Intellectual Property Law and Globalisation

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Mr. Khawaja Mansoor

Intellectual Property Law and its enforcement in Pakistan

The expression “intellectual property” embraces a variety of intangible property, which

like any other property gives rise to the conjoint needs of legal protection and of legal
enforcement of rights which the law recognises as being available in respect of such
property.

Perhaps the earliest instance of enforcement of intellectual property rights (IPR) is the
common law action of passing off developed by the judges as part of the law of torts
and more particularly as an extension of the actionable tort of deceit. This common
law action of passing off, which the commentaries show to have been well established
by the middle of the 19th century, has remained available to trade mark owners in
Pakistan as well, and is often pursued in combination with an action for infringement of
a registered trade mark where a trade mark registration is also available. The Specific
Relief Act 1877 expressly recognised a trade mark as property in the explanation to
section 54 in the context of granting perpetual injunctions against the invasion of rights
to property and its enjoyment.

As regards legislative action, the Penal Code 1860 and the Trade and Merchandise
Marks Act 1889 treated the unauthorised use of confusingly similar trade marks as
non-cognizable criminal offences, punishable under the Code of 1860 with
imprisonment of upto one year or with fine or with both, and under the Act of 1889 with
imprisonment of upto three months or with fine which may extend to Rs. 200 for a first
offence, and for a subsequent conviction to a similar punishment as under the Code of
1860. An enhancement of penalties to a realistic level commensurate with the intrinsic
value of trade marks would help to correct the impression which the current level of
penalties tend to convey that the infringement of trade marks rights are not serious
enough to merit substantial punishment.

The Trade Marks Act was passed in 1940 and was brought into force in 1942 and is
now replaced by the Trade Marks Ordinance 2001. This Ordinance requires substantial
amendments necessary to bring it in line with the requirements of the TRIPs
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Agreement under the WTO regime. The Government has this matter under
consideration and hopefully the necessary amendments will be made. Prior to the
coming into effect of these laws, which permit registration of trade marks, instances
can be found of traders who as a matter of desperation sought to register their trade
marks under the Registration Act 1908.

In the case of patents and registered designs, the Patents Ordinance 2000 replaces
the patent provisions of the Patents and Designs Act 1911 and the Registered Designs
Ordinance 2000 replaces the industrial design provisions of that Act.

The Registered Layout Designs of Integrated Circuits Ordinance 2000 covers a field
not previously legislated upon.

The Copyright Ordinance 1962 after recent amendment now covers under the heading
“literary work” computer programs recorded on disc, tape, perforated media or other
information storage device capable of reproducing the information when fed into a
computer, in addition to the coverage of dramatic, musical or artistic works,
cinematographic works and records.

Of late there has been considerable activity with regard to IPR in the legislative field
due mainly to the acceleration of international arrangements by WTO to liberalise trade
and the efforts made by WIPO which is an intellectual property organisation of the
United Nations to standardise laws internationally for the protection and enforcement of
IPR. All these activities at the national and international levels constitute recognition of
the important role which IPR play in the industrial and commercial field. A proper
understanding of these roles is helpful to appreciate why IPR deserve protection and
why their enforcement is repeatedly brought forward as an issue by industry and the
trade.

Patents are granted for inventions and are in reality grants of exclusive rights for a
period of 20 years as a reward for placing for public inspection at the Patent Office of
relevant information regarding those inventions so that all may benefit from the
advancement in scientific knowledge which those inventions represent. Inventions do
not come easily, they require intense research over time at considerable cost; the
patentee gets exclusive rights from which he may hope to gain a commercial
advantage for a period of 20 years while he and others use the advanced scientific
knowledge for further research and invention. In the case SmithKline and French
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Laboratories Limited v. Ferozsons Laboratories Limited reported in 1992 MLD 2226 the
Hon’ble High Court of Sindh held that “the defendants have not produced any evidence
to indicate that their drug has been produced by a process other than the process for
which the plaintiffs hold the patent”. This is yet another example of the fact that the
courts in Pakistan are not hesitant in granting full protection to intellectual property
rights. Other patent cases advancing the law on similar lines and decided by our courts
have been reported in 1987 CLC 1571 and 1992 CLC 2382.

