Author: Hitesh Vachhani Gujarat Law Society, Ahmedabad
Editor: Aryan Mehta New Law College, BVDU, Pune
Intellectual property is an intangible creation of the human intellect that must be protected and valued. Intellectual Property would encourage the creation of a wide variety of goods only if an individual’s intellect is protected. The law protects the intellectual rights of an individual for a limited period and if a third party infringes the intellectual rights of the right holder during the said period; the right holder can enforce such rights against the infringer by taking recourse to legal action. Taking recourse to the traditional court method often proves to be time-consuming, expensive or inflexible and more often the infringement suit may last longer than the period for which the protection is granted by law. Thus, an individual fails to enjoy his intellectual property rights against the third person in a manner that he desires. Therefore, there arises a need to combat such failures through other alternative mechanisms such as arbitration, mediation, conciliation, Early Neutral Evaluation, etc.
The following points render why the traditional method of litigation in IP matters is baneful for the right holders which call for a quick shift to the alternatives:
Excessive Delays frustrate the need for immediate relief as the offenses in IP dispute are of continuing nature which demands quick
IP matters require expert knowledge. Thus, it calls for special adjudicating officers in IP
The hiring of various scientific and technical experts is
The traditional method is not
Appeals in the normal court proceedings are also frustrating and time-consuming.
There is a threat to confidential
JUDICIAL PERSPECTIVE OF ARD IN IPR MATTERS
The Judiciary at times has acknowledged the shortcomings of resolving the disputes in a timelier manner. The Judiciary is also of the view that the litigation in matters related to IPR goes on for years and years and still the result is hardly decided. In Shree Vardhman Rice and Gen Mills vs. Amar Singh Chawalwala6 the Hon’ble Supreme Court was of the view that, “in the matters relating to trademark, copyright and patents the hearing shall proceed on a day to day basis and the final judgment should be given normally within four months from the date of the filing of the suit.”
The Hon’ble Supreme Court in Bajaj Auto Limited vs. TVS Motor Company Limited7 held that “experience has shown that in our country, suits relating to the matters of patents, trademarks and copyrights are pending for years and years and litigation is mainly fought between the parties about the temporary injunction. This is a very unsatisfactory state of affairs, and hence we in Special Leave Petition (C) No. 21594 of 20098 had passed such order to serve the ends of justice. We direct that the directions in the aforesaid order be carried out by all courts and tribunals in this country punctually and faithfully.”
Thus, the Judiciary has also paved a way to resolve the dispute through alternative dispute resolution mechanisms mainly mediation, in the matters of copyright, patents, and trademarks. This in their view will lead to a timely remedy, would be cost-effective and most importantly, it would satisfy both the disputed parties.
SECTION 89 C.P.C: A TOOL TOWARDS ACHIEVEMENT
ADR was formulated with the purpose of reducing the burden on the “already occupied” system and render expeditious justice. 10 The Indian Legislature has also contributed towards the need of resorting to the ADR mechanisms. Section 89 had been introduced for settlement of disputes outside the Court, with the only objective of providing speedy justice. In Salem Advocate Bar Association, TN vs. Union of India12 the Hon’ble Supreme Court upheld the constitutional validity of the provision because the object behind the provision was laudable and sound. The Hon’ble SC in Afcons Infrastructure Ltd. vs. Cherian Varkey Construction Co. Pvt. Ltd.13 had laid down a more-clearer picture of section 89 C.P.C in the following words:
“If Section 89 is to be read and required to be implemented in its literal sense, it will be a trial judge’s nightmare. It puts the cart before the horse and lays down an impractical, if not impossible, procedure in sub-section (1). It has mixed up the definitions in subsection (2). Despite of these defects, the object behind Section 89 is laudable and sound. Resort to ADR processes is necessary to give speedy and effective relief to the litigants, to reduce the pendency of cases in courts and the burden upon them.
