CERTIFICATE COURSE IN INTELLECTUAL

PROPERTY RIGHTS

(CCIPR)

(FOR PRIVATE CIRCULATION ONLY)

2020
 Contents

Module
No. Title
Page No.

Introduction to Indian Legal System

1.1 Introduction to Law and Indian Legal System

1.2 Sources and Development of Law
1.3 Basics of Negotiations, Mediation, Arbitration and 1–28
1 adjudication
1.4 Hierarchy of courts in India and their Jurisdiction
1.5 Public interest litigation
1.6 Indian legal system and Intellectual Property Rights

Intellectual Property Rights, its need and awareness

2.1 Scope of Intellectual property.

2.2 Various factors related to the Intellectual Property Rights and
their impact on Business and economy

2 2.3 IPR as valuable assets for the business growth, research and
29–56
development, advancement in the technology sector.
2.4 Role of WIPO, Treaties and reciprocal agreements to facilitate
IPR services. (E.g.: TRIPS, GATT, Paris Convention, Berne
Convention, Madrid Protocol, Patent Cooperation Treaty,
WCT and WPPT)
 2.5 IP Policy 2016, IPR status of India and other countries, Need
for IPR awareness
2.6 Innovation and IPR.- Important factor in the growth and
development of nation, Global Innovation Index
2.7 Intellectual Property and Public Interest – Access to
Medicines, Access to Education

Patents

3.1 Essentials for obtaining Patent – Novelty, inventive step and

utility
3.2 Inventions not patentable – Section 3 and 4 of Patent Act, 1970
3.3 Details of types of patents applications, types of patent
specifications, patent searching, patentability, National and
International filings.
3.4 Patent filing procedures in India, related forms and documents
3.5 Patent searches, patent drafting, patent filing strategies, patent
57–117
oppositions, patent commercialization, enforcement, First

3 Schedule (Forms), Second Schedule (Fees), sections and rules

3.6 Assignment and licensing of Patents, Technology Transfer
Agreements, Material Transfer Agreements, Research
Collaboration Agreements,
3.7 Compulsory licensing and Revocation
3.8 Patent infringement, prosecution and litigation
3.9 Precautions to be taken, Managing risks associated with
patent, Freedom to operate (FTO) search
3.10 Protection of Plant Varieties under the Protection of Plant
Varieties and Farmers Rights Act, 2001 – Essentials for
protection, Breeders’ rights, Farmers Rights, Procedure for
Registration, Infringement under the Act
 3.11 Landmark cases – NATCO v. BAYER, NOVARTIS AG v.
UOI, Bajaj Auto Ltd. v. TVS Moto Company Ltd., Bayer
Corporation v. UOI, Dimminaco AG v. Controller of Patents
3.12 Prospects for Patent Agent - Who can attempt the Patent Agent
Examination? How to prepare for Patent Agent Examination?
Additional topics required to know for patent agent
examination – Role of Patent Agent, Secrecy Provisions, and
Powers of the Controller, Working of Patent, Parallel
Importation, Various Forms and Fees under the Patent Rules.

Trademarks

4.1 Reasons for seeking trademark, its importance, Mandatory

information and documents needed
4.2 Types of trademark its classes, Nice Classification and Vienna
Classification
4.3 New Forms and guidelines for trademark as per Trademark
Act 1999 and Trademark Rules,2017
4.4 Filing and Processing of Trademarks & , search, publication
or advertisement and examination, Precautions to be observed

4 4.5 Concept of Deceptive similarity

4.6 Trademark prosecution and opposition
4.7 Registration and validity of trademark
4.8 Amendments after registration of trademark 118–178
4.9 International Trademarks Filing / Filing of trademarks under
Madrid Protocol
4.10 Trademark and Brand Strategy
4.11 Assignment and licensing of trademark
4.12 Passing off action and infringement of trademarks
4.13 Remedies under the Trademark Act, 1999 – Civil, Criminal
and Administrative
 4.14 Landmark Cases – Yahoo Inc v. Akash Arora & Anr, Clinique
Laboratories LLC and Another v. Gufic Limited &Anr, Coca-
Cola Company v. Bisleri International Pvt. Ltd., Kaviraj
Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical
Laboratories, Cabila Health care Ltd. v. Cadila
Pharmaceuticals, Parle Products Pvt. Ltd. v JP & Co
4.15 Prospects for Trademark Agent - Who can attempt the
Trademark Agent Examination? How to prepare for
Trademark Agent Examination? Additional topics required to
know for trademark agent examination – Role of Trademark
Agent, Various Forms and Fees under the Trademark Rules,
Renewal fees, Restoration of lapsed trademark

Copyright

5.1 Meaning & Importance of copyright in various sectors

including Academia, Music Industry, Entertainment Industry,
ITES and Software Service
5.2 Subject Matter of copyright
5.3 Term Ownership
5.4 Economic Rights and Moral Rights
5.5 Copyright Office & Copyright Board

5 5.6 Registration of Copyright – Procedure

179–208
5.7 Assignment, Transmission & Licensing
5.8 Copyright Societies – Formation & Role
5.9 Performer Rights
5.10 Broadcast Reproduction Rights
5.11 Permitted Acts in Relation to Copyright - Fair use
5.12 Filing of copyright application
5.13 Landmark Cases – Eastern Book Company and Others v. D B
Modak and Anr., R. G. Anand v. Delux Films, Fateh Singh
Mehta v. O P Singhal, Indian Performing Rights Society V.
 Eastern Indian Motion Pictures, Super Cassettes Industries v.
UOI
5.14 Copyright and Freedom of Expression
5.15 Copyright Infringement, Remedies for Infringement: Civil,
Administrative, Criminal
5.16 International Copyright Law (U.S. and E.U.)

Designs

6.1 Introduction
6.2 Definition & Importance
6.3 Registration Procedure under Design Act, 2000
6.4 What can be filed as design?
6.5 Pre-requisites of Registration
6.6 Application for Registration
6.7 Publication
6.8 Grant of Certificate
6 209–234
6.9 Copyright in Registered Designs & Duration
6.10 Cancellation of Registration
6.11 Piracy and infringement of designs
6.12 Overlap of Copyright and Design Acts
6.13 Case Studies –
6.14 Layout Designs of Integrated Circuits protection in India
6.15 IPIC Treaty
6.16 Cases – Crocs Inc USA v. Liberty Shoes Ltd., Whirlpool v.
Videocon, Marico v. Raj Oil

Geographical Indication

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7.1 Introduction
7.2 Definition & Importance
 7.3 Registration of GI – and benefits of registration under the 235–263
Geographical Indications of Goods (Registration and
Protection) Act, 1999 - Procedure
7.4 Application
7.5 Acceptance
7.6 Advertisement of Application
7.7 Opposition to Registration
7.8 Registration
7.9 Basmati GI and Issues therein
7.10 Effect of GI Registration
7.11 Correction of Register
7.12 Strategies for Global markets
7.13 Offences and Penalties
7.14 Geographical Indications and Overview of the Lisbon System
& Geneva Act
7.15 GI protection in India
7.16 Issues faced by owners of Geographical Indications in regard
to counterfeit products in international and national markets

IPRs in Software

8.1 Describes the role of IPRs in the development of software

technology and industry
8 8.2 Computer Related Inventions (CRI), software patents
263–291
8.3 Confidential Information / Trade Secret
8.4 Requirements for Consideration of Information as CI / TS
8.5 Remedies against Breach of Confidence

Key Business Concerns in Commercializing Intellectual Property

9 Rights and IP Strategy
 9.1 Describes the various business aspects related to 292–317
commercialization of Intellectual Property Rights.
9.2 Competition and Confidentiality Issues, Antitrust Laws,
Assignment of IPR, Technology transfer Agreements, Legal
Auditing.
9.3 IP Licensing, Strategies for successful Transfer of
Technologies
9.4 Brand transference and translation
9.5 Strategies for invention and new product development,
Monopoly and collaboration
9.6 International collaborations in product development
9.7 IP Insurance
9.8 Domain Name Dispute Resolution
9.9 IPR and Competition Law
9.10 IP Valuation
9.11 IP Monetization
9.12 IP Due Diligence
9.13 IP Taxation
9.14 Traditional Knowledge Protection

Start-ups and IPRs

10.1 Innovation Management / IP Asset Management

10.2 Describes the role of IPRs in the growth and development of
Start-ups.
10 10.3 Government of India schemes
10.4 Guidelines of IPRs to facilitate start-ups, Start-up contracts 318–341

and agreement, IP Facilitators.

10.5 Registration of IP: examples and case studies of the process
and cycle
 Case Studies

11.1 Real industry examples where the companies had learned the 342–353
importance of IP via case laws, IP licensing, IP infringement
suits and had implemented that learning in growing their
businesses; enforcement and infringement defence strategies
11 11.2 Turmeric Patent Case in US
11.3 Basmati Rice Patent Case in US
11.4 Diamond v. Chakraborty
11.5 Myriad Case
11.6 D. C. Comic v. Towle
11.7 Impression Products Inc v. Lexmark International Inc
Introduction to Indian Legal Systems
MODULE

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Structure:

1.1 Introduction to Law and Indian Legal System

1.2 Sources and Development of Law
1.3 Basics of Negotiations, Mediation, Arbitration and adjudication
1.4 Hierarchy of courts in India and their Jurisdiction
1.5 Public interest litigation
1.6 Indian legal system and Intellectual Property Rights

Check your progress

Summary
Keywords
Self-Assessment Questions
Answers to Check your Progress

1.1 INTRODUCTION TO LAW AND INDIAN LEGAL SYSTEM

The law is an enterprise that seeks to rule us from cradle to the grave. Some sort of norms binding the
mankind into specific set rules and regulations always existed since the nomadic culture. Periodically,
these set of rules took a structure of a legal system.

Our nation India achieved independence in 1947 and was declared as democratic republic in 1947 and
its constitution, which came into force on 26th November 1949, is the supreme law. India has a common

1
law legal system having a major impact of British Colonial legal system. The constitution is based on
the Government of India Act 1935 passed by British Parliament. The Indian constitution lays out a federal
Union of 28 States, 8 union territories and 1 national capital territory. The Union and States have separate
executive and legislative branches, whereas the territories are ruled by the national government. Law
generated by the Union is superior to that of the States.

In a layman's language, law is a system of rules and regulations which a country or society recognizes as
binding on its citizens, which the authorities may enforce, and violation of which is subject to punitive
action. These laws are generally contained and explained in the constitutions, legislations, judicial
decisions etc. Jurists and legal scholars have not arrived at universal definition of law. The problem of
defining law is not new as it goes back centuries. Some jurists consider law as a 'divinely ordered rule' or
as 'a reflection of divine reasons'. Law has also been defined from philosophical, theological, historical,
social, economic and realistic angles.

1.2 SOURCES AND DEVELOPMENT OF LAW

Law is a typical concept. Before understanding the law of contracts, we need to know what a law is.
Salmond says that, “Law is the body of principles recognized and applied by the state in the administration
of justice.”

For a citizen, law is a set of rules which he must obey. For a lawyer, law is a matter of study and practice.
For a judge, law is a set of guiding principles to be applied to make decisions. Salmond, an English Jurist,
has classified sources of law into the following categories:

Formal Sources of Law: These are the sources from which law derives its force and validity. A law enacted
by the State or Sovereign falls into this category.

Material Sources of Law: It refers to the material of law. In simple words, it is all about the matter from
where the laws are derived. Customs fall in this category of law. However, if we look around and examine
the contemporary legal systems, it may be seen that most legal systems are based on legislations. At the

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same time, it is equally true that sometimes customs play a significant role in the legal system of a country.
In some of the legal systems, court decisions are binding as law.

On the basis of the above discussion, three major sources of law can be identified in any modern society
are as follows:

i. Custom
ii. Judicial precedent
iii. Legislation

1.3 BASICS OF NEGOTIATION, MEDIATION, ARBITRATION AND ADJUDICATION

Negotiation is a process where two parties in a conflict or dispute (fight) reach a settlement between
themselves that they can both agree on. Negotiation is a dialogue between two or more people or parties
intended to reach a beneficial outcome. This beneficial outcome can be for all of the parties involved, or
just for one or some of them, in situations in which a good outcome for one/some, excludes the possibility
of a desired result for the other/others. It is aimed to resolve points of difference, to gain advantage for an
individual or collective, or to craft outcomes to satisfy various interests. It is often conducted by putting
forward a position and making small concessions to achieve an agreement. The degree to which the
negotiating parties trust each other to implement the negotiated solution is a major factor in determining
whether negotiations are successful. Negotiation is not a zero-sum game; if there is no compromise, the
negotiations have failed. When negotiations are at an impasse it is essential that both the parties
acknowledge the difficulties, and agree to work towards a solution at a later date. Negotiation occurs in
business, non-profit organizations, government branches, legal proceedings, among nations, and in
personal situations such as marriage, divorce, parenting, and everyday life. The study of the subject is
called negotiation theory. Professional negotiators are often specialized, such as union negotiators,
leverage buyout negotiators, peace negotiators, hostage negotiators, or may work under other titles, such
as diplomats, legislators or brokers. Negotiations are reached through discussions made between the
parties or their representatives without an involvement of the third party. Each party should consult or see

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a lawyer before settling down the matter, so that they are well aware of their rights and duties in respect
to the matter or dispute they are willing to solve.

Mediation is essentially a search for solution by the parties to dispute under the guidance of the third party.
Mediation means the process in which a neutral (means not supporting any one side) third party assists
the parties in conflict to reach a solution. The third party is called the mediator and the mediator facilitates
communication between the parties. The mediator manages communication process between the parties
fairly, honestly and impartially. The mediators do not take sides, give legal advice or provide counseling.
They do not act as Judge or arbitrator. They assist by clarifying the issues in dispute and identifying the
underlying concerns. They assist in each party to understand the other party’s interests. Mediators
sometimes have the parties meet face to face. Other times, a mediator may shuttle back and forth between
parties in separate locations. They also assist in the searching of a resolution (a formal expression of
opinion or intention made) to the problem but will not impose a solution. Mediation takes place in private
and the decisions reached are private. A Memorandum of Agreement MOA is a cooperative agreement or
a document written between the parties to cooperate on the agreed terms and conditions. The basic purpose
of MOA is to have a written understanding of the agreement between the parties is written up by the
Mediator outlining the details of the solutions reached by the parties. The parties should have their
respective legal counsel (legal counsel is the person representing the party to the dispute) review the
Memorandum of Agreement. Each party is encouraged to consult with their lawyers before mediation so
that they know their legal rights. Negotiation and Mediation is less expensive and less time consuming
than the Court action. An agreement is encouraged but the parties are free to pursue other processes if they
cannot reach an agreement.

Arbitration refers to the process where the decision is made by a third party. The arbitrator hears the case
as presented by the parties in conflict or dispute (fight) and makes a decision or award in the same way as
a Judge would. Awards are generally final and binding on all parties. An award may be filed in Court and
enforced as if it were a Court judgment. Arbitration, a form of alternative dispute resolution (ADR), is a
technique for the resolution of disputes outside the courts. The parties to a dispute refer it to arbitration by
one or more persons (the "arbitrators", "arbiters" or "arbitral tribunal"), and agree to be bound by the
arbitration decision (the "award"). A third party reviews the evidence in the case and imposes a decision
that is legally binding on both sides and enforceable in the courts. Arbitration is often used for the
resolution of commercial disputes, particularly in the context of international commercial transactions. In

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certain countries such as the United States, arbitration is also frequently employed in consumer and
employment matters, where arbitration may be mandated by the terms of employment or commercial
contracts. Arbitration can be either voluntary or mandatory (although mandatory arbitration can only come
from a statute or from a contract that is voluntarily entered into, where the parties agree to hold all existing
or future disputes to arbitration, without necessarily knowing, specifically, what disputes will ever occur)
and can be either binding or non-binding. Non-binding arbitration is similar to mediation in that a decision
cannot be imposed on the parties. However, the principal distinction is that whereas a mediator will try to
help the parties find a middle ground on which to compromise, the (non-binding) arbitrator remains totally
removed from the settlement process and will only give a determination of liability and, if appropriate, an
indication of the quantum of damages payable. By one definition arbitration is binding and non-binding
arbitration is therefore technically not arbitration. Arbitration is a proceeding in which a dispute is resolved
by an impartial adjudicator whose decision the parties to the dispute have agreed, or legislation has
decreed, will be final and binding. There are limited rights of review and appeal of arbitration awards.
Arbitration is not the same as: judicial proceedings, although in some jurisdictions, court proceedings are
sometimes referred as arbitrations, alternative dispute resolution (ADR), expert determination, mediation
(a form of settlement negotiation facilitated by a neutral third party). Arbitration is commonly used in
labor disputes and commercial disputes. It is also used in oil and gas disputes, insurance claim disputes
and family and divorce disputes. The arbitrator arranges a meeting between the parties to determine what
issues need to be resolved. The arbitrator then holds a hearing into the matter where both sides present
information and evidence they believe supports their case. The arbitrator may also request written
submissions before and/or after the hearing. Once the arbitrator has all the evidence, the arbitrator
considers the matter and issues a decision that is binding upon the parties. It can often take a significant
amount of time to receive an arbitration decision.

Adjudication is a legal ruling or judgment, usually final, but it can also refer to the process of settling a
legal case or claim through the court or justice system. It usually refers to the final judgment or
pronouncement in a case that will determine the course of action taken regarding the issue presented.
Normally, adjudication represents the final judgment or pronouncement in a case. Adjudication can also
refer to the process of validating an insurance claim and a decree in the bankruptcy process between the
defendant and the creditors.

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1.4 HIERARCHY OF COURTS IN INDIA AND THEIR JURISDICTION

The feature Indian judiciary system is its hierarchical structure of courts. There are different levels of
judiciary system in India empowered with distinct type of courts. The courts are structured with very
strong judiciary and hierarchical system as per the powers bestowed upon them. This system is strong
enough to make limitation of court with its jurisdiction and exercise of the power. The Supreme Court of
India is placed at the top of the hierarchical position followed by High Courts in the regional level and
lower courts at micro level with the assignment of power and exercising of the same for the people of
India.

1.4.1 Supreme Court of India

Supreme Court of India is the highest level of court of Indian juridical system which was established as
per Part V, Chapter IV of the Constitution of India which endorses the concept of Supreme Court as the
Federal Court to play the role of the guardian of the esteemed constitution of India with the status of the
highest level of court in the status of appeal cases.

Constitution Regulation

As conferred by Articles 124 to 147 of Indian Constituency, the jurisdiction and composition of the
Supreme Court is being fixed. This court is primarily of the status of appellate court. This court is
accepting the appeals of cases, which are being heard in the High courts situated in different states and
union territories with dissatisfaction of related parties. This court also accepts writ petitions with the
suspected occurrence of activities, which may infer about violation of human rights and subsequent
petitions are accepted to hear and judge the consequences of such happenings.

These types of petitions are accepted under Article 32 of Indian constitution. This article confers the right
to ensure remedies through constitution. This court also hears about such serious issues which need to be
attended with immediate attention.

Supreme Court of India is the highest judicial forum and final court of appeal under the Constitution of
India, the highest constitutional court, with the power of constitutional review. It came into existence on

6
26th January, 1950 and is located on Tilak Marg, New Delhi. The Supreme Court comprises the Chief
Justice and 30 other Judges appointed by the President of India.

 Recent update: [Link]

(Source- [Link]

The top court is currently functioning with 30 judges though its sanctioned strength is 34.

After Justice Indu Malhotra retires, Justice Indira Banerjee would be the sole woman judge at the Supreme
Court unless a woman High Court judge is elevated.

The Collegium is expected to meet in the coming days to recommend appointments to fill up the vacancies.

Change in Chief Justice of India:

If the convention holds, Justice NV Ramana (presently the second senior-most judge) will succeed Justice
SA Bobde as the Chief Justice of India (CJI) and will take oath on April 24, 2021.

Justice Ramana has recently been in the spotlight due to allegations raised against him by Andhra Pradesh
Chief Minister YS Jaganmohan Reddy that Justice Ramana is managing appointments and roster at the
Andhra Pradesh High Court to favour the opposition Telugu Desam Party (TDP).

The allegations which were initially sent in a letter format to CJI Bobde were subsequently placed as an
affidavit.

Crucial hearings to look forward to in 2021:

The lockdown due to the Coronavirus pandemic has affected the functioning of all courts in the country.
Most courts are only taking up extremely urgent cases (cases which directly and immediately impact
liberty and livelihood of persons) for hearing and such cases are being heard through video conference

The Supreme Court is no exception with the hearings happening via video conference since March 23,
2020.

Some of the crucial cases which are pending before the top court are as follows:

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1. Challenge to the abrogation of Article 370 of the Constitution of India

The challenge to the abrogation of Article 370 of the Indian Constitution has been pending before the apex
court since August 2019.

The Court is hearing at least 23 petitions challenging the Central government's decision to scrap Article
370 thereby revoking the special status of the erstwhile State of Jammu and Kashmir.

The matter was last listed on March 2 when a 5-judge bench Constitution bench of the Supreme Court in
a 42-page judgment declined to refer the case to a larger bench of seven judges. The case has not been
heard after that.

The case involves significant questions on federalism, Centre-State relations and role of Governor which
require Court's adjudication.

Turning the clock back: How the Supreme Court has dealt with cases arising out of last year’s abrogation
of Article 370

2. Challenge to Citizenship (Amendment) Act, 2019

One of the most important cases pending before the top court which has been delayed due to Corona
induced lockdown is the challenge to the Citizenship (Amendment) Act (CAA) of 2019. More than 150
petitions are pending before the top court on this issue.

A Bench of CJI SA Bobde and Justices BR Gavai and Surya Kant had issued notice to the Central
government on December 18, but refused to stay the Act. The Court had remarked that the prayer for stay
will be considered later.

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The case was last heard on February 18 when the court granted time to the Central government to file its
response. The Centre filed its response on March 17, stating that the CAA is intended to tackle the problem
of religious persecution in certain specific countries and that it will not affect the rights of any of the Indian
citizens.

When the matter was mentioned by Senior Counsel Kapil Sibal on March 5 for early hearing, the CJI
hinted that the matter will be heard soon after the conclusion of the hearing in the Sabarimala reference
case. He also granted liberty to Sibal to mention the matter again after the Holi break.

However, as luck would have it, the Court went into restricted functioning immediately after Holi break
and the matter has not been heard since then.

3. Faith v. Rights: Sabarimala and other cases

Another important case which was slated for hearing in March was the case involving legal questions on
entry of women into the Sabarimala temple and other gender-related questions in other religions.

Aside from the Sabarimala case, there are three other cases raising similar legal questions. These concern
rights of Muslim, Parsi and Hindu women vis-à-vis religious practices.

One is a petition seeking the entry of Muslim women into mosques while the other is a challenge to the
practice of female genital mutilation practised by the Dawoodi Bohra community.

The third case relates to the restrictions placed on Parsi women to enter the holy fire place of an Agyari
(fire temple) if they marry non-parsis.

A nine-judge bench was constituted to deal with larger questions arising out of these cases after a
November 14, 2019 judgment rendered by a five-judge bench hearing the review petitions in the
Sabarimala case. Under review was a September 2018 judgment where entry into the Sabarimala temple
was made open to all women irrespective of their age.

The court in its November 14 judgment had observed that the practices entailing restrictions on the entry
of women in places of worship were not limited to the Sabarimala case but also arose in respect of the
three above-mentioned cases.

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Thus, the court had said that the issues concerning women’s rights vis-à-vis religious practices require
consideration by a larger bench of not less than seven judges so as to ensure that a judicial policy is evolved
to do substantial and complete justice. The Court had also framed seven questions to be decided by the
larger bench. It added that the Sabarimala review petitions should be decided only after the larger legal
issues are settled.

However, this November 14 judgment came under scrutiny since it was argued that the court cannot frame
legal questions or refer matter to larger Benches when hearing review petitions.

On February 10, the Court shot down this challenge and held that questions can be referred to a larger
Bench even in review petitions.

Later, CJI Bobde told in open court on March 5 that the matter would be heard by a nine-judge bench
from March 16.

But the court functioned only in a restricted manner in the week of March 16 and the case was not taken
up. Subsequently, the national lockdown was announced on March 24 and the Court was constrained to
limit its functioning.

Sabarimala Review: Majority Judgment

4. Use of the money bill route

The contentious issue of the government adopting the money bill route to get laws passed in the Parliament
is another crucial case pending before the Supreme Court.

10
This matter has to be heard by a bench of seven judges, though there is no clarity on when it will be heard.

A money bill originates in Lok Sabha. Once passed in the Lok Sabha by a simple majority, it is sent to the
Rajya Sabha for its recommendations. The recommendations made by Rajya Sabha on money bills are
not binding on Lok Sabha which may choose to reject it.

The current government which still does not have a majority in the Rajya Sabha has used the money
bill route on more than one occasion to pass contentious laws.

In a challenge to the Finance Act, 2017, which was passed as a money bill, a five-judge Bench of the
Court on November 13, 2019 held that its earlier judgment in the Aadhaar case approving the money bill
route needs to be reconsidered. It, therefore, referred the issue to a bench of seven judges.

Thus, the fate of Aadhaar judgment and the Aadhaar scheme itself depends on the outcome of this larger
legal issue.

5. Creamy layer

The issue relating to applicability of creamy layer principle to Scheduled Castes and Scheduled Tribes is
another case in which is awaiting hearing by the top court.

The Central government has urged the Supreme Court to reconsider its 2018 judgment in the case of
Jarnail Singh, in which the Court had ruled that the principle of creamy layer, previously applicable to
Other Backward Castes (OBCs) should be applied to Scheduled Caste/Scheduled Tribe (SC/ST)
communities for reservation in promotions.

‘Creamy layer’ who are better-off individuals among other backward classes, are ineligible for
reservations as per the Mandal Commission provisions. Whether a person falls under 'creamy layer'
category is determined based on economic parameters.

For OBCs, the creamy layer would cover households with an annual income in excess of Rs 8 lakh a year.

The centre is against the application of this principle to SC/ST communities on the ground that they have
been discriminated against for centuries and should get reservation benefits despite economic
advancement.

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In 2018, the Supreme Court in the judgment in Jarnail Singh & Ors. v. Lachhmi Narain Gupta & Ors. had
held that the principle of a creamy layer, previously applicable to Other Backward Castes, should be
applied to SC/ST communities as well for reservation in promotions.

6. Challenge to constitutionality of 2019 amendments to RTI Act

Another important plea pending before the Supreme Court is the petition filed by Congress MP Jairam
Ramesh who has challenged the Constitutional validity of the 2019 amendments made to the Right to
Information Act (RTI) giving the Centre authority to decide the tenure, salaries and service terms of the
Chief Information Commissioner and Information Commissioner.

It was in January last year that Supreme Court had issued notice in the plea.

During the debate in the Rajya Sabha on the Right to Information (Amendment) Bill, Ramesh had cited
five reasons behind the government's move to "dilute" the Act. He also raised questions on the timing of
bringing the amendments to the Bill, which mandates a timely response to citizen's requests for
government information.

The five cases he mentioned to strengthen his case included the Central Information Commission's (CIC)
order on disclosure of Prime Minister's educational qualification, allegedly false claims made by the Prime
Minister on bogus ration cards, the CIC's revelation that the RBI had disapproved demonetization, that
the then RBI Governor Raghuram Rajan had given a list of top NPA defaulters and the value of black
money brought back from abroad.

7. EWS Reservation

A five-judge Constitution Bench will decide on a batch of pleas that challenge the Constitution (One
Hundred and Third) Amendment Act, that introduced 10% reservation for the Economically Weaker
Sections (EWS). The Centre has defended its new law on the grounds that the amendments are intended
to bring about "social equality".

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8. Challenge to IBC code provisions

A batch of petitions challenging provisions of the Insolvency and Bankruptcy Code (IBC) that
allow initiation of insolvency proceedings against personal guarantors is also pending before the apex
court.

On November 15, 2019, the Centre published the IBBI (Insolvency Resolution Process for Personal
Guarantors to Corporate Debtors) Regulations, 2019 with effect from December 1, allowing lenders to
simultaneously haul companies and personal guarantors before the National Company Law Tribunal
(NCLT).

This means, if an individual has executed a deed as a personal guarantor to avail a loan for a company,
the lender can now recover dues from both parties.

The Court's decision in this regard is eagerly awaited as it would impact industrialists such as Anil
Ambani, Prashant Ruia of Essar Steel, Amtek Auto's Arvind Dham, Venugopal and Saurabh Dhoot from
Videocon Group, etc.

9. Challenge to constitutionality of Farm Acts

There are 8 petitions pending in the Supreme Court challenging the Farmers Produce Trade and
Commerce (Agriculture and Promotion) Act, 2020, Farmers (Empowerment and Protection) Agreement
on Price Assurance and Farm Services Act, 2020 and the Essential Commodities (Amendment) Act, 2020.

Though the CJI led bench is now focusing on the farmers protests near the Delhi borders and how they
can bring about a resolution of deadlock between the farmers and the government, an eventual decision
on the challenge will be crucial as farmers maintain that the laws must be repealed.

10. Electoral bonds

The challenge to the Constitutionality of the Electoral Bonds scheme is another crucial case still pending
before a Bench led by chief Justice SA Bobde. In January 2020, the Court declined to stay the scheme and
opted to adjourn the matter. With the COVID-19 pandemic coming in, the case did not make any headway
in 2020.

13
The main petition in the case was filed in 2017 and challenges as many as five amendments brought to
various legislations in order to facilitate the implementation of the scheme for electoral bonds. The Centre
has opposed the challenge, asserting that this ‘alternate system’ would promote transparency and
accountability in funding and donations received by political parties in India. The Election Commission
of India, however, registered its disagreement, contending that the scheme would affect the transparency
of political funding.

A Bench headed by Chief Justice Ranjan Gogoi actually reserved orders in the matter in April 2019, after
Attorney General buttressed the Central government's stance, contending in open Court that "voters don't
need to know where money of political parties comes from."

However, the following day, the Court confined to directing all the political parties to disclose details of
the donations received by them through electoral bonds to the Election Commission of India. Rather than
give a conclusive ruling at the time, the Bench opined that the petition gave rise to “weighty issues” which
need an in-depth hearing and which cannot be concluded in the limited time that was available before the
Court. Thus, an interim order was passed, keeping in mind that the interim arrangement “does not tilt the
balance in favour of either parties.”

The matter remains pending and it is unclear when the Supreme Court will take it up next.

Crucial verdicts
Apart from the cases to look forward to, two judgments which are eagerly awaited are:

RBI Loan moratorium case: Justice Ashok Bhushan led bench of the Supreme Court will deliver its verdict
on a batch of pleas pertaining to the banks' decision to charge interest on EMIs that remained unpaid by
borrowers after they availed the Reserve Bank of India's loan moratorium scheme introduced between
March 1 to August 31 in the wake of COVID-19 pandemic.

The Supreme Court will also give a verdict that would clarify on how sector specific loans need to be
restructured.

TATA vs Mistry: The other judgment due to be pronounced concerns the corporate battle between TATA
sons and Cyrus Mistry, wherein the December 2019 National Company Law Appellate Tribunal (NCLAT)
decision reinstating Shapoorji Pallonji heir Cyrus Mistry to Tata Sons has been challenged.

14
The CJI SA Bobde led bench had heard the case for about a week at a stretch and is likely to deliver a
verdict before CJI Bobde retires in April, 2021.

1.4.2 High Court of India

Constitution:

High Courts are second Courts of Importance of the democracy of India. They are run by Article 141 of
the Constitution of India. They are governed by the bindings conferred by the Supreme Court of India so
far judgments and orders are concerned. The Supreme Court of India is the highest level of courts and is
responsible for fixing the guidance to the High Courts set by precedence. The High Courts are the principal
civil courts of original jurisdiction in the state, and can try all offences including those punishable with
death. The work of most High Courts consists of Appeals from lowers courts and writ petitions in terms
of Article 226 of the Constitution of India.

High courts are the types of courts which are instituted as the courts powered by constitution with the
effect of Article 214 Part IV Chapter V of the Indian Constitution. There are 24 high courts in India taking
care of the regional juridical system of India out of which Kolkata High Court is the oldest.

Jurisdiction:

These courts are mainly confined to the jurisdiction of state, group of states or Union Territory. They are
being empowered to govern the jurisdiction of lower courts like family, civil and criminal courts with
other different courts of the districts. These courts are of the statute of principal civil courts so far
originality of jurisdiction is concerned in the related domain of the states and the other district courts.
These courts are treated as subordinate to High Courts by status. But High Courts are mainly exercising
their jurisdiction related to civil or criminal domain if the lower courts are proved incapable of exercising
their power as per authorization extended by law. These situations may be generated through the inability
of financial or territorial jurisdiction. There are specific areas in which only High Courts can exercise the
right for hearing like cases related to Company Law as it is designated specially in a state or federal law.
But normally the high courts are involved in the appeals raised in the cases of lower courts with the writ

15
petitions as conferred in Article 226 of the Constitution of India. The area of writ petitions is also the sole
jurisdiction of high courts. The jurisdiction of High Court is varying so far territorial jurisdiction is
considered.

Official structure and application:

The appointment of the judges of High Courts is being executed by the President of India with the
consultation of the Chief Justice of India, the Chief Justice of High Court and the Governor of the state or
union territory.

Decision on the number of judges in High Court is mainly dictated considering the higher number of either
the average of organization of main cases for the last years as per the average nationally calculated or the
average rate of main cases disposed per judge per year in the respective high court.

The high courts with handling of most of the cases of a particular area are provided with the facility of
permanent benches or branches of the court situated there only. To serve the complainants of remote
regions the establishment of circuit benches had been made to facilitate the service with the schedule of
operation as per the occurrence of visit of the judge.

The High Court is the highest judicial body in a state. As per the Indian constitution, Articles 214-231
deals with the provisions of the High Courts in India. Every High Court in India shall consist of a Chief
Justice and such other judges appointed by the President of India. There is no fixed minimum number of
judges for the High Courts. The number of judges varies from Court to Court and from State to State as
per the requirement. Currently, there are 25 High Courts in India, three having control over more than one
State.

16
 - Total High Courts in India:
The total number of high courts in India is 25. The list High Courts for all states and union territories with
the year of establishment has been given below:

List of High Courts in India

Name Year Territorial Seat

Jurisdiction

Kolkata 1862 West Bengal, Andaman & Nicobar Kolkata ( Bench of port Blair)
Islands

Mumbai 1862 Maharashtra, Dadra & Nagar Havel Mumbai (Bench at Panaji, Aurangabad
i, Goa, Daman Diu and Nagpur)

Chennai 1862 Tamil Nadu & Pondicherry Chennai (Bench at Madurai)

Allahabad 1866 Utter Pradesh Allahabad (Bench at Lucknow)

Karnataka 1884 Karnataka Bengaluru (Bench at Dharwad and Gul

barga)

Patna 1916 Bihar Patna

Jammu & Kashmir 1928 Jammu & Kashmir Sri Nagar & Jammu

Punjab & Haryana 1947 Punjab, Haryana , Chandigarh Chandigarh

17
Guwahati 1948 Assam, Nagaland, Mizoram and Ar Guwahati (Bench at Kohima, Aizawl a
unachal Pradesh nd Itanagar

Orissa 1948 Orissa Cuttack

Rajasthan 1949 Rajasthan Jodhpur ( Bench – Jaipur)

Madhya Pradesh 1956 Madhya Pradesh Jabalpur (Bench –Indore , Gwalior)

Kerala 1958 Kerala & Lakshadweep Ernakulam

Gujarat 1960 Gujarat Ahmedabad

Delhi 1966 Delhi Delhi

Himachal Pradesh 1966 Himachal Pradesh Shimla

Sikkim 1975 Sikkim Gangtok

Chhattisgarh 2000 Chhattisgarh Bilaspur

Uttarakhand 2000 Uttarakhand Nainital

Jharkhand 2000 Jharkhand Ranchi

Tripura 2013 Tripura Agartala

Manipur 2013 Manipur Imphal

Meghalaya 2013 Meghalaya Shillong

Andhra Pradesh 2019 Andhra Pradesh Amravati

Telangana 2019 Telangana Hyderabad

18
 Appointment of the Judges:

The Chief Justice of a High Court is appointed by the President of India after the consultation with the
Chief Justice of the Supreme Court and the Governor of the State.

Qualifications for the Judges:

 In order to be a judge in High court, candidates should be a citizen of India.

 Candidate must have been an advocate in one or more High Courts in India or a judge for at least 10 years
in subordinate courts in India.

Tenure of a Judge:

Initially, the age of the retirement for the judges of the High Courts was fixed at 60. It was increased to
62 years in 1963 as per the 15th amendment of the Constitution.

Removal of the Judges:

 A judge may leave his office by resigning. The judge needs to send the letter of resignation to the President.
 The office would be considered to have been vacated if the person is appointed as a judge of the Supreme
Court or is transferred to some other High Court.
 The judge of a High Court can also be removed from its position by the judge of the Supreme Court. The
judge of High Court can be removed by the President, if the Parliament passes a motion against the judge
by an absolute majority of the members present and voting, both the Houses sitting separately.

Salary:

 The salary of the Chief Justice of a High Court is rupees 2,80,000/- per month. Salary of other judges is
rupees 2,50,000/- per month.

Powers and Functions:

 Power to issue certain writs: Every High Court of India holds the power to issue writs of habeas corpus,
mandamus, prohibition, quo-warranto and certiorari for the enforcement of Fundamental Rights or for
other purpose.

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 Power of Superintendence: Every High Court of India has superintendence over all Courts and Tribunals
throughout the state in relation to which it exercises jurisdiction.
 Power to transfer case: If the High Court thinks that a case which is pending in a court subordinate to it
involves a substantial question of law then High Court shall withdraw the case and can either dispose of
the case itself or determine the said question of law and return the case to the court from which the case
has been so withdrawn together with a copy of its judgment on such question.
 Consultation in the appointment and posting etc. of District Judges: Governor consults the High Court
in the appointment, posting and promotion of District Judges. High Court is also consulted in the
appointment of other members of the State Judicial Service.
 Other original and appellate powers: High Court has original and appellate jurisdiction in civil and
criminal matters as conferred by the Codes of Civil and Criminal Procedure and the Letters of Patent.

1.4.3 Lower Courts of India:

District Courts

Constitution

The basis of structuring of district courts in India is mainly depending upon the discretion of the state
governments or the union territories. The structure of those courts is mainly made considering several
factors like the number of cases, distribution of population, etc. Depending upon those factors the state
government takes the decision of numbers of District Courts to be in operation for single district or
clubbing together different adjacent districts.

Normally these types of courts exercise their power of juridical service in district level. These courts are
covered by the administrative power of the High Courts under which the district courts are covered. The
judgments of the district courts are subject to review to the appellate jurisdiction of the respective High
court.

The District Courts of India are presided over by a judge. They administer justice in India at a district
level. These courts are under administrative and judicial control of the High Court of the State to which
the district concerned belongs.

20
The highest court in each district is that of the District and Sessions Judge. This is the principal court of
civil jurisdiction. This is also a court of Sessions. Sessions-triable cases are tried by the Sessions Court. It
has the power to impose any sentence including capital punishment.

There are many other courts subordinate to the court of District and Sessions Judge. There is a three tier
system of courts. On the civil side, at the lowest level is the court of Civil Judge (Junior Division). On
criminal side the lowest court is that of the Judicial Magistrate. Civil Judge (Junior Division) decides civil
cases of small pecuniary stake. Judicial Magistrates decide criminal cases which are punishable with
imprisonment of up to five years.

The District Courts of India are the local district courts of the State governments in India for every
district or for one or more districts together taking into account the number of cases, population
distribution in the district.

These Courts administer justice in India at a district level.

The highest court in each district is that of the District and Sessions Judge.

District and Sessions Judge is the principal court of original civil jurisdiction besides the High Court of
the State and which derives its jurisdiction in civil matters primarily from the code of civil procedure.

The district court is also a court of Sessions when it exercises its jurisdiction on criminal matters under
the Code of Criminal procedure. The district court is presided over by one District Judge appointed by the
state Governor with on the advice of state chief justice.

In addition to the district judge there may be a number of Additional District Judges and Assistant District
Judges depending on the workload.

The Additional District Judge and the court presided have equivalent jurisdiction as the District Judge and
his district court.

 Andaman and Nicobar

 Andhra Pradesh
 Telangana
 Arunachal Pradesh

21
 Assam
 Bihar
 Chhattisgarh
 Dadra and Nagar Haveli
 Daman and Diu
 Delhi
 Goa
 Gujarat
 Haryana
 Himachal Pradesh
 Jammu and Kashmir
 Jharkhand
 Karnataka
 Kerala
 Lakshadweep
 Madhya Pradesh
 Maharashtra
 Manipur
 Meghalaya
 Mizoram
 Nagaland
 Odisha
 Puducherry
 Chandigarh
 Punjab
 Rajasthan
 Sikkim
 Tamil Nadu
 Tripura
 Uttar Pradesh
 Uttarakhand

22
 West Bengal

1.5 PUBLIC INTEREST LITIGATION

Public Interest Litigation (PIL), means a legal action initiated in a court of law for the enforcement of
public interest or general interest in which the public or class of the community have pecuniary interest or
some interest by which their legal rights or liabilities are affected.

Public Interest Litigation (PIL), means a legal action initiated in a court of law for the enforcement of
public interest or general interest in which the public or class of the community have pecuniary interest or
some interest by which their legal rights or liabilities are affected." Public Interest Litigation's explicit
purpose is to alienate the suffering off all those who have borne the brunt of insensitive treatment at the
hands of fellow human being. Transparency in public life & fair judicial action are the right answer to
check increasing menace of violation of legal rights. Traditional rule was that the right to move the
Supreme Court is only available to those whose fundamental rights are infringed.

A Public Interest Litigation (PIL) can be filed in any High Court or directly in the Supreme Court. PIL
is a right given to the socially conscious member or a public spirited NGO to espouse a public cause by
seeking judicial for redressal of public injury. Such injury may arise from breach of public duty or due to
a violation of some provision of the Constitution. Public interest litigation is the device by which public
participation in judicial review of administrative action is assured. It has the effect of making judicial
process little more democratic.
- Who can file PIL?
The following persons are not entitled to file a PIL case.
(a) a person without sufficient public interest;
(b) a person acting for self-gain or personal profit.;
(c) a person Public Interest Litigation (PIL) 317 with political involvement; and
(d) a person with malafide intentions. A third party who is a total stranger to the prosecution which ended
in the conviction of the accused has no ‘locus standi’ to challenge the conviction and sentence awarded to

23
the convicts through a PIL. It was upheld by the Supreme Court in Simranjit Singh Mann vs. Union of
India, 1992 (4) SC 65.
In this case the two assassins of General Vaidya were found guilty of murdering him. They were awarded
death penalty which was confirmed by the Supreme Court. The President of Akali Dal filed a PIL under
Article 32 challenging the conviction and the sentence on the ground of violation of Article 22, 21 and 14
of the Constitution. The court held that the petitioner has no ‘locus standi’ to file the petition as he was a
total stranger to the prosecution and more than that he was not even authorized by the convicts. The fear
expressed by certain people regarding the liberal view of the Supreme Court on ‘locus standi’ is that it
would lead the court being flooded with writ litigation and therefore they should not be encouraged. To
the above criticism the court declared, “No State, had the right to tell its citizens that because a large
number of cases of the rich are pending in our courts, we will not help the poor to come to the courts, for
seeking justice until the staggering load of cases of people who can afford rich lawyers is disposed off.”
(AIR 1983 SC 339).

- EXAMPLES OF PIL
Of the numerous cases on the subject, the following cases are worthy of studies:
i) [Link] Vs Union of India, AIR 1982 SC 149, 194 (Scope and basic approach)
ii) DC Wadhwa Vs State of Bihar, AIR 1987, SC 579 (Locus Standi)
iii) Ratlam Municipality Vs Vardichand, AIR 1980, SC 1622 (General)
iv) Fertilizer Corporation Vs Union of India, AIR 1981 SC 344 (Locus Standi)
v) People’s Union for Democratic Rights Vs Union of India, AIR 1982 SC 1473 (General)
vi) State of Himachal Pradesh Vs Parents, AIR 1985 SC vii) Shivaji Rao Vs Mahesh, AIR 1985 SC
910 (Mode of entertaining).

- Points to be Followed While Filing PIL:

While filing a PIL the following points are to be taken for consideration:
1) Discuss the legal issue with the affected people thoroughly.
2) Find out whether the matter infringes on the fundamental rights of the people or not. It is also important
to specify which fundamental rights have been infringed.
3) Help the people to decide whether legal action should be taken in the court to enforce their rights or to
prevent the violation of their rights.

24
4) Write out a petition with all the facts and details, dates, etc.
5) Specify in the petition the type of relief wanted by the people.
6) Get the signatures of all the affected people, if possible.
7) Collect all the available documents, newspaper clippings, photographs, investigation reports,
certificates and affidavits related to the issue and attach them to the main petition as annexures.
8) If possible, consult a socially conscious lawyer or the members of the local legal aid society before
sending the petition.
9) Send the registered petition to the Chairman of the High Court Legal Services Committee of the
respective High Court or to the Chairman of the Supreme Court Legal Services Committee, New Delhi-
110 001.

1.6 INDIAN LEGAL SYSTEM AND INTELLECTUAL PROPERTY RIGHTS

Protecting and managing intellectual property rights (IPR) is the first step for any business seeking to
establish its presence in India, and must be incorporated as an integral part of the business asset growth
strategy. Having a distinguished intellectual property can set your business apart from competitors, and
become an essential part of your marketing. An intellectual property can also be sold or licensed to
generate revenues for you or your business. In India, there are different types of intellectual property,
which are protected under separate laws. As a result, registering intellectual property involves navigating
complex legalities and submitting numerous documents. This requires expertise and familiarity with
procedural norms to ensure fast and effective registration.

Intellectual Property Rights are legal rights governing the use of creations of the human mind. The
recognition and protection of these rights is of recent origin. Patents, designs and trademarks are
considered as industrial property. As per International Convention for the protection of industrial (Paris
Convention) the protection of industrial property has as its object patents, utility models, industrial
designs, trademarks, service marks, trade names, indications of source or appellations or origin and the
repression of unfair competition when copyrights, Geographical indicators, layout Designs and
confidential information were included to industrial property, they all become intellectual property.

- Summary

25
 - Intellectual property encompasses the properties that are the creations of the human mind, labor,
capital and intellect.
- Intellectual property is divided into two categories: Industrial property, which includes inventions
(patents), trademarks, industrial designs, and geographic indications of source; and Copyright,
which includes literary and artistic works such as novels, poems and plays, films, musical works,
artistic works such as drawings, paintings, photographs and sculptures, and architectural designs.
- The most noticeable difference between intellectual property and other forms of property,
however, is that intellectual property is intangible, that is, it cannot be defined or identified by its
own physical parameters. It must be expressed in some discernible way to be protectable.
- With the establishment of the world trade Organization (WTO), the importance and role of the
intellectual property protection has been crystallized in the Trade -Related Intellectual Property
Systems (TRIPS) Agreement.
- The TRIPS Agreement, which came into effect on 1 January 1995, is to date the most
comprehensive multilateral agreement on intellectual property. The areas of intellectual property
that it covers are:
- Copyright and related rights (i.e. the rights of performers, producers of sound recordings and
broadcasting organizations); trademarks including service marks;
- Geographical indications including appellations of origin; Industrial designs; Patents including
protection of new varieties of plants; the lay-out designs (topographies) of integrated circuits; the
undisclosed information including trade secrets and test data.
- After India became a signatory to the TRIPS agreement, the Patents Act, 1970 has been amended
in the year 1995, 1999, 2002 and 2005 to meet its obligations under the TRIPS Agreement. The
law of trademarks is also now modernized under the Trademarks Act of 1999. Copyright Act, 1957
has been amended several times to keep pace with the changing times. The most notable
amendment was introduced in 1984 including “computer programmes” within the definition of
"literary work”.

 Check your Progress:

State True or False.

1. Patents, Designs and Trademarks, which are also known as ‘Industrial Property’.

26
2. ‘Moveable property’ includes standing timber, growing crops and grass, fruit upon and juice in trees,
and property of every other description, except immovable property.

 Keywords

- Property: It is anything that is owned by a person or entity.

- Regulations: These are rules made by a government or other authority in order to control
the way something is done or the way people behave.
- The World Intellectual Property Organization (WIPO): It is an international
organisation designed to promote the worldwide protection of both industrial property
(inventions, trademarks, and designs) and copyrighted materials (literary, musical,
photographic, and other artistic works).

 Self-Assessment Questions

1. What does it mean by property?

2. How many types of the property are there?

3. Define Intellectual Property.

 Answers to Check your Progress

State True or False.

1. True

2. True

27
  Suggested Reading

1. Law Relating to Intellectual Property Rights by M. K. Bhandari.

2. Law Relating to Intellectual Property Rights by V K Ahuja.

3. Intellectual Property Rights by Kriti Sharma & Vedant Shukla.

4. [Link]

28
Intellectual Property Rights, its need and awareness

MODULE

Structure
2
2.1 Scope of Intellectual property.
2.2 Various factors related to the Intellectual Property Rights and their impact on Business and economy
2.3 IPR as valuable assets for the business growth, research and development, advancement in the
technology sector.
2.4 Role of WIPO, Treaties and reciprocal agreements to facilitate IPR services. (E.g.: TRIPS, GATT,
Paris Convention, Berne Convention, Madrid Protocol, Patent Cooperation Treaty, WCT and
WPPT)
2.5 IP Policy 2016, IPR status of India and other countries, Need for IPR awareness
2.6 Innovation and IPR.- Important factor in the growth and development of nation, Global Innovation
Index
2.7 Intellectual Property and Public Interest – Access to Medicines, Access to Education

Check your progress

Summary
Keywords
Self-Assessment Questions
Answers to Check your Progress
Suggested Reading

29
2.1 SCOPE OF INTELLECTUAL PROPERTY

The scope of IP rights is broad; two classification modes are used to determine whether IP is copyright or
Industrial Property. Industrial properties include patents or inventions, trademarks, trade names,
biodiversity, plant breeding rights and other commercial interests. A patent gives its holder the exclusive
right to use the Intellectual Property for the purposes of making money from the invention.

An invention is itself a new creation, process, machine or manufacture. Having copyright does not give
you the exclusive right to an idea, but it protects the expression of ideas that are different from a patent.
Copyright covers many fields, from art and literature to scientific works and software.

Even music and audio-visual works are covered by copyright laws. The duration of copyright protection
exists 60 years after the death of the creator. In other words, an author’s book is copyrighted for his entire
life and then 60 years after his death. Unlike patent laws, there is no requirement of the administrative
process in copyright laws.

2.2 VARIOUS FACTORS RELATED TO THE INTELLECTUAL PROPERTY RIGHTS AND

THEIR IMPACT ON BUSINESS AND ECONOMY

There has been a lot of controversy on the role of intellectual property protection (IPP) regime especially
the patent system in fostering innovation, technology and industrial development of a country. IPP is
expected to encourage innovation by rewarding the inventor. Strong IPP regime may also inhibit diffusion
of knowledge and even technology development in the countries that are technology followers. Countries
have fine-tuned their IPP regimes as per their developmental requirements. Against this backdrop, the on-
going attempt to harmonize and strengthen the IPP regimes worldwide, as a part of the TRIPs Agreement,
is widely seen to be adversely affecting the technological activity in developing countries by choking the
knowledge spillovers besides implications for the access and affordability to lifesaving drugs by the poor.

30
2.3 IPR AS VALUABLE ASSETS FOR THE BUSINESS GROWTH, RESEARCH AND
DEVELOPMENT, ADVANCEMENT IN THE TECHNOLOGY SECTOR

Intellectual Property of a company is indispensable to develop and maintain a successful

business. In order for the biotechnological companies to succeed, Intellectual Property
protection in the form of patents is crucial as it encourages them to develop new medicines
and treatments for diseases. This protection benefits the owner as well as adds importance
to the industry as well as business and also provides incentives for the private sector to
invest in their developments. It is known that most of the products on the World Health
Organization’s Essential Drug list are an outcome of the intensive research and development
done by the pharmaceutical industry which is covered under Patents. Trad e secrets and
patents are inordinately valuable to a company, mainly because they give an edge in the
competitive market.

Intellectual property rights entities to have exclusivity over their innovative new or original
products, their creative designs and t heir brands. The exclusivity creates an appropriate
incentive for investing in improving their competitiveness. A company builds strong
goodwill with consumers, by its trademark. The brand acts as corroboration of quality and
is a source of certain products or services which are extremely valuable. Trademark or brand
is considered to be a direct reflection of the owner by clients or customers. Copyrights are
an exceptionally valuable asset for creative and software companies, media and film
industry as this protection aids the companies in maintaining their business in cut -throat
competition. It is a widely known fact that Intellectual Property provides a strong position
when it comes to entering into business partnerships.

The asset class of Intellectual Property generates revenue for business entities through
licensing, franchising, sale of protected products or services. In case of a merger or
acquisition protected IP assets increase the value of business significantly. The importance
of Intellectual Property is evident in export markets as well. Protected Intellectual Property
assets can be exported abroad or franchising agreements can be sought with foreign
companies. It is pivotal to note that the top organization in the world which have been
ranked in billions namely, Apple, Microsoft, Blackberry have developed a powerful revenue

31
stream because of their extensive IP assets. Maximum benefits can be reaped through a
strong IP portfolio which can be used to increase revenue through licensing stream.

The rapid rate of development, globalization, advancement of technology, increase in

commercial activities, development of international business and last but not the least
increase in knowledge has made the business entities perceive the importance of Int ellectual
Property assets and its stipulation in the growth of business. There is strife in the sector and
in order to survive and to grow at the desired pace it is necessary to realize the importance
and need of this class of assets because they no longer just add exclusivity to the
organization but are also paramount for the foundation of the company. It will be befitting
here to conclude by quoting the famous American businessman Mark Getty who suitably
reflects that Intellectual Property is directly pro portional to the growth of any business
organization, ‘Intellectual property is the oil of the 21st century. Look at the richest men a
hundred years ago; they all made their money extracting natural resources or moving them
around. All today's richest men have made their money out of the intellectual property.

2.4 ROLE OF WIPO, TREATIES AND RECIPROCAL AGREEMENTS TO FACILITATE IPR

SERVICES. (E.G.: TRIPS, GATT, PARIS CONVENTION, BERNE CONVENTION,
MADRID PROTOCOL, PATENT COOPERATION TREATY, WCT AND WPPT)

 WIPO:
World Intellectual Property Organization is an organization based in Geneva and it works with the vision
of encouraging creative activity and for promoting the protection of Intellectual Property throughout the
world. WIPO is one of the 15 specialized agencies of the United Nations. Currently, there are 193 members
in the World Intellectual Property Organization. WIPO, at the time when it started, was originally about
promoting the protection of intellectual property, but when it joined the United Nations in 1974, the
objective was redefined as public interest or humanitarian goal. Article 1 of the key agreement
establishing WIPO’s relationship to the UN restates WIPO’s purpose as: “for promoting creative

32
intellectual activity and for facilitating the transfer of technology related to the industrial property to the
developing countries in order to accelerate economic, social and cultural development…”

WIPO is a unique organization among the UN organizations, it’s activities largely are self-funded,
according to the Program and Budget of WIPO for the year 2020-2021, the expected income for the
biennium will be over 880 million Swiss francs and the expected expenditure is 768 million Swiss francs.
WIPO has expected that nearly 95% of the expected income is going to be generated from the fees that
the organization will receive for their services.

The World Intellectual Property Organization is the oldest organization in the field of IP protection.
Actually, it was created at the diplomatic conference in 1893.

The WIPO Convention, the constituent instrument of the World Intellectual Property Organization
(WIPO), was signed at Stockholm on July 14, 1967, entered into force in 1970 and was amended in 1979.

 Role of WIPO:

a. It Ensures administrative Cooperation among IP unions namely, the Paris Union, Berne
Union, Madrid Union, Hague Union, Nice Union, Lisbon Union, Locarno Union, PCT
Union, IPC Union, Vienna Union and Budapest Union.

b. Provides technical legal assistance

c. Helps setting of standards and classification of IP for protection

d. Facilitates registration process of International applications

The role of WIPO with regard to patent is as follows:

1. Assisting campaigns development to improve IP protection all over the world and harmonize
national legislation.
2. Signing international agreements on IP protection.
3. Rendering technical and legal assistance in the field of intellectual property.
4. Collecting and spreading information along with conducting researches and publishing results.

33
 5. Ensuring the proper facilitation of the International Intellectual Property (IP) protection.

The most important function is to facilitate multilateral international conventions. The WIPO administers
people in the field of industrial property, copyrights, patents and other rights with patents being the one
of prime importance.

 Other main functions of it are:

1. Improving national legislation in the field of Intellectual Property (IP) using the experience of
other countries and their harmonization tendencies.
2. Strengthening the role of IP in the scientific, technical and economic fields.
3. Improving the law enforcement activities to prevent violations in the field of IP.
4. Strengthening the technical potential of the use of IP.

