CHAPTER 2: PROTECTION OF INTELLECTUAL PROPERTY

RIGHTS IN DIGITAL MARKET: INTERNATIONAL PERSPECTIVE

2.1 International Treaties and Their Impact on India

The scenario where India can successfully notify various related treaties as the basis for its IP
laws, somewhat aligned to international standards while protecting domestic interests, puts
forth another very significant consideration in the implementation of the IPR regime in India.
Due to international treaties, this is yet another factor making India weigh the delicate balance
between IPR protection and enforcement.
2.1.1 TRIPS Agreement & India's Compliance
As one of the premier international agreements on IP, the TRIPS Agreement 31 serves under the
administration of the WTO. The Patents (Amendment) Act, 2005, 32 made India TRIPS
compliant, by allowing product patents in pharmaceuticals, chemicals, and biotechnology. This
was a significant departure from the past that India patented manufacturing processes only as
the means of gaining exclusive rights over a product. On the other hand, however, it is very
strict in the patentability criterion like Section 3(d) of the Patents Act, where minor
modifications will not be patentable unless it establishes enhanced efficacy, this has been a
point of international criticism, especially from the US and EU. India, however, has been
backed in its position by global health organizations, particularly in really democratizing access
to medicines. (Chatterjee, 2019)
2.1.2 Berne Convention for Copyrights
India is a signatory to the Berne Convention for the Protection of Literary and Artistic Works, 33
1886, which provides the same protection to Indian creators overseas as they have in India. The
convention enables the automatic protection of copyright in foreign works in India and
enhances cross-border enforcement. Enforcement is still a problem, especially with the growth
of online piracy and the difficulty in monitoring infringers across borders. (Rao & Sinha,
2020)2.1.3 WIPO Internet Treaties and Implementation in India

31
Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh Agreement
Establishing the World Trade Organization, Annex 1C, 1869 U.N.T.S. 299.
32
The Patents (Amendment) Act, No. 15 of 2005, Acts of Parliament, 2005 (India).
33
Supra note 3

17
India has enacted some parts of the WCT34 and the WPPT into its Copyright (Amendment)
Act, 2012.35 India has not yet ratified these treaties, however, which has been criticized on the
grounds that India's framework for digital copyright enforcement remains incomplete. 36 (Goyal
& Prasad, 2021)
International Cooperation and Treaties
The IPR enforcement system in India is influenced by international treaties and agreements. It
has signed the TRIPS Agreement, which the WTO administers, which sets international
minimum standards for protection and enforcement of IPRs. This aspect of TRIPS is important
to the IPR requirements of Indian law, especially relating to patents and copyrights, as it takes
India towards a globalized IP framework.37 (Chatterjee, 2019)
Of course, there are many other international treaties relating to IPR of which India is a
member, including the Berne Convention for the Protection of Literary and Artistic Works, the
Paris Convention for the Protection of Industrial Property, and the WIPO Copyright Treaty.
They ultimately guarantee that the creations and innovations of Indian IP holders will be
protected under other member countries and vice versa. 38 (Goyal & Prasad, 2021)
At times, however, such obligations coalesce into conflicting interests with the local markets
that have been agitated, particularly in pharmaceutical patents, the requirements for strict
patentability dictated in Section 3(d) of the Patents Act39 have been criticized by countries.40
41
(Chatterjee, 2019)
2.1.4 Paris Convention for the Protection of Industrial Property (1883)
The Paris Convention for the Protection of Industrial Property (1883) 42 forms the first pillar of
international law on intellectual property (IP). It ushered in the era of common international
standards for the establishment and protection of patent rights and other forms of industrial
property. Among its most important provisions, perhaps even its most influential, is the
establishment of the right to priority: the fact that inventors filing a patent application in one