ADVANTAGES OF ALTERNATIVE DISPUTE RESOLUTION MECHANISM IN IPR RELATED MATTERS
The ADR mechanism, which aims at quick, efficacious, neutral, and party-centric resolution, can be fruitful in the Intellectual property right suits. The advantages of ADR mechanism in IP matters are as follows:
Simple/ Flexible: The traditional approach of litigation is not only time-consuming but also very complex for people to understand. It is because they are not well versed with the long procedures that the courts follow. On the other hand, the ADR mechanism is simple as the parties have procedural flexibility.
Expert Knowledge: The Intellectual Property rights dwell into complex issues that require scientific and technical expertise. The Judges cannot be expected to be experts in every sphere whereas ADR provides the parties to choose an expert who, with his knowledge and experience, would adjudicate the issues between the parties. The expert knowledge helps the parties to negotiate more effectively.
Diverse Solution: Litigation is a process where the courts determine the rights of one party over the other and the outcome is weighed heavily on the side of the party whose rights are determined. In some cases, the other party still may not be satisfied with whom those rights are to be enforced. The ADR mechanism helps the parties to come out with diverse solutions where both the parties can agree to use the IP rights upon a consent agreement whereby the actual right holder gets some percentage of the profit or maybe they can agree to exercise their rights in different jurisdictions.
Less Time Consuming: The courts especially in the IP matters have to seek expert knowledge and they also have to understand the entire concepts, no matter how technical they are. Seeking expert advice not only increases the expenses but also consumes a lot of court’s precious time. On the other hand, ADR helps the parties to choose their expert who already possess the expertise which helps the parties to save their time by going to the courts and wait until the matter is settled.
Finality: In the IP matters most of the cases are of interim injunction. After the interim injunction is granted the affected party has an option of appealing in the higher forum. While the main matter is still at the lower court where the parties are endlessly fighting for the interim injunction. On the other hand, ADR seeks to ensure minimal court intervention. Thus, the decisions rendered by the adjudicator in ADR mechanisms are final and there is only a limited scope of appeal.
Confidentiality: The Amendment bill of 2019 seeks to insert confidentiality as a clause in Arbitration proceedings by Section 42A of the Arbitration and Conciliation (Amendment) Bill, 2019. Confidentiality helps the parties sharing important commercial information and ensures party autonomy in the ADR mechanisms.
In the recent past, there has been an increase in the use of Arbitration in India. This has reduced the burden on the Judiciary. The only requirement of adopting an alternative mechanism is the existence of an arbitration agreement between the parties. In cases, especially in IPR related matters, Arbitration is merely an impossibility as the right holder and the infringer cannot in advance apprehend a situation that may arise. The IP rights are against the general public and not the individual. In such cases, where the matters reach the courts, the courts can use Section 89 of the Civil Procedure Code to suggest the parties to opt for mediation as a dispute resolution mechanism which increases the chance of using Mediation as the most popular method to settle the disputes in IP matters.
1 w.e.f 21st January, 1958, vide notification No. 269, dated 21st January 1958, see Gazette of India, Extraordinary, Part II, sec. 3.
2 w.e.f 12th May 2000, see Gazette of India (Extraordinary Part II-Section I)
3 Act No. 47 of Year 1999 dated 30th. December, 1999
4 Patents (Amd.) Act, 2005 (15 of 2005), dated. 4-4-2005]
5 Act No. 48 of 1999, received Presidential assent on 30th Dec. 1999
6 Shree Vardhman Rice and Gen Mills vs. Amar Singh Chawalwala MANU/SC/1680/2009: 2010 (79) ALR 357
7 Bajaj Auto Limited vs. TVS Motor Company Limited MANU/SC/1632/2009: 2009 (77) ALR 687
8 Shree Vardhman Rice and Gen Mills vs. Amar Singh Chawalwala MANU/SC/1680/2009: 2010 (79) ALR 357
9 Krishnan, K.S. Gopala. The Code of Civil Procedure. 1st ed. Vol. 1. Hyderabad: Alt Publications, 2011. 912
11 Salem Advocate Bar Association, TN vs. Union of India (2003) 1 SCC 49
12 Infrastructure Ltd. vs Cherian Varkey Construction Co. Pvt. Ltd.  8 SCC 24.