Sr. No. Treaty IPR work Particulars of the Treaty

i. Berne Convention for Literary & Artistic Revisions: Berlin-Rome-

the Protection of Work Brussels- Stockholm-Paris
Literary and Artistic Propounds what protectable-
Work, 1886 Rights & Exceptions

Principles: Minimum standards-

National treatment- automatic
protection

ii. Universal Copyright Literary, Scientific & Rights: of Authors and

Convention, 1952 Artistic Work Proprietary Owners

Work : Original and Derivate

34
iii. Rome Convention, Performers, Concept of neighboring rights
1961 Phonograms of and the person entitled to
Producers, protection
Broadcasts of Communication & Performance
Broadcasting to Public Rights and Exceptions
Organizations
Minimum 20 years protection
period

iv. Geneva Convention, Phonograms Provisions: Piracy and

1971 Counterfeiting

Phonograms: any exclusive

aural fixation of sounds of
performance or other sounds

v. WIPO Copyright Extension to Article 2 Protectable as copyright:

treaty, 1996 of Berne Convention Computer Programmes and
compilation of data if selected
and arranged uniquely.
Illustration: Encyclopedias and
anthologies

Exclusive Rights of Authors:

Distribute- Rent- communicate
to Public

vi. Marrakesh Treaty, Adaptation of Provisions: WIPO administered

2013 copyright work for - makes the production and
blind Visually international transfer of
impaired specially-adapted books for
people with blindness or visual
impairments easier

35
 vii. WIPO Performances Performances & Exclusive Economic Rights:
and Phonograms Phonograms Reproduce- distribute-rental-
Treaty, 1996 communicate to public-equitable
remuneration-50 year’s
protection.

viii. Paris Convention, Industrial Property Protectable Matter: Patents,

1883 Utility Models, Industrial
Designs, Trademarks, Service
marks, Trade names, duration of
application 12 months for
Patents and 06 months for Utility
Designs

Provisions: Priority Period -

National Treatment -
compulsory Licenses-deeming
Provisions for action for passing
off – Unfair Competition

2.5 IP POLICY 2016, IPR STATUS OF INDIA AND OTHER COUNTRIES, NEED FOR IPR
AWARENESS

(Source: [Link]

Official document of DFPIIT OF MINISTRY OF COMMERCE AND INDUSTRY)

Features:
 The National Intellectual Property Rights (IPR) Policy 2016 was adopted in May 2016 as a vision
document to guide future development of IPRs in the country.

 Its clarion call is “Creative India; Innovative India”.

36
 It encompasses and brings to a single platform all IPRs, taking into account all inter-linkages and
thus aims to create and exploit synergies between all forms of intellectual property (IP), concerned
statutes and agencies.

 It sets in place an institutional mechanism for implementation, monitoring and review. It aims to
incorporate and adapt global best practices to the Indian scenario.

 Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce, Government of

India, has been appointed as the nodal department to coordinate, guide and oversee the
implementation and future development of IPRs in India.

 The ‘Cell for IPR Promotion & Management (CIPAM)’, setup under the aegis of DIPP, is to be
the single point of reference for implementation of the objectives of the National IPR Policy.

 India’s IPR regime is in compliance with the WTO's agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS).

The Union Cabinet has approved the National Intellectual Property Rights (IPR) Policy on 12th May, 2016
that shall lay the future roadmap for IPRs in India. The Policy recognises the abundance of creative and
innovative energies that flow in India, and the need to tap into and channelize these energies towards a
better and brighter future for all.
The National IPR Policy is a vision document that encompasses and brings to a single platform all IPRs.
It views IPRs holistically, taking into account all inter-linkages and thus aims to create and exploit
synergies between all forms of intellectual property (IP), concerned statutes and agencies. It sets in place
an institutional mechanism for implementation, monitoring and review. It aims to incorporate and adapt
global best practices to the Indian scenario.

Creativity and innovation have been a constant in growth and development of any knowledge economy.
There is an abundance of creative and innovative energies flowing in India. India has a TRIPS compliant,
robust, equitable and dynamic IPR regime. An all-encompassing IPR Policy will promote a holistic and
conducive ecosystem catalyzes the full potential of intellectual property for India’s economic growth and
socio-cultural development, while protecting public interest. The rationale for the National IPR Policy lies
in the need to create awareness about the importance of IPRs as a marketable financial asset and economic
tool.

37
Overview:

The concrete measures taken by the Government in the last two decades in consonance with national
development priorities and in conformity with international treaties, conventions and agreements to which
India is a party has created and established a TRIPS compliant, robust, equitable and dynamic IPR regime.
The continuous and unending improvements along with the sweeping and far-sighted changes at the
legislative and administrative levels have resulted in strengthening the administration, management and
enforcement of IPRs. The statutes governing different kinds of IPRs in India are Patents Act, 1970; Trade
Marks Act, 1999; Designs Act, 2000; Geographical Indications of Goods (Registration and Protection)
Act, 1999; Copyright Act, 1957; Protection of Plant Varieties and Farmers’ Rights Act, 2001;
Semiconductor Integrated Circuits Layout-Design Act, 2000 and Biological Diversity Act, 2002. The
Department for Promotion of Industry and Internal Trade (DPIIT) is entrusted with matters concerning
the specialized UN agency on IPRs, the World Intellectual Property Organization (WIPO), including
coordination with other concerned Ministries or Departments. The Controller General of Patents, Designs
and Trade Marks (CGPDTM) under the Department for Promotion of Industry and Internal Trade,
Ministry of Commerce and Industry is entrusted with the responsibility of administering the laws relating
to Patents, Designs, Trade Marks and Geographical Indications within the territory of India. The
CGPDTM presently functions through Patent Offices at four locations (Chennai, Delhi, Kolkata, and
Mumbai), Trademarks Offices at five locations (Ahmedabad, Chennai, Delhi, Kolkata and Mumbai), and
a Geographical Indications Registry at Chennai and a Designs Wing at Kolkata. The Office of CGPDTM
is also in charge of the Rajiv Gandhi National Institute of Intellectual Property Management at Nagpur.
Copyrights were administered by the Ministry of Human Resource Development. The Copyright Act is
comprehensive and with the recent amendments, the rights of creators have been strengthened. The
Protection of Plant Varieties and Farmers’ Rights Act, 2001 is a sui generis legislation in India providing
protection for plant varieties and rights of farmers and is under the aegis of the Ministry of Agriculture.
The Department of Information Technology was responsible for Semiconductor Integrated Circuits
Layout-designs; the first registration under the Semiconductor Integrated Circuits Layout-Design Act was
granted in October 2014. The preservation of biological diversity in India is under the Ministry of
Environment and Forests; the Biological Diversity Act 2002 provides mechanism for regulating access
and ensuring fair and equitable sharing of benefits arising out of the use of biological resources and
associated traditional knowledge. India has always been conscious of its obligations in the international

38
arena, and has acceded to a number of international conventions to further the cause of IPRs globally.
India was the first country to ratify the Marrakesh Treaty 2013 for Access to Published Works by visually
impaired persons. The accession to the Madrid Protocol in 2013 is a step towards global alignment for
proprietors of marks. The Indian Patent Office has been recognized as an International Search Authority
and an International Preliminary Examination Authority. The IPR regime in India has adequate safeguards
in the form of judicial review and appellate provisions. Indian courts have consistently enforced IPRs,
with judgments clearly expressing the intent and purpose of our laws. The Intellectual Property Appellate
Board hears appeals arising from the decisions of Controllers of Patents as also Registrars of Trade Marks
and GIs. In a slew of initiatives, the IP offices under the CGPDTM have been modernized and there is a
perceptible change for the better. Conscious efforts have been made to develop a robust e-service delivery
system, including real-time public dissemination of dynamic IP knowledge through e-enabled innovative
tools.

Vision Statement: An India where creativity and innovation are stimulated by Intellectual Property for
the benefit of all; an India where intellectual property promotes advancement in science and technology,
arts and culture, traditional knowledge and biodiversity resources; an India where knowledge is the main
driver of development, and knowledge owned is transformed into knowledge shared.

Mission Statement: Stimulate a dynamic, vibrant and balanced intellectual property rights system in
India to:

• foster creativity and innovation and thereby, promote entrepreneurship and enhance socioeconomic and
cultural development, and

• focus on enhancing access to healthcare, food security and environmental protection, among other
sectors of vital social, economic and technological importance.

Objective 1

IPR Awareness: Outreach and Promotion - To create public awareness about the economic, social and
cultural benefits of IPRs among all sections of society. The 21st century belongs to the knowledge era and
is driven by the knowledge economy. A nation-wide program of promotion should be launched with an
aim to improve the awareness about the benefits of IPRs and their value to the rights-holders and the

39
public. Such a program will build an atmosphere where creativity and innovation are encouraged in public
and private sectors, R&D centers, industry and academia, leading to generation of protectable IP that can
be commercialized. It is also necessary to reach out to the less-visible IP generators and holders, especially
in rural and remote areas. The clarion call of the program would be the holistic slogan.

“Creative India; Innovative India”

The 21st century belongs to the knowledge era and is driven by the knowledge economy- an economy that
creates, disseminates and uses knowledge to enhance its growth and development. Traditionally,
monetization of knowledge has never been the norm in India. While laudable and altruistic, this does not
fit with the global regime of zealously protected IPRs. Hence, there is a need to propagate the value of
transforming knowledge into IP assets. This requires a major paradigm shift of how knowledge is viewed
and valued - not for what it is, but for what it can become. Many IP holders are unaware of the benefits of
IP rights or of their own capabilities to create IP assets or the value of their ideas. They are often
discouraged by the complexities of the process of creating defendable IP rights. Conversely, they may be
unaware of the value of others’ IP rights and the need to respect the same. The policy proposes to tackle
both perspectives through outreach and promotion programs. A nation-wide program of promotion should
be launched with an aim to improve the awareness about the benefits of IPRs and their value to the rights-
holders and the public. Such a program will build an atmosphere where creativity and innovation are
encouraged in public and private sectors, R&D centers, industry and academia, leading to generation of
protectable IP that can be commercialized. It is also necessary to reach out to the less-visible IP generators
and holders, especially in rural and remote areas. Emphasis would be laid on creating awareness regarding
the rich heritage of India in terms of our Geographical Indications, Traditional Knowledge, Genetic
Resources, Traditional Cultural Expressions and Folklore.

Objective 2

Generation of IPRs - To stimulate the generation of IPRs India has a large talent pool of scientific and
technological talent spread over R&D institutions, enterprises, universities and technical institutes. There
is a need to tap this fertile knowledge resource and stimulate the creation of IP assets. A comprehensive
base line survey or IP audit across sectors will enable assessment and evaluation of the potential in specific
sectors, and thus formulate and implement targeted programmes. Focus will be placed on facilitating

40
researchers and innovators regarding areas of national priority. The corporate sector also needs to be
encouraged to generate and utilize IPRs. Steps also need to be taken to devise mechanisms so that benefits
of the IPR regime reach all inventors, especially MSMEs, start-ups and grassroot innovators.

The profile of IP filings and registrations/grants is one of the parameters, though not the only one, to assess
the current status and potential of IP creation in a country. In India, the number of patent filings has
increased in the last few years, but the percentage of filings by Indians is relatively low. In the case of
trademarks, India is among the top five filers in the world, with the majority being filed by Indians. The
number of design applications filed is nowhere near India’s potential, given its vast pool of designers,
artisans and artists. India has a large talent pool of scientific and technological talent spread over R&D
institutions, enterprises, universities and technical institutes. There is a need to tap this fertile knowledge
resource and stimulate the creation of IP assets. GIs is an area of strength and optimism for India, where
it has accorded protection to a number of hand-made and manufactured products, especially in the informal
sector. The copyright based sector contributes significantly to the Indian economy and its future potential
is immense. In the area of plant varieties and farmers’ rights, the number of filings and registrations are
very encouraging. There is considerable unexplored potential for developing, promoting and utilizing
traditional knowledge, which is a unique endowment of India. Activities for promotion of traditional
knowledge have to be conducted with effective participation of holders of such knowledge. A
comprehensive base line survey or IP audit across sectors will enable assessment and evaluation of the
potential in specific sectors, and thus formulate and implement targeted programmes to tap this vast
potential and help develop new technologies, products and solutions. This would include strengthening
and spread of IPR facilitation centers and incubators, amongst other measures. Focus will be placed on
facilitating researchers and innovators regarding areas of national priority. The corporate sector also needs
to be encouraged to generate and utilize IPRs. It is also desirable to introduce IPRs as part of academic
curriculum in educational institutions, especially universities, law and technical institutions. Steps also
need to be taken to devise mechanisms so that benefits of the IPR regime reach all inventors, especially
MSMEs, start-ups and grass root innovators. Incentives may be built-in to encourage filing by such
targeted users. These may include schemes to facilitate domestic IPR filings, for the entire value chain
from IPR generation to commercialization. R&D needs to be promoted through tax benefits available
under various laws, through simplification of procedures for availing direct and indirect tax benefits.

41
Objective 3

Legal and Legislative Framework - To have strong and effective IPR laws, which balance the interests
of rights owners with larger public interest The existing IP laws in India were either enacted or revised
after the TRIPS Agreement and are fully compliant with it. These laws along with various judicial
decisions provide a stable and effective legal framework for protection and promotion of IPRs. India shall
remain committed to the Doha Declaration on TRIPS Agreement and Public Health. At the same time,
India is rich in traditional medicinal knowledge which exists in diverse forms in our country, and it is
important to protect it from misappropriation.

It is an acknowledged fact that a strong and balanced legal framework encourages continuous flow of
innovation and is among the bare necessities to fuel a vibrant knowledge economy. India recognizes that
effective protection of IP rights is essential for making optimal use of the innovative and creative
capabilities of its people. India has a long history of IP laws which have evolved taking into consideration
national needs and international commitments. The existing laws were either enacted or revised after the
TRIPS Agreement and are fully compliant with it. These laws along with various judicial decisions
provide a stable and effective legal framework for protection and promotion of IPRs. India will continue
to utilize the legislative space and flexibilities available in international treaties and the TRIPS Agreement,
even as it continues to engage constructively in the negotiation of such international treaties and
agreements. India shall remain committed to the Doha Declaration on TRIPS Agreement and Public
Health. At the same time, India is rich in traditional medicinal knowledge which exists in diverse forms
in our country. Amongst them, well developed systems like Ayurveda, Yoga & Naturopathy, Unani,
Siddha, SowaRigpa and Homeopathy have immense economic value. It is important to protect such
knowledge, be it oral or in codified form, from misappropriation, while providing space and environment
for dynamic development of traditional knowledge for benefit of mankind. Since it is difficult to predict
the reach of existing laws in a changing and dynamic knowledge field, it becomes necessary to carry out
legislative changes, as may be required from time to time. For this purpose, stakeholder consultation shall
be done to keep the laws updated in consonance with national needs and priorities. The legal framework
may also be utilized to enhance transparency and efficiency in the administration and enforcement of IPR
laws.

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Objective 4

Administration and Management - To modernize and strengthen service oriented IPR administration
The Offices that administer the different Intellectual Property Rights (IPOs) are the cornerstone of an
efficient and balanced IPR system. IPOs now have the twin challenges of making their operations more
efficient, streamlined and cost effective, with expanding work load and technological complexity on one
hand, and enhancing their user-friendliness by developing and providing value added services to the user
community on the other. The administration of the Copyright Act, 1957 and the Semiconductor Integrated
Circuits Layout-Design Act, 2000 is being brought under the aegis of DPIIT, besides constituting a Cell
for IPR Promotion and Management (CIPAM). This will facilitate more effective and synergetic working
between various IP offices, as also promotion, creation and commercialization of IP assets.

The Offices that administer the different Intellectual Property Rights are the cornerstone of an efficient
and balanced IPR system, administering laws, granting or registering IP rights, providing IPR related
services to users, including dissemination of IPR related information for the benefit of research &
development and furthering of innovation in the country, as also serving as a bridge between the
government, IP support institutions and the user community. As IPRs increase in significance and
contribute to economic development, the importance and role of IP administration and management has
also expanded. The IPR infrastructure is one of the key elements of enhanced competitiveness in the
globalized international economic paradigm. This in turn influences the organization, structure and
functions of modern IPOs. Intellectual Property Offices (IPOs) now have the twin challenges of making
their operations more efficient, streamlined and cost effective, with expanding work load and
technological complexity on one hand, and enhancing their user-friendliness by developing and providing
value added services to the user community on the other. Steps will continue to be taken towards
modernization of various IP offices, including improvement of ICT infrastructure. Aiming towards a
service oriented regime at IPOs, steps would be taken to fix and adhere to timelines for disposal of IPR
applications. There is also need to augment manpower after analyzing the projected workload.
Sensitization of IPR officials at all levels with regard to the objects and reasons of our laws and
international obligations; their continuous education and training and regular audit of their work will
ensure a vibrant and service oriented IPR regime. The Rajiv Gandhi National Institute of Intellectual
Property Management, Nagpur (RGNIIPM) needs to be strengthened to cater to the training needs in an
evolving IP environment. Measures should also be taken to promote interaction between the IP Offices

43
and various R&D organizations and Universities. The administration of the Copyright Act, 1957, hitherto
under the Department of Higher Education, and the Semiconductor Integrated Circuits Layout Design Act,
2000, hitherto under the Department of Electronics and Information Technology is being brought under
the aegis of the Department for Promotion of Industry and Internal Trade leading to synergetic linkage
between various IP offices under one umbrella, streamlining processes, and ensuring better services to the
users. To facilitate promotion, creation and commercialization of IP assets, a Cell for IPR Promotion and
Management (CIPAM) should be constituted under the aegis of DPIIT. Continued efforts should be made
for promotion of technical cooperation with IP offices in other countries in areas such as capacity building,
human resource development, training, and access to databases, best practices in search and examinations,
use of ICT and user oriented services.

Objective 5

Commercialization of IPR - Get value for IPRs through commercialization The value and economic
reward for the owners of IP rights comes only from their commercialization. Entrepreneurship should be
encouraged so that the financial value of IPRs is captured. It is necessary to connect investors and IP
creators. Another constraint faced is valuation of IP and assessment of the potential of the IPRs for the
purpose of marketing it. Efforts should be made for creation of a public platform to connect creators and
innovators to potential users, buyers and funding institutions.

The value and economic reward for the owners of IP rights comes only from their commercialization. A
concerted effort should be made for capitalizing the existing IP assets in the country. Entrepreneurship
should be encouraged so that the financial value of IPRs may be captured. Existing mechanisms including
Incubators and Accelerators set up to promote entrepreneurship should be strengthened with IP oriented
services. Financing is a major impediment for entrepreneurs and therefore it is necessary to connect
investors and IP creators. Another constraint faced is valuation of IP and assessment of the potential of
the IPRs for the purpose of marketing it. There is an urgent need to take stock of existing IP funding by
different departments and bodies of the Government like BIRAC, NRDC and TIFAC, and take measures
to consolidate the same, scaling up successful models while avoiding duplication of efforts. Public–funded
research laboratories, academia and other institutions should stimulate commercialization of their research
outcomes. They ought to be suitably state-supported in the development and deployment of their IPRs.
While certain larger organizations have the intent and capabilities to commercialize their technology/

44
IPRs, several others do not. Hence, it becomes imperative to establish facilitative mechanisms that can
address such limitations, especially in terms of MSMEs, academic institutions and individual innovators.
One of the effective ways of achieving this would be by synergizing the activities of IP facilitation centers
with the industry, especially industrial clusters. This would also include sensitization regarding licensing
arrangements. Efforts should be made for creation of a public platform to function as a common database
of IPRs. Such a platform can help creators and innovators connect to potential users, buyers and funding
institutions. It would also be helpful in scouting the technology landscape to identify white spaces and
thereby help promote innovative activities in uncovered areas. Significant potential for innovation exists
in new and emerging technologies like nanotechnology, biotechnology, agri-biotech, life sciences, green
technologies, telecommunications, new materials, space technologies, etc.

Objective 6

Enforcement and Adjudication - To strengthen the enforcement and adjudicatory mechanisms for
combating IPR infringements There is a need to build respect for IPR among the general public and to
sensitize the inventors and creators of IP on measures for protection and enforcement of their rights. At
the same time, there is also a need to build the capacity of the enforcement agencies at various levels,
including strengthening of IPR cells in State police forces. Measures to check counterfeiting and piracy
also need to be identified and undertaken. Regular IPR workshops/ colloquia for judges would facilitate
effective adjudication of IPR disputes. It would be desirable to adjudicate on IPR disputes through
specialized commercial courts. Alternative Dispute Resolution mechanism may also be explored.

IP rights are essentially private rights. The primary obligation of protecting IP rights is on the IPR owners
who can seek legal remedies for enforcement of their rights. Along with providing an effective mechanism
for enforcement of IP rights, it is equally important to balance the rights of the public in a manner
conducive to social and economic welfare and to prevent misuse or abuse of IP rights. There is a need to
build respect for IPR among the general public and to sensitize the inventors and creators of IP on
measures for protection and enforcement of their rights. At the same time, there is also a need to build the
capacity of the enforcement agencies at various levels, including strengthening of IPR cells in State police
forces. Measures to check counterfeiting and piracy also need to be identified and undertaken. In this
regard, the definitions of “counterfeit trademark goods” and “pirated copyright goods” as referred to in
the footnote of Article 51 of the TRIPS Agreement shall serve as the guiding principles. Regular IPR

45
workshops/colloquia at judicial academies and other forum for judges would facilitate effective
adjudication of IPR disputes. Multi-disciplinary IP courses/modules for other stakeholders are also
needed. It would be desirable to adjudicate on IPR disputes through specialized commercial courts.
Alternative Dispute Resolution mechanism may also be explored.

Objective 7

Human Capital Development - To strengthen and expand human resources, institutions and capacities
for teaching, training, research and skill building in IPRs In order to harness the full potential of IPRs for
economic growth, it is essential to develop an increasing pool of IPR professionals and experts in spheres
such as policy and law, strategy development, administration and enforcement. Such a reservoir of experts
will facilitate in increasing generation of IP assets in the country and their utilization for development
purposes.

The IPR scenario is dynamic and fast changing with increasing globalization, advancement of
technologies, digital environment, development imperatives and global public policy issues. It is important
to build national capacity for providing thought leadership in the IPR field. Continuous policy research is
also needed on empirical and topical IPR areas of relevance with an interdisciplinary perspective at the
national and international level. This research would enrich the process of policy, law, strategy
development and international negotiations at the government and organizational levels. While apex level
institutes or bodies exist for most sectors of national importance, such an institution is yet to be established
for intellectual property rights development. In order to harness the full potential of IPRs for economic
growth, it is essential to develop an increasing pool of IPR professionals and experts in spheres such as
policy and law, strategy development, administration and enforcement. IPR expertise would thus need to
be developed and increased in industry, academia, legal practitioners, judiciary, IP users and civil society.
In addition, there will be enhancement of multidisciplinary human and institutional capacity for policy
development, teaching, training, research and skill building. Such a reservoir of experts will facilitate in
increasing generation of IP assets in the country and their utilization for development purposes.

Implementation

The present IP Policy aims to integrate IP as a policy and strategic tool in national development plans. It
foresees a coordinated and integrated development of IP system in India and the need for a holistic

46
approach to be taken on IP legal, administrative, institutional and enforcement related matters. While
DPIIT shall be the nodal point to coordinate, guide and oversee implementation and future development
of IPRs in India, the responsibility for actual implementation of the plans of action will remain with the
Ministries/ Departments concerned in their assigned sphere of work.

Intellectual property in India is regulated by several laws, rules and regulations under the jurisdiction of
different Ministries/ Departments. A number of authorities and offices administer the laws. The legal
provisions need to be implemented harmoniously so as to avoid conflict, overlap or inconsistencies among
them. It is necessary that the authorities concerned administer the laws in coordination with each other in
the interest of efficient administration and user satisfaction. Legal, technological, economic and socio-
cultural issues arise in different fields of IP which intersect with each other and need to be addressed and
resolved by consensus in the best public interest. International, regional and bilateral negotiations require
developing a common national position in consultation with different Ministries, authorities and
stakeholders.

The present IP Policy aims to integrate IP as a policy and strategic tool in national development plans. It
foresees a coordinated and integrated development of IP system in India and the need for a holistic
approach to be taken on IP legal, administrative, institutional and enforcement related matters. Thus, the
Department for Promotion of Industry and Internal Trade shall be the nodal point to coordinate, guide and
oversee implementation and future development of IPRs in India. The responsibility for actual
implementation of the plans of action will remain with the Ministries/ Departments concerned in their
assigned sphere of work. Public and private sector institutions and other stakeholders, including State
governments, will also be involved in the implementation process.

India has been ranked 40th out of 53 countries on a global intellectual property index, even as the
country has shown improvement in terms of scores when it comes to the protection of IP and copyright
issues, a top American industry body said on Wednesday.

India was placed at 36th position among 50 countries in 2019.

India's score, however, increased from 36.04 per cent (16.22 out of 45) in 2019 to 38.46 per cent (19.23
out of 50) in 2020, a 2.42 per cent jump in absolute score.

47
However, India's relative score increased by 6.71 per cent, according to the International IP Index
released by Global Innovation Policy Center or GIPC of the US Chambers of Commerce.

In 2020, it finds itself on the 40th place among 53 countries.

India has robust IP laws and a strong IP jurisprudence. The legal framework does reflect the underlying
policy orientation and national priorities, which have evolved over time, taking into account development
needs and international commitments. An all-encompassing IPR Policy will promote a holistic and
conducive ecosystem to catalyze the full potential of intellectual property for India’s economic growth
and socio-cultural development, while protecting public interest. Such a policy will nurture the IP culture,
guiding and enabling all creators and inventors to realize their potential for generating, protecting and
utilizing IPRs which would contribute to wealth creation, employment opportunities and business
development. This policy shall weave in the strengths of the Government, research and development
organizations, educational institutions, corporate entities including MSMEs, start-ups and other
stakeholders in the creation of an innovation conducive environment. It will complement the strengths of
our substantive laws with transparent, predictable and efficient administrative and procedural mechanisms
as also well-informed adjudicatory structure.

Two new Index economies (Greece and the Dominican Republic) scored ahead of India.

On a pilot basis CIPAM/DIPP launched the IPR Awareness campaign across 18 states in country in June-
July 2016. These awareness programmes received a very warm response from participants and various
stakeholders. The Industry requested CIPAM to conduct more of such awareness programmes across the
country to encourage creativity, innovation and awareness on protection of Intellectual Property.
Similarly, IP sensitizing programmes were conducted on a pilot basis for Andhra Pradesh and Uttar
Pradesh Police in various batches, CIPAM in association with FICCI has made an IPR Enforcement
Toolkit for Police.

Targets and future plans:

 4000 IP awareness workshops/seminars in academic institutions and the industry across

India
 40 training programmes (Training of Trainers) to create a resource pool of persons for
conducting IPR Awareness workshops/seminars

48
  5 workshops with eminent International speakers on IP in the global context
 270 IP training and sensitization programmes for enforcement agencies and judiciary.

Achievements under new IPR policy

 Improvement in GII Ranking: India’s rank in the Global Innovation Index (GII) issued by
WIPO has improved from 81st in 2015 to 52nd place in 2019.

 Strengthening of institutional mechanism regarding IP protection and promotion.

 Clearing Backlog/ Reducing Pendency in IP applications: Augmentation of technical manpower

by the government has resulted in drastic reduction in pendency in IP applications.

o Automatic issuance of electronically generated patent and trademark certificates has also been
introduced.

 Increase in Patent and trademark Filings: Patent filings have increased by nearly 7% in the first
8 months of 2018-19 vis-à-vis the corresponding period of 2017-18. Trademark filings have
increased by nearly 28% in this duration.

 IP Process Re-engineering Patent Rules, 2003 have been amended to streamline processes and
make them more user friendly. Revamped Trade Marks Rules have been notified in 2017.

 Creating IPR Awareness: IPR Awareness programs have been conducted in academic institutions,
including rural schools through satellite communication, and for industry, police, customs and
judiciary.

 Technology and Innovation Support Centres (TISCs): In conjunction with WIPO, TISCs have
been established in various institutions across different states.

What do the critics say about this policy?

One of the major allegations is that government has released this policy under pressure of US and lobbying
groups in that country. What kinds of pressures are these?
The IP rights were included in the international trade regulations as a part of the Uruguay Round (1986-
94) and thus resulted in the TRIPS {Trade-Related Aspects of Intellectual Property Rights} Agreement.
This agreement provided a framework on how the IP rights have to be protected, particularly of companies

49
that invest huge amounts in inventions and creation of patents. In summary, these provisions demanded
that every party to TRIPS will have to create domestic laws and regulations to create a sound protection
system. However, within the TRIPs agreement, some flexibility was included in favor of public interest
for developing / least developed countries. These flexibilities allowed such countries relaxation in
domestic laws.
However, this is a major issue for companies engaged in pharma because they wanted strict IPR laws in
the countries where they sell their products. So, the pharma TNCs chose to not to recognize these
flexibilities and deployed various ways to curb use of flexibilities. Using such flexibilities, India made
two special provisions in its domestic law viz. compulsory license and Section 3(d) in patent law. The
compulsory license enabled grant of compulsory license for export of medicines to countries which have
insufficient or no manufacturing capacity. This was done to keep India’s generic drug exports to Africa
and other countries alive and competitive. The Section 3(d) of Indian Patents Act puts caveat on some
inventions which are not patentable (sets a novelty standard for patents). Both of these provisions have
been controversial because they directly harm the interests of pharma MNCs and TNCs.
Meanwhile, due to these laws, the MNCs found whatever method deployed for protection of their IPR
useless. They intensified lobbying with USTR {United States Trade Representative} to categorize India
as a “preferred” foreign country in the Special 301 report that carried with it the threat of trade sanctions.
These pressures led creation of a high level working group to discuss the IP issues {between US and
India}. Thus, for the first time, India agreed to engage bilaterally with US on IPR issues. Since the
government was also in the process of creation of new IPR, it got attention of US and US industry groups.
There was a speculation that DIPP and Indian patent office came under the influence of US and shaped
India’s new IPR policy under that influence only.
To what extent, Government has succumbed to the pressures?
IPR policy has tried to be a balancing act overall. Firstly, the policy has not tried to dismantle or bypass
the Section 3(d) of Indian Patent Act 1970 which says that marginal alterations don’t entitle new patent.
The policy makes it loud and clear that India will not go beyond what is needed to be TRIPS-compliant;
and it will use flexibilities to address its developmental concerns. Secondly, the policy has kept
Compulsory License intact with restrictions in case of a public health emergency such as in case of a
public health emergency such as epidemics. This is also compliant with the World Trade Organization’s
guidelines. This implies that government has not compromised on two major issues.

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2.6 INNOVATION AND IPR- IMPORTANT FACTOR IN THE GROWTH AND
DEVELOPMENT OF NATION, GLOBAL INNOVATION INDEX:

Innovation means doing something new that improves a product, process or service. Many innovations
can be protected through intellectual property (IP) rights. Inventions are the bedrock of innovation. An
invention is a new solution to a technical problem and can be protected through patents. Patents protect
the interests of inventors whose technologies are truly groundbreaking and commercially successful,
by ensuring that an inventor can control the commercial use of their invention.

WIPO is making this and other IP-related information freely available to the public through its global
databases. Innovation is widely recognized as a central driver of economic growth and development. The
aim of the Global Innovation Index is to provide insightful data on innovation and, in turn, to assist
economies in evaluating their innovation performance and making informed innovation policy
considerations.

Since its creation in 2007, the GII has been impactful on three fronts. First, policymakers are now referring
regularly to innovation and their innovation rankings as part of their economic policy strategies.
Additionally, the GII is now considered a yardstick for measuring innovation by the UN General
Assembly, as noted in its resolution on Science, Technology and Innovation for achieving Sustainable
Development Goals (SDGs) at its 74th session in 2019.

Second, the GII allows economies to assess their innovation performance. Economies invest resources to
analyze their GII results in cross-ministerial task forces and use the GII to design appropriate innovation
and intellectual property (IP) policies.

Third, the GII continues to give a strong impetus for economies to prioritize and collect innovation metrics.
By experimenting with new data and evaluating existing innovation metrics, the GII also aims to shape
the innovation measurement agenda.

The GII is co-published by Cornell University, INSEAD, and the World Intellectual Property Organization
(WIPO), a specialized agency of the United Nations. The 2020 edition of the GII draws on the expertise
of its Knowledge Partners: the Confederation of Indian Industry (CII), Dassault Systèmes—the

51
3DEXPERIENCE Company, and the Brazilian National Confederation of Industry (CNI), as well as an
Advisory Board of eminent experts. For the tenth consecutive year, the Joint Research Centre (JRC) of
the European Commission audited the GII rankings and associated calculations.
 India is a member of the World Trade Organization and committed to the Agreement on Trade
Related Aspects of Intellectual Property (TRIPS Agreement).

 India is also a member of World Intellectual Property Organization, a body responsible for the
promotion of the protection of intellectual property rights throughout the world.

 India is also a member of the following important WIPO-administered International Treaties

and Conventions relating to IPRs.

o Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the
Purposes of Patent Procedure

o Paris Convention for the Protection of Industrial Property

o Convention Establishing the World Intellectual Property Organization

o Berne Convention for the Protection of Literary and Artistic Works

o Patent Cooperation Treaty

o Protocol Relating to the Madrid Agreement Concerning the International Registration of

Marks- Madrid Protocol

o Washington Treaty on Intellectual Property in respect of Integrated Circuits

o Nairobi Treaty on the Protection of the Olympic Symbol

o Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication

of Their Phonograms

o Marrakesh Treaty to facilitate Access to Published Works by Visually Impaired Persons and
Persons with Print Disabilities.

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2.7 INTELLECTUAL PROPERTY AND PUBLIC INTEREST – ACCESS TO MEDICINES,
ACCESS TO EDUCATION

Public interest arguments typically feature in balancing accounts of intellectual property rights that evince
concern for the distribution of benefits as well as for the production of new works or inventions. Public
interest rationales also often feature in justifications both for the rights themselves and for limitations or
exceptions to those rights when private control of an intellectual resource would not promote the general
welfare.

A national procurement strategy may assist governments to formalize a range of measures to purchase
quality medicines at cheaper prices. Addressing corruption, eliminating tariffs on imported drugs,
controlling mark-ups on drugs at wholesale and retail levels, requiring or creating incentives for the supply
of generic versions of drugs by pharmacists and medical practitioners, and banning or limiting direct-to-
consumer advertising of medicines, are some of the strategies that may reduce prices. · Most essential
medicines are not under patent, and generic versions can be produced or imported without infringing
patent rights. Affordable access to essential medicines that are under patent depends partly on the terms
of national patent laws, and on the actions of the patent holder. The Agreement on Trade-Related Aspects
of International Property Rights (TRIPS) includes a number of flexibilities that can be used to reduce the
prices of essential medicines and to better meet the goal of universal access. TRIPS does not prevent
national governments from issuing compulsory licenses in order to meet national health objectives, from
choosing an exhaustion regime that best suits national circumstances (allowing parallel importing for
example), or from defining patentability criteria in national patent legislation.

The national drugs policy adopted by each country needs to be consistent with international law governing
intellectual property rights. Medicines, as well as the processes required to produce them, are patentable
under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). TRIPS are one
of the families of agreements that Members of the World Trade Organization (WTO) are required to
implement. In order to implement TRIPS, all Members of the WTO are required to enforce national
legislation that recognizes and enforces pharmaceutical patents. This section reviews some features of
national patent laws that may influence access to medicines, and the prices at which medicines are
available for purchase, within the context of countries’ TRIPS obligations.

53
  Check your progress:

1. TRIPS deals with IP protection under _______ regime.

2. WTO provides for Dispute settlement mechanism through _______.

3. _______ provides for non-substantive standards of protection.

4. LDC stands for _______.

 Summary
- TRIPS Agreement under WTO contains provisions with regard to setting up of standards
concerning availability, scope and use of Intellectual Property Rights, Geographical Indications,
and Layout-Design of Integrated Circuits etc. Therefore, the Government enacted the Semi-
conductor Integrated Circuits Layout- Designs Act, 2000 providing for protection of Semi-
conductor Integrated Circuits Layout-Designs.
- The Protection of Plant Varieties and Farmers’ Rights Act 2001 was enacted in India to protect the
new plant varieties. The various modifications and amendments to earlier Intellectual Property
Laws are an indication of India's move towards new IPR regime so as to prepare ourselves for the
global trade competition.
- Only a small but significant number of countries and regions provide the option of utility model
protection. At present India does not have legislation on Utility Models.
- India has made a number of changes in its IPR regime to increase efficiency and has cut down
the time required to issue patents. The culture of innovation is taking center stage in the country.
India is well poised to focus on R&D. This has been reflected in its improved ranking in Global
Innovation Index over the years.

- Government’s effort to strengthen National IPR policy, IP appellate tribunal, e-governance and
commitment to abide by the TRIPS agreement of WTO in letter and spirit will help in improving
perception of India globally.

- An efficient and equitable intellectual property system can help all countries to realize intellectual
property’s potential as a catalyst for economic development and social & cultural well-being.

- Intellectual property rights (IPR) are the rights given to persons over the creations of their minds:
inventions, literary and artistic works, and symbols, names and images used in commerce. They

54
 usually give the creator an exclusive right over the use of his/her creation for a certain period of
time.

- These rights are outlined in Article 27 of the Universal Declaration of Human Rights, which
provides for the right to benefit from the protection of moral and material interests resulting from
authorship of scientific, literary or artistic productions.

- The importance of intellectual property was first recognized in the Paris Convention for the
Protection of Industrial Property (1883) and the Berne Convention for the Protection of Literary
and Artistic Works (1886). Both treaties are administered by the World Intellectual Property
Organization (WIPO).

 Keywords

- Treaty: It is an agreement under international law entered into by actors in international law,
namely sovereign states and international organizations. A treaty may also be known as an
(international) agreement, protocol, covenant, convention, pact, or exchange of letters, among
other terms.
- Inter-Partes: It means ‘between the parties’.
- TRIPS: The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an
international agreement administered by the World Trade Organisation (WTO) that sets down
minimum standards for many forms of intellectual property (IP) regulation as applied to nationals
of other WTO Members.

 Self-Assessment Questions

1. India provides protection to Intellectual Property Rights in accordance with its obligations under
the TRIPS Agreement of the WTO. Discuss.
2. List out the subject matter protected by intellectual property rights under the World Intellectual
Property Organization (WIPO).

55
  Answers to Check your Progress:

Fill in the Blanks.

1. TRIPS deals with an IP protection under WTO regime.

2. WTO provides the Dispute settlement mechanism through panel consultation.

3. TRIPS provide the non-substantive standards of protection.

4. LDC stands for Least Developed Countries.

- Suggested Reading:

1. Intellectual Property Rights In the WTO and Developing Countries, Jayshree Watal, Oxford
University Press, New Delhi, 2012.

2. Guide to WTO & GATT Economics, Law and Politics, Autar Krishen Koul, KLuwer Law
International, India, 2005.

3. World Intellectual Property Handbook: Policy, Law and Use (reprinted edition- 2008)
[Link] wipo_pub_489.pdf.

4. [Link] [Link].

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Patents

MODULE

Structure 3
3.1 Essentials for obtaining Patent – Novelty, inventive step and utility
3.2 Inventions not patentable – Section 3 and 4 of Patent Act, 1970
3.3 Details of types of patents applications, types of patent specifications, patent searching,
patentability, National and International filings.
3.4 Patent filing procedures in India, related forms and documents
3.5 Patent searches, patent drafting, patent filing strategies, patent oppositions, patent
commercialization, enforcement, First Schedule (Forms), Second Schedule (Fees), sections and
rules
3.6 Assignment and licensing of Patents, Technology Transfer Agreements, Material Transfer
Agreements, Research Collaboration Agreements,
3.7 Compulsory licensing and Revocation
3.8 Patent infringement, prosecution and litigation
3.9 Precautions to be taken, Managing risks associated with patent, Freedom to operate (FTO) search
3.10 Protection of Plant Varieties under the Protection of Plant Varieties and Farmers Rights Act, 2001
– Essentials for protection, Breeders’ rights, Farmers Rights, Procedure for Registration,
Infringement under the Act
3.11 Landmark cases – NATCO v. BAYER, NOVARTIS AG v. UOI, Bajaj Auto Ltd. v. TVS Moto
Company Ltd., Bayer Corporation v. UOI, Dimminaco AG v. Controller of Patents
3.12 Prospects for Patent Agent - Who can attempt the Patent Agent Examination? How to prepare for
Patent Agent Examination? Additional topics required to know for patent agent examination – Role
of Patent Agent, Secrecy Provisions, and Powers of the Controller, Working of Patent, Parallel
Importation, Various Forms and Fees under the Patent Rules.

57
Check your progress
Summary
Keywords
Self-Assessment Questions
Answers to Check your Progress

3.1 ESSENTIALS FOR OBTAINING PATENT – NOVELTY, INVENTIVE STEP AND

UTILITY

An invention, as per the Indian Patents Act, is a new product or process, involving an inventive step, and
capable of industrial application. In simple terms, a patent application is patentable only if it has novelty
(newness), inventiveness, and is capable of being made or used in an industry. Once the invention meets
the novelty (or newness) requirement, which is an absolute must, the next challenge is to show
inventiveness in the invention. The essentials are:

The innovation You cannot patent something that is already publicly known, as it would be unfair
is new (called to confer the economic benefits of a patent in relation to something that is already
'novelty') publicly known. The test of 'novelty' is assessed as at the date you file your
application for the patent.

For this reason, if you intend to disclose your product, process or invention to
someone, it is critical that you have a confidentiality agreement signed
beforehand.

The innovation This requirement of an inventive step relates to the 'obviousness' of the new
is inventive product, process or invention. If it is 'obvious' to a skilled person, it is not
patentable.

The innovation This requirement does not relate to whether the new product, process or invention
is useful (called is 'useful' in terms of whether or not someone would buy it. Instead, it relates to
'utility') whether the invention is capable of being made in accordance with the claims and
information in the patent.

58
 From April 2013, there has been a requirement to disclose a specific, substantial
and credible use for the invention in the patent specification.

1.2 INVENTIONS NOT PATENTABLE – SECTION 3 AND 4 OF PATENT ACT, 1970

The Indian Patent Act under sections 3 & 4 enlists the criteria for non-patentable inventions as follows:

 Frivolous in nature and contrary to established laws of nature.

Illustration: Ramar Pillai’s claim that water can be transformed into petrol by use of herbal formula was
frivolous since he only replaced fermented liquid – tetrahydrofuan and lauric acid to produce fuel like
liquid.

 Contrary to public order or morality or has a harmful effect on human-animal-plant life-

environment.

Illustration: Machines that can duplicate-counterfeit currency.

 Mere discovery of the scientific principle of living or non-living beings or a new form of known
substance or process.

Illustration: Discovery of gravitational laws or Black holes.

 A mere admixture of components as an outcome of aggregation of substances or property.

Case Law: Novartis AG v. Union of India and Others SC (2013) wherein Novartis pharmaceutical
company had applied for a patent of Glivecvec (a beta crystalline form of already known
imatinibmeslyate) used to treat cancer was rejected.

 A mere arrangement or re-arrangement or duplication of known devices functioning independently

or in a known way.

Illustration: Cooking Utensil with thermometer for temperature detection cannot be patented.

 A method of agriculture or horticulture

59
Illustration: A method of producing oyster mushrooms or where an apple tree has been grafted with a
mango branch allowing the tree to bear both the fruits is not patentable.

 A mere idea of abstract nature without detailed industrial application.

 Any process for medicinal, surgical, curative, prophylactic or other treatment of human beings or
animals so as to render them free of disease

Illustration: The dosage of insulin for diabetic patients varies individually and is obtained by trial and
error method by the physician.

 Plants or animals in part or whole other than micro-organisms but including seeds, varieties and
species, the biological process for production or propagation of plants or animals.

Illustration: Human genome is the common birth right of all hence no patentable but Genetically Modified
Organisms (GMO) like the bacterium that can break down the crude oil helping in curtailing the oils spills.

 A mathematical or business method or computer programme or algorithms.

 A mere scheme or rule or method of performing a mental act or methods of playing games

Illustration: A teaching method using the keyboard and notation sheet or Vedic Mathematics

 Presentation of information

Illustration: 1000 year calendar

 The topography of integrated circuits

 Information constituting traditional knowledge

Illustration: US patent claim of turmeric having antiseptic and curative powers in already in Ayurvedic
texts in India.

 A literary, artistic, musical or dramatic work or any other aesthetic creations including
cinematograph works and television productions.

 Inventions relating to atomic energy or prejudicial to the security of India

1.3 DETAILS OF TYPES OF PATENTS APPLICATIONS:

Ordinary Applications: they are filed directly in Indian patent office.

Convention Application: is filed by a member of Paris Convention country.

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PCT Application: filed under the Patent Cooperation Treaty. The date of filing shall be the international
date as obtained under PCT. The IPO process’ the PCT application- English translation (e-filed or by hard
copy) only after completion of 30-31 months from the priority date.

Divisional Application: formed as a result of the division of application to preserve the unity of invention
but the ensure ease of replying to the official objections by the examiner.

3.3.1 Types of Patent Specifications, Patent Searching:

While filing a patent application in any country other than India, statement-undertaking (as per Form 3)
giving details of the application in a foreign country and the status needs to be filed with the Controller.
Herein the Indian Patent office act as a receiving office and subject to certain conditions the actual process
of filing of the patent is done with the International Bureau (IB) of WIPO. The process encompasses
roping in the International Search Report to ascertain the date of priority of claims.

Application for a patent (unless PCT or convention application) must be accompanied by a provisional
and complete specification, the latter needs to be filed within 12 months (extendable up to 15 months by
the Controller on request) from the date of filing of the provisional specification.

As per section 10 of the Patent Act, 1970 the Provisional specification must have title, subject matter with
claim priority and while the complete specification shall provide title indicating the special features, field
and use of invention, prior art and problem to be solved, object of invention, summary of invention,
detailed description of the invention-subject matter, the best method of performing the invention,
statement of claims accompanied by drawings.
Claims consist of the preamble, transitional phrase, and claim elements. Claims can be of any of the
following type namely, Jepson claim (used to describe the improvements with single reference to previous
components), Markush claims (there exists no generic term to define a particular group or subsets- ‘chosen
from the group’), Beauregard Claim(claiming an internet related business method on a computer readable
medium like CD, Floppy disk), Signal claim (operated only through computer readable medium), Product
by Process claim (describes the process rather than the compositional structure).

The Provisional specification need not describe the invention completely but the complete specification
shall be filed within 12 months of provisional specification with an abstract, not more than 150 words and
the title.

61
Additionally in complete specification after the description, the claims are enlisted clearly to define the
scope and nature of the legal protection and consequently operating as the rights of the patentee.

The controller has following powers firstly, to accept A single complete specification to for two or more
provisional specifications in respect of the inventions, secondly, cancel the provisional application and
notify the date for filing of complete specification, thirdly, issue secrecy directions and prohibit
publication if the invention is prejudicial to India, fourthly, correct clerical errors, fifthly, publish the
official Patent Journal every Friday on the website giving details of matters connected with grant-
cessation-amendment to applications-revocation-surrender of patents, etc.

Additionally, the controller exercises certain powers of civil court wherever required to hearing-
adjudication-discretion on matters of the patent. Costs awarded by Controller are executable as a decree
of a civil court.

3.3.2 Patentability:

Patentability is determined based on novelty, non-obviousness/ inventive step and utility criteria (Article
27 TRIPS) the three have not been defined thereby allowing multiple interpretations.

3.3.3 National and International Filings

For protecting an invention, patent protection is taken by people, multi-national companies, research
institutions and universities. Since, patent protection is jurisdiction specific in nature; it only gives the
protection for the country in which it is filed. An international patent application helps applicant to seek
patent protection based on the priority date of initial application in other countries also. Therefore, there
is a need of an international patent protection. There are broadly two ways for seeking international patent
protection: Convention Patent Application and PCT Application.

What is a PCT Application?

The Patent Cooperation Treaty, or the PCT as it is typically referred to, came into existence in 1970. The
Treaty, which like any other Treaty is a legal agreement entered into between various countries. The
purpose of the PCT is to streamline the initial filing process, making it easier and initially cheaper to file

62
a patent application in a large number of countries. You accomplish this by filing an "international patent
application." 1

It may generally be filed with the national patent office of the Contracting State of which the applicant is
a national or resident or, at the applicant's option, with the International Bureau of WIPO in Geneva. If
the applicant is a national or resident of a Contracting State party to the European Patent Convention, the
Harare Protocol on Patents and Industrial Designs (Harare Protocol), the Bangui Agreement, or the
Eurasian Patent Convention, the international application may also be filed with the European Patent
Office (EPO), the African Regional Intellectual Property Organization (ARIPO), the African Intellectual
Property Organization (OAPI) or the Eurasian Patent Office (EAPO), respectively.

Filing a PCT application has the effect of automatically designating all Contracting States bound by the
PCT on the international filing date. The effect of the international application is the same in each
designated State as if a national patent application had been filed with the national patent office of that
State.

3.4 PATENT FILING PROCEDURES IN INDIA, RELATED FORMS AND DOCUMENTS:

A patent can be granted only to the inventor who has first filed the application in the patent office or who
is the true and first inventor (TFI). The application can be made singly or jointly by the inventor or assignee
(a natural or artificial person having a legal entity) or legal representative of the deceased person who is
TFI or assignee of an assignee of TFI. Patent law allows co-ownership of patents as ‘tenants-in-common.’
TFI is not the person who first imports the invention or to whom the invention is first communicated from
outside India.

3.4.1 Form of Application and Jurisdiction :

• An application for every invention shall be made as per Form I to be filled and filed in patent offices.

• The territorial jurisdiction of the Patent Office (Diagram I) is based on

- Place of residence, domicile or business of the applicant (first name if joint applicants)

- Place of invention

- Address of service for foreign applicants.

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3.4.2 Major Steps in Grant of Patent :

- Step 1: locating appropriate patent office-filing a patent application along with fee and Provisional
or complete specification- other required documents.

- Step 2: Examination of application of by Patent Examiners-statutory compliances, hearing on

objections, and Strategic search with universal prior knowledge.

- Step 3: Communication of objections (if any)-reply to the controller within 15 to 18 months-

Application is rejected or accepted
- Step 4: Advertisement of the invention in the official gazette (if accepted) – filing within 4 months
the pre-grant objections (if any) – reply to the objections within 1 month of notice by controller-
hearing of pre-grant objections- Order of the Controller-Appeal to Appellate Board, Chennai.
- Step 5: Grant and seal of patent office-entry into a register in the patent office.

3.4.3 Concept and Significance of Priority Date :

- Priority date in simple terms is the date allotted by the controller based on the earliest date of filing
of the patent application-claim for the patent.
- Priority Date is significant to determine the novelty and non-obviousness of the invention.
- The priority date can be separate for each claim in the complete specification or may be based
fairly on the matter disclosed in the provisional specification.
- For the Divisional Applications, the priority date is the same as the parent application.
- For a Convention country, the first filing of an application for patent is called as basic application
and actual application for patent is filed thereafter within 12 months entailing protection from the
date of the basic application.
- The Controller may refuse to accept the application if the invention is published prior to the priority
date.

3.4.4 Procedure to File a PCT application :

PCT being an international regime to protect inventions by granting patents, it has some rules and
procedure of its own for doing so. Among them, some are mandatory (such as filing of the
application, international search, international publication, and national phase) and some are

64
optional (such as supplementary international search and international preliminary examination).
When the applicant files the PCT application at the regional patent office or directly at an
international authority, the application is examined by the ISA (International Search Authority)
whether it’s patentable or not and published in international journals so that the whole world will
know about the invention and oppositions can be filed from all over the world.

Though the examination and publication all are done by the international authority the granting of
patents remains under the control of the national or regional patent Offices in what is called the
“national phase”. So, the filing procedure is,

Filing: An international application is filed with a national or regional patent Office or WIPO,
complying with the PCT formality requirements, in one language, and a set of fees. This has to be
done within 12 months of filing the local application.

International Search: An “International Searching Authority” (ISA) (one of the world’s major
patent Offices) identifies the published patent documents and technical literature (“prior art”) which
may have an influence on whether your invention is patentable, and establishes a written opinion
on your invention’s potential patentability. This has to be published within 16 months from filing
the application in the home country.

International Publication: As soon as possible after the expiration of 18 months from the earliest
filing date, the international application comes into the public domain. This has to be published
within 18 months from filing the application in the home country.

Supplementary International Search (optional): A second ISA identifies, at your request,

published documents that may not have been found by the first ISA which carried out the main
search because of the diversity of prior art in different languages and different technical fields. This
has to be published within 22 months from filing the application in the home country.

International Preliminary Examination (optional): One of the ISAs at your request carries out
an additional patentability analysis, usually on an amended version of your application. This has to
be published within 28 months from filing the application in the home country.

65
National Phase: After the end of the PCT procedure, usually at 30 months from the earliest filing
date of your initial application, from which you claim priority, you to pursue the grant of your
patents directly before the national (or regional) patent Offices of the countries in which you want
to obtain them.

What are the costs associated with a PCT Application?

PCT applicants generally pay three types of fees when they file their international applications:

(a) an international filing fee,

(b) a search fee which can vary depending on the ISA chosen, and

(c) a small transmittal fee which varies depending on the receiving Office.

Cost of filing a PCT Application in India :

In India, the filing cost of PCT will be,

1. Transmittal fee of e-filing- Natural Person- 3200 INR, Small Entity – 8000 INR, Others –
16000 INR and for physical filing – Natural Person- 3250 INR, Small Entity – 8800 INR,
Others – 17600 INR

2. The international filing fee for Indian Applicant – 1471 USD (Fee per sheet over 30 is 17
USD and reduction in fee for PCT easy filing 11 USD)

3. Search fee for Indian applicant choosing Indian Patent Office as ISA, for individuals 2500
INR and others 10,000 INR.

4. Preliminary Examination fee where the ISR was issued by ISA/IN for individuals is 2500
INR and others 10,000 INR and where the ISR was not issued by ISA/IN for individuals is
3000 INR and others 12,000 INR.

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What is a Convention Application?

The Paris Convention is an international treaty that allows applicants to file the first application in
their home country. That application is referred to as a priority document or filing, and the date it
is filed is called the priority date.

The priority filing starts a 12-month period within which a further application called a Paris
Convention application (or a direct application claiming priority) can be filed elsewhere, claiming
Paris Convention priority back to the priority date. To the extent that the content of the Paris
Convention application is disclosed in the earlier priority document, it will be backdated to th e
priority date.

The 12-month convention period lets the applicant seek funding, perform market research, and turn
an idea into a commercial product. All of these can be done following a single filing without risking
a loss of rights in other countries.

If the Paris Convention didn’t exist, applicants would need to coordinate simultaneous filing in all
countries that are of potential interest at the very start of the process. This would be complicated
and costly, bearing in mind the need for translations in many countries.

3.5 PATENT SEARCHES:

A patent search, or patentability search, is a search of existing patents and other publicly-available
documents (which is referred to as “prior art”) to locate the closest existing things to your invention. A
patent application is scrutinized by the Patent Office by comparing the claimed invention with the prior
art, and a patent can be issued if the patent examiner is convinced that an invention is new and not an
obvious combination of things in the prior art.
A patent search is often the first thing that is done in the patent process. The purpose of a patent search is
to determine how different an invention is from what already exists in the prior art. A patent search will
not tell you if your invention infringes someone else’s patent.
The patent search benefits the inventor by identifying the closest prior art so that we can determine both
how patentable the invention is, and also what specific parts of the invention are the most different from

67
the prior art. A patent search can also reveal that the inventor’s invention has already been made – even if
the invention has never been commercially available for purchase.
When we perform a patent search, we analyze the prior art in comparison with the inventor’s invention
and draft a memorandum which summarizes the most relevant items in the prior art and also provides an
opinion as to whether the invention appears to be patentable, and if so, what parts of the invention appear
to be new in comparison with the prior art.

3.5.1 Patent Drafting:

A patent application needs to describe an invention completely, and if you really are entitled to a patent
then at least some aspect of your invention is new and non-obvious, which means that heretofore it hasn’t
existed. Describing something new that has not previously existed is more of a challenge than most people
realize.

Many times those new to the industry fail to adequately describe inventions because the invention is
obvious to them, and they think it will be equally obvious to others. The law, however, requires that a
patent application explain the invention to someone who is not already familiar with the invention. Yes,
the goal is to explain the invention to a knowledgeable individual who knows something about the
technical area pertaining to the invention, but if you really have an invention there must be something
new, so at least that which is new won’t be understood or appreciated until it is described.

One of the best ways to accomplish the goal of completely describing an invention is to explain the
invention like a child explains things when doing a show and tell at school. Children explain everything
in excruciating detail, no matter how obvious. Kids do this when they describe things because they have
no idea what the person listening knows, and to them it is new and interesting so they explain everything
with tremendous detail (whether you want to hear it or not). That is exactly what you need to do in the
application. Explain your invention with so much detail that you will bore the knowledgeable reader to
death.

