservative approach to authorship. Breaking Down the Ruling Shenzhen Tencent v. Shanghai Yinxun (“Tencent case”) was a decision of the Guangzhou Province court (China) in December 2019 which grappled with the question of copyright and authorship of AI created works. It alters the direction of the discourse set by the Beijing Internet Court’s 2019 decision in the case of Feilin v. Baidu, (where the Chinese courts chose to deny copyright protection to AI created literary work even though the work was held to meet the requirement of originality) and has been widely speculated to be the floodgate towards the recognition of Copyrights of AI created works. As per the facts of the case, the plaintiff, Tencent, was granted a non-exclusive license of the software ‘Dreamwriter’, (an AI software capable of generating literary works) and had subsequently published an article entailing an overview of the stock market using the said software. Attached with the article was a disclaimer stating that the article was one which was automatically written by the Tencent Robot Dreamwriter. Following the publication of an identical piece by the defendants, a suit was filed by the plaintiffs alleging unfair competition and copyright infringement. Before entering into what the court held in the case, it is important to first understand how the said AI writing assistance system works. The Dream works system creates articles in four phases, namely that of data collection and triggering, writing, reviewing, and distributing. In the first phase, the AI system analyses the data collected using its machine learning algorithm and using the triggering module, it gauges whether the said data meets the requirements for creation of an article. Based on this it moves to the next few phase where the article is created via the writing engine, reviewed using the proof-reading module and is finally distributed on various online platforms using the distribution module. It is relevant to note here that while most steps happen independent of any human intervention and all occur within what is known as the ‘black box processes’ of the AI, the selection and arrangement of the input data, selection of the article structure and a few other process are controlled and dependant on humans. Having understood this basic process, we can now move on to understand what was held in the case. The two questions before the court were that of, (a) whether the article could constitute an original work under Chinese law, and (b) whether the copyright of the same vested with the plaintiff. With regards to the first question, the court held that the piece being an analytical write up on available data of the stock market which employed creativity and novelty possessed the required degree of creative effort to be considered original. Building on this ruling, the court went on to analyse the role the plaintiff’s team played in the creation of the article. The main aspect for consideration of the court was whether the selection and arraignment of data by the plaintiff’s team could constitute an intellectual activity which resulted in the creation of the piece. Relying on the aspect of human intervention in the process involved in the creation of the piece, the court held that the copyright for the same vested with the plaintiff. The rationale behind the same was that the court viewed the algorithm merely as a means of facilitating the creative expression of the plaintiff’s teams’ intellectual efforts and not as an independent system for creation. On the point of authorship, the court held that the plaintiff was the author as per Article 11 of the PRC Copyright Law, again premising the same on the aspect of human involvement, which they saw as essential for recognition of the same. Arrested Development Within Conservative Notions From a technical standpoint, while most AI systems have not yet moved into the stage of functioning completely independent of human involvement, the diminishing importance of human involvement over the years hints towards the eventual end of such a form of dependence. With that in mind, the current outlook of AI being merely tools enabling the creation of the products of human intellectual efforts, is restrictive and prevents the smooth transition towards a newer conception of authorship and copyright. While the Tencent case has been much celebrated and has been the center of much discussion, it is important to realise that the court merely retained the notion of authorship being exclusively a human concept (which cannot be granted devoid of any form of human intervention). In such a manner, much like the previous Beijing court’s opinion (in the case of Feilin v. Baidu), the current court also reinforced the conservative approach to authorship which centralises human intervention to the creative process. Nonetheless, while sticking to the conservative notion of authorship, the court did contribute to the development of the discourse by viewing such works created by AIs as being ‘integrated intellectual creations’, arising from both the involvement of human factors and processes of such AI systems. While it may be argued that the said case could possibly open the doors to more such AI created works gaining copyright from the involvement of even the slightest human factor in the process, the present author believes that the same would not be possible until the dominant lens of authorship is shifted away from its human centralised outlook and until the importance of human involvement is decreased. With this in mind, only time can truly tell what role the Tencent case would actually play in the development of the said discourse – whether it would be the gateway into a new theory of authorship or merely remain as yet another mirage of development. The next piece of this series attempts to theorize the outlook of Indian law towards authorship and copyright of AI created works. Aditya Krishna is a third-year law student from Jindal Global Law School and is currently pursuing his B.A. LL.B. (Hons.). He has a keen interest in Intellectual Property Law, Technology Law and Constitutional Law.

