The Jan Vishwas Bill, 2022 is introduced to further amend the provisions relating to easing of doing business by de-criminalizing minor offences and rationalizing compliance mechanism. This impacts a wide gamut of fields, including Intellectual property rights. The instant article is an in-depth analysis from the IPR point of view regarding the Jan Vishwas Act.
Objectives of Jan Vishwas Act
- Decriminalization: The act aims to decriminalize minor offenses under different laws, including those dealing with IPR.
- Ease of Doing Business: It eases the compliance requirements and takes away the fear of criminal prosecution to foster a better business environment.
- Compliance Focus: Owing to the fact that very few businesses intentionally violate any provisions of the law, it encourages voluntary compliance rather than deterring businesses with stringent criminal provisions.
Key Amendments in IPR Laws
The Jan Vishwas Act, 2022, provides for an amendment in various IPR-related statutes pertaining to decriminalization and improvement in ease of compliance. The key amendments are as follows:
Patents Act, 1970
- Amendment to Section 120: Unauthorized claim of patent rights: Penalty Increase: Fine changed from “up to one lakh rupees” to “up to ten lakh rupees”. Additionally, for continuing claims, a further penalty of one thousand rupees per day after the first day.
- Omission of Section 121: Wrongful use of words “patent office”.
- Amendment to Section 122: Refusal or failure to supply information:
- Sub-section (1): Penalty changed to “up to one lakh rupees” and for continuing refusal or failure, a further penalty of one thousand rupees per day after the first day.
- Sub-section (2): Penalty changed from imprisonment (up to six months) or fine, to “a sum equal to one half per cent of total sales or turnover, or five crore rupees, whichever is less”.
- Amendment to Section 123: Practice by non-registered patent agents: Penalty Change: Fine changed from “up to one lakh rupees for the first offence and five lakh rupees for subsequent offences” to “up to five lakh rupees”. For continuing defaults, a further penalty of one thousand rupees per day after the first day.
- Insertion After Section 124: Adjudication of Penalties:
- Authority: The Controller can authorize an officer to act as an adjudicating officer for inquiries and penalties.
- Procedure: Penalties are imposed as prescribed, with a reasonable opportunity for the accused to be heard.
- Section 124B: Appeal:
- Appeal Right: Aggrieved parties can appeal the adjudicating officer’s order within 60 days to an appellate authority, who must be of higher rank.
- Form and Manner: Appeals must be submitted as prescribed.
- Extension: Appeals can be admitted post the 60-day period if there is sufficient cause for the delay.
- Hearing: Appeals cannot be resolved without giving the appellant a hearing opportunity.
- Timeline: Appeals must be resolved within 60 days of filing.
- Non-Compliance: Failing to comply with adjudicating or appellate orders within 90 days results in a fine of one lakh rupees or imprisonment up to one year, or both.
- Amendment to Section 159: Power of Central Government to make rules: New Clauses:
(xiiia): Prescribes the manner of holding inquiries and imposing penalties under Section 124A.
(xiiib): Prescribes the form and manner for preferring appeals under Section 124B(2).
Trade Marks Act, 1999
- Sec 106: Penalty for removing piece goods, etc., contrary to Section 81: shall be omitted
- Sec 108: Penalty for improperly describing a place of business as connected with Trade Marks Office: shall be omitted
- Sec 109: Penalty for falsification of entries in the register: shall be omitted.
- Sec 103 and 104: These sections are for offences relating to falsification of trademarks and false application marks. The amendments seek to reduce penalty and enhance fine rather than imprisonment biased punishment towards monetary penalties for the offences of misuse of the trademark.
- Sec 107(2): the words “punishable with imprisonment for a term which may extend to three years, or with fine, or with both”, the words “liable to penalty of a sum equal to one half per cent. of the total sales or turnover, as the case may be, in business or of the gross receipts in profession, as computed in the audited accounts of such person, or a sum equal to five lakh rupees, whichever is less” shall be substituted.
- Sec 112A: The Registrar may issue an order to appoint an officer mentioned in section 3 as the adjudicating officer. This officer will conduct inquiries and impose penalties according to the provisions of this Act, following the prescribed procedures, and ensuring a reasonable opportunity for a hearing is provided.
- Sec 112B: Appeal:
- Anyone aggrieved by an adjudicating officer’s order under section 112A can appeal to an appellate authority, who must be at least one rank higher and authorized by the Central Government. The appeal must be filed within sixty days of receiving the order.