The caveat, however, is you absolutely must focus on what is unique. Spending all your time discussing
those features, elements, characteristics and attributes that are already known and can be found in the prior
art will just make your patent application needlessly long. You will need to describe those known things
to the extent necessary to explain the what, where and why of what is unique, but too often those new to

68
drafting patent applications focus exclusively, or nearly exclusively, on things that simply will not
contribute to patentability. Uniqueness contributes to patentability, not a better or more complete
description of the prior art.

But how do you explain the uniqueness of the invention? The best advice anyone can give you is to define
everything that works so that those with knowledge in the technical area pertaining to the invention will
understand both the boundaries of the invention (i.e., what has actually been invented) and how to make
and use the invention. Doing this with instruction manual level detail is what you need to aim for.

3.5.2 Patent filing strategies:

The development of a patent strategy must take into account the specific situation and circumstances of
the business. It is, however, possible to set out some general considerations.

The primary consideration is the rights that you will obtain with a granted patent. A patent will not give
you a positive right to exploit your technology, but rather the right to exclude others from doing so. Thus
the first question to answer, with reference to your business strategy, is this: what would you like third
parties to think you are able to stop others from doing?

This might be very different from what you want to do yourself. Also, in some situations where there is
a licensing agreement in place, for example – the last thing you want to do is to stop others. What you
want is the ability to do so.

Third party knowledge is important because patents are not only useful as weapons to be brought out and
applied when necessary. They may be useful simply to demonstrate value in your business, of which more
below.

The business strategy of a company that is likely to be interested in patents can perhaps be expressed most
broadly as the use of new technology to obtain an advantage in the market place. The way in which you
attempt to do this will determine the way you deal with patents. We will look at three broad situations.

69
Example 1: Focus on Products

The simplest situation is where a company produces new products in direct response to customer
requirements. Product development is driven by factors other than IP, and products will be made and sold
whether or not they are patentable.

Each product innovation can be reviewed in isolation after it is made, and a patent application filed if the
cost seems justified at the time. The value of a patent filing would be to discourage the customer from
going elsewhere for the particular product in question, and perhaps to allow you to control second sources
if the customer’s policy requires multiple sources.

Patents need be of only narrow scope, and filed only in countries where you sell. Little or no money needs
to be spent on prior searching, as you will sell the product whether or not the invention is patentable. You
can often save money by abandoning the initial patents as the product evolves.

Example 2: Focus on Technology Area

The second, more complex situation is where your business strategy involves a deliberate attempt to build
a proprietary position.

You might wish to do so for a variety of reasons, most obviously if you are a research-based business and
you need to prevent competitors from benefiting from your technology without incurring the costs that
you incurred as a result of your R&D. You force the competition to go away, or to incur comparable costs
either in designing around or in paying a license fee.

In this situation you must search for opportunities that are patentable. The first part of the strategy is
broad searching to understand the prior art both in terms of technology and in terms of competitor strengths
and weaknesses. Searches should be regularly updated, and the results reviewed together with internal
“invention disclosures” which bring to management’s attention all new ideas from R&D and elsewhere,
such as from sales and product support.

The hurdle for submission of an invention disclosure to management should be low, at least initially. This
allows potentially patentable ideas to be identified early and technical patent support work undertaken to
produce the evidence that might be needed to prove patentability. It also provides time to consider
proliferation of the technology outside the initial product application.

70
A patent review procedure should become part of regular business management meetings. It is important
that the correct people from both the technical and the sales and marketing parts of the business are
involved and support the process.

In contrast with the situation discussed under Example 1, in this situation the focus is on an area of
technology rather than individual products. If the new technology does not merely provide an
improvement to an existing product of yours, if in other words it is to be considered in its own right, it
might be decided that the level of patentability has to be higher if further money is to be spent on R&D
and on patenting. It might also be decided that a broad scope of patent protection is necessary because
initially the nature of the product would probably not be known. The geographical scope of patent filing
might also need to be broader.

The best way of protecting your investment over an area of technology is initially to file several patent
applications, each covering a different aspect of the technology, and then file on new developments as
they arise. The new patent applications that you file should be directed to those features that determine
success in the market, rather than to other features that your products embody merely because that happens
to be the way you developed them. Different views as to what is important will often be expressed by
R&D on the one hand, and by sales and marketing on the other. Input from both groups is important in
operating your patent strategy.

In this situation, you will have achieved your commercial aim if the competition fears that any one claim
in any one of your patents or applications is likely to be held to be valid and infringed. For the competition
to have a clear run, they must be confident that all of your claims in all of your cases are either invalid or
not infringed. That asymmetry provides the value of a portfolio of patents and applications, rather than a
single patent case, covering a given area of technology or product group.

This approach might be thought to be expensive both in external costs and in management time. However,
it can be done to a budget and the close attention to the market and to competitor activity that drives it
means that you can direct expenditure to where it serves your business strategy. It need be no more
expensive than the common, and rather lazy, approach of filing patent applications on all technically
interesting developments in all countries where you do significant business.

71
An important part of your patent strategy relevant here is to include not only patent drafting and initial
filing decisions, but also foreign filing decisions and regular portfolio reviews in the management
meetings referred to above.

Patent applications often remain pending for many years and during that time they can have considerable
commercial value. They may well have more commercial value as pending applications than the patents
do when they are subsequently granted. This is because the competition will often be unable to predict
what scope of protection you will obtain, and they may be deterred from a broader range of activity than
later turns out to be covered by the granted patent. This means that you should set the bar low when filing
new applications.

Decision points will later arise regarding geographical extent of filing and possible later
abandonment. Cases may be abandoned either before some of the expense associated with prosecution is
incurred, or during the life of the granted patent when renewal fees become significant. Decisions here
will take account of changes in the market, so you can abandon cases that relate to features that have
ceased to be required by the customer.

During the life of a patent or application you may be able to reduce geographical coverage by selective
abandonment. You might initially file in all countries where there seem to be significant opportunities for
sales. Later, when the market matures and you can identify all likely competitors, you might maintain
patents only where necessary to make it uneconomic for the competitors to enter the market. You might
therefore switch from a foreign filing programme based on possible sales to one based on competitor
manufacturing capability.

A further reason for pruning your portfolio is to maintain only those cases over which it is thought you
would be prepared to take some action if you discover infringement. You want to develop and maintain
a reputation for enforcing your active cases. If you are found to ignore infringement too often you will
eventually be forced to litigate when it really matters.

72
3.5.3 Patent Oppositions:

A patent can be opposed by any person (including the government) after the publication of the patent
application/advertisement (pre-grant) I writing to the controller within 4 months on any of the following
grounds:

• The invention or part thereof has been wrongfully obtained. The invention as a claim in the complete
specification has been published before priority date not amounting to publication in anticipation of the
invention; the latter includes previous communication to the government, display at the industrial
exhibition, published in paper before a learned society within 1 month before a patent application is filed
and publicly worked upon.

• There exists a previous priority date than the applicants claim.

• The invention is obvious and lacks an inventive step.

• The invention falls within the non-patentable category.

• The complete specification does not sufficiently describe the best method of working of patent.

• The applicant has failed to disclose to the controller the claim filed in a foreign country or rendered false
information on the invention.

• In the case of the Convention application, the period of 12 months from the date of the first application
has lapsed.

• The geographical or biological source of the invention is not described or falsely mentioned in the
invention.

• The invention in anticipatory in nature owing to traditional knowledge whether in India or foreign
country existing in oral or otherwise format.

After grant of a patent within 12 months on any of the above grounds’ opposition can be raised.

3.5.4 Patent Commercialization:

The commercial exploitation of a patent is not mandatory in any patent law jurisdiction. But if you wait
too long, someone else will capitalize on a similar idea and capture your niche invention. On the other

73
hand, if your invention is the first of its kind, the market might not be ready and you will have to fight an
uphill battle to carve out a place for your product. The grant of a patent acts as a trigger to increase the
likelihood of manufacturing activity. One thing, however, is certain, the existence of a patent would make
the patentee confident that they would be able to prevent infringement and that future revenue streams
would remain protected. It also serves as a warning to others to desist from copying as the law is stringent
and, at times, levies heavy punitive damages on the infringers. A patent is not mandatory for
commercialization of an invention. Nevertheless, millions of patent applications are filed every year.

Commercializing patents has been done through the ‘patent blitzkrieg’ which can be used to exclude others
from competing in the market or developing competitive technologies, among others as mentioned below:

a. Umbrella Patents:

A strategy involving obtaining of patents so broad in nature, to prevent the development of similar
products. Additional patents can be obtained to effectively extend the patent term and retain market
exclusivity.

Illustration: Pharmaceutical Company Lily obtained an additional patent for its famous anti-depressant
drug ‘Prozac’ through obtaining the new narrowly improved drug using ‘weekly sustained release of
fluoxetine formulation.’

b. Bottle Neck Patents:

A strategy that controls the use of the invention without which the industry cannot operate thereby
commercially exploiting the patent and also preventing the competitors from using the same. Illustration:
In 1990 [Link] developed the ‘Once-Click’ patent which allowed customers to buy the product
with just one click unlike the previous interface which required filling up of numerous forms

c. Patent Wall:

If an organization develops multiple designs that achieve the same or substantially similar function as the
invention, the organization may choose to patent all the products.

Illustration: Twin blade sensor shave developed by Gillette had seven designs which had been patented
creating a patent wall.

d. Bracketing:

74
It refers to developing and delivering a disruptive technology ahead of time to gain an edge over the
competitors in the industry.

Illustration: In the telephone industry cordless phones bracketed phones with wires which were attached
to the dialing units.

e. Kill Strategy:

Companies launch a better and sophisticated version of the product so that the competitors are indirectly
pressurized not to launch such similar products or products of lesser technicality.

Illustration: Apple has been using this strategy to launch its iPhones every 8-10 months.

f. Patent Shopping:

Organizations having financial capacity purchase the patents in bulk or rather the whole bankrupt
organization-consortium, resulting in ownership of patents assisting the purchaser to gain leverage and
expand the business.

Illustration: Facebook acquired patents from IBM and America Online (AOL) to counter claim the
infringement claims of Yahoo Inc. and also proceed in the direction online business expansion.

g. Protective Patents:

Also called as blocking patents wherein a number of patents are obtained collaterally to the main patented
invention which in effect prevents the competitors from patenting similar functionality products via
alternative routes.

Illustration: Xerox Company used the strategy to protect inventions from photocopying.

h. Defensive Patents:

The strategy involves using the competitor organizations (E.g. X Co.) Patent portfolio to obtain patents in
its own name (e.g. Y Co.), through a careful study of the loopholes in the patent portfolio of X Co. so that
the competitor organizations are prevented from gaining an advantage or are forced to collaboratively
work (e.g. X Co. and Y Co.).

Illustration: HP used the defensive strategy against Xerox by filing a suit against Xerox for patent
infringement of interface technology as a counter claim to the suit filed by Xerox against HP for inkjet
patent infringement.

75
3.5.5 Enforcement:

Patent enforcement is a lawsuit filed by the patent holder against parties who have infringed upon their
patent rights. Patent enforcement usually results in one of two legal remedies. The first is a monetary
damages award, where the infringing party agrees to reimburse the patent holder for any economic losses
caused by the infringement, as well as royalties. The second involves an injunction, which is basically an
order requiring the defendant to cease their infringing activities.

3.5.6 First Schedule (Fees):

Number
Amount of fees (in rupees)
of entry

For other than

natural
Number of the
On what payable person(s)
relevant Form
For either alone or
natural jointly with
person(s) natural
person(s)

On application for a patent 750 Multiple

under sections 5(2), 7, 54 or of 750 in case 3,000 Multiple of
1.
135 and rule 39 accompanied 1 of every 3,000 in case of every
by provisional/complete multiple multiple priority
specification. priority.

On filing complete
2. 2 No fee No fee
specification after provisional.

76
 On filing a statement and
3. 3 No fee No fee
undertaking under section 8.

On request -[or extension of

time under sections 8(2), 9(1),
4. 25(1), 28(4), 43(3) or 53(3) 4 250 per month 1,000 per month
and rules 12(4), 13(6), 24(5).
56(1), 73(3) or 130.

On filing a declaration as to
5. 5 No fee No fee
inventorship under rule 13(6).

6. On application for postdating. - 500 2,000

On app1ication for deletion of

7. - 500 2,000
reference under section 19(2).

On claim under section

(i) 6 500 2,000
20(1);

8. On request for direction

under
(ii) 6 500 2,000

Section 20(4) or 20(5).

On request for postponement

9. of acceptance of complete - 500 2,000
specification under section 22.

On notice of opposition to
10. grant of patent under section 7 1,500 5,000
25.

On giving notice that hearing

11. before Controller will be - 1,500 5,000
attended under rule 62(2).

77
 On application under sections
12. 8 500 2,000
28(2), 28(3) or 28(7).

On request for sealing of a

13. 9 1,500 5,000
patent under section 43.

On application under section

14. 10 1,500 5,000
44 for amendment of patent.

On application for directions

15. 11 500 2,000
under sections 51(1) or 51(2).

On request for grant of a

16. 12 1,500 5,000
patent under section 52(2).

On request for converting a

patent of addition to an
17. . 500 2,000
independent patent under
section 55(1).

For renewal of a patent under

18.
section 53.

Before the
expiration of the 2
(i) year from the date . 600 3,200
of patent in respect
of 3rd year.

Before the
expiration of the
(ii) . 600 3,200
3rd year in respect
of the 4th year.

Before the
(iii) . 600 3,200
expiration of the

78
 4th year in respect
of the 5th year.

Before the
expiration of the
(iv) . 600 3,200
5th year in respect
of the 6th year.

Before the
expiration of the
(v) - 1,500 4,500
6th year in respect
of the 7th year.

Before the
expiration of the
(vi) 1,500 4,500
7th year in respect
of the 8th year.

Before the
expiration of the
(vii) 1,500 4,500
8th year in respect
of the 9th year.

Before the
expiration of the
(viii) 1,500 4,500
9th year in respect
of the 10th year.

Before the
expiration of the
(ix) 3,500 10,000
10th year in respect
of the 11th year.

Before the
(x) 3,500 10,000
expiration of the

79
 11Th year in respect
of the 12th year.

Before the
expiration of the
(xi) 3,500 10,000
12th year in respect
of the 13th year.

Before the
expiration of the
(xii) 3,500 10,000
13th year in respect
of the 14th year.

Before the
expiration of 14th
(xiii) 3,500 10,000
year in respect of
15 1h year

Before the
expiration of 15th
(xiv) 5,000 15,000
year in respect of
16th year

Before the
expiration of 16th
(xv) 5,000 15,000
year in respect of
17th year

Before the
expiration of 17th
(xvi) 5,000 15,000
year in respect of
18th year

Before the
(xvii) 5,000 15,000
expiration of l8th

80
 year in respect of
19th year

Before the
expiration of 19th
(xviii) 5,000 15,000
year in respect of
20th year

On application for amendment of application for

patent /complete specification/other related
documents under section 57 - 13
(i) Before acceptance 700 2,500
19. (ii) After acceptance 1,000 6,000

Where amendment is
for changing name
(iii) 200 500
/address/nationality/add
ress for service

On notice of opposition to an application under

sections 57(4), 61 (1) and 87(2) or to surrender a
14 1,500 5,000
patent under section 63 (3) Or to a request under
section 78(5).

On application for restoration of a patent under

21. 15 1,500 5,000
section 60.

22. Additional fee for restoration. 3,000 10,000

On notice of offer to surrender a patent under

23. 1,000 3,000
section 63.

Application for registration of a document In the 700 (In 3,000 (In respect of
24. 16
Register of Patents under section 68. respect of each patent)

81
 each
patent)

On application for the entry in the register of patent

of the name of a person entitled to a patent or as a 700 (In
share or as a mortgagee or as licensee or as respect of 3,000 (In respect of
25. 17
otherwise or for the entry in the Register of Patents each each patent)
of notification of a document under sections 69(1) patent)
or 69(2) and rule 90(1), or 90(2).

On application for alteration of an entry in the

26. Register of Patents or Register of Patent agents 200 500
under rule 94( 1) or rule 118(1).

On request for entry of an additional address for

27. 700 2,500
service in the Register of Patents under rule 94(3).

On application for Compulsory licence under

28. 18 1,500 5,000
sections 84(1), 91(1) and 92(1).

On request for examination of application for

29. 19 1,000 3,000
patent under Section 11B and rule 24(1).

On application for revocation of a patent under

30. 20 1,500 5,000
section 85(1).

On application for revision of terms and conditions

31. 21 1,500 5,000
of licence under section 88(4).

On request for termination of cOD1pulso~licence (a) 1,500 (a) 5,000

32. (a) under section 94 and (b) under section 94 as 22
modified by section 24C. (b) 25,000 (b) 75,000

On application for registration as a patent agent

33. 23 500
under rules 109 or 112.

82
 On request for appearing in the qualifying
34. 200
examination under rule 109 (3).

For registration of a person as a patent agent under

35. 1,500
rule 109 or 112.

For continuance of the name of a person in the

register of patent agent.

(i) For the 1st year to be paid along with

36. 500
registration

(ii) For every year excluding the 1st year to be paid

500
on the 1st April in each year.

1,000
(Plus
continuati
On application for restoration of the name of a
on fee
37. person in the Register of Patent Agents under rule 24
under
117.
entry
number
36)

On a request for correction of clerical error under

38. - 500 1,500
section 78(2).

On application for review or setting aside the

39. decisions! Order of the controller under sections 25 700 2,500
77(1) (f) or 77(l) (g).

On application for permission for applying patent

40. 500 1,500
outside India under section 39.

On application for duplicate Patent under section

41. 1,000 3,000
154 and rule 132.

83
 On request for certified copies under section 72 or
42. 700 2,500
for certificate under section 147 and rule 133.

43. For certifying office copies or printed each. 200 500

On request for inspection of register under section

44. 200 500
72 inspection under rule 27 or rule 38.

45. On request for information under section 153. 300 1,000

46. On form of authorization of patent agent. 26 No fee No fee

47. On petition not otherwise provided for. 1,000 3,000

For supplying of photocopies of the documents per

48. 4 4
page.

49. Transmittal fee for International application. 1,500 5,000

For preparation of certified copy of priority

document and for transmission of the same to the
50. 1,000 3,000
International Bureau of World Intellectual
Property Organization.

750
Multiple
National fee on application corresponding to of 750 in 3,000 Multiple of
S1. International application under PCT under section 1A case of 3,000 in case of every
7(1A). every multiple priority
multiple
priority

On request for grant of exclusive marketing right

52. 27 25,000 75,000
under section 24A.

On application for compulsory licence under rule

53. 18 25,000 75,000
47.

84
 On application for revocation of exclusive
54. 20 1,500 5,000
marketing rights under rule 47.

On notice of opposition to application under

55. section 87 as modified by section 24C or under rule 14 10,000 30,000
49 (1) or rule 52 (3).

On application for revision of terms and conditions

56. 21 10,000 30,000
of licence under rule 51 (1).

On request for inspection of Register of Exclusive

57. 200 500
Marketing Right.

On request for supply of Certified copy of the entry

58. 700 2,500
in the Register of Exclusive Marketing Right.

On statement regarding working of a patented

59. invention on a commercial scale in India under 29 No fee No fee
Section 146(2).

Request for permission for making patent

60. 30 No fee No fee
application outside India under section 39.

3.5.7 Second Schedule (Forms), Sections and Rules

Form
Sections and rule Title
No.

1. Sections 5(2), 7, 54, 135 and rule 39 Application Jar grant of a patent.

Applicant for grant of patent on an application

l.A Section 7ClA); rule 20(1) corresponding to an International application under
PCT.

2. Section 10; rule 13 Provisional/Complete Specification.

3. Section S and rule 12. Statement and undertaking.

85
 Section 8(2), 9(1), 25(1), 28(4), 43(3),
4. 53(3) and rules 12(4), 13(6), 24(5), Request for extension for time.
56(1), 73(3) or 130.

5. Section 10(6) and rule 13(6). Declaration as inventorship.

Sections 20(1), 20(4), 20(5) and rules Claim or request regarding any change in applicant for
6.
34(1), 35 or 36. patent.

7. Section 25 and rule 55. Notice of opposition to grant of a patent.

Sections 28(2), 28(3) or 28(4) and rules Request or claim regarding mention of inventor as such
8.
66, 67, 68. in a patent.

9. Section 43 and rule 73(1). Request for sealing of a patent.

10. Section 44 and rule 75. Application for amendment of patent.

11. Sections 51(1), 51(2) and rules 76, 77. Application for direction of the controller.

12. Section 52(2) and rule 79. Request for grant of patent.

Application for amendment of the application for

13. Section 57 and rule 81(1).
patent/complete specification.

Sections 57(4), 61(1), 63(3), 7S (5) and

Notice of opposition to
87(2) and rules 49(1), 52(3), 81(3) (b),
amendment/restoration/surrender of patent/grant of
14. 85(1), 87(2), 98(1), 101(3) Or 124 and
compulsory licence or revision of terms thereof or to a
also section 87 (2) as modified by
correction of clerical errors.
section 24C.

15. Section 60 and rule 84. Application for restoration of patents.

16. Section 68 and rule 89. Application for registration of a document.

Application for registration of title/interest in a patent or

Sections 69(1) or 69(2) and rules·
17. share in it or registration of any document purporting to
90(1) and 90(2).
affect proprietorship of the patent.

86
 Sections 84(1), 91 or 92(1) and rules
18. 47, 96 and also sections 84 and 92 as Application licence. for compulsory
modified by section 24C.

19. Section 11B and Rule 24(1). Request for examination of application for patent.

Section 85(1) and rules 47, 96, and also

Application for revocation of a patent or exclusive
20. section 85(1) as modified by section
marketing right.
24C.

Section 88(4) and rules 51, 100 and

Application for revision of terms and conditions of
21. also section 88(4) as modified by
licence.
sectl0n 24C.

Section 94 and rule 102(1) and also

22. Request for termination of compulsory licence.
section 94 as modified by section 24C.

23. Rules 109 and 112. Application for registration of Patent Agent.

Application for the restoration of the name in the

24. Section 130 (2) and rule 1 17.
register of Patent Agents.

Sections 77(1){I), 77(l)(g) and Application for review/setting aside controller's

25.
rules)30(1) or 130(2). decision/order.

Form of authorization of a Patent Agent/or any person

26. Sections 127, 132 and rule 135.
in a matter or proceeding under the Act.

27 Section 24A and rule 40. Application for grant of exclusive marketing rights.

28. Rule 46. Form for the grant of exclusive marketing rights.

Statement regarding the working of the Patented

29. Section 146(2) and rule 131(1)
invention.

Request for permission for making patent application

30. Section 39
outside India

87
3.6 ASSIGNMENT AND LICENSING OF PATENTS:

Primarily, it is crucial to understand as to who can assign or license a patent. It is only the owner of a
patent who can either assign or license its patent. However, in case of joint owners or co-owners, one of
the owners cannot assign or grant license without the consent of the other owner. Pursuant to section 68
of the Patents Act, 1970 (“Act”), any license is not valid unless all the terms and conditions between the
parties in relation to the license have been reduced in writing and documented in the agreement, which
should be duly executed. Further, section 69 of the Act stipulates that the licensee shall file an application
for registration of his rights as a licensee under the concerned license agreement with the Controller of
Patents (“Controller”) within six months of the date of agreement. A similar application to register the
transfer of interest shall also be filed by the licensor.

The Act provides certain crucial features relating to patent licensing which are as follows:

• The terms and conditions of the agreement should be explicit.

• The agreement should be prepared on a stamp paper and adequate stamp duty be paid.

• The document registered will be effective from the date of its execution and not from the date of
registration.

• Section 70 enunciates the power of the registered grantee to deal with the patent and recognizes the right
of the registered grantee to grant license under, or otherwise deal with the patent, subject to a contract to
the contrary. If a license is not registered but the parties have acted upon the covenants in the document,
then in lieu of the proviso to section 70, equity will grant the licensee such rights as he would be entitled
to if the license was registered.1 1 V. J. Taraporewala, Law of Intellectual Property (Mumbai: V. J.
Taraporewala, 2005) at 78. Issue XV | September 2010 Disclaimer – This bulletin is for information
purposes and should not be construed as legal advice. The terms of license shall be kept confidential by
the controller, if requested by the patentee or licensee.

Patent licensing agreement: A licensing agreement is a partnership between a patent holder (licensor)
and another who is authorized to use such rights (licensee) in exchange for an agreed payment (fee or
royalty). A patent licensing agreement can be an “exclusive license agreement”, a “non-exclusive license

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agreement” or a “compulsory license”. A patent holder, by a license, permit others to make, use, or
exercise, the invention which otherwise would not be allowed. An exclusive license excludes all other
persons including the patent holder from the use of invention and wherever limitation is provided, it is
generally a limitation related to persons, time, place, manufacture, use or sale. Section 2(f) of the Act
defines an “exclusive license” as “a license from a patentee which confers on the licensee, or on the
licensee and persons authorized by him, to the exclusion of all other persons (including the patentee), any
right in respect of the patented invention, and ‘exclusive licensee’ shall be construed accordingly.” The
exclusivity may depend on the geographical extent of the licensee’s right, time factor, and/or the
exclusivity to exercise the rights licensed.

Assignment of patent: The term “assignment” is not defined under the Act. A patent holder can assign
the whole or any part of the patent rights to the whole of India or any part thereof. Assignment is in essence
a transfer of ownership even if it is partial. There are three kinds of assignments: legal assignment,
equitable assignment and mortgages. An assignment of an existing patent is a legal assignment where the
assignee may enter his name as the patent owner. A certain share given to another person is called an
equitable assignment. An equitable assignee cannot have his name entered in the register as proprietor of
the patent but he may have notice of his interest in the patent entered in the register. A grant of patent
rights before the grant of patent is an equitable assignment, which gives the assignee the right to call upon
the patentee when the patent is granted to assign that patent to the assignee. A mortgage is when patent
rights are wholly or partly transferred to obtain money. On repayment of the money the mortgagor
becomes entitled to get his name entered in the register as the proprietor. Section 68 provides that the
assignment deed shall, when registered, have effect from the date of its execution.

3.6.1 Technology Transfer Agreements:

This contract is used when a company (Licensor) assigns or licenses to another (Licensee) registered
industrial and intellectual property rights (patents, utility models, trademarks, copyright etc.) as well as
technical assistance and know-how. In the first case, knowledge and exclusive rights are granted, which
are recognized and registered in order to manufacture and market products, whilst in the second,
knowledge is transferred which has no legal recognition, but that does have a value in itself. As in the
Trademark License Agreement, in the technology transfer contract the price for the assignment of
industrial and intellectual property rights, as well as the know how is initially paid a certain amount of

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money (fee) and during the term of the contract a percentage (royalties) calculated on the amount of the
sales of the products under license, made by the Licensee. The fees for technical assistance services are
paid individually for each service rendered. The Technology Transfer Agreement is increasingly being
used in technological cooperation strategies through which companies endeavor to enter into competition
in certain sectors or markets but without having to develop internally the technology necessary for that
purpose and that which is acquired through this type of contract to R&D+ i companies.

3.6.2 Material Transfer Agreements:

A Material Transfer Agreement (MTA) is a contract that governs the transfer of tangible research
materials between two organizations, when the recipient intends to use it for his or her own research
purposes. The MTA defines the rights of the provider and the recipient with respect to the materials and
any derivatives. Biological materials, such as reagents, cell lines, plasmids, and vectors, are the most
frequently transferred materials, but MTAs may also be used for other types of materials, such as chemical
compounds and even some types of software. As a general rule, University of Houston requires MTAs for
any incoming or outgoing materials in order to monitor what materials are coming on campus, and what
materials (and to whom) UH is supplying.

Faculty members coming to or leaving UH need to have an MTA in place prior to transferring any
materials from/to other institutions such as plasmids, cell lines, animals, etc.

3.6.3 Research Collaboration Agreements:

This contract is used when a company (Licensor) A collaborative research agreement has five major parts:
(1) statement of objectives, (2) statement of work, (3) general provisions, (4) budget, and (5) list of
materials. The objective of writing a collaborative research agreement is to clarify for both parties what
they are trying to accomplish together and to clearly set forth the rules that will govern the collaborative
effort. A good partnership must be mutually beneficial, and an effective collaborative research agreement
will help both parties understand and accept mutual benefit as a goal. Of course, simply writing that an
agreement is mutually beneficial does not make it so. An effective agreement must be based on an actual
win-win relationship, one that is truly mutually beneficial. So to start with, the concept of the collaborative
research project must involve a research project through which both parties benefit from the work that
will be done.

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3.7 COMPULSORY LICENSING

Technology licensing is an industry in itself and the provisions for compulsory licensing replaced the
notion of Exclusive marketing rights.

Patent Licenses can be of following types namely,

i. Exclusive license: Licensor agrees to license only one licensee.

ii. Non-exclusive license: Licensor can issue licenses to many licensees.

iii. Cross license: Licensor and licensee act as mutual issuers of patent licenses.

iv. Non- Sub-License: No sub-letting of the License is permitted.

v. Irrevocable License: Licensor cannot revoke the license.

vi. Perpetual License: Ever-lasting license.

vii. Royalty free License: No monetary benefits whether annual or otherwise accrued to the
inventor.

viii. Shrinkwrap License: Once the product opens from the box, the terms become effective.

ix. Clickwrap License: Virtual consent to the terms in the license.

Having regard to the general principles of use and grant of a patent, the Patentee has the rights to utilize
the patent, however, on failure, the provisions of compulsory licensing are set in motion namely on the
following grounds:

i. Refusal to voluntarily enter into licenses for commercial utilization

ii. In the interest of the public

iii. For maintaining and improving public health and nutrition

iv. In case of national emergency

v. For the functioning of dependent patents

vi. Insufficient working of patents

vii. Unaffordable pricing

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After three years of grant of patent an interested person (including Central Government) may make an
application to the Controller on the grounds mentioned above for issuance of compulsory license on terms
and conditions as the Controller may deem fit after establishing the ability- capacity to work the patent to
public advantage and any prior attempt to obtain the license for the patent was unfruitful at reasonable
price and conditions. The compulsory license may also be revoked if subsequently after 2 years of its grant
it’s shown to be non-working.

3.7.1 Revocation:
Revocation of Patent can be pursued by a person of interest, Central Government or on non-payment of
annual renewal fees or after adjudication by the High court that the infringement on any of the grounds is
meted out.

3.8 PATENT INFRINGEMENT, PROSECUTION AND LITIGATION

The types of Patent Infringement are:

i. Direct Infringement: The rights of the patentee or exclusive licensee are violated if no authorization
has been obtained to use, sell, offer to sell, import the patented product. The burden of proof lies on the
patentee or exclusive licensee alleging infringement.

ii. Indirect Infringement: Active inducement of infringement.

iii. Literal Infringement: The infringing product or process has every attribute or identical correlation
with each and every claim as mentioned in the specification.

iv. Infringement under Doctrine of Equivalents: Developed in the US wherein to circumvent the claim
in the patent, changes or additions are made but functional and compositional working capacity remains
the same. The doctrine requires the claims to be interpreted in light of all elements rule in claims, improver
or protocol questions principle, Pith and Marrow (essential ingredients are copied) and Comparative Test
(prior art and skill of person expert in the field).

- Defences to infringement of patent:

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i. Bolar Provision: If the patent is used for providing or developing information as required under the law
the same doesn’t constitute infringement.

ii. Invalidity of Patent.

iii. Use of patented invention for the purpose of research and education.

iv. Parallel Import: Import of patented invention from an authorized person to sell or distribute the same.

v. Use by Central Government after notifying the same in written format.

vi. Use on foreign Vessels: If an aircraft or vessel registered in a foreign country comes to India accidently,
temporarily, and the use of the patented invention is done therein the same is not infringement. The defense
applies only if the countries follow the reciprocity principle as envisaged under International law.

Despite its name, patent prosecution is not a legal action - at least, not in the manner that term would
typically suggest in settings outside of IP law. In other words, the process is not set up against a defendant:
That would be patent litigation, which can only occur after you have an approved patent that has come
into jeopardy as a result of someone's act of infringement against it.

3.9 PRECAUTIONS TO BE TAKEN, MANAGING RISKS ASSOCIATED WITH PATENT:

Following precautions are required to be taken:

A. Design around

Risks from a patent can be mitigated by designing around the claims of the patent. If a product or process
is so designed that it does not fall within the scope of the claims it would not be infringing.

Example – Vinod wants to make tables in India. He carries out a patent search at the Indian Patent Office
and finds a patent, whose independent claim reads as follows:
1. I claim a table comprising of a flat wooden plank connected to legs at four corners of the said wooden
plank.

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The claim includes tables, which have four corners. This claim can be designed around by making tables
without corners or with corners more or less than four corners. So, if Vinod makes tables, which are
circular in shape, he can successfully design around the claim. Though Vinod may be able to design around
by making tables having the shape of a triangle, pentagon and so on, there is always a danger of
equivalence extending to such tables.

B. Licensing
If a patent claim cannot be designed around, then the person may consider the option of licensing the
patent. The option of licensing may be the only way with respect to base patents, which are related to new
technologies. However, this mode of risk mitigation is dependent on patent holder’s willingness to grant
a license. Many companies, which derive competitive advantage through the patents and have the
economic muscle to make the best of it, may not be interested in licensing.

Example – Vishnu wishes to start a company for making a fairness cream. After carrying out a patent
search, Vishnu finds a patent, whose claim reads as follows:
1. I claim a skin lightening composition comprising a melanin inhibitor or a UV light screening agent and
additives.

As the patent claim is very broad, the only option for Vishnu may be a license unless he can invalidate the
patent.

C. Invalidation
Patent invalidation is a very common strategy followed by many companies. When a suit for patent
infringement is filed, the defendant in the suit generally claims patent invalidity. A patent may be
invalidated at any time after grant and before it expires. Invalidation of a patent may be done based on
grounds such as non-satisfaction of patentability requirements, wrongful obtainment of the patent,
inequitable conduct and so on.

Example – As the patent claim in the earlier example is very broadly worded, the best option for Vishnu
may be patent invalidation. It may be invalidated based on prior ort or on the ground that the claim is not
clear and succinct.
In addition to the aforesaid basic strategies of risk mitigation, companies follow many other strategies
such as patent fencing or ticketing, cross licensing, pooling and so on for risk mitigation. Many open

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patent models are also evolving with the objective of providing risk free operating fields in certain
technologies.

3.9.1 Freedom to Operate (FTO) Search:

An FTO search is a way to determine if your product or process—no matter if that product or process
actually exists or is still being developed (or is even still just an idea)—would infringe any existing
patents.
In the end, an FTO search enables an inventor or company to know in advance if there are any patents
covering the inventor’s or company’s product or process.

3.10 PROTECTION OF PLANT VARIETIES UNDER THE PROTECTION OF PLANT

VARIETIES AND FARMERS RIGHTS ACT, 2001

In order to provide for the establishment of an effective system for the protection of plant varieties, the
rights of farmers and plant breeders and to encourage the development of new varieties of plants it has
been considered necessary to recognize and to protect the rights of the farmers in respect of their
contributions made at any time in conserving, improving and making available plant genetic resources for
the development of new plant varieties. The Govt. of India enacted “The Protection of Plant Varieties and
Farmers' Rights (PPV&FR) Act, 2001” adopting sui generis system. Indian legislation is not only in
conformity with International Union for the Protection of New Varieties of Plants (UPOV), 1978, but also
have sufficient provisions to protect the interests of public sector breeding institutions and the farmers.
The legislation recognizes the contributions of both commercial plant breeders and farmers in plant
breeding activity and also provides to implement TRIPs in a way that supports the specific socio-economic
interests of all the stakeholders including private, public sectors and research institutions, as well as
resource-constrained farmers.

3.10.1 Essentials for protection:

The breeding activities and exploitation of new varieties are the decisive factors for improving rural
income and their overall economic development. Since the process of plant breeding is long and

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expensive, it is important to provide an effective system of plant variety protection with an aim to
encourage the development of new varieties of plants for the benefit of society.

3.10.2 Breeders’ rights, Farmers Rights:

1. Breeders’ Rights: Breeders will have exclusive rights to produce, sell, market, distribute, import
or export the protected variety. Breeder can appoint agent/ licensee and may exercise for civil
remedy in case of infringement of rights.
2. Researchers’ Rights: Researcher can use any of the registered variety under the Act for
conducting experiment or research. This includes the use of a variety as an initial source of variety
for the purpose of developing another variety but repeated use needs prior permission of the
registered breeder.
3. Farmers’ Rights
o A farmer who has evolved or developed a new variety is entitled for registration and
protection in like manner as a breeder of a variety;
o Farmers variety can also be registered as an extant variety;
o A farmer can save, use, sow, re-sow, exchange, share or sell his farm produce including
seed of a variety protected under the PPV&FR Act, 2001 in the same manner as he was
entitled before the coming into force of this Act provided farmer shall not be entitled to
sell branded seed of a variety protected under the PPV&FR Act, 2001;
o Farmers are eligible for recognition and rewards for the conservation of Plant Genetic
Resources of land races and wild relatives of economic plants;
o There is also a provision for compensation to the farmers for non-performance of variety
under Section 39 (2) of the Act, 2001 and
o Farmer shall not be liable to pay any fee in any proceeding before the Authority or Registrar
or the Tribunal or the High Court under the Act.

3.10.3 Procedure for Registration:

Authority are compiled and published on its website. In the second stage, only those varieties whose
applications have been granted certification for “DUS” (distinctiveness, uniformity, stability) testing are
subsequently published in the Plant Variety Journal of India, the journal published by the Authority. At

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this stage, any objections to registration may be put forward for consideration. The details of an application
are posted in the Plant Variety Journal of India once it is approved for registration. The specific purpose
of such publication is to ensure that there is no opposition to the applicant’s claim to the particular variety.
Every application requires a processing time, which may range from 8 to 20 months. Registration is
granted on the basis of the denomination, also called the “the label or title” of a variety. Once a variety is
registered, it is again advertised in the Plant Variety Journal of India as a registered variety. The breeder
then has the exclusive right to market and produce the crop for a period of 15 years in the case of annual
crop varieties, and for 18 years in the case of trees and vines. In addition, the Act provides that where
derived varieties are developed from farmers’ varieties, permission must be obtained from the farmers’
community or individual farmers before commercial production.

3.10.4 Infringement under the Act:

The types of Patent Infringement are:

i. Direct Infringement: The rights of the patentee or exclusive licensee are violated if no authorization
has been obtained to use, sell, offer to sell, import the patented product. The burden of proof lies on the
patentee or exclusive licensee alleging infringement.

ii. Indirect Infringement: Active inducement of infringement.

iii. Literal Infringement: The infringing product or process has every attribute or identical correlation
with each and every claim as mentioned in the specification.

iv. Infringement under Doctrine of Equivalents: Developed in the US wherein to circumvent the claim
in the patent, changes or additions are made but functional and compositional working capacity remains
the same. The doctrine requires the claims to be interpreted in light of all elements rule in claims, improver
or protocol questions principle, Pith and Marrow (essential ingredients are copied) and Comparative Test
(prior art and skill of person expert in the field).

• Defences to infringement of patent:

i. Bolar Provision: If the patent is used for providing or developing information as required under the law
the same doesn’t constitute infringement.

ii. Invalidity of Patent

iii. Use of patented invention for the purpose of research and education.

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iv. Parallel Import: Import of patented invention from an authorized person to sell or distribute the same.

v. Use by Central Government after notifying the same in written format.

vi. Use on foreign Vessels: If an aircraft or vessel registered in a foreign country comes to India accidently,
temporarily, and the use of the patented invention is done therein the same is not infringement. The defense
applies only if the countries follow the reciprocity principle as envisaged under International law.

The District Court can issue a declaratory order that the use of a patent is non-infringing and also grant
relief for groundless threats for infringement proceedings. However, suits with counter claims for
revocation of the patent are transferred to High courts.

3.11 LANDMARK CASES

3.11.1 NATCO v. BAYER:

Bayer had approached Delhi high court to stop Alembic Pharmaceuticals from exporting Rivaroxaban,
the active ingredient of its patented drug ‘Xarelto’ and Natco Pharmaceutical from exporting Sorafenib,
the active ingredient of its patented drug ‘Nexavar.’ Both the Indian drug manufacturers were granted
compulsory licenses for manufacturing respective drugs. According to records, both the patents for the
drugs ‘Xarelto’ and ‘Nexavar’ granted to Bayer would cease to be in force from 2020.

On March 8, 2017, a single-judge Bench of the Delhi high court lead by Justice Rajiv Sahai Endlaw had
allowed Natco Pharma and Alembic to export the active pharmaceutical ingredient (API) Sorafenib and
Rivaroxaban for research and development of information for regulatory submissions.

Natcopharma and Alembic pharmaceuticals affirmed that they will export Bayer's patented drugs only for
the purposes allowed as per section 107A of the Patent Act, 1970.

Some of the findings of the single- judge bench were as follows: –

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  Sale by a non-patentee (even if the non-Patentee is a compulsory Licensee) of a pharmaceutical
product solely for the purposes prescribed in Section 107A would also not be infringement;
 Use of the word selling in section 107A refers to selling within India, and also exports;
 Merely because no provisions are stated to exist in laws relating to export of pharmaceutical
products, for ensuring that API exported is used in the destination country for the purposes for
which it has been exported, does not allow Court to interpret Section 107A as not permitting
export;
 Natco and Alembic can export the patented invention for purposes specified in Section 107A of
the Patents Act, and for no other purposes.

Aggrieved by the judgement, Bayer Corp. Ltd. Appealed to the Division bench of the Delhi high court for
correct interpretation of Section [Link] 22nd of April 2019, the divisional bench gave its final verdict in
both the cases.

3.11.2 NOVARTIS AG v. UOI,

This case concerns the constitutionality of Section 3(d) of the 2005 Amendment (“Amendment”) to India’s
Patent Law, which was added to comply with Trade-Related Aspects of Intellectual Property Rights
(TRIPS) and World Trade Organization’s (WTO) minimum standards for protecting intellectual
property. Section 3(d) requires that inventions based on a known substance be patentable only if they
show the “enhanced efficacy” of the known substance. Novartis, a large pharmaceutical company,
submitted a patent application for its leukemia medication, Gleevec. Novartis’ application was denied on
the grounds that the medication was a reformulation of an older drug already patented by Novartis under
India’s Patent Law. It was therefore not patentable under Section 3(d). Novartis petitioned the Madras
High Court claiming the invalidation of Section 3(d) on jurisdictional and constitutional grounds.

The Madras High Court ruled that Indian courts do not have jurisdiction to rule on a case concerning
Indian law under an international treaty. Due to this restriction, the Court could not make a ruling as to
whether Section 3(d) is in compliance with TRIPS, as requested by Novartis. The Court did find, however,
that Section 3(d) was not in violation of the Indian Constitution. Novartis had argued that Section 3(d)’s
requirement of “enhanced efficacy” was ambiguous and unclear and that the section was arbitrarily
enacted. The Court did not agree and stated that generally it is up to the courts to interpret statutory

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language according to the facts of each case. The Court also stated that the enactment of Section 3(d) was
not arbitrary, pointing to the debates over access to medicine that led to the passage of the Amendment.

Novartis also argued that Section 3(d) gave the Patent Controller too much discretionary power so as to
lead to discriminatory behavior. The Court disagreed, stating that discretionary power does not
necessarily lead to discriminatory behavior. There cannot be an assumption that the possibility of the
abuse of provision is grounds for holding that provision to be abusive. Additionally, courts should give
greater latitude to laws dealing economic regulation.

Enforcement of the Decision and Outcomes:

The denial of Novartis’ patent application for its leukemia drug was upheld for not meeting Section 3(d)
requirements. Novartis subsequently appealed to the Indian Supreme Court in Delhi. On April 1, 2013,
the Indian Supreme Court upheld Section 3(d) in India’s Patent Law as constitutional.

Significance of the Case:

This case, and the subsequent ruling by the Indian Supreme Court, shows the divide between
pharmaceutical companies and the Indian state’s position on affordable drugs. Had Novartis been
successful in eliminating Section 3(d) from India’s Patent Law, the price of medicine in India would
increase exponentially, eliminating access to medication for a large proportion of the second most
populated country on the planet. Although India had to amend its patent laws to comply with WTO
requirements, the Indian legislature inserted Section 3(d) in order to protect access to medicine, and the
Supreme Court judgment consolidates Section 3(d).

3.11.3 Bajaj Auto Ltd. v. TVS Moto Company Ltd.

Facts:

There were two suits in this case. One was by the plaintiff Bajaj Auto Limited which filed a suit under
Section 108 of the Patents Act, 1970 for the relief of permanent injunction in respect of the plaintiff's
patent and/or from using the technology/invention described in the said patent and/or manufacturing,
marketing, selling, offering for sale or exporting 2/3 wheelers, including the proposed 125-CC FLAME
motorcycle containing an internal combustion engine or any internal combustion engine or product which
infringes the plaintiff's patent claiming of damages for infringement of patent etc. Pending the said suit,

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the plaintiff prayed for an order of temporary injunction restraining the respondent from in any manner
infringing the applicant's patent.

Plaintiff in another suit, TVS Motor Company filed the suit on the basis of groundless threat of
infringement under Section 106 of the Patents Act, for declaring that the threats held out by the defendant
that the plaintiff is infringing the defendant's patent and that the defendant is proposing to take
infringement action against the plaintiff are unjustified and also for permanent injunction restraining the
defendant from continuing the issuance of threats and thereby interfering with the launch and sale of
product TVS Flame apart from directing the defendant to compensate the plaintiff by way of damages
sustained on account of the unjustified threats made by the plaintiff. Pending the said suit, the plaintiff
filed for an order of interim injunction restraining the respondent from interfering with the manufacture
and marketing of applicant's products.

Except the use of three valves, the product which was attempted to be marketed by the respondent was
prima facie similar to the applicant's patented product.

Issue:

Whether the Defendants infringed the patent or combination even though it made some improvements to
the main patented article?

Whether the patent of the applicant was valid and still subsisting?

Whether there were similarities in the design of TVS flame with the patent of Bajaj motors?

Whether the grant of the injunction was necessary to protect the rights of the applicant under the statutory
provision

Whether the respondents were unjustly threatened only for the purpose of obtaining an unjust monopoly
over the market?

Contentions:

Appellant: Technology been used was a prior art as it had been previously used in a US Honda Patent and
so the patent must not have been granted in the first place.

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The applicants claim is for two spark plugs with two valves; the respondents design includes two spark
plugs with three valves for which they held a license.

Applicant's invention is not new and novel as held under norms of Bishwanth Prasad Radhey Shyam v.
H.M. Industries. The validity of a patent can be challenged.

Respondent:

The technology patented is a new invention. The technology falls under strata of inventive step.

The prior art as contended by the appellant not applicable and thus injunction be sustained.

On the balance of convenience, the learned senior counsel contended that the Respondent's product came
into the market three years prior to the Appellant's product and that it had already achieved commercial
success.

Held:

The court held that if the exact technological combination as patented was used by TVS then it could have
led to infringement but there were improvements that were made and that instead of two, three valves
were used and thus this wasn't infringement, the court further held that if there is a slightest variance and
modification in the technology used and if there are different combinations used to achieve the same result
then it is not infringement.

The court relied on the case of Improver Corporation and Ors. V. Remington Consumer Products and Ors
to reach to the conclusion.

The court also widened the scope of infringement of trademark, patent and copyright. Court observed that
the matters of intellectual property rights hold important aspects and thus speedy disposal should be made.
It further gave guidelines to the lower courts that the matters relating to intellectual property shall be heard
on day to day basis and should be resolved within two to three months. Court further passed direction that
all tribunals and lower courts have ton strictly and punctually comply with this direction.

Analysis:

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The court gave the ratio decidendi that if the different combinations and process is done differently than
the patented procedure even then it is not an infringement and can be held as an inventive step. If different
combinations are used for the same result then no infringement.

The proper approach to the interpretation of patents registered under the Patents Act 1949 was explained
by Lord Diplock in Catnic Components Ltd. v. Hill & Smith Ltd. The language should be given a
purposive and not necessarily a literal construction.

If the issue was whether a feature embodied in an alleged infringement which fell outside the primary,
literal or a contextual meaning of a descriptive word or phrase in the claim (a variant) was nevertheless
within its language as properly interpreted, the court should ask itself the following three questions:

Does the variant have a material effect upon the way the invention works? If yes;, the variant is outside
the claim. If no –

Would this (i.e. that the variant had no material effect) have been obvious at the date of publication of the
patent- to a reader skilled in the art. If no, the variant is outside the claim. If yes –

Would the reader skilled in the art nevertheless have understood from the language of the claim that the
patentee intended that strict compliance with the primary meaning was an essential requirement of the
invention. If yes, the variant is outside the claim.

3.11.4 Bayer Corporation v. UOI,

Facts of the Case

Petitioner Bayer Corporation was granted a subject patent by India’s Patent Office on 3rd March 2008 for
their drug “Sorafenib Tosylate” that is sold in market under the name of Nexavar. The drug is used in the
treatment of liver and kidney cancer. The Indian drug making company Natco approached the petitioner
Bayer Corporation for grant of voluntary license to produce and sell the drug in India under its brand name
at a price of Rs. 10,000 per month as against the expensive price of Rs. 2, 80,428 per month that was
charged by petitioner. Petitioner rejected the Natco’s application for grant of voluntary license of their
drug Nexavar.

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The patented drug can be manufactured and sold by the third party if the patent holder has granted
permission for it. After the denial of voluntary license Natco lodge an application under Section 84(1) of
the Patents Act, 1970 to the Controller general of patent to get a compulsory license to manufacture and
sell the Nexavar in India. Finally, on 9th March, 2012 Controller granted a non-exclusive, non-
assignable compulsory license to Natco to manufacture and sell the patented drug at a price of Rs. 8,800
and also directed them to pay the royalty 6% of its net sales to petitioner Bayer till the time of patent.

Aggrieved by it, Bayer appealed against the order of compulsory license in 2013 in IPAB intellectual
property appellate board contending that the order passed was in contravention with the Patents Act. Board
rejected the contention of Bayer and upheld the decision of Controller general of patents. Finally, Bayer
challenged both the orders of 2012 and 2013 passed by the Controller general of patent and by the IPAB,
on the issue of granting a compulsory license to the Natco in the Bombay High court.

Issues of the case

1] Whether the Compulsory license granted by controller is in accordance with the provision of Patents
Act?

2] Did the respondent Natco make efforts to obtain voluntary license from patent holder Bayer
Corporation?

Rules applied

Provisions from the Patents Act, 1970 were applied in the case at hand. The prime provisions which were
applied while deciding this matter are as follow

1] Section 83: General Principle applicable to working of patented inventions

2] Section 84: Compulsory license

3] Section 87: Procedure for dealing with applications under sections 84 and 85

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4] Section 90(1) (iii): Terms and condition of compulsory license.

Analysis

The access versus benefit banter is an overall wonder in the pharmaceutical business and India is no
exception. As of late in any case, India’s undeniably noticeable, master get to position has grown new
teeth. In a spate of patent cases, the legal executive has clarified that open intrigue is of prime significance
and India won’t endure the misuse of its masses by tranquilize goliaths hoping to receive rewards. The
fundamental objective behind the Patent Rights is to safeguard the interest of inventor with respect to
public interest. In the case at hand the personal right was superseding in the name of Patents right as patent
holder were selling drugs at a much higher price.

The main issue in the case at hand is about the issuance of compulsory licensing. In granting the
compulsory license all the requirements under the provisions of Patent Act were fulfilled by the Controller
general of Patent for granting the compulsory license to Natco. The provisions which were analyzed by
the court is clause (a), (b) and (c) of Section 84(1)[9] of the Patents Act, 1970 for granting compulsory
license.[10]

The conditions for granting the compulsory licensing is fulfilled and the Natco’s application for
compulsory licensing mentioned the issues on which the petitioner were lacking i.e. the drug was not
satisfying the reasonable requirement of public with regard to its various factors, the drug was not working
in the territory of India here it means the drug must be manufactured to a reasonable extent in India
comprising the R&D also, on this point the court took into instance the meaning of words ‘worked in the
territory of India’, Section 83(f) of the Act states that there should not be abuse of patent by patent holder
in International trade. The case at hand was the first case which exclusively dealt with the concept of
compulsory licensing. The decision prima facie seems right but is it, really right? Yeah, to some extent it
is as it is in accordance with the Patents Act, 1970 Natco get the compulsory license for the drug from
Indian Patent Office but the Barley approached two forums as they were aggrieved by order of controller.
Both the forum ruled in the favor of Natco and also from the facts it is evident as the patent holder were
abusing his patent rights by charging too much for medicine but they also contended about R&D cost what

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about that, this might be a lacunae in judgment but it does not provide a strong contention to claim that
judgment is not right.

The decision in the case at hand will pave a long way to ensure that the safeguard of public interest is
drowned by reason of self-benefit, personal interest of the patent holder in certain circumstances. Each
coin has two sides, in the present case also when we get to see the international framework about IPR, the
Articles from TRIPS agreement were not completely taken into consideration and they were superseded
by the legal framework of country and court interpreted the Articles of TRIPS in literal sense and not in
purposive one, but here also court took a note on Article 31of TRIPS. The decision by court is a win for
Natco and a slight disadvantageous to Barley Corporation.

3.11.5 Dimminaco AG v. Controller of Patents

The case of Diamond v. Chakrabarty in 1980s, opened gates for the patentability of microorganisms,
wherein the claim of a Micro-biologist Dr. Ananda Chakrabarty, for the grant of patent for a live human
made & genetically engineered bacterium, capable of breaking the components of crude oil was accepted
by the US Supreme Court. In this case, the controller of patents of the United States denied the claim for
patenting the bacterium per se, stating that, microorganism are product of nature and hence are non-
patentable according to the US patents regime, which was reversed by the United States Court of Customs
and Patent Appeals. Dejected by the decision of the US court of Customs and Patents Appeal, Sidney A.
Diamond, the commissioner of Patents and trademarks appealed to the US Supreme court which again
went in favor of Chakrabarty by establishing that a human made, genetically engineered bacteria was
capable of treating oil spills and thus was an invention accompanied by novelty, usefulness, utility, non-
obviousness and industrial applicability, which a naturally occurring microorganism was incapable of.

Before the US Supreme Court’s decision in the case of Diamond v. Chakrabarty, Patent protection was
not granted to microorganisms as product claims, but only to the process claims in which microorganisms
was used as a medium in inventions.

Article 27(3)(b) of the TRIPS 1994, further established that microorganisms and non-biological and
microbiological processes are patentable by stating that, “Members may also exclude from patentability,

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plants and animals other than micro-organisms, and essentially biological processes for the production of
plants or animals other than non-biological and microbiological processes.”

‘Microorganisms per’ se can be patented, however, it should be noted that a patent is not granted for a
discovery rather for an invention which is novel, non-obvious, useful and capable of industrial
application. Therefore, a patent can only be granted for a micro-organism, when there’s a human
intervention to create a new, non-obvious and useful microorganism by way of genetic
modification/engineering, cell fusion, gene therapy or other micro-biological or non-biological
techniques.

Further, since the disclosure of details in written description w.r.t., inventions involving micro-organisms
is not possible, the Budapest Treaty provides for a mechanism to deposit microorganism with any
“international Depository Authority” for the purpose of patent procedure of national patent office of all
the contracting states.

The Indian Scenario:

The Indian Patents Act, 1970 added microorganisms under the purview of patentability through the Patents
(Amendment) Act, 2002, in compliance with the TRIPS.

According to Section 3(j) of the Patents Act, 1970, a plant, animal, seeds and biological processes, apart
from microorganisms are not patentable. Therefore, section 3(j) of the Indian patents act, allows
patentability of microorganisms.

The landmark judgment of the Calcutta High court in the case of Dimminaco A.G. v. Controller of Patents
& Designs on 15th January, 2001, prior to the 2002 amendment in the patents act, 1970 established a
benchmark in the field of micro-biological research. In this case, an appeal was filed against the Assistant
Controller of Patents & Designs, wherein, the process for preparation of infectious Bursitis Vaccine was
refused on the grounds that the process of preparation of vaccine that contained a living virus cannot be
considered manufacture and that a vaccine comprising of a living virus cannot be considered a substance
or inanimate object. The court in this case reversed the decision of the Assistant controller and held that,
the process of preparing a vendible commodity containing a living substance is not excluded from the
purview of the word, ‘manufacture’ and that the controller erred in denying patent protection to the vaccine
just because it contained a live virus. Furthermore, the end product was novel, capable of industrial

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application and was useful for protecting poultry against contagious Bursitis infection, thus making the
process an invention. The court further allowed the appeal and directed the petitioner’s patent application
to be reconsidered within two months of the publication/delivery of the judgment.