34
WIPO Copyright Treaty, Dec. 20, 1996, 2186 U.N.T.S. 121.
35
WIPO Performances and Phonograms Treaty, Dec. 20, 1996, 2186 U.N.T.S. 203.
The Copyright (Amendment) Act, No. 27 of 2012, Acts of Parliament, 2012 (India).
36
Supra at 52
37
Supra at 28
38
S. Goyal & R. Prasad, Digital Copyright Protection in India: Challenges and Future Directions, 9 Tech. L.J. 57
(2021).
39
Patents Act, No. 39 of 1970, § 3(d) (India).
40
Supra at 28
41
Chatterjee, A., TRIPS Compliance and Public Health: A Critical Analysis of India’s Patent Laws, 7 World
Trade Rev. 88, 88-104 (2019).
42
Paris Convention for the Protection of Industrial Property, art. 1, Mar. 20, 1883, 21 U.S.T. 1583, T.I.A.S. No.
6937.

18
member state can enter that filing date for any subsequent applications in another member state,
provided that the period of filing does not exceed 12 months.
Article 4 of the Paris Convention describes the priority right: subsidiarily leads to holding the
date of the first filing in various territories and thus protects applicants against disclosers or
other competing filings in the interim. As Kur, Ganea, and Heath suggested (2012) 43, such rules
lessen some challenges that arise from the purely territorial nature of patent systems by
harmonizing resurrection periods in different jurisdictions, so that in legal certainty, procedural
redundancy is reduced, which is particularly crucial for small entities and individual inventors
without the manpower to do so.
The priority right gives a comfort period to grant strategic decision making-whether to obtain
financing or do market analysis-before going ahead with international patenting protection, and
reduces administrative hassle44 (Trimble, 2012). The Paris Convention therefore fosters
innovation through the establishment of a provision that lessens the risk of novelty loss-a major
factor in patentability-between international borders 45(Grosheide & Van Caenegem, 2014).
The Convention recognizes the principle of national treatment besides the right of priority
(Article 2) under which every member country guarantees to nationals of other member
countries the same legal protection as it grants to its own nationals 46(WIPO, 2020). This lays
the foundation for equitable access to local legal remedies and better fosters trust in
international cooperation in the field of IP.
Moreover, patrons applied for different countries that are made independent or in which a
patent is granted in one different member state, states, rejected, or invalidated, would not affect
the legal standing of other patents in the rest of the member states. This aspect of legal
independence enhances the resilience with which one can approach or has one's portfolio
towards possible avenues open to the applicant and makes such portfolio more flexible 47
(Blakeney, 2013).
The Paris Convention paved the way for international intellectual property protection. It
allowed inventors to obtain patent protection in other countries without suffering prohibitive
legal complexity or financial risks. It has since then become, and continues to serve, as a

43
Kur, A., Ganea, S., & Heath, C., International Patent Law: The Paris Convention (2012).
44
Trimble, T., The Paris Convention and Its Impact on International Patenting (2012).
45
Grosheide, W., & Van Caenegem, W., Global Patent Protection and International Cooperation (2014).
46
Supra note 13
47
Michael Blakeney, Geographical Indications and TRIPS, in Extending the Protection of Geographical
Indications: Case Studies in the Protection of Agricultural Products in Africa 7, 7-34 (Michael Blakeney et al.
eds., Earthscan 2012), UWA Faculty of Law Research Paper No. 2012-09, available at SSRN:
[Link]

