Criminal Prosecution For Copyright And Trademark Violation

The Copyright and Trademark regimes grant a person, statutory rights, relating to their literary, artistic work (under Copyright Protection) and for their Trademark/brand identity (under Trademark Protection). When there is a violation or infringement of these rights by way of use by any person other than the one upon whom these rights have been conferred in exclusion of others, such author/owner/proprietor/asignee can seek to remedy the wrong and sue the perpetrator(s).

The Trademark Act 1999 and Copyright Act 1957 provide for remedies and action against infringement by way of both a civil action as well as a criminal action. In case you chose to opt for the later, we bring to you a point-wise study of the criminal remedies available under the Copyright Act and the Trademark Act.

criminal[Picture credit: istockphoto]
Criminal Complaint Under Trademark And Copyright Acts Infringement And Procedure For Filing FIR

COPYRIGHT

The investigation of a cognizable offense (such as copyright infringement) begins when a police officer in charge of a police station has probable cause to suspect the commission of the offense under the Copyright Act, following the filing of a First Information Report (FIR) under Section 154 of the Criminal Procedure Code. In such circumstances, the suspicion may be founded on any additional information obtained by the police Section 157 (1).

When a reasonable suspicion of Copyright infringement exists, the SHO must immediately send a report of the facts giving rise to the suspicion to a Magistrate with the authority to take cognizance of such an offense based on a police report Section 157 (1).

The SHO must then proceed in person or delegate a subordinate officer (not below the level of Sub-Inspector) to the scene to investigate the facts and circumstances of the case and to take the necessary steps for the discovery and seizure.

  • Direct Complaint Before the Police

Under Section 64(1) of the Copyright Act 1957, any Police Officer not below the rank of sub-inspector has the authority to seize and produce before the Magistrate any infringing copies of works, plates, etc., without a warrant.

  • The complaint before the Magistrate

Similar to the Trademark Act, under the Copyright Act a complaint can be filed against the offender to the police or the magistrate under section 190 of the Code of Criminal Procedure to initiate an inquiry under section 156 (3).

TRADEMARK

  • Direct Complaint Before the Police

To commence criminal actions against the infringer, the owner must file a criminal complaint under Sec. 156 of the Code of Criminal Procedure, 1973. In the circumstance that the police refuse to file an FIR, the owner may file a complaint with the magistrate under section 190 of the code. No court below the level of Metropolitan Magistrate or Judicial Magistrate First Class shall try violations of this Act.

  • Setting the criminal matters

One of the primary reasons why entrepreneurs do not opt for criminal prosecution is the absence of available exits. However, the condition of the courts has altered drastically, and the courts are now becoming more vigilant in resolving criminal problems, as explained below.

(a) By the Plea Bargaining

The Code of Criminal Procedure (1973), Chapter XXIA addresses Plea Bargaining. The accused may file a plea-bargaining application pursuant to section 265-B following the filing of the police’s charge sheet. A notice is issued to the complainant or the public prosecutor upon such a request. In accordance with section 265-C of the Code of Criminal Procedure, an MSD (Mutually Satisfactory Disposition) deed is executed and signed if the complainant accepts a settlement. Upon execution of the same, the accused is typically found guilty but without a sentence. Nonetheless, if no such decision has been made pursuant to section 265-D, the court shall continue in accordance with the provisions of the Code from the time the application under paragraph (1) of section 265-B was filed.

(b) By Writ Petition or Quashing

As violations of the Trademark and Copyright Act are of a significant and serious nature, they cannot be resolved by filing an application under section 320 of the Code of Criminal Procedure. However, under section 482 of the Code of Criminal Procedure, the FIR might be dismissed if the parties to the case have settled.

Statutes Governing Criminal Remedy For Infringements of Copyright Law And Trademark Law In India

COPYRIGHT

In copyright infringement, individuals convicted of breaking the law may also be penalized in both a civil and a criminal offense. The complainant may pursue criminal charges against the infringer in addition to a civil suit.

Section 63 criminalizes the infringement of copyright and other associated rights granted by the Copyright Act, with the exception of section 53 A’s right to resale share in original copies. It stipulates imprisonment for a minimum of six months and a maximum of three years, as well as a minimum fine of fifty thousand rupees and a maximum fine of two lakh rupees.

The intent of Section 63A is to discourage repeat offenses by convicted offenders. It prescribes a harsher punishment of imprisonment for a minimum of one year, which may extend up to three years, and a fine of one lakh rupees, which may extend up to two lakhs, for those who have previously been convicted under section 63 and are subsequently convicted under section 63 for a second or subsequent time.

