Enabling Online Dispute Resolution to Make India an IP-Friendly Jurisdiction

by Vilasini Pollisetty and Krunal Modi* Vislani Polishetty is a Senior Executive at Presolv360 at the time of the original publication.

Krunal Modi is a Senior Executive at Presolv360 at the time of the original publication.

Abstract:

The 2017 United Nations Commission on International Trade Law [“UNCITRAL”] Technical Notes on Online Dispute Resolution [“ODR”] defines ODR as a mechanism that facilitates resolution of disputes in a simple, fast, and flexible manner without the need for a physical presence of the disputing parties. This paper explores the possibility of establishing an ODR system in India to resolve Intellectual Property Rights [“IP”] disputes with a special focus on Trademark opposition disputes. To do so, it examines the shortcomings of the current dispute resolution process by looking at various case studies and reviewing ODR systems successfully adopted by other countries to resolve IP disputes.

Introduction

India is home to numerous creative individuals with efficient and innovative ideas. Intellectual Property Rights [“IP”] provide such individuals with the ability to own their ideas and businesses. Like all other rights, IP can also be disputed. The protection of IP is critical for advancement and innovation.

Given the value IP adds, it is necessary to ensure availability of a speedy, cost-effective and an efficient recourse mechanism for these disputes. While the various IP legislations of India provide parties with a dispute resolution process, there is a huge backlog of cases that persists. Lengthy timelines, inadequate infrastructure, and limited resources are the causes for this problem. Non-adversarial Alternative Dispute Resolution [“ADR”] mechanisms, which include negotiation, mediation, conciliation must be explored to combat this problem.

With a similar objective in mind, the Office of the Controller General of Patents, Designs & Trademarks [“CGPDTM”], vide public notice dated August 1, 2022, urged parties to resolve Trademark [“TM”] opposition and rectification disputes using ADR methods. Once the disputing parties reach a settlement, it may be communicated to the TM Registry [“TMR”] who will then ensure closure of the case by issuing appropriate orders in accordance with the provisions of the Trade Marks Act, 1999 [“Act”].

Considering this initiative by the CGPDTM, the question arises whether there is a possibility to further simplify this exercise by using Online Dispute Resolution [“ODR”] as a form of ADR to resolve IP disputes.

Since TM opposition disputes are specifically mentioned in the CGPDTM’s notice, we will explore this kind of IP dispute in detail.

Process of opposition and challenges of the process:

Section 21 of the Act, and The Trade Marks Rules, 2002 [“Rules”], provide the process for TM opposition:

The TM opposition process begins when a third-party objects to a TM application by submitting a written notice of opposition to the TMR and paying fees within four months of the advertisement of the application (1). The applicant has two months to file a counterstatement (2), followed by a two-month window (3) for each party to file further evidence. The TMR will then hold the final hearing (4) within three months of completion of the evidence filing stage. The timeline for each stage may be extended at the discretion of the TMR.

As of July 2022, there are over 2,00,000 pending opposition cases. This pendency can be attributed to various reasons; however the most common ones are listed below:

i. Non-adherence to timelines: The problem of accumulation of cases has been a longstanding challenge. The Act and Rules equips the TMR with discretionary authority to deviate from normal procedure and condone delays in certain circumstances. However, there have been instances where this authority of the TMR becomes one of the reasons contributing to the backlog of cases.

For example, in 2004, Boost Juice Holdings filed an application to register the TM “JOOST” for some food and beverage product. GlaxoSmithKline Consumer Healthcare Limited [“GSK”] objected to the application because the company already owned a registered TM for “BOOST”, which also was a food and beverage product. GSK submitted its evidence in support of the opposition, but Boost Juice did not file its counterstatement in time. There was a delay of almost a year in this case. Boost Juice consistently failed to file its evidence and adhere to the timelines prescribed in the Act and Rules.

Despite the unwarranted delays, the hearing officer accepted Boost Juice’s further evidence and decided the petition in its favour. The delay was condoned, and no cost penalty was imposed.

ii. Lack of a tool to track service of notices: In the case of Praveen Kumar Maakar vs Union of India and Anr., the aggrieved party filed the petition as it was held that he had abandoned his opposition case, since he did not file a counterstatement within the timeline of two months as prescribed under Section 21(2) of the Act. However, the petitioner held that the notice of opposition that was to be served to him as per Section 21(1) of the Act was not received by him. After providing necessary evidence in favour of his argument, the Court held that the notice of opposition was not served to the petitioner on time, and he may file his counterstatement within a further period of eight weeks from the date of the judgement. This points out the deficiency of the present process due to the absence of a proper tracking mechanism.

iii. Tedious and time-consuming process: Owing to the lengthy timelines prescribed in the Act and Rules, disputing parties often loose interest midway of a case and completely abandon the case. The Government themselves recognize the need to make changes to this process. This is indicated by the amendments proposed to modify the timelines of opposition dispute resolution process in the Trade Marks (Amendments) Bill, 2022. The Parliamentary Standing Committee in its 161st published report, titled, “Review of Intellectual Property Rights regime in India”, also noted that there is a need to reconsider the prescribed timelines for filing an application for opposition.

iv. Effect of COVID-19: The limited functioning of Courts during the lockdowns in 2020 and 2021 added to the backlog of cases pending resolution.