Trade Marks are powerful instruments in the hands of a trader for distinguishing goods
with which he is connected in the course of trade from the goods of others. It is
sometimes forgotten that in the process the trader benefits the public as well, by
holding himself out in regard to the consistency in quality of his products bearing his
trade mark and the maintenance of that standard of quality in other goods which he
may provide from time to time under the same trade mark. An example of this powerful
instrument at work in the public interest is to be found in our pharmaceutical industry
where the chaos, created by the generic names scheme which facilitated the
promotion of sub-standard and spurious drugs, was stemmed and reversed by the
Drugs Act 1976, which in contrast to the earlier law provides that compound drugs
shall generally be registered under their respective proprietary names, and currently
this is the norm with single ingredient drugs as well.

As the supplier maintains consistent quality to protect and enhance his reputation, he
also gains in customer loyalty and attracts new customers. This is sometimes
mistakenly equated with monopoly power. The popularity of a trade mark does not
preclude new entrants in the same field to compete with the trade mark proprietor in
terms of product quality and price and such new entries are common and these natural
market forces preclude exploitation of the public under free market conditions. After
all, the beverage sold under the brand Coca-Cola did not prevent the entry of a
competing product under the brand Pepsi-Cola. In the case of the 7UP trade mark
where the proprietor who had used and registered the trade mark for beverages
opposed the registration of the identical trade mark for confectionary items such as pan
masala, the High Court viewed the matter as one attempting to enforce a monopoly
(see PLD 1976 Karachi 895 at pg. 900). The Supreme Court in PLD 1990 SC 313 did
not adopt this approach and refused registration to the applicants. The Supreme Court
was not deterred in refusing registration by the difference in the goods for which
registration was sought and for which the proprietor had used and registered the trade
mark. This trend was continued in the subsequent cases of Philips, (PLD 1990 SC
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1074 - where Philips, a foreign company, had never used or registered that brand for
sewing machines for which the same mark was sought to be registered by a local
person) and Toshiba (PLJ 1991 SC 57 - where Toshiba, a Japanese company, had
never been used or registered for fans for which the same mark was sought to be
registered by a local trader). In the 7UP cases the process of disposal of proceedings
before the Registrar of Trade Marks and in the Appellate Courts occupied a
considerable time. But the end result was salutary and achieved advancement through
judicial interpretation of an outdated law. However, the fact that this process took a
long time is daunting when one considers that these were commercial matters of
considerable importance to those litigating. The delay was no doubt due to the
complexities of the matter and cannot be regarded as representing the norm.

Under the Registered Designs Ordinance registrations are granted for new and original
designs of industrial products. These registrations are granted for features of industrial
products which appeal to the eye and are not dictated by mechanical needs or
principles of mechanics. Such registrations cover the shape or configuration of a
product and even a pattern such as that printed on a fabric, provided of course the
design is new and original. The exclusive right to use the design for a period of 20
years is granted in recognition of the design of the industrial product being new and
original.

The Copyright Ordinance specifies works in which the author or the owner has
exclusive rights to record, perform, copy, reproduce, broadcast and otherwise display
the works in which the copyright subsists. For this purpose works are literary,
dramatic, musical and artistic works, if original, cinematographic works and records.
Literary works now cover computer programs as well. There are many persons whose
livelihood depends upon the recognition of copyright in their works. The copyright
proprietor benefits from dealing with a copyright which he has in his works and
specially through the grant of licences.
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The availability of different laws for the protection of various categories of IPR
sometimes leads to an abuse of the processes available under those laws for which
those administering the laws need to be vigilant. For example a person unable to
register a trade mark will sometimes seek to register it under the Copyright Ordinance
although the Ordinance does not contemplate the registration of trade marks. This
practice has been deprecated in a recent decision of the Sindh High Court in 2003
CLD 1531. The High Court rejected the defense of the infringer based on a copyright
registration secured for what was essentially a copy of a foreign trade mark and which
should never have been registered as a copyright.

