What is criminal breach of trust in IPR

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Information about What is criminal breach of trust in IPR

Published on December 23, 2016

Author: pranavgupta24

Source: slideshare.net

1. Remedies against exploitation of Intellectual Property The intellectual property is protected by the sanctions of law and a right to secure one’s intellectual property is a statutory right1 . It is well known principle of law that where there is a right there is a remedy, which is derived from the maxim ubi jus ibi remedium. India has four statutes protecting the infringement of intellectual property of a person, namely, (a) The Trade Marks Act, 1999, (b) The Copyright Act, 1957, (c) The Patents Act, 1970 and (d) The Designs Act 2000. Not limited to remedies available in those statutes, an aggrieved person may have recourse to the provisions in Section 479 to 489 Indian Penal Code, 1860 and Section 38 of the Specific Relief Act, 1963. IPR infringement in case through Criminal Breach of trust. The essential ingredients of Criminal breach of trust are under section 4052 : • The accused must be entrusted with property or dominion over it. • He must have dishonestly misappropriated the property or converted it to his own use or disposed of it in violation of such trust In order to establish criminal breach of trust, the most important aspect here is to prove , first, wether term Property used n intllectual property falls in the ambit of normal property in general sense and dominion over it. And second, misapropriation, conversion etc. leading to violation of such trust.                                                                                                                 1  Significance  Of  Remedies  Available  In  Intellectual  Property  Rights;  Author:  Abhinav  Gaur;   Http://Lex-­‐Warrier.In/2013/05/Significance-­‐Of-­‐Remedies-­‐Available-­‐In-­‐Intellectual-­‐Property-­‐ Rights/#Identifier_3_3584   2  405.  Criminal  Breach  Of  Trust.—Whoever,  Being  In  Any  Manner  Entrusted  With  Property,  Or   With  Any  Dominion  Over  Property,  Dishonestly  Misappropriates  Or  Converts  To  His  Own  Use   That  Property,  Or  Dishonestly  Uses  Or  Disposes  Of  That  Property  In  Violation  Of  Any  Direction  Of   Law  Prescribing  The  Mode  In  Which  Such  Trust  Is  To  Be  Discharged,  Or  Of  Any  Legal  Contract,   Express  Or  Implied,  Which  He  Has  Made  Touching  The  Discharge  Of  Such  Trust,  Or  Wilfully   Suffers  Any  Other  Person  So  To  Do,  Commits  “Criminal  Breach  Of  Trust”  

2. Property: The famous international author on property Bentham expresses the inter-relationship between law and property in his book Theory of Legislation as3 : Property and law are born together, and die together. Before laws were made there was no property; take away laws, and property ceases. Intellectual property rights are like any other property right4 . Rights allow creators, or owners, of patents, trademarks or copyrighted works to benefit from their own work or investment in a creation. The Bombay High Court in the case of Commissioner of Income- tax v. Taw Services Ltd. (MANU/MH/0139/1979: 122 ITR 594) held that the word "property" used in section 2(14) of the Act is a word of the widest amplitude and the definition has re- emphasized this by the use of the words "of any kind", Any right which can be called property will be included in the definition of "capital asset"5 Authority for Advance Ruling in the case of foster's Australia Ltd. (302 ITR 289)6 held that "Property of any kind" undoubtedly includes intellectual property which is but species of intangible property. Trade mark. Brand, goodwill, technical know- how relating to the manufacture of goods would all qualify to be treated as capital assets within the meaning of section 2(14) (a)7 of the Act. In a Supreme Court judgment definition in a 405 does not restrict the property to movables or immoveable alone. In the case of R K Dalmia vs Delhi Administration8 , the Supreme Court held that: 1. The word ‘property’ is used in the Code in a much wider sense than the expression ‘moveable property’. 2. There is no good reason to restrict the meaning of the word ‘property’ to moveable property only, when it is used without any qualification in s 405.                                                                                                                 3  Real  Property  Vs  Intellectual  Property    By  Dr.  Sudhir,  Http://Www.Altacit.Com/Wp-­‐ Content/Uploads/2015/03/12-­‐REAL-­‐PROPERTY-­‐Vs-­‐INTELLECTUAL-­‐PROPERTY.Pdf   4  What  Is  IPR?  By  World  Intellectual  Property    Organization;   Http://Www.Wipo.Int/Edocs/Pubdocs/En/Intproperty/450/Wipo_Pub_450.Pdf   5  Commissioner  Of  Income  Tax,  Bombay  City  I  Vs.  Tata  Services  Ltd.  (16.01.1979  -­‐  BOMHC)   6  Discussed  In  Case  Of  :  Mylan  Laboratories  Ltd.    Vs.  Asst.  Commissioner  Of  Income  Tax MANU/IH/0015/2015   7  14(1)(A)  Property  Of  Any  Kind  Held  By  An  Assessee,  Whether  Or  Not  Connected  With  His   Business  Or  Profession;   8  AIR  1962  SC  1821  