In the recent Supreme Court’s judgment in the case of, Monsanto Technology Pvt. Ltd. v. Nuziveedu
Seeds, The plaintiff claimed that their patent in the man-made, chemical product called NAS (Nucleotide
Acid Sequence) containing the gene Bacillus thuringiensis (Bt gene), capable of killing bollworms when
inserted in cotton, was not an infringement under section 3(j) of the patents act, 1970, as held by the
Division bench of the Delhi High Court. Nuziveedu’s claim was that, NAS was merely a chemical
composition in-capable of reproduction and not a man-made inventive microorganism, capable of
industrial application. The Supreme Court in this case set aside the order of the division bench and restored
the order of the single bench and reverted back the matter back to the single bench of the Delhi High Court
to be decided on the basis of expert advice and evidence, who had held that, the claims on NAS was rightly
entertained by the Indian Patent office and that the parties shall remain bound to their sub-lease agreement.

Thus, the current scenario in India w.r.t. patents in microorganisms is still at an infancy stage and needs
progression.

Conclusion:

The micro-organisms with human interventions, accompanied by novelty, utility and industrial
applicability are patentable. The technological advancements in the field of micro-biology, genetics, etc.,
have complicated the issues relating to patents in microorganisms. Therefore, scientific aspects and legal
drafting of the invention should be done with due precaution and consideration. Further even though, the
issues involved in the Monsanto’s case was highly technical, The Supreme Court missed its opportunity
in deciding upon the facts in issue.

3.12 PROSPECTS FOR PATENT AGENT

A person who is qualified to prosecute patents (i.e. drafting and filing a patent application) is known as a
patent agent. Given the fact the drafting a patent requires specific technical as well as legal knowledge,
only a person qualified in both domains will be able to fulfill the obligations of patent prosecution. In

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India, a patent can be prosecuted through a registered Indian patent agent. Section 126 of the Indian
Patents Act, 1970 envisages the qualifications for becoming a patent agent.

The qualifying exam stated in point (d) is the Patent Agent Exam that is conducted every year by the
Controller General of Patents. Passing this exam is a must in order to qualify as a registered Indian patent
agent.

They have the right to practice before the Controller and conduct transactions are required in proceedings
before the Controller. Patent agent is the attester, signatory to all the communications between the person
and the Controller.

Patent Agents are Indian citizens above the age of 21 years who have qualified the concerned examination
and duly registered with the Controller, having a science or engineering educational qualification and
professional experience/practice not less than 10 years as a patent examiner.

From the preceding listed qualifications, two things are absolutely clear:

1. In order to become a patent agent, a degree in law is not required. A degree in science, engineering
or technology is a must.
2. An individual with a degree in law does not automatically qualify as a patent agent unless he meets
the above requirements.

3.12.1 Who can attempt the Patent Agent Examination?

The statutory requirements for becoming a patent agent are:

a. Be a citizen of India;
b. Have completed the age of 21 years;
c. Have obtained a degree in science, engineering or technology from any University established
under law for the time being in force in the territory of India.
d. Have passed the qualifying exam prescribed for the purpose.

3.12.2 How to Prepare for Patent Agent Examination?

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This exam is important for those who wish to practice patent as a profession

It is also important for inventors/researchers to learn more about Indian Patenting System and taking up
an examination is one of the best means to learn this subject.

Thus one must do good preparation for this exam. One can prepare well in 3-4 months’ time provided
there is a consistency maintained.

Each day at least 2 hours should be given while during weekends one should ideally give 5-6 hours of
study time.

It is rather very beneficial to study in a group because the group discussions really help. Try not to prepare
a solo; otherwise, it may get boring.

Further, for the beginners, it is useful to first go through sample answers to previous year questions
because more than 50% of confidence is built reading and understanding those as it will cover most of the
important provisions of the Patents Act, 1970.

It is beneficial to buy some book that is available in the market on Patent Agent Examination, especially
the one that offers a detailed analysis of various sections of the Patents Act.

One should note that it is not important at all to memorize the bare Act provisions. What is more important
to have a clear understanding of what it means.

While preparing for the exam, main some crisp notes that one should revise close to the exam date, like a
week before.

3.12.3 Additional topics required to know for patent agent examination –

There is no syllabus prescribed by the government in the notifications Rule 110 of Section 126 the Patent
Act 1970 which govern the Patent Agent Examination part says: 110. Particulars of the qualifying
examination for patent agents. –

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(1) The qualifying examination referred to in clause (c) (ii) of sub-section (1) of section 126 shall consist
of a written test and a viva voce examination.

(2) The qualifying examination shall consist of the following papers and marks, namely: Paper T Patents
Act and Rules 100 Paper II – Drafting and interpretation of patent Specifications and other documents
100, Viva voce 100.

(3) The qualifying marks for each written paper and for the viva voce examination shall be fifty per cent
each, and a candidate shall be declared to have passed the Indian Institute of Patent and Trademark 10
examination only if he obtains an aggregate of sixty per cent of the qualifying marks.

3.12.4 Role of Patent Agent:

As stated above a patent agent is qualified for patent prosecution. The role of a patent agent is described
in section 127 of the Indian Patents Act, 1970. According to Section 127, a patent agent is entitled to:

Practice before the Controller; and

Prepare all documents, transact all business and discharge such other functions as may be prescribed in
connection with any proceeding before the Controller under this Act

3.12.5 Secrecy Provisions and Powers of the Controller:

Secrecy provisions apply to any of the inventions which the authorities feel important for the defence. The
duration when the secrecy directions are applicable, the patent may not be granted and the details of the
invention are also not disclosed to the public.

Section 35 of the Patents Act, 1970: This section of the Act deals with the secrecy provisions or directions
relating to the inventions which are relevant for the defence purposes.

The Act states that any resident of India is not allowed to apply for granting of a patent for any invention
for which he/she has not got the written permission of the controller of patents. The controller of patents
needs to obtain consent from the central government before granting such permission for an invention
related to defence purpose or atomic energy. If the permission is not received from the Central

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Government, the controller of grants if he feels that the information is so relevant to them (related to
defence) than he can give directions for prohibiting or restricting the publication of information with the
respect to the invention or communication of such defence information.

3.12.6 Working of Patent:

During negotiations of the Paris convention, in Rome meeting in 1896, since all countries maintained
different meaning for the term work, the meeting finally adopted the compromise opinion that the word
work has different meanings and every member country has the right to interpret the term work
themselves.

The Indian Patents act, 1970, does not define the term work/working. In the Bayer compulsory license
case, while the controller concluded that worked in the territory of India means manufactured to a
reasonable extent in India, IPAB avoided giving definition of work. Further, the board concluded that
working could mean local manufacturing entirely, and working in some cases could mean only
importation. It would depend on the facts and evidence of each case. Though the Board did not define
the meaning of working in the Bayer case, it can be reasonably inferred based on the approach taken by it
that the term embraces all patent rights.

3.12.7 Parallel Importation:

The cross-border sale of products that are protected by IP rights is known as parallel importing. The option
to parallel import protected products is determined by the system of international exhaustion governing
the associated IP rights. The products are acquired abroad by the importer and then resold domestically
outside the normal manufacturer distribution channels. The advantage of such activity is the exploitation
of the price gap between the manufacturer’s product and the parallel imported product. In this way the
importer competes directly with the manufacturer of the product.

The Agreement on Trade-Related Aspects of Intellectual Property Rights allows for parallel imports,
although the specific circumstances under which such imports can take place have not been defined. The
Patents Act 1970 includes a provision on parallel imports and Section 107A (b) reads as follows:

“Section 107A: Certain acts not to be considered as infringement for the purposes of this act:

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(b) Importation of patented products by any person from a person who is duly authorized under the law to
produce and sell or distribute the product shall not be considered as an infringement of patent rights.”

Section 107A(b) of the Patent Act, as amended by the Patent (Amendment) Act 2005, appears to allow
local companies to import generic drugs manufactured in least-developed countries (e.g., Bangladesh),
where pharmaceutical patents are not in effect, if the local law in that country authorizes the manufacture
of those medicines.

Previously, Section 107A (b) insisted that a company could import such drugs only if it purchased them
from a person “who was duly authorized by the patentee” to sell those drugs in least-developed countries.
The provision was amended in 2005 to state that it is not necessary for the exporter in a least-developed
country to be authorized by the patentee; however, it must be duly authorized under the law to produce
and sell or distribute the product. As a result, if the exporter is authorized by the law in a least-developed
country (e.g. Bangladesh) to produce and sell the product, a drug maker can import that product legally
under Section 107A (b). As the government has explained, this provision for the parallel import of patented
products was introduced to ensure the availability of patented products at cheaper prices for consumers.

The issue of drugs and patents has been under recent discussion in the courts: a pro-public health policy
interim decision was granted in the Roche-Cipla patent dispute over Roche’s patented drug Tarceva (for
further details please see "Patent Dispute Between Roche and Cipla Continues"), while Natco Pharma has
applied for a compulsory licence to export the patented drugs of Pfizer and Roche to Nepal under Section
92A of the Patents Act.

Parallel imports from least-developed countries that do not favor pharmaceutical patent protection can
also be an important tool for ensuring adequate access to medicines. Recent reports have suggested that
Bangladesh is amending its patent regime to remove pharmaceutical patents and as a consequence, all
patent applications for medicines and chemicals will be suspended until January 1, 2016.

Some experts believe that Section 107A (b) is at the core of the patentee rights provided under Section 48
of the Patents Act. The statute gives the patentee exclusive rights to prevent third parties from importing
its product where such product is the subject matter of the patent. Such prevention remains to be seen by
the Indian courts, but it cannot be denied that parallel imports are a crucial component of public health
policies. The patent law situation in Bangladesh may trigger a debate on India’s parallel imports regime

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and a possible attempt to harmonize the financial interests of IP owners with the increasingly easy
availability of key products.

3.12.8 Various Forms and Fees under the Patent Rules:

Fees:

(1)The fees payable under section 142 in respect of the grant of patents and applications therefor, and in
respect of other matters for which fees are required to be payable under the Act shall be as specified in the
First Schedule. Provided that ten per cent additional fee shall be payable when the applications for patent
and other documents are filed through physical mode, namely, in hard copy format: Provided further that
in the case of a small entity, every document, for which a fee has been specified, shall be accompanied by
Form-28.

(2) (a) The fees payable under the Act or these rules may be paid at the appropriate office either in cash
or through electronic means or may be sent by bank draft or banker‘s cheque payable to the Controller of
Patents and drawn on a scheduled bank at the place where the appropriate office is situated and if the draft
or banker‘s cheque is sent by post, the fees shall be deemed to have been paid on the date on which the
draft or banker‘s cheque has actually reached the Controller.

(b) Omitted

(c) Where a fee is payable in respect of a document, the entire fee shall accompany the document.

(3) In case an application processed by a natural person is fully or partly transferred to a person other than
a natural person, the difference, if any, in the scale of fee(s) between the fee(s) charged from a natural
person and the fee(s) chargeable from the person other than the natural person in the same matter shall be
paid by the new applicant with the request for transfer. (3A) In case an application processed by a small
entity is fully or partly transferred to a person other than a natural person (except a small entity), the
difference, if any, in the scale of fee(s) between the fee(s) charged from a small entity and the fee(s)
chargeable from the person other than a natural person (except a small entity) in the same matter shall be
paid by the new applicant with the request for transfer.; (3B) In case an application processed by a startup
is fully or partly transferred to any person other than a natural person or a startup, the difference, if any,
in the scale of fees between the fees charged from a startup and such person to whom the application is

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transferred, shall be paid by the new applicant along with the request for transfer: Explanation.— Where
the startup ceases to be a startup after having filed an application for patent due to lapse of more than five
years from the date of its incorporation or registration or the turnover subsequently crosses the financial
threshold limit as defined, no such difference in the scale of fees shall be payable.

(4) Fees once paid in respect of any proceeding shall not ordinarily be refunded irrespective of whether
the proceeding has taken place or not: Provided that, if the Controller is satisfied that during the online
filing process, the fee was paid more than once for the same proceeding, the excess fee shall be refunded.
(4A) notwithstanding anything contained in sub-rule (4), upon the withdrawal of an application in respect
of which a request for examination has been filed, but before issuance of first statement of objection, the
fee may be refunded to the extent prescribed in the First Schedule on a request made by the applicant in
Form 29.

(5) (i) Subject to the approval of the Controller, any person may deposit money in advance and request
the Controller to realize any fee payable by him from the said deposit and in such case the date of the
receipt of the request to realize the fee or the date on which the request to realize the fee is deemed to have
been received, whichever is earlier, shall be taken as the date of payment of the fee: Provided that the
requisite amount of money is available at the credit of the person making such request. (ii) Subject to the
approval of the Controller, any person may discontinue the deposit of money in advance and in such case
the balance, if any, shall be refunded.

3.12.9 Forms

(1) The Forms set forth in the Second Schedule with such variations as the circumstances of each case
may require shall be used for the purposes mentioned therein.

(2) Where no Form is so specified for any purpose, the applicant may use Form 30 specified in the Second
Schedule.

 Check your progress:

State whether true or false.

1. The relief’s for infringement of patents only includes damages.

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2. A patent agent should have a law background as an essential qualification.

3. An application for a compulsory license shall be filled after the expiry of one year from non-working
of the patent.

4. Anton Piller Injunction accords an opportunity to enter the premises of the infringer and seize evidence.

 Summary:

A patent is granted and recognized to an individual under the contract between the Inventor and the
State. Paris Convention, Patent Cooperation Treaty and TRIPS provide for a harmonized system for
patent protection having international and national implications.

 Keywords:

- Novelty: new, exciting, unusual or unique.

- Utility: useful, profitable, or beneficial,
- Appellate Board: Board established to hear and review appeals from legal cases that have already
been heard in a trial-level or other lower authorities.

 Self-Assessment Questions

1. “Patent rights are limited and territorial in nature” Discuss briefly.

2. Sylvia Benjamin wants to file a patent in India for discovering the nuclear energy reaction. Whether the
same is patentable discuss the criteria for grant of patent or refusal thereof.

3. Prof. ABC appropriated the patented work of her research Scholar to manufacture and sell clothes made
from jute. Discuss the possible options for the research scholar among other grounds for
infringement (if applicable).

4. What is meant by surrender and revocation of patent?

 Answers to Check your Progress

State True or False.

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1. False

2. False

3. False

4. True

 Suggested Reading

1. Indian Patent Law and Practice by Kalyan C. Kankanala, Arun K. Narasani, and Vinita Radhakrishana,
Oxford India Paperbacks, India, 2012

2. Intellectual Property and Business: The Power of Intangible Assets by Rodney Ryder and Ashwin
Madhavan, Sage Publications, India 2014

3. Demystifying Intellectual Property Rights by N.R. Subbaram, LexisNexis Butterworths Wadhwa,

Nagpur, 2009

4. [Link]

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Trademarks

MODULE

Structure:
4
4.1 Reasons for seeking trademark, its importance, Mandatory information and documents needed
4.2 Types of trademark its classes, Nice Classification and Vienna Classification
4.3 New Forms and guidelines for trademark as per Trademark Act 1999 and Trademark Rules,2017
4.4 Filing and Processing of Trademarks & search, publication or advertisement and examination,
Precautions to be observed
4.5 Concept of Deceptive similarity
4.6 Trademark prosecution and opposition
4.7 Registration and validity of trademark
4.8 Amendments after registration of trademark
4.9 International Trademarks Filing / Filing of trademarks under Madrid Protocol
4.10 Trademark and Brand Strategy

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4.11 Assignment and licensing of trademark
4.12 Passing off action and infringement of trademarks
4.13 Remedies under the Trademark Act, 1999 – Civil, Criminal and Administrative
4.14 Landmark Cases –
Yahoo Inc v. Akash Arora&Anr, Clinique Laboratories LLC and Another v. Gufic Limited &Anr,
Coca-Cola Company v. Bisleri International Pvt. Ltd., Kaviraj Pandit Durga Dutt Sharma v.
Navaratna Pharmaceutical Laboratories, Cabila Health care Ltd. v. Cadila Pharmaceuticals, Parle
Products Pvt. Ltd. v JP & Co.
4.15 Prospects for Trademark Agent - Who can attempt the Trademark Agent Examination? How to
prepare for Trademark Agent Examination? Additional topics required to know for trademark
agent examination – Role of Trademark Agent, Various Forms and Fees under the Trademark
Rules, Renewal fees, Restoration of lapsed trademark

Check your progress

Summary
Keywords
Self-Assessment Questions
Answers to Check your Progress
Suggested Readings

4.1 REASONS FOR SEEKING TRADEMARK, ITS IMPORTANCE, MANDATORY

INFORMATION AND DOCUMENTS NEEDED

Trademarks make it easy for consumers to find you. Trademarks help you distinguish your products and
services from those of competitors and help identify you as the source. Trademarks indicate a consistent
level of quality of your products and services. Awareness of your brand and the goodwill embodied in
your trademark can often take decades to establish. Aggregate cost of advertising, promotion, marketing,
and sales efforts can easily reach into tens of millions or even billions of dollars, depending on the
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product/service. Differentiating your product/service from competitors is increasingly difficult to achieve,
especially over a protracted period. Trademarks are the most efficient commercial communication tool
ever devised to: “cut through the clutter”; capture the consumer's attention; and make your
products/services stand out.

Trademarks help prevent marketplace confusion. Trademarks protect the consuming public by preventing
confusion as to the source of goods or services. If the product made under a brand turns out to be defective,
consumers have accurate information about the source of a product and can return it to the manufacturer
or supplier for a refund. Trademarks give consumers the ability to protect themselves by relying upon
known brands of products or services. Trademarks provide consumer convenience by allowing consumers
to identify (by word, logo, slogan, package design, or other indicators of origin) which product or service
they would like to purchase or to avoid purchasing. Trademarks provide consumer convenience by
allowing consumers to base their purchasing decisions on what they have heard, read, or experienced
themselves. Trademarks motivate companies to provide a consistent level of quality, helping the
consumer to decide whether to purchase a desirable product or service again or to avoid an undesirable
one.

Trademarks are a very economically efficient communication tool. Trademarks dramatically reduce the
costs of decision-making by allowing consumers to rapidly select the desired product or service from
among competitive offerings. Trademarks can wrap up in a single brand or logo intellectual and emotional
attributes and messages about your: • Company; • Reputation; • Products and services; and • Consumers'
lifestyles, aspirations, and desires. Trademarks can work effectively across borders, cultures, and
languages. Famous marks can be recognized as brands even when the native population speaks a different
language and reads a different alphabet (i.e., the McDonalds "arches" logo, the NIKE "swoosh" logo).

Trademarks are your most enduring assets. Trademarks are one of the few assets that can provide you
with a long-term competitive advantage. Trademarks are usually the only business asset you have that can
appreciate over time. Trademarks are leverageable - they provide value beyond your core business, and
can pave the way for expansion (or acquisition, if desired) of your business. • Brand Expansions: •
KELLOGG'S - from "ready-to-eat cereals" to "snack bars and breakfast bars" • ARMANI - from "runway
apparel" to "perfumes and eyewear" • VIRGIN - from airline services to entertainment media and
carbonated drinks.

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Trademarks support stronger sales volume, stronger margins, and can provide price maintenance legally.

 Mandatory information and documents needed:

Trademark registration is an essential mechanism through which a brand can be protected from unwanted
use and infringement. The Indian Government has simplified the trademark registration process. The
Entrepreneurs can now easily obtain trademark registration for their brands within a few months. In this
article, we look at the documents required for obtaining trademark registration in India.

Note: During the trademark application process, there is no requirement for submitting original
documents. Scan copy of the original document would suffice the requirement.

 Individuals & Sole Proprietorship:

Any individual – Indian National or Foreign National can easily register a trademark in India. There is no
requirement for forming a legal entity or business entity to register a trademark. Further, the documents
required to register a trademark in the name of a proprietorship are the same as that of an individual as
under:

 Copy of the logo, preferably in black & white (Optional). In case the logo is not provided, the
trademark application can be filed for the word.
 Signed Form-48. Form-48 is an authorization from the applicant to a Trademark Attorney for filing
the trademark application on his/her behalf.
 Identity Proof of the individual or Proprietor.
 Address Proof of the individual or Proprietor.

 Partnership / LLP / Company – Small Enterprise or Startup:

The trademark registration fee varies from Rs.4500 to Rs.9500. For small enterprises, startups,
proprietorships and individuals, the lower trademark fee of Rs.4500 is applicable. For all other entities,
the trademark government fee applicable is Rs.9500. To be classified as a small enterprise, the applicant
would have to provide Udyog Aadhar registration certificate. Further, in addition to the Udyog Aadhar
registration, the following details would be required.

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  Partnership / LLP / Company:

In the case of a partnership firm or LLP, the entrepreneur would have to submit the following:

 Copy of Logo (Optional)

 Signed Form-48.
 Udyog Aadhar Registration Certificate.
 Incorporation Certificate or Partnership Deed.
 Identity Proof of Signatory.
 Address Proof of Signatory.

 Other Applicants:

All other applicants, including companies that do not have Udyog Aadhar registration, will have to submit
the following documents to obtain trademark registration in India.

 Copy of Logo (Optional)

 Signed Form-48.
 Incorporation Certificate or Partnership Deed.
 Identity Proof of Signatory.
 Address Proof of Signatory.

4.2 TYPES OF TRADEMARK AND ITS CLASSES:

a. Service Mark: Is the same as a trademark except that it identifies the source of the service rather than
a product. Service mark appears in the advertising on the services

Illustration: Airtel, LIC

b. Associated Trademarks: If a proprietor seeks registration of a new mark in respect of same goods or
services or the mark resembles/ likely to cause confusion/ deceive if used by a person other than the
proprietor then the registrar can register the same as an associated trademark. An associated trademark
can be assigned or transmitted as a whole only with the permission of the registrar.

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Illustration:

c. Certification Marks: The mark certified by the proprietor depicting origin, material, mode of
manufacturing of goods or quality of services, quality of accuracy, or other attributes that are not
sanctioned for registration under the law. However, the mark is used by non-owner to certify that standards
as conforming to the certified mark. The registration of Certification Marks is subject to furnishing details
to Registrar namely, details of applicants, nature of the business, infrastructural facilities, competence to
administer certification and monitoring thereof, financial arrangements, limitations on use, undertaking
for the observance of non-discrimination principle. Illustrations: Hall mark and BIS marked gold and
Jewellery.

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d. Collective Mark: An association of persons not being a partnership but using a mark to differentiate
their goods or services from the other. The registration of Collective Mark is subject to furnishing details
to registrar namely, names of associations of persons, the object of the association, details of members,
conditions of membership, conditions of authorization of use of the mark, conditions of penalty for non-
compliance and the procedure for appeals against the use of the mark.

Illustration:

e. Well Known Trademark: the use of such mark which has been imprinted in public minds that the use
with any other goods or services would indicate origin or connection between the two trade owners or
services or goods. A well-known mark may be identified by the promotion through celebrity endorsers in
addition to the pre-requisites of the duration of usage, consumer base, and trades. The mark may be well
known in any area even certain section geographically to be qualified for well known.

Illustration: 7’o clock (shaving razors) is a trademark owned by Gillette a UK based company.

4.2.1 Nice Classification :

The Nice Classification (NCL), established by the Nice Agreement (1957), is an international
classification of goods and services applied for the registration of marks. A new edition is published every
five years and, since 2013, a new version of each edition is published annually

4.2.2 Vienna Classification

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The Classification constitutes a hierarchical system that proceeds from the general to the particular,
dividing all figurative elements into categories, divisions and sections. Where appropriate, explanatory
notes have been introduced. They concern either a category as a whole or any given division or section.

There are two kinds of sections: main and auxiliary sections. The latter are intended for figurative elements
that are already covered by the main sections, but which it is considered useful to group according to a
particular criterion for ease of anticipation searching.
The countries party to the Vienna Agreement may apply the Classification either as a principal or as a
subsidiary system. Thus, they have the possibility of continuing to use their national classification at the
same time as the Vienna Classification, either as a transitional or as a permanent measure.

The competent offices of countries party to the Vienna Agreement are obliged to include in the official
documents and publications relating to registrations and renewals of marks the numbers of the categories,
divisions and sections in which the figurative elements of those marks have been placed. “Documents and
publications” mean, in particular, entries in the trademark register, registration and renewal certificates
and publications of registrations and renewals in office journals, gazettes or web sites.

4.3 New Forms and guidelines for trademark as per Trademark Act 1999 and Trademark
Rules,2017

Form Section and Rules of the Act & Entry number of

No. Rules Title for which form may be used first Schedule

1 2 3 4

Application for registration of a

trademark for specification of goods or
Sections 15, 15(3), 18(1), 18(2), services included in one or more than one
TM-A 63(1), 71, 71(1), 154(2). classes under section 18 (1) or 18 (2), or 1

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 Application for registration of collective
Marks for specification of goods or
services included in one or more than one
classes under section 63 (1), or

Application for registration of Certificate

Marks for specification of goods or
services included in one or more than one
classes under section 71 (1), or

Application for registration of trademark

as series for specification of goods or
services included in one or more than one
classes under section 15 (3).

Request for amendment in trademark

application, or

Seeking grounds of decision, or

Seeking Registrar preliminary advice, or

Application for deposition of regulation

of collective trademark, or
Sections 18(4), 22, proviso to
22, 23(2), 43, 58, 66, 74(2), Alteration of regulation of certification
127(c), 131, 133(1), 137, trademark, or
148(2),
Request for Certified copy, or
Rules: 23, 36, 36(1), 41, 56(3),
TM-M 108, 109, 122, 124,127. Duplicate Registration Certificate, or 13,14,15,16, 17, 18

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 Extension of time,

Request to review of decision to registrar,

or

Inspection of document, or

Request to registrar for particulars of

advertisement, or

Review of Registrar’s decision, or

Petition (not otherwise charged) for

obtaining Registrar’s order for any
interlocutory matter in a contesting
proceeding, or

Request to inclusion of a mark in list of

well-known trademarks, or

Any other matters not covered in other

TM forms.

Application of Renewal of a Trademarks,

or

Request for Renewal with surcharge, or

Section: 25, Proviso to
TM-R Section 25(3), 25(4). Request for restoration of a trademark. 3,4,5

TM-C rule 22(1), rule 22(3) Application for Search certificate request 11, 12

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 On a notice of opposition under section
21(1), 64, 66 or 73,

Application for rectification of register

under section 47 to 57, 68, 77,

Sections 21, 21(1), 47-57, 59, Application under rule 99, 135, 140, or
64, 66, 68, 73, 77 and 25 of
Geographical Indication of Application under section 25 of

Goods (Regulation and Geographical Indication of Goods

Protection) Act, 1999 (Regulations and Protection) Act, 1999 to

invalidate a trademark or counter
TM-O Rules: 99, 105, 130, 136. statement related thereto. 2

Request to replace subsequent proprietor

as registered proprietor on register, or

Request to amend the details of registered

proprietors or registered users, or

Request to amendment of registered

trademarks, or

Request for amendment in specification

of goods or services, or

Sec. 16 (5), 40(2), 41, 42, 43, 45, Request for conversion of goods, or
58, 59, 60
Request for dissolution of association
TM-P Rules 75, 80, 83, 85, between trademarks. 6, 7, 8, 9

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 Application for recordal of registered
users, or

Request for amendment in details of

registered user, or

Application for cancellation or variation

Sections 49, 50, 50(1) (a), of registered user, or
50(1)(b), 50(1)(c) or (d).
Application to intervene in the
TM-U Rule: 95. proceedings by third party. 10

Application of registration of a
Trademark Agent, or

Request for continuation as a Trademark

agent, or

Restoration of the Trademark agent name

in register, or

Alteration related to details of

TM-G Rules 147, 153, 154. Trademarks Agents in the register. 19,20,21,22

4.4 FILING AND PROCESSING OF TRADEMARKS:

Filing a trademark application in India is a simple process. While making a trademark filing, various
documents like Form 48, TM-1 and trademark class have to be mentioned without any mistake. Hence,
it’s best to take help from a trademark Expert while making a trademark application.

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  Search:

Before filing a trademark application, it’s recommended that a trademark search be conducted to know all
similar or identical trademark applications filed along with its status. A trademark search can help reduce
chances of the application being objected or opposed or refused.

 Publication

If the trademark application is acceptable to the Government, it would be published in the Trademark
Journal for a period of 90 days. During this time, any person can raise an opposition for registration of the
mark. In case of opposition, the Trademark Registrar would provide an opportunity for the applicant and
the counter-party to present their concerns.

 Advertisement

4.4.1 Advertisement of Trademark Application:

Advertisement of a trademark application before or after its acceptance by the Trademark Officer is an
opportunity given to the public to oppose the registration of the trademark – which is a necessary rule
under the Trademark Act. When an application of a trademark has been accepted by the Registrar, the
Registrar is required to advertise the approved application in the Trademark Journal. This article discusses
the advertisement of the trademark application on the trademark journal in detail.

4.4.2 Examination:

Once the application is filed and where all formalities are in order, the application will be examined. Once
examined, the TMO will either issue an examination report citing.
1. Procedural objection – where there are errors like not filing a POA, goods/service not falling under the
applied class etc.
2. Substantive objections – objection put forth in the light of Absolute (Section 9) and Relative grounds
(Section 11) of refusal. These have been elaborately dealt with, under marks not registrable.

Where there are objections, an appropriate response has to be submitted within one month of receipt of
the examination report.

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If there are no objections, then the mark shall be ordered to be advertised before acceptance (ABA) or
accepted and advertised (AAA).

4.4.3 Precautions to be observed:

1. Perform a Google Search Check:

Before filing a Trademark application, especially for a new business, it is best for the applicant to check
the existing competitors in the market. This is to make sure, that no other business, older than your
business idea, exists in the market. Alike business names might later give a problem to the applicant, as
chances are you may get that name, but the other business might also get the same name, showing the
older evidences. So it is better initially to choose a unique name.

2. Choose your Goods or Services class from Trademarks Classification List:

After you are done with Google search, now is the time to choose a class for your trade description, from
TM classification list. TM classification list is divided into 2 parts. Class 1 To 34 is for Manufacturing of
Goods and Class 35 to 45 is for Dealing in Services. You need to make sure in which class or classes your
Trade Description falls. It can also fall in more than one class. You will find the classification list in the
download section of this link Trademark Classification List

For Example, Mr. A has a business of poultry under the Brand Name of “ABC Fresh Farms” and where
he procures eggs and raw meat. From which he sells some of part to wholesalers and sends rest of the
produce to a restaurant he owns, under the same brand name of “ABC Fresh Farms”. Under such
Circumstances Mr. A has to apply Trademark for his brand name under class 29 “Meats & Processed
Foods” and Class 43 “Restaurants & Hotel”.

3. Perform a Public Search of Trademarks Check:

After you are done with your Google search and selecting Trademark Class, now is the time to perform a
public search of Trademarks. Public search of Trademarks will make sure that if any other applicant has

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already filed an application for a similar or alike name as you do, dealing in similar nature of Goods or
Services.

4.5 CONCEPT OF DECEPTIVE SIMILARITY:

"Deceptively similar" trademarks can be understood as a trademark created, almost similar or a look-alike
of an already existing trademark in order to deceive and confuse the consumers. This concept of deceptive
similarity has been discussed in The Trade Marks Act, 1999 under Section 2(h) as:

"A mark shall be deemed to be deceptively similar to another mark if it so nearly resembles that other
mark as to be likely to deceive or cause confusion." The concept of deceptive similarity has been widely
recognized as a ground for trademark infringement under various trademark regimes. Under the Indian
legal system as well, deceptive similarity is consider as a ground for not granting the registration of the
trademark to an applicant by the Registrar of Trademarks.

4.6 TRADEMARK PROSECUTION AND OPPOSITION:

After an application is filed the same is then examined by the Registrar in accordance to the provisions of
Trade Marks Act. If an objection to registration of the mark is raised, an official examination report will
be issued by the Registrar within 3 months of filing depending on the backlog of Registry.

The Registrar may accept or refuse the application subject to the provisions of the Act. An application can
be refused / objected by the Registrar on relative or absolute grounds:

Absolute Grounds
Section 9 of the Trade mark Act, 1999 provides for the absolute grounds for refusal of a Trade mark. The
absolute grounds of refusal are:

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(i) If the Trade mark is devoid of any distinctive character, that is to say, not capable of distinguishing the
goods or services of one person from those of others;

(ii) If the Trade mark consists exclusively of the marks or indications which may serve in trade to designate
the kind, quality, quantity, intended purpose, values, geographical origins or the time of productions of
the goods or rendering of the service or other characteristics of the goods or services;

(iii) If the Trademark consist exclusively of marks or indications which have become customary in current
language or in the bona fide and established practices of the trade.

(iv)The Trade mark is of such nature so as to deceive the public or cause confusion;

(v) The mark comprises of any matter likely to hurt the religious susceptibilities of any class or section of
the citizens of India;

(vi)The mark comprises or contains scandalous or obscene matter;

(vii) Use of the mark is prohibited under the Emblems and Names (Prevention of Improper Use) Act,
1950;

(viii) If the mark consists exclusively of:

1. The shape of goods which results from the nature of the goods themselves; or
2. The shape of goods which is necessary to obtain a technical result; or
3. The shape which gives substantial value to the goods.

 Exception to Section 9:

However, a Trade mark which may be initially refused on absolute grounds can be registered if it acquires
a distinctive character/ secondary significance as a result of extensive and continuous use

Relative Grounds
The relative grounds for refusal of a Trade mark are provided under Section 11 of the Trade mark Act,
1999 provides that:

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• That a Trade mark cannot be registered if because of:

(i) Its identity with an earlier Trade mark and similarity of goods or services;

(ii) Its similarity to an earlier Trade mark and the identity or similarity of the goods and services, there is
likelihood of confusion.

• That a Trade mark cannot be registered which is identical with or similar to an earlier Trade mark and
which is to be registered for goods and services which are not similar to those for which earlier Trade
mark is registered in the name of a different proprietor if, or to the extent, the earlier Trade mark is a well-
known Trade mark in India.

• That a Trade mark cannot be registered if or to the extent that, its use in India is liable to be prevented
by virtue of any law.

Reply to office Action

Pursuant to the issuance of Examination Report/ office action, the applicant has to file an appropriate reply
along with the required documents (if any) for overcoming the objections raised by the Registry against
the Trade mark.

The Trade Marks Rules, 2002 provide for a period of 30 days from the date of receipt of the examination
report for filing reply to the office action, or to request a hearing. In the absence of such response, the
application shall be deemed to have been abandoned on the grounds of non-prosecution.

After the examiner reviews your trademark and finds that it qualifies for registration, your trademark will
be published in the Trademarks Journal. The purpose behind publishing a Trademark in the Journal is to
enable any third party to view the trademark and file a trademark opposition against it. Simply put, a
trademark opposition is filed by a third-party against the registration of your Trademark. When an
opponent files an opposition, your trademark status will reflect as 'Opposed'.

 What is the time limit for filing an Opposition?

The third party has to file the trademark opposition within 3 months (extendable by 1 month) from the
date of publication of the trademark.

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  Who can file a Trademark Opposition?
Statutorily, Section 21 of the Trademarks Act, 1999 states that 'any person' can file the notice of
opposition. This includes individuals, companies, partnership firms and trusts. In fact, if two or more
persons have the same issues against a trademark, they can be joined together as opponents.

4.7 REGISTRATION AND VALIDITY OF TRADEMARK:

Step 1: Searching of identical or similar Trademark in the registry and filing the requite application forms.

Step 2: Preliminary Examination of application-comparison with the existing trademarks- advertisement

of the trademark in the official journal within six months of acceptance stipulating the number of
application-class- address of service/principal place of business-journal number-correction made.

Step 3: Any third party-communicate objections (if any) in a notice to the Registrar within 90 + 30 days
(on request extended) days to oppose - notice shall signed, verified and clearly mention the grounds
of opposition-publication of notice within 3 months of receipt-Counter statement/ written
submission of reply to opposition to be filed within 2 months (in triplicate) - further the written
submission sent within 2 months to opponent-Evidence in support of opposition is a must within 01
months + 01 months (on request extended)-the show cause hearing-reasoned reply requiring proof
of trademark as unique/has been in use-publication of mark (if registry is satisfied).

Step 4: Rejection of Opposition by Registrar

Step 5: Grant and seal of patent office-entry into a register in the patent office.

4.8 AMENDMENTS AFTER REGISTRATION OF TRADEMARK:

Following are the permissible amendments under the Trademarks Act:

Amendment/correction in the name, address or description of the registered proprietor

Cancel the entry of a trademark on the Register

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 Amendment of user date

Amendment in the specification of goods and/or services.

4.9 INTERNATIONAL TRADEMARKS FILING / FILING OF TRADEMARKS UNDER

MADRID PROTOCOL

The Madrid System is a convenient and cost-effective solution for registering and managing trademarks
worldwide. File a single application and pay one set of fees to apply for protection in up to 123 countries.
Modify, renew or expand your global trademark portfolio through one centralized system.

India adopted Madrid Protocol in 2013. The Madrid Protocol is a WIPO administered treaty to simplify
the process of filing trademarks across multiple jurisdictions Trademark applications can be filed in India
under the Madrid Protocol when India is either the origin country or the designated country If India is the
origin country, the Indian Trademarks Registry (TMR) will receive the applications for international
registrations of trademark If India is the designated country, the international trademark application is
filed with WIPO selecting India as the designated country.

4.10 TRADEMARK AND BRAND STRATEGY:

a. Complementary Strategy:

A strategy involving combining two or more protections offered by different Intellectual Property whether
traditional (copyright, Patent, Trademark) or non-traditional (Designs, domain names, circuit layouts,
confidential information, plant varieties, trade secrets).

Illustration: The pharmaceutical drug Asprin was developed by Bayer AG, which used both patent and
trademark protection. Thus long after the patent protection has ceased the trademark protection since being
renewable allows the company to exercise monopoly rights and control use of the name.

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b. Single Trademark Strategy:

All goods and services offered are under the umbrella trademark which is essentially the only trademark
used. Illustration: Intel has used the strategy.

c. Blitzkrieg:

A strategy wherein trademark is registered in as many numbers of classes and translations-graphical

representations as possible.

Illustration: Facebook has registered in more than 60 classes both in India and China.

d. Family Trademark Strategy:

The strategy uses a common link among all its products.

Illustration: The ‘Mc’ trademark is used universally in the food industry denoting McDonalds,
McChicken, McPuff, McCafe. Hence the McBaby was refused permission.

e. Umbrella Trademarks:

In this strategy, a corporate entity uses the trademark for all the business carried on in the parent company
as well as the sister concerns.

Illustration: Google primarily as a search engine is also recognized through the usage of trademarks of
Google maps, Google pay.

f. Trademark complimentary Strategy:

The primary trademark of the company is used on all the products but subsequently on certain unique
products secondary marks are imprinted.

Illustration: Microsoft is a registered trademark but Windows, Internet Explorer is also certain marks used.

g. Secondary trademarks supersede Primary trademarks in usage:

Certain companies use the secondary marks to relate to the customer base rather than using the primary
trademark on all of the classes the products.

Illustration: FMCG uses the trademark P&G (Proctor and Gamble) actively.

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4.11 ASSIGNMENT AND LICENSING OF TRADEMARK :

Assignment of a trademark occurs when the ownership of such mark as such, is transferred from one party
to another whether along with or without the goodwill of the business. In case of a registered Trademark,
such assignment is required to be recorded in the Register of trademarks.

A mark may be assigned or transferred to another entity in any of the following manners:

 Complete Assignment to another entity- The owner transfers all its rights with respect to
a mark to another entity, including the transfer of the rights such as right to further transfer,
to earn royalties, etc. (E.g. X, the proprietor of a brand, sells his mark completely through
an agreement to Y. After this X does not retain any rights with respect to the brand)
 Assignment to another entity but with respect to only some of the goods/ services- The
transfer of ownership is restricted to specific products or services only. (E.g. P, the proprietor
of a brand used for jams and jellies and dairy products. P assigns the rights in the brand with
respect to dairy products only to Q and retains the rights in the brand with respect to jams
and jellies.) This is called partial assignment.
 Assignment with goodwill- Such assignment is where the rights and value of a trademark
as associated with the product is also transferred to another entity.(E.g. P, the proprietor of
a brand "Shudh" relating to dairy products, sells his brand to Q such that Q will be able to
use the brand "Shudh" with respect to dairy products as well as any other products it
manufactures.)
 Assignment without goodwill- Such assignment also referred to as gross assignment, is
where the owner of the brand restricts the right of the buyer and does not allow him to use
such brand for the products being used by the original owner. Thus, the goodwill attached
to such brand with respect to the product already being sold under such brand, is not
transferred to the buyer. (E.g. P, the proprietor of a brand "Shudh" relating to dairy products,
sells his brand to Q such that Q will not be able to use the mark "Shudh" with respect to
dairy products but can use this brand for any other products being manufactured by it. In
such case the goodwill which is associated with brand "Shudh" for dairy products is not
transferred to Q and Q will be required to create distinct goodwill of brand "Shudh" for any

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 other product or service like Restaurant wherein Q proposes to use this brand.). In many
jurisdictions like United States, assignment of mark without goodwill is not allowed at all.
India on the other hand allows assignment without goodwill.

Further, in case of registered Trademarks, the Trade Mark Act 1999 also puts certain restrictions on the
assignment of a registered trade mark wherein there exist possibilities of creating confusion in the mind
of public/users. Such restrictions are:

 Restriction on assignment that results in the creation of exclusive rights in more than one person
with respect to the same goods or services, or for same description of goods or services or such
goods or services as associated with each other.
 Restriction on assignment that results in different people using the trademark in different parts of
the country simultaneously.

4.11.1 Trademark Licensing

The licensing of a mark is to allow others to use the mark without assigning the ownership and the same
may be done for all or some of the goods and services covered. The Trademarks Act does not mention
the term 'License', the concept under the Act is mentioned as that of a 'Registered User'.

Trademark licensing is advantageous to both the parties. While the licensor enjoys its rights to the mark
by getting the royalties for its use, the licensee is able to expand its market operations by using the brand
and developing its reputation.

In case of Licensing, the licensor is open to license the rights over the trademark in manner it may like.
The Licensor can restrict the rights of the licensee in a trademark or brand with respect to the products or
services wherein the licensee can use such brand, with respect to time for which it can use such mark, with
respect to area within which it can use such mark etc.

4.12 PASSING OFF ACTION AND INFRINGEMENT OF TRADEMARKS

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Infringement essentially requires the marks to be identical or deceptively similar such that the unregistered
mark may deceive or cause confusion between the goods with registered trademark and unregistered one.
The comparison of the two marks shall be done as a whole.

The plaintiff/owner of the registered trademark has to prove similarity.

Through the eyes of the judiciary, factual assessment of the two marks is done.

In the course of assessment the primary test used is to ‘identification of essential features of the registered
trademark.’

No action for infringement or passing off can lie if the trademark is used (affixes the mark on the goods
or services or business papers/ offers the goods/ services for sale/ imports or exports) in bona fide manner.

The specific description of passing off is not given in the trademark act but the courts have drawn its
meaning from common law that if the infringement of trademark done in such a manner where the mark
is not only deceptively similar to the trademark of other company but also creating confusion for the
customers, which ultimately results in damage for business of the company.

Section 29 of the Trademark Act-1999 talks about various aspects related to infringement as given in
S.29(1) that a registered trade mark is infringed by a person who, not being a registered proprietor or a
person using by way of permitted use, uses in the course of trade, a mark which is identical with, or
deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark
is registered and in such manner as to render the use of the mark likely to be taken as being used as a trade
mark.
Other subsections describes that in course of the use of the trademark it is said to be infringing the rights
of other company due to use of similar or identical trademark using for marketing of similar kind of goods
and services or use of identical or deceptively similar trademark for any other kind of goods and services.
It is further given in the Sub Section (9) of this section that the infringement can also be done by the
spoken use of those words as well as by their visual representation.

4.13 REMEDIES UNDER THE TRADEMARK ACT, 1999 – CIVIL, CRIMINAL AND
ADMINISTRATIVE

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The owner of the Registered Trademark can commence legal proceedings against the infringer stating the
unfair business practices. There are two types of remedies that are available to the owner of the trademark
against the unauthorized use of its limitation by the third party. The Trade Marks Act protects the
trademark with civil and criminal remedies. Civil proceedings can be initiated by the trademark owner
before the District Court in whose jurisdiction the owner resides.

Civil Remedies for Trademark Infringement are available in following heads:

1. In form of Injunction:

The action of an injunction is referred as stopping one person from doing particular activity or task through
the judicial process. With respect to trademark infringement, it is restraining a person from unauthorized
use of the trademark. Through a temporary or permanent stay, the Court grants protection to the trademark
owner.

2. In form of Damages:

Damages refer to the recovery of loss faced by the trademark owner through the trademark infringement.
The monetary value of financial loss or brand impairment is recovered under this head. The amount of
damages will be granted by the court after considering the actual and anticipated loss of owner due to
infringement.

The damages in Trademark law as a relief has increasingly assumed importance and the main aim of the
damages is to monetarily compensate.

3. Custody of infringing materials:

This remedy suggests that the Court may ask the infringer to deliver all the goods or products that are
labeled with the brand name. Here, the Court may direct the authorities to withhold the related materials
accounts and destruct all such goods. Where the trademark relates to services, i.e. a Service Mark is
infringed; the order may be passed to stop the provision of the services immediately by the infringer.

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In case of infringement/passing off trademark, the criminal complaint can also be filed and noted under
the Trade Marks Act, 1999 which states the registered owner of the trademark has a chance to file the FIR
through police on the infringer.

Criminal remedies:

If we take a look at the Trade Marks Act, 1999, it can be viewed that there are several provisions that can
be counted as a criminal remedy for the infringement of trademark. The following are laid down below:

1. Sections 103 of the Act lays down criminal remedy for the contravention of the trademark of
any individual or entity which lays down a period of six months of imprisonment which can be
extended till a time frame of three years for infringing trademark rights.
2. Section 104 of the Act talks about penalties that need to be provided as a sanction against an
infringement. The section mentions a fine of fifty thousand rupees which can be increased till
an extent of two lakhs in case someone is found to transgress the trademark rights.
3. An inflating version of punishment is laid down under Section 105 of the same Act.
4. A seizure of powers of the person liable for infringing can be carried out as a criminal remedy
for an efficient adaptation to the above provisions. This procedure carried out by police is
subjected to reasonable grounds of proving the infringement only.

4.14 LANDMARK CASES

4.14.1 Yahoo Inc v. Akash Arora &Anr,

CASE FACTS
Yahoo Incorporation is the owner of the well-known trade mark, Yahoo and of the domain name
[Link]; both the trademark and the domain name acquired a distinctive name, good will and
reputation. [Link] had been registered by Yahoo Inc with Network Solution Inc since 1995 and
offers a whole range of web based services. The trade mark Yahoo had been registered or was close
to being registered in 69 countries. Yahoo Inc had not registered its domain name in India.
Akash Arora started to offer web-based services similar to those offered by [Link] under the

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name of Yahoo India. Yahoo Inc. had sued Akash Arora for using a trade mark deceptively similar to
its own and passing off his services as those offered by Yahoo Inc.
ISSUE:
Whether the act of Akash Arora in registering the domain name Yahoo India, to offer services similar
to those offered by Yahoo Inc, is an infringement of the trade mark of Yahoo Inc and amounts to
passing-off under the relevant sections of the Trade and Merchandise Marks Act?

RULE OF LAW:
When a defendant does business under a name which is sufficiently close to the name under which the
plaintiff is trading and that name has acquired a reputation and the public at large is likely to be misled
that the defendant’s business is the business of the plaintiff, or is a branch or department of the plaintiff,
the defendant is liable for an action in passing off.

ANALYSIS:
Yahoo Inc. contended that Akash Arora adopted the domain name of Yahoo to offer services similar
to those of Yahoo Inc and had attempted to cash in on the good will generated by Yahoo Inc. because
there was every possibility of an Internet user getting confused and deceived, believing that both the
domain names, Yahoo and Yahoo India belong to Yahoo Inc.. Therefore, Yahoo Inc. argued that
Akash is liable for passing off. As the two trademarks/domain names ‘Yahoo!’ and ‘Yahoo India!’
were almost similar and the latter offered services similar to those offered by the former and as the
latter passed them off as being offered by Yahoo Inc., the court held Akash liable for passing off and
restrained him from using the deceptively similar domain name. The decision of the court in this case
is based on the rationale that where the value of a name lies solely in its resemblance to the name or
trade mark of another organization, the public is likely to be deceived by the use of such name and
such act would amount to passing off.

4.14.2 Clinique Laboratories LLC and Another v. Gufic Limited &Anr,

Facts

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The plaintiff (Clinique Laboratories) has the registered trademark by the name ‘CLINIQUE’ since
13th July,1981 in regards to cosmetics, lotions, oils and creams, used in cleansing etc, falling under
class 3 of the goods and services mentioned in the 4th schedule to the Trade Marks Rules, 2002. There
are many other trademarks that are owned by the plaintiff and most of them include the word
‘CLINIQUE’. For the plaintiff’s products which are used worldwide, Clinique is the most
distinguished feature of the trademark and the plaintiff’s company has been doing business in India
since 2007

The respondent has been selling their product “STRETCH NIL SKINCLINIQ” since 1999, defendant
has their registered trademark by the name ‘CLINIQ’ but the plaintiff got to know about the
registration and usage of mark “SKINCLINIQ” and use of the label ‘SKINCLINIQ STRETCH NIL’
on or about September, 2006. Defendants were involved in the same business as that of plaintiff and
both the parties got their trademark registered with the registrar of trademark authority.

On discovering about the similar trademark that defendant got, the plaintiff filed a rectification
application (cancellation petition) with the Registrar of Trademarks, India with a view to get the
trademark of the defendant cancelled. At the same time the plaintiff also files a suit in the court seeking
the order of injunction against the defendant prohibiting them from passing off the goods
manufactured under the similar trademark and selling them in the Indian market not even through their
distributor and agents.

Issues:

 Whether there is an infringement of the trademark by the defendant.

 Whether a suit be brought up against a registered trademark for infringement of another

registered trademark.

 Whether the court can pass interim injunction to restrain the use of registered trademark.

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 Order:

In this landmark case the court said that a proprietor of a registered trademark is legally capable of
bringing a suit against another proprietor of the registered trademark if the trademark is identical or
similar in any kind and infringes the right of the trademark owner.

4.14.3 Coca-Cola Company v. Bisleri International Pvt. Ltd.,

Facts:
The plaintiff is the largest brand of soft drinks operating in 200 countries and the defendant in this
case is a well-known Indian brand which is highly regarded for its bottled water. On September 18,
1993 the defendant sold the trademarks, formulation rights know how, intellectual property rights
and goodwill etc. of their products THUMPS UP, LIMCA, GOLD SPOT, CITRA and MAAZA
inter alia to the plaintiff. The present case concerns with the product MAAZA only.

On November 12, 1993, the plaintiff and defendant entered into a deed of assignment by way of
which the following agreements as regards MAAZA were concluded. Finally, in October 1994 the
Licensing Agreement for MAAZA between the plaintiff and Golden Agro Products Pvt. Ltd. was
entered into and executed. It is the plaintiff's case that by this agreement all the trademarks,
formulation rights etc. were irrevocably conveyed to the plaintiff forever.

In March 2008, the defendant became aware of the fact that the plaintiff had filed for registration of
MAAZA trademark in Turkey. On September 7, 2008 the defendant sent the plaintiff a legal notice
repudiating the Licensing Agreement thereby ceasing the plaintiff from manufacturing MAAZA and
using its trademarks etc. directly or indirectly, by itself or through its affiliates.

As per the plaintiff, the notice claimed that the plaintiff had breached the said agreement by
attempting to register MAAZA in Turkey as the agreements/assignments between the parties
allowed the plaintiff to use MAAZA in India alone. The notice also stated the defendant’s intention
to start using the trademark MAAZA in India. The plaintiff subsequently filed a law suit.

Issues Raised:

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Does the High Court of Delhi have jurisdiction to deal with the matter in this particular case?
Is the Plaintiff entitled to get permanent injunction and damages for infringement of trade mark and
passing off?

Holding:
The defendant prayed for the vacation of this court's order dated 15 October, 2008. The objection was
mainly on the ground that this court lacks jurisdiction to hear the present suit. The reasons of plaintiff in
the plaint to state that this court has jurisdiction are that the defendant is carrying on business within its
jurisdiction; the plaintiff has further supplemented his submissions by adding that the license agreement
dated 13th May, 2004 has originated within the jurisdiction of this Court. A newspaper report showing
the defendant intention to use the trademark MAAZA in India has been published in the Delhi edition of
Times of India.

The defendant has a factory in Delhi from where the defendant is operating a sales and distribution
infrastructure similar to that in Mumbai and has an extensive market share in and around Delhi. Further it
is alleged that Mr. Ramesh Chauhan, who is the person with whom the correspondence was exchanged
and who has now been impleaded as defendant, is residing in New Delhi. The court has jurisdiction to
entertain the suit for infringement of trademark under Section 134 (2) of the Trademark Act, 1999 and
Section 20(c) of the Code of Civil Procedure, 1908. The plaintiff is commercially and deeply engaged in
business in Delhi.

Therefore, there is no bar under the said provision as the plaintiff is carrying on business by selling and
advertising its products within the territory of this court. The plaintiff has argued that no one can dispute
that the product of the plaintiff is available in every nook and corner on extensive manner in Delhi under
the trade mark MAAZA. Since the court at this stage has to take the prima facie view of the matter and
see the averment made in the plaint, therefore in view of the mandate of Section 134 (2) of the Act, there
is no bar against filing this suit in Delhi and having jurisdiction.
Similar issues of jurisdiction has been dealt with in the case of Tata Iron & Steel Co. Ltd. v. Mahavir
Steels &Ors.; 47(1992) DLT 412 and LG Corporation &Anr. v. Intermarket Electroplasters(P) Ltd. and
Anr.; 2006 (32) PTC 429 held that:

146
The question as to whether the Court has territorial jurisdiction to entertain a suit or not has to be arrived
at on the basis of averments made in the plaint, that truth or otherwise thereof being immaterial as it cannot
be gone into at this stage.
The grounds on which the plaintiff established that the defendant had an intention to use the mark as
appeared from its notice and as per newspaper reports published in the Delhi edition of Times of India.
The plaintiff’s argument that the defendant has a factory at 66, Shivaji Marg, New Delhi clearly states the
misconduct. In accordance with its own admission in the present application, the defendant also has a
place of business in Delhi where it is bottling water there and that its registered office is in Mumbai are
facts of no consequence.
The invoices filed by the Local Commissioner which were recovered from M/[Link] International show
that the latter has been exporting MAAZA products to one Mr. Pars Ram Fruit and Spices in Australia.
The Local commissioner has also filed various documents issued by one M/s. MAAZA Beverages Inc.,
New York pertaining to the purchase of MAAZA drinks which were addressed to M/s. Parle Bisleri Pvt.
Ltd.

This is further established from the certificate of registration of MAAZA issued by the Trade mark office,
Australia in the name of M/s. Pars Ram Bros, Australia Pvt. Ltd. M/s. Varma International has admitted
during the course of the hearing that the said firm has been receiving orders to manufacture beverages
under the trade mark MAAZA and defendant has regularly been exporting products under the mark
MAAZA on a large scale. It is established that the defendant no. 1 not only had the intention to use the
trade mark MAAZA but in fact, directly or indirectly, the defendant was involved in the said activities
with other firms/companies.

It is well settled law that exporting of goods from a country is to be considered as sale within the country
from where the goods are exported and the same amounts to infringement of trade mark as per section 29
of the Trade Marks Act, 1999. The plaintiff is the registered owner of the trademark MAAZA.

Finally in the light of the above stated reasons the Hon’ble Court granted an interim injunction against
defendant. The court said that there is a prima facie case in favor of plaintiff and also the balance of
convenience also lies in favor of the plaintiff only and if the injunction is not issued the plaintiff will suffer
irreparable loss and injury.

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Therefore the repudiation of the agreement by the defendant was invalidated by the court of law and all
the trademark rights of MAAZA were given back to the plaintiff.

Conclusion:
The Trademark is a unique symbol or word(s) used to represent a business or its products. Once registered,
that same symbol or series of words cannot be used by any other organization, forever, as long as it remains
in use and proper paperwork and fees are paid. As the definition explains what trademark is, the present
case is an elaboration to the definition of Trademark. If a trademark is licensed by a corporation, no other
corporation may use it, or it may constitute an infringement.

It was a similar situation in the present case where the defendant sold all the rights of the trademark to the
plaintiff but still used it, resulting in a trademark infringement suit. The present case is a landmark case
concerning patent infringement. The issues raised were of the jurisdiction and infringement. But this case
has made it evident that the Trademark is a global phenomenon and it protects proprietors across
boundaries.

Also, this case has made it clear that a trademark of any organization can be registered anywhere once
there is an assignment conferring the rights entirely, be it within the country or outside of it. The judgment
laid the groundwork for several similar decisions where separate companies that have rights over the same
goods in different nations will supply products to the same manufacturers.

