ASIAN PATENT ATTORNEYS ASSOCIATION
RECOGNIZED GROUP OF SRI LANKA
REPORT TO THE ANTI -COUNTERFEITING COMMITTEE
63rd COUNCIL MEETING
08-11 NOVEMBER 2014
PENANG, MALAYSIA
1.
APPLICABLE STATUTE
The Law relating to Intellectual Property is governed by the Intellectual Property
Act No. 36 of 2003.
2.
PROVISIONS IN THE ACT
There has been no change in the law by way of amendment.
3.
PROCEDURE
Criminal
Action is instituted by way of a Private plaint and in some instances through
the Commercial Crimes Division of the CID which has been specially set up to
deal with these matters.
Civil
Action is instituted by way of a plaint in Commercial High Court.
4.
SIGNIFICANT CASES DURING THE PAST YEAR
•
Upon a complaint made by Disney Enterprises Inc. action was instigated against
an entity named Paragon Paper Industries for violating the Intellectual Property
rights by using the world renowned Disney characters on stationery products
without a valid license . The firm looked after the interest of Disney nEnterprises
Inc in this matter. The raids took place with a search warrant issued by the
Colombo Chief Magistrate Hon Gihan Pilapitiya and executed by the Colombo
Crimes Division. Approximately 34,000 Disney Stationery and templates were
taken into police custody and thereafter produced in courts. The representative
for Disney confirmed that the stationery items which were manufactured in mass
scale were of inferior quality. Disney Enterprises Inc. based in California, United
States of America, instituted action to safeguard and protect its well reputed
brand image and for violation of its Intellectual Property Rights in respect of its
well known cartoon characters such as Mickey Mouse, Minnie Mouse, Donald
Duck, Daisy Duck, Goofy, Pluto, Winnie the Pooh, Tigger, Piglet, Eeyore,
Cinderella, Snow White and the Seven Dwarfs.
As one of the world’s most admired companies, Disney sets high standards in
its operations throughout the world and is extremely concerned in providing
quality products in the best interest of the consumer, especially products that are
enjoyed by children.
According to investigations conducted, these stationery items manufactured in
large scale with poor quality paper and toxic paint are distributed across Sri
Lanka for unsuspecting children.
Disney Enterprises Inc. complained that the actions of this party was violating
its intellectual property rights causing severe loss and damage to its goodwill
and reputation. It is clear that the actions of the accused is an attempt to piggy
back on the goodwill and reputation built up by the brand over the years. This
matter is currently pending in Court. The sale of counterfeit goods is an
infringement under the Intellectual Property Act No. 36 of 2003. Under the said
Act, if a person and/or persons are convicted, a fine of up to Rs. 500,000 and/or
six months imprisonment may be imposed.
•
The firm filed action on behalf of Red Bull AG of Switzerland, which owns the
world renowned energy drink brand of the same name, in the Commercial High
Court of Colombo, against United Ceylon Venture Traders which had imported
the Thai Red Bull drink - Krating Daeng - to Sri Lanka, which, according to the
terms of the agreement between the Thai TCPI company and Red Bull, cannot be
imported to or sold in Sri Lanka. Red Bull AG had detected a consignment of the
Thai product passing through Sri Lanka Customs and immediately informed
Customs to detain the container and prevent its release. It was argued on behalf
of Red Bull AG that the sales volume of the Red Bull energy drink has grown
from 113 million units in 1994 to over 5.1 billion in 2012, worldwide. Based on
these figures, Red Bull has become the unchallenged market leader for energy
drinks. In Sri Lanka, the numbers have risen with consumption reaching
approximately 4,500,000 units in 2012.The firm stated that the infringing product
is not manufactured by Red Bull AG nor under license from Red Bull AG, nor
has Red Bull AG licensed and/or authorized any other party to manufacture or
sell the infringing product. It further averred that Red Bull AG, as the registered
owner of the Red Bull trademark, has not consented and/or authorized and/or
licensed United Ceylon Venture Traders and/or any other individual or
organization to use the said trademark. In many jurisdictions throughout the
world, courts have determined the Red Bull word mark and the double bull
device trademark to be well known. Due to the enormous good reputation and
unmatched brand value associated with the Red Bull trademarks, the Krating
Daeng Red Bull product imported by United Ceylon Venture Traders would
mislead the public into mistakenly believing that both the Krating Daeng
product and the Red Bull energy drink product emanate from the same source.