Section 63B criminalizes the use of an unauthorized copy of a computer program by anybody who is aware that the copy is infringing. For anyone who uses an infringing copy of a computer program on a computer with the knowledge that it is an infringing copy, the law imposes a minimum of seven days of imprisonment, which can be extended up to three years, and a minimum fine of fifty thousand rupees, which can be extended up to two lakh rupees.

Section 64 authorizes police officers with the rank of inspector or higher to seize infringing copies of works or all plates used to make such copies without a warrant. This ability to seize has frequently been used as an evidence in favor of cognizability.

Section 65 stipulates imprisonment of up to two years and a fine for anybody who intentionally creates or possesses a plate for making copies of a copy-protected work. The term “plates” refers to the plates used in offset printing to print books.

The Copyright (Amendment) Act of 2012 added Section 65A, which criminalizes anybody who, with the intent to infringe, circumvents an effective technological measure implemented for the purpose of preserving copyright and any other right given by the Copyright Act. This person will be sentenced to a prison term of up to two years and a fine.

Regardless of whether the alleged offender is found guilty or not, Section 66 of the Copyright Act, 1957 allows the court trying the case to order that all infringing copies of the copyrighted work or all plates used for the purpose of making the infringing copies be delivered to the owner of the copyright, or to make any other order it deems appropriate regarding the disposal of such infringing copies or plates.

In accordance to section 70, offenses under the act are not to be tried by any court other than the metropolitan magistrate or a magistrate of the first class.

TRADEMARK

Under Chapter XII, which addresses offenses and punishments, the Trade Marks Act of 1999 also includes criminal remedies for infringement and passing off.

Sections 103 and 104 provide for imprisonment of not less than six months and up to three years and a fine of not less than fifty thousand rupees that may be increased to two lakh rupees in the event of a fraudulent trademark application and the sale of goods bearing a false trademark.

According to Section 105, any person who has committed an offense specified in Sections 103 or 104 shall be punished for the second and every subsequent offense with imprisonment of not less than one year but not more than three years and a fine of not less than one hundred thousand rupees but not more than two hundred thousand rupees. The legal process for instituting a case for trademark infringement is three years from the date of the infringement.

Section 115 (4) of the Act describes the police’s search and seizure authority and procedure. The police can search and seize any product that warrants legal action for trademark infringement.

In the case of a default by a company, the organization and every person in management responsible for the company’s business behaviour at the time of the violation shall be subject to prosecution and punishment.

Cases On Copyright And Trademark Infringement Of Criminal Prosecution

COPYRIGHT CASE LAWS

Krishika Lulla & Ors. v. Shyam Vithalrao Devkatta & Another

This case, commonly known as the Desi Boys case, established the benchmarks for Criminal Legislation on copyright infringement in film names and plots. The facts of the case are straightforward: Shyam Rao Devkatta wrote a narrative titled “Desi Boys” and registered the synopsis with the “Film writers association” before sending it to his friends. Next, he saw the trailers for the film titled ‘Desi Boyz,’ and despite not being able to pinpoint the infringement of his idea or story, he filed a complaint about the copyright infringement of the title ‘Desi Boys,’ which was clearly his intellectual property, under Section 482 of the Cr.PC, Section 63 of the Copyright Act, and Sections 406 and 420 of the Indian Penal Code. The issue in the main case thus was whether the title is a literary work on its own and hence a matter of intellectual property and copyright that can be infringed on.

The Supreme Court of India declared that a film’s title does not qualify it as a ‘work’ for classification. The film’s title is not a ‘literary work,’ according to the Oxford dictionary definitions, and both ‘Desi’ and ‘Boys’ are ‘commonplace’ terms.

Ayesh Premji Savla & Ors. v. Mattel, INC., U.S.A. and Anr

This matter, generally known as the Barbie case, was one of the most well-known copyright and trademark infringement cases in the United States. It established the rule that a criminal case cannot be filed unless it meets all of the requirements of a criminal case. Mattel Inc. had sued the applicants under the Copyright Act, Section 156 of the Criminal Procedure Code, Sections 420, 487, 488 of the Indian Penal Code, and Sections 103, 104 of the Trademark Act, as well as various other ancillary Acts. The case’s facts are as follows. Mattel Inc. has owned the trademark and copyright to the product ‘Barbie’ for a long time. The outfit type, doll decoration, unique features, and Barbie’s brand are all covered by this IP right. As a result, the respondent’s representative filed various criminal cases for infringement of the same.