4.14.5 Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical Laboratories,

Respondent firm was founded in 1926 under the name of “Navaratna Pharmacy” later changed to
“Navaratna Pharmaceutical Laboratories” in 1945. Respondent was a manufacturer of medicinal products
and proprietor of two registered trademarks “Navaratna” and “Navaratna Pharmaceutical Laboratories”
from a period prior to February 25, 1937.

Appellant carried on business which involved preparation of ayurvedic pharmaceutical products under the
name of “Navaratna Kalpa Pharmacy” and had been vending medicines prepared by him under the name
of “Navaratna Kalpa”.

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The Appellant applied for the registration of “Navaratna Kalpa” as a trademark which was successfully
opposed by the Respondent. The Appellant moved to the Registrar of Trade Marks, for removing from
the register the trade mark “Navaratna” by itself or as parts of other marks as a trademark for goods
belonging to the Respondent.

The Registrar directed the Appellant to move to the High Court as the Respondent firm had already filed
an Original suit in the District Court for a perpetual injunction against the Appellant for infringing the
exclusive right that the Respondent had over the words “Navaratna” and “Navaratna Pharmaceutical
Laboratories” by advertising his own products under the name of “Navaratna Kalpa” and also by passing
off his goods as those of the Respondents.

The District Court granted the Respondent a decree for an injunction confined to the trademark “Navaratna
Pharmaceutical Laboratories”.

The Appellant made an appeal against the decree of the District Court and also filed an Original Petition
in the High Court of Travancore-Cochin making the same prayer as he did before the Registrar of Trade
Marks. The decree against the Appellant was confirmed by the High Court and the Original Petition
seeking removal of the trademarks of the Respondent was dismissed.

Appellant filed two Special Leave Petitions before the Supreme Court against the orders of the High
Court affirming the decree against the Appellant granted the District Court and dismissing the Original
Petition of the Appellant.

Arguments on behalf of the Appellant:

The Counsel on behalf of the Appellant argued that “Navaratna” did not qualify for registration as Section
6 (1) (d) of the Trade Marks Act, 1940 excluded words “having direct reference to the character or quality
of the goods” from being treated as distinctive .

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“Navaratna” is a Sanskrit word describing Ayurvedic preparations of a particular composition and is
incapable of being distinctive.

“Navaratna” neither by itself nor in combination with other words like “Pharmaceutical” or “Laboratories”
which are ordinary English words confers has any quality of distinctiveness.

The Counsel relied on the judgment in the case of India Electric Works Ltd; (1) (1) 49 C.W.N. 425,
wherein the Court was concerned with the appeal from an order of the Registrar refusing registration in
the respect of an “old mark”, i.e., used before February 25, 1937. The mark in question was the word
“India” as applied to electric fans. The Judge dismissed the appeal on the ground that the word “India”
was a geographical word and therefore would not qualify for registration as being prohibited by Sec 6 (1)
(d).

The next argument made by the Counsel on behalf of the Appellant was based on the dissimilarity of the
packing in which the goods of the two parties were vended. The Counsel drew attention the fact that the
difference in the physical appearance of the two packets by reason of the variations in their color and other
features and their general get up together with the name and address of the manufacturer was prominently
displayed on his packets were all set out for negating the Respondent’s claim that the Appellant had passed
of his goods as those of the Respondents.

Arguments on behalf of the Respondent:

The arguments on behalf of the Respondent solely rely on the proviso to Section 6 (3) of the Act, which
urged that, every mark which had been in use prior to the February 25, 1937 qualified for registration.
Hence, the Respondent complained both of an invasion of a statutory right by the Appellant under Section
21 of the Trade Marks Act in respect of a registered trademark and also for passing off goods by the use
of the same marks as the Respondent’s.

Court’s Observations:

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If the matter had to be decided in terms of Section 6 (1) alone, there is great force in the argument of the
Counsel on behalf of the Appellant as regards to the non-registerability of the Respondent’s mark.

When the matter is read in reference to the terms of proviso to sub section (3) of Section 6, the Supreme
Court finds no error in the approach of the learned District Judge that the length of the user world be a
material factor for the mark to become distinctive and had become exclusively associated with the goods
of the Respondent as they are using the said mark since 1926 and the said fact was not disputed.

While an action for passing off is a Common Law remedy being in substance an action for deceit, that is,
a passing off by a person of his own goods as those of another, that is not the gist of an action for
infringement. The action for infringement is a statutory remedy conferred on the registered proprietor of
a registered trade mark for the vindication of the exclusive right to the use of the trade mark in relation to
those goods. The use by the Defendant of the trade mark of the Plaintiff is not essential in an action for
passing off, but is the sine qua non in the case of an action for infringement. No doubt, where the evidence
in respect of passing off consists merely of the colourable use of a registered trade mark, the essential
features of both the actions might coincide in the sense that what would be a colourable imitation of a
trade mark in a passing off action would also be such in an action for infringement of the same trade mark.
But there the correspondence between the two ceases.

In an action for infringement of a trade mark the onus would be on the Plaintiff (Respondent) to establish
that the trade mark used by the Defendant (Appellant) is deceptively similar. This has to be done by a
comparison of the two marks. Where the similarity between the Plaintiff’s and Defendant’s marks is so
close either visually, phonetically or otherwise, the Court reaches the conclusion that there is an
infringement. No further evidence is required to establish that the Plaintiff’s rights are violated.

Expressed in another way, if the essential features of the trade mark of the Plaintiff have been adopted by
the Defendant, the fact that the get- up, packing and other writing or marks on the goods or on the packets
in which he offers his goods for sale show marked differences, or indicate clearly a trade origin different
from that of the registered proprietor of the mark would be immaterial; whereas in the case of passing off,
the Defendant may escape liability if he can show that the added matter is sufficient to distinguish his
goods from those of the Plaintiff.

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A finding regarding the packing is relevant with respect to the relief on the ground of passing off, but
plays a limited role in an action for infringement of a registered trade mark by the registered proprietor
who has a statutory right to that mark and a statutory remedy, under S. 21, for vindication of his exclusive
right to use it.

The question of deceptive similarity is one of facts, unless the test employed suffers from error the Court
would not interfere. In the instant case there being no such error, the conclusion reached by both the lower
courts that the Appellant’s mark was deceptively similar to that of the Respondent, cannot be interfered
with.

Lastly, it was submitted that this was a case of honest con-current user within Section 10(2) of the Trade
Marks Act, 1940. However, this point was not raised in the Lower Courts; therefore the Supreme Court
did not entertain it either.

As a result, the appeals of the Appellant were dismissed.

4.14.6 Health care Ltd. v. Cadila Pharmaceuticals,

Bench – Justice [Link], Justice Doraswamy Raju, Justice British Kumar

The case is a landmark judgment in relation to passing off of an unregistered trademark. In the case of
unregistered trademarks, passing off action is maintainable. The passing off action depends upon the
principle that nobody has a right to represent his goods as the goods of somebody. In other words, a man
is not to sell his goods or services under the pretense that they are those of another person. The Appellant
and Respondent were both pharmaceutical companies who had taken over the business of the Cadila
Group subsequent to restricting under the Companies Act. Both companies were granted the right to use
the term Cadila. The Appellant Company initially manufactured a drug to treat cerebral malaria with the
mark ‘Falcigo’ and was granted permission by the Drugs Controller of India in 1996 to sell the product
across India. In 1997 the permission was also granted to the Respondent for selling drugs for cerebral
malaria with the name ‘Falcitab’. The Supreme Court took into consideration various aspects like the
legibility of doctor’s prescription, accidental confusion due to deceptive similarity and the need for caution

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in cases of drugs which are used to treat the same disease, however comprise of different composition.
The test of a reasonable ordinary person was held to be a person of imperfect recollection and average
intelligence. The Court took into consideration that even if both the drugs are Schedule L drugs which
means that they are only sold in hospitals and clinics with prescriptions, there could be a cause of
confusion even amongst professionals dispensing the medicines. The Hon’ble Supreme Court after
evaluating the provisions of the Trademarks Act, 1999 and Section 17-B of the Drugs and Cosmetics Act,
1940 conclusively established that there was a likelihood of passing off and it was a case of deceptive
similarity. Some of the essential factors to be considered for determining deceptive similarity were held
in this case as follows –

 The nature of marks

 The extent of similarity between the competing marks – phonetic and visual similarity
 Nature of goods
 Area where the goods are used.
 The similarity in the goods in relation to effectiveness, performance, nature etc.
 The target consumers of the goods, their intelligence and the requisite degree of care that needs to
be taken.

4.14.7 Parle Products Pvt. Ltd. v JP & Co

Appellant was manufacturer of biscuits and owner of registered trade mark being a wrapper. This wrapper
was used in connection with the sale of their biscuits known as “Parle’s Glucose Biscuits” printed on the
wrapper.
In March 1961, Appellant came to know that the Respondent was selling biscuits in a wrapper which was
deceptively similar to their registered trade mark.

Respondent’s Contentions:
There was a lot of difference in the competing wrappers.
Respondent’s wrapper contained the picture of a girl supporting with one hand a bundle of hay on her
head and carrying a sickle and a bundle of food in the other.

District Court:

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There were greater points of dissimilarity than of similarity between the two wrappers and it was unlikely
that the Respondent’s goods could be passed off as and for the goods of the Appellant.

High Court:
Court has to bear in mind that it was dealing with packets of biscuits which were generally used by people
of the upper classes.
There were several distinguishing features between the two wrappers.
Similarity in the two wrappers was limited to the extent that both were partly yellow and partly white in
colour and both bore the design of a girl and some birds.
The lady in the wrapper used by the Appellant has a pot on her hand while the lady in the wrapper used
by the Respondent has a hay-bundle on her head.
Respondent’s wrapper has cows and Appellant’s wrapper has two calves.

Supreme Court:
“Whether one mark is deceptively similar to another, the broad and essential features of the two are to be
considered. They should not be placed side by side to find out if there are any differences in the design
and if so, whether they are of such character as to prevent one design from being mistaken for the other.
It would be enough if the impugned mark bears such an overall similarity to the registered mark as would
be likely to mislead a person usually dealing with one, to accept the other if offered to him. In this case
we find that the packets are practically of the same size, the colour scheme of the two wrappers is almost
the same; the design on both though not identical bears such a close resemblance that one can easily be
mistaken for the other. The essential features of both are that there is a girl with one arm raised and carrying
something in the other with a cow or cows near her and hens or chickens in the foreground. In the
background there is a farm house with a fence. The word “Glucose Biscuits” in one and “Glucose Biscuits”
on the other occupy a prominent place at the top with a good deal of similarity between the two writings.
Anyone in our opinion who has a look at one of the packets to-day may easily mistake the other if shown
on another day as being the same article which he had seen before. If one was not careful enough to note
the peculiar features of the wrapper on the plaintiffs’ goods, he might easily mistake the defendants’
wrapper for the plaintiffs’ if shown to him some time after he had seen the plaintiffs’. After all, an ordinary
purchaser is not gifted with the powers of observation of a Sherlock Holmes. We have therefore no doubt
that the defendants’ wrapper is deceptively similar to the plaintiffs’ which was registered. We do not think

154
it necessary, to refer to the decisions referred to at the Bar as in our view each case will have to be judged
on its own features and it would be of no use to note on how many points there was similarity and in how
many others there was absence of it.”

4.15 PROSPECTS FOR TRADEMARK AGENT

Trademark Agents are Indian citizens above the age of 21 years having a graduation degree and has
qualified the concerned examination or an advocate or a member of The Institute of Company Secretaries
of India and duly registered with the Registrar. Certain grounds of disqualification are being of unsound
mind, discharged insolvent, adjudged as a convict or dishonest or guilty of professional
misconduct/negligence.

Practicing as trademark agent is regarded to be a lucrative job that comes with a wonderful pay package.
One can either join a company or draw a neat salary or if having good communication skills and a
wonderful client base can practice self. The choice is entirely up to the individual to make. Around 1.5
million trademarks are said to be on record, either in the form of granted trademarks or pending
applications in the Trademark database, which is being maintained by Trademark Registry of India.

4.15.1 Who can Attempt the Trademark Agent Examination?

An individual is said to be eligible for applying for examination under Trademark Act of 1999 only after
completing 21 years of age. Also, he needs to possess a graduate degree from any recognized Indian
university or other qualification that is equal to it, or hold a law degree.
Trademark agent India examination application needs to be made in TMA 1 form that is provided in
Trademark Rules 2002 schedule II. This application is to be submitted in triplet along with a prescribed
fee to the trademark registry. Eligible candidates for appearing the examination would be called for
undertaking written examination, along with viva voice. Written examination is to be for 150 marks and
the viva voice is of 50 marks. This exam is slated to deal with the different Trademark Practice and Laws
from Trademark Act and Rules.
The individual having cleared this examination would successfully become trademark attorney and
practice anywhere in the country. The trademark agent can assist clients in a variety of matter related to

155
trademark field, which includes registering company’s name, logo, individual name or logo for their
product. Also, they have a right for dealing with clients in regards to cases that are related to the products.

4.15.2 How to prepare for Trademark Agent Examination?

The exam is aimed at candidates who possess an understanding of:

- the basic principles of trademark law, including descriptiveness, distinctiveness, confusion,

and entitlement;
- the trademark process from filing to registration and beyond, including exposure to office
actions involving technical and substantive objections, and to assignments and licensing;

Opposition and summary non-use cancellation proceedings, including exposure to opposition

pleadings and evidence.

4.15.3 Additional Topics Required to Know for Trademark Agent Examination

Within the scope of examining competency in these core tasks, candidates are expected to be additionally
knowledgeable about pertinent issues such as:

1. Official marks
2. Certification marks
3. Non-traditional marks
4. International trademark system (Madrid Protocol)
5. Chain of title
6. Licensing
7. Transfers
8. Ethics and conflicts of interest

4.15.4 Role of Trademark Agent:

In the contemporary times, trademarks are becoming indispensable to the conduct of business. With an
unprecedented increase in the number of people choosing to start their own business, trademarks have
come to occupy an important place in the economy. This is because apart from giving a distinctive

156
character to your business, trademarks also ensure that your goodwill and repute cannot be illegally
harnessed by anyone else to their own advantage. The process of getting your trademark registered is
available online. This process initially comes across to be fairly simple, something that a common man
can comprehend. When such is the case, why do we need trademark agents or trademark attorneys in
India?
The answer to this lies in the fact that, as simple as the procedure may seem, there are a lot of intricacies
involved that require the expertise of a trained eye. Expertise is required from the very beginning of the
registration process. Choosing a proper trademark is no easy task. You need to ensure that it is not similar
to any preceding trademark and that it is in compliance with the relevant legislations in India. This is
where a trademark attorney or agent steps in and makes the process easy for you.
The trademark agent/attorney helps you in choosing an apt trademark after ensuring compliance with the
legal norms and thus reducing the chances of rejection of your trademark application.
The second step is the filing of an application for registration. This filing has very specific requirements
that can be dealt with by ease by a trademark attorney in India. Apart from this, if there are any objections
to the trademark registration, it is upon the attorney to reply to the objection and provide you with an
alternative. Their role in prosecuting trademark applications is indispensable. Additionally, they also
provide important advice about the nuances of trademark infringement.
To break it down, a trademark attorney/ agent puts the thing in perspective for you. They provide
unrelenting and expert assistance from the choosing of your trademark right down to its registration. They
help in breaking down the long tedious process of registration while ensuring that at the end of the process
you have your very own registered trademark.

4.15.5 Various Forms and Fees under the Trademark Rules:

Entry On what
No payable Amount in INR. Corresponding Form Number

For Physical
filing For E-filing

157
Entry On what
No payable Amount in INR. Corresponding Form Number

Application for
registration of a
trademark
/collective
Marks /
Certification
Mark / Series of
trademark for
specification of
goods or services
included in one
or more than one
classes.

Where the
applicant is an
Individual /
Startup/Small
Enterprise 5,000 4,500

In all other
cases (Note: Fee
is for each class
and for each
1 mark ) 10,000 9,000 TM-A

158
Entry On what
No payable Amount in INR. Corresponding Form Number

On a notice of
opposition under
section 21(1),
64, 66 or 73 or
application for
rectification of
register under
section 47 to 57,
68, 77 or
application
under rule 99,
103, 135,140 or
On application
under section 25
of Geographical
Indication of
Goods
(Regulations and
Protection) Act,
1999 to
invalidate a
trademark or
counter
statement related
thereto. (Note:
Fee is for each
2 3,000 2,700 TM-O
class opposed or

159
Entry On what
No payable Amount in INR. Corresponding Form Number

counterstatement
filed)

For renewal of
registration of a
trademark under
section 25 for
each class 10,000 9,000 TM-R

Application
for renewal
with
surcharge of
registration of 5,000 Plus
a Trademarks renewal fee
under section applicable
25 (3) for under entry 4,500 Plus renewal fee applicable
each class 3 under entry 3

Application
for renewal
with
10,000 Plus
surcharge/
renewal fee
restoration
applicable
and renewal
under entry 9,000 Plus renewal fee applicable
of a
3 3 under entry 3
Trademarks

160
Entry On what
No payable Amount in INR. Corresponding Form Number

under section
25 (3), 25 (4)
for each class

On application
under section 45
to register a
subsequent
proprietor in
case of
assignment or
transfer for each
trademark 10,000 9,000 TM-P

On
application
for:
Certificate of
the Registrar
under section
40(2), or For
approval of
the Registrar
under section
41, or
Direction of
4 3,000 2,700
the Registrar

161
Entry On what
No payable Amount in INR. Corresponding Form Number

for
advertisement
of
Assignment
without
goodwill
under section
42, or Add or
alter a
registered
trademark
under section
59(1) for each
trademark, or
Conversion
of
specification
under Section
60 for each
trademark.

On
application
for:
Extension of
time for
2,000 1,800
applying for

162
Entry On what
No payable Amount in INR. Corresponding Form Number

direction
under section
42 for
advertisement
of assignment
without
goodwill, or
Extension of
time for
registering a
company as
subsequent
proprietor of
trademarks
under section
46(4), or
Consent of
Registrar to
the
assignment or
transmission
of a
certification
trademark
under section
43, or Change
a name and /

163
Entry On what
No payable Amount in INR. Corresponding Form Number

or description
of a registered
proprietor or
a registered
user of a
trademark
under section
58 for each
trademark.

On
application
for:
Dissolution
of association
between
trademark
sunder
section 16(5),
or Change in
address or
address for
service in
India of
Registered
Proprietors
1,000 900
under section

164
Entry On what
No payable Amount in INR. Corresponding Form Number

58 for each
trademark, or
Request for
cancellation
of an entry in
the register or
part thereof
under section
58 for each
trademark.

Application
under section 49
to a registered
user of a
registered
trademark in
respect of goods
or services Or
On application
under clause (a)
of sub-section
(1) of section 50
to vary the entry
of a registered
user of one
5 5,000 4,500 TM-U
trademark where

165
Entry On what
No payable Amount in INR. Corresponding Form Number

the trademarks
are covered by
the same
registered user in
respect of each
of them Or On
application
under clause (b),
(c) or (d) of sub-
section (1) of
section 50 for
cancellation of
entry of a
registered user of
one trademark
Or On notice
under rule 95 (2)
of intention to
intervene in one
proceeding for
the variation or
cancellation of
entries of a
registered user of
a
trademark (Note:

166
Entry On what
No payable Amount in INR. Corresponding Form Number

applicable fee is
for each mark)

Request for
search and issue
of certificate
under rule 22(1) 10,000 9,000 TM-C

Request for
an expedited
search and
issuance of
certificate
under rule 22
6 (3) Not allowed 30,000

On application
for: Extension of
time, or Certified
copy, or
Duplicate
Registration
Certificate, or
inspection of
document, or
Particulars of
7 1000 900 TM-M
advertisement to

167
Entry On what
No payable Amount in INR. Corresponding Form Number

registrar, or
seeking grounds
of decision of
Registrar, or
Enter in the
register and
advertise a note
of certificate of
validity under
rule 127,
Amendment in
trademark
application, or
Particulars of
advertisement of
a trademark to
Registrar under
rule 41.

On
application
for:
Deposition of
regulation of
collective
trademark
2,000 1,800
under section

168
Entry On what
No payable Amount in INR. Corresponding Form Number

66 or
alteration of
regulation of
certification
trademark
under section
74 (2), or
Seeking
Registrar
preliminary
advice, or For
division of an
application.

On
application
for: Review
of Registrar’s
decision, or
Petition (not
otherwise
charged) for
obtaining
Registrar’s
order for any
interlocutory
3,000 2,700
matter in a

169
Entry On what
No payable Amount in INR. Corresponding Form Number

contesting
proceeding or
Any other
matters not
covered in
other TM
forms.

On request
for an
expedited
certificate of
the Registrar
(other than a
certificate
under section
23(2) of the
Act) or
certified
copies of the
documents
under proviso
to rule
122 (Note:
for entry in
respect of
5,000 4,500
each

170
Entry On what
No payable Amount in INR. Corresponding Form Number

registered
trademark or
for each
document)

On
application
under rule 34
for expedited
process of an
application
for the
registration of
a trademark

Where the
applicant is
an Individual
/
Startup/Small
Enterprise Not allowed 20,000

In all other
cases (Note:
Not allowed 40,000
fee is for each

171
Entry On what
No payable Amount in INR. Corresponding Form Number

class and for

each mark)

Request to
include a
trademark in
the list of
well- known
trademark
(Note:
applicable fee
is for one
mark only.) Not allowed 1,00,000

On application
for registration
of a person as a
trademark agent
under rule 147 &
149. 5,000 4,500 TM-G

For
continuance
of the name
of a person in
the Register
8 10,000 9,000
of a

172
Entry On what
No payable Amount in INR. Corresponding Form Number

trademark
Agents under
rule 150 for
every Five
year to be
paid on or
before 1st day
of succeeding
financial
year.

On
application
for
restoration of
the name of a
person to the
Register of
trademarks
agents under 5,000 Plus
rule 153 continuation
within 3 years fee as
from the date mentioned
of removal of in entry 4,500 Plus continuation fee as
registration. number 20 mentioned in entry number 20

173
 Entry On what
No payable Amount in INR. Corresponding Form Number

On
application
for an
alteration of
any entry in
the Register
of trademarks
Agent under
rule 154 1,000 900

Handling fee for

certification and
transmission of
international
application to
International
Bureau with
MM2(E) Not allowed 5,000

4.15.6 Renewal Fees

A registered trademark is only valid for 10 years, after which it needs to be renewed. The registrar of
trademarks will send you a letter of reminder of the expiry of the trademark 6 months prior to its expiry.
When you are going to renew a trademark you have two options:

1. Renew the trademark as it is

2. Renew the trademark with changes and alterations

174
  The application for the renewal of a trademark is the form TM-R.
 The application does not need to be filed by the registered owner of the trademark, it can be done
by an authorized representative or an agent.

After filing the application one has to follow the status of the application in case any opposition is filed to
the registration of the trademark. Such opposition can be filed by any person of the public.

 When the application is approved the trademark will be published in the official gazette the
Trademark Journal.
 If the trademark has been published then the owner of the trademark has protection for another ten
years.
 The trademark can be indefinitely renewed.

The price for the renewal of a trademark depends upon whether it has been one in-person physically or it
has been done online.

 If done physically the filing for the renewal costs 10,000 rupees
 If done online via e-filing it costs 9,000 rupees

For the renewal of a trademark, the following are required:

 A copy of the registration certificate

 Copy of form TM-A (form used for the original application for registering the trademark)
 ID and address proof of the applicant
 Power of attorney if the applicant is an authorized representative or an agent

4.15.7 Restoration of Lapsed Trademark

There can be times that a person forgets to renew their trademark in the given time period. No worries
there are still an option available in such cases. In the case of failure to renew one can then try to restore
a trademark. Restoration of a trademark is allowed by the Trademark Act, 1999 under Section25 (4) where
it allows persons to apply for the restoration of the trademark. Restoration can only be done within one
year of the expiry of the registered trademark.

Restoration of a trademark includes an additional fee over the renewal fee of:
175
  10,000 rupees if done by a person physically,
 or an additional 9000 rupees if done online.

 Check your progress

Multiple Choice questions with Single Responses.

1. The protection period for a trademark is

a. 10 years

b. 20 years

c. 30 years

d. 60 years

2. Which of the following is not an essential condition for trademark registration

a. Distinctiveness

b. Non-Descriptive

c. Self-Explanatory

d. None of the above

- State True or False.

1. Deceptively similarity is an absolute ground for refusal of registration.

2. A non-registered trademark is represented by using the TM symbol while the registered mark is
represented by the symbol.

 Summary
- Trademark may be registered or unregistered for the goods or services to differentiate on the
grounds of the manufacturer, quality, origin, etc. which essentially is dependent on the goodwill.
The initial protection is for a period of 10 years renewable for a lifetime but subject to the principle
of ‘Use It or Lose It’.
176
 - Harmonization of law protecting trademarks is evident numerous international instruments
namely, Paris Convention for Protection of Industrial Property, 1883, Madrid Agreement and
Protocol, Nice Agreement, etc.
- Following Schematic representations sum up various procedures under the trademarks act

 Keywords

- Accord: to bring into an agreement.

- Non-Descriptive: having the quality of describing.

 Self-Assessment Questions

1. What is a trademark? Comparatively, discuss the relative and absolute grounds for a refusal to register
a trademark as stipulated in the statute.

2. Elaborate upon the process of registration of a trademark.

3. Differentiate between action for passing off and infringement of trademarks.

4. What the various strategies used to commercially exploit the trademark protection?

 Answers to Check your Progress

Multiple Choice questions with Single Responses.

1. The protection period for a trademark is

a. 10 years

2. Which of the following is not an essential condition for trademark registration?

c. Self-Explanatory

 State True or False.

1. True

177
2. True

 Suggested Reading

1. Law Relating to Intellectual Property Rights by V.K. Ahuja, Lexisnexis, India 3rd edn. 2017
2. Intellectual Property and Business: The Power of Intangible Assets by Rodney Ryder and Ashwin
Madhavan, Sage Publications, India 2014

3. Law Relating to Intellectual Property by B.L. Wadhera, Universal Publications, 2011 (Reprint)

4. [Link] [Link].

5. [Link]

178
 Copyright

MODULE

Structure

5
5.1 Meaning & Importance of copyright in various sectors including Academia, Music Industry,
Entertainment Industry, ITES and Software Service
5.2 Subject Matter of copyright
5.3 Term Ownership
5.4 Economic Rights and Moral Rights
5.5 Copyright Office & Copyright Board
5.6 Registration of Copyright – Procedure
5.7 Assignment, Transmission & Licensing
5.8 Copyright Societies – Formation & Role
5.9 Performer Rights
5.10 Broadcast Reproduction Rights
5.11 Permitted Acts in Relation to Copyright - Fair use
5.12 Filing of copyright application
5.13 Landmark Cases – Eastern Book Company and Others v. D B Modak and Anr., R. G. Anand v.
Delux Films, Fateh Singh Mehta v. O P Singhal, Indian Performing Rights Society V. Eastern
Indian Motion Pictures, Super Cassettes Industries v. UOI
5.14 Copyright and Freedom of Expression.
5.15 Copyright Infringement, Remedies for Infringement: Civil, Administrative, Criminal
5.16 International Copyright Law (U.S. and E.U.)

179
 Check your progress
Summary
Keywords
Self-Assessment Questions
Answers to Check your Progress
Suggested Reading

5.1 MEANING & IMPORTANCE OF COPYRIGHT IN VARIOUS SECTORS INCLUDING

ACADEMIA, MUSIC INDUSTRY, ENTERTAINMENT INDUSTRY, ITES AND
SOFTWARE SERVICE

I. Copyright in Literary work

Literary works are protected by copyright as they are present in physical form. Literary works include
books, magazines, newspapers, journals, anthologies, novels, computer software and programmes, letters,
e-mails, poetry, lyrics of songs, tables and compilations. Literary works are not only confined to the above
mentioned things but also abstracts, encyclopedia entries, dictionary meanings and individual poems are
protected within the shield of copyright laws.

Duration of Copyright

In case of a copyright pertaining to literary work both published and unpublished the creator/ author owns
the copyright which extends to his lifetime plus 60 years after his death.

Ownership

The author or the creator of a work is generally regarded as an owner of a work in case of literary works.

II. Copyright in dramatics

Dramatics includes within itself dance, mime covering screenplays, ballets, operas etc. Copyright in the
field of dramatic safeguards the creators, composers, choreographers, dramatists, poets, author and other
from replication of their work.
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The different types of published and unpublished work may be submitted for registration
including pantomimes, treatments, plays, choreography and scripts prepared for radio, cinema and
television. They may be with music or without music.

Usually, dramatic scripts are intended to be performed including spoken text, plot and direction of action
etc. It however needs to be understood that all dramatic work cannot get a copyright. A few dramatic
works are exception to it namely:

1. Title or series of a programme.

2. Copyright protects dramatic expressions of a creator but not the general idea of a work.
3. Present work/ script can only be given copyright and not the future scripts/ works.

In order to get the copyright of a dramatic work, a copy of:

 Manuscript
 Printed copy
 Film recording
 Video recording
 Phonorecord

These are treated as a physical script. The registration of the work gets effect on the day when all the
above mentioned material is submitted in the Copyright Office in the prescribed format.

III. Copyright in Musical Work

Musical work means a work which consists of music and for a work to be musical it requires a combination
of graphical notations. However, it excludes any actions or words which are intended to be sung/ spoken
with the music.

Composer

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The author of the musical work is known as a composer. Composer is a person who composes the music
irrespective of the fact that the music is recorded in any form of graphical notations or not.

Duration of copyright

The copyright for the musical work extends to the lifetime of the author plus 60 years after the author dies.
However in case of joint authorship the duration is counted after the death of the last author.

IV. Copyright in sound recordings

Sound recordings which comprises of any person’s speech, song sung by any person with or without
music, any audio or any podcast. The sound recordings are subjected to copyright.

Producer

The author of sound recording is known as producer. The producer of any sound has a right to register
himself as the owner of that sound recording which is created by his intellect.

Duration of copyright

The copyright usually lasts for 60 years. However, in the case of sound recording copyright extends to the
lifetime of the producer plus 60 years after the death of the creator.

V. Copyright in cinematograph films

Cinematograph films include a plethora of activities namely:

1. Any work of visual recording displayed on any medium from which any moving object can be
visualized.
2. Work involving sound recordings.

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  Stages of protection of cinematography under copyright

Pre- production

Before any film is produced a humongous number of preparation is done which included casting and
crewing, scripting, screenplay, shoot schedule, location, rehearsals etc. and here it needs a very strict rules
and a legal backing so that nothing can be replicated.

Post-production

Once the film is released it becomes the prime necessity to protect it from replication.

 Rights of the owner

1. Reproduction right
2. Distribution and rental rights
3. Synchronization rights
4. Derivative working rights
5. Broadcasting rights
6. Right of adaptation and translation
7. Display rights

Another interesting fact in this topic is related with piracy which is called as ‘copyleft’. The owner has
the right to avoid it and sue the person who does the work of piracy.

5.2 SUBJECT MATTER OF COPYRIGHT

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All subject matters protected by copyright are called ‘works’. Thus according to Section 13 of The
Copyright Act 1957, it may be subjected for the following works:

 Original Literary Work,

 Original Dramatic work,
 Original Musical work,
 Original Artistic Work,
 Cinematography films, and
 Sound recordings.

Original Literary Work

It is the product of the human mind which may consist of a series of verbal or numerical statements, not
necessarily possessing aesthetic merit, capable of being expressed in writing, and which has been arrived
at by the exercise of substantial independent skill, creative labor, or judgment. The Copyright Act,1957
provides an inclusive definition of literary work, according to which the literary work includes computer
programming, tablets, and compilations including computer database.

Original Dramatic Work

According to the Copyright Act, 1957, the dramatic work includes any piece for recitation, choreographic
work or entertainment in dumb shows, the scenic arrangement or acting form which is fixed in writing or
otherwise but does not include a cinematographic film. Since the definition is an inclusive one, the other
things fall within the general meaning of dramatic work, and may also be covered by the definition.

Original Musical Work

According to the Copyright Act, 1957, the musical work means any work consisting of music and includes
any graphical notion of such work, but does not include any words or any action intended to be sung,
spoken or performed with the music. In order to qualify for copyright protection, a musical work must be
original.

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Original Artistic Work

According to the Copyright Act, 1957, the artistic work includes any painting, sculpture, drawing,
engraving photograph of any work possessing artistic qualities. However, it also includes the architecture
and artistic craftsmanship of such works.

Cinematographic Films

According to the Copyright Act,1957 cinematographic films includes any work of visual recording and a
sound recording accompanying such visual recording and the expression cinematograph shall be construed
as including any work produced by any process analogous to cinematographic including video films.

Sound Recording

According to The Copyright Act, 1957, sound recording suggests that a recording of sounds from which
that sound may be produced regardless of the medium on which such recording is made or the method by
which the sounds are produced.

Clause (a) of this Section 13 provides the definition of original work whereas clause (b) and (c) protect
by-product works. This Section stipulates that copyright is subject to the provisions of the aforesaid
Section and therefore the different provisions of the Act don’t exist de-hora and outside the ambit of the
Act, it’s a right created under the statute and no right outside the aforesaid Act is claimed.

5.3 TERM OWNERSHIP

In case of a copyright pertaining to literary work both published and unpublished the creator/ author owns
the copyright which extends to his lifetime plus 60 years after his death.

The copyright for the musical work extends to the lifetime of the author plus 60 years after the author dies.
However in case of joint authorship the duration is counted after the death of the last author.

The copyright usually lasts for 60 years. However, in the case of sound recording copyright extends to the
lifetime of the producer plus 60 years after the death of the creator.

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5.4 ECONOMIC RIGHTS AND MORAL RIGHTS

All moral rights are independent of actual copyright of the author and exist even after the assignment of
the copyright.

Moral rights are complementary to exclusive economic rights.

It Includes

- Right of Divulgation: Means right of first publication of new work

- Right of preservation of the integrity of the work

- Right to claim damages in case of distortion-modification of the original work

- Right to claim authorship

- Right of Identification as a performer

- Right to withdraw the work if the same is not reflective of the views of the author (In India no such
right has been conferred, on the contrary, if work is withheld from the public then a compulsory
licence may be issued).

Case Law: Mannu Bhandari v. Kala Vikash Pictures (P) Ltd. (Delhi High Court, 2008) under the
assignment deed of copyright a motion picture was to be made which was an adaptation of the novel
‘AapkaBunty.’ However, the author claimed distortion of the work and the relief of permanent injunction
was granted on the basis of moral rights asserted therein.

Copyright is a proprietary right existing in original literary, dramatic, musical and artistic work. As a
copyright owner, you have the exclusive right to do certain 'restricted acts' in respect of your work.

For example, you can allow or prohibit:

186
  copying of your work - including photocopying, reproducing by handwriting, typing or scanning
into a computer, and taping live or recorded music
 issuing copies of the work to the public
 renting or lending copies to the public - unless the work is lent under the Public Lending Right
Scheme, which does not infringe copyright
 performing, showing or playing the work in public - e.g. performing plays and music, playing
sound recordings and showing films or videos in public, letting a broadcast be seen or heard in
public
 electronic broadcasting of the work to the public - e.g. putting copyright material on the internet
or using it in an on-demand service
 adapting the work - e.g. translating a literary or dramatic work, transcribing a musical work or
converting a computer program into a different computer language or code

5.5 COPYRIGHT OFFICE:

The term copyright office is given under section 9 on the Copyright Act, 1957 makes it compulsory to
have a copyright office. The copyright office is controlled by the registrar of copyright which is appointed
by the Union government, which means that he will be working under the guidance, supervision and orders
of the union government. The main aim of registration office is to provide facilities of registration and is
headed by the registrars. The copyright office is located at IPO (Intellectual Property Office), Plot No. 32,
Sector 14, Dwarka, Delhi, 110075 from G-30, August Kranti Bhawan, Bhikaji Cama Place, New Delhi,
110066. The jurisdiction of this office is extended to whole of India. Copyright office performs the
following copyright tasks:

 Literary work
 Artistic work
 Story themes
 Lyric books
 Story books

187
  Software
 Cinematograph films
 Music
 Sound recordings

5.5.1 Copyright Board:-

1. As soon as may be after the commencement of this Act, the Central Government shall constitute a
Board to be called the Copyright Board which shall consist of a Chairman and not less than two
nor more than eight other members.
2. The Chairman and other members of the Copyright Board shall hold office for such period and on
such terms and conditions as may be prescribed.
3. The Chairman of the Copyright Board shall be a person who is, or has been, a Judge of the Supreme
Court or a High Court or is qualified for appointment as a Judge of a High Court.
4. The Registrar of Copyrights shall be the Secretary of the Copyright Board and shall perform such
functions as may be prescribed.

5.6 REGISTRATION OF COPYRIGHT – PROCEDURE

The right to register the work: Acquisition of copyright is automatic and it does not require any
formality. Copyright comes into existence as soon as a work is created and no formality is required
to be completed for acquiring. However, certificate of registration of copyright and the entries made
therein serve as prima facie evidence in a court of law with reference to dispute relating to ownership
of copyright.

Step 1: File an Application

In the first step:

 The author of the work, copyright claimant, owner of an exclusive right for the work or an
authorized agent file an application either physically in the copyrights office or through

188
 speed/registered post or through e-filing facility available on the official website
([Link]).
 For registration of each work, a separate application must be filed with the registrar along with
the particulars of the work. Along with this, the requisite fee must also be given, Different types
of work have different fees.

For example, getting the copyright for an artistic work registered, the application fees is INR 500, while
for getting the copyright for a cinematograph film registered is INR 5000. The application fees range from
INR 5000 to INR 40000. It can be paid through a demand draft (DD) or Indian postal order (IPO)
addressed to the Registrar of Copyright Payable at New Delhi or through e-payment facility. This
application must be filed with all the essential documents.

At the end of this step, the registrar will issue a dairy number to the applicant.

Step 2: Examination

In the next step, the examination of the copyright application takes place.

Once the dairy number is issued, there is a minimum 30 days waiting period. In this time period, the
copyright examiner reviews the application. This waiting period exists so that objections can arise and be
reviewed. Here the process gets divided into two segments:

 In case no objections are raised, the examiner goes ahead to review and scrutinize the
application to find any discrepancy.
1. If there is no fault and all the essential documents and information is provided along
with the application, it is a case of zero discrepancies. In this case, the applicant is
allowed to go forward with the next step.
2. In case some discrepancies are found, a letter of discrepancy is sent to the applicant.
Based upon his reply, a hearing is conducted by the registrar. Once the discrepancy
is resolved, the applicant is allowed to move forward to the next step.
 In case objections are raised by someone against the applicant, letters are sent out to both
parties and they are called to be heard by the registrar.

189
 1. Upon hearing if the objection is rejected, the application goes ahead for scrutiny and
the above-mentioned discrepancy procedure is followed.
2. In case the objection is not clarified or discrepancy is not resolved, the application
is rejected and a rejection letter is sent to the applicant. For such applicant, the
copyright registration procedure ends here.

Step 3: Registration

The final step in this process can be termed as registration. In this step, the registrar might ask for more
documents. Once completely satisfied with the copyright claim made by the applicant, the Registrar of
Copyrights would enter the details of the copyright into the register of copyrights and issue a certificate
of registration.

The process registration of copyright completes when the applicant is issued the Extracts of the Register
of Copyrights (ROC).

5.7 ASSIGNMENT:

Assignment is also known as sale agreement for copyright wherein the owner of any work sell his right to
any other person with the help of a contract. After the transfer of ownership the person giving copyright
has no control over the fact that how the third party uses it. The person selling the copyright is called
assignor and the person buying is known as assignee. Once a sale is completed the assignee is vested with
all the rights and he may use that work in whatever manner he wishes to use it. For the assignment to be
valid the contract must be written and signed by both parties, the subject of the assignment of copyright
must be clear and without any ambiguity.

Assignment serves a dual purpose, on one hand, the assignee to exploit the work in the specified time; on
the other hand, the assignor has the right to receive a royalty. The assignment may be limited by territory
or time or part or as a whole but has to be written and duly signed by the assignor or authorized party.
Both the work in existence as well as future work can be assigned by the owner provided the agreement

190
contemplates the medium of exploitation. Failure to exercise the rights under the assignment within one
year of the assignment results in lapse. If the first assignment is in favor of the copyright society and
subsequent assignment contrary to the previous then the latter is void. Incorporation of the work in a
cinematograph film through assignment is limited to the film and no further dissemination is permissible.
Disputes pertaining to copyright assignment shall be dealt by the Copyright Board. An assignment is
discharged in case of breach of fundamental terms of the grant.

5.7.1 Transmission:

If the owner of the copyright dies, who was working on a manuscript of dramatic, literary, artistic, or
musical work and was unable to publish the manuscript before dying, then, in that case, the copyright
owner is transmitted to the person stated in the will.

5.7.2 Licensing:

License under copyright rights means that the owner possesses or maintains his or her copyright ownership
rights, however when he permits or allows another party to exercise some of those rights without the
party’s actions being considered an infringement of copyright. The person giving license is referred to as
‘licensor’ and the person who is given the license is called ‘licensee’.

Usually, a license is more preferable than an assignment. This is because the copyright holder has the full
right over his work and can exercise ownership control over the work whereas,, the licensee uses just a
few rights given by the copyright holder.

For instance, a software license agreement is signed between the copyright holder and the licensee,
whereby the copyright owner grants the licensee pertaining to the right to use the software in a manner
which is specified in a contract. In return, the user/licensee may agree to limit the use of the software as
per the agreement and at the same time pay the copyright owner a license fee.

Unlike a copyright assignment, a copyright license may or may not have to be in a written format and
signed by both the parties. It can be oral or arise by implication when considering all the facts and
circumstances surrounding the transaction between the copyright owner and the purported licensee.
191
5.8 COPYRIGHT SOCIETIES – FORMATION & ROLE:

The Copyright societies are also authorized to watch out for infringement of the copyright and take
appropriate legal action against the infringers.

A copyright society is a registered collective administration society under Section 33 of the Copyright
Act, 1957. Such a society is formed by authors and other owners. The minimum membership required for
registration of a society is seven. Ordinarily, only one society is registered to do business in respect of the
same class of work. A copyright society can issue or grant licences in respect of any work in which
copyright subsists or in respect of any other right given by the Copyright Act. The business of issuing or
granting license in respect of literary, dramatic, musical and artistic works incorporated in a cinematograph
films or sound recordings shall be carried out only through a copyright society duly registered under this
Act. This is a kind of compulsory collective licensing for managing of performing rights. The registration
granted to a copyright society shall be for a period of five years and may be renewed from time to time
before the end of every five years on a request in the prescribed form and the Central Government may
renew the registration after considering the report of Registrar of Copyrights on the working of the
copyright society under section 36. The renewal of the registration of a copyright society shall be subject
to the continued collective control of the copyright society being shared with the authors of works in their
capacity as owners of copyright or of the right to receive royalty. Every copyright society already
registered before the Copyright (Amendment) Act, 2012 came into existence shall get itself registered
under this Chapter within a period of one year from the date of commencement of the Copyright
(Amendment) Act, 2012.

5.8.1 Role:
The copyright Societies discharge the following functions:

1. It grant license of the Copyright in the work for reproduction, performance or communication to public.

2. It locates the infringement of the Copyright and initiates legal proceedings.

192
5.9 PERFORMER RIGHTS:

The Indian Copyright Act, also for a very long time failed to give due recognition to the rights of the
performances and it was only in 1994, that the Copyright Act was amended to give certain rights to the
performers. The 1994 Amendment has defined the concept of performer’s right in following manner:

Section 38 says that if any person during the continuance of performer’s right without the consent of the
performer does any of following acts in respect of the performance or a substantial part thereof he will be
deemed to have infringed the performer’s rights:

a) Reproduces a sound recording or visual recording of the performance which was;

i. Made without the consent of the performer;

ii. Made for the purposes different from those for which the performer has given his consent;
iii. Made for purposes different from those referred to in sec 39 from sound recording or visual recording
which was made in accordance with S. 39(acts not constituting infringement);

b) Broadcasts the performance except where the broadcast is made from a sound recording or visual
recording other than one made in accordance with S. 39 or in rebroadcast by the same broadcasting
organization of an earlier broadcast which did not infringe the performer’s right; and

c) Communicates the performance to the public otherwise than by broadcast except where such
communication to the public is made from sound recording or a visual recording or a broadcast.

A ‘Performer’ shall mean and include an actor, singer, musician, dancer, acrobat, juggler, conjurer, snake
charmer, a person delivering a lecture or any other person who makes a performance.

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5.10 BROADCAST REPRODUCTION RIGHTS:

Section 37(1) every broadcasting organization shall have a special right to be known as ‘‘broadcast
reproduction right’’ in respect of its broadcasts. 2 [37. Broadcast reproduction right.—

(1) Every broadcasting organization shall have a special right to be known as ‘‘broadcast reproduction
right’’ in respect of its broadcasts."

(2) The broadcast reproduction right shall subsist until twenty-five years from the beginning of the
calendar year next following the year in which the broadcast is made.

(3) During the continuance of a broadcast reproduction right in relation to any broadcast, any person who,
without the licence of the owner of the right does any of the following acts of the broadcast or any
substantial part thereof,—

(a) Re-broadcasts the broadcast; or

(b) Causes the broadcast to be heard or seen by the public on payment of any charges; or

(c) Makes any sound recording or visual recording of the broadcast; or

(d) Makes any reproduction of such sound recording or visual recording where such initial recording was
done without licence or, where it was licensed, for any purpose not envisaged by such licence; or

(e) Sells or hires to the public, or offers for such sale or hire, any such sound recording or visual recording
referred to in clause (c) or clause (d), shall, subject to the provisions of section 39, be deemed to have
infringed the broadcast reproduction right.]

5.11 PERMITTED ACTS IN RELATION TO COPYRIGHT - FAIR USE

Under Indian regime legal framework being the Copyright Act, 1957, section 52 lays down certain acts or
works that cannot be considered as an infringement of copyright namely fair dealing with a literary,
dramatic, musical or artistic work not being a computer program for the purposes of-

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  fair dealing with any work, not being a computer programme, for the purposes of—
(i) “private or personal use, including research;
(ii) criticism or review, whether of that work or of any other work;
(iii) the reporting of current events and current affairs, including the reporting of a lecture
delivered in public.
 the transient or incidental storage of a work or performance purely in the technical process of
electronic transmission or communication to the public;
 transient or incidental storage of a work or performance for the purpose of providing electronic
links, access or integration, where such links, access or integration has not been expressly
prohibited by the right holder, unless the person responsible is aware or has reasonable grounds
for believing that such storage is of an infringing copy:
 the reproduction of any work for the purpose of a judicial proceeding or for the purpose of a
report of a judicial proceeding;

The Court along with the above mentioned provision, also relies upon classic cases which has been dealt
in brief in the next chapter as to what and up to how much extent any work which is abridged as under the
Act can be considered to be “Fair Use” of the copyrighted work which in fact, is an extremely technical
based issue that is seen by the Court mainly looking into the fact of the case.

5.12 FILING OF COPYRIGHT APPLICATION:

Registering a copyright is an added advantage, which protects the ownership of the work from any
unnecessary disputes. In the event of probable copyright infringement dispute, certificate of registration
of copyright and the Register of Copyright containing particulars of registered copyrights are considered
as “admissible evidence” in the court of law. These serve as prima facie evidence with reference to dispute
relating to ownership of copyright.

5.13 LANDMARK CASES –

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5.13.1 Eastern Book Company and Others v. D B Modak and Anr,

The facts of Eastern Book Company &Ors vs D.B. Modak &Anr (Civil Appeal No. 6472 of 2004) are as
below:
Eastern Book Company (EBC) is a leading publisher of law reports/journals in India. One such publication
is a law report titled “Supreme Court Cases” (“SCC”), containing all Supreme Court judgments. Raw
judgments are copy-edited by a team of assistant staff and various inputs are put in the judgments and
orders to make them user friendly. These include an addition of cross-references, standardization or
formatting of the text, paragraph numbering, and verification and by putting other inputs.

The appellants also prepare the headnotes comprising of two portions, the short note consisting of
catch/lead words written in bold; and the long note, which is comprised of a brief discussion of the facts
and the relevant extracts from the judgments and orders of the Court. EBC argues that the preparation of
the headnotes and putting the various inputs in the raw text of the judgments and orders received from the
Supreme Court Registry require considerable amount of skill, labor and expertise and a lot of effort and
expenditure.

Therefore, “SCC” constitutes an `original literary work’ of the appellants in which copyright subsists
under Section 13 of the Copyright Act, 1957 and EBC alone has the exclusive right to make printed as
well as electronic copies of the same under Section 14 of the Act.

EBC alleges that two defendants (Spectrum Business Support Ltd and Regent Data Tech Pvt Ltd) market
software packages that infringe EBC’s copyright in SCC. Sprectrum markets “Grand Jurix” (published on
CD-ROMs) and Regent Data Tech Pvt. Ltd markets “The Laws” (again on CD-ROMs). As per EBC, all
the modules in the defendants’ software packages have been lifted verbatim from the SCC.

In particular, EBC alleged that the defendants’ have copied EBC’s sequencing, selection and arrangement
of the cases coupled with the entire text of copy-edited judgments as published in SCC, along with and
including the style and formatting, the copy-editing paragraph numbers, footnote numbers, cross-
references, etc.

Interestingly, the court adopted the “minimal degree of creativity” as the threshold for copyright
protection. Deploying such a standard, the court held that mere copy editing would not suffice, as this
involved mere labor and nothing else. However, since there is some creativity involved in the making of

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headnotes, such headnotes would qualify for copyright protection. (Incidentally, Mr. Surendra Malik, the
owner of EBC writes the headnotes himself! I had the great pleasure of studying with his son, Sumeet
Malik in law school. Sumeet joined his dad at the EBC, after a stint at the Franklin Pearce Law Center
[FPLC], a school reputed for its IP program. Sumeet was the one who alerted me to this and asked me as
to what Spicy IP thought of this judgment).

Unsurprisingly, the judgment of the court rambles on for 100 odd pages, with the court religiously
reproducing arguments of counsel and the various case law that they cite. The real crux of the decision is
only about 4 pages!! This seems to have become a way of life for our judiciary, with none of them paying
any heed to the great bard who pleaded that “brevity was the soul of wit”.

At one extreme lies the “sweat of the brow” approach to originality, which the Canadian court held as too
low a standard. Such a standard (which entitles anyone expending “labor” and “capital” to claim copyright
protection) shifts the balance of copyright protection too far in favor of the owner, and fails to allow
copyright to protect the public’s interest in maximizing the production and dissemination of intellectual
works. At the other extreme, we have the “creativity” standard, which implies that something must be
novel or non-obvious – concepts more properly associated with patent law than copyright law.

The court therefore adopted a “middle path” approach by enunciating an “exercise of skill and judgment”
standard. In essence, the court held that to claim copyright in a compilation, the author must produce a
material with “exercise of his skill and judgment” which may not be creativity in the sense that it is not
novel or non-obvious, but at the same time it is not the product of merely labor and capital. The Indian
Supreme Court endorses the above standard of the Canadian Supreme Court (that the appropriate standard
is neither one of “sweat of the brow” nor of “creativity”) and holds that:
“Creative works by definition are original and are protected by copyright, but creativity is not required in
order to render a work original. The original work should be the product of an exercise of skill and
judgment and it is a workable yet fair standard”

Yet, a few paragraphs later, the Indian Supreme Court notes:

“Novelty or invention or innovative idea is not the requirement for protection of copyright but it does
require minimal degree of creativity.”!!

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Under such a standard, the court held that mere copy-editing (clerical corrections, syntax etc.) wouldn’t
qualify as they did not involve “creativity”, but skill expended in writing head-notes, footnotes and
editorial notes would qualify. The Supreme Court therefore “restrained the respondents from copying head
notes, footnotes and editorial notes appearing in their law journals.”

5.13.2 R. G. Anand v. Delux Films,

CASE FACTS:
The appellant, R. G. Anand, an architect by profession and also a playwright, dramatist and producer of
several stage plays, wrote and produced a play called ‘Hum Hindustani’ in 1953. It ran successfully and
was re-staged in 1954, 1955 and in 1956. Aware of the interest of the plaintiff in filming the play in view
of its increasing popularity, the second defendant, Mr. Mohan Sehgal, contacted plaintiff.
In January, 1955, plaintiff met the second and third defendants and had detailed discussions about the play
and its plot and the desirability of filming it. However, after this discussion, the plaintiff received no
further communication from the second defendant. In May, 1955, the defendants started to make the film
‘New Delhi’, which, the plaintiff gathered, was based on his play, “Hum Hindustani’. The defendant,
however, assured him that it was not so. In September, 1956, the movie was released and after viewing it,
the plaintiff filed a suit for infringement of his copyright in his play ‘Hum Hindustani’. His claims included
damages, account of profits and a permanent injunction against the defendants restraining them from
exhibiting the movie.
CASE HISTORY:
Appellant filed a suit at the District Court and the learned trial judge held, in his wisdom, that the movie
‘New Delhi’ made by the defendants does not infringe the copyright of the plaintiff. On appeal, the
Delhi High Court upheld the judgment of the district court. An appeal against the judgment of the Delhi
High Court was filed at the Supreme Court.
ISSUE:
Whether the production, distribution and exhibition of the film ‘New Delhi’ made by the defendants are
in infringement of the plaintiff’s copyright in the play, ‘Hum Hindustani’?
RULE OF LAW:

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Unless there is any substantial resemblance between the original work and the alleged copy, the play and
the movie here respectively, in terms of scenes, incidents and treatment, and similarity between the two is
so much that a reasonable man would consider the ‘copy’ to be more or less an imitation of the original,
an infringement of copyright cannot be said to have taken place.
ANALYSIS:
It was argued by Anand that Delux Films and the other defendants were fully aware of the theme of his
play and its intricacies. He had had detailed discussions with them about the same. There were various
similarities between the play and the movie made by Delux Films in terms of the main theme of
provincialism, characterization and situations. Anand pleaded that he was the owner of the copyright in
the play ‘Hum Hindustani’ and that his copyright in the play had been violated. The Delhi High court
recognized the copyright of the plaintiff under the Copyright Act of 1911.
Delux Films and others, on the other hand, asserted that the movie was not substantially similar to the play
in terms of the themes it dealt with and there were lot of differences in terms of characterization and
treatment.
The court held that the film produced by the defendants cannot be said to be a substantial copy of the play
and the defendants cannot be held to have committed an act of piracy because of differences in story,
theme, characterization and climaxes. Moreover, copyright cannot be acquired in an idea; the idea being
provincialism in this case. A copyright offers protection only to the expression of an idea and not the idea
itself. The allegation by Anand that the defendants violated his copyright by copying his idea was held
invalid.
The plaintiff could not prove that the defendant had committed a colorable imitation of his play. Where
similarities between the copyrighted work and the copy are so many and the similarities between the two
works are not coincidental, a reasonable inference of colorable imitation can be drawn. The court held that
a case for infringement may be made out only when such infringement may be identifiable by a reasonable
man; and, in this case, the court observed, that no prudent person could get an impression that the film
appears to be a copy of the original play. The Supreme Court did not find any violation of copyright and
dismissed the appeal.
The fundamental principles established in the case with regard to infringement of copyright in case of
substantial similarity still hold good.

5.13.3 Fateh Singh Mehta v. O P Singhal:

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His Lordship Fazal Ali, J. in R.G. Anandv. M/s Delux Films (1978) 4 SCC 118: (AIR 1978 SC 1613) after
referring to various authorities and case law on the subject of copy right, extracted the following
propositions: --

1. There can be no copyright in an idea, subject matter, themes, plots or historical or legendary facts and
violation of the copy rights in such cases is confined to the form, manner and arrangement and expression
of the idea by the author of the copyrighted work.

2. Where the same idea is being developed in a different manner, it is manifest that the source being
common, similarities are bound to occur. In such a case the Courts should determine whether or not the
similarities arc on fundamental or substantial aspect of the mode of expression adopted in the copy righted
work. If the defendant's work is nothing but a literal imitation of the copyrighted work with some
variations here and there it would amount to violation of the copy right in other words, in order to be
actionable the copy must he a substantial and material one which at once leads to the conclusion that the
defendant is guilty of an act of piracy.

In R.G. Anand's case (AIR 1978 SC 1613), there were concurrent findings of the fact of the District Judge
and Delhi High Court and they were not assailed before the Supreme Court.

5.14.4 Indian Performing Rights Society V. Eastern Indian Motion Pictures:

Facts:
This is a dispute that broke out in a matter involving rights over Indian literary and music works for which
the copyright subsides in India. Parties to the dispute where the Indian performing right society and the
cinematograph exhibitors association of India.
IPRS incorporated on 23/08/1969 in the state of Maharashtra governed by copyright Act 1957 has the
authority for issuing licenses for performance in public of all existing future Indian literary and musical
works for which the copyright subsides in India and is a company limited by guarantee for the purpose of
granting license for all present and future Indian musical works to be performed in public.
IPRS claimed that it is entitled to a royalty in case the literary work used in cinematograph films is
broadcasted on radio stations as they claimed themselves to be assignees of the literary works and laid
down a tariff for the same.