Image Source: Forbes The Swedish clothing chain, H&M, has been hit with a fine of €35 million over data breach and privacy violations under the new General Data Protection Regulation (“GDPR”) laws introduced in 2018. Several hundred employees at the H&M Service Center in Nuremberg have been under surveillance of the company. The German authorities have said that since 2014 the workforce has been subject to “extensive recording of details about their private lives“. After a year-long investigation by the Data Protection Authority of Hamburg it was seen that H&M’s privacy violations ranged vastly from details of their employee’s family issues, vacations, religious beliefs and medical illnesses. This data was stored, made accessible to 50 managers of the company and used to make decisions related to employment. The fact that the company had been collecting such private data of the employees came to light only after there was a configuration error in the October of 2019 which caused this data to be available on their site for several hours. The company was asked by the Hamburg Commissioner for Data Protection and Freedom of Information to freeze the data and submit the data for analysis. Caspar, the head of the German data protection watchdog in Hamburg, called this incident as “a case that showed gross disregard” of data protection laws. The company released a statement stating that though the policies of the outlet were not in accordance with the guidelines of the company, they take full responsibility and extended an apology to the employees. Further, it promised to give compensation to the affected employees and bring a change in their practices. H&M has received a decision from the regional Data protection authority in Hamburg to impose an administrative fine of M Euro 35. The company will now review this decision carefully. Since the initial discovery and reporting of the incident, H&M immediately began making several improvements at the service centre in Nuremberg. A comprehensive action plan has been launched to improve the internal auditing practices to ensure data privacy compliance, strengthen leadership knowledge to assure a safe and compliant work environment and continue to train and educate both staff and leaders in this area. A number of actions have been implemented which includes: · Personnel changes at management level at the service centre in Nuremberg. · Additional training for leaders in relation to data privacy and labour law · Revised instructions for managers · Creation of a new role with specific responsibilities to audit, follow up, educate and continuously improve data privacy processes · Enhanced data cleansing processes · Improved IT solutions supporting compliant storage of personal data, training and leadership. In addition, H&M has decided that all currently employed at the service centre, and all who have been employed for at least one month since May 2018 when GDPR came into force, will receive financial compensation. H&M Group wants to emphasize its commitment to GDPR compliance and reassure its customers and employees that the company takes privacy and the protection of all personal data as top priority. The H&M Group strictly adheres to laws and regulations stipulated by the relevant data protection authorities, as well as the company’s own high standards. – H&M Group Press Release, October 1, 2020 The penalty of €35 million is the largest fine of its kind imposed in Germany and the second highest in the continent after Google was fined 50 million Euros last year for the violation of GDPR. The GDPR laws have definitely been an exceptional step to secure data and privacy rights of individuals. These laws allow fines to be levied as much as 4% of the annual global sales of the company thereby acting as a major deterrent to prevent companies to violate privacy rights. Reported by Avneet Kaur, Student Ambassador [ORIGINALLY REPORTED ON OCTOBER 20, 2020]

Image Source: Brian Goodman, ShutterStock The Competition and Markets Authority (“CMA”) issued this past 29th June, 2020, a letter to suppliers and resellers informing and warning the public about the illegality of resale price maintenance. This action comes from a series of ongoing investigations towards musical instrument manufacturers in the UK where it was determined that competitive conditions in the market were disturbed because of the resale price maintenance. These investigations have led the CMA to impose fines that total £13.7 million on musical instrument suppliers. Additionally, the CMA has taken action against a musical instrument retailer for the first time, which has resulted in that retailer being fined as well. Although specifically tailored to the music instrument sector, their final decision serves as a “wake-up call” to all suppliers and resellers taking this illegal behavior. The unhesitant response on the part of the CMA shows that any conduct against fair competition will be prohibited. A resale price maintenance is not a recent phenomenon, nor has it ever been considered a legal practice. This situation occurs when a supplier and a retailer agree on a certain price, at or between a price floor and price ceiling for the distributor to sell it at. This prohibits the retailer from offering lower prices at its full discretion, making them unable to compete on price. In turn, the consumers will have to pay a higher price. Yamaha, a leading supplier in the music sector, admitted to illegal actions to the CMA and, in return, received immunity for cooperation, which then opened the floor to the investigation of a total of five musical instrument cases of resale price maintenance. CMA started to apply their monitoring tools, which brought the illegal behaviors of the suppliers and resellers to light. For example, in the investigations of Fender and Casio, separately investigated and fined, it was shown that they knowingly went against the law, as they tried to cover up their impositions on demanding the certain sale price for the retailers. It was determined that there was illegal behavior in the five cases, as the resale price maintenance imposed