3. 3. Whether the offence defined in a particular section of IPC can be committed in respect of any particular kind of property, will depend not on the interpretation of the word ‘property’ but on the fact whether that particular kind of property can be subject to the acts covered by that section. The word ‘dominion’ connotes control over the property. In Shivnatrayan vs State of Maharashtra9 , it was held that a director of a company was in the position of a trustee and being a trustee of the assets, which has come into his hand, he had dominion and control over the same. Misapropriation, Conversion etc. Leading To Violation Of Such Trust10 : In case of InPhase Power Technologies Ltd. V. ABB India11 , InPhase is a private limited Company formed by the former employees of ABB India (hereinafter referred to as "ABB" or "the Respondents"), holding significant posts at the Company. InPhase alleged to • Misappropriated information for the making of a patented product of ABB • Consequently infringing ABB's Patent • Infringed ABBs' trademarks during the marketing, distribution, and sale of their products. • Directors of InPhase had formed a competitive establishment ie: InPhase Power Technologies Ltd. , while they were still employed under ABB India which was evident inter alia from the use of inphase as the domain names even before they had resigned. The Hon'ble High Court of Karnataka held that the contentions made by InPhase were frivolous as mere few changes in a patented product can be ignored if they do not significantly change it or its use. The Court also placed reliance upon (Bombay Dyeing And Manufacturing Co. Ltd. v. Mehar Karan Singh 2010 ) a case12 cited by ABB India Ltd. wherein it was observed that "a person, who obtained information in confidence, is not allowed to use it as a "springboard" for activities detrimental to the                                                                                                                 9  AIR  1980  SC  439.   10  India:  Springboard  Doctrine  In  India:  Inphase  V.  ABB  India  ;  Last  Updated:  11  November  2016   Article  By  Vikrant  Rana  And  Sanchi  Malhotra,  S.S.  Rana  &  Co.  Advocates;   Http://Www.Mondaq.Com/Content/Company.Asp?Article_Id=543270&Company_Id=570   11  Https://Indiankanoon.Org/Doc/137445049/   12  Bombay  Dyeing  And  Manufacturing  Co.  Ltd.  V.  Mehar  Karan  Singh  2010  (112)  Bomlr  3759;   Https://Indiankanoon.Org/Doc/286447/  

4. persons who made the confidential communication, it was held that breach of confidential information depended upon the broad principle of equity that he who receives information in confidence shall not take unfair advantage of it." And similarly in case of Jaikrishnadas Manohardas Desai vs State of Bombay, it was held that dishonest misappropriation or conversion may not ordinarily be a matter of direct proof, but when it is established that property, is entrusted to a person or he had dominion over it and he has rendered a false explanation for his failure to account for it, then an inference of misappropriation with dishonest intent may readily be made13 . From above mentioned judgment, it is evident that punishment for infringement in case of IPR falls with in the ambit of criminal breach of trust (IPC section 405). The term property fall with in the interpretation of property in general. So, criminal proceedings in case of infringement can be brought against the person taking said act (CR, TMA etc.) and IPC. Relationship between IT act & IPC incase of Copyright infringement The Information Technology Act, 2000 (“IT Act”) prescribes punishment for ‘cyber contraventions’ (Section 43 (a) to (h)) and ‘cyber offences’ (Sections 65-74). The former would include gaining unauthorized access, and downloading or extracting data stored in computer systems or networks, and may result in civil prosecution. The latter category covers ‘serious’ offences like tampering with computer source code, hacking with intent to cause damage, and breach of confidentiality and privacy, all of which would invite criminal prosecution (the Copyright Act, 1957 like literary, dramatic, musical, artistic and cinematographic works. It has granted the status of “literary work” to databases as well, although this is limited only to computer databases. Therefore copying the computer database, or copying and distributing the database would amount to infringement of copyright). The offences of theft14 and                                                                                                                 13  Criminal  Breach  of  Trust  –  by  Divi  Jain;  http://www.legalserviceindia.com/articles/crbt.htm   14  Section  378,  379  of  IPC  

5. misappropriation15 under the IPC are punishable with imprisonment up to three and two years respectively, with or without fine16 . General Penal Provision Dealing with infringement of IPR. 1. Criminal Remedies for Trademark: • Section 482, IPC: Punishment for using false property mark. • Section 483, IPC: Punishment for counterfeiting a property mark • Section 484, IPC: Punishment for counterfeiting a mark used by a Public Servant. • Section 485, IPC: Punishment for making or possession of any instrument for counterfeiting a property mark. • Section 486, IPC: Punishment for selling goods marked with a counterfeit property mark. • Section 487, IPC: Punishment for making a false mark upon any receptacle containing goods. • Section 488, IPC: Punishment for making use of any such false mark. • Section 489, IPC: Punishment for tampering with property mark with intent to cause injury. 2. Criminal Remedies for Copay Rights17 : The Penal Provisions under the Copyright Act, 1957 are contained in Chapter XIII of the Act. The punishment for infringing Copyright is contained under section 63, 65 of the Act and the powers of the Police are contained under section 64 (1) of the Act. An offence under the Copyright Act is cognizable and non-bailable. An offence concerning infringement of Copyright is punishable with an imprisonment of not less than 6 months but which may extend to three years. The minimum fine under the Act is INR 50,000/- extendable to INR 2,00,000.                                                                                                                 15  IPC,  Section  403   16  LEGAL  ASPECTS  OF  DATA  PROTECTION  ;   http://www.majmudarindia.com/pdf/Data%20Protection   17  CRIMINAL  PROSECUTION  FOR  IP  VIOLATIONS  ;  Author:  Advocate  Jay  Bhardwaj;   http://www.rkdewan.com/articledetails.php?artid=114  

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