The court, citing Gian Singh v. The State Bank of Punjab, dismissed all Criminal charges, finding that “the dispute has an overwhelming and predominately civil flavour and derives from a commercial and mercantile dispute,” thereby declaring that the FIR was ‘impugned’. Thus, the court denied the petition and ordered the return of the seized copies, emphasizing unequivocally that civil litigation stays civil unless it assumes a criminal nature under the Act or precedents. As the first case of its kind in which the court contested the legitimacy of criminal prosecution for copyright infringement, this is a historic criminal case.

Girish Gandhi, Etc. v. Union of India and Anr.

This case emerged from a civil writ petition and is arguably one of the most significant criminal statutes or case laws in the field of Criminalisation of Copyright Infringement in India. Girish Gandhi argued that despite acquiring all confirmed documentation and genuine copyrights for each film in his video cassette business, he anticipates the unwarranted use of section 64(1) against him”. Although no action was taken against him, he said that Section 64(1) gives the police extra broad powers, putting him in permanent fear of “Harassment from the police and unnecessary litigation.” Thus, he requested that the article’s assertion be ruled extra vires.

The petition was dismissed on the grounds that no overt act had occurred with the complaint and that the Act’s Section 64(2) provided recommendations for “satisfaction means” in the event of an inappropriate or arbitrary seizure.

This case was precedent-setting because the court elaborately outlined the Act’s parameters and demonstrated that the Act is not arbitrary, may be the despite the fact of that police officers.

Abdul Sathar v. Nodal Officer, Anti-Piracy Cell

This precedent-setting decision called into question the character of an offense punished under Section 63 of the statute. The petitioner questioned the legitimacy of the offense’s cognizability. Since there were no particular precedents before the court, it relied on the provisions of Cr. P.C, wherein Part II of Cr.PC distinguishes between the three degrees of offenses based on their respective punishments. Since violations of Section 63 of the Copyright Act, are penalized by imprisonment for three years, they come within Category 2 (Category 2 is the class of offenses for which imprisonment for seven years or less is imposed) and are cognizable. Consequently, since there were no controversies regarding the same in terms of the Act or auxiliary Acts, principles, or precedents, this ruling unequivocally determined that copyright infringement crimes are cognizable.

Juhu Jagruti Trust and Others v. The State of Maharashtra

This case was primarily significant because it emphasized the significance of Section 482 of the Criminal Procedure Code, especially in the context of a copyright-related FIR. The petitioner played a song without permission, whereas the respondent filed a criminal complaint notwithstanding the petitioner’s apology. The petitioner used the clause of the Criminal Procedure Code that is ancillary to the Copyright Act to discharge the FIR, which the court did after gaining jurisdiction over the matter.

TRADEMARK CASE LAWS

Nippon Steel & Sumitomo Metal Corporation vs. Kishor D Jain and Another

NMC filed a complaint against KDJ for allegedly selling counterfeit iron pipes that resembled the plaintiff’s products. Saudi Arabia’s Yanbu Steel Company filed a complaint seeking a permanent restraining order. Yanbu Steel procured KDJ’s goods, which were to be manufactured by NMC. In addition, KDJ supplied Yanbu Steel with forged certificates carrying the trademark and emblem of NMC, stating that the certificates were sent by NMC.

The Honourable Court issued an ex-parte ad interim injunction prohibiting KDJ from infringing on the NMC’s registered trademarks. Receivers were appointed to visit KDJ’s location and confiscate further infringing articles, including unbranded pipes and electronic recordings identical to NMC. The usage of NMC’s products necessitates a stringent level of quality control due to their intrinsic characteristics. The Honourable Court noted a negative impact on the reputation and goodwill of NMC and India.

Upon NMC’s request, Justice SJ Kathawalla awarded five crores of Rupees in expenses. KDJ was compelled to pay the specified sum to Mumbai’s Tata Memorial Hospital. This hospital is renowned for its cancer treatment and research center. Lastly, KDJ was required to submit personal guarantees informing all entities in the position of Yanbu Steel regarding the genuine nature of the supplied pipes.

Glenmark Pharmaceuticals Limited vs. Curetech Skincare and Another 

Anti-fungal cream manufactured and sold by GPL under the CANDID-B trademark. CS was engaged as a manufacturer by Galpha Laboratories, the owner of a medicine comparable to GPL that Galpha Laboratories marketed under the brand name Clodid – B. The product’s artwork and packaging were identical. Infuriated by this GPL, the CS filed a lawsuit against the GPL charging trademark infringement before the Honourable High Court of Bombay. The Honourable court opined that CS had duplicated GPL’s trademark, thereby infringing on GPL’s trademark.