was proven to have been imposed. By the CMA making public their decisions regarding the illegality of resale price maintenance, suppliers and resellers in other sectors are now informed about the consequences these actions can entail. Suppliers must refrain from such conduct, retailers must be aware that action may be taken against suppliers that impose a determined price, and the willful acceptance of such behavior will result in illegal actions on the part of the retailer. The ultimate goal encrypted in this case is to ensure that action must and will be taken in order to preserve fair competition. Letter issued by the CMA regarding the topic: Pope, Ann. The Consequences of Restricting Resale Prices: an Open Letter to Suppliers and Retailers in the Musical Instruments Sector., Competition and Markets Authority, 29 June 2020, Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/896119/Musical_instruments_open_letter_290620.pdf Press Release, CMA: https://www.gov.uk/government/news/musical-instrument-firms-to-pay-millions-after-breaking-competition-law Cases of reference: Why we fined Casio £3.7 million for breaking competition law., Competition and Markets Authority, 29 June 2020, Available at: https://www.gov.uk/government/case-studies/why-we-fined-casio-37-million-for-breaking-competition-law £4.5 million fine for Fender for illegally preventing online price discounts., Competition and Markets Authority, 29 June 2020, Available at: https://www.gov.uk/government/case-studies/45-million-fine-for-fender-for-illegally-preventing-online-price-discounts Reported by Sarah Sanchez, Student Ambassador [ORIGINALLY REPORTED ON OCTOBER 20, 2020]

Image Source: Technosports.co.in The Supreme Court of the United States heard oral arguments in Google v. Oracle as the decade-long dispute between tech giants finally reached the Apex Court after multiple trials and delay. At the heart of this copyright litigation which was initiated in 2010, is the copyrightability of application programming interfaces (APIs), which are intermediary software that ensure interoperability by allowing communication between programs. Claiming copyright in Java APIs, Oracle sued Google for $9 billion for copying verbatim 11,500 lines of declaring code from Oracle’s Java API packages for use in its Android Operating System. Reversing the District Court verdict, the Federal Circuit Court in 2018 ruled in favour of Oracle stating that Google’s use of code from 37 Java API packages was not covered under the fair use doctrine. Subsequently, Google approached the Supreme Court to review the aforesaid decision resulting in the case Google LLC v. Oracle America, INC. (No. 18-956). Google primarily argued that the declaring code cannot be copyright protected as it is functional in nature, thereby invoking the merger doctrine. It was contended that since Oracle has copyright but not a patent in the Java SE code, it is the public and not Oracle that has the right to Java SE’s functionality or method of operation [Section 102(b)]. However, the argument that Google could not have made Android accessible to Java developers without using Oracle’s exact declaration code was met with resistance as Chief Justice Roberts stated that a license can be obtained if there is no substitute to the declaration code. Oracle, in its arguments, added that major companies like IBM and SAP were paying for such licenses. Furthermore, Justice Gorsuch also noted that competitors like Apple and Microsoft that have successfully developed similar platforms without copying any code. Oracle, on the other hand, contended that declaring code cannot be distinguished from implementing code and Google’s use was not transformative use as the code copied in verbatim serves the same purpose and communicates the same thing, albeit in context of a smartphone. In response to Google’s concerns on impediment to innovation in the software industry, Oracle stated that industry rose to dominance owing to copyright protection, which incentivizes investment in the creation of high-quality code, and it is unlicensed copying that will kill software innovation. The decision in this matter is of immense significance. In addition to the billions at stake, the case holds the potential to be a landmark judgment in the digital era that shapes the future of the software industry. Reported by Priyanshi Rastogi, Student Ambassador [ORIGINALLY REPORTED ON OCTOBER 20, 2020]

Posted on October 18, 2020 Authored by Manika Dayal* Image Source: Techidence.com Introduction Recently, the Government of India imposed a ban on 59 Chinese apps, including applications such as TikTok, WeChat, and UC Browser, as reported earlier here. This action was taken under section 69A of the Information Technology Act, 2000, citing reasons of continued threat on the sovereignty and integrity of India. The Government of India made this decision in light of growing tensions at the Ladakh’s Galwan Valley , primarily to avoid misuse of data of India citizens by the Chinese authorities. This was an active attempt by the Government to efficiently secure the citizens data and avoid misappropriation of sensitive information. However, since 2019, there have been visible concerns regarding unwarranted storage of people’s smartphone data in a relatively subtle manner. Recently, a public interest litigation (“PIL”) was filed before the Hon’ble Supreme Court of India in October, adequately addressing and seeking protection of these privacy concerns. This article seeks to analyse the privacy concerns and security risks with “bloatware” on Android devices in light of the issues raised in the PIL. Privacy Concerns in the PIL On 11th October 2020, Advocate Wajeeh Shafiq moved a PIL before the Supreme Court of India, seeking to secure and extend the right to privacy in consonance with Article 21 of the Constitution to pre-installed applications or “apps” present in android smartphones. The PIL primarily seeks imposition of certain set of guidelines by the Government upon smartphone manufacturers, specifically mandating disclosure of all pre-installed apps in the phone on the outer packaging