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21 September 2016Trademarks

The pirate busters: India’s new IP crime fighters

A menace is a person or thing that is likely to cause harm, according to the Oxford English Dictionary, and in the 21st century, this “menace” for some intellectual property owners is online piracy. It has become the norm to read stories of films being leaked illegally online before their official release in cinemas. This is a problem which is particularly true in India, whose rich film industry is lauded worldwide.

On June 24, 2016 US ambassador to India, Richard Verma, and Indian IT minister Kalvakuntla Taraka Rama Rao announced the launch of the Telangana Intellectual Property Crime Unit (TIPCU), the first state-level IP enforcement agency in India. Telangana is one of India’s 29 states.

Verma said: “I congratulate the government of Telangana, the Telangana police, and the Federation of Indian Chambers of Commerce and Industry for their leadership supporting this great initiative. Hyderabad [the capital city of Telangana] has long been an intellectual property rights leader.”

The US and India, he added, are “two robust democracies that value innovation and entrepreneurship. But the system that supports this creativity and imagination is under strain”.

In the modern world, piracy, illegal downloads and illegal film recordings threaten creators’ business models. The growth of the digital age has only made it easier for the public to easily view films and TV shows illegally.

India is currently the seventh largest economy in the world as measured by nominal gross domestic product by the International Monetary Fund’s (IMF) estimates for 2016.

Verma alluded to India’s global economic reputation at the launch of TIPCU.

“IP rights infringement also negatively impacts on India’s global economic reputation as a destination for investment,” he said.

“Investors today are watching with interest how governments and businesses are working together to protect intellectual property rights, and they will make decisions based upon the quality of these actions,” he added.

In January this year, the IMF published its “World Economic Outlook Update”, in which it found that “India and the rest of emerging Asia are generally projected to continue growing at a robust pace, although with some countries facing strong headwinds from China’s economic rebalancing and global manufacturing weakness”.

However, US-based research group and non-profit business membership organisation The Conference Board released its “Global Economic Outlook 2016” report, saying that it does not expect “any improvement in India’s economic growth performance in 2016 relative to 2015”.

India released its new IP rights (IPR) policy in May this year and its executive summary mentioned that the policy “will promote a holistic and conducive ecosystem to catalyse the full potential of IP for India’s economic growth and socio-cultural development”.

“The rationale for the national IPR policy lies in the need to create awareness about the importance of IPRs as a marketable financial asset and economic tool,” it added.

Creativity and innovation underpinned by IP is at the forefront of the policy and the IP system will be used to “foster creativity and innovation and thereby promote entrepreneurship and enhance socio-economic and cultural development”, as well as focus on enhancing access to healthcare, food security and environmental protection.

Further evaluating the role that TIPCU can play in strengthening IP protection in India, Verma said: “TIPCU can play a crucial role locally in helping to improve the implementation of IP laws. US and Indian agencies regularly meet to exchange best practices on copyright protection and we will continue to support units like TIPCU. I hope one day TIPCU can become a model for the entire country.”

Film industry in focus

TIPCU’s main area of focus is to monitor online piracy and block websites and it will be working with representatives from the Telangana state IT ministry, cyber crime police, the Telugu Film Chamber of Commerce (TFCC), representing the Telugu language film industry, and legal and financial experts.

Daggubati Suresh Babu, president of the TFCC, said at the launch of TIPCU: “The piracy which has become quite widespread these days online is compared to a seven-headed hydra by anti-piracy agencies as it struggles for aid without such enforcement agencies in the state.”

According to a report by professional services company Deloitte and the Associated Chambers of Commerce and Industry of India, called “Digitisation & Mobility: Next Frontier of Growth for M&E”, the Indian film industry—‘Bollywood’—is expected to grow by 17% each year until the 2017 financial year. The report also highlights that big Indian movies earn millions of rupees overseas.

Telugu cinema, also known as ‘Tollywood’, is produced in the Telugu language and is a well-known sub-genre of Indian cinema.

Abhijeet Deshmukh, attorney-at-law at Khurana and Khurana, tells WIPR that in India’s hour of need, TIPCU is a unit that is necessary to fight piracy in Bollywood and Tollywood.

“The TFFC recently claimed that there were 14,000 sites and 89,000 illegal downloads of movies, causing losses worth millions of rupees,” he adds.