Thus, it was argued on behalf of Red Bull AG that the consumer is confused by
the presence of two similar products in the market exhibiting identical
trademarks. By reason of the fact that United Ceylon Venture Traders is using
trademarks identical to the registered trademarks of Red Bull AG for identical
goods in respect of which the said trademarks are registered. The firm further
informed court that the infringing product was not being lawfully imported,
distributed or sold in Sri Lanka.It was also argued that Red Bull has been present
and active in the Sri Lanka market since 1999 and Red Bull has emerged as the
market leader in the energy drink category in Sri Lanka.
Further, it was pleaded in the plaint that the acts of United Ceylon Venture
Traders, of importing the infringing product into Sri Lanka and/or distributing
and/or marketing and/or offering it for sale and/or dealing in the infringing
product in Sri Lanka without the consent of Red Bull AG would cause and/or are
likely to cause confusion, would damage and/or dilute the goodwill and
reputation of Red Bull AG and mislead the public with respect to the quality
and/or source of the product.
Upon satisfaction of documents and annexures filed, the Colombo High Court
issued enjoining orders preventing the Defendant Company United Ceylon
Venture Traders from causing to be released into free circulation the allegedly
infringing products ‘Red Bull’ energy drink .Commercial High Court Judge,
M.C.B.S. Moraes, issued enjoining orders preventing United Ceylon Venture
Traders and/or any one acting under or through it or on its behalf from releasing
into free circulation the infringing products imported by United Ceylon Venture
Traders and also preventing the first defendant and/or any one acting under or
through it or on its behalf from importing and/or distributing and/or marketing
and/or offering for sale in any manner whatsoever, any products bearing the
plaintiff’s trade name ‘Red Bull’ and/or the trademarks referred to and depicted
in paragraph 12(c) of the plaint. The action was filed under the terms of the
Intellectual Property Act No 36 of 2003 and the matter was concluded upon
terms of settlement being tendered and undertakings given by United Ceylon
Venture Traders.
•
This is the first time that a seizure action took place in Sri Lanka, for selling
unauthorized and/or counterfeit Microsoft Certificate of Authenticity (COA)
stickers, without purchase of original Microsoft software. The firm, on behalf
Microsoft, U.S.A., made a complaint to the Criminal Investigations Department
(CID) against the unauthorized seller, and then arranged a trap purchase to take
place in a public location with CID officers witnessing. The CID arrested the
accused and conducted a raid which netted 20 numbers of such stickers. When
police interrogation of the accused revealed that it was another party who was
the main distributor of theses unauthorized COAs, the firm arranged yet another
trap purchase to take place during which the CID seized over 40 numbers of
counterfeit COAs in the possession of the distributor and took the distributor
into custody. Thereafter, upon information revealed by both the re-seller and the
distributor, a third raid for the same transaction was arranged two days later.
This raid targeted the main importer into Sri Lanka of the unauthorized and/or
counterfeit COAs. Accordingly, during the raid, the CID discovered over 400
numbers of such stickers. Three separate criminal actions were filed in the
relevant Magistrate’s Court and the accused were fined by the Magistrate. Two
of the accused also had imposed upon them 6 months’ imprisonment, suspended
for 2 years. This was a very successful seizure action against violators of
Microsoft copyrights in Sri Lanka, with three separate raids taking place.
Tabulated below are some of the Principal brands and the number of items
seized during the past year by the firm.
Number of items
Trademark
Type of Case
Goods involved
Walt Disney
Criminal
Stationery items
34,000 exercise
books with the
Mickey Mouse
logo, Donald Duck
and Winnie the
Pooh characters
Walt Disney
Criminal
Stationery items
6000 exercise
books with
characters of
Mickey Mouse,
Minnie Mouse,
Pluto, Winnie the
Pooh and the
Princesses
Microsoft
Criminal
software
seized
400 copies of fake
Windows 7 COA’s
Microsoft
Criminal
software
BSA
Criminal
Software
Victoria’s Secret
Criminal
Garments
40 copies of
counterfeit COA’S
None
2800 ladies
under garments
Sudath Perera Associates