itself. The disclosure, in all major regional languages, is to be included in the shrink-wrap agreement on the packaging of the smartphone and is meant to serve as a condition precedent. Further, the PIL seeks disclosure of storage and usage of the data collected by the smartphone manufacturers in order to assure that the data is not being consequently misused by the industry giants. The plea, with regard to privacy concerns, highlighted the gravity of the situation in light of the recent tensions between India-China, especially since most of the smartphone companies are Chinese. The PIL further included another perspective of the present issue, i.e. consumer rights. The process of storing data by pre-installed apps and the fact that those apps cannot be deleted by the smartphone user, directly goes against various rights of the consumer which are guaranteed to them under Consumer Protection Act, 2019. The rights in the plea included rights such as the right to be protected against the marketing of goods which are hazardous to life and property of consumer; right to be informed; and right to consumer education and awareness etc., amongst others. Bloatware The plea mentions a key term that is central to the subject matter which is ‘bloatware’. Bloatware essentially refers to the pre-installed apps in a smartphone that cannot uninstalled by the user. The primary concern with bloatware is the lack of consent and knowledge of the user with regard to the collection, storage and usage of their data. The first and foremost question that arises with the issue of bloatware is what data are these apps collecting from a user’s phone? A 2019 study ventures into the same territory. The study on “Pre-installed Android Software” done by researchers at the IMDEA Networks Institute, Universidad Carlos III de Madrid, Stony Brook University, was conducted on pre-installed apps on Android devices from 2,748 users, spanning over 1,742 devices from 214 vendors across 130 countries. The study predominantly focused on the grave lack of regulation and transparency pertaining to pre-installed apps found on new devices. According to the study, these apps are responsible for stockpiling the user’s geographical locations, emails, contacts, and metadata. Further, apart from harvesting user data, bloatware apps also tend to monitor other apps’ activity that are installed by the user. This process has often led to user data being siphoned to advertising agencies who are responsible for advertising the same products on different apps that the users have mentioned or “looked up” on their phones. An ancillary question that arises is – how is the bloatware authorised to perform such tasks? Bloatware communicates the information using custom permissions. In other words, they essentially let the developer define access points that can be assigned to users. In this case, custom permission is granted by the smartphone vendor or mobile network operator (instead of the user) which enables the bloatware to perform actions that regular apps would ordinarily be unable to. Another alarming aspect of bloatware singled out by the above study is the presence of malware in them – such as Loki (spyware and adware) and Slocker (ransomware). Presence of malware alone can provide complete access to the user’s device and personal information. Generally, in a smartphone, the user periodically receives ‘update’ notifications pertaining to the regular apps in the phone. These updates essentially refer to software updates that are issued by the developers. In contrast to regular apps, bloatware, on the other hand, is automatically updated – prima facie, the automation just seems like a way to save time and effort. However, it can prove to be rather dangerous as the automatic update allows the app to evolve on its own without any implied or express consent by the user. These automatically updated and evolving bloatware apps become fit to receive and carry out any function that is put in their code in consonance with a “green light” granted by the manufacturers and the developers. Again, this “green light” being granted by the mobile developers and not the users themselves. This evidently works towards the users’ detriment as there is no guarantee that there might come a time where the apps could harvest personal messages, photos and/or record conversations without the users’ knowledge. Another aspect of this use is – how do these apps make their way to our phones in the first place? Various software companies, like Google, often enter into contractual obligations with third-parties for the purpose of packaging and pre-installing apps that are compatible with their versions of Android (such as ‘Google Play Store’, ‘Google Maps’, ‘Google Calendar’ etc). Further, there is an entire documentation procedure that is mandatory where digital certificates are filed for the purpose of proving legitimacy of the apps. However, more often than not, most developers create their own self-attested digital certificates – essentially providing their own guarantee and reference for their apps. Lastly, there is a probability of these third-party apps themselves entailing alarming security and privacy issues through which custom permissions are transferred to the users’ device. Conclusion The PIL was filed by Advocate Wajeeh at the Hon’ble Supreme Court of India based on the above mentioned discussion, which – in the author’s opinion – had been a long time coming. It is pertinent to note that while the research on this specific issue had been conducted in mid 2019, yet India was not at the forefront of this discussion – at least up until this PIL. It is evident that any user data is far from secure at this juncture. Therefore, it becomes exceedingly important for the Government to take affirmative steps towards investigating these lesser known threats as imposing ban on mobile apps simply isn’t “secure” enough anymore. Manika Dayal, Senior Editor and Board Member at IntellecTech Law, graduated with B.A LL.B (Hons) from Jindal Global Law School with a specialization in Intellectual Property, Data Privacy and Media laws.

