What is Infringement?

Infringement is the act by which a person not authorised to use an intellectual property, uses it, without the permission/consent of the authorised proprietor/owner/author. What constitutes infringement for one form of IP, may not constitutes infringement for another. The test for whether an IP has been infringed or not differs on the basis of the IP, and the nature of protection and rights it offers to its owner/proprietor/author, as the case may be.

Gone are the days when it was believed that the protection of one’s IP is not as important as protection of the physical, tangible assets. Industries, businesses, and even individuals nowadays invest in the protection of their intellectual property, because of the realization that ‘prevention is better than cure’. The resources spent on registration of your IP, is a drop in the ocean, compared to the losses and costs one may have to incur in defending a cumbersome suit for infringement for an unregistered, and unprotected IP.

Protection of intellectual property is available under, both, civil as well as criminal law mechanisms. But in practicality, criminal remedies are much more effective as a medium for protection of intellectual property rights, as compared to civil remedy. The underlying reason behind this is that, while civil litigation is directed towards a particular individual, criminal action strikes general deterrence even though it is initiated against certain identified or unknown infringers or violators. The social condemnation and embarrassment attached to facing the police during a search and seizure proceeding makes not only the persons against whom such proceedings are being carried out but also precludes the entire distributor- sales network of such person as well as the market in general, form doing any such act which would amount to infringement and/or passing off of the goods under the trade mark of the complainant. The deterrence tends to have a ripple effect throughout the market which cannot be brought about by initiation of civil litigation.

While “infringement” is an umbrella term, remedies by way of criminal action are available only for trademarks and copyrights.

Elements of Infringement

In order for an intellectual property to be infringed, certain characteristics must be fulfilled:

• Intellectual Property

First and foremost, the property in question must be the subject matter of “intellectual property” for it be infringed. In order to ascertain this, one must see if the subject property qualifies for all the characteristics associated with that particular form of IP.

• Unauthorised use

The other essential characteristic of infringement is that the IP in question must be used by someone other than one who is authorized to use it (i.e. the registered owner, proprietor or author). The registered user comprises not only the proprietor or owner, but also those to whom the IP may have been legally transferred, assigned or licensed by such registered proprietor or owner.

• Without permission/consent of registered owner The most important essential to comprise infringement is that the unauthorized user must have used the subject IP without the permission, consent, valid transfer, assignment or license.

The fulfilment of the aforementioned three conditions is common to the infringement of all kinds of intellectual property.

The consequence of infringement of an IP more often than not, is the loss of business, reputation and profits for the registered owner/proprietor. However, this consequence is not a condition precedent for the owner/proprietor to take legal action against the infringer. The business losses however, become an integral part of the civil proceedings, in order for the Plaintiff to claim damages, account of profits or rendition of accounts, from the Defendant, by quantifying the actual loss suffered by the Plaintiff as a result of the infringement.

Further, some of the IP statutes, specify, that where the infringer is able to prove to the Court that at the time when he/she first infringed the IP, they were not aware that the IP was registered, the reliefs of damages and account of profits cannot be sought against the infringer.

Civil Remedies

Upon IP infringement civil remedies can be enforced by filing a suit for infringement and/or passing off (in case of unregistered trademarks) in the competent court. Following reliefs of civil nature can be granted:

• Injunctions

An injunction is the action by which the Court can order a party to do, or refrain from doing certain acts/omissions. The nature of injunctions in intellectual property cases often comes in the form of the Court ordering the infringing party from refraining from selling, making, distributing etc. the IP which is the subject matter of the suit. The injunctions can be both temporary or permanent in nature.

• Ex-parte orders

Ex-parte orders refer to orders passed by the Court in the absence of/before notifying the Defendant. For example, the Court may, on the first date of hearing itself, before issuing notice of the suit to the Defendant, direct the Defendant to refrain from disposing off, selling or in any other manner alienating the assets, in order to protect the Plaintiff from any adverse impact at the time of recovering damages and costs.

Another example is when the Court orders the Plaintiff to enter the premises of the Defendant and seize the evidence of infringement and infringing goods. Such an order may be passed when there exists a risk or danger that the infringing goods may be removed or destructed by the Defendant.

• Account of Profits

The Courts can order that an assessment be carried out in order to account for the profit that the infringing goods have caused for the infringer, often for the purpose of ascertaining damages payable by the infringing party to the aggrieved party.

• Delivery-Up; destruction; or seizure of the infringing goods

In IP infringement cases, the Courts can order the Defendant to deliver the infringing goods to the Plaintiff, or order seizure of the infringing goods, or order that the infringing goods be destroyed to prevent the Defendant from using them, and causing further adverse impact to the Plaintiff. These orders can also be passed in the form of ex-parte orders.

• Order of costs and damages

Orders as to costs and damages may be passed by the Court if it is proved that the infringer was aware that the goods he was using were the subject matter of another intellectual property. The orders as to costs are discretion of the Court, while damages are granted in accordance with the proof of loss of business.

Criminal Remedies

Section 63 of the Copyright Act, 1957 deals with “Offences of infringement of copyright or other rights conferred by the Act and provides for an imprisonment for a term not less than six months which may extend up to three years and fine not less than fifty thousand rupees which may extend up to two lakh rupees. The said term of imprisonment and fine can be enhanced under the provisions of Section 63A of the Copyright Act, 1957. As is already well known to us by now, that registration of a copyright is not mandatory to permit the owner from exercising his rights against infringement. The same goes for criminal action as well.

On the other hand, the Trade Marks Act, 1999 also provides for criminal remedies against infringement and passing off of the trade mark under Chapter XII which deals with offences, penalties and procedures. Section 103 and 104 provide for imprisonment for a term not less than six months which may extend up to three years and fine not less than fifty thousand rupees which may extend up to two lakh rupees. The provision for enhanced punishment is laid down under Section 105 of the Trade Marks Act, 1999. Criminal action can be taken irrespective of whether the subject mark is a registered  trademark or not.

The Hon’ble Supreme Court, put to bed this debate in State of Uttar Pradesh vs. Ram Nath & Ors. wherein the Apex Court clearly distinguished between a registered trademark and an unregistered trademark, while interpreting Sections 77, 78 and 79 of the Trade and Merchandise Act, 1958, and opined that the legislature has deliberately not used the word “registered” before the words trade mark, mark or trade description in the chapter dealing with offences, penalties and procedure, thereby implying that registration of the trademark is not compulsory for initiation of criminal action.

Criminal complaints can be instituted under both these Acts on the basis of complaints to the Magistrate, or by filing FIR with the Police. The procedure of the Code of Criminal Procedure, 1973 can be followed to pursue the same.

The benefit of initiating criminal action is not only that it causes a deterrent effect on the infringing party, but also that many a times the Complainant may not be aware of who exactly the infringer is.

Many a times, the identity of the manufactures and the distributors of the infringing material is not known to the Complainant and the same operates as an obstacle in initiation of criminal action. This issue is addressed under Section 93 and 94 of the Code of Criminal Procedure, 1973 under which one can request for initiation of a search and seizure proceedings against known and unknown persons which is the underlying difference between a civil and criminal action.

In situations like these, Courts are also empowered to pass “John Doe Orders”, also known as “Ashok Kumar Orders”. These are injunction orders passed by a court of law against entities, whose identity is not known at the time of the issuance of the order.

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