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The association of cinematograph exhibitors opposed to the same saying that IPRS has absolutely no rights
over these works and that the production house was the real owner of copyrights over the literary work in
question since composer loses his rights under the contract of service between production houses
especially when there is a consideration involved.
An appeal was preferred as the objectors were dissatisfied with the high court decision which allowed
claim made by the cinematographers association and further laid down that assignment of future work has
no effect.

Issue:
1. Whether an existing or a future right of music composer /lyricist is capable of assignment
2. Whether the producer of the film can be the copyright owner by means of engaging the composer.
Holding:
1. Yes. Copyright relating to existing and future work can be assigned. The assignment would take effect
only when the work comes into existence.
2. Yes. The cinematograph film producer becomes the first owner of the copyright in case he commissions
a composer of music, a lyricist, for reward or for a consideration to compose music to be incorporated in
the cinematograph film as the composer is employed under a contract of service.

The Rule of Law:

Issue no: 1
Section 30 of the copyright act 1957 states that assignment of work is possible by means of issuing a
license duly signed by the composer or his assignee; and
In case of a license relating to future work; the assignment shall take effect after the work comes into
existence.
Issue no: 2
Section 17(c) of Copyrights Act 1957 lays down that the proprietor becomes the absolute owner in cases
of contract of service for valuable consideration unless there is an agreement contrary to it.
Analysis:
Issue no: 1

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A composer can assign rights over future work. The assignment takes effect once the composition comes
into existence. Section 30 of the copyright act 1957 lays down that assignment of work is possible by
means of issuing a license in favor of the prospective owner of the copyright. The rights can be transferred
by means of a document duly signed by the owner or the assignee. Present and future works of a composer
can be assigned; however, the assignment comes into effect only after the work in question comes into
existence.
Once an agreement is entered into between the production house and the composer for incorporating the
composer’s composition; composer loses his rights over the composition and the production house
becomes the owner of the copyright. The agreement can be a present as well as a future one. In either case,
IPRS cannot claim royalty as it has absolutely no rights over it. However, it is different in case of lack of
any agreement.
Issue no: 2
The court held that the composer loses his right over the composition automatically when he enters into
an agreement with a cinematograph producer to compose songs to be incorporated in the film for
consideration. Section 17(c) of the copyright act lays down that the producer shall be the owner of the
composition in case of consideration and that the composition automatically becomes a part of the
cinematograph film and the composer loses his rights over it completely and works falling under such
category cannot be assigned further. IPRS cannot claim royalty as the production house has the right over
the composition the moment it comes into existence. Here there is a contract of service between the
composer and production house. In this case, the producer of the cinematograph film becomes the absolute
owner and the authority cannot be questioned.

5.13.6 Super Cassettes Industries v. UOI

The Supreme Court held that the Board had the jurisdiction to entertain any application for grant of
compulsory license. The order of the Board should be set aside and the matter be remitted to the Board
again for the consideration of the matter afresh on merit.

SCIL claimed that the business model of YouTube allows, encourages and profits from use of copyrighted
work uploaded on the website without obtaining any license or permission from the rightful copyright
owners and without paying them any royalty. The High Court passed the order against YouTube and
Google restraining them from reproducing, adapting, distributing, communicating, transmitting,

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disseminating or displaying on their websites any audio-visual works which is in the exclusive ownership
of SCIL.

5.14 COPYRIGHT AND FREEDOM OF EXPRESSION:

The relationship between copyright law and freedom of expression has always been controversial, but this
tension has deepened in recent years with the emergence of the digital environment and expansion of
copyright law. Copyright grants to copyright owners the exclusive right to control and prevent the
dissemination of their works. These rights amount to an effective fetter on what other persons are able to
speak, write and so forth, resulting in a conflict between copyright and freedom of expression. Copyright
serves to incentivize the creation of new forms of expression, thereby promoting freedom of expression.

5.15 COPYRIGHT INFRINGEMENT:

5.15.1 Primary Infringement: No knowledge or intention is required if the acts concern the
exclusive rights of the owner.

5.15.2 Secondary Infringement: No knowledge or intention is required but the infringement

occurs through facilitative means namely, sale, hire distribution, exhibition or importation
of infringing copies.

5.15.3 Contributory Infringement: One party causes/induces or contributes or aids to commit the
infringement by the second party.

5.15.4 Vicarious Infringement: if a person has direct ability to supervise the infringing act, yet
results in the commission of the infringing act for a financial interest. Piracy (duplicating
the legitimate copies and illegitimately distributing), Counterfeiting (unauthorized copying
of the work and being passed off as genuine) and reproduction of the work in any material
form, whether in part or substantially have implications on the right of reproduction. The
tests evolved by the judiciary to ascertain the extent of infringement of right of reproduction
is used collaterally to determine the originality too as follows:

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 - By identifying the similarities.

- Feeling and Artistic Character Test.

- Minimum of Creativity Test as an advancement of the sweat and brow test.

- Abstraction, filtration and Comparison test.

5.15.5 Remedies for Infringement: Civil, Administrative, Criminal International Copyright Law
(U.S. and E.U.)

The Registrar of copyright, copyright Board and Customs authorities have powers to enforce the
copyright.
The Intellectual Property Appellate Board (IPAB), a quasi-judicial body with the headquarters in New
Delhi can enforce the copyright.
The Board is entrusted with the task of adjudication of disputes pertaining to copyright acquisition,
assignment of copyright, the grant of Licenses in respect of works withheld from the public, unpublished
Indian works, production, and publication of translations and works for certain specified purposes.

Civil Remedies:

• Jurisdiction: The District court has jurisdiction where the plaintiff resides or carries on business or work
for gain but the not necessarily where the infringement has occurred.

• Interlocutory Injunction: Temporary order from the court to do a certain act or refrain from doing a
certain act. The plaintiff is able to establish prima facie case along with the balance of convenience tilted
in favor of the plaintiff and if the relief is not granted will result in irreparable injury to the complainant.
The defence to the relief includes, irreparable injury to the defendant, plaintiff’s interest can be protected
even without the order or fair dealing claim or acquiesce by the plaintiff to the infringement or
unreasonable delay in approaching the court for redressal.

• Mareva Injunction: restraints the defendant from disposing of the assets or removing them from the
jurisdiction of the court, to adversely affect the satisfaction of the claim of the plaintiff that is likely to
arise.

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• Perpetual Injunction: is a permanent order that seeks to prevent any further infringement of the
copyright, in the operative sense the infringer is required to deliver the infringing material to the plaintiff/
deemed owner of the copyrighted work. Herein the plaintiff is not required to prove actual damages.

• John Doe or Ashok Kumar Order: a form of Injunction wherein the offenders are unknown or identity
is not available at the time of issuance of the order.

• Injunction for groundless Threats of Legal Proceedings: A declaratory order - injunction is obtained
against the person who threatens to file a suit of infringement when in reality the act of using the work is
not of infringing nature.

Additionally, the court can issue the Anton Piller Order permitting the plaintiff and the solicitor to inspect
(and not search) the premises of the defendant and collect the infringing copies before actual destruction
for evidentiary purposes.

• Damages: can be obtained for both published as well as unpublished work so as to undo the unjust
enrichment the defendant has had by entering into monetary transactions of copyright material. Damages
may be nominal or exemplary.

• Account for Profits: based on the profit earned by the infringer the amount has to be given to the author/
owner of the copyright.

b. Criminal Remedies:

- The standard of the degree of proof in criminal cases is beyond reasonable doubt needs to be proved
along with intention and physical act is done in pursuance of the act of infringement.

- Police have the power to seize the infringing copies while Judicial Magistrate First Class has jurisdiction
over such criminal cases.

- In certain offence, the statute provides for imprisonment, fine or both in addition to being a non bailable
offence.

- Any use of technological advancement to protect the detection.

 Check your progress:

Multiple Choice questions with Single Response.

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1. The protection period for copyright is

a. 10 years

b. 20 years

c. 30 years

d. 60 years

2. Which is not an essential condition/s for copyright protection of a literary work

a. Quantity

b. Quality

c. Literary references

d. All of the above

State True or False.

1. Author of the work is always the first owner.

2. Copyright comes into existence only when the entry is made in the Registry.

 SUMMARY:

- Copyright is a well-recognized form of property right which had its roots in the common law system and
subsequently came to be governed by the national laws in each country.
- Copyright is a right given by the law to creators of literary, dramatic, musical and artistic works and
producers of cinematograph films and sound recordings. In fact, it is a bundle of rights including, inter
alia, rights of reproduction, communication to the public, adaptation and translation of the work.
- In India, the law relating to copyright is governed by the Copyright Act, 1957 which has been amended
in 1983, 1984, 1985, 1991, 1992, 1994, 1999 and 2012 to meet with the national and international
requirements.
- Under the Copyright Act, 1957 copyright subsists throughout India in the following classes of works:
Original literary; dramatic, Musical and artistic works; Cinematograph films; and Sound recordings.

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- The definition of “Literary work” under the Copy right Act, 1957 includes computer programmes, tables
and compilations including computer “literary data bases.
- Literary, dramatic, musical or artistic works enjoy copyright protection for the life time of the author
plus 60.

 Keywords

- Software Program: It is a collection of instructions that performs a specific task when executed by a
computer.
- Plaintiff: It is the party who initiates a lawsuit before a court.

 Self-Assessment Questions:

1. Briefly explain the international conventions dealing with copyright protection accorded to various
works.

2. Elaborate on the classes of work in which copyright subsists.

3. Explain briefly the concept of infringement of copyright?

4. Enlist the remedies available against copyright infringement.

5. Elaborate on the strategies to commercialize copyright/exploit the exclusive economic benefits.

 Answers to Check your Progress:

Multiple Choice questions with Single Responses.

1. The protection period for copyright is

d. 60 years

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2. Which is not an essential condition/s for copyright protection of a literary work

d. All of the above

- State True or False.

1. True

2. False

 Suggested Reading:

rd
1. Law Relating to Intellectual Property Rights by V.K. Ahuja, Lexisnexis, India 3 edn. 2017
2. Law of Copyright- comparative Perspectives by Alka Chawla, Lexisnexis, India, 2013

3. [Link]

[Link]://[Link]/Documents/Public_Notice_inviting_reviews_and_
comments_of_stakeholders_on_draft_guidelines/Literary_Work.pdf

5. [Link] DraftManual_11March2015.pdf

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Designs

MODULE

Structure: 6
6.1 Introduction
6.2 Definition & Importance
6.3 Registration Procedure under Design Act, 2000
6.4 What can be filed as design?
6.5 Pre-requisites of Registration
6.6 Application for Registration
6.7 Publication
6.8 Grant of Certificate
6.9 Copyright in Registered Designs & Duration
6.10 Cancellation of Registration
6.11 Piracy and infringement of designs
6.12 Overlap of Copyright and Design Acts
6.13 Case Studies -
6.14 Layout Designs of Integrated Circuits protection in India
6.15 IPIC Treaty
6.16 Cases – Crocs Inc. USA v. Liberty Shoes Ltd., Whirlpool v. Videocon, Marico v. Raj Oil

Check your progress

Summary
Keywords
Self-Assessment Questions
Answers to Check your Progress
Suggested Reading

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6.1 INTRODUCTION

Industrial designs must be protected in each Contracting State, and protection may not be forfeited on the
ground that articles incorporating the design are not manufactured in that State.
Industrial design is a combination of applied art and applied science, whereby the aesthetics, ergonomics
and usability of products may be improved for marketability and production. The role of an industrial
designer is to create and execute design solutions towards problems of form, usability, physical
ergonomics, marketing, brand development and sales.

6.2 DEFINITION & IMPORTANCE

‘Design’ means a conception or suggestion or idea of a shape or of a picture or of a device or of some

arrangement which can be applied to an article by some manual, mechanical or chemical means.
Therefore, the order of the Board is correct on this aspect and does not call for any interference. The
Hon’ble Court dismissed the appeal filed by the Appellant and held that the Side trim is a design under
the Designs Act, 2000 and therefore Section 15(2) of the Copyright Act, 1957 would clearly be attracted.
In doing so the Hon’ble Court relied on the definition of term ‘Design’ given under the Designs Act, 2000.

An industrial design may constitute the ornamental or aesthetic aspect of an article. It may consist of 3-D
features such as the shape of an article, or 2-D features, such as patterns, lines or color.[1] India has seen
the evolution of design as an important fragment of the intellectual property family in protecting the
aesthetic value of the articles.

The Designs Act, 2000, currently governs the issues related to design registration and piracy in India.
Design registrations are particularly useful since, many a time, a customer's purchase decision is based on
the product aesthetics i.e., the shape, look, color combination ornamentation, etc.

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6.3 REGISTRATION PROCEDURE UNDER DESIGN ACT, 2000:

The first thing to be noted is that the application to register a design may be applied to five different
authorities:

– Controller Designs Patent Office in Kolkata

– Patent office in Delhi
– Patent office in Ahmedabad
– Patent office in Mumbai
– Patent office in Chennai

When an application is submitted at any one of the four offices in Delhi, Mumbai, Chennai and
Ahmedabad and are rerouted to the head office in Kolkata, the following is the application procedure for
filing for a design registration:

 The application must be filed with Form-1 along with the following details:

– Name of applicant.
– Address of the applicant.
– Nationality of the applicant.
– In the case where the applicant is not a natural person, i.e. a company, etc. you must include
information regarding the place of incorporation and the legal status of the entity.
– The required fee applicable.

The class and the sub-class of the article under the Locarno Classification, of the article embodying the
design.

The name of the article to which the design is applied upon shall be decided.

Representation of the design: In the case where the design is two dimensional, two copies of the design
are to be submitted. In the case where the design is three dimensional, two copies of the design from the

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viewpoint of the front, back, top, bottom, and the two sides must be submitted. Further, the applicant must
also highlight the unique features of the design that sets it apart from any other existing designs.

If the application is to register the design in more than one class, each class of registration must have a
separate application.

Statement of disclaimer or novelty must be attached to each representation with respect to mechanical
processes, trademark, numbers, letters etc. it should also be endorsed and duly signed and dated on each
representation by the applicant or the authorized person on behalf of the applicant.

After submission of the application, the patent office will examine the application and raise objections, if
any. Upon the clearance or removal of all objections, the design shall be granted a copyright certificate by
the patent office.

The registration of the design is valid for ten years from the date of registration.

The period of registration may be extended by another 5 years before the expiry of the first ten year period
by submitting an application through Form-3 and paying a fee of Rs 2000.

6.4 WHAT CAN BE FILED AS DESIGN?

In a legal sense, an industrial design constitutes the ornamental or aesthetic aspect of an article.

An industrial design may consist of three dimensional features, such as the shape of an article, or two
dimensional features, such as patterns, lines or color.

6.5 PRE-REQUISITES OF REGISTRATION:

The design should be new or original, not previously published or used in any country before the date of
application for registration. The novelty may reside in the application of a known shape or pattern to new
Subject matter. Practical example: The known shape of “Kutub Minar” when applied to a cigarette holder

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the same is registrable. However, if the design for which application is made does not involve any real
mental activity for conception, then registration may not be considered.
The design should relate to features of shape, configuration, pattern or ornamentation applied or applicable
to an article. Thus, designs of industrial plans, layouts, and installations are not registrable under the Act.

The design should be applied or applicable to any article by any industrial process. Normally, designs of
artistic nature like painting, sculptures and the like which are not produced in bulk by any industrial
process are excluded from registration under the Act.
The features of the design in the finished article should, appeal to and are judged, solely by the eye. This
implies that the design must appear and should be visible on the finished article, for which it is meant;
Thus, any design in the inside arrangement of a box, money purse or almirah may not be considered for
showing such articles in the open state, as those articles are generally put in the market in the closed state.
Any mode or principle of construction or operation or anything which is in substance a mere mechanical
device, would not be registrable design. For instance, a key having its novelty only in the shape of its
corrugation or bend at the portion intended to engage with levers inside the lock associated with, cannot
be registered as a design under the Act. However, when any design suggests any mode or a principle of
construction or mechanical or other action of a mechanism, a suitable disclaimer in respect thereof is
required to be inserted on its representation, provided there are other registrable features in the design.
The design should not include any Trade Mark or property mark or artistic works as defined under the
Copyright Act, 1957.

6.6 APPLICATION FOR REGISTRATION:

The application for registration of design can be filed by the applicant himself/herself or through a
professional person (i.e. patent agent, legal practitioner). However, for the applicants not being residents
of India, an agent residing in India has to be employed. Any person who desires to register a design shall
submit the following documents to the Controller of Designs, The Patent Office at Kolkata, or at any of
its branch offices at New Delhi, Mumbai and Chennai.

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6.7 PUBLICATION:

If any person has filed an application for patents and utility models, marks and industrial designs, or of a
Trademark, in one of the contracting States, the applicant may—within a certain period of time, that is

- 12 months for patents and utility models;

- 6 months for industrial designs and marks,

— apply for protection in any of the other contracting States, and these later applications will then be
regarded as if they had been filed on the same day as the first application. i.e., these later applications will
have priority or the “right of priority” over applications, as the Convention provides, which may have
been filed during the said period of time by other persons for the same invention, utility model, mark or
industrial design. These periods shall start from the date of filing of the first application, but the date of
the filing shall not be included in the period. These later applications will not be affected by any event that
may have taken place in the interval, such as any publication of the invention or sale of articles bearing
the mark or incorporating the industrial design.

6.8 GRANT OF CERTIFICATE:

When an application for registration of a Design is in order, it is accepted and registered and then a
certificate of registration is issued to the applicant. However, a separate request should be made to the
Controller for obtaining a certified copy of the certificate for legal proceeding with requisite fee.

6.9 COPYRIGHT IN REGISTERED DESIGNS & DURATION:

Designs are registered in different classes as per the Locarno Agreement. It is used to classify goods for
the purposes of the registration of industrial designs which further helps in design searches. These classes
are mainly function oriented. The copyright on a registered design is in total for 15 years. Initially the

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Copyright in Design is registered for 10 years, which can further be extended by 5 years on making an
application for renewal.

In addition to the above, the design sought for protection must be new or original, i.e., not disclosed to the
public in India or elsewhere in the world by prior publication or by prior use or in any other way. The
design should be significantly distinguishable from designs or combination of designs that are already
registered or pre-existing or disclosed to the public. Furthermore, the design shall not include any
scandalous or obscene matter or any feature that is purely functional in nature.

6.10 CANCELLATION OF REGISTRATION:

The registration of a design may be canceled at any time after the registration of the design, on a petition
for cancellation in form 8, with a fee of Rs. 1,500/- to the Controller of Designs, on the following grounds:

 That the design has been previously registered in India or

 That it has been published in India or elsewhere prior to the date of registration or
 The design is not new or original or
 Design is not registrable or
 It is not a design under Clause (d) of Section 2.

6.11 PIRACY OF DESIGNS:

Piracy of a design means the application of a design or its imitation to any article belonging to a class of
articles in which the design has been registered for the purpose of sale or importation of such articles
without the written consent of the registered proprietor. Publishing such articles or exposing them for sale
with knowledge of the unauthorized application of the design to them also involves piracy of the design.

6.11.1 Infringement of designs:

In the Design Act, 2000, the piracy of registered design is considered as an Infringement of Design in
India. Section 22 of the Designs Act, 2000, provides the provisions related to the Piracy of registered

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Designs in India. As per Section 22 of the Design Act, 2000, any fraudulent or obvious imitation of a
Design that is already registered without the consent of the owner or proprietor of the registered design is
unlawful. The Section also prohibits the import of any kind of substance or material which is in close
resemblance of such a registered design.

An Infringement of a registered Design means when any person, without the consent of the proprietor of
the design, imports, applies, or publishes the registered design or any obvious or fraudulent or imitation
thereof.

The acts mentioned above of a person become the Infringement of Design only in the circumstances
as follows:

 The Act is committed during the existence of a Copyright in any Design;

 The design is imitated or applied without the prior consent of the registered owner or proprietor;
 The Act done is for the purpose of sale, and not for any private or personal use;
 The infringing articles must be in the same class in which the design is registered.

In order to ascertain Design Infringement in India, the court or any adjudicatory body is not required to
compare the two articles directly, but should look at the articles from the point of view of an average
consumer and should see if the two articles are causing any obvious confusion in the minds of the
consumers.

In order to understand the infringement of copyright in a design, we need to know what constitutes a
design to be qualified as statutorily registered design under the Designs Act, 2000 (hereinafter referred to
as the “Act”). To that extent, section 4 of the Act lays down the following three criteria which are to be
considered while a person or proprietor intends to get their work registered:

1. It has to be new or original. For further clarification, the landmark case of Gammeter vs
Controller of Patents explained that the design does not necessarily have to be created newly,
but can also be used in a unique way on an old design as long as the usage of the new design
on an existing product has not been already discovered earlier otherwise.
2. It is not existing in the public domain or has been published in any tangible form within India
or outside India as the case may be. This can be explained by citing the case of Steelbird Hi-

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 tech India Ltd vs SPS Gambhir in which the Court clearly explained that the design needs to
be new or original which is a product of the intellectual outcome of a person and has never
been in existence before such person has expressed such design in a tangible form.
3. It is significantly distinguishable from other designs or a combination of designs already
existing in the public domain.
4. Should not have any scandalous or obscene matter present in its content.

A design which is registered as per Chapter II of the Act, section 11 of the Act gives an advantage to the
registered user to not only protect their work under the Act itself but also can acquire copyright protection
for a period of ten years from the same day the work was registered under the Act. On the registration of
a design under the Act the proprietor of the design acquires the following rights:

1. The exclusive right to apply the design to any article in any class in which the design is
registered;
2. the exclusive right to publish or expose, or cause to be published or exposed, any article in any
class of goods in which the design is registered to which such design is applied; and
3. the exclusive right to import for the purposes of sale any article belonging to the class in which
the design is registered and having applied to it that design.

For explaining further as to what constitutes as an act of “Piracy of Design”, section 22 (1) of the Act
lays down the following checks that will help determine whether the Design created or developed is pirated
or not:

1. The design which is proposed to be registered or used otherwise for the purpose of sale should
not have “fraudulent or obvious limitation” as to that with a registered design, until and
unless written permission has been acquired from the registered owner of the registered design.
This was clarified in the case of Veerplast Houseware vs Bonjour International in which the
Court considered this particular check to be confirmed from the point of view of the “customer
with average knowledge and imperfect recollection”.
2. “Substantial differences” should be there between the design which is proposed to be
registered and the design which has been already registered. This was discussed in a landmark
case of Britannia Industries Ltd vs Sara Lee Bakery wherein, the infringement of the design

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 was judged by matching the old design with the newly registered design and in the instance of
substantial similarities. It was an important case since the designs of both the parties were to
be considered from the perspective of a child which was found out by the Court to having
substantial differences as against the contentions which were made by the plaintiff.

Contravention of any of the following checks mentioned above shall be discussed in the next chapter of
this article which provides remedy as against the wrongdoer or the person who has infringed upon the
rights of the person who has already registered their design as under the Act.

 Remedies against Infringement of Copyright in a Design

In pursuant to the previous chapter, we have established as to what constitutes an infringement of

copyright in design and the different case laws, which had further helped in developing the understanding
of the concept. In this chapter, the different remedial mechanisms shall be explained below with reference
to the relevant provisions:

1. Section 22(2) of the Act- Subsection 2 of section 22 provides that if any person has been found
in contravention of section 22(1) of the Act which has been discussed in the previous chapters,
the person who has infringed the rights of the registered proprietor of the design shall be liable
to pay not more than INR 25,000 which will be recoverable towards contract debt. The
registered proprietor also has the right to file a suit for injunction, not lower than that of the
Court of a District Judge, as against the person wherein, if injunction is passed against the
person, he/ she shall be liable to pay such damages awarded by the Court other than stopping
the wrongdoer to use the infringed design.
2. Section 55 of the Copyright Act, 1957 provides for civil remedies that can be availed by the
registered proprietor wherein, if any person who is intentionally infringing such work as
covered in the Copyright Act, 1957 are entitled to seek remedy in the form of either claiming
damages, accounts or by filing a suit for injunction against the person who has infringed the
right of the registered proprietor.
3. The registered proprietor is also entitled to receive such profit which was gained by the
wrongdoer during the time of using the infringed design of the registered proprietor.

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 4. The registered proprietor may also seek an interlocutory injunction as under Order 39, Rules 1
and 2 of The Code of Civil Procedure, 1908 wherein, the registered proprietor has to establish
a prima facie case showing “balance of convenience” in its favour. This can be further
explained by citing the case of Novartis AG vs Mehar Pharma9 wherein, the Court held that
an “interlocutory injunction will not be granted where damages will provide an adequate
remedy should the claim succeed”.
5. As under Administrative Remedies, the registered proprietor of the design can file an
application under section 53 of the Copyright Act, 1957 before the Registrar of Copyright for
stopping the import of products which are subjected to infringement of his/ her right under the
Copyright Act, 1957 wherein, after necessary examination, may confiscate such products
which are likely to infringe the rights of the registered proprietor.
6. Section 63 of the Copyright Act, 1957 provides for criminal remedies that can be availed by
the registered proprietor wherein, if any person who is intentionally infringing or abets such
infringement of such work as covered in the Copyright Act, 1957 or otherwise (meaning work
connected to designs as under the Act), such person shall be punished by way of imprisonment
for a minimum of 6 (six) months which may extend up to 3 (three) years along with fines
amounting to a minimum of INR 50,000 which may extend to INR 2,00,000.
7. Section 63A of the Copyright Act, 1957 provides for punishment on second and subsequent
crime wherein criminal remedies can be availed by the registered proprietor. Such punishment
shall consist of imprisoning the wrongdoer for a minimum 1 (one) year which may extend up
to 3 (three) years along with fines amounting to a minimum of INR 1,00,000 which may extend
to INR 2,00,000.

6.12 OVERLAP OF COPYRIGHT AND DESIGN ACTS:

In spite of the several judicial pronouncements with reference to the overlap of copyright and designs, the
position is not settled. It is much essential to look into the provision of the copyright Act which talks on
resultant of the overlap between both. It says that when a particular matter is registered under designs then
it will lose its protection under the copyright regime. In addition to it, when a particular matter is eligible
for protection under design, will lose the copyright protection if the item is produced for more than 50

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times in an industry. This applies though the item is not registered under designs. With this it can be
derived that though a work is created by a person, he cannot have a copyright protection over it if such
work has been applied in a product for such numbers.

If we could look at the objective behind such provision, it would be a much needed provision to prevent
a particular author from claiming rights over the same product under different regimes of intellectual
property. Because, if a creator claims the right of copyright and also uses the creation in a product to
economically benefit from both the regimes, the law prohibits it. For instance, if a particular work is
applied in a product and produced for more than 50 times, then there won’t be a copyright protection and
moreover since it is not registered under the design, the creator loses the right under the designs regime
also. The best suiting example would be of the game “Scrabble”, a board game.

The owner of the game claimed protection for the game under the category of artistic works. He also seeks
infringement by an online game maker. But unfortunately the court held that since there is no registration
under designs and moreover since it is produced more than 50 times, he gets no protection under both the
regimes. In the “Microfibres case”, there is an infringement claim made by the US Company against an
Indian businessman for infringement of copyright. He claimed that he own a copyright over the patterns
in the fabric, which he claims to be copied without his consent. The court looked into the issue of the
overlap of copyright and designs and have held that the patterns fall under the design regime and since the
claimed owner hasn’t registered the same, he doesn’t have ownership over the same and hence no
infringement. Even in “Samsonite case”, the court refused the claim of the claimed owner over the design
of the suitcase since it was not registered and also since more than 50 times the suitcase is produced, the
copyright ceased to exist. Hence there is no infringement.

 Recent update:

The inherent nature of intellectual property is such that the overlap between the bundle of rights available
to an owner in a single subject matter is unavoidable. Consequently, maintaining harmonious co-existence
between these rights and setting a precedent that fits all is proving to be a difficult task for enforcement
bodies.

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One such blurred line arises between copyright and designs law, particularly in relation to artistic works.
The law governing copyright and designs in India however provides a fairly clear and simple distinction
between both types of IP. A bare perusal of the Copyright Act, 1957 (“Copyright Act”) would reveal that
a copyright subsists is any original work which grants the author an exclusive right over such work. The
Designs Act, 2000 (“Designs Act”) defines a design as an external feature that is applied to an article and
judged solely by the eye. Copyright protection in India is granted from the moment an original work is
created. However, protection under the Designs Act is made available to an owner only when the design
is granted registration. Therefore, copyright is often referred to as an inherent right, and a design is referred
to as a statutory right.

The Copyright Act even addresses the issue of dual protection with designs explicitly in Section 15. As
per Section 15(1), an owner of a design will forego protection under copyright law, once the design has
been granted registration. Section 15(2) states that a copyright in an unregistered design shall cease, as
soon as the article to which the design has been applied, has been reproduced more than fifty times by an
industrial process.

This provision is often used as a defense in copyright infringement suits. For instance, in a 2016 Delhi
High Court judgment [1], the defendant was able to successfully prove that no copyright subsists in a
drawing of a dress because the drawing was applied to create more than fifty dresses. Further, given that
the design in the dress was not registered by the plaintiff, the court denied the plaintiff from claiming
design infringement as well. The plaintiff was thereby stripped off from claiming both copyright and
design protection in its original design of the dress.

Even though the above ruling seems straightforward in its application to the facts of the case, it is
unsettling that an original artistic work can be precluded from copyright protection by virtue of being
depicted in three-dimensional or two-dimensional form and being reproduced or distributed to the public
(which is covered under the meaning of copyright under Section 14(c) of the Copyright Act).

The court in this case made a reference to a popular 2009 judgment of the Delhi High Court [2], in which
it was held that a copyright in an original artistic work, such as a painting, would subsist even if a design
created from that painting is applied to an article more than fifty times, in which case only the copyright

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in the applied design would cease to exist. This interpretation, however, is problematic, given that the
Copyright Act does not recognize a separate copyright in the ‘design’ that is applied to an article.

Nonetheless, the court in the aforementioned 2016 Delhi High Court case did not even allow the plaintiff
to claim copyright infringement in its original artistic work, on the ground that since the defendant was
creating dresses using an industrial process, there was no infringement of the plaintiff’s copyright.

Another 2017 Delhi High Court judgment [3] reached a similar conclusion. The plaintiff was denied from
enforcing a claim of copyright in its industrial drawings of automatic twisted locks on the basis of them
being registrable under the Designs Act. Furthermore, this judgment brought the highly contentious issue
of “intention of the creator” back to the forefront, wherein the artists’ intent at the time of creation of the
artistic work is deciphered, in order to determine the nature of protection available to the artistic work.

One of the consistent trends that seem to have arisen out of these judgments is that copyright in a subject
matter will exist until put to industrial use, at which time the subject matter will be covered under the
ambit of the Designs Act. Courts have, time and again, propounded that any other interpretation would
render the registration of a subject matter under the Designs Act as meaningless, thereby enunciating the
importance of maintaining exclusive protection under the Designs Act separate from the Copyright Act.
However, formulating an interpretation that leads to erosion of the perpetual rights of copyright owners
subsisting in their original works is not a good precedent to set for the intellectual property regime in
India, especially from the point of view of foreign investors, who might not see India as a viable market
for commercializing copyright table subject matters. The need of the hour is to roll out a comprehensive
law addressing the above-noted issues, so that the courts are not burdened with the task of navigating
through vague and conflicting provisions existing in the statute.

6.13 CASE STUDIES:

LUCKY EXPORTS VS. THE CONTROLLER OF PATENTS AND DESIGNS AND ORS.,
MANU/WB/1173/2019.
Decided On: 10.05.2019

Court: Calcutta High Court

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The Court in this case set aside an order rejecting the application for cancellation of a registered design
pertaining to Coaster Brake Hub Sub-Assembly because the Controller had not determined whether the
design possessed aesthetic appeal, and did not consider novelty, originality and prior publication for
determining registrability. The Court stated in the case that the design of a sub-assembly that forms part
of the Coaster Brake Hub can be registered if it is capable of being made and sold independently. It further
pointed out that a design may be protectable if some of its features appeal to the eye even if the design is
functional. A mere mechanical device is not protectable if the design is purely functional, but if it has
features, which are not functional, it is registrable as a design. The Court stated that if a design appeals to
the eye, and if what appeals to the eye can be separated from its function, a design is protectable.

6.14 LAYOUT DESIGNS OF INTEGRATED CIRCUITS PROTECTION IN INDIA- IPIC

TREATY

In compliance with the TRIPS Agreement, India has enacted the Semiconductor Integrated Circuits
Layout-Designs Act, 2000 in order to provide protection to layout designs of integrated circuits. The Act
defines "Layout Design" to mean a layout of transistors and other circuitry elements and includes lead
wires connecting such elements and expressed in any manner in a semiconductor integrated circuit. Under
the (Indian) Semiconductor for Integrated Circuits Layout-Designs Act, 2000, a Semiconductor Integrated
Circuit has been defined as a product having transistors and other circuitry elements which are inseparably
formed on a semiconductor material or an insulating material or inside the semiconductor material and
designed to perform an electronic circuitry function

6.15 Cases:

 Crocs Inc USA v. Liberty Shoes Ltd.,

Facts:
Crocs USA filed cases against shoe manufacturers alleging infringement of their design No. 197685 which
is valid up to [Link] designs are related perforated and non-perforated shoe design. Cases were
filed in various lower courts and against different manufacturers. In some of the cases ex-parte orders
were issued by the court and in other cases matter was contested by the parties.

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The facts in most of the cases were related to design infringement alleged by Crocs Inc. USA. The cases
were at different stages in different courts and were later transferred to Delhi High Court for adjudication.
Delhi High Court decided to club together all the pending applications and suits and heard them together.

Crocs Inc. USA had started filing suits against alleged infringers when they were informed of the same.
Major players against whom cases were filed were Bata India, Relaxo Footwear Ltd, Coqui and ors.

Issues:
1. Whether the plaintiffs design was in the public domain prior to registration or not?
2. Next issue which the court decided was whether the plaintiff design was new and original.

What the plaintiff held:

The plaintiffs stated that their registered design was infringed upon the various defendants in some way
or another. The most common design element that was copied, were signature gaps as the design element.

What the Defendants held:

The defendants stated that the alleged piracy and infringement never occurred as the said design of the
plaintiff should not have been registered in the first place.
Defendants based their arguments on interpretation sub section 4 of section 22 of Designs Act.

 Whirlpool v. Videocon:

In India, patents have been the “in-thing” for the last couple of years. Copyright makes resurgence
occasionally. However, the law of designs isn’t (and has never been) too much of a conversation starter.
It probably has to do with the meandering language of some of the provisions (Section 6 to me is pure
legislative torture), or just because most people would rather have copyright protection wherever possible.
In other countries, however, design infringement is a big deal. Case in point Apple v. Samsung. And, more
amusing, recent news reports that Apple may be sued by a Swiss company for copying the design of its
clock on iOS6!
In India, we make do with the cases we get. Whirlpool v. Videocon is a recent decision of the Bombay
High Court. And it seems that while most of the judgment is well-reasoned, the Court like me is
flummoxed by Section 6.

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On a motion of temporary injunction before the Bombay High Court, Whirlpool alleged that Videocon
had infringed and passed off its registered design for its washing machine which had a rectangular shape
on one side and a semi-circular shape on the other with a jettisoned panel for the knobs. The case appears
to have been argued in great detail by both sides on issues of infringement, passing off and, as a defense,
invalidation of the registered design.
To invalidate the design, the defendant argued that the design ought to be invalidated on grounds of
Section 4(a) & (b) of the Designs Act i.e. the design was neither new nor original and had previously been
disclosed to the public. This appears to have been the strongest argument for the Defendant. At first glance,
this made sense to me. How many designs/types of washing machines could there be? (You’d be surprised-
check out the human washing machine or the dog-cat washing machine.) To substantiate, the Defendant
relied on several documents but failed to convince the Judge that a washing machine of similar design
already existed on the market.
The Defendant also argued that the Plaintiff itself had two similar designs, and the design involved in this
suit was only a minor variation, and therefore neither new nor original. The Court did not agree with the
Defendant and used Section 6 to explain why. The relevant sub-provisions of Section 6(3) and (4) are:
“Section 6:
(3) Where a design has been registered in respect of any article comprised in a class of article, the
application of the proprietor of the design to register it in respect of some one or more other articles
comprised in that class of articles shall not be refused, nor shall the registration thereof invalidated.
(a) on the ground of the design not being a new or original design, by reason only that it was so previously
registered; or
(b) on the ground of the design having been previously published in India or in any other country, by
reason only that it has been applied to article in respect of which it was previously registered:
Provided that such subsequent registration shall not extend the period of copyright in the design beyond
that arising from previous registration.
(4) Where any person makes an application for the registration of a design in respect of any article and
either-
(a) That design has been previously registered by another person in respect of some other article;
or
(b) the design to which the application relates consists of a design previously registered by another person
in respect of the same or some other article with modifications or variations not sufficient to alter the

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character or substantially to affect the identity thereof, then, if at any time while the application is pending
the applicant becomes the registered proprietor of the design previously registered, the foregoing
provisions of the section shall apply as if at the time of making the application the applicant had been the
registered proprietor of that design.

The Court says that in light of Sections 6(3) and (4), the registered design cannot be invalidated even if
not novel or published previously. This however makes no sense to me.
Section 6(3) and (4) of the Designs Act are strangely worded and at first glance seem to be in direct
conflict with Section 4. However, the Manual of Design Practice and Procedure provides some clarity. It
states that:
“If the applicant has registered the design in any other class of articles, prior to the application under
consideration, the fact shall be mentioned in [Link] Examination, if it is found that the design under
consideration is already registered by the same applicant in another class and the applicant has not
disclosed that fact in the application form, the Examiner shall raise an objection only with an objective to
predate the application, and not on the ground of novelty. In such cases, the objection is communicated
along with the citation of such prior registered design and the applicant is asked to amend the application.
The term of the copyright of the design under consideration shall be co-terminus with the term of
previously registered design.”

Therefore, it seems that these provisions are for the prosecution of a design application, and cannot be a
valid answer for a minor modification of a previously known and registered design. If it were an answer,
then the Court ought to have clarified that the application may require to be pre-dated in line with the
earlier published design applications of the Plaintiff.
The Court, after rejecting the arguments on invalidity, examined the issues of infringement and passing
off based purely on appearance (as is the standard test in the law of designs). Holding that the similarities
were more important than any minor differences, the Court held that there was infringement and passing
off of the Plaintiff’s design. The Court also fleetingly refers to an admission of “similarity” of designs by
the Defendant. Perhaps not the best move, but my guess is that they were hoping to succeed on their claims
of invalidation.
The case itself isn’t path-breaking or positing new or unknown legal principles. And the designs may very
well be similar in appearance. However, this is one of the first design cases I have read where neither the

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lawyers nor the Court discuss the fact that the design ought to be invalidated since it is functional rather
than aesthetic. Also, another look at the manner in which the Court dealt with the arguments of novelty
and originality may be required. Or perhaps Section 6 could be amended to provide some clarity, and save
us all some trouble labouring through its phrasing.
 Marico v. Raj Oil:

Background of case:
In the month of September, 2006, the cause of action arose, when the Plaintiffs (Marico) learnt about the
use of the “caps” in question by the Respondents (Raj Oil Mills). Marico had registered and acquired
copyright of the said design under the Designs Act, 1911. They sent an official letter asking Raj Oil mills
to change their caps but Raj Oil did not pay heed to this. They denied the allegation of the Plaintiffs and
claimed to be using the impugned caps since 2002. On 3rd October, 2006, the Plaintiffs vide their
Advocates letter, once again called upon the Defendants to desist from using the impugned caps for which
they are the proprietor of registered design. On 4th October, 2006, the Plaintiffs thereafter filed the suit in
the Court in order to restrain the Defendants from further infringing their registered cap design.

Some Facts of the Case:

Marico’s bottles shape and configuration was registered, whereas, the Respondents registration of separate
cap was rejected.

There was no dispute about the front side, isometric bottom view of the CocoRaj bottle, which they got
registered sometime in the year 2004.

There was a certificate on record dated 29th June, 2000 in favor of the Appellants with regard to the
registered design number on 181063 dated 10th December, 1999 in Clause 3 in the name of Marico
Industries Limited, Mumbai, in respect of the shape, configuration and surface pattern of bottle cap of the
Appellants.

There is no dispute on record that both the parties got the cap made separately. The concept of getting
such cap registered separately is known to the commercial world and especially business and the market
of the products in question. The Respondents cap registration was rejected. The Appellants/ Plaintiffs got
the registration under the Act. Therefore, such proprietor of design article is definitely entitled to have

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exclusive rights to claim the protection. Therefore, unless the said registration is set aside on application
either by the Defendants or such person, it is final and binding to all.

Thus, on 4th October, 2006, the Plaintiffs thereafter filed the suit in this Court in order to restrain the
Defendants from further infringing their registered cap design.

Course of action:
By virtue of registration of cap design of Parachute bottle, the Appellants had acquired the copyright of
the said design under the Act. The Appellants had exclusive rights to manufacture and market such bottle
cap and to apply for such a product. The Appellants had been, therefore, using the said registered design
since July, 2000.

With respect to the infringement of the design, the following factors were similar-

PARACHUTE

COCORAJ

Shape same

Shape same

Color: Shade of Blue

Color: Shade of Blue

One side of the cap has ribbon shaped hinge

One side of the cap has ribbon shaped hinge

There was no claim in respect of any mechanical or mechanism or construction or colour combination of
the article, including use of the letters or numerals.

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Basic difference found in Industrial Design:

There was a clear different mark name with Parachute and Cocoraj with a tick mark symbol on Parachute
bottle. There was a single drop shape mark on Cocoraj bottle.

The word “Parachute” and “Cocoraj” were written with different letters, shape, size and design. The marks
of both the bottles were different.

The Parachute cap consisted of a circular/ cylindrical elevation with cut outs at two ends. There was no
such shape of Respondents cap. The pattern of the Respondents cap was a combination of a concave and
a convex surface with the intermediate part being raised.

There was a mark of “Parachute” on the top of the cap. The shape and design of cap of Parachute from
the top, rear, left side, right side and views was different than “Cocoraj”.

Looking from the top and surface pattern of the bottle cap, even from the point of view of the shape and
configuration and surface pattern of the bottle cap, both the bottles were not similar. The colour of cap of
“Cocoraj” was translucent blue.

The edges of the caps of “Cocoraj” were rounded. The top of the “Cocoraj” cap had embossed name
“Cocoraj” with an embossed tick mark symbol. On “Cocoraj” cap from front, the plastic seal touched the
top level of the cap or placed on the equal level. Whereas the plastic seal on the “Parachute” cap or parallel
level of the cap. As some part of the cap about the seal was visible on “Parachute” cap. The “Parachute”
cap had a sharper edge from all sides.

Judgment/Verdict:
The Judge dismissed the Notice of Motion of the appellants by stating that cap is not ‘an article’ as defined
in Section 2 (a) of the Act. This decision was taken based on the following research:

To qualify under Section 44(1) a spare part has to have an independent life as an article of commerce and
not be merely an adjunct of some larger article of which it forms part.

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A part must have an independent life as an article of commerce and not be merely an adjunct of some
larger article of which it forms part. The cap involved in the present case cannot be said to have an
independent life of an article of commerce.

The definition of “article” under the Indian Act as reproduced above read with the definition of “design”
are different from the provision of the English statute.

Presence of the words “capable of being made and sold separately” made the treatment as per Indian Act
quite ambiguous.

The Apex Court clearly mentioned that there is no vagueness in the definition of “article”. The isolated
section cannot be read of English statute to decide the express and clear provisions of the Indian Law like
in question.

At the most the English decisions have persuasive value but cannot be relied to interpret; especially when
the provisions of the Act as amended is different and clear.

Any design article which is capable of being made and sold separately, is a prerogative and or a right of
the registered owner of the design to sale it separately or not.

After visual examination of the registered design cap of the Appellants and the cap of the Respondents, it
was announced that both the caps were dissimilar in shape. No case of piracy or any infringement was
made out. Cap is an article within the ambit of definition of “an article” under Section 2(1) of the Design
Act, unless set aside. Both the caps in question were not similar and identified as contemplated under the
Act.

Taking all this into account, the reasoning given by the learned Judge was reversed and quashed and set
aside on both the above counts but the order of dismissal of Notice of Motion was maintained.

In the result, for the above reasons the Appeal was disposed off.

The Defendants defence even though permissible under Section 22(3)(4) of the Act, unless decided in
trial, at this stage, the rights created in view of the registered design just cannot be taken away by raising
such defence including the validity/ legality of grant of registration to the Appellants/ Plaintiffs. The suit

230
is still pending for trial. The issue about cancellation of registration as need detailed material and inquiry
kept open for the trial.

The Respondents/ Defendants have also averred which is supported by an affidavit, that approximately 1,
52, 43,725 bottles here in this suit, with the caps in question have been sold in the market from July 2004
to 2005. Apart from further sale from 2005 till this date in a way i.e. the matter of trial but still this fact
just cannot be overlooked while dealing with the grant of injunction in such matter.

 Check your progress

Choose the correct answer

1. Industrial Design is protected in India by

(a) Design Patent
(b) Un-registered Design
(c) Industrial Design Registration
(d) Patent

2. Industrial Design protects

(a) Shape and Configuration of an article
(b) Surface Pattern of an article
(c) Both (a) and (b)
(d) None of the above
3. Article means
(a) Something which can be made and sold independently
(b) Part of an article
(c) Part of an article which can be made and sold independently
(d) Both (a) and (c )

4. In order to register Industrial Design, Design should be

(a) New
(b) Original

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 (c) New or Original
(d) Distinct

5. Industrial Design is protected for

(a) 20 years
(b) 10 year
(c) 10+5 years
(d) Both (b) and (c)
 Summary
 An industrial design is the ornamental or aesthetic aspect of an article. The design may consist
of three dimensional features, such as the shape or surface of an article, or of two-dimensional
features, such as patterns, lines or colour.
 The Designs Act of 1911 is now replaced by the Designs Act, 2000. The new Act complies with
the requirements to TRIPS and hence is directly relevant for international trade. Industrial Design
law deals with the aesthetics or the original design of an industrial product.
 An industrial design to be protectable must be new and original. The total time of a registered
design is 15 years. Initially the right is granted for a period of 10 years, which can be extended,
by another 5 years.
 The important purpose of design Registration is to see that the artisan, creator, originator of a
design having aesthetic look is not deprived of his bonafide reward by others applying it to their
goods.
 A design is not eligible registration if it (a) is not new or original; or (b) has been disclosed to the
public anywhere in India or in any other country by publication in tangible form or by use in any
other way prior to the filing date, or where applicable, the priority date of the application for
registration; or (c) is not significantly distinguishable from known designs or combination of
known designs; or (d) comprise or contains scandalous or obscene matter.
 The registration of a Design may be cancelled at any time after the registration of the Design on
a petition for cancellation in Form 8, along with the prescribed fee.
 A proprietor shall have no right to institute a suit or proceeding in respect of piracy of design or
infringement copyright, which has been committed between the date on which the design ceased
to have effect and the date of restoration of the design.

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 Piracy of a Design means the application of a design or its imitation to any article belonging to
the class of articles in which the design has been registered for the purpose of sale or importation
of such articles without the written consent of the registered proprietor.
 A registered proprietor can institute a suit for injunction as well as recovery of damages against
any person engaged in piracy of the registered design

 Keywords
- Commercialization- Commercialization is the process or cycle of introducing a new product or
production method into the market. Many technologies begin in the laboratory and are not practical
for commercial use in their infancy.
- Component Part. Single, discrete element within an assembly.
- Concept design Early-stage design, not all aspects are resolved, however overall intent or
direction should be apparent.

 Self-Assessment Questions

1. What is a design under the Designs Act, 2000? What is the difference between copyright and
Design?
2. What is the object of registration of designs? What are the essential requirements for the Registration
of a design under the Designs Act, 2000?
3. What is the duration of design registration? Can it be extended?

 Answers to Check your Progress

1. C
2. C
3. D
4. C
5. C

233
  Suggested Reading

1. [Link]
2. [Link]
3. [Link] Judgement_12-[Link]
4. [Link]

234
Geographical Indication

MODULE

Structure: 7
7.1 Introduction
7.2 Definition & Importance
7.3 Registration of GI – and benefits of registration under the Geographical Indications of Goods
(Registration and Protection) Act, 1999 - Procedure
7.4 Application
7.5 Acceptance
7.6 Advertisement of Application
7.7 Opposition to Registration
7.8 Registration
7.9 Basmati GI and Issues therein
7.10 Effect of GI Registration
7.11 Correction of Register
7.12 Strategies for Global markets
7.13 Offences and Penalties
7.14 Geographical Indications and Overview of the Lisbon System & Geneva Act
7.15 GI protection in India
7.16 Issues faced by owners of Geographical Indications in regard to counterfeit products in
international and national markets

235
Check your progress

Summary
Keywords
Self-Assessment Questions
Answers to Check your Progress
Suggested Reading

7.1 INTRODUCTION

Geographical indications are protected in accordance with international treaties and national laws. Under
the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), there is no obligation
for other countries to extend reciprocal protection unless a geographical indication is protected in the
country of its origin. India, as a member of the World Trade Organization (WTO), enacted the
Geographical Indications of Goods (Registration & Protection) Act, 1999.
The Object of the Geographical Indications of Goods (Registration and Protection) Act, 1999 is three-
fold, firstly by specific law governing the geographical indications of goods in the country which could
adequately protect the interest of producers of such goods, secondly, to exclude unauthorized persons from
misusing geographical indications and to protect consumers from deception and thirdly, to promote goods
bearing Indian geographical indications in the export market.
This Act is administered through the Geographical Indications Registry established in Chennai under the
overall charge of the Controller General of Patents, Designs and Trade Marks. Appeal against the
Registrar's decision would be to the Intellectual Property Appellate Board established under the Trade
Marks legislation.

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In respect of all geographical indications, interested parties must have legal means to prevent use of
indications which mislead the public as to the geographical origin of the good, and use which constitutes
an act of unfair competition within the meaning of Article 10bis of the Paris Convention (Article 22.2).

7.2 DEFINITION & IMPORTANCE

Place names are sometimes used to identify a product. Well-known examples include “Champagne”,
“Scotch”, “Tequila”, and “Roquefort” cheese, 'Basmati' rice and 'Darjeeling' Tea. Wine and spirits makers
are particularly concerned about the use of place-names to identify products and the TRIPs agreement
contains special provisions for these products.
“Geographical indication” in relation to goods means an indication which identifies such goods as
agricultural goods, natural goods or manufactured goods as originating, or manufactured in the territory
of a country, or a region or locality in that territory, where a given quality, reputation or other characteristic
of such goods is essentially attributable to its geographical origin and in case where such goods are
manufactured goods one of the activities of either the production or of processing r preparation of the
goods concerned takes place in such territory, region or locality, as the case may be.
It may be noted that any name which is not the name of a country, region or locality of that country shall
also be considered as the geographical indication if it relates to a specific geographical area and is used
upon or in relation to particular goods originating from that country, region or locality, as the case may
be. [Section 2(1) (e)]
Geographical indications are defined, for the purposes of the Agreement, as indications which identify
goods as originating in the territory of a Member, or a region or locality in that territory, where a given
quality, reputation or other characteristic of the good is essentially attributable to its geographical origin
(Article 22.1).
The registration of a trademark which uses a geographical indication in a way that misleads the public as
to the true place of origin must be refused or invalidated ex officio if the legislation so permits or at the
request of an interested party (Article 22.3).
Protection for Wines and Spirits: Article 23 provides that interested parties must have the legal means to
prevent the use of a geographical indication identifying wines for wines not originating in the place
indicated by the geographical indication. This applies even where the public is not being misled, there is
no unfair competition and the true origin of the good is indicated or the geographical indication is

237
accompanied by expressions such as “kind”, “type”, “style”, “imitation” or the like. Similar protection
must be given to geographical indications identifying spirits when used on spirits. Protection against
registration of a trademark must be provided accordingly.
A geographical indication is a sign used on goods that have a specific geographical origin and possess
qualities, reputation or characteristics that are essentially attributable to that place of origin. Most
commonly, a geographical indication includes the name of the place of origin of the goods. Agricultural
products typically have qualities that derive from their place of production and are influenced by specific
local factors, such as climate and soil.

Rights Provided Under Geographical Indication

A geographical indication right enables those who have the right to use the indication to prevent its use
by a third party whose product does not conform to the applicable standards. For example, in the
jurisdictions in which the Darjeeling geographical indication is protected, producers of Darjeeling tea can
exclude use of the term Darjeeling for tea not grown in their tea gardens or not produced according to the
standards set out in the code of practice for the geographical indication.

However, a protected geographical indication does not enable the holder to prevent someone from making
a product using the same techniques as those set out in the standards for that indication. Protection for a
geographical indication is usually obtained by acquiring a right over the sign that indication. Protection
for a geographical indication is usually obtained by acquiring a right over the sign that constitutes the
indication.

- Application of Geographical Indication

Geographical Indications protection is granted through the TRIPS Agreement. See also the Paris
Convention, the Madrid Agreement, the Lisbon Agreement, and the Geneva Act. Protection afforded to
geographical indications by law is arguably two folded. On the one hand it is granted through sui generis
law (public law), e.g., in the European Union.

In other words, GI protection should apply through ex-officio protection, where authorities may support
and get involved in the making of GI collective dimensions together with their corresponding GI

238
regulatory council, where ongoing discourse with the government is implied for effective inspection and
quality control.

On the other hand, it is granted through common law (private law). In other words, it is similar to the
protection afforded to trademarks as it can be registered through collective trademarks and also through
certification marks, i.e., in the United States of America.

GI protection systems restrict the use of the GIs for the purpose of identifying a particular type of product,
unless the product and or its constituent materials and or its fabrication method originate from a particular
area and or meet certain standards. Sometimes these laws also stipulate that the product must meet certain
quality tests that are administered by an association that owns the exclusive right to license or allow the
use of the indication.

As GIs are recognised through public or private law, - depending on the GI protection system applied
among the different WTO state members, either through common law or sui generis law, the conflicts
between prior trade mark registration and GIs is an international debate that is yet to be resolved and what
makes the GI system rather positional in terms of international trade negotiations.

These conflicts are generally resolved through three intellectual property protection approaches: first in
time first in right approach, coexistence approach, GI superiority approach.
Arguably trademarks are seen as a valuable asset in terms of private business and their economic assets
while GIs are strongly connected to socio-economic development, along the lines of sustainability in
countries rich in traditional knowledge.

The consumer-benefit purpose of the protection rights granted to the beneficiaries (generally speaking the
GI producers), has similarities and differences to the trade mark rights:
While GIs confer a geographical origin of a good, trademarks confer a commercial origin of an enterprise.
While comparable goods are registered with GIs, similar goods and services are registered with
trademarks. While a GI is a name characterized by tradition from a delineated area, a trade mark is a sign
as a badge of origin for goods and services. While a GI is a collective entitlement of public-private
partnership, a trade mark refers entirely too private rights. With GIs, the beneficiaries are always a

239
community from which usually, regardless of who is indicated in the register as applicant, they have the
right to use. Trademarks distinguish goods and services between different undertakings, thus it is more
individual (except collective trademarks which are still more private). While with GIs its particular quality
is essentially because of the geographical area, although the human factor may also play a part
(collectively), with trademarks, even if there is any link to quality, it is essentially because of the producer
and provider (individually). While GIs are an already existing expression and is used by existing producers
or traders, a trade mark is usually a new word or logo chosen arbitrarily. While GIs are usually only for
products, trademarks are for products and services. While GIs cannot become numerous by definition,
with trademarks there is no limit to the number that can be possibly be registered or used. While GIs may
not normally qualify as trademarks because they are either descriptive or misleading and distinguish
products from one region from those of another, trademarks normally do not constitute a geographical
name as there is no essential link with the geographical origin of goods.
While GIs protect names designating the origin of goods, trademarks collective and certification marks
where a GI sui generis system exists protect signs or indications.
While with GIs there is no conceptual uniform approach of protection (public law and private law sui
generis law and common law), the trade mark concepts of protection are practically the same in all
countries of the world (i.e., basic global understanding of the Madrid System). In other words, with GIs
there is no international global consensus for protection other than TRIPS.
While with GIs the administrative action is through public law, the enforcement by the interested parties
of trademarks is through private law. While GIs lack a truly global registration system, trademarks global
registration system is through the Madrid Agreement and Protocol.
While GIs are very attractive for developing countries rich in traditional knowledge, the new world, e.g.,
Australia, with a different industry development model they are more prone to benefit from trademarks.
In the new world, GI names from abroad arrive through immigrants and colonization , leading to generic
names deriving from the GIs from the old world.