19
common reference point for modern international intellectual property treaties, including the
TRIPS Agreement adopted under the aegis of the World Trade Organization. In addition to
reducing legal barriers for processing, it has helped the globalization of innovation significantly
through facilitation of international trade and transfer of technology across borders.
2.1.5 Patent Cooperation Treaty (PCT) (1970)
It provides a common procedure for international patent application filing to protect the
inventions in various countries- One patent, which has given new turning point in the world's
patent filing, was introduced under the Patent Cooperation Treaty (PCT), which was adopted
in 1970 and is administrated by the World Intellectual Property Organization (WIPO). This
system is being used by about 150 countries-and more-and allows inventors to postpone
important costs, as well as time spent in legal procedures and translation. It also returns early
evaluative benefit through prior art search and patentability opinions48.
The PCT purports to simplify both the procedure and expenses incurred in filing national patent
applications in several jurisdictions. The effect of a single PCT application is, thus, that it has
the legal force of having been filed in each designated state so long as the applicant enters the
49
national phase after that within prescribed timelines . Essential features in the PCT process
include the international search carried out by an International Searching Authority (ISA),
which would provide a search report and a written opinion regarding novelty, inventive step,
and industrial applicability of the invention. The applicant may additionally request
international preliminary examination for further insights before moving on to the national
phase50.
Transformation after joining the PCT in 1998 is visible in the patent ecosystem of India. The
PCT has spurred a dramatic increase in PCT national phase entries into India, enabling foreign
applicants to enjoy smoother entry. Global recognition of India's expanding market and
capacity to innovate is thus elicited from this trend51. The system permits foreign applicants to
defer a decision on filing in India until they assess commercial viability, thus better resource
allocation and higher international IP activity in the country.

48
Satpathy, Sambit, Patent System in India in the Light of the Patent Cooperation Treaty, Int'l J. L. & Pol.
Analysis (n.d.), available at [Link]
cooperation-treaty-evolution-and-challenges-by-sambit-satpathy.
49
World Intellectual Property Organization, Patent Cooperation Treaty (PCT): Articles, WIPO,
[Link]
50
Khan, Mohammad Hussain, The Patent Cooperation Treaty and PCT Application Filing in India: An Overview,
Research Journal of Social Science & Management, Vol. 3, Issue 2, 2013, available at
[Link]
filing_in_India_An_Overview.
51
Supra note 18

20
The single international application process for Indian inventors and institutions seeking
protection abroad has made their domestic patent competition more globally inclined. This has
proved much possible for Indian start-ups, public research institutions, and universities to
engage in effective global patenting strategies due to the cost and procedural flexibility it
offers52 (IJLPA, n.d.). Research indicated that most applications from India under the PCT are
in areas such as pharmaceuticals, engineering, and IT, because of the high R&D strengths that
it exhibits53 (Tax Management India, n.d.).
It does throw up challenges to face. Increasing number of PCT national phase filing has been
putting tremendous load on the Indian Patent Office, which is screaming for greater human and
technological resources. Concerns about delays in patent prosecution and examination still
exist though measures such as digitization and recruitment of examiners are being undertaken
to tackle these issues.
The importance the PCT has accorded the global patent regime is that it has simplified access
to international patent protection. For India, it has also made a robust inward and outward flow
for patents as a crucial cog in the global intellectual property scenario. An effective domestic
framework in tune with the requirements of PCT will enable India to hinge on this treaty for
driving innovativeness-driven growth.
2.1.6 Strasbourg Agreement Concerning the International Patent Classification (1971) 54
The Strasbourg Agreement Concerning the International Patent Classification (IPC) was signed
in 1971 under the aegis of WIPO, which speaks of a unified classification system for patents
worldwide. The IPC is an International Patent Classification system framework that helps the
organization, retrieval, and examination of patent documents by classifying them into
technological sectors (WIPO, n.d.-a).
The IPC system is hierarchical and contains eight sections subdivided into classes, subclasses,
groups, and subgroups, which further divide into approximately 80,000 subdivisions. Each
classification is indicated through the use of alphanumeric symbols, permitting registration of
patent content in a language-independent format. This system enables patent offices, inventors,
and researchers alike to locate relevant technology information and prior art throughout the

52
Sodhi, Garima, Shreya Jad & Akriti Jain, Technology Start-ups and Patent Protection in India: Case
Studies, ResearchGate (n.d.), available at
[Link]
Case_Studies.
53
Hussain, Mohammad, The Patent Cooperation Treaty and PCT Application Filing in India: An
Overview, ResearchGate (n.d.), available at
[Link]
filing_in_India_An_Overview.
54
European Commission, Strasbourg Agreement and Its Role in Patent Classification (1971).