Image Source: The Verge Every person, in one way or the other, must have come across the revolutionary video game known as PlayStation manufactured by the tech giant, Sony. Since its invention a lot of versions of the game have been available in the market. Recently, Sony has launched its much-awaited next generation console, the PlayStation 5 (“PS5”). The whole world of video-game aficionados have been waiting for its launch and Sony is set to release the console in mid-November in various countries. In India, however, there was a delay in the announcement of the release date. The reason for this delay was that Sony was in the middle of a trademark dispute with Mr. Hitesh Ashwani, a person based in Delhi who had applied for the registration of PS5 mark in October 29, 2019 – interestingly, on October 13, 2020 – Mr. Ashwani filed a Letter of Withdrawal seeking to withdraw his trademark application. He had applied for registration prior to Sony, who (Sony) was only able to apply for the registration of trademark in February 2020. Both of the parties applied for registration of their trademark under Class 28 (Sony applied for a multi-class application including in Class 28). As anyone can anticipate, Sony had opposed Ashwani’s application for registration and filed a Notice of Opposition to Ashwani’s application No. 4332863 on April 16, 2020. The grounds for such opposition by Sony included that the ‘PlayStation and PS series of marks’ has been in extensive use by it in connection to the manufacture and sell of video game consoles. Furthermore, Sony had asserted that ‘PlayStation and PS series of marks’ are recognized all around the world, including in India, and thus should fall under the definition of ‘well-known’ trademark. It was further asserted that since PS4 has been previously registered in India, the use of such mark by Ashwani could be considered as ‘identical and deceptively similar’ to the ‘PlayStation and PS series of marks’ and has the power to deceive potential consumers, thus causing irreparable damage to Sony’s reputation and goodwill. Ashwani had also filed its counter-statement in response to Sony’s notice on September 16, 2020 alleging that Sony’s applications have been made on a ‘proposed to be used basis’, and that no similar mark had been used prior to this application. Furthermore, it was claimed that Sony has made applications in a mala fide way to harass him as he is the alleged creator of the mark. Interestingly, Ashwani had also opposed Sony’s application for registration and filed the Notice of Opposition to Sony’s application bearing Application No. 4431871. The claims made in Ashwani’s notice were that Ashwani is the rightful proprietor by virtue of its earlier application and that the mark was allegedly adopted by him on 29.10.2019. The other contentions mirrored Ashwani’s counter-statement claims. The opposition was filed only against the word mark, since the logo mark has not yet been accepted and advertised by the Trade Marks Registry. It is likely that Sony may have offered a settlement deal to Ashwani, or perhaps it was the pressure of the legal proceedings, because on October 13, 2020, Ashwani withdrew his trademark application. As many experts argue, this dispute has once again brought up the issue of trademark squatting. Trademark squatting refers to instances where one party intentionally applies/registers a trademark of another party in a country where the second party does not hold a registration. Hence, the applicant acts in a mala fide way. This is often done to manipulate parties like Sony to pay monetary compensation to procure the rights over the trademark squatted by such other person. Reported by Ujjawal Bhargava, Student Ambassador

image: A reproduction of the Flower Thrower stencil mural at a Banksy exhibition in Budapest this year. Photograph: Zsolt Szigetváry/EPA Recently, the European Union Intellectual Property Office (“EUIPO”) invalidated the trademark registration for Banksy’s popular artwork of the “Flower Thrower” image. The dispute between the world-famous anonymous street artist known as Banksy (or rather the proprietor of the trademark – Pest Control Office Limited – as Banksy continues to remain anonymous) and Full Color Black – a UK-based greeting card company that often uses Banksy’s artwork- began in March 2019 when the former requested the invalidity of the trademark that protected the “Flower Thrower” under trademark No. 12 575 155, one of Banksy’s most popular graffiti that first appeared in 2005 on a wall in Bethlehem (Israel). Back in 2014, Banksy’s art and legal representatives – Pest Control Office Limited – successfully formalized a trademark petition for the “Flower Thrower”, granted by the EUIPO. However, in 2019 Full Color Black contested this registration claiming bad faith. In response, Banksy opened his own stationery and decoration store in Croydon called Gross Domestic Product, with the sole intention -according to the artist himself and his legal representatives- of complying with the requirements of use necessary to maintain the registry of the brand. In the invalidity or cancellation proceedings instituted before the EUIPO, the applicant – Full Colour Black Limited – relied on Article 59(1)(a) of the EU Trademark Regulation (“EUTMR”) invoking the ground of bad faith. The applicant relied on a decision of the Board of Appeal of 22/07/2019, R1849/2017-2 and the Attorney General’s opinion in relation to the case C 371/18, Sky Plc v Skykick to argue that where there is no intention to use a sign as a trade mark and to obtain a collateral benefit in the obtaining of a trade mark, it constitutes an abuse of the system and an act of bad faith. The proprietor of the trademark relied on the judgment of 06/09/2018, C-488/16 P, NEUSCHWANSTEIN, EU:C:2018:673, § 82-84 to state that a party that registers a trade mark in pursuit of a legitimate objective to prevent another party from taking advantage by copying the sign is not acting in bad faith. Notwithstanding the arguments put forth by the