Geographical indications have other similarities with trademarks. For example, they must be registered in
order to qualify for protection, and they must meet certain conditions in order to qualify for registration.
One of the most important conditions that most governments have required before registering a name as
a GI is that the name must not already be in widespread use as the generic name for a similar product. Of

240
course, what is considered a very specific term for a well-known local specialty in one country may
constitute a generic term or generalized trademark for that type of product?

For example, parmigiano cheese in Italy is generically known as Parmesan cheese in Australia and the
United States.

Rural development and its effects:

Geographical indications are generally traditional products, produced by rural, marginal or indigenous
communities over generations that have gained a reputation on the local, national or international market
due to their specific unique qualities.

The recognition and protection on the markets of the names of these products allows the community of
producers to invest in maintaining the specific qualities of the product on which the reputation is built.
Most importantly, as the reputation spreads beyond borders and demand grows, investment should be
driven to the environment sustainability where these products originate and are produced. In the
International Trade Centre's Guide to Geographical Indications: Linking Products and their Origins author
Daniele Giovannucci states that geographical indications are by no means a panacea for the difficulties of
rural development.

They can however offer a comprehensive framework for rural development since they can positively
encompass issues of economic competitiveness, stakeholder equity, environmental stewardship, and
socio-cultural value. The application of circular economy will ensure socio-economic returns in the long-
run to avoid growth at an environmental cost. This approach for GI development may also allow for
investment together with promoting the reputation of the product along the lines of sustainability when
and where possible.

Rural development impacts from geographical indications, referring to environmental protection,

economic development and social well-being, can be the strengthening of sustainable local food
production and supply (except for non-agricultural GIs such as handicrafts); a structuring of the supply
chain around a common product reputation linked to origin; greater bargaining power to raw material
producers for better distribution so as for them to receive a higher retail price benefit percentage capacity

241
of producers to invest economic gains into higher quality to access niche markets, improving circular
economy means throughout the value chain, protection against infringements such as free-riding from
illegitimate producers, etc economic resilience in terms of increased and stabilized prices for the GI
product to avoid the commodity trap through de-commodisation, or to prevent/minimise external shocks
affecting the premium price percentage gains (usually varying from 20-25%) added value throughout the
supply chain spill-over effects such as new business and even other GI registrations preservation of the
natural resources on which the product is based and therefore protect the environment preservation of
traditions and traditional knowledge identity based prestige linkages to tourism.

None of these impacts are guaranteed and they depend on numerous factors, including the process of
developing the geographical indications, the type and effects of the association of stakeholders, the rules
for using the GI (or Code of Practice), the inclusiveness and quality of the collective dimension decision
making of the GI producers association and quality of the marketing efforts undertaken.

International issues:
Like trademarks, geographical indications are regulated locally by each country because conditions of
registration such as differences in the generic use of terms vary from country to country. This is especially
true of food and beverage names which frequently use geographical terms, but it may also be true of other
products such as carpets (e.g. Shiraz), handicrafts, flowers and perfumes.

When products with GIs acquire a reputation of international magnitude, some other products may try to
pass themselves off as the authentic GI products. This kind of competition is often seen as unfair, as it
may discourage traditional producers as well as mislead consumers.

Thus the European Union has pursued efforts to improve the protection of GI internationally. Inter alia,
the European Union has established distinct legislation to protect geographical names in the fields of
wines, spirits, and agricultural products including beer. A register for protected geographical indications
and denominations of origin relating to products in the field of agriculture including beer, but excluding
mineral water, was established (DOOR). Another register was set up for wine region names, namely the
E-Bacchus register.

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A register of the geographical indications for spirits and for any other products is still missing in the
European Union and most other countries in the world. A private database project (GEOPRODUCT
directory) intends to close this gap. Accusations of unfair competition should although be leveled with
caution since the use of GIs sometimes comes from European immigrants who brought their traditional
methods and skills with them.

Agreement on Trade-Related Aspects of Intellectual Property Rights

The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) defines
geographical indications as indications that identify a good as originating in the territory of a Member, or
a region or locality in that territory, where a given quality, reputation or other characteristic of the good is
essentially attributable to its geographic origin.

In 1994, when negotiations on the WTO TRIPS were concluded, governments of all WTO member
countries (164 countries, as of August 2016) had agreed to set certain basic standards for the protection of
GIs in all member countries.

There are, in effect, two basic obligations on WTO member governments relating to GIs in the TRIPS
agreement:
Article 22 of the TRIPS Agreement says that all governments must provide legal opportunities in their
own laws for the owner of a GI registered in that country to prevent the use of marks that mislead the
public as to the geographical origin of the good. This includes prevention of use of a geographical name
which although literally true falsely represents that the product comes from somewhere else.

Article 23 of the TRIPS Agreement says that all governments must provide the owners of GI the right,
under their laws, to prevent the use of a geographical indication identifying wines not originating in the
place indicated by the geographical indication. This applies even where the public is not being misled,
where there is no unfair competition and where the true origin of the good is indicated or the geographical
indication is accompanied by expressions such as kind, type, style, imitation or the like. Similar protection
must be given to geographical indications identifying spirits.

243
Article 22 of TRIPS also says that governments may refuse to register a trademark or may invalidate an
existing trademark (if their legislation permits or at the request of another government) if it misleads the
public as to the true origin of a good. Article 23 says governments may refuse to register or may invalidate
a trademark that conflicts with a wine or spirits GI whether the trademark misleads or not.

Article 24 of TRIPS provides a number of exceptions to the protection of geographical indications that
are particularly relevant for geographical indications for wines and spirits (Article 23). For example,
Members are not obliged to bring a geographical indication under protection where it has become a generic
term for describing the product in question. Measures to implement these provisions should not prejudice
prior trademark rights that have been acquired in good faith and under certain circumstances including
long established use continued use of a geographical indication for wines or spirits may be allowed on a
scale and nature as before.

In the Doha Development Round of WTO negotiations, launched in December 2001, WTO member
governments are negotiating on the creation of a multilateral register of geographical indications. Some
countries, including the EU, are pushing for a register with legal effect, while other countries, including
the United States, are pushing for a non-binding system under which the WTO would simply be notified
of the member respective geographical indications.

Some governments participating in the negotiations (especially the European Communities) wish to go
further and negotiate the inclusion of GIs on products other than wines and spirits under Article 23 of
TRIPS. These governments argue that extending Article 23 will increase the protection of these marks in
international trade. This is a controversial proposal, however, that is opposed by other governments
including the United States who question the need to extend the stronger protection of Article 23 to other
products. They are concerned that Article 23 protection is greater than required, in most cases, to deliver
the consumer benefit that is the fundamental objective of GIs laws.

Judicial Approach on Geographical Indication

Scotch Whisky Association v. Pravara Sahakar Karkhana Ltd., (AIR 1992 Bom 294) is a leading case on
this subject. In this case, the plaintiff Scotch Whisky Association, a company incorporated under the
Companies Act of United Kingdom instituted the passing off action against the defendants- a manufacturer

244
of various brands of Indian Whisky like blended scotch whisky or Blended with Scotch' under various
brand names, Drum Beater and God Tycoon.

On these facts, the Bombay High Court held: The Plaintiff had sufficient interest to prevent passing off of
Indian Whisky manufactured by the defendant and to prevent damage to reputation and goodwill of Scotch
whisky. The defendants were passing off their goods as blended Scotch whisky which in fact they were
not. The case therefore merited interim injunction.

The defendants resorted to unfair means by using the words Blended with Scotch and indulged in
colourable imitation and unfair trading in an attempt to harvest unjust benefits by appropriation of
plaintiff's goodwill. The defendant was restrained from advertising or offering for sale or distributing in
any country Whisky, which is not Scotch whisky. It is evident from the aforesaid decision that the judiciary
in India has consistently extended the umbrella of legal protection to GIs even in the absence of any
legislation in force at that point of time.

In appropriate cases the court may on an application by the plaintiff pass an exparte order requiring the
defendant to permit the plaintiff accompanied by solicitor or attorney to enter his premises and take
inspection of relevant documents and articles and take copies thereof or remove them from the custody.
The necessity for such an order arises where there is a grave danger of relevant documents and infringing
articles being removed or destroyed so that the ends of justice will be defeated. (Anton Piller v.
Manufacturing Processes (1976) R.P.C. 719).

Darjeeling Tea case

Darjeeling Tea could be considered as the most important geographical indication along with Basmati for
India. Darjeeling tea is the tea produced in the hilly areas of Darjeeling district of West Bengal. Today,
India is the World's largest grower of tea with a total production of 826.17 million kilograms in the year
2002.

The district of Darjeeling is situated in the State of West Bengal, India. Tea has been cultivated, grown
and produced in tea gardens geographically located in this area for the last 150 years. The unique and
complex combination of agro-climatic conditions prevailing in the region and the production regulations

245
imposed, lends the tea a distinctive and naturally-occurring quality and flavour which has won the
patronage and recognition of discerning consumers all over the world for well over a century.

The tea produced in the region and having special characteristics is and has for long been known to the
trade and the public all over the words as Darjeeling tea. According to records, the commercial tea gardens
were planted by British tea interests in 1852. Darjeeling was then only a sparsely populated hamlet which
was being used as a hill resort by the army and affluent people. However, by 1866, Darjeeling had 39
gardens producing a total crop of 21,000 kilograms of tea harvested from 4,400 hectares. By 1874, tea
cultivation in Darjeeling was found to be a profitable venture and there were 113 gardens with
approximately 6000 hectares.

Today, nearly 17, 400 hectares in 85 tea gardens produce around 11.5 million kilograms of tea. The Easter
and spring flushes have the unique Darjeeling flavour and command a high price. Most of the tea coming
on to the world market, as counterfeit' Darjeeling seems to be coming from Kenya and Srilanka. The other
source is said to be Nepal. Nepalese tea is produced in similar geographic conditioned to that of Darjeeling
tea.

About 60 percent of Nepalese tea is exported to India and most of the Nepalese tea estates gardens are
owned by Indians. There are allegations that Nepalese tea is imported in to India is repackaged as
Darjeeling tea and exported. Nepal is small producer and exporter of tea in the world market. What will
happen if 40000 tons of counterfeit Darjeeling disappears from the world market because of protection of
the geographical indication for Darjeeling Tea?

We could expect the price of Darjeeling tea to go up depending on the price elasticity of demand of
Darjeeling tea, which will benefit the producers of Darjeeling tea. Counterfeit Darjeeling produced in
India and consumed in India. Counterfeit Darjeeling produced in other countries consumed in India.
Counterfeit Darjeeling produced in India and consumed outside India. Counterfeit' Darjeeling produced
in India and consumed outside India. Since Darjeeling has a high reputation, both the Tea Board and the
Darjeeling planters Association have been involved at various levels in protecting this common heritage.

The protection is essentially geared to:

246
Prevent misuse of the word Darjeeling for other types of tea sold worldwide.
Deliver the authentic product to the consumer.
Enable the commercial benefit of the equity of the brand to reach the Indian industry and hence the
plantation worker.
Achieve international status similar to champagne or Scotch Whisky both in terms of brand equity and
governance/administration.

One of the first significant measures was taken by the Tea Board to protect Darjeeling as a geographical
indication about 15 years ago by developing a Darjeeling Logo. The Darjeeling logo created in 1983 has
since been registered in various jurisdictions including UK, USA, Canada, Japan and Egypt and some
European countries as a Trademark/Certification Trademark/collective Mark.

The Tea Board has obtained home protection by registering the Darjeeling Logo and also the word
Darjeeling as a certification mark under the Indian Trade and Merchandise Marks Act, 1958. Under the
new Geographical Indication of Goods (Registration and Protection) Act, 1999 (which has come in to
force on September 15, 2003), the tea Board has also filed applications for the Darjeeling logo as well as
Darjeeling word to be registered as a geographical indication. Under the new Act Darjeeling is registered
as GI.

7.3 REGISTRATION OF GI

Section 8 of the Act provides that a geographical indication may be registered in respect of any or all of
the goods, comprised in such class of goods as may be classified by the Registrar and in respect of a
definite territory of a country, or a region or locality in that territory, as the case may be.
The Registrar may also classify the goods under in accordance with the International classification of
goods for the purposes of registration of geographical indications and publish in the prescribed manner in
an alphabetical index of classification of goods.
Any question arising as to the class within which any goods fall or the definite area in respect of which
the geographical indication is to be registered or where any goods are not specified in the alphabetical
index of goods published shall be determined by the Registrar whose decision in the matter shall be final.

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BENEFITS OF REGISTRATION UNDER THE GEOGRAPHICAL INDICATIONS OF GOODS
(REGISTRATION AND PROTECTION) ACT, 1999

Geographical Indications registration gives to the registered proprietor and its authorized users, the legal
right to the exclusive use of the GI and also the right to obtain relief in case of its infringement. Exclusion
of unauthorized persons from misusing GI would ensure that genuine products of the rightful producers
are marketed.
 Procedure

7.4 APPLICATION

The application should include the requirements and criteria for processing a GI application as specified
below:
o A statement as to how the geographical indication serves to designate the goods as originating
from the concerned territory of the country or region;
o The class of goods;
o geographical map of the territory or locality in which goods are produced;
o The particulars of appearance of the geographical indication;
o Particulars of producers;
o An affidavit of how the applicant claims to represent the interest in the GI;
o The standards benchmark for the use or other characteristics of the GI;
o The particulars of special characteristics;
o Textual description of the proposed boundary;
o The growth attributes in relation to the GI pertinent to the application;
o Three certified copies of the map of the territory, region or locality ;
o Particulars of special human skill involved , if any;
o Full name and address of the association of persons or organization;
o Number of producers; and
o Particulars of inspection structures, if any, to regulate the use of the GI. [Rule 32].

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7.5 ACCEPTANCE

On receipt of the application, a number is allotted. Thereafter, the examiner scrutinizes the application to
check whether it meets the requirements of the GI Act and the Rules. Deficiencies if any found through a
preliminary examination would be communicated by the Examiner to the Applicant. The deficiencies need
to be complied within the time limit mentioned in the communication. [Rule31]
Upon compliance of the deficiencies, the Registrar shall ordinarily constitute a Consultative Group of
experts (not more than seven representatives) to ascertain the correctness of the particulars furnished in
the Statement of Case. The Consultative Group is chaired by the Registrar of Geographical Indications.
[Rule 33]

7.6 ADVERTISEMENT OF APPLICATION

After issuance of the Examination Report, submissions of the applicant would be considered. If no further
objection is raised, the application would be accepted and published (within three months of acceptance)
in the Geographical Indications Journal. [Rule, 34& 38]
After advertisement of a Geographical Indication in the Geographical Indications Journal, any person may
within three months oppose the registration of an application for GI. This period may be extended by a
period, not exceeding one month, by making an application to the Registrar along with the prescribed fee.

7.7 OPPOSITION TO REGISTRATION

Such an application for extension shall be filed before the expiry of the period of three months. The Notice
of Opposition shall be filed only before the Registrar of Geographical Indications at Chennai. [Section 14,
Form GI-2]

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7.8 REGISTRATION

If no opposition is filed within the period specified or where an opposition is filed and it is dismissed and
the appeal period is over, the Registrar registers the geographical indication in Part A of the Register
unless the Central Government otherwise directs.
On the registration of a geographical indication, the Registrar shall issue each to the applicant and the
authorized users, if registered with the geographical indication, a certificate sealed with the seal of the
Geographical Indications Registry. The date of filing of the application shall be deemed to be the date of
registration.
It may be noted that where registration of a geographical indication is not completed within twelve months
from the date of the application by reason of default on the part of the applicant, the Registrar may, after
giving notice to the applicant in the prescribed manner treat the application as abandoned unless it is
completed within the time specified in that behalf in the notice. [Section 16]

Revisiting registration process:

Step 1: Application filing

Please check if the Indication falls within the definition of Section 2(1) (e) of Gl Act.

The association of individuals or producers or any association or authority should represent the interest of
the producers of the goods concerned and file an affidavit as to how the Applicant claims to represent their
respective interests.

 Applications must be made in triplicate.

 The Application must be signed by the Applicant or his agent and must be accompanied by a
description of the case.
 Describe the special features and how those standards are maintained.
 Three certified copies of GI-related field maps.
 Description of the inspection structure if there is an area for regulating the use of G.I.
 Provide details of all applicants with the address. If there are a large number of manufacturers,
then collective reference applications for all producers of goods and G.I. should be made. If

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 registered, it should be indicated accordingly in the register. The Application must be sent in a
respective address in India.

Step 2 and 3: Preliminary Examination and Examination

 The examiner will check the Application for any deficiencies.

 The Applicant should take measures in this regard within one month of communication.
 The content of the case description is evaluated by an advisory group of experts who will master
the subject.
 Furnished will ascertain the correctness of the description.
 After that, an examination report will be issued.

Step 4: Show cause notice

 If the Registrar has any objection to the Application, he shall file such objection.
 Applicant must reply within two months or apply for a hearing.
 The decision will be duly communicated. If the Applicant wants to appeal, he can request it
within a month.
 The Registrar also has the right to withdraw an application, if it is mistakenly accepted, after
giving it on the occasion of a hearing.

Step 5: Publication in Geographical Indication Journal

Every Application, within three months of acceptance, will be published in the Geographical Indications
Journal.

Step 6: Resist Registration

 Any person opposing the G.I. application, published in the journal, can file a notice of protest
within three months (another month upon request which is to be filed before three months).
 The Registrar will provide a copy of the notice to the Applicant.
 Within two months, the Applicant will send a copy of the counter statement.

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  If he does not do so, he is believed to have dropped his Application. Where a counter-claim has
been filed, the Registrar will serve a copy on the person giving notice of the protest.
 Thereafter, both parties will lead their respective evidence through affidavits and supporting
documents.
 After this, the date of hearing of the case will be fixed.

Step 7: Registration of Application

 Where an application for G.I. has been accepted, the Registrar will register the Geographical
Indication. If the date of filing the Application after being registered will be considered as the
date of registration.
 The Registrar will issue a certificate to the Applicant with the seal of the Geographical
Indicators Registry.

Step 8: Renewal of Application

A registered G.I. will be valid for 10 years and can be renewed on payment of a renewal fee.

Step 9: Additional Security for Notified Goods

An application can be made to the Registrar for respective goods which are notified by the Central
Government for additional protection for the registration of geographical Indication in Form GI-9, there
will be three copies of the case details and three copies of issued notification.

The Application will be made jointly by the registered owner of Geographical Indication in India and
jointly by all the producers of Geographical Indication.

Step 10: Appeal

Any person who is aggrieved by an order or decision which may prefer an appeal to the Intellectual
Property Appellate Board (IPAB) within three months.

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7.9 BASMATI GI AND ISSUES THEREIN

The case which triggered a lot of controversy was granting of a US-patent to Texas based Rice Tec Inc.
who claimed that this invention pertains to a novel breed of rice plants and grains. The USPTO granted
the patent on ‘Basmati Rice Lines and Grains’ in September 1997 after three years examination and
accepted all the 20 claims put forward by them. India challenged the patent. A team of agricultural
scientists screened several research papers, reports and proceedings of seminars, conferences, symposia,
journals, newspapers and archives for relevant supporting information to establish the existence of prior
art in this area in India.
The documentary evidences against the claim Nos. 15, 16 and 17 of the company for novelty were so
strong that Rice Tec had to withdraw these claims. The company further withdrew 11 claims. Thus only
five of the Rice Tec's original 20 claims survived the Indian challenges. The patent granted simply gives
three hybrid varieties Bas 867, RT 1117 and RT 1121. The new rice has nothing to do with basmati.
Importantly, none of the claims granted by the patent pertain to basmati rice as a generic category. Also,
the Rice Tec. application was for a patent and not for basmati as a trade mark, so there is no question of
Rice Tec getting exclusive rights to use the term basmati. The patent granted, therefore, neither prevents
Indian Basmati from being exported to the US nor puts it at a disadvantage in the market.

Basmati Rice case

Basmati is a unique, long grain aromatic rice cultivated traditionally only in the Indo-Gangetic plains of
India and Pakistan. India has been exporting Basmati rice to several countries of the world including the
US, Europe and Middle East countries for several decades and a over a period of time, it has acquired a
unique position in the world market. The patenting of the world famous Basmati rice the crown jewel of
the Asian sub-continent India and Pakistan by the US Company Rice Tec Inc.

woke India and many other developing countries and made them aware of the unfair world market trend.
The Basmati which has extra-long grain, soft textured, aromatic rice has been cultivated since time
immemorial in the foothills of the Himalayas. The rare agro climatic conditions this region endow Basmati
rice with certain characteristics, physical and sensory, not found elsewhere nor amenable to replication.

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This makes Basmati a premium product in the international market and the uniqueness needs to be
preserved and protected.

Basmati commands a premium price both in domestic and international markets. Approximately one
million hectares in India and 0.75 million hectares in Pakistan are planted in Basmati varieties, where it is
cultivated by hundreds and thousands of small farmers. In India alone basmati exports were valued at
approximately US$ 475 million in 1998-99. The serenity of the surroundings was suddenly broken by
bold new headlines which read US Rice Company says India and Pakistan don't own word Basmati.

Ever since the company, Rice Tec, based in Texas, United States, patented Basmati rice, there has been a
hue and cry in India and Pakistan. The fear of cultural piracy from the western multinationals is felt by
the Indian farmers.

In February 1996, the APEDA12 has found that Rice Tec had registered for a trademark for exporting
what they called. Texasmati in the UK and had lodged a case against Rice Tec in an UK economic court.
Thus this was the authority strategy i.e., to file such cases in all the countries that Rice Tec approaches for
trademarks.

The first legal issue, which arose in the protection of Basmati as a geographical indication is as to whether
it is a generic name?
Rice Tec in its claim states that it is a generic name and therefore cannot be protected as a geographical
indication. Various reports have referred to the US Company's use of such names as Basmati, Kasmati,
Jexamati and Jasmati.

In fact, the company has used the brand names Kasmati, Texmati, and Jasmati in the US and UK since
before the patent was issued. It has been using the term Basmati as a generic term for considerably longer,
Rice Jec has produced and marketed Texas Basmati and American Basmati rice and labelling it as such
for 20 years and exporting the products for 15 years with no objection ever previously raised, the company
stamen says. Since the word Basmati is not a place name, its validity as a geographical indication would
depend on whether Basmati can be shown to be closely and exclusively associated with a geographical
area, although the world trade agreement calls it as geographic appellation.

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The name and the patent are completely separate issues; and there is also a distinct difference between the
use of Basmati as a generic term, and the use of brand names such as Texmati and Jasmati. Two types of
intellectual property are involved with names; Trademarks and Geographical Indications. The concern
what Indian authorities had was the fear of Rice Tec getting a trademark on Texmati, Texmati is
deceptively similar to Basmati and therefore cannot be registered as a trademark.

An action of passing off was also expected to succeed. However this was only an immediate solution
available to the problem in hand since by virtue of Article 24.9 of the TRIPs Agreement, at that time India
had no law protecting GI. This prevented Indian from approaching the WTO dispute settlement body and
asking any other members country to protect our GI. Therefore the only hope we Indians had was relying
on tort protection of passing off and unfair competition laws as usual.

It is extremely laborious to prove passing off repeatedly. Moreover, there was the danger of the lack of
the tort law (passing off) protection in the country where we seek to protect our GI along with the fact that
courts in US have been extremely unpredictable on this issue This was the position of India which
highlighted the need to legislate laws for protection of GI in our country.

7.10 EFFECT OF GI REGISTRATION:

According to Section 18, a registered geographical indication shall be valid for 10 years and can be
renewed from time to time on payment of renewal fee. Any person aggrieved by an order or decision of
the Registrar may prefer an appeal to the intellectual property appellate board (IPAB) within three months.
[Section31]

7.11 CORRECTION OF REGISTER:

Where an application has been made under Sub-section (1) of section 28 for the alteration of the register
by correction, change, cancellation or striking out of goods or for the entry of a memorandum in the

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register, the Registrar may require the applicant to furnish such evidence by affidavit or otherwise as the
registrar may think fit, as to the circumstances in which the application is made. Such application shall be
made on Form GI-5 as may be appropriate and a copy thereof shall be served by the applicant on the
authorized user or users, if any or issue a public notice in at least two leading local newspapers under the
registration of the geographical indication in question and to any other person who appears from the
register to have an interest in the geographical indication and inform the Registrar he has done so.

7.12 STRATEGIES FOR GLOBAL MARKETS:

Market orientation, as organizational culture, is targeted at providing customers with value-added products
and allowing the organization to achieve superior economic performance, by combining three behavioral
components: customer orientation, competitor orientation and interfunctional coordination. These
components are in perfect harmony with decisions relative to long-term perspectives and firm profitability.
Customer orientation is defined as the capacity to add value to consumers on a regular basis and to
disseminate this information to the whole organization. Competitor orientation consists in getting to know
the short-term weaknesses and strengths and the long-term competencies and strategies of current and
potential competitors. Interfunctional coordination gathers all corporate efforts, other than those of the
marketing department only, for the creation of a superior value for target customers.

7.13 OFFENCES AND PENALTIES:

Chapter VIII of the Act details certain acts as offences punishable by imprisonment or with fine or with
both.
The legislature has taken a strong view of infringement, piracy, falsification, misrepresentation and has
now made them penal offences. The chapter apart from listing penalties for the above-mentioned offences
also details the penalty and procedure of prosecution.
The following are the acts deemed as offences:
In the context of offences, what constitutes the meaning of “applying geographical indication has been
dealt with in Section 37 and the expression geographical indication has been defined in Section 2 (1) (e).

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Section 38 list two kinds of offences namely:-
(a) falsifying a GI and
(b) falsely applying a GI.
• The penalty for falsification of GIs and the circumstances in which a person applies false GI are
enumerated in Section 39.
• Selling goods to which false GI is applied as outlined in Section 40.
• Enhanced Penalty for subsequent convictions for the offences of falsifying, falsification of GIs or selling
goods with false GIs.
• Falsely representing a GI as registered as listed in Section 42. Misrepresenting the GI as
Registered, which has not been actually registered is an Offence.
• Improperly describing a place of business as connected with the GIs Registry as listed in Section
43.
• Falsification of entries in the Register as listed in Section 44.
• No offence in certain cases as provided under Section 45.
• Exemption of certain persons employed in ordinary course of business as provided under Section 46.
• Procedure where invalidity of registration is pleaded by the accused as provided in Section 18.

7.14 GEOGRAPHICAL INDICATIONS AND OVERVIEW OF THE LISBON SYSTEM &

GENEVA ACT:

Lisbon Agreement for Protection of Appellations of Origin and Their International Registration, 1958:

Provisions: Appellation of origin as geographical denomination of country, region or locality

depicting exclusive quality and reputation - Mandate to internationally protect unless the name is
notified by the International Bureau.

- Paris convention and Lisbon agreement:

International trade made it important to try to harmonize the different approaches and standards
that governments used to register GIs. The first attempts to do so were found in the Paris
Convention on trademarks (1883, still in force, 176 members), followed by a much more elaborate
provision in the 1958 Lisbon Agreement on the Protection of Appellations of Origin and their
Registration. 28 countries are parties to the Lisbon agreement: Algeria, Bosnia and Herzegovina,

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 Bulgaria, Burkina Faso, Congo, Costa Rica, Cuba, Czech Republic, North Korea, France, Gabon,
Georgia, Haiti, Hungary, Iran, Israel, Italy, Macedonia, Mexico, Moldova, Montenegro,
Nicaragua, Peru, Portugal, Serbia, Slovakia, Togo and Tunisia. About 9000 geographical
indications were registered by Lisbon Agreement members.

7.15 GI PROTECTION IN INDIA:

India did not have a specific law governing geographical indications of goods which could adequately
protect the interest of producers of such goods. This resulted into controversial cases like turmeric, neem
and basmati. To prevent such unfair exploitation, it became necessary to have a comprehensive legislation
for registration and for providing adequate legal protection to geographical indications. Accordingly the
Parliament enacted a legislation titled the Geographical Indications of Goods (Registration and Protection)
Act, 1999.

7.16 ISSUES FACED BY OWNERS OF GEOGRAPHICAL INDICATIONS IN REGARD TO

COUNTERFEIT PRODUCTS IN INTERNATIONAL AND NATIONAL MARKETS:

Not only is the compliance of transitional and institutional arrangements mandatory but the Council on
TRIPS has been divested with the power to monitor and facilitate consultations. Indian Laws are TRIPS
complaint on careful analysis of law relating to copyright, trademark, geographical indications, Industrial
Designs, patents and trade secrets.

- Case study;
- Banglar Rasogolla v. Odisha Rasagola

- In November 2017, the West Bengal State Food Processing and Horticulture Development
Corporation Limited registered G.I. as Ras Banglar Rasogola. It was reported that Bengal won the
dormant war between Odisha and Bengal, which would own the famous dessert. The legal battle
for G.I. registration started when objections to G.I. registration were lodged, and it was said that
this famous dessert originated at Jagannath temple in Puri, Odisha. An application to remove the

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 registration of G.I. status was filed on February 2018. Meanwhile, G.I. Registry in July notified
that Odisha registered G.I. as ‘Odisha Rasgola’, after which several reports were released. Odisha
did not give up in the race but won one. It is very important to note that the G.I. The registry has
not registered the word all Rasogola / Rasgola ‘. It has prefixed two words specifically for G.I. tag,
one is ‘Banglar’, and the other is ‘Odisha’. To say that ‘rasogola / rasgola’ is a general term, which
any person can use in his trade and business. Thus, as far as the law is concerned, neither of the
two states has got a monopoly on the word ‘Rasogola / Rasola’. Therefore, it is free to sell sweets
to anyone in the trade as Rasgulla / Rasgola or any other synonym. What is prohibited is the use
of the words “Odisha rasgola” and “Benglar rosogola” by anyone other than authorized users
‘under the law.

 Check your progress

Choose the correct answer

1. Trademark can be used as domain name

(a) Yes
(b) No
(c) Yes in some cases
(d) None of the above

2. Who administers UDRP?

(a) WTO
(b) WIPO
(c) Supreme Court
(d) High court

3. Geographical Indication is

(a) Private right

(b) Community right

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 (c) Intellectual property right
d) both (b) and (c)

4. Who can register Geographical Indication?

(a) Individual
(b) Company
(c ) Producers
(d) No one of the above

5. Certification mark indicates

(a) Source
(b) Quality
(c ) both (a) and (b)
(d) None of the above

 Summary
- A geographical indication points to a specific place, or region of production, that determines the
characteristic qualities of the product which originates from that place. It is important that the
product derives its qualities and reputation from that place. Like trademarks or commercial names,
geographical indications are also IPRs, which are used to identify products and to develop their
reputation and goodwill in the market.
- TRIPS Agreement prescribes minimum standards of protection to the geographical indications that
WTO members must provide. Notably, under the Agreement on Trade Related Aspects of
Intellectual Property (TRIPS), countries are under no obligation to extend protection to a particular
geographical indication unless that geographical indication is protected in the country of its origin.
- India did not have a specific law governing geographical indications of goods which could
adequately protect the interest of producers of such goods. This resulted into controversial cases
like turmeric, neem and basmati.
- To prevent such unfair exploitation, it became necessary to have a comprehensive legislation for
registration and for providing adequate legal protection to geographical indications. Accordingly

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 the Parliament enacted a legislation titled the Geographical Indications of Goods (Registration and
Protection) Act, 1999.
- The legislation is administered through the Geographical Indication Registry under the overall
charge of the Controller General of Patents, Designs and Trade Marks.
- “Geographical indication” in relation to goods under the Act means an indication which identifies
such goods as agricultural goods, natural goods or manufactured goods as originating, or
manufactured in the territory of a country, or a region or locality in that territory, where a given
quality, reputation or other characteristic of such goods is essentially attributable to its
geographical origin and in case where such goods are manufactured goods one of the activities of
either the production or of processing r preparation of the goods concerned takes place in such
territory, region or locality, as the case may be.
- The GI Act, which came into force, along with the GI Rules, with effect from 15 September 2003,
has been instrumental in the extension of GI status to many goods so far. The central government
has established the Geographical Indications Registry with all-India jurisdiction, at Chennai, where
right-holders can register their GI. Unlike TRIPS, the GI Act does not restrict its special protection
to wines and spirits alone.

- The central government has discretion to decide which products should be accorded higher levels
of protection. This approach has deliberately been taken by the drafters of the Indian Act with the
aim of providing stringent protection as guaranteed under the TRIPS Agreement to GI of Indian
origin.
- However, other WTO members are not obligated to ensure Article 23-type protection to all Indian
GI, thereby leaving room for their misappropriation in the international arena. Registration of GI
is not compulsory in India. If registered, it will afford better legal protection to facilitate an action
for infringement. Once a GI is registered in India, it becomes relatively easier to seek protection
in other countries, particularly the member countries of WTO.

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  Keywords

- The geographical area: In the process of setting-up a GI, an essential step is the delimitation of
the geographical area. This has to be substantiated by relevant arguments, such as an existing link
between the product and its geographical environment, or other economic, political or cultural
considerations.
- The terroir : The notion of “terroir” is rich of meanings and has been evolving over time. In
addition, having been conceptualized in a well-defined socio-cultural context, translating the
French word “terroir” in other languages is not an easy task.

 Self-Assessment Questions

1. What is a geographical indication? How is a geographical indication different from a trade mark?
List out the examples of possible Indian Geographical Indications?
2. What is the legal position relating to geographical indications of goods in India?
3. Who can apply for the registration of a geographical indication? What is the benefit of registration of
geographical indications? Who is a registered proprietor of a geographical indication?
4. Discuss the procedure for registration of geographical indications?
5. When is a registered geographical indication said to be infringed? Who can initiate an infringement
action?
6. Is registration of a geographical indication compulsory and how does it help the applicant? How long
the registration of geographical indication is valid?

 Answers to Check your Progress

1. A
2. B
3. D
4. C
5. B

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  Suggested Reading
 [Link]
LNW7cw=
 [Link]

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IPRs in Software

MODULE

Structure:
8
8.1 Describe the role of IPRs in the development of software technology and industry
8.2 Computer Related Inventions (CRI), software patents
8.3 Confidential Information / Trade Secret
8.4 Requirements for Consideration of Information as CI / TS
8.5 Remedies against Breach of Confidence

Check your progress

Summary
Keywords
Self-Assessment Questions
Answers to Check your Progress
Suggested Reading

8.1 DESCRIBE THE ROLE OF IPRS IN THE DEVELOPMENT OF SOFTWARE

TECHNOLOGY AND INDUSTRY

With the rapid advancement in science and technology, newer forms of intellectual property protection
are emerging. Examples of such protection are seen in the efforts made to protect computer programmes
and softwares, life forms particularly following developments in the biotechnology etc. Patent laws of
several countries favor patent protection for software innovation. Such countries include USA, Australia
and Singapore, to name a few. However, many other countries which include India and European nations

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have more stringent laws concerning patent protection to software innovation. The Indian Patent Law does
not contain any specific provision regarding the protection of computer software. Biotechnology has been
at the core of a number of important developments in the pharmaceutical, agrochemical, energy and
environmental sectors. In particular, progress in the field of molecular biology, biotechnology and
molecular medicine has highlighted the potential of biotechnology for the pharmaceutical industry.
Innovation in software products can be protected as intellectual property, usually either through the use
of copyrights or patents. Both patents and copyrights are devices that are intended to protect a firm’s or
individual’s innovation from misuse by others, although they are quite different devices for doing so.
Copyrights, generally, protect the expression of an idea. That is, copyright protection extends to a specific
work, but cannot be applied to the ideas contained in such work. The application of copyright protection
for software products was firmly established internationally via the World Trade Organization’s (WTO)
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). Under Article 10 of the
TRIPs agreement, WTO members are required to treat computer programs, whether in object or in source
code, as literary works as defined in the Berne Convention. Copyright protection thus extends
automatically to software code once the code has been written and recorded in a medium (i.e., hard drive
of a computer). A copyright holder may use his or her right to prevent others from using, making, selling
or distributing unauthorized copies of the work. Unlike in the context of copyright, the TRIPs agreement
does not explicitly discuss patent protection for software. The TRIPs agreement does, however,
contemplate protection for software under its general discussion of patentable subject matter in Article 27.
Article 27 makes patent protection available to any inventions in all fields of technology, provided they
meet the minimum threshold requirements of novelty, utility and non-obviousness (otherwise known as
“inventive step” in some countries). Like copyright, a patent holder may use his or her right to prevent
others from using, making, selling or distributing unauthorized copies of the invention protected. The
protection offered by patents tends to be broader than that of copyright, as copyright protection extends
only to a specific expression whereas patent protection extends to the underlying functionality of an
invention. Because patents can offer broader protection than copyrights, they are seen as more valuable if
they can be obtained. However, patent protection tends to be more expensive to obtain than copyright
protection, because patents require a formal application process in every country where protection is
desired. This application process often involves not only application fees, but attorney and translation fees
as well. In practice, the extent to which software may be patented varies by country, depending upon the
formal requirements and limitations placed on the patenting of software by individual countries. The 1981

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Supreme Court decision in Diehr is widely regarded as the seminal case on the patentability of software
in the United States. In Diehr, the Supreme Court reaffirmed the long-held idea that a mathematical
formula or algorithm, in the abstract, is unpatentable subject matter. The Supreme Court went on to hold
in Diehr, however, that when a formula or algorithm is employed in a claimed invention, one must view
the invention as a whole to determine patentability and not summarily dismiss the invention as
unpatentable simply because a formula or algorithm (i.e., software) was used. In other words, an invention
that includes software may be protected via the patent laws, provided the invention, as a whole, meets the
criteria of patentability. Following Diehr, it still was not entirely clear to what extent software itself could
be protected via the patent law. The Federal Circuit however cleared up much of this confusion in its 1998
State Street and 1999 AT&T decisions. In State Street, the Federal Circuit found a software program used
to manipulate financial data to be patentable subject matter. Here, the court reiterated that “unpatentable
mathematical algorithms are merely abstract ideas constituting disembodied concepts or truths that are
not ‘useful’.” The Federal Circuit, however, reasoned that “to be patentable, an algorithm must be applied
in a ‘useful’ way,” thus a software program, which employs mathematical algorithms in its operation, may
be patentable subject matter if it has “some type of practical application, i.e., ‘a useful, concrete and
tangible result.’” The Federal Circuit further held in AT&T that a resulting physical transformation is
unnecessary, and that a transformation of data in one form to another will serve to establish the requisite
tangible result. Despite the TRIPs agreement’s explicit prohibition on discriminatory treatment as to field
of technology, many countries have come to view patent protection for software as a policy choice and as
such have placed limits on the patent protection available for software. For instance, the European Patent
Convention (EPC) classifies software programs as unpatentable subject matter. This restrictive policy
towards software patents however has been tempered by the European Patent Office’s (EPO) Technical
Board of Appeal. For instance, the Technical Board of Appeal has held that an invention may be patentable
even is software is a component in the invention, provided patent protection is not sought simply for the
software “as such,” thus bringing European protection for software patents closely in line with the U.S.
Diehr decision discussed above. The state of patent protection for software in Europe however many
change in the near future as the European Commission has proposed a Directive on Software Patentability.
However, given how contentious the issue is in Europe, it is difficult to speculate how the Directive will
ultimately change the nature of software patentability. While Europe (via the EPC and EPO decisions) has
only gone so far as to provide patent protection for software embedded in a larger invention, Japan has
chosen to pursue a course much more closely aligned with the U.S. According to Examination Guidelines

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for Computer Software-Related Inventions issued by the Japanese Patent Office, software-related
inventions are patentable if they are “a creation of technical ideas utilizing a law of nature.” The guidelines
go on to further explain that software amounts to this “creation of technical ideas utilizing a law of nature”
when “information processing by software is concretely realized by using hardware resources,” or in other
words, when software is run on a computer. In practice, this means that most software is patentable subject
matter in Japan.

Indian context:
The protection of intellectual property was of little interest to Indian software companies in the past. In
part this lack of interest is explained by the small “new knowledge” content of Indian software services –
there was not much intellectual property to protect. Indian companies did not own the customized
intellectual property they might have created since their work product fell under work for hire standards
or ownership was explicitly transferred to the hiring company. But even if India companies created
software services that had new knowledge value, they did not seriously take steps to protect it. The chief
intellectual property protection available for software in India is copyright protection. India’s copyright
law conforms to the requirements set out by the TRIPs agreement and thus software is protected as a
literary work in India (for a broader discussion of copyright protection in India, see below). This is not to
say that software is well protected in India, as this depends not only on standards established by laws, but
also on enforcement of the standards by the judicial system. India has had a bad reputation among foreign
business people for intellectual property protection (Mansfield 1994), although that bad reputation has not
come unduly from the information technology sector.4 Over the last ten years, India has implemented a
number of legislative measures to bring it into compliance with TRIPs requirements. Nevertheless, there
is great concern about inadequate intellectual property protection in software. This concern is mainly due
to piracy of packaged software products.
 India is one of 11 countries on the US Trade Representative’s “Priority Watch List” for 2003 for unfair
trade in intellectual property under the Special 301 provision of US trade law. Three other countries (one
of which is China) are in still more serious USTR categories.
 India is reckoned to be the 5th worst offender in terms of dollar losses due to piracy of business software
(installation without a license) amounting to $343 million.

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8.2 COMPUTER RELATED INVENTIONS (CRI):

Computer Related Inventions (CRIs) comprises inventions which involve the use of computers, computer
networks or other programmable apparatus and include such inventions having one or more features of
which are realized wholly or partially by means of a computer programme or programmes.

In the recent years, the Office of the Controller General of Patents, Designs, and Trademarks has issued
multiple sets of guidelines interpreting the scope of computer-related inventions and their protection in
India.

As per the Guidelines for Examination of Computer-Related Inventions by the office of the Controller
General of Patents, Designs, and Trademarks, the computer Related Inventions are defined as those that
involve:

 The use of computers

 Computer networks
 Other programmable apparatus.
 Inventions with one or more features that are realized wholly or partially by means of a
computer programme.

Legal Nature of the Document

These guidelines by the office of the Controller General of Patents, Designs, and Trademarks do not
constitute any rulemaking. In case if there is any conflict between the provisions of the Patents Act, 1970
or the Rules made thereunder and guidelines, the said provisions of the Act and Rules will prevail over
these guidelines. These guidelines are subject to revision from time to time based on interpretations by
Courts of law, statutory amendments and valuable inputs from the stakeholders. The merits of such
guidelines being binding on the patent applicants are questionable since they neither supersede the Act
nor the precedents. However, one can argue that these guidelines may be binding on the patent examiners.
Nevertheless, these guidelines have significant practical implications. The examiners of the patents are
expected to follow these guidelines while examining CRI. Therefore, they are rational while issuing

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examination reports, granting or rejecting patents to CRI will likely be in line with these guidelines. These
guidelines act as an indirect reflection of the government’s stand on the patentability of the CRIs.

What are the requirements to determine the patentability of CRIs?

In order to make the computer-related invention patentable, one needs to understand various requirements,
which are needed to be followed:

 Novelty – It is understood from the meaning of the word novelty, which means, the quality of
being new, original, or unusual. It is the foremost requirement to determine the patentability of
any invention. The criterion to judge the novelty can be understood from various provisions
of:
1. Indian Patents Act, 1970
2. Chapter 08.03.02 of the Patent Manual, 2008.
 Inventive Step – In accordance with the provisions of section 2(1)(ja) of The Patents Act,
1970, “inventive step” means a feature of an invention that involves technical advance as
compared to the existing knowledge or having economic significance or both and that makes
the invention not obvious to a person skilled in the art.

Supreme Court of India on inventive step:

Hon’ble Supreme Court in Biswanath Prasad Radhey Shyam vs Hindustan Metal Industries Ltd (AIR
1982 SC 1444), the following points need to be objectively judged to ascertain, looking at the invention
as a whole, whether the invention does have an inventive step or not:

1. Identify the “person skilled in the art”, i.e competent craftsman or engineer as distinguished
from a mere artisan.
2. Identify the relevant common general knowledge of that person at the priority date.
3. Identify the inventive concept of the claim in question or if that cannot readily be done, construe
it.
4. Identify what, if any, differences exist between the matter cited as forming part of the “state of
the art” and the inventive concept of the claim or the claim as construed.

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  Industrial Applicability – Industrial Applicability has been defined in section 2(1)(ac) of
Indian Patents Act, 1970 as “capable of industrial application”, in relation to an invention,
means that the invention is capable of being made or used in an industry. The invention is
required to be of industrial applicability or industrial application. It should have workability
and usefulness in the industrial application to be eligible for the patent.
 Sufficiency of Disclosure – The requirement of “What” (is the invention) and “How” (to
perform it) must be satisfied. The complete disclosure of invention must be made to meet the
requirements of Indian Patent Act, 1960. The description made must be unambiguous, clear,
correct and accurate.

How to determine the excluded subject matters relating to CRIs

The below mentioned are excluded from patentability and if one’s claim falls in any of the below-
mentioned categories, it will not be patentable.

 Claims directed as “Mathematical Method”

o Mathematical methods, like a method of calculation, formulation of equations,
finding roots of numbers and all other similar acts of mental skill are, not patentable.
o Mere manipulations of an abstract idea or solving purely mathematical
problem/equations without specifying a practical application also attract the
exclusion under this category.
o Below mentioned does not come under exclusion:
i. Encoding
ii. Reducing noise in communications/electrical/electronic systems
iii. Encrypting/ Decrypting electronic
 Claims directed as “Business Method”
o The claims drafted not directly as “business methods” but apparently with some
unspecified means are held non-patentable.
o If the claimed subject matter specifies an apparatus and/or a technical process for
carrying out the invention(even partly), the claims shall be examined as a whole.
o When a claim is “business methods” in substance, it is not to be considered a
patentable subject matter.

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 o Mere presence of words like, “enterprise”, “business”, “business rules”, “supply
chain”, “order”, “sales”, “transactions”, “commerce”, “payment”, etc. in the claims
may not lead to conclusion of an invention being just a “Business Method”.
o If the subject matter is essentially about carrying out business/ trade/ financial
activity/ transaction and/or a method of buying/selling goods through the web (e.g.
providing web service functionality), the same should be treated as a business
method and shall not be patentable.
 Claims directed as “Algorithm”
o A set of rules or procedures or any sequence of steps
o Any method expressed by way of a finite list of defined instructions, whether for
solving a problem, And
o Whether employing a logical, arithmetical or computational method, recursive or
otherwise, are excluded from patentability.
 Claims directed as “Computer Programme per se”

 Claims directed that are not patentable.

o Computer programmes
o Set of instructions
o Routines and subroutines.
o Computer programme products
o Storage Medium having instructions
o Database
o Computer Memory with the instruction stored in a computer-readable medium.

 A literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever
including cinematographic works and television productions.
o As per the procedures laid out in chapter [Link] of the Patent Manual.

 A mere scheme or rule or method of performing mental act(s) or a method of playing

game(s)
o As per the procedures laid out in chapter [Link] of the Patent Manual.

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  Presentation of information
o As per the procedures laid out in chapter [Link] of the Patent Manual.
 Topography of integrated circuits
o As per the procedures laid out in chapter [Link] of the Patent Manual.

8.3 SOFTWARE PATENTS

A software patent is generally defined as a patent that protects some programming technique. An early
example of a software patent is that of United Kingdom.
The term "software" does not have a precise definition and even the software industry fails to give a
specific definition. But it is basically used to describe all of the different types of computer programs.
Computer programs are basically divided into "application programs" and "operating system programs".
Application programs are designed to do specific tasks to be executed through the computer and the
operating system programs are used to manage the internal functions of the computer to facilitate use of
application program.
According to the Software Patent Institute, thousands of software patents are issued every year. However,
the ongoing debate over whether and under what circumstances software should be patented often presents
a dilemma for individuals and companies engaged in software development. In particular, it can be
difficult to determine how best to protect computer software in ways that will prevent competitors from
making, using, or selling similar programs that perform the same functions.

The United States Patent and Trademark Office (USPTO) has issued guidelines for the examination of
computer related inventions. These guidelines apply a series of tests to determine whether an invention
qualifies for the strong protection of a patent. While these guidelines do not carry the weight of law, they
do show that some software is patentable.

Berne Convention
Under the Berne Convention, copyrights are automatically provided under U.S. law to the authors of
“original works,” including literary, dramatic, musical, artistic, architectural and other intellectual works.
Copyright protection applies automatically when a work is created and “fixed in tangible form,” such as
on a computer disk or hard drive. Moreover, this protection applies whether or not the work is formally

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registered with the USPTO. Copyright laws provide original authors or artists the right to exclude others
from copying their work or claiming it as their own. It grants them exclusive rights over the reproduction
and preparation of derivative works as well as the distribution, publication or public display of their work.
While formally registering a copyright is not required to claim these protections, it is required to obtain
damages in litigation pertaining to infringement. Also, it is critical to note that copyright does not protect
facts, ideas, systems, or methods of operation; it only protects the way these things are expressed. In other
words, it will not prevent a competitor from creating a program that uses the same ideas presented in
another way

Though the term ‘Software patent’ does not have a universally accepted definition. One definition
suggested by the Foundation for a Free Information Infrastructure is that a software patent is a "patent on
any performance of a computer realized by means of a computer program".

According to Richard Stallman, the co-developer of the GNU-Linux operating system and proponent of
Free Software says, "Software patents are patents which cover software ideas, ideas which you would use
in developing software.

That is Software patents refer to patents that could be granted on products or processes (including
methods) which include or may include software as a significant or at least necessary part of their
implementation, i.e. the form in which they are put in practice (or used) to produce the effect they intend
to provide.

Merits Demerits

Patenting of software protect the idea and the The software may be protected through other forms of
same can be used only subject to the statutory provisions like Copyrights as it may be
permission/license from the patentee. considered as literary work, as and maintaining patent
is a costly proposition.

Patent will protect the inventor against the The innovations which would depend on the previous
copier as against copyright which would only work of concepts would be halted, and the
protect the literary work and not the logic itself.

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 development of the technology would be retarded and
hindered.

New incentives ranging from royalty to Short cycles of the software would render the patent
licensing fee would be there. useless by becoming outdated and/ or obsolete.

It will stimulate and incentivize the innovation Long-term protection would drastically hinder the
making more people get into this regime. growth.

29
Bargaining capacities of the companies It would lead to the rise in bad patents and burden on
improved. the resources of Patent offices.

Cases in software patents:

There have been several cases in India regarding the software patent cases, and the issues relating to the
patents have been discussed in the same. Some of the most important case laws are as under:

Electronic Navigation Research Institute vs. Controller General of Patents:

This case was in relation with the patent application number 3624/DELNP/2005 for the invention titled
"A CHAOS THEORETICAL EXPONENT VALUE CALCULATION SYSTEM" in which the
application was denied by the patent office on the ground that the proposed system fell under the category
of mathematical formulae even if it resulted in technical effects. The invention claimed a mathematical
method to determine and evaluate the time signals.

Yahoo v Controller of Patents & Rediffcom India Limited:

In this case, section 3(k) was discussed in great detail, and the patent application was rejected owing to a
business model being embodied via technology. It was implied that the business model disguised as
technological innovations would not meet the criteria for the patents being granted in India.

In the case of Yahoo, the patent claims included features of a software tool targeting search terms relevant
to Yahoo's business. Accordingly, the IPAB concluded that the technical advance proposed by Yahoo was
simply a method of doing business, even if it was a technically smarter way of doing business and,
therefore, cannot be patented in accordance with provisions of Section 3(k) of the patents act.

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Accenture global service GMBH vs. the assistant controller of Patents & Designs:

This case relates to Indian patent application number 1398/DELNP/2003, which is now a granted patent
as patent number [Link] patent application was initially refused for patent registration by patent
office under the provisions of Section 3(k) of the Indian patents act.

However, the patent applicant appealed before the IPAB, and as per the Controller's decision, it was held
that the instant invention as claimed is not software per se but, a system is claimed which is having the
improvement in web services and software. Accordingly, it was held that the invention since not falling
into the category of section 3(K), viz software per se, corresponding objection was waived and the patent
was granted.

Enercon India Limited v. Aloys Wobben, Germany:

In this particular case, an invention was presented which had the automated steps for controlling the wind
turbine which depended on the external conditions by the use of computer system. The board decided that
it was not merely computer software per se or a set of rules or procedure like algorithms and thus its
patentability cannot be objected to.16 The patent application was granted.

Case Laws in USA:

First software patent was granted to Martin Goetz and British Petroleum Company in the US and the
world. Diamond v. Diehr17 defined the case laws, and IT patents took a nebulous form where it was held
the execution of the physical process by running a computer program did not preclude the patentability.

Cuno Engineering v. Automatic Devices:

Flash of a genius test- A patent eligible device or process:

 The new device, however useful must reveal the creativity and not just the calling.
 The new invention cannot be the mere 'tinkering'.
 It led to the birth of Inventive step/ Nonobviousness.

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Gottschalk v. Benson :

This case determined that a mere algorithm to convert binary-coded decimal (BCD) into a pure binary
number without any practical/ industrial application cannot be patented. The patent for this algorithm was
not granted.

Machine or Transformation test: a patent can be granted if-

 It is tied to some apparatus or machine.

 Transform an article into a different thing or state.

Parker v. Flook :

Updating a numerical value (counter/ alarm limit) which is used in the chemical process of hydrocarbon
conversion. A mathematical formula which was previously unknown needed to be used and solved. But
updating counter value did not have the application to this process as such, and the mathematical formula
could not be wholly preempted. The effective change was in a state of non- physical thing. Therefore, the
patent was denied.

Diamond v. Diehr :

In this particular application, a method of operating a rubber molding press with the help of digital
computer and software using an unknown mathematical equation, i.e., ln v=cz +x. The patent was not
granted for the equation, but it was granted for the process as it affected the change in physical state of
things.

KSR v. Teleflex:

TSM test: To be patent eligible, three criteria need to be considered.

1. Teaching
2. Suggestion
3. Motivation

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If in the known knowledge/ existing documents/ prior art the answer to the above three questions is a no,
then the process/ invention is eligible to get patented.

Alice Corp. V. CLS bank:

It was hedging software which could be used in financial trading systems and could reduce counterparty
and settlement risk. It involved the use of third party or an escrow. The judges decided even though it
would take an infinitesimal amount of time, this process could be carried out manually in the pre-internet
era. Hence, the element of novelty was missing in the invention, and therefore it could not be patented.

Smartflash v. Apple:

The idea behind the alleged invention was such that data would be taken from the supplier to a carrier
after determining the cost/ payment to provide access to the relevant content. This process was novel and
could not have existed in the pre-internet era. As such, the patent was granted.

Supreme Court of USA hence determined a two-part test for determining if the patent could be granted:

A. determine whether the claims at issue are directed to one of those patent-ineligible concepts
(judicial exceptions), and
B. Search for the 'inventive concept'- i.e., "an element or combination of elements that is "sufficient
to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible
concept] itself.

In the above case following JUDICIAL EXCEPTIONS were carved out:

 laws of nature/natural principles,

 natural phenomena; and / or
 Natural products.

DDR Holdings, LLC v. [Link]:

The patent was filed to execute and assist financial-trading systems resulting in the reduction of settlement
and counterparty risks.

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  They do not cite or ask for patenting any mathematical algorithm or idea. Neither do they recite
any business practice or longstanding commercial practice.
 The issue was of a novel process which would be used to interact with internet to get the desired
result.

The implementation of the idea was beyond the "routine", "conventional" and "generic" and hence the
patent was granted.

Ultramercial, Inc v. Hulu, LLC:

The patent was regarding the interactive advertisements which made the access to the premium content to
be available. So, basically, the patents were using these advertisements as a form of currency. The effect
for the same was intangible, and hence patent was not granted.

DDR Holdings, LLC v. [Link]:

The uniform way to represent the website/ pages in a user-friendly format. For example, every website
used to have the format of its own, but after the [Link] paved its way in the market, everything
became uniform and generalized. The new page was hybrid that merged the relevant content in a user-
friendly manner.

The effects were tangible in nature as the content was build and made into a new format, and therefore the
patent was granted.

8.4 Confidential Information / Trade Secret:

A trade secret is a formula, practice, process, design, instrument, pattern, commercial method, or
compilation of information which is not generally known or reasonably ascertainable by others, and by
which a business can obtain an economic advantage over competitors or customers. The scope of trade
secrets is virtually unlimited.

A trade secret is therefore defined as any information that is:

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  Not generally known to the relevant business circles or to the public. The information should also
not be readily accessible.
 Confers some sort of economic benefit on its owner. This benefit must derive specifically from the
fact that it is not generally known, and not just from the value of the information itself. It must
have commercial value because it is a secret. Commercial value encompasses potential as well as
actual value.
 It must have been subject to reasonable steps by the rightful holder of the information to keep it
secret. What is reasonable can vary depending on the specific circumstances.

A trade secret continues for as long as the information is maintained as a trade secret. However,
information may no longer be considered to be a trade secret once it becomes easily accessible, is no
longer properly protected or has no commercial value.