21
jurisdictions with ease. The IPC is kept up to date to accommodate dynamic changes in
technology, with amendments taking effect every year on January 1.
One of the main benefits of the IPC is its promotion of internal consistency and comparability
of patent documents from different jurisdictions. Patent offices assign IPC symbols to patent
documents to iron down any differences in national language or procedural practice. Such
degree of harmonization helps international patent search immensely and provides legal
certainty to applicants and examiners55.
India though it isn't a contracting party to the Strasbourg Agreement embraces the IPC system
for classifying its patent documents. As a result, the patent classification of India becomes
global in operation because this will ensure interoperability with international databases and,
as a result, the visibility of Indian patents globally. The Indian Patent Office, therefore, makes
it compulsory for IPC classification of published applications and those granted to India and
thus assimilates India into the international patent information ecosystem.
Among the many advantages that the IPC brings India is an enhancement of the efficiency of
examination of patent applications through easier searching of prior art and greater reliability
of the searches, which brings to it an improvement in the quality of grants. It supports
internationally collaborative when patent applications and patent offices outside India can
easily study and follow the Indian patent classifications. Thirdly, an IPC-based analysis may
allow the policymakers and researchers in India to keep track of technology trends, monitor
innovation by sector, and shape national R&D strategies 56.
But it is to be noted that India is not a formal member of the Strasbourg Agreement and hence
has no direct say in the revision processes regarding the IPC. However, it still takes directives
of the latest IPC updates as released from WIPO which means it is under alignment with
international standards without incurring treaty membership obligations.
The development of the IPC system as the basis for global patent classification has really
simplified matters through the Strasbourg Agreement. Though not officially signatory, India's
use of IPC demonstrates its adoption of international best practices to enhance the efficiency
of its patent office in operations, interoperability internationally, and formulation of policy.
Further strengthening of such integration may well arm India's position within the global
intellectual property ecosystem.

55
Simmons, Heather J.E., Categorizing the Useful Arts: Past, Present, and Future Development of Patent
Classification, 106 Law Libr. J. 563 (2014), available at [Link]
content/uploads/2018/01/[Link].
56
Chakraborty, S., & Saha, P. (2020). Monitoring emerging technologies for technology planning using technical
keyword-based analysis from patent data. Technological Forecasting and Social Change, 161, 120278.

22
Conclusion
India's IPR regime has progressed well in recent years, aligning itself with international norms
and coping with the specific socio-economic problems of the nation. The regime, comprised of
the laws regulating copyrights, patents, trademarks, and geographical indications, has helped
nurture innovation and safeguard creators and business owners’ rights. The amendments to
major laws like the Copyright Act, Patents Act, and Trademarks Act have assisted India in
bringing its legal system in line with international standards so that Indian creators and
innovators can reap the benefits of international protection.
Even with the advancements, challenges persist, particularly in the virtual world. The quick
expansion of e-commerce, digital content development, and technology has created new forms
of IP infringement in the form of digital piracy, counterfeiting, and cybersquatting. These pose
the need for ongoing updates of India's IPR enforcement tools. Although the judiciary has a
crucial role in enforcing IPR through specialized courts and prompt decision-making, doubts
about the efficiency of courts and regulatory authorities continue to exist. The abolition of the
IPAB and the reversion of its jurisdiction to High Courts is concerning considering the already
heavy workload of such courts.
In addition, India's fulfillment of such international agreements like TRIPS, the Berne
Convention, and the WIPO Internet Treaties has played a pivotal role in structuring India's IPR
regime. Although these agreements have increased the protection of Indian creators overseas,
they have also been sources of tensions, particularly in fields like the patenting of medicines,
where India's high patentability standards under Section 3(d) have been a contentious issue
with developed nations.
In order to face these challenges, India needs to beef up its enforcement machinery through
court efficiency increases, improving copyright protection online, and resolving complexities
around patent law, especially for the technology space. More robust protection frameworks for
digital content coupled with mechanisms like the DMCA to expedite takedowns would be a
stronger response against piracy and counterfeiting. Finally, India's IPR regime has to develop
in synchrony with technological progress so that creators and innovators receive their due while
promoting an ambience of progress and innovation.