"US and Indian agencies regularly meet to exchange best practices on copyright protection and we will continue to support units like TIPCU. I hope one day TIPCU can become a model for the entire country.”

Sunil Krishna, managing partner at India-based law firm Krishna & Saurastri Associates, says: “TIPCU has been set up by the state government of Telangana under the cyber crime wing of the Criminal Investigation Department. It is a great initiative and one of the first dedicated units tackling online piracy, sending a strong message of the government’s commitment to act against online piracy.

“It may be premature to comment on its functioning, but since the state of Telangana hosts one of the important regional film industries of the country, it appears that at present the focus of TIPCU might be more on cracking down on websites indulging in illegal downloads and spreading pirated films.

“This is unlike the UK’s Police Intellectual Property Crime Unit (PIPCU), which tackles all serious and organised IP crime using online platforms including counterfeits, except pharmaceutical goods,” Krishna adds.

“However, since there is also a large presence of IT companies in Telangana and particularly in the city of Hyderabad, we expect that TIPCU will also take up offences pertaining to counterfeits and e-commerce related issues. From the reports available, TIPCU is supposed to identify perpetrators of online piracy, block websites, their revenues and pursue action,” he adds.

“We can expect that in the future, TIPCU may widen its scope,” says Adheesh Nargolkar, partner at law firm Khaitan & Co.

Improvement for IP

Krishna adds that the “IP regime in India is rapidly progressing and adapting to changes in technology and needs of the industry”.

Deshmukh says that as TIPCU is the first unit of its kind in India, it “seems to be a vigilant step by the Telangana state government in setting up a special unit dedicated to tackle serious and organised IP crime such as piracy”.

It follows recent initiatives by the Indian government including “providing incentives to start-ups for IP generation, accession to the Madrid Protocol of international registration for trademarks, announcement of its IPR policy, and hiring more personnel in its IP offices”, and “measures such as TIPCU bear testimony to the developments”, Krishna adds.

“Measures such as training and increasing awareness among IP offices and enforcement agencies such as the police, and setting up more units such as TIPCU in other states of the country, will be just a few steps to further improve our IP regime,” he says.

More generally at the moment, Nargolkar says, what India needs “is faster processing of IP applications. The huge backlog with the IP office is a deterrent to domestic as well as international applications”.

“The recently published IPR policy seeks to address these issues. However, this will require legislative reforms, which may take time,”
he adds.

Legislative reforms and stricter enforcement can be a “more effective method” to tackle online piracy in the country, according to Nargolkar.

Deshmukh adds: “Units like TIPCU are essential to curb the menace of piracy and IP infringement in India, which ultimately helps retain confidence among the authors, creators and owners towards their IP in India. Now the actual effective working of the unit is expected to speak louder than words and help clear the menace of piracy.

“It is essential to have agencies like TIPCU across the country which actively participate in curbing the threat to IP. This would help retain confidence among IP rights holders and will undoubtedly lead to growth of innovation in India,” he says.

The UK’s enforcer

The UK launched its own IP law enforcement unit, PIPCU, in 2013. The unit is operated by the City of London Police and started with £2.56 million ($3.33 million) of funding from the UK Intellectual Property Office (IPO). In 2014, it was announced that PIPCU had received a further £3 million
from the IPO to finance the unit until 2017.

In its short time in operation, PIPCU has successfully arrested and sentenced criminals who are selling or distributing IP-infringing goods. This year has seen it successfully bring IP criminals to justice. In February, Adeel Arshad was jailed for two years after he had sold more than 2,000 mainstream counterfeit DVDs such as “Game of Thrones” and “Breaking Bad” on the internet. In August PIPCU arrested three men in Lancashire for selling illegal set-top boxes on the internet to unwitting customers for a yearly fee of £400.

PIPCU also operates through partnerships with organisations such as domain name registry Nominet, the Anti-Counterfeiting Group, the Federation Against Copyright Theft, PRS for Music, Alliance for Intellectual Property, IP Crime Unit and the British Phonographic Industry.

The scalps taken by PIPCU show that IP units can work successfully, but they are still facing daily counterfeit and piracy challenges. If TIPCU can emulate some of these successes, it could go a long way to deterring infringement online. The menace of online piracy is still present in the 21st century, but with units such as TIPCU, perhaps that threat will decline.

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