Even apart from the protection and enforcement available for IPR under the specific
laws mentioned and in the case of trade marks also under the common law, proprietary
rights may subsist in regard to secret processes and other trade secrets which have a
valuable role in industry and commercial ventures. Secret knowledge of this nature
can be licensed enabling a licensee to operate his venture to produce products of
international standard in the most efficient manner. This kind of secret knowledge is
often licensed together with a license of trade marks or of patents or registered designs
and results in the transfer of valuable technology not otherwise available. Both kinds
of licences are in essence based on contract. Licensing operations are readily
resorted to only where the owner of the underlying property or secret knowledge is
assured that the laws in place and the courts which enforce those laws respect the
underlying property rights and that the contractual licenses can be enforced in the
courts in accordance with their terms. What is required is a track record of reasonable
and speedy handling by the courts of litigation relating to such matters. This must
respect the underlying property rights and the terms on which they are licensed to
provide the necessary confidence required to licence. Clearly in the absence of this
confidence the owner of the underlying IPR or knowledge would be reluctant to licence
local manufacture. If the current lament on the tardiness with which investment is
forthcoming both locally and from abroad is to be removed and if investment is to be
encouraged it would be necessary to consider dispassionately whether our
enforcement procedures in place and the approach of our courts in granting suitable
remedies are sufficiently reasonable and are adequate to provide speedy relief
commensurate with the importance of the subject matter concerned. It is not helpful in
such matters for the court to take the view that perhaps in the distant future the
licensee may be able to establish that after all he has a case to be regarded as an
agent having an agency coupled with an interest. Licences of this kind preclude the
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agent from entering into any binding contract on behalf of the licensor and in fact the
licensee is in no sense an agent within the definition in the Contract Act.

As regards the underlying property, be it a trade mark or a patent or a registered

design or a copyright it is imperative to provide speedy and reasonable processes for
the granting of rights through registration where available and for the enforcement of
those rights against persons seeking to infringe them. Such matters are mainly civil
cases and should be regarded as commercial matters requiring urgent attention and
speedy remedies. Of course the rights sought to be enforced should be established
and genuine and there can be no compromise on that issue. From time to time
attempts are made to seek enforcement where no rights subsist. A typical example in
the English courts is of the expression “oven chips” in the Oven Chips case reported in
(1981) R.P.C. 69, where McCain’s claimed that they had proprietary rights in those
words as a brand and even succeeded in securing an interlocutory injunction but from
the Queens’ Bench Division. Upon appeal by Country Fair Foods Limited, the Court of
Appeal had no difficulty in reversing that judgement and in making cautionary remarks
that such cases should originate in the Chancery Division where the judges had
familiarity with equitable principles which normally arise in such matters. But where
rights are established for example through registration or in the case of a trade mark
through long and extensive use, a speedy remedy is the plaintiff’s right and it should be
available to him expeditiously or if remedy is to be denied to him for any good reason it
should be stated with equal expedition.

Matters relating to IPR raise important issues of fact and law and decisions on such
matters have far reaching effects including effects which encourage or discourage
industrial and commercial investment, as also the employment of available workforce.
These are by no means simple cases which could be dealt with through the usual
method by putting a specialized tribunal in place. Even if the creation of such a
tribunal is considered there can be no substitute for a full right of appeal to the High
Court on issues of fact and law with further appeal to the Supreme Court. In England a
High Court judge with experience in matters related to IPR is designated as an appeal
tribunal for matters arising from the Patent Office or the Trade Marks Office with a full
right of appeal on issues of fact and law to the Court of Appeal and beyond. The
jurisdiction of this tribunal is limited to appeals arising from decisions of the Patent
Office and the Trade Marks Office in relation to matters of registration. In other matters
related to IPR the High Court exercises its normal jurisdiction. The issues which arise
in an IPR case cannot be equated with the kind of issues that arise in a case relating to
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the recovery of bank loans or in a case related to the collection of taxes. The issues of
fact and law arising in an IPR case are generally of a more serious nature and are best
dealt with by the Courts in their ordinary jurisdiction. It is therefore not helpful to
appoint a specialised tribunal as is sometimes suggested. The number of IPR cases in
any case would not justify the constitution of a specialised tribunal. Also it needs to be
recognised that a right to approach the courts of general jurisdiction for justice in any
matter inspires confidence among those engaged in industry and commerce although
the availability of this right tends to be taken for granted.

Another matter which may be mentioned in the context of enforcement of IPR is the
facility often provided by organisations such as WIPO for special training in this
specialised field. Often fellowships offered for this purpose are availed by the
bureaucracy. Such offers provide an opportunity of interaction with persons performing
similar functions in different jurisdictions. It is important even for judges to take
advantage of such offers. This does not seem to be happening. Perhaps an
international organisation such as WIPO, being an organisation of the United Nations,
could help in this matter.