2.2 Challenges to IPR in the Digital Market

India's economic digitalization has brought with it a plethora of new challenges for protection
and enforcement of IPR. The emergence of e-commerce, online content, and technology start-

23
ups has brought forth a new set of problems, from fake merchandise to patent violations and
abuse of trademarks. Though India's IPR legislation has come to terms with these challenges,
the growth of the digital market has been faster than the existing enforcement mechanisms,
necessitating constant updating of legal provisions as well as their enforcement.

Piracy and Counterfeiting on E-commerce Websites

E-commerce platforms in India have significantly multiplied the sale of counterfeit products
and digital piracy. They have become centers for the easy sale of counterfeits, along with easy
consumer access by virtue of deploying the online selling model. Although such platforms as
Amazon, Flipkart, and others are trying to have self-regulatory mechanisms to prevent
counterfeit proliferation of counterfeit products, they continue spilling over, affecting genuine
business profits and triggering problems of consumer safety. A case relevant to this domain is
Christian Louboutin SAS v. Nakul Bajaj & Ors., (2018) 57 wherein the Delhi High Court
delivered a verdict against the backdrop of trademark infringement in e-commerce platforms.
The court stated that such an online platform would be liable for sale of counterfeit goods if it
played an affirmative role rather than acting as a mere passive conduit in sale. 58(Chatterjee,
2019) Thus, it demands proactive steps by e-commerce platforms, so stringent verification
mechanisms for brands should be established to check counterfeiting.

Abuse of Trademarks and Domain Name Conflicts

Cybersquatting is a direct misuse of trademarks that has become a considerable concern today.
These processes are the registration of domain names resembling well-established trademarks
with malicious intention to seek profit by taking advantage of the brand recognition, consumer
misrepresentation, or even worse creating confusion among the consumers while diluting
trademark value. In Satyam Infoway Ltd. v. Sifynet Solutions Pvt. Ltd.,59 (2004) the Supreme
Court asserted that domain names were to be covered under trademark law. This was a
landmark judgment that laid down the law with respect to trademarks applying to cyberspace
where similar domain names could cause confusion or damage to the goodwill of the business
brand identity.60(Shukla & Menon, 2022) The case therefore offered a remedy against

57
Christian Louboutin SAS v. Nakul Bajaj & Ors., 2018 SCC OnLine Del 13032 (India)
58
Supra at 28
59
Supra at 29
60
Supra at 26

24
cybersquatting, thus bringing forward the point of marking protection online as much as
protection in the traditional marketplace.

Patent Infringement in the Technology Sector

The Indian technology wing has marked its rapid growth in the telecommunications and
software development sectors, as well as in mobile technologies. This quick growth gave rise
to a larger number of cases of patent infringement, especially with respect to Standard Essential
Patents. SEPs are those patents necessary for implementing industry standards used for
telecommunications or wireless technologies. Most Indian startups are usually ignorant of the
complications surrounding patent law, which then lead to them infringing these patents, thus
racking up costly litigation. An interesting case of this nature is Telefonaktiebolaget LM
Ericsson v. Intex Technologies (India) Ltd.,61 (2014) before the Delhi High Court granting an
injunction in favor of Ericsson against Intex infringing Ericsson's SEPs concerning patent
technology relating to mobile technology. The court laid much emphasis on the need for fair,
reasonable, and non-discriminatory licensing terms, which signifies that Indian technology
companies challenged even more in negotiating access to essential patents. 62 (Shukla & Menon,
2022) This case brought out the need to have fair licensing practices so that patent technology
remains accessible at reasonable rates and does not lock out the technology companies from
key innovations.

