Intellectual property: these legal steps you can take if your IP rights are violated in India

What to do if your intellectual property is infringed in India? According to our lawyer Van Lavanya, as a European company, you have three options: send a Cease & Desist letter, initiate civil or criminal proceedings. She explains when which remedy applies and what to expect at each step.

Cease & Desist letter

When there is counterfeiting (the unauthorized imitation of a branded product) and/or piracy (the unauthorized copying of a product protected by intellectual property rights), the first option available to the aggrieved party is to send a Cease & Desist letter requesting that the infringing acts cease(cease) and remain ceased(desist).

The purpose of this letter is to resolve the dispute quickly and without litigation. Moreover, this means is very cost-effective to enforce IP laws before taking legal action. It is recommended that this letter be sent by an attorney to show that the company is considering legal action.

Should the cease and desist letter not work, the aggrieved party can always decide to go to court. Indian IP law has both civil and criminal approaches for this purpose:

Civil action for IP infringement

The civil action is designed to stop the distribution, manufacture or sale of the infringing product. A choice can be made to bring a claim for damages or to gain insight into the infringing party's accounts.

If insight into the accounts is chosen, the infringing party must hand over the profits they made from the illegal activities to the injured party. In a claim for damages, the court sets an amount to be paid by the infringing party.

During ongoing civil proceedings, the court may even issue injunctions designed to prevent imminent infringement of IP rights. The court can impose an ad interim injunction on the opposing party. This is prohibiting any action with the aggrieved party's product until the dispute is resolved. However, the injured party must be able to show that if the temporary injunction is not granted, it will result in irreparable losses.

The Mareva injunction also protects the interests of the aggrieved party during litigation and is granted to stop the opposing party from selling its products or services until the trial ends.

Further, under a Anton Pillar Order, a company may go to the opposing party's location with a court-appointed commissioner to search and seize relevant documents and counterfeit goods. This may be decided to prevent the removal or destruction of evidence before trial.

If the infringing party is unknown (for example, if it is an e-commerce company), action can still be taken on the basis of a John Doe order. This gives prosecutors the freedom, with the help of a court-appointed commissioner, to raid locations where infringement activity may be occurring.

Learn how to protect your intellectual property already when setting up your entity in India

Criminal proceedings for IP infringement

In India, IP rights are private rights enforceable through civil proceedings. Yet the Trademark Act, the Copyright Act and the Geographical Indications Act, also have criminal remedies. Penalties can range from 6 months to 3 years in prison and a fine of 50,000 to 200,000 rupees (550 euros to 2250 euros).

Under these laws, suspects are subject to prosecution and police can conduct raids and seize property without a court order.

Because criminal investigations take a long time to complete, there is a large backlog of cases in these courts. To get around these years of proceedings, the courts have created an option of plea bargaining. In this case, the offending party accepts its guilt in exchange for remission of jail time and compensation for damages suffered by the injured party.

Always seek legal advice first

It is important to always seek legal advice first about suspecting that someone is infringing on your intellectual property rights. Making threatening demands without proof is illegal.

An intellectual property legal expert can help you determine whether the infringement of your property rights is actionable and where to report it. If you choose to file a civil lawsuit as well, a local IP lawyer can help you file and build a strong case.

How to avoid a business conflict in India

India offers enormous business opportunities for Dutch companies, but entrepreneurs need to be well prepared. Five tips to avoid business failures and conflicts.

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1. Know who you are doing business with
It is advisable to conduct thorough background research on the party you want to do business with in India. What is their reputation in the market? Who are their key customers? What does the management team look like? Does it include the shareholders? Are there any lawsuits open or is the company being sued? Have there been any legal conflicts in the past? This information is publicly available and can be made insightful by specialized Indian parties.

2. Check the experiences of international customers
The question you should always ask Indian customers as an exporter is whether they do business with international (Western) companies more often. This says something about the mentality and professionalism of the company. Don't take the Indian party's word for it, but also check with the Western party whether it is true and how the cooperation went.

3. Engage an Indian lawyer in a timely manner
Make sure you have cooperation documents drafted and reviewed by a specialized Indian lawyer. Do not wait for a contract proposal from the Indian party, but draw up your own contract together with an Indian lawyer. Then have your Indian business partner look at it and make any changes together in a second round of review. Such a thorough approach ensures involvement of both parties and produces an agreement that takes into account the Indian context.

4. Intellectual Property
India has very comprehensive intellectual property legislation. This includes all aspects that entrepreneurs may have to deal with: from copyright and trademarks to industrial design and trade and brand names. For Dutch entrepreneurs there are numerous possibilities to protect their intellectual property in India. Make sure you always have good contract templates with strong clauses that address and protect intellectual property (IP). Proper preparation and contractual protection of your intellectual property helps tremendously in case of escalation.

5. Relationship, relationship, relationship
Finally - in addition to the formal protective measures you should take - there is no more effective way for preventing business conflicts than to create a good, personal business relationship. When you have a good relationship with your Indian business partner, conflicts will rarely escalate through formal routes.

Have you run into a problem with an Indian customer or partner and the situation remains unresolved? Or would you prefer to have a background check performed? Our legal experts are ready to answer your questions.

Brabants ENS Clean Air experiences difficult market entry in India despite high demand for unique technology

ENS Clean Air from Brabant and artist Daan Roosegaarde jointly developed a so-called smog tower, which removes fine dust from the air. After the success in China, requests from India flooded in, but market entry was difficult. "You need to be in it for the long haul in India," says Esmée van de Vorle, managing director of ENS Clean Air.