- Appeals must follow the prescribed form and manner.
- Appeals filed after sixty days may be accepted if there is a valid reason for the delay.
- The appellant must be given a reasonable opportunity to be heard before the appeal is disposed of.
- The appellate authority must resolve the appeal within sixty days of filing.
- Failure to comply with the adjudicating officer’s or appellate authority’s order within ninety days will result in a fine of one lakh rupees, imprisonment for up to one year, or both, in addition to the penalty.
- Sec 140(3): Power to require information of imported goods bearing false trade marks: The importer or their agent must comply with the requirement within fourteen days. If they fail to do so, they will be liable to a penalty of ten thousand rupees. The penalty will be levied and recovered by the authority designated under the Customs Act, 1962 (52 of 1962).
- Sec 157(2): Power to make rules:
(xxxiiia) the method for conducting inquiries and imposing penalties under section 112A;
(xxxiiib) the form and procedure for filing appeals under section 112B(2)
Copyright Act, 1957
- Section 68: Penalty for making false statements for the purpose of deceiving or influencing any authority or officer: shall be omitted.
Geographical Indications of Goods (Registration and Protection) Act, 1999
- Section 37A: Adjudication of Penalties
Authority: The Registrar can authorize an officer to act as an adjudicating officer for inquiries and penalties.
Procedure: Penalties are imposed as prescribed, with a reasonable opportunity for the accused to be heard.
- Section 37B: Appeal
- Appeal Right: Aggrieved parties can appeal the adjudicating officer’s order within 60 days to an appellate authority, who must be of higher rank.
- Form and Manner: Appeals must be submitted as prescribed.
- Extension: Appeals can be admitted post the 60-day period if there is sufficient cause for the delay.
- Hearing: Appeals cannot be resolved without giving the appellant a hearing opportunity.
- Timeline: Appeals must be resolved within 60 days of filing.
- Non-Compliance: Failing to comply with adjudicating or appellate orders within 90 days results in a fine of one lakh rupees or imprisonment up to one year, or both.
- Amendment to Section 42: Penalty Change: Replaces the term of imprisonment (up to three years) or fine with a penalty of 0.5% of total sales/turnover or five lakh rupees, whichever is less.
- Section 43: Penalty for improperly describing a place of business as connected with the Geographical Indications Registry: shall be omitted.
- Section 44: Penalty for falsification of entries in the register: shall be omitted.
- Amendment to Section 87: Power to make rules: New Clauses:
(oa): Prescribes the manner of holding inquiries and imposing penalties under Section 37A.
(ob): Prescribes the form and manner for preferring appeals under Section 37B(2).
Impact on Stakeholders
Business and Innovators
- Less Exposure to Criminal Liability: Companies face less exposure to criminal liability for minor offenses, hence encouraging innovation and entrepreneurship in a better way.
- Compliance provides the incentive for business to comply with the IPR laws with the knowledge that an entire company would not come down due to serious criminal penalties against its officials.
Legal and Compliance Departments
- Streamlined Processes: Their legal and compliance departments may ensure that the IPR laws are complied with without fearing protracted procedures of the criminal case.
- Cost Efficiency: Decreased legal expenses and potential liabilities associated with criminal cases enable the resources to be used more effectively.
Law Enforcement Agencies
- Efficient Use in Enforcement: The enforcement agencies can efficiently use available resources, serious violations would be least used, and the administrative burden for minor offenses is alleviated.
- Improved Monitoring of Compliance: It is more focused on monitoring the compliance and fining that improves the regulatory enforcement.
Criticisms and Concerns
- Probability of More Violations: Some opponents have argued that reduced criminal penalties encourage more violations by reducing the deterrent effect of criminal prosecution.
- Strong Administrative Mechanisms Called for: The imposition of monetary penalties and compliance mechanisms must be effective to avoid its misuse in ensuring that the intention behind the amendments is achieved.
Conclusion
The Jan Vishwas Act has brought an immense change in the regime of IPR regulation in India; by decriminalization of minor offenses and laying more emphasis on ease of compliance will make it a much more business-friendly environment that encourages innovation and entrepreneurship. The success of these amendments shall, however, largely depend on how effectively the new compliance mechanisms are implemented and balance is maintained between ease of doing business and robust protection of intellectual property.