Trade secrets can be one of the most important assets in the intellectual property portfolio of an
organization. Trade secrets are at least on a par with other forms of intellectual property such as patents
and trademarks. Some would argue that trade secrets are the crown jewels of any intellectual property
portfolio.

Trade secrets vs confidential information

Broadly speaking, any confidential business information which provides an enterprise a competitive edge
may be considered a trade secret. However, not all confidential information within an organization
qualifies as a trade secret.

Within an organization, there may have multiple levels of confidential information, with trade secrets
being at the highest level of confidential information. A distinction should be drawn between widely
accessible (internal) confidential information and trade secrets which require special governance. This
means that the normal processes to manage confidential information may not be considered adequate for
managing trade secrets.

Although the terms confidential information and trade secrets as well as proprietary information and even
know-how are often used interchangeably, these terms are interpreted differently and the remedies for the
unauthorized revelation of such information may also differ.

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Although there is substantial overlap between trade secrets and confidential information, they are in fact
different things.

The law on trade secrets

Generally speaking, any confidential business information which provides a business with a competitive
edge may be considered as a trade secret. The unauthorized use of such information by persons other than
the holder is regarded as an unfair practice and a violation of the trade secret.

Depending on the jurisdiction, the protection of trade secrets forms part of the general concept of
protection against unfair competition or is based on specific provisions or case law on the protection of
confidential information.

A trade secret is a valuable piece of information for an enterprise that is treated as confidential and that
gives that enterprise a competitive advantage. European companies are increasingly exposed to the
misappropriation of trade secrets. The European Commission is working to harmonize the existing
diverging national laws on the protection against the misappropriation of trade secrets so that companies
can exploit and share their trade secrets with privileged business partners across the EU, turning their
innovative ideas into growth and jobs.

In the United States there is already a unified trade secrets law, the Uniform Trade Secrets Act, or UTSA.
Interestingly, trade secret law is predominantly governed by state law. However, every state except
Massachusetts and New York has adopted some version of USTA. The language of USTA, and the state
statutes that have adopted it, is very similar to the language in TRIPS. TRIPS is the Agreement on Trade-
Related Aspects of Intellectual Property Rights (TRIPS) is an international agreement administered by the
World Trade Organization (WTO) that sets down minimum standards for many forms of intellectual
property (IP) regulation as applied to nationals of other WTO Members.

The US however may strengthen trade secret law. The Defend Trade Secrets Act of 2015 (DTSA), for
which identical bills were proposed with bipartisan support in both the House and Senate in July 2015,
would significantly enhance US federal protections to curb trade secret theft and secure the value of trade
secrets.

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There are also two major US federal laws that govern certain aspects of trade secrets. The Computer Fraud
and Abuse Act is the federal statute governing computer hacking. The Economic Espionage Act targets
industrial espionage.

Shortly after the start of the 2014 Chinese New Year, China’s State Administration for Industry and
Commerce (SAIC) announced the opening of a discussion regarding a revision to the 1993 Anti-Unfair
Competition Law (AUCL). Since the AUCL includes provisions governing trade secret misappropriation,
the up-coming revision may potentially bring important changes to the current regulatory and statutory
channels for the protection of trade secrets in China. Regardless of the jurisdiction, clearly unfair practices
in respect of trade secret include industrial or commercial espionage, breach of contract and breach of
confidence. However it is not misappropriation of a trade secret to independently discover the secret
information, or to reverse engineer it from a properly obtained source.

Legal protection is not sufficient:

Depending on this legal protection of trade secrets alone is not sufficient. Organizations possessing trade
secrets need to take reasonable efforts to protect these assets, such as via some administrative and technical
measures.

Administrative measures may include having robust trade secret policies and procedures in place. At a
minimum, a reasonable policy should require that a company identify trade secret material as just that,
with a big ‘Trade Secret’ stamp on the document itself. Then limit the number of people who have access
to the trade secret. Educate the employees about the trade secret policy of the organization. Insist that
employees with access to trade secrets sign a confidentiality, or nondisclosure, agreement.

Technical measures may include various access control and security measures to make it difficult for the
trade secrets to be stolen. With the increase in cyber security threats, hacking, electronic espionage,
malware, etc. trade secrets that are stored in electronic format must be properly protected. Various reports
indicate that organizations are increasingly vulnerable to theft of trade secrets, whether due to activities
by current or former employees, from corporate espionage or from hackers or cyber criminals. It is
therefore most important that organizations take reasonable steps using both administrative as well as
technical measures to protect their trade secrets.

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The subject matter of trade secrets:

The subject matter of trade secrets is usually defined in broad terms and includes sales methods,
distribution methods, consumer profiles, marketing plans, supplier lists, client details, and manufacturing
processes. Trade secrets may encompass manufacturing or industrial secrets and commercial secrets.

Perhaps the most famous trade secret is the Coca-Cola formula reputedly stored in a vault in the city of
Atlanta. Google’s proprietary search algorithm; KFC’s blend of eleven herbs and spices; the compound
WD-40, that distinctive spray with thousands of uses, are other famous examples of trade secrets. Trade
secrets can even protect negative know-how, for example the results of failed experiments.

A final determination of what information constitutes a trade secret will depend on the circumstances of
each individual case, but it is clear that the subject matter is very broad indeed. Trade secrets often protect
valuable information that cannot be protected under other forms of intellectual property law.

Advantages of trade secrets:

There are many forms of intellectual property. The advantages of trade secret protection are as follows:

 Trade secrets involve no registration costs. Obviously there may be costs associated with the
administrative, technical and/or legal barriers the company puts in place to protect its trade secrets.
 Trade secret protection does not require disclosure or registration, unlike for example a patent
which becomes public information
 Trade secret protection is not limited in time, unlike for example a patent which only lasts for
twenty years;
 Trade secrets have immediate effect, unlike for example a patent which may take a few years to
be granted.

Trade secret management:

It varies greatly from one company to another how they actually manage their trade secrets. Good practice
however suggests:

 Assign ownership of trade secret management process to someone senior in the organization.

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  Have a trade secret policy and associated procedures in place.
 Utilize confidentiality agreements as these play an important role in protecting trade secrets.
 Have an awareness and education program to ensure that all employees are aware of this trade
secret policy and associated procedures. This can be included within a broader intellectual property
awareness and education program.
 Determine which types of information should be deemed as trade secrets within the organization,
and the qualifying criteria.
 Identify all of the trade secrets across the organization and mark these documents in the proper
and professional manner. Of course this inventory of trade secrets will change over time as new
trade secrets are identified and perhaps some older trade secrets no longer warrant being treated as
such.
 Classify these trade secrets in terms of the nature of the secret, the date created, responsible
person(s), etc. etc. plus of course the value of the trade secret to the business.
 Determine the administrative, technical and legal measures that are needed to properly protect each
trade secret. The exact measures may differ from one trade secret to another.
 Ensure fit for purpose access control measures are in place.
 Ensure IP issues in general and trade secret issues specifically are addressed in both entry
interviews of new employees and exit interviews of departing employees.
 Develop contract provisions and working mechanisms in relationships with outside business
partners, including joint venture partners, to protect trade secrets.
 Conduct regular trade secret audits.

Trade secret management process & system:

Trade secrets are valuable assets for any business, possibly among the most important that it possesses. It
is therefore imperative that whatever trade secret management process is taken into use is fit for purpose,
and add some value to those using the process. Whatever trade secret management system or tool taken
into use should properly underpin the processes, and the process, system and associated data all need to
be synchronized.

A process can be seen as an agreement to do certain things in a certain way and the larger the organization,
the greater the need for agreements on ways of working. Processes are the memory of the organization,

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and without them a lot of effort can be wasted by starting every procedure and process from scratch each
time and possibly repeating the same mistakes. A first class trade secret process facilitates good
communication between the information originator and the information receiver, because they help to set
and manage expectations and the consistency of the information being given.

The trade secret process defines what and how tasks are done and by whom, to ensure repeatability. This
is especially important as a trade secret may originate in one part of the organization but be utilized
elsewhere in the organization or even externally. The trade secret process also enable an organization to
set performance criteria and measurement, which can be utilized when identifying the source or root-cause
of any problems.

The trade secret process must never be allowed to become static, because it is there to serve the
organization and not vice versa. Ways and means to take identified improvements systematically into use
should exist within the organization and well-established processes can be used as a tool to accomplish
this aim.

If the organization only has a handful of trade secrets to manage, then it is possible to live with some
handcrafted approach. However, once the number of trade secrets increases, then it is best to put a trade
secret management system in place to underpin the process. Such a software system helps ensure that the
company is managing its trade secrets in an efficient and effective manner. Such a system can help to
manage the trade secret management process, even if the trade secrets themselves are captured in non-
electronic format.

Trade secret audits:

You typically get what you measure. It is therefore crucial that there are regular audits conducted. It is
strongly recommended that regular audits of the trade secrets policy and procedures are conducted as well
as of the trade secrets themselves and the associated protection measures in place. Companies generally
gain tremendous value by taking a proactive, systematic approach to assessing their trade secret assets,
trade secret policy and associated procedures through regular audits. A proper trade secret audit should
involve people with business, technical and legal skills and competencies, knowledge and experience,
given the unique nature of trade secrets. The findings of these regular trade secret audits should be reported
to and discussed with senior management in the organization.

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Not an island:

It is indeed possible to maintain a trade secret yet share it with others, so long as this sharing is well
managed and the trade secret is not dispersed broadly. In today’s business environment, valuable business
information must be shared with employees across diverse organization functions, plus externally with
key suppliers and customers as well as with other collaboration partners. Technology transfer licenses,
joint venture agreements and other contractual arrangements can provide for trade secrets to be assigned
or shared on a limited basis.

It is also important to realize that the trade secret management process is not an isolated process,
disconnected from other processes or activities across the organization. Good trade secret management
means having a good understanding and appreciation of the links with other organizational functions and
their key processes or procedures.

Confidential Information should be thought of as an umbrella with many varied types of information
underneath. There’s no one clearly outlined definition because confidential information is so many things,
ranging from secret recipes to client contact information, and nearly everything in between.

To help break it up, confidential information can be divided into two categories: competitive
advantage and personal.

Some examples of competitive-advantage confidential information include:

 Sales or Marketing Strategy

 Research Data
 Profit & Loss Data
 Business Plan
 Instructions
 Procedures
 Formulas

Examples of personal confidential information include:

 Customer Profiles

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  Driver’s License Information
 Customer Bank Account Details

8.5 REQUIREMENTS FOR CONSIDERATION OF INFORMATION AS CI / TS.

The following clip exhibits a fairly detailed definition of ‘Confidential Information ‘within a non-
disclosure agreement.

The drafter of this agreement made sure to cover the gamut so the Recipient knows that their obligation
to maintain confidentiality covers any and all types of confidential information that may be disclosed
during the course of the business relationship.

Some agreements require a broad definition like this one. Others will have a more narrowly defined
version. It’s entirely dependent on the parties and business relationship as well as the specific purpose and
goal of the agreement.

Trade secrets are a type of confidential information. (Remember the umbrella?) True to form, the law does
not specifically define what is and is not a trade secret, but thankfully there are some general guidelines
to help you figure it out case-by-case.

Confidential information is generally defined specifically as a ‘trade secret’ if:

1. The information is not known or available to the public and is used by the company directly for
business
2. The information provides the company with an economic advantage
3. The company takes reasonable efforts to protect the secrecy of the information

Furthermore, trade secrets are separate and apart from intellectual property. (This is an important
differentiation.) Intellectual property is specifically defined and has special protections through the filing
of a patent, trademark or copyright.

Trade secrets, on the other hand, have no filing requirement and no statute of limitations, like IP does. Just
to make it a bit more confusing, though; some trade secrets can become IP, but not all trade secrets do.

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For example, a restaurant may not fully meet the requirements to patent their secret sauce recipe, but they
can treat it like a trade secret and keep it confidential through their own precautions.

Despite the fact that it can’t be patented, it may still provide an economic advantage and would therefore
be worthy of a trade secret label.

Some examples of possible trade secrets include:

1 Marketing Strategies
2 Computer Algorithms
3 Test Data
4 Blueprints and Plans
5 Unpatented Recipes or Formulas

8.5 REMEDIES AGAINST BREACH OF CONFIDENCE

In any case, for breach of confidence the complainant can choose what remedy or remedies they want;
what remedies they get however will be decided by the judge. The choices are usually one or more of the
following:

 damages (monetary compensation), which usually requires expert evidence as to the amount of
loss and how that amount has been calculated;

 account of profits, to claw back any riches the person in breach has unjustly made;

 injunction, to stop a person from continuing to do something and/or prevent them from doing
something in the future; and

 Exemplary damages, if the breach is so flagrant that an additional level of punishment is required.

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  Check your progress

1. Integrated Circuit performs

(a) Electrical circuitry function

(b) Mechanical function

(c) Electronic circuitry function

(d) None of the above

2. IC layout consists of layout of

(a) Capacitor

(b) Transistor

(c) Lead wire

(d) All of the above

3. Mask work is

(a) Two dimensional

(b) Three dimensional

(c) Uni-dimensional

(d) All of the above

4. Mask work protection is available in

(a) India

(b) China

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(c) Bangladesh

(d) USA

5. SCPA was in-acted in

(a) 1999

(b) 1984

(c) 1989

(d) 1994

 Summary
- A trade secret is any kind of information that is secret or not generally known in the relevant
industry giving the owner an advantage over competitors.
- Unlike patent, a trade secret does not have to pass the test of novelty; nevertheless the idea should
be somewhat new, unfamiliar to many people including many in the same trade.
- Trade secrets are not protected by law in the same manner as trademarks or patents. In India, trade
secrets are not covered under any law.
- The TRIPS Agreement provides protection to trade secrets in the form of “undisclosed
information” providing a uniform mechanism for the international protection of trade secrets.
- Trade secrets are by definition not disclosed to the world at large. So long as trade secret remains
a secret, it is valuable for the company. As for instance formula for Coca-Cola which is considered
to be one of the best well protected trade secrets. Once the information enters the public domain,
it is lost forever.
- If a trade secret is well protected; there is no term of protection. Trade secret protection can, in
principle, extend indefinitely and in this respect offers an advantage over patent protection, which
lasts only for a specified period.
- Only because the software is a code, doesn't mean it should not be patented as today's era is that
of the internet which is again based on the code. To save the technological innovations and promote

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 it, it is imperative that even the codes should be patented. Even though India was the first nation
to provide statutory protection to the software, it has lagged behind in the area of software
patenting, whereas the USA has realized its importance. Even though there are several demerits of
the idea but the merits far outweigh the demerits. It has become the need of the hour to evolve our
laws so that we may promote the technological advancements in the country.

 Keywords
- Trade Secret- A trade secret is any practice or process of a company that is generally not known
outside of the company. Information considered a trade secret gives the company an economic
advantage over its competitors and is often a product of internal research and development.

 Self-Assessment Questions

1. What is a trade secret?

2. How are trade secrets protected?
3. How long can trade secrets protection last? Is there any legislation governing trade secrets?
4. The TRIPS Agreement provides protection to trade secrets. Explain.
5. What causes a business to lose trade secret protection?

 Answers to Check your Progress

1. C
2. D
3. B
4. D
5. B

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 Suggested Reading
1. [Link]
2. [Link]
3. [Link]
n_of_Computer-related_Inventions_CRI__.pdf.
4. [Link]
puterrelated+Inventions+CRIs.
5. [Link]
patentability-of-computer-related-inventions-is-this-the-final-chapter.
6. [Link]

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Key Business Concerns in Commercializing

Intellectual Property Rights and IP Strategy

MODULE

9
Structure:

9.1 Describe the various business aspects related to commercialization of Intellectual Property
Rights.
9.2 Competition and Confidentiality Issues, Antitrust Laws, Assignment of IPR, Technology transfer
Agreements, Legal Auditing.
9.3 IP Licensing, Strategies for successful Transfer of Technologies
9.4 Brand transference and translation
9.5 Strategies for invention and new product development, Monopoly and collaboration
9.6 International collaborations in product development
9.7 IP Insurance
9.8 Domain Name Dispute Resolution
9.9 IPR and Competition Law
9.10 IP Valuation
9.11 IP Monetization
9.12 IP Due Diligence
9.13 IP Taxation
9.14 Traditional Knowledge Protection

Check your progress

Summary
Keywords
Self-Assessment Questions
Answers to Check your Progress
Suggested Reading

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9.1 DESCRIBE THE VARIOUS BUSINESS ASPECTS RELATED TO
COMMERCIALIZATION OF INTELLECTUAL PROPERTY RIGHTS:

National Institute for Intellectual Property Management (NIIPM) as a national centre of excellence for
training, management, research, education in the field of Intellectual Property Rights related issues, caters
to the training of Examiners of Patents and Designs, Examiners of Trademarks & Geographical
Indications, IP Professionals, IP Managers in the country, imparting basic education to user community,
government functionaries and stakeholders involved in creation, commercialization and management of
intellectual property rights. The institute will also facilitate research on IP related issues including
preparation of study reports and policy analysis of relevance to Government. These activities are not
addressed to by any other agency in the country at present.

9.2 COMPETITION AND CONFIDENTIALITY ISSUES:

World has changed drastically after globalization. In other words, as coined by Thomas Friedman, the
world is flat now. Among others, markets internationally could not have remained untouched. Markets
have been affected drastically. Some have reengineered, some have revamped and some in a state of flux.
What unfortunately has been observed in certain quarters is that unregulated markets have the tendency
to assume monopolistic or near monopolistic character thereby affecting consumer welfare.

We all realize that Markets have an important role to play in any economy be it developed or developing.
Economic theory brings out the clearly the benefits that flow from a market of competitive nature. A
market where there is level playing field for players of all sort operates freely. Efficiency is associated
with competition and the efficient functions of the markets could be achieved only when there is
competition. Regulatory framework therefore becomes imperative to halt the degeneration of the markets
to a monopolistic or a near-monopolistic situation.

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9.2.1 Antitrust Laws:

Competition law and intellectual property law has different occupied field and enacted to cater distinct
objectives. There is a dire need to understand the smooth functioning of the both the laws. Competition
law regulates those practices which has anti-competitive effect on market and thus hampering the smooth
functioning of the market. On the other hand, IPR talks about the exclusive monopoly right to the holder.
The non-excludable character that has been created by IPR that causes deadlock between the two
essentially which creates interface between two respective laws. Thus, it creates a tussle between the IPR
and Competition laws which needs to be resolved cordially.

IPR is usually used as a tool to create exclusive monopoly rights to the holder and thus deterring other
players from offering the products in the same market which reduces competitiveness in the market and
led to creation of conflict between objectives of both the law. IPR is based on the concept of reward theory
means the reward the inventor who has disclosed to the society at large which further intensifies the bone
of contention. However, by observing the objectives there are undisputed opinions that both the laws
promote consumer welfare and innovation. Competition law is enacted to avoid the misuse of the
monopoly power granted under the statute which is widely traced in different before enacting such
legislation to control abuse of monopoly power. The Competition Act, 2002 has widely accepted the
intentions of IPR while framing provisions and it does not eliminate the dominance achieve by an
individual due to such Intellectual Property Rights. Thus, a balanced approach is required to harmoniously
construct both the statute and to clarify much upon that different jurisdictional opinion has to be taken
into consideration.

9.2.2 Assignment of IPR:

The intellectual property assignment is a transfer of an owner's rights, title and interest in certain
intellectual property rights. The transferring party ("assignor") transfers to the receiving party ("assignee")
its property in intellectual property rights, such as patents, trademarks, industrial designs and copyrights.

The owner of the intellectual property rights may transfer all or part of his rights - e.g. the copyright owner
could assign only some of his economic prerogatives. The transfer of intellectual property rights is made
upon a payment of a lump sum or royalties.

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Unlike licence agreements, which grant permission to use intellectual property under certain conditions,
as a general rule assignments are transfers of property rights, with no conditions under which the rights
will be used.

For Trademarks: An assignment is a transfer of ownership of a trademark application or trademark

registration from one entity to another.

For Patents: An assignment involves the sale and transfer of ownership of a patent by the assignor to the
assignee.

For Copyright: An assignment is a transfer of the copyright owner’s economic rights. In contrast to the
economic rights under copyright, moral rights cannot be sold or assigned to another person (moral rights
are the right to be identified as the author of the work or to object to derogatory treatment or to a distortion
or mutilation of the work, to protect the personality and reputation of authors).

9.2.3 Technology transfer Agreements:

Technology Transfer Agreement is required by organizations/companies when technology is transferred

to another organization or companies. This agreement specifies the process of transfer of intellectual
property, whether the license given to the licensee is an exclusive license or non -exclusive the validity
along with terms and condition of the agreement.

9.2.4 Legal Auditing:

An IP audit may be undertaken by an enterprise in a number of instances such as:

• when an enterprise is acquiring an IP centric company;

• when an enterprise is making a sale of its IP;

• for the purposes of IP asset valuation;

• to identify procedures followed by the enterprise with respect to its IP and to frame systematic
guidelines for its better protection and management;

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 • to check whether any third party rights, including IP rights, are being violated;

• to check whether any third party is violating IP rights of the enterprise;

• to keep itself updated with changes in the legal environment;

• as part of an ongoing IP management program;

• for enforcing or defending IP rights

9.3 IP LICENSING:

IP licensing can provide companies with additional (or core) revenue streams, enable them to raise brand
awareness and enhance their reputation, and extend their brands into new markets and geographies.
However, if IP ownership or validity is unclear, it can also pose significant financial and business risk.

An IP licence is an agreement between the owner of a specific IP right and a third party, in which the IP
owner (licensor) provides the third party (licensee) with the right to use (part of) its IP rights for a limited
time, for certain products, in an often restricted geographic area.

Managed correctly, it can provide businesses with an important revenue stream, as well as offering them
a cost-effective method to extend their brand into new product or service areas, and into new markets.

9.3.1 Strategies for successful Transfer of Technologies:

The choice of a technology transfer method should be based on technology analysis, future strategy of
cooperation with a company’s supplier, investment resources and technical capacities of the company to
implement the technology.

When choosing a transfer method, it is necessary to understand that the more complex is the technology,
the closer should the connections be between the buyer and the supplier. As noted earlier, technology
transfer doesn’t end with equipment delivery. In itself, equipment doesn’t generate new competences. The

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real changes in the company’s work can be introduced by transfer of knowledge, skills, and intellectual
property rights.
Let’s try to consider main technology transfer methods, their strengths and weaknesses:

- Licensing:
Licensing is an agreement under which the owner of a patent, trademark or other intellectual property
gives permission to another company to use the technology developed by him (her), in a certain area
during a certain period of time.

There are two main types of licenses: 1) one which grants an exclusive right to use the technology; 2)
another with non-exclusive right, which implies that the patent owner may transfer the right to use the
technology to other companies in the same area.

Additionally, the licensing agreement could include a sublicensing clause which permits the licensee to
grant to someone else the right to use the technology.

The advantage of buying a license/patent is that it has lower costs, compared with other technology
transfer methods. However, the purchase of a license requires sufficient knowledge, experience, relevant
expertise and manufacturing base for the further in-house technology implementation.

- Support Contract:
According to this agreement, the technology owner participates in the technology implementation,
providing at each stage of the transfer technical support, as well as personnel training.

The involvement of technology developer in the technology transfer process ensures a closer cooperation
between two parties which favors a complete transfer of all knowledge and skills related to the technology.
In this way, the support contract may be a part of the licensing agreement, in order to improve the transfer
efficiency.

- Joint Venture:
A joint venture is an agreement concluded between two or more companies in order to execute a particular
business. The joint venture implies mutual assets, management, risks, profit sharing, co-production,
services and marketing.

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Benefits from a joint venture in case of technology transfer are the following: long-term cooperation
between the parties, motivation of all participants in the successful transfer, lower costs than if the
companies have been working separately.

The disadvantages of a joint venture are often associated with the different vision and goals of both
partners, their inability to be independent in management. Also, companies are not always able to
determine objectively the value of capital contributed by each of them and, therefore, subsequent profits
distribution. (The foreign company provides innovative technology and management competence, while
the local company is familiar with the market and regulation. Finally it is difficult to determine the value
of each asset).

- Franchising:
Franchising is an agreement where one company grants to another the right to use its trademark and
business model. The buyer of the franchise starts manufacturing and selling the goods according to the
seller’s specification. Normally, the company owner of a trademark also shares its experience in operating
and managing the franchised product/technology.

The main advantage of franchising is the fact that the company gets an already-made brand. With the
franchised product, the company acquires a proven business model, knowledge in management and
marketing.

The disadvantages are the company’s dependence on the technology owner. In most cases, the company
has to purchase raw materials, equipment and other products from specific vendors. It must follow internal
rules and procedures of the technology owner. Generally, the company cannot bring the product to other
markets as well as sale the franchise. In addition, the decline of the franchise owner reputation could have
an impact on the company that has bought its franchise.

- Strategic Alliance:
A strategic alliance agreement is usually concluded between two or more big companies in order to use
specific skills of each of them in the development of new innovative technologies. Strategic alliance could
be in form of joint laboratories, research programs, production and promotion of a new product.

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Typically mutual efforts of different partners give better results than an independent development of a
new technology. During joint operations, each company can get the needed experience in new areas and
in different forms of management.

The major weakness of strategic alliances is the complexity in managing companies with different
cultures. There will be at least two teams of managers with different approaches. The companies may have
different goals and strategies in further business development of the new technology.

- Turnkey Agreement:
In case of a turnkey agreement, the general contractor is responsible for all the procedures related to
technology transfer, such as technology design, financing, equipment supply, construction and
commissioning.

The advantages of a turnkey agreement are that the company concludes a contract only with one supplier
who takes full responsibility for the project execution; except a force majeure, the project will have a fixed
price; the supplier guarantees the performance and the efficiency of technology.

The disadvantages could be the following: company should know in advance all the features and output
parameters which the technology should have after its launch; a complex or large-scale technology
requires a deep knowledge in the corresponding field (in this case an independent expert organization
could be employed to determine the technology’s features and output characteristics); transfer price under
a turnkey agreement is generally much higher than with any other method (the more risks the supplier
takes, the higher the price is); during the transfer implementation, a company doesn’t have full control
over the progress and quality of each stage of the transfer; contractor’s financial problems may lead to the
project suspension (it is difficult for company to determine supplier’s financial capacity and its ability to
self-finance all stages of the transfer).

One of the ways to reduce the risks of the turnkey agreement is to involve the supplier in the capital of the
new entity. This will motivate the supplier to ensure the quality of the new technology, as well as it will
bring the supplier’s experience in the further operational processes.

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 - Equipment Acquisition:
Equipment Acquisition is a simple and, therefore, one of the most common methods of technology
transfer. The main disadvantage of this method is the fact that the company limits itself to mere technical
knowledge incorporated in the equipment and does not get any new competences in the management and
production. Moreover, equipment available on the market does not give unique privilege to the buyer, as
this equipment may be purchased by any other competitor.
- Management Contract:
Technology can be transferred through a competent expert, who could be “entice” from another company.

This method of technology transfers involves minimum costs. But, generally, it can be effective only for
small projects with relatively simple technology. Furthermore, technology should not be patented.

- Foreign Company Acquisition:

A company may acquire a foreign startup which is developing a new technology. As a result, the company
will not only get the technology, but also a team capable to develop it in the future. Moreover, the
acquisition of a foreign firm automatically places the company on the new international market.

Among the main risks of buying an existing firm, is the possible resignation of key employees after the
acquisition. Besides, the founders of the successful startup would agree to sell it only for a price
significantly higher than the market. This increases the risk of the profitability in the future.

- Direct Foreign Investments:

Direct foreign investments are one of the main methods of technology transfer at the state level. Generally,
a foreign company invests in developing countries in order to create a new market, remove export barriers
and get an access to cheap labor.

In this case, a developing country gets all the benefits of technology transfer, particularly the development
of its own research environment. Besides, it is a way to create new jobs and raise taxes.

However, to attract foreign investors, the developing country’s government, generally, has to make some
concessions in its policy. As we can see in practice, without these concessions large international
corporations are not motivated in long term investments in developing countries.

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 - Buy-Back Contract:
A buy-back contract is a form of agreement between developing countries and large foreign companies.
Under this agreement, a foreign company supplies industrial equipment in exchange for profits derived
from the sale of raw materials or goods produced on this equipment. This kind of technology transfer is
often used in the construction of new plants in the developing countries. In that case the state becomes a
shareholder in the created enterprise.

For a developing country this represents a possibility to get a high-tech equipment without direct
investment in it. Moreover, the foreign company is responsible for the performance of supplied
technologies.

Potential disadvantages of a buy-back contract are the motivation of the foreign company to start
production at least costs which, certainly, will affect the execution quality. Typically, under a buy-back
agreement the price for a new technology is much higher than in case of direct investments.

- Original equipment manufacturer (OEM):

OEM can be considered as a form of subcontracting, where a local firm starts manufacturing according to
the foreign company specifications.

A foreign company transfers a part of its technologies and equipment. It conducts training and
management reorganization. Afterwards, the foreign company sells produced goods through its own
channels and under its own trademark.

OEM agreement enables local companies to absorb new technologies and to reorganize their production.
With new equipment and skills, these firms can produce new goods for the domestic market under its own
brand.

The main drawback of this agreement is the obligation to supply to the foreign company products at a
fixed price which is normally much lower than the market one.

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9.4 BRAND TRANSFERENCE AND TRANSLATION:

Brand transference is the

use of an existing brand name for new or modified products. Brand transference or extension
seeks to capitalize on consumers’ loyalty towards the firm's established brands to gain rapid consumer a
cceptance of a new product.

9.5 STRATEGIES FOR INVENTION AND NEW PRODUCT DEVELOPMENT:

Invention is the creation of new products or processes. These can be completely novel and untried or may
be derived from previous products, but with sufficient new features or technical attributes, that a firm can
patent the design or copyright ideas included in the development. Invention often explores the boundaries
of possibility, with outcomes that are both uncertain and unknown. As a result there will be more failures
than successes. Total invention is difficult, because there are few ideas that others have not considered
previously. However, technical advances mean that the opportunities for invention are increasing.

Innovation is an incremental process where an existing product, process or idea is developed further. New
product functions or designs are added to a product range as a means of gaining market share. Innovation
in manufacturing is likely to result in lower costs, and therefore, prices

9.5.1 Monopoly and collaboration

Intellectual property (IP) refers to "creations of the mind" such as inventions, designs, brand names and
images which are attached to particular brands, and literary or artistic works. Simply put, intellectual
property law grants intellectual property rights (IPRs) which entitle the right holder to the exclusive use
and exploitation of his IP. IPRs can be categorized into two: (a) "industrial property" which covers patents
for inventions, trademarks for brand names and logos, industrial designs and geographical indications of
origin of a product, and (b) "copyright" which covers literary and artistic works. There has been much
debate on the monopoly that is created by the granting of such IPRs to a few persons with a direct
economic interest in protecting their IP from use or copying thereof by unauthorized third parties, to the
detriment of the wider general interests of society.

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The discussion on IP monopoly has predominantly concentrated on industrial property, for example, with
regards to the patenting of medicines and pharmaceuticals giving a monopoly power to pharmaceutical
companies, and this to the detriment of third world country nationals who do not afford to purchase such
medicines due to that monopoly. However, the discussion has also extended to copyright. As consumers
become increasingly literate in IP matters, the general public is aware that IPRs are often held by large
legal entities like publishers, record labels, collecting societies, and, in general, multinational IP producing
or managing companies.

9.6 INTERNATIONAL COLLABORATIONS IN PRODUCT DEVELOPMENT:

Industry and academia alike are increasingly becoming aware of the fact that innovation does not take
place in isolated cells or functions within the firm. During the last the years the term open innovation
has emphasized the importance of internal and external collaboration in order to increase the
competitiveness of companies. Although the idea of involving internal and external actors in the new
product development (NPD) process is not new, the knowledge about the benefits and pitfalls is still
limited.

Results based on analyses of 584 companies from the International Manufacturing Strategy Survey
(IMSS) 2005 indicate that suppliers are heavily involved in the NPD process in firms in B2C markets
aiming at increasing the innovation volume. For B2B companies the reverse picture emerges. However,
when the aim is to increase the radicalism of new products, suppliers and customers are heavily involved
for firms in B2B markets. Further, market uncertainty, and to some extent company size, seems to
moderate the relationships between strategy and involvement considerably.

9.7 IP INSURANCE:

Intellectual property (IP) insurance helps the business defend itself against claims of IP infringement, and
can help you pursue those who are infringing on your patent, copyright or trademark.

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Intellectual property insurance provides capital for legal expenses if you find yourself involved in covered
IP litigation.
In the case of defense policies, it helps pay for any judgment or settlement rendered against you.
Enforcement policies let you work with the carrier to actually enforce your own patents. With the
underwriters’ permission, you could sue the infringer and then be reimbursed for your legal costs.
Many carriers take a proactive approach and help their insured as much as possible. These carriers will
(for a fee) conduct a full analysis of your IP risk relative to your industry and provide you a report prior
to issuing their insurance quote. This serves the dual purpose of letting the underwriter assess their
potential exposure while also educating policyholders to make sure they know how to operate safely in
their space.
Patent insurance is a type of intellectual property insurance coverage. An IP insurance policy can include
coverage for patents, copyrights and other specific types of IP. The phrases “Intellectual Property
insurance” and “Patent insurance” are sometimes used interchangeably, but not all IP insurance policies
include coverage for patents.

9.8 DOMAIN NAME DISPUTE RESOLUTION:

The WIPO Arbitration and Mediation Center provides time- and cost-efficient mechanisms to resolve
internet domain name disputes, without the need for court litigation. This service includes the WIPO-
initiated Uniform Domain Name Dispute Resolution Policy (UDRP), under which the WIPO Center has
processed over 50,000 cases.

The Uniform Domain Name Dispute Resolution Policy (the UDRP Policy) adopted by the ICANN Board
on October 24, 1999 sets out the legal framework for the resolution of disputes between a domain name
registrant and a third party over the abusive registration and use of an Internet domain name in the generic
top level domains or gTLDs (e.g., .biz, .com, .info, .mobi, .name, .net, .org), and those country code top
level domains or ccTLDs that have adopted the UDRP Policy on a voluntary basis. The procedure is
administered by dispute resolution service providers accredited by ICANN (e.g. WIPO Arbitration and
Mediation Center).

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Any person or entity wishing to register a domain name in the gTLDs and ccTLDs in question is required
to consent to the terms and conditions of the UDRP Policy.

9.9 IPR AND COMPETITION LAW:

The law on intellectual property seeks to strike a balance between the exclusive right of the owner and the
social interest. Bainbridge sums up “in the area of intellectual property the law strives to reach a balance
between conflicting interests to reach a justifiable compromise. Justifiable on the ground of protecting the
private interest and promoting investment and providing benefits and providing benefits for society at
large in terms of increased wealth, knowledge and employment”.

Intellectual Property Rights consist of a bundle of legal rights in favor of stakeholders of the intellectual
property to exploit them commercially. Those rights are acquired not through delegation but through
statutory recognition. While granting the rights the State confers them for a specific duration to prevent
firstly, a perpetual monopoly of the rights and secondly, to maintain balance harmony between the
conflicting interest of the stakeholders and the public. The curtailed monopoly led some jurists to conclude
that the IPR in actuality cannot be bracketed within a monopoly in a strict sense. But it cannot be denied
that the objective of curtailed monopoly is to foster innovations of newer products of the product. The
conferment of Intellectual Property Rights further strives to reward the innovator or creator in
commercially viable means.

 The similarities and dissimilarities of the concept of ‘competition’ between Intellectual Property
Rights and Competition law:
The denotation of ‘competition’ in the IPR and Competition Law are contextually different. The primary
objectives of granting IPR encourages fierce competition among the intending innovators and
simultaneously restricts the competition in a number of ways and at the end of the specified duration, the
rights go to the public domain ending the completion. The objective of Competition Law is to prevent
abusive practices in the market, promote and sustain competition in markets and ensure that the consumers
get the proper products at a reasonable price and better quality. Presence of horizontal agreements, that is

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agreements in between enterprises who are engaged in trading with similar or identical goods is said to
have an appreciable adverse effect on competition.

An agreement is said to have an appreciable adverse effect on competition if the agreement has a force of
limiting or controlling product or services at any stage and which directly or indirectly results in bid
rigging or collusive bidding. Anti-trust law also prohibits vertical agreements which might result in having
an appreciable adverse effect on competition. Vertical agreements are the agreements between enterprises
at a different level of production, distribution, etc. Competition Law also prohibits abuse of dominant
position of an enterprise.

Dominance over a specific area of a market can be earned by any enterprise through monopoly power,
this is not per se violation of anti-trust law but abuse of this position is illegal and has a detrimental effect
on the market. An enterprise tends to become dominant if the relevant market is narrowly defined and it
ceases to be so if it is defined widely.

The law also regulates mergers and acquisitions. Competition Law also regulates monopolies and their
position of dominance. The focus of Competition Law is primarily on three areas, agreements among
enterprises, abuse of dominant position and mergers or combination among enterprises. In a nutshell, it is
prevention of unfair competition.

9.10 IP VALUATION:

IP valuation is a process to determine the monetary value of subject IP. (1) Prerequisites for
Undertaking IP Valuation. To be able to do the valuation of an IP asset, it must be separately identifiable.

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9.11 IP MONETIZATION:

Large multinational corporations have developed many of the existing IP portfolio strategies. However,
it is important to understand how those strategies function in order to begin applying them in your own IP
strategy.

For example, licensing and sale of IP were strategies developed and initially used by large companies.

According to IP expert James E. Malackowski in From Assets to Profits: Competing for IP Value &
Return, current efficient IP portfolio management strategies will:

- Limit internal prosecution to innovation that can be most cost-effective and deployed rapidly
internally.
- Acquire those assets that are most efficiently deployed by others.
- Sell or otherwise eliminate IP not relevant to current management strategies, reallocating these
resources and rebalancing the portfolio.

9.12 IP DUE DILIGENCE:

IP due diligence is essentially an audit to assess the quantity and the quality of intellectual property assets
owned by, or licensed to, a company, business or individual. It should also include an assessment of
how intellectual property is captured and protected by the relevant company or business.

9.13 IP TAXATION:

The manufacturing of an IP includes various transactions which are taxed separately:

 DEDUCTION : The capital used for research and development of an IP which is the pre-existing
stage including the analysis cost, manufacturing cost, etc. is treated as an expense which is to be
deducted from the gross income for further calculation of income tax.

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  INCOME: The income received as royalty by transfer of IP is treated and taxed under the Income
Tax Act, 1961. To promote innovation in the country, royalty income is given tax incentives.
 GOODS AND SALES TAX: Tax on Sale/ Transfer/ Licensing/ Assignment of the intellectual
property.

Once the IP is created, it can be commercialized either by integrating it into products and selling them or
the right to use the IP can be transferred- temporarily or permanently and is subject to taxation under the
Indian Taxation system of direct and indirect taxes.

Income Tax:

 ROYALTY: Royalties are taxable income and also a business expense. If you receive royalties
from someone for use of your property, you must claim these payments as business income.
Explanation 2 to Section 9(1)(vi) of Income Tax Act elaborates the definition of royalty. Income
by way of royalty is taxable under the Income Tax Act except in respect of any right, property or
information used or services utilized by a resident, outside India or for the purposes of making or
earning any income from any source outside India.
Royalty income is taxable in respect of any right, property or information used or services
utilized by a non- resident, in India or for the purposes of making or earning any income from any
source in India.
If such income is payable in pursuance of an agreement made before the 1st day of April 1976,
and the agreement is approved by the Central Government, is not taxable.
 DEPRECIATION: Section 32(1)(ii) of the Act accounts for depreciation of the intellectual
property as expenditure for the purpose of calculation of income tax.
 EXPENDITURE: Section 35A of the Income Tax Act 1961 explained the expenditure on
acquisition of patents and copyrights rights.
o Depreciation over the acquired patents and copyrights shall be claimed over a period of
time when the consideration is paid in lump sum.
o In a scenario where the consideration if paid on periodical timeline, the depreciation can
be claimed as expenditure fully incurred for the purpose of business.
Provided any expenditure incurred after the 28th day of February 1966 but before 1st April
1998, on the acquisition of patent rights or copyrights for the purpose of business,

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 deductions will be allowed for each of the previous years on an amount equal to the
appropriate fraction of the amount spread over 14 years.
o Deductions are not applicable to amalgamating companies in the case of amalgamations,
if the amalgamating company sells or otherwise transfers the rights to the amalgamated
company (being Indian company).
 Section 35AB states that where the assesse has paid any lump sum consideration for acquiring any
know-how for the use of his business, the expenditure for the same shall be deductible in six equal
installments for six years:
o one-sixth of the amount so paid shall be deducted in computing the profits and gains of the
business for that previous year, and
o the balance amount shall be deducted in equal installments for each of the five immediately
succeeding previous years.
 DEDUCTIONS: Section 80 GGA talks about certain other deductions for scientific research
which are provided under the head "deduction in respect of certain donation for scientific research
or rural development" – Any sum paid to for scientific research or to a university, college or
institution to be used for scientific research. The research work for the development of a patent
comes under the umbrella of scientific research.
 Under present laws, expensed deductions and additional weighted deductions are permitted to all
taxpayers for R&D expenditure.
o Such weighted deduction is restricted to 150% of the expenditure from tax year 2017/18 to
tax year 2019/20. Thereafter, deduction will be restricted to 100% of the expenditure.
 Section 80-O provides and that no deduction shall be allowed in respect of the assessment year
beginning on the 1st day of April, 2005 and for subsequent years for income from patents.
 Section 80 OQA states that a deduction of 25% shall be allowed from any income obtained by the
author in exercise of his profession on account of any lump sum consideration for the assignment
or grant of any of his interests in the copyright of any of his books or of royalty or copyright fees.
 Exceptions to 80 OQA : No deduction in case of:
o Dictionary
o Thesaurus
o Encyclopedia

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 o Any book that has been added as textbook in the curriculum by any university for degree
of graduate or post graduate course of the university, or
o Book which is written in any language specified in the 8th schedule of the constitution or
in any other language as the Central Government by notification in the official gazette
specifies for the promotional need of the language.
 Section 80QQB, highlights the deductions to be made in respect of royalty income of authors of
certain books other than text-books.
 Section 88 RRB deals with the deductions on payment of royalties for patents. In some cases, the
total income earned by an individual on a Patent can be divided into royalty and additional income
classified not under royalty. In all cases, the income received as royalty alone is eligible for tax
deduction; it states that when income is received as a royalty, the whole income or Rs. 3 lakhs
(whichever is lesser) shall be deducted.
When a compulsory license is being granted in respect of any patent, the terms and conditions of
the license agreement shall decide the status of the income by way of royalty for the purpose of
allowing deduction under this section which shall not exceed the amount of royalty
 Deductions under Section 80 RRB can be claimed only upon satisfaction of a few basic criteria by
the inventor:
o The individual claiming a deduction should be an Indian resident.
o Only patentees can claim this tax deduction. Individuals who do not hold the original patent
are not eligible for tax benefits.
o The patent under Section RRB in question should be registered under the Patent Act of
1970, either on or after April 1, 2003.
 Patent Box Regime: Section 115BBF provides concessional rate of taxation at 10% on royalty
income in respect of exploitation of patents granted under Patents Act, 1970 and is only applicable
to Indian resident who is a patentee (eligible taxpayer). The total income of eligible taxpayer must
include income by way of royalty in respect of patent developed and registered in India and at-
least 75% of the expenditure is incurred in India by eligible taxpayer for invention No other
expenditure is allowed under the tax provisions if concessional tax rate under Section 115BBF is
availed.
The eligible taxpayer has an option to avail the benefit of Section 115BBF is exercised in any
year but he is required to continue to avail the benefit for next 5 years because in case option is

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 not exercised in any of such 5 years, he shall not be eligible to take the benefit under the section
for the next 5 years following such year in which option is not exercised.
 Treatment of Capital Expenditure and Revenue Expenditure: While talking about the tax liability,
the difference between revenue and capital expenditure is a critical one. A revenue expense is
deductible from a business' chargeable income, while capital expenditure is not.
 The Hon'ble Supreme Court in case of Assam Bengal Cement Companies Ltd. v. CIT, observed
that "If the expenditure is made for acquiring or bringing into existence an asset or advantage for
the enduring benefit of the business it is properly attributable to capital and is of the nature of
capital expenditure. If, on the other hand, it is made not for the purpose of bringing into existence
any such asset or advantage but for running the business or working it with a view to produce the
profits, it is a revenue expenditure. The aim and object of the expenditure would determine the
character of the expenditure whether it is a capital expenditure or revenue expenditure."

START-UPS AND SME'S

While talking about Start-ups and Small & Medium Enterprises, there is always confusion in the minds
of people in respect of difference between the two. What is a startup, and how is it different from an SME?
Let's first see the difference between the two. Startup is basically an industry which has been in existence
for a period not more than 7 years and has a turnover not exceeding 25 Crores whereas SME's are
enterprises with an investment upto 1 Crore in Plant and Machinery. The main objective of a startup is to
work in innovation and development of products and processes and thus, government has come up with
special tax exemptions to promote such startups.

TAX EXEMPTION FOR STARTUPS:

Startup-India, to flagship initiative facilitated by of the Indian Government, intended to catalyze startup
culture and build a strong and inclusive ecosystem for innovation and entrepreneurship in India. The two
main points in the 19-point Action plan to be taken into consideration in respect of intellectual property
envisaged for Startup India includes easier IPR facilitation and better tax benefits and easier compliance.

 SECTION 80- IAC:

Post getting recognition a Startup may apply for Tax exemption under section 80 IAC of the Income Tax
Act. Section 80 IAC of Income Tax Act, 1961 provides for Income tax exemption to recognized startups

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for any 3 consecutive years out of a block of 7 years (10 years for startups from Bio-Technology Sector)
from the date of its incorporation. Eligibility Criteria for applying to Income Tax exemption (80IAC): The
entity should be a recognized Startup

 Only Private limited or a Limited Liability Partnership is eligible

 The Startup should have been incorporated after 1st April, 2016

 SECTION 56-Income Tax Act (ANGEL TAX)

Post getting recognition a Startup may apply for Angel Tax Exemption. Eligibility Criteria for Tax
Exemption under Section 56 of the Income Tax Act:

 The entity should be a DPIIT recognized Startup

 Aggregate amount of paid up share capital and share premium of the Startup after the proposed
issue of share, if any, does not exceed INR 25 Crore.

 Other Benefits for Intellectual Property for Startups:

FACILITATION COST: The Central Government shall bear the entire fees of the facilitators for any
number of patents, trademarks or designs that a Startup may file, and the Startups shall bear the cost of
only the statutory fees payable.

REBATE ON FILING OF APPLICATION: Startups shall be provided an 80% rebate in filing of patents
vis-a-vis other companies, helping those spare costs in the crucial formative years.

9.14 TRADITIONAL KNOWLEDGE PROTECTION

The current international system for protecting intellectual property was fashioned during the age of
industrialization in the West and developed subsequently in line with the perceived needs of
technologically advanced societies. However, in recent years, indigenous peoples, local communities, and
governments, mainly in developing countries, have demanded equivalent protection for traditional
knowledge systems.

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 In 2000, WIPO members established an Intergovernmental Committee on Intellectual Property and
Genetic Resources, Traditional Knowledge and Folklore (IGC), and in 2009 they agreed to develop an
international legal instrument (or instruments) that would give traditional knowledge, genetic resources
and traditional cultural expressions (folklore) effective protection. Such an instrument could range from a
recommendation to WIPO members to a formal treaty that would bind countries choosing to ratify it.
Traditional knowledge is not so-called because of its antiquity. It is a living body of knowledge that is
developed, sustained and passed on from generation to generation within a community, often forming part
of its cultural or spiritual identity. As such, it is not easily protected by the current intellectual property
system, which typically grants protection for a limited period to inventions and original works by named
individuals or companies. Its living nature also means that “traditional” knowledge is not easy to define.

Recognizing traditional forms of creativity and innovation as protectable intellectual property would be
an historic shift in international law, enabling indigenous and local communities as well as governments
to have a say over the use of their traditional knowledge by others. This would make it possible, for
example, to protect traditional remedies and indigenous art and music against misappropriation, and
enable communities to control and benefit collectively from their commercial exploitation.

Although the negotiations underway in WIPO have been initiated and propelled mainly by developing
countries, the discussions are not neatly divided along “North-South” lines. Communities and
governments do not necessarily share the same views, and some developed country governments,
especially those with indigenous populations, are also active.

Can’t we protect Traditional Knowledge without creating proprietary rights?

We should be careful in creating registrable rights on the Traditional Knowledge (TK), including
Traditional Medicine Practices, and classifying TK under Intellectual Property Rights, which are private
exclusive rights operating like a monopoly in practice. Patents create private spaces in the knowledge
arena (though for a short duration), and therefore no private appropriation should be allowed in the realm
of TK.

Traditional Knowledge protection shall mean ‘in situ’ perpetual protection and its sustainable
development. Since TK is not definitive in terms its geographical origin, completeness and custodians,
the ownership should be attributed to the State only, given the fact that TK is an accumulated traditional
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wealth and the long kept preserve of its practitioners, tribal communities and families, wherein all of them
acted as deemed “trustees” of the State.

Traditional Knowledge Docketing System (TKDS) vs TKDL

A “Traditional Knowledge Docketing System (TKDS)” (an Information System) shall be created instead
of registers, to indicate the location at which the Traditional Knowledge is available, the community that
possesses the TK, and a short description of nature of TK and the COMMUNITY PROTOCOL if any. The
Communities should be empowered to take appropriate intellectual property rights on the innovations
made by them on the TK and to negotiate with the potential customers by forming Societies/Trusts of their
own.

It is dangerous to create “registers” and ‘registries’ of TK, as registering ‘rights’ make them absolute.
“Compulsory licensing”, “license or right” etc. won’t provide solution as the “rights are intact” on
registration.

Any attempt to enable codification of community-held TK in the form of Traditional Knowledge Digital
Libraries (TKDL) using “Prior Informed Consent” and “Access and Benefit Sharing” concepts is a gross
injustice to those communities, as TKDL is being shared with Patent Offices across the world as “prior
art” in an easy-to-access format on the presumption that the database would be used for search and
examination only.

The Patent Offices are obliged not to make any third party disclosure except for the purpose of giving a
copy to the inventor/applicant as citation, since the definition of “prior art” encompasses everything that
has been published, presented or otherwise disclosed to public on the date of patent and includes
documents in foreign languages disclosed in any format in any country.

But it is hard for the Patent Offices to keep the contents of the TKDL secret from third parties, since no
patent could be denied without disclosing the entire gamut of coded traditional knowledge (TK) associated
with the invention to the claimant to prove that it is “prior art”. Those persons may either use it secretly

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for commercial advantage or put it in the public domain and hence seriously affecting the livelihood of
TK practitioners.

It is going to be a great opportunity for fraudsters to file patent applications purely on conceptual grounds
(as if they had performed the invention), only to see that they could fetch the authentic information on a
TK practice/product.

Documentation may be done only in the case of ‘TK in public domain’ in national interest. Of course, the
TKDL is the right strategy to prevent the direct misappropriation of Traditional Knowledge already in the
public domain and known to a large cross-section of people (wound-healing property of turmeric for
example), though it bears the risk of patenting attempts on cosmetic improvements on such TK that is not
accessible otherwise.

 Check your progress

1. Patent is a form of
a. Tangible Property
b. Intellectual Property

c. Industrial property

d. Both (b) and (c)

2. Patent protects
a. Discovery
b. Invention
c. New invention
d. Both (a) and (b)

 Summary
- An IP licensing agreement occurs between an IP rights owner (“licensor”) and someone who is
authorized to use the rights (“licensee”) in exchange for monetary value in the form of a fee or a
royalty. The two parties agree on the terms and conditions via negotiation, with the outcome

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 dependent upon the bargaining power of each side. The licensor is always the owner of the licensed
IP, and one license can cover patent and design rights, related know-how and a trade mark. The
agreement between the two parties can allow the licensor to tap into the licensee’s productive
capacity and relevant local expertise, thus increasing the licensor’s overall knowledge.
- A potential licensor has to ensure, for example, that it actually owns the IP that is sought to be
licensed to others. Also, it has to be sure that there are no existing licenses that would interfere
with the proposed new license. A potential licensee has to ensure, for example, that the potential
licensor has the necessary rights to the IP in question so as to legitimately transfer the rights and
that scope and extent of the proposed license will duly serve its intended purpose.
- Intellectual Property Rights have become a significant factor in both creating and using ideas that
are translated into knowledge and inventions to promote innovation and economic growth.
Competition law seeks to prevent companies from inappropriately creating, enhancing or
maintaining market power that undermines competition without offering economic benefits.
- Intellectual property law and competition law are both necessary for the efficient operation of the
marketplace. Intellectual property laws provide property rights comparable to those of other kinds
of private property, thereby providing incentives for owners to invest in creating and developing
intellectual property and encouraging the efficient use and dissemination of the property within
the marketplace.
- Licensing arrangements raise concerns under the competition laws if they are likely to affect
adversely the prices, quantities, qualities, or varieties of goods and services either currently or
potentially available.
- Licensing agreements may also have anti-competitive effects, because such agreements can reduce
potential competition in the technology and innovation markets, which would have existed in the
absence of the agreement.
- Restrictive trade practices under the guise of intellectual property licensing can always be
corrected by competition authorities. some of the restrictive practices mainly used in the
intellectual property licensing agreements are: restrictions after expiration of industrial property
rights or loss of secrecy of technical know-how; restrictions after expiration of arrangements;
restrictions on research and development; noncompetition clauses; tie-in arrangements; export
restrictions; price fixing; restrictions on field of use, volume or territory; grant-back provisions;
exclusive sales and representation arrangements

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 - A number of multilateral agreements in the field of intellectual property deals with unfair
competition in intellectual property transactions. The laws dealing with restrictive trade practices
in India are contained under the Patents Act and the Competition Act.

 Keywords
- Launching a new product or service:
When a significant new product or service is being developed or about to be launched, risk of infringing
IP rights of others might be especially high. An IP audit needs to be taken to address any possible
infringement or freedom to operate issues linked to new product development and launch of such a product
on the market.
- Bankruptcy, layoffs:
An IP audit would also be appropriate as a planning tool in advance of any filings for bankruptcy,
significant plans for employee layoffs, business closure, or elimination of significant lines of business.

 Self-Assessment Questions
1. Intellectual Property Law and Competition Law are both necessary for the efficient
operation of the marketplace. Explain the interface between intellectual property rights and
competition.
2. Enumerate the competition issues in intellectual property licensing.
3. Briefly list out the restrictive practices used in the intellectual property licensing agreements.
4. A number of multilateral agreements in the field of intellectual property deal with unfair
competition in intellectual property transactions. Discuss

- Answers to Check your Progress

1. D
2. C

 Suggested Reading
1. [Link]
2. [Link]
[Link]

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Start-ups and IPRs

MODULE

10
Structure:

10.1 Innovation Management / IP Asset Management

10.2 Describes the role of IPRs in the growth and development of Start-ups.
10.3 Government of India schemes
10.4 Guidelines of IPRs to facilitate start-ups, Start-up contracts and agreement, IP Facilitators.
10.5 Registration of IP: examples and case studies of the process and cycle

Check your progress

Summary
Keywords
Self-Assessment Questions
Answers to Check your Progress
Suggested Readings

10.1 INNOVATION MANAGEMENT / IP ASSET MANAGEMENT

Innovations and technological developments have been recognized for their central importance for
economic success and growth at least since the 1930s. Intellectual property (IP) and intellectual property
rights (IPRs), such as patents, trade secret rights, and copyrights, have during more recent decades caught
increasing attention, and, mainly due to various developments at macro level, IP has become an important
source of competitive advantage at micro level in many industries. This has led to an increased importance
of strategic IP management, and the related research field has been growing since the late 1990s. This
thesis aims to contribute to this growing field, and the first purpose of this thesis is to explore and explain
strategic and innovation related IP management practices, and the managerial and economic consequences

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of such practices. Apart from the growing importance of IP management in general, an increased focus on
open and collaborative approaches for creating innovations has led to a need for new and adapted IP
management skills. The second purpose of this thesis is therefore to develop managerial and economic
frameworks, models, and tools to be used in the intersection between IP management and open innovation
practices. These purposes are addressed in a cover paper and six appended research papers of
theoretical/conceptual as well as of empirical nature, being based on interviews, questionnaires, patent
statistics, and document studies.

In connection to the first purpose the results show that, while many small firms have problems with
properly benefitting from the patent system, large firms have increasingly developed their IP strategies,
especially their patent strategies. The purpose is then not only to appropriate monopolistic returns from
innovations but also to govern various forms of open innovation. Large firms were found to in a first step
increase their patenting (in terms of quantity), and in a second step focus more on selective, quality-
oriented, and internationalized patenting. Additional results show that the internationalization leads to a
convergence in managerial choices of output markets for patenting worldwide, in parallel with market