Friday, December 16, 2011

Interesting Conflicts and the Basis for Bias: The Right Peg?

Two important IP developments in the recent past have thrown up interesting issues around the standards for judicial recusal and for determining conflict of interest.

Novartis Patent Dispute and Judicial Recusal

1. Justice Dalveer Bhandari recused himself from a controversial patent dispute involving Novartis' famed anti cancer drug, Glivec; a dispute that has dogged Indian courts for several years now. The allegation was that since he attended a conference organised by patent owners (Novartis was one amongst the many patent owners that formed part of the association organising the conference to which the judge was invited), there was a genuine apprehension of bias. It would appear that under rules pertaining to travel abroad by judges, he would first have had to take permission from the Chief Justice and that his trip would necessarily have to be paid for by the Government of India.

Justice Ruma Pal mentions this rule in her hard hitting Tarkunde memorial speech:

"At present no judge, whether of the Supreme Court or the High Courts can accept any invitation from any foreign person or organization or indeed even visit a foreign country out of his/her personal funds, unless an application is made to the State and Central Governments with the approval of the Chief Justice two months ahead of the date of departure and the application is vetted by different Ministries and ultimately allowed or disallowed by an executive order which may or may not be received before the date fixed for leaving!"

One might therefore infer that Justice Bhandari attended the conference only after getting the necessary government and CJI clearances. And that his trip was paid for by the government. Further, it bears noting that the judge did not speak on the Novartis case at the conference but made a general speech on intellectual property rights and asked that IP regimes be strengthened. Some months later, he refused to admit Roche's challenge in a big ticket patent case (and Roche was also a member of the very same association that organised the impugned conference). The key question is: given these facts, was there a genuine apprehension of bias? Or ought we to have strict rules preventing judges from attending such conferences? Where ought we to peg the standards in this regard? I reflect on this issue in two posts on SpicyIP here and here.

Sibal, Copyright Bill and Conflict

2. More recently, allegations of non declaration of a conflict of interest were levelled against HRD Minister, Kapil Sibal who sought to introduce the copyright amendment bill in Parliament. The claim was that since his son (Amit Sibal, a rising lawyer) appears for T series (a major sound recording company) in several cases, he ought to have declared this "interest" prior to moving the bill. The relevant rule (Rule 294(1)) in the Parliament’s Ethics Committee Report states as below:

“whenever a Member has a personal or specific pecuniary interest, direct or indirect, in a matter being considered by the Council or a Committee thereof, he shall declare the nature of such interest notwithstanding any registration of his interests in the Register, and shall not participate in any debate taking place in the Council or its Committees before making such a declaration.”

It must be noted that this rule appears less potent than our rules informing judicial recusal. An apprehension of bias leveled against a judge invariably means that the judge cannot adjudicate upon that case. However, a declaration of "interest" within our Parliamentary framework is simply nothing more than a mere "declaration". It does not prevent the person concerned from participating in the concerned Parliamentary debate (provided he/she makes such declaration before participating).

The following issues arise for consideration:

1. Firstly, does the fact that Amit Sibal (Minister Sibal's son) represent T series pose a personal or a pecuniary interest, direct or indirect? What if Amit Sibal had only acted once for T series? What if Mr Sibal had himself acted for T series during his career (and I recall he did appear for T series in a Supreme court case dealing with "version" recordings). Given that Mr Sibal was and continues to remain an illustrious lawyer, isn't it possible that he may have acted at one point or other for a whole range of clients with some kind of an "interest" in the present copyright bill?

Does this mean that he has to declare an "interest" in all such cases? And given that his son is a rising star in the litigation firmament, does he have to declare an interest in all cases where his son acts for some client with a copyright interest (given the pervasive nature of copyright today, is there any corporate entity that does not have a "stake" in copyright law today?)

The second issue is: even assuming that there is an indirect interest here, does this pose a serious apprehension of bias (or potential for corrupt practices)? The question may not be relevant to the issue of whether or not this is an "indirect" interest, but I deal with this nevertheless to study the nexus between "interest" and apprehensions of bias or the potential for corrupt practices.

T Series and the Copyright Bill

If one were to simply examine the text of the copyright amendment bill, one finds that not all provisions favour T series. In fact, some provisions are heavily loaded against it. The Bollywood mandatory royalty provisions are a glaring example of this, where T series cannot enjoy all music revenues by itself (even assuming it has contractually taken over all rights of underlying music composers and lyricists), but must necessarily share all its revenues with them, each time the work is exploited outside of the regular cinematographic medium.

On the other hand, the amendment to section 52 (1) (j) (dealing with version recordings) clearly favours T series.

Section 52(1) (j) provides that anyone is free to reproduce their own version of a copyrighted song after two years of the song being on the market, provided royalties (currently, it is 5% of sales) are paid to the owner of copyright in the song (music and lyrics). The most recent copyright amendment bill (whose fate is expected to be decided this winter in Parliament) contains an amendment to this provision. Surprisingly, this amendment has received very little attention thus far. In fact, it is not even clear as to how the proposed amendment came about and at whose behest and one may need to file an RTI application to locate its genesis.

While section 52 (1) (j) provides that a cover version can be made anytime after the expiry of two years after the first recording is made (by a music major such as T series), the amendment seeks to extend this moratorium to 5 years: in other words, sound recording companies such as T series benefit immensely, since there are no cover versions for the first 5 years after their commercial release.

Given this mixed bag, where one set of amendments favours T series and the other goes against them, can one argue that there is still a genuine apprehension of bias? Or ought we to desist from asking this question and simply follow the "declaration" rule to its letter?

And lastly, what happens now? Assuming the rules are interpreted rather liberally (with "indirect" interest being read widely), does this mean that the bill can only be discussed in the absence of Mr Sibal, the prime mover of the Bill? Or does he only have to stay away from discussions involving provisions that impact T series (one might argue that almost all amended provisions will impact T series one way or the other).

Whatever the outcome, one can be sure that these thorny conflict issues will continue to accost us with increasing rapidity in the years to come. The time is therefore ripe for for an intense discussion and debate around these norms, the standards that they must be pegged at, their overall purpose and how best to enforce them.

In the meantime, for those interested, the PRS website has some excellent resources/discussion on conflict of interest rules and the Indian Parliament. And LAOT has had some excellent discussion around the rules relating to judical recusal in the past.
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