The resolution of other IP disputes is often delayed due to similar reasons. The CGPDTM has already taken steps to increase efficiency of the IP dispute resolution process in recent years. These steps include digitising records, providing access to e-registry, launching e-service for notices and orders, and conducting hearings via videoconferencing during the pandemic.

Albeit the CGPDTM is turning to modern methods to tackle the pendency of IP disputes, collaboration with and integration of ODR will unlock IP jurisprudence and be the key to making India an IP-friendly jurisdiction.

ODR for IP disputes:

(i) Defining ODR and outlining its advantages and features

ODR is a branch of ADR that leverages technology to facilitate resolution of disputes between parties. ODR harnesses the power of technology to create a level playing field by enabling participation from remote locations and diverse socio-economic backgrounds. It facilitates quick and effective out-of-court resolution of disputes, while drastically reducing the costs and resources involved in resolving them.

In November 2021, NITI Aayog released a report titled Designing the future of dispute resolution – The ODR policy plan for India. The report helps to understand the definition, scope, and benefits of ODR. The Department of Legal Affairs, Ministry of Law & Justice, Government of India, vide a notification, published a list of institutions offering ADR mechanisms (including ODR) on their website.

Fostering the idea of ODR is sure to unlock the potential of a partnership between law and technology that will alleviate the burden on the office of the CGPDTM and the Courts. ODR service providers possess infrastructure such as case management systems, sending and tracking notices, e-signatures and e-stamping, audio-video application integration, secure and confidential platforms. ODR institutes are dedicated to facilitating smooth administration of disputes. This exclusive focus allows them to manage the complexities involved in IP cases, maximizing efficiency of outcomes achieved while minimizing the resources utilized.

(ii) Leading by example

The National Internet Exchange of India [“NIXI”] handles the process of registering domain names for Indian citizens. Given the importance of domain names, NIXI recognizes that it is also crucial to have a robust dispute resolution mechanism in place to protect them from any damage. To address this need, NIXI developed the .IN Dispute Resolution Policy as a convenient and accessible means of providing justice to all aggrieved parties. The dispute resolution process is conducted entirely online. Registration of a dispute by the complainant, appointment of the arbitrator, submission of arguments by both parties and publishing of the final award is done via email only.

(iii) Adoption of ODR for IP disputes in other jurisdictions

The Department of Intellectual Property [“DIP”] under the aegis of the Ministry of Commerce, Government of Thailand, and the Thailand Arbitration Centre [“THAC”], an independent institute offering ADR services, co-developed an ODR platform called “Talk DD” targeted specifically at resolving IP disputes. In February 2021, the Director General of DIP, while highlighting the success of the project, presented a case study of an IP dispute which was resolved within two days by leveraging the ODR platform.

Similarly, in Indonesia, PANDI (Pengelola Nama Domain Internet Indonesia), the top-level domain name registry (.id) assigned by the Ministry of Communication and Information Technology for the Republic of Indonesia, leveraged ODR to resolve domain name disputes. In the case of Netflix, Inc vs. Yulian Hariyanto, a dispute arose for the domain name “Netflix.id”. Netflix, Inc raised a complaint against respondent Yulian Hariyanto when he registered the domain name “Netflix.id”. The dispute was successfully resolved via online mediation.

Conclusion:

ODR has gained widespread momentum in India, especially since the onset of the pandemic. Financial and commercial, consumer, real-estate, e-commerce, etc are just some types of disputes that are being resolved by adopting quicker and more accessible modes of dispute resolution such as ODR. This adoption of new-age modes of dispute resolution is not limited to the private sector. Ministries at both the Central and State levels, regulatory authorities, and quasi-governmental bodies are transitioning from traditional dispute resolution methods and encouraging the use of technology in resolving disputes. The Chief Justice of India, Hon’ble D.Y. Chandrachud, emphasized that ODR is the need of the hour and can play a pivotal role in today’s digitally transformed era. Despite the multi-sectoral implementation of ODR, its full-fledged adoption in the IP domain remains to be explored.

Trade, investment, industrial policy, promotion, and innovation are the backbone of an economic superpower, and India’s progress cannot be weighed down due to a lack of conflict management creativities and an overburdened IP ecosystem. While it is commendable to witness momentous steps to promote ADR in our country, infusion of technology will only speed up the disposal of cases and help us create a conducive environment for commercial and overall growth.

End Notes:

(1) Trademarks Act 1999, s 21(1) & TM Rules 2022, Rule 47(1).

(2) Trademarks Act 1999, s 21(2) & TM Rules 2022, Rule 49.

(3) TM Rules 2022, Rule 50.

(4) TM Rules 2022, Rule 56.

*All errors are attributable entirely to the author.