Intellectual Property Law vis-à-vis Globalisation

Globalisation a catchword of the new millennium is paving the way for increasing
hiatus between the urban and rural areas which provides validity to the argument in
new development for the emergence of two Pakistanis: the rural versus the urban, the
poor versus the rich. It is commonly known that boom in the markets generates
wealth, not equity and re-distribution. The developing countries like Pakistan are likely
to face new challenges in world trading system after WTO where the developing
economies are not able to claim an equitable share of the new world trade order.

Intellectual Property has acquired a wide international importance in recent years and
in this regard various treaties or conventions have come into existence for better
protection of intellectual property rights such as Paris Convention, Berne Copyright
Convention, Universal Copyright Convention, Madrid Agreement, Patent Co-operation
Treaty and last but not the least, TRIPS. Of these Pakistan is a signatory only of the
Berne and Universal Copyright Conventions and of the TRIPS Agreement under WTO
(World Trade Organisation). On the last mentioned i.e. TRIPS there has, of late, been
a lot of discussion and discourse and for the compliance of the requirements thereof
far reaching amendments have either already been made in the IP Laws in Pakistan or
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are being made in such IP Laws relating to trade marks, patents, designs, copyright,
etc. The new laws relating to Patents, Designs and Layout-Designs of Integrated
Circuits have come into force fully in the year 2000 and a number of important
amendments have been made in the Copyright Law in the same year, however, the
Trade Marks Ordinance 2001 has not been fully enforced or promulgated as yet. With
the enforcement of the new trade marks law it will become possible to register service
marks and collective marks and Pakistan may have to become a member of the Paris
Convention, just as India has already, which will also enable right holders to enforce
priority and to protect their well-known trade marks.

It is very important to strictly enforce the intellectual property rights for the reason that
an intellectual property is of immense value both commercially and otherwise. In many
cases heavy investments of money and skill go into the research and development of
new products and materials which are subsequently granted patent rights or copyrights
e.g. pharmaceuticals, chemicals, electronic and other equipment, machinery, computer
software, artistic, literary, cinematographic works, etc. which are created by the genius
of the human mind and thereafter commercially exploited by entrepreneurs resulting in
economic and industrial growth and further employment of manpower. A trademark on
the other hand is another form of intellectual property on which colossal amounts are
spent to make the public aware and with the onslaught of the cable television
products/trade marks can be advertised very widely at one go. As a result a relatively
new expression “Trans Border Reputation” has come into being. A trade mark is a
guarantee of quality and assures the consumer regarding the source of the product.
The growing complexity of trademark use in marketing is illustrated in the licensing of
the Harry Potter character from the popular children’s book series by J.K. Rowling.
Warner Brothers, which acquired worldwide merchandising rights to the work, was
amazed to see one of the biggest movie openings of all time which earned an
estimated USD 93.5 million in its first three days. Warner Brothers had divided up the
license rights among various of its business partners/licensees including competitor
Mattel to make toys, a California based software company to make Harry Potter
computer and video games; and Coca-Cola secured still other rights relating to the
marketing of the film. Seen in the context of this complex network of agreements, the
trademark licence becomes a way of “extending the brand” and co-marketing, so that
each product helps sell the other products by reinforcing the popularity of the
character.
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Trademarks are effective business tools that can communicate a strong focused
message about products, technologies, cultures and individuals. Unlike patents and
copyright, trademarks can be renewed indefinitely, which makes them a very powerful
IP asset. They are most effective when integrated into a total business and marketing
strategy which can include licensing and sales transactions involving strong products
and other forms of intellectual property but can be damaged when the products and
technologies they identify do not live up to customer expectations. Trademarks
perform a valuable macro-economic function in terms of identifying the origin of
products and technologies and thereby fostering accountability to the consumer. They
also play a strategic marketing role in individual enterprises. The most common use of
trademarks is in consumer advertising to promote product sales, but trademark use
has become increasingly sophisticated and varied. Trademarks help to cement
customer loyalty. In addition to promotion of product sales and cementing customer
loyalty, trademarks help their owners increase profitability, respond to unfair
competition, expand and maintain market share, differentiate products, introduce new
product lines, gain royalties through licensing programs, support strategic partnerships
and marketing alliances and justify corporate valuation in financial transactions.
Trademarks are also one of the basic elements of franchising. Examples of some well-
known trademarks are McDonalds, Coca-Cola, KFC, Calvin Klein (CK), Armani, Mont
Blanc and many others.
A geographical indication, like a trade mark communicates a message. It tells potential
buyers that a product is produced in a particular place and has certain desirable
characteristics that are only found in that place or region. Regional specialities may
have their stature enhanced in the eyes of the consumer when a regional collective
and its members enjoy the exclusive right to use a particular geographical indication.
The story of Basmati in India and Pakistan, which is still a contentious issue, illustrates
the success that can come from the strategic use of geographical indication. BASMATI
is a non-geographical name traditionally applied to a long-grain aromatic rice grown
and produced in a particular geographical region of the Indian sub-continent, namely, a
belt of North India and the adjacent part of Pakistan below the foothills of the
Himalayas, forming part of the Indo-Gangetic plain. Worldwide, BASMATI has been
exclusively associated with this particular type of rice originating in the aforesaid
region. BASMATI is a common heritage of Pakistan and India and both Pakistan and
India take pride in owning this precious rice which has certain unique characteristics
owing to the agro-climatic conditions prevailing in the specific regions of Pakistan and
India where it is grown. To put it in a nutshell, BASMATI is a treasured geographical
indication of Pakistan and India, giving collective rights to such legitimate users of the
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term and therefore, cannot be registered and appropriated as a trade mark which is a
private monopoly right.