Digital Copyright Problems

The content digitization has created a boom in digital copyright matters, especially with regard
to online streaming sites, social media, and dissemination of creative works. The quick
dissemination of pirated digital content on sites such as YouTube, Facebook, and Twitter has
made it challenging for creators of content to assert their rights. Although the Copyright Act,
1957 and the Copyright (Amendment) Act, 2012, 63 provide protection, India does not yet have
a strong framework like the U.S. Digital Millennium Copyright Act (DMCA), 64 which enables
quick takedown of infringing material. In MySpace Inc. v. Super Cassettes Industries Ltd.

61
Telefonaktiebolaget LM Ericsson v. Intex Techs. (India) Ltd., 2015 SCC OnLine Del 10004 (India).
62
Supra at 26
63
The Copyright (Amendment) Act, No. 27 of 2012, Acts of Parliament, 2012 (India).
64
Digital Millennium Copyright Act, Pub. L. No. 105-304, 112 Stat. 2860 (1998) (codified as amended in
scattered sections of 17 U.S.C.).

25
(2016),65 the Delhi High Court held that online platforms were not necessarily liable for
copyright infringement if they removed the content as per takedown notices, under the safe
harbor provision set out in Section 79 of the Information Technology Act, 2000. 66 This case
highlighted the requirement for a better mechanism to tackle digital copyright infringement.
67
(Rao & Sinha, 2020) While the decision enforced the safe harbor provision, it also
underscored the enforcement lacunae, especially with increasing user-generated content.

The digitized economy threatens the state with numerous challenges in the enforcement of IPR
from counterfeit goods selling on e-commerce platforms to patent infringement in the
technological field. While the country has made certain significant improvements to update its
IPR laws to counter digital challenges, the real challenge remains the enforcement. E-
commerce platforms should be made responsible for the sales of counterfeit goods.
Cybersquatting should also be subjected to stricter controls. Growth of technology and digital
content platforms speeds along, which also has given rise to new challenges like patent
infringement along with digital piracy, hence requiring better and more effective enforcement
mechanisms. Challenges like these necessitate laws needing continuous revamping as well as
cooperation and tighter coordination between the government, judiciary, and industry players
for the protection of IPR in the dynamic digital landscape.

Challenges Faced by SMEs in IP Protection

Therefore, SMEs are most probably the engine of world economic growth by providing
innovation and employment. These small businesses have been challenged in defending their
IP. Cost of legal enforcement and having access to sophisticated AI tools for enforcement are
the major ones.

The most prominent of the SME IP protection hitches lies in the exorbitant cost of legal
enforcement. Unlike the large companies, which have a special legal team to handle their IP
matters, SMEs tend to have limited financial resources, therefore, it is difficult for them to
obtain and enforce their IP rights. Cost components of patents, trademarks, and copyrights are

65
MySpace Inc. v. Super Cassettes Indus. Ltd., 2016 SCC OnLine Del 6382 (India).
66
Information Technology Act, No. 21 of 2000, § 79, Acts of Parliament, 2000 (India).
67
Supra at 31

26
mainly registration fees, legal fees, and possibly litigation costs, which tend to be exorbitant. 68
(Sukarmijan & Sapong, 2014)

As put forth in the International Trademark Association (INTA), most SMEs in Europe and
China have trouble because they are unable to fund any kind of IP protection. To this end, some
governments have instituted financing programs to assist SMEs in upholding their IP rights.
The said programs help in minimizing the cost and spur more additional SMEs intending to do
so for formal IP protection.69 (INTA, 2023)

OECD points out that intangible assets such as patents and trademarks are assuming an
increasingly central importance for the competitiveness of enterprises, yet SMEs are severely
challenged by financing because it renders any funding more difficult for them in the area of
IP protection.70 (OECD, 2024) Inadequate funding may lead to the abandonment or
postponement of registering patents and trademarks by SMEs, thus increasing the vulnerability
of such enterprises to infringement and loss of competitive advantage.