The Honourable Court ruled that Galpha Laboratories had violated the GPL’s intellectual property rights and punished CS for utilizing poor products. In addition, the court ordered exemplary damages of Rs. 1.5 crore. These damages were donated to the Kerala Chief Ministers Distress Relief Fund at the request of GPL. This fee was intended to prevent manufacturers from engaging in such conduct, keeping public health, interest, and welfare the top priority in areas of healthcare and medicine. Consequently, it is the responsibility of the producers to preserve quality and safety in these situations.

To Check Whether The Offences Under Section-63 Of The Copyright Act, 1957, Section-103 Of The Trademark Act, 1999 Are Bailable Offences Or Not.

The Code of Criminal Procedure, 1973, under Section 2(a) defines ‘bailable offense’ meaning ‘an offense which is shown as bailable in the First Schedule, or which is made bailable by any other law for the time being in force; and “non-bailable offense” means any other offense.” In the instance of bailable charges, bail is a matter of right, however, in the case of non-bailable offenses of a more serious kind demanding severe punishments, bail is granted at the court’s discretion.

The Trade Marks Act, 1999, Section 103, and the Copyright Act, 1957, Section 63, specify that the penalties for trademark and copyright infringement, respectively, “include imprisonment for a term which shall not be less than six months but which may extend to three years” for certain offenses committed thereunder. Thus, the primary determination must be based on the terms chosen by these statutes, i.e., whether “may extend to three years” as used in the Copyright Act and the Trade Marks Act has the same impact as “three years and upwards” as used in the Code of Criminal Procedure.

CASE LAWS RELATED TO COGNISABLE AND NON-COGNISABLE OFFENCE UNDER THE TRADEMARK AND COPYRIGHT ACT.

In February 2021, the Bombay High Court, in Piyush Subhashbhai Ranipa vs. The State of Maharashtra (“Ranipa”), ruled that offences under section 63 of the Copyright Act, 1957 and section 103 of the Trade Marks Act, 1999 (collectively “Sections”) are non-bailable and Cognisance and denied Mr. Piyush Ranipa’s anticipatory bail for various alleged related to the Sections.

Similarly, in the case of Amarnath Vyas vs. State of A.P. 2007, An offence under Section 63 of the Copyright Act is bailable, according to the Hon’ble High Court of A.P.

State Govt. of NCT of Delhi vs. Naresh Kumar GargThe Hon’ble High Court of Delhi further observed that the interpretation of the Hon’ble Supreme Court in the case of Avinash Bhosale vs. Union of India of the term “the Hon’ble High Court of A.P. took the view that an offence under Section 63 of the Copyright Act is bailable”, imprisonment which may extend to three years or with fine or with both which is for an offence under Section 135 (1) (ii) of the Act of 1962, will fully apply in a case under Section 63 of the Copyright Act.

The Honourable High Court also determined that it would be beneficial to refer to Section 64 of the Act, which authorizes a police officer not below the rank of Sub-Inspector to seize infringing copies of any work, and noted that if the offense had been cognizable and non-bailable, there would have been no need to specifically authorize the police officer with seizure authority. The Petition being devoid of merit was dismissed by the Hon’ble High Court.

A similar view taken by the Court included in the case of Mahesh Shivram Puthran v. The Commissioner of Police, Thane, Dist. Thane and others and Nathu Ram S/o Purna Ram v. The State of Rajasthan, both of which concluded that offenses punishable by up to three years in prison were non-bailable. The Court stated that where a sentence of up to three years’ imprisonment is possible, the offense is invariably cognizable and non-bailable.

Under Part II of Schedule I of the Code of Criminal Procedure, 1973, offenses under laws other than the Indian Penal Code, 1860, such as the Trade Marks Act, 1999 and the Copyright Act, 1957, are classified as bailable or non-bailable. In accordance with the aforesaid, mentioned cases and Part II of Schedule I, offenses punishable by imprisonment for three years or more but not more than seven years are non-bailable and cognizable, whereas offenses punishable by imprisonment for less than three years or only by fine are bailable and non-cognizable.

Conclusion

With ongoing litigation, writ petitions, and revisions, the evolution of the Criminalisation of copyright infringement and Trademark Infringement in India has been gradual. While India’s Trademark and Copyright rules require refinement, it is heartening to note that progress is discernible despite a slowdown. The aforementioned instances are significant not because of the frequency with which they have been cited, but because of the changes, they have wrought in the law. In legal terms, changes are not necessarily obvious or dramatic, but they are nonetheless significant, even if they merely restate an important idea. Consequently, it is essential to study and work towards the growth of the heart of intelligentsia: the Trademark Law and Copyright Law.

Author: Bipul Kumar (intern) – a student of  Chanakya National Law University (Patna), in case of any queries please contact/write back to us via email chhavi@khuranaandkhurana.com  or at Khurana & Khurana, Advocates and IP Attorney.

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