The objective of copyright law is to boost the growth and advancement of learning
through building a rich heritage of culture for the public welfare. Primarily the copyright
laws foster the creation and dissemination of intellectual works for benefiting the
general public. Secondly, it recognises the brainchild of the author, his contribution to
society in emulating the skill of writing, in the form of some reward. Copyright provides
protection to original works of authorship such as books, paintings, architecture,
musical compositions and computer software. The introduction and enhancement of
new media, information and telecommunications technology such as the videocassette
recorder (VCR) in the late 1970s, the digital revolution in the 1980s and the internet in
the 1990s has consistently challenged both copyright laws and the cultural industries
and communications that live and prosper under them. In the area of music, MP-3
technology has made it easy to compress music files, so that they take up considerably
less space, are easy to upload and download over the internet, and can be neatly
stored in mobile devices. Because of the ease of use of such technologies, they can
be used to download and copy, without the knowledge or consent of the holders of the
rights to the music, in violation of the spirit and express provisions of copyright law.

Patents which protect a new and useful idea, give the inventor a temporary shelter
from the sources of market competition. The shelter is limited to the precise terms of
the claims of the patent, but it is sturdy and durable for many years. The premise of
the patent system is that this shelter and the resulting competitive advantage
encourage invention because inventors know that they can reap a financial reward
from their ingenuity. The patent system also promotes technological and business
competition because patent holders must disclose the details of their inventions in
exchange for the specified period during which they have exclusive rights over the
exploitation of their invention. As a result, both they and their competitors race to
improve those inventions and to use the technology to create new ones. The quid pro
quo for issuance of a patent is full disclosure of the invention. For this reason, patent
databases which are public and searchable on the internet are a rich source of
technical information that can be used, provided that the patent is not infringed. The
patent system is as solid as the assumptions on which it rests and it will stay effective
in its purpose only if it will keep on adjusting to change in the technical, economic,
social and political sphere. Adjusting to change today means adjusting to Globalisation
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and the Knowledge Economy and fitting in the new and ever changing environment
that is taking shape.

Hence in a nutshell, while intellectual property laws demand international

harmonization the fact is that these laws are impossible to enforce. The “on the
ground” reality therefore is not a single global order, but rather a patchwork of different
zones both within and between countries where intellectual property laws are enforced
to varying degrees. It is the heterogeneity of these zones each of which operates with
a fair degree of autonomy that allows global piracy to thrive.

By: Mr. Khawaja Mansoor

Advocate, Supreme Court of Pakistan
Chairman, Pakistan Intellectual Property Rights Association (PIPRA)
M/s. Vellani & Vellani
Karachi