There is a legal enforcement cost, and SMEs bear it because it is too expensive for getting the
IP rights. For instance, litigation is always the very last option for SMEs because it is very
expensive. A WIPO report points out that the initial litigation in the patent field in the US can
be from $500,000 to $3 million, thus leading most smaller companies to find themselves
incapable of taking legal action against infringers 71 (WIPO, 2023) Thus, most SMEs do not
protect their IP rights against unauthorized use and counterfeiting.

In addition, legal disputes regarding IP rights can be lengthy and distracting to SME business.
A study by the European Union Intellectual Property Office (EUIPO) discovered that most
SMEs do not go to court because of the time and effort involved, which takes away from
business development and innovation72 (EUIPO, 2022) This is a significant disadvantage since
SMEs cannot compete with large companies that can sustain lengthy legal battles.

68
J. Sukarmijan & O. Sapong, The Importance of Intellectual Property for SMEs: Challenges and Moving
Forward (2014), [Link]
69
TA, IP Funding Programs for SMEs (2023), [Link]
70
OECD, IP-lifying SMEs’ Access to Finance (2024).
71
World Intellectual Prop. Org., Patent Litigation Costs and Their Impact on SMEs (2023), [Link]
72
European Union Intell. Prop. Off., SME Scoreboard: The Intellectual Property Rights Challenges for SMEs
(2022), [Link]

27
AI has transformed IP enforcement by making infringement detection and monitoring
automated. AI-based systems employ web scraping, image recognition, and machine learning
to identify counterfeits and IP misuse on digital platforms 73 (Mbah, 2024) Nevertheless,
although the benefits can be realized, SMEs tend to be limited in accessing such tools by virtue
of cost and technical limitations.

WIPO (2024) stresses in a report that AI-based IP enforcement tools demand enormous
investment in training data as well as computational capacity. Big companies can handle these
technologies, but most SMEs have limited financial and technical capacity to implement AI-
facilitated solutions. Moreover, the creation and deployment of AI tools necessitate specialized
expertise, and many SMEs lack this expertise.74 (WIPO, 2024)

OECD studies show that AI predicated IP enforcement entails subtle legal issues such as ethical
dimensions and regulatory approval. Most SMEs are also not aware of the legal vulnerability
of AI managed IP tracking, which continues to restrict its use among such businesses. 75
(OECD, 2025) SMEs would also struggle with understanding AI made infringement reports
due to a potential lack of sufficient legal knowledge necessary to decide upon the next move.

In addition, most AI based IP protection software is offered on a subscription basis. The

To address these issues, governments have launched programs to facilitate AI adoption in IP

73
E. Mbah, The Role of Artificial Intelligence in Shaping Future Intellectual Property Law and Policy: Regulatory
Challenges and Ethical Considerations (2024), [Link]
74
World Intellectual Prop. Org., The Use of Artificial Intelligence in Intellectual Property Enforcement (2024),
[Link]
75
OECD, Intellectual Property Issues in Artificial Intelligence Trained on Scraped Data (2025),
[Link]
76
J. Nyaboke, Intellectual Property Rights in the Era of Artificial Intelligence (2024),
[Link]
77
European Comm’n, AI and Intellectual Property Protection for SMEs (2023), [Link]

28
Financial limitations and restricted access to sophisticated AI enforcement technologies greatly
impede SMEs in safeguarding their IP assets. Excessive legal expenses bar numerous SMEs
from obtaining and enforcing their IP rights, while the technical and financial hurdles to AI
adoption restrict their capacity to fight infringement effectively. In order to fight these
challenges, governments and industry players need to come up with support systems like
funding schemes and accessible AI products especially for SMEs. By enhancing access to IP
protection tools, SMEs can protect their innovations as well as remain competitive in the
market.

29