Managing Director Esmée van de Vorle pitch ENS Clean Air's air purification technology during the trade mission in India

First steps in India

The first contacts with India did not turn out as the Brabant family business ENS Clean Air had hoped. "We have an interesting technology for countries that struggle with poor air quality," says Esmée. "Not surprisingly, soon after we were founded in 2009 we were approached by a potential Indian partner. I flew back and forth with my mother, the founder of ENS, several times to see if we could actually set up a joint venture with this potential partner. It just didn't seem like we could keep full ownership of our technology and that closed the door on us right away. Our goal is clean air for everyone, but this way it didn't feel right." After this experience, India disappears from ENS's sights for a while. Until Esmée got talking to a local engineer at a trade fair in Germany. He wanted to link the company from Brabant to the European Business and Technology Centre in Delhi, because he thought that India could make good use of ENS's technology. "We seized the opportunity. Perhaps with the help of European experts on the ground we could find the right partner." 

The applications from India are rolling in

While the Brabant family business is working with the EBTC to find a suitable business partner in India, artist Daan Roosegaarde is simultaneously starting his world tour with the Smog Free Tower. "That's a design tower incorporating our air purification technology," Van de Vorle explains. "That exposure suddenly got the whole world interested in us. One of the interested parties was the Dutch Embassy in Delhi, which is keen to help ENS gain a foothold in India. "And then it all goes really fast," says Esmée. "Through the EBTC we met a suitable partner with whom it clicked well, and through our contact with the Dutch embassy we not only got an assignment from The American Embassy School to improve the air quality in their courtyard, but also a last minute spot in the trade mission in India led by Prime Minister Rutte."

Don't shy away from pitching at a children's party

- Esmée van der Vorle - Managing Director ENS CLEAN AIR

A trade mission is hard work

"Trade missions are mainly a very nice way to make contacts and to get exposure for your business," explains Esmée. "So don't expect to come home after your participation with all the hard deals under your arm. Especially not in a country like India where building a relationship of trust between trading partners is ten times as important." According to Esmée, making good contacts is therefore one of the most important lessons she learned about business from her mother and would also like to pass on to other entrepreneurs. "You are on a business trip to work, so you just have to show your face everywhere. Not just at business events and meetings, you have to be on 24/7." 

Pitching at a child's birthday

"If you get the chance to meet in private, make sure you take it," is Esmée's advice. "During the trade mission with Rutte I met our new business partner, whom EBTC had found for us, in person for the first time. That went very well and so they invited us to the birthday of the owner's niece. That birthday fell exactly on our last day in India, three hours before the flight back to the Netherlands. My colleague therefore doubted whether it was wise to go, but I knew we couldn't miss out. Once at the party, we were introduced to one senior official after another, all very interested in our company. So on the last day of the trip I was pitching at a children's birthday party to about twenty high-ranking officials."  

Firm agreements on quality

ENS and their Indian partner, Sudhir Power, have now successfully completed their first major job at The American Embassy School in New Delhi. "This job allowed us to test our newly formed partnership. We only had technical supervision on site and gave our partner Sudhir Power the freedom to do the installation work in their own way." Despite the fact that, according to Esmée, in such a partnership you have to dare to surrender a little to your new partner's way of doing things, she still advises companies to make clear agreements on manufacturing methods. "For example, we have agreed that we will produce the control cabinets in the Netherlands and the rest of the components, such as the housing, will be made in India. We do have strict requirements for this, so that we can be sure of guaranteeing the quality of our product. Fortunately, we have found a partner who has been working with European companies for a long time. They understand very well what quality the products have to be."

Benefits of corona crisis

With the outbreak of the coronavirus, the cooperation between ENS and Sudhir has temporarily slowed down. "Not because things are not going well between us", says Esmée, "but because we agreed from the start that we would build up the cooperation slowly. First we'd date, then we'd get engaged, and whether we'd actually get married or set up a joint venture is something we'll see in due course." But the big impact COVID-19 is having on India could create some interesting opportunities for ENS's products in the near future. "We are still a niche product, but as air purification is an important weapon in the fight against airborne viruses, more attention is being paid to our technology. That could well pay off for us in the future. 

Bureaucratic hurdles

For the time being, ENS is mainly suffering from the strict measures that the Indian government has taken to curb the spread of the coronavirus. After installing the purification systems in the courtyard of The American Embassy School, ENS also had special measuring equipment installed to show how effective the systems work. "And then suddenly the whole country went on lockdown and we were suddenly unable to remove that equipment, which we had introduced with a special visa, in time for the permit to expire," says the management director of ENS. "I thought I had done the right thing by asking the Indian Chamber of Commerce for advice. But now they have sent me from pillar to post and there is a claim on our equipment. We are now getting help from Maier+Vidorno, IndiaConnected's partner in India, and hope to convince the customs authorities to let us recover the equipment. If not, this will become a legal case. I am thus learning a hard lesson about bureaucracy in India."

Family business

Despite this setback, for Esmée India is above all a place where you are received with a warm smile and genuine interest. "Especially the fact that we are a family business opens doors for us. Our Indian partner, for example, is also a real family business and that not only evokes recognition, but also creates a better bond of trust. We are very happy with this cooperation. Esmée is looking forward to working with Sudhir Power in the coming years to gradually build a cleaner living environment in India. "For example by helping more schools to turn their squares into safe playgrounds or to improve the situation in the Indian streets a little by further implementing our Lungs of the City concept. Hopefully, in the longer term, we will also see the first smog towers rising in Indian cities."