proprietor, the EUIPO eventually considered that the artist never had a real intention to use the work registered as a trademark to commercialize goods but to circumnavigate the law. The EUIPO concluded that “these actions are inconsistent with honest practices”. Justifying the reasons for its conclusions, the EUIPO noted as follows: “Banksy has chosen to remain anonymous and for the most part to paint graffiti on other people’s property without their permission rather than to paint it on canvases or his own property. He has also chosen to be very vocal regarding his disdain for intellectual property rights, although clearly his aversion for intellectual property rights does not annul any validly acquired rights to copyright or trademarks. It must be pointed out that another factor worthy of consideration is that he cannot be identified as the unquestionable owner of such works as his identity is hidden; it further cannot be established without question that the artist holds any copyrights to a graffiti. The contested EUTM was filed in order for Banksy to have legal rights over the sign as he could not rely on copyright rights, but that is not a function of a trade mark. Therefore, the filing of a trade mark cannot be used to uphold these rights which may not exist, or at least may not exist for the person claiming to own them.” This decision opens the door to similar procedures in relation to the rest of Banksy’s artworks – currently registered as trademarks of the European Union – putting Banksy in a very interesting crossroads between protecting his rights to his works and preserving his much-coveted anonymity. Read the full opinion of the EUIPO here: euipo-cancellation-banksy-trademarkDownload Reported by Elisa Garcia, Student Ambassador [ORIGINALLY REPORTED ON OCTOBER 17, 2020]

Posted on September 19, 2020 Authored by Tanya Varshney* Acknowledgement: Thanks to Prof. (Dr.) Manveen Singh* for sharing his inputs and reviewing this article. Image Source: WhatMobile.net In simple terms, Standard Essential Patents (“SEPs”) are the patents that have been declared as “essential” to implement the industry or technology standards and ensure uniformity and compatibility in the technology sector worldwide. Such standards are laid down by various Standard Setting Organizations (“SSOs”) such as European Telecommunication Standard Institute (ETSI) which lays down the standards for the telecommunication industry and particularly 2G, 3G, and 4G (LTE) and Institute of Electrical and Electronics Engineers (IEEE) which lays down the standards for WiFi. In the smartphone industry, some examples of SEPs include 4G/5G technology, GPRS, Qualcomm processors, etc. The antitrust concern with respect to SEPs arises because of the immense market power the SEP holder has because their patented technology is now a part of the essential standard. Due to this, the SEP holders often have the power to include unfair and discriminatory terms during licensing negotiations for their patents. In fact, in many instances, the SEP holders have filed for (or simply used the threat of) injunctive reliefs against third parties to completely restrain the use of their technology, forcing third parties to agree to the SEP holder’s terms. However, in contrast to ordinary patents, without the use of such standardized technology, third parties often cannot manufacture their products and face huge financial implications. This article aims to discuss the jurisprudence on the interface of antitrust concerns and the intellectual property rights of the SEP holders in India with the help of the precedents set in European Union, as seeking injunctive relief by SEP holders has been alleged to be anti-competitive conduct and abuse of dominance in itself. Ericsson’s SEPs – Injunctive Reliefs Triggering the Jurisdiction of CCI Ericsson’s plethora of SEP litigations began with Ericsson v. Xiaomi where Ericsson filed a suit for permanent injunction against Xiaomi in relation to AMR, 3G and EDGE technologies in the field of telecommunication pertaining to 2G and 3G devices patented by Ericsson which were recognized as a ‘standard’ by ETSI. Ericsson and Xiaomi had been involved in licensing negotiations for some time but before such negotiations were concluded, Xiaomi launched some products that contained Ericsson’s patented technology in about 2014. The High Court of Delhi granted the injunction restraining Xiaomi from manufacturing, assembling, importing, selling, offering for sale or advertising any present or future devices containing the AMR, 3G and EDGE technologies. Xiaomi challenged the said order on the ground, amongst others, that the interim injunction would defeat the licensing norm of “fair, reasonable and non-discriminatory terms”, commonly known as FRAND terms. With respect to Ericsson, the smartphone wars continued with similar cases seeking injunctions against Lava, Micromax, Intex and iBall with licensing negotiations exceeding 40 months with each party. In fact, negotiations between Ericsson and iBall lasted about 60 months. Interestingly, injunctions were granted in all these cases. Amongst these parties, Micromax, Intex and iBall lodged complaints before the Competition Commission of India (“CCI”) alleging that Ericsson is abusing its dominant position under the Indian Competition Act, 2002 by demanding unfair, discriminatory and exorbitant royalties. Thus, the CCI launched its investigation and the matter was heard in Ericsson v. CCI. The evidence led by the parties included the notice of infringement by Ericsson, documents indicating willingness to enter into negotiations on FRAND terms and proposed terms of license. Intex alleged that the royalty rates proposed by Ericsson were based at the end value of the mobile device rather than the components of the device using the patented technology. Micromax asserted that as a consequence of Ericsson’s demand for excessive royalties, the Indian handset manufacturers were denied market access in respect of the GSM market. It was also alleged that Ericsson was charging differential royalty rates for different companies, and tying and bundling its SEPs for a collective license. In view of the fact that in case of SEPs, there is no possibility of using a non-infringing technology, CCI formed a prima facie view that Ericsson enjoyed complete dominance over its present and prospective licensees in the relevant product market and royalties linked with the cost of the end product were contrary to the FRAND obligations under ETSI’s policy. The court clarified that when there is a question of abuse of dominance (under Section 4) or reasonability of the terms of agreement (under Section 3), such a matter can only be decided by CCI. The Court stated that it must be determined whether the allegations in the complaint would indicate the abuse of dominance. Dominant Position While there are many factors to take into account, such as the ones listed under Section 19 of the Indian Competition Act, while examining the dominant position of an entity, the position of dominance of an SEP holder is a little more evident. In Ericsson v. CCI, the court noted that an SEP holder is generally in a position of dominance and has significant bargaining power in relation to the other implementers of that technology. In Ericsson v. Intex, the court further observed: “As a result of its huge portfolio of standard essential patents, for which there are no non-infringing alternatives, the company is in a position to operate independently of any competitive forces/ pressures in the relevant market. Based on the power of its ownership over a large pool of SEPs, Ericsson is in a position to set the terms and conditions for making its SEPs available to the customers without any constrain and thereby alter the market in its favour.” Along similar lines, the European Commission has also acknowledged in Oscar Bronner v. Mediaprint that owner of the intellectual property of an ‘essential facility’ may be in a dominant position. Thus, it is more likely than not that a SEP holder would be in a dominant position. Abuse of Dominance Although the Indian courts have noted that inclusion of a patented technology as a SEPcould place the patent holder in a position of substantial market power[1], these courts have not provided an overall guiding principle as to when it constitutes abuse of dominance[2]. In Ericsson v. CCI, the court noted that Section 4 of the Indian Competition Act would also cover abuse of a dominant position as proscribed by Article 102 of the Treaty on the Functioning of the European Union (“TFEU”) as cause (a) and clause (b) of Section 4(2) of the Competition Act are similar in their import as clause (a) and (b) of Article 102 of TFEU. Clause (d) of Article 102 of TFEU and clause (d) of Section 4(2) of the Competition Act are also similarly worded. Since it has been established that the Indian and the TFEU provisions are similar, the European Union case laws will be relevant to the present analysis. The European Union’s antitrust regime has heavily emphasized on FRAND terms when it comes to licensing of SEPs to curtail any abuse of dominance or market power by the SEP holder. This comes as a limitation for the companies who are investing heavily into research and development. If seeking injunctive relief is considered as abuse of dominance or violation of FRAND terms, then SEP holders are put in a difficult position when licensing negotiations are dragged on and third parties start using the infringing technology. On the other hand, allowing injunctive relief may place a lot of power in the hands of the SEP holder who could monopolize the specific industry. The Indian Patents Act is silent on any compulsory or statutory licenses with respect to SEPs, and no concrete governing law on this matter has been set by the Indian judiciary so far in respect of the policies set by the SSOs, apart from general guidelines and principles referred to by the Delhi High Court in the Ericsson cases. Conduct of the Implementer The European Commission (“EC”) has often taken into account the conduct of the SEP holder while examining abuse of dominance. In Samsung EC[3], while the Commission did not deliver its final decision on Samsung’s abuse of dominance, it was held that there should be an objective justification for a refusal to license the SEP or an unwillingness to license by the potential licensee. The EC held that the mere presence of a patent does not constitute as an objective justification for refusal to license or for seeking injunctive relief if the SEP patent holder refuses to enter into a contract on FRAND terms. An SEP holder may refuse to grant a license or seek a interlocutory or permanent injunction in cases wherein (i) the potential licensee is not able to clear theirdebts or they may be in financial distress; (ii) the potential licensee is located in a jurisdiction wherein there is no sufficient adjudication system that can allow for enforcement of damages; and (iii) in a situation wherein the potential licensee refuses to enter the agreement on the basis of the FRAND terms and conditions, ultimately denying the SEP their FRAND compensation due for the usage of their patents. Samsung claimed injunction under this scenario as they claimed that Apple refuses to enter into a contract with them which is based on FRAND terms and conditions. However, the Commission came to the conclusion that Apple’s conduct did not portray their unwillingness to license based on FRAND terms and conditions. In Motorola EC[4], the Commission noted that the SEP holder may file for infringement without constituting abuse if the potential licensee is unwilling to enter into a licence agreement on FRAND terms and conditions, with the result that the SEP holder will not be appropriately remunerated for the use of its SEPs. In Huawei v. ZTE[5], the guiding principal was laid down as – in injunctive cases, the SEP holder may be dominant but the conduct would not be an abuse of dominance save in exceptional circumstances. The Huawei case also laid down that the first duty is of the SEP holder to alert the alleged infringer of the infringement by identifying the SEP at issue and “specifying the way it has been infringed” and to make an offer on FRAND terms. The alleged infringer should then ‘diligently’ respond to the patent holder’s offer without any delaying tactics on its part. If the alleged infringer does not accept the offer made to it, it must submit a counter-offer on FRAND terms “promptly and in writing”. Even in Indian cases with respect to injunctions on failure of licensing of SEPs, the Courts have given due weightage to the conduct of parties – willingness of the licensee[6]. For instance, in Ericsson v. Lava, the Court looked at the negotiations to assess whether the SEP holder was willing to enter into an agreement. Ericsson had sent a list of patents and claim charts along with a notice, the court observed that this was sufficient information to initiate a discussion on the execution of the agreement. In Ericsson v. Intex, the Court found that there was a lack of bona-fide intention on the part of the potential licensee to obtain a license on FRAND terms as the licensee proceeded to file a competition complaint, before the negotiations for license, without informing the SEP holder. The court also said that the negotiation period, of about 4 years, is a delaying tactic on the part of the potential licensee. In Ericsson v. iBall, the court observed that iBall had not taken any step towards the execution of the FRAND Agreement. By filing a complaint before the CCI, iBall admitted that Ericsson was the holder of some patents while contending non-infringement at the same time. Therefore, both EU and Indian cases have looked at the conduct of the SEP holder and the implementer. Both the jurisdictions have also clarified that seeking injunctive reliefs by an SEP holder in certain circumstances may amount to abuse of its dominant position. In such cases, it will also be important to assess whether the implementers acted in “good faith”, i.e., were willing to enter into a license on FRAND terms. Threats of Infringement Suits and Injunctions by SEP Holders As per Ericsson v. CCI, threats of infringement suit by the SEP holder may amount to abuse of dominance if it is done to compel the implementer to accept the license on non-FRAND terms. In Samsung EC, the EC took the preliminary view that the seeking of an injunction for SEPs can constitute an abuse of a dominant position in the exceptional circumstances of this case – where the holder of a SEP has given a commitment to license these patents on FRAND terms and where the company against which an injunction is sought is willing to negotiate a FRAND license. It was argued that Samsung’s refusal to grant a license (to Apple) is effectively eliminating Apple as competition and also putting it in a disadvantageous position because of the unfavorable licensing terms it would have to admit in case the injunctions were permitted. Where a commitment to license SEPs on FRAND terms has been given by Samsung, and where a potential licensee, in this case Apple, has shown itself to be willing to negotiate a FRAND license for the SEPs, then recourse to injunctions harms competition. Since injunctions generally involve a prohibition of the product infringing the patent being sold, such recourse risk excluding products from the market without justification and may distort licensing negotiations unduly in the SEP holder’s favour. In Sisvel v. Haier[7], the ECJ noted that “if the patent holder did not offer a FRAND-conforming license to the infringer, the infringer is not obliged to show his willingness with a counter offer in conformity with the FRAND-principles”. The SEP holder had offered discounted royalty rates to third parties, and the offer was discriminatory. Thus, it will be important to assess that the SEP holder did not file for injunctive relief to compel the implementers to accept license on non-FRAND terms. Conclusion Whilst the intellectual property and competition law interface has evolved its jurisprudence with respect to SEPs in the European Union, India has largely focused on abuse of dominance by SEP holders filing for injunctive relief following the “smartphones wars” due to several infringement suits filed by Ericsson in 2016. Understandably, there is a concern that SEP holders may file injunctive suits or threaten third parties with the same to force them into entering into non-FRAND terms. It is evident that an SEP holder has a lot of market power by virtue of their patent being an ‘essential’ in the market. However, the assumption that SEP holder seeking injunctive relief is anti-competitive or abusing its dominant position would make the patent redundant and may deter further research and development in the technology sector. The author agrees with the stance taken in the Huawei case that the courts must take into account if an SEP holder took certain steps before seeking injunctive reliefs against third parties and the injunctive reliefs were not to ensure that the SEP holder remains the only player in the relevant market. *Tanya Varshney, Founder and Chief Editor of IntellecTech Law, is a practicing lawyer based in New Delhi focusing on Intellectual Property, Technology-Media-Telecommunications, Data Protection, Commercial Disputes and Corporate-Commercial work. *Prof. (Dr.) Manveen Singh is an Associate Professor and Associate Dean at Jindal Global Law School (JGLS). He is also the Director of the Graduate Program and one of the founding faculty members of the Jindal Initiative on Research in IP and Competition Law (JIRICO). [1] Ericsson v. CCI [2] Gupta, I. et. al., Trends in pre-licensing negotiations of standard‐essential patents, 22(3-4) The Journal of World Intellectual Property Law Journal (2019) [3] (COMP/C-3/39.939) [4] (Case COMP/C- 3/39.985) [5] C-170/13 – Huawei Technologies [6] Gupta, I. et. al., Trends in pre-licensing negotiations of standard‐essential patents, 22(3-4) The Journal of World Intellectual Property Law Journal (2019) [7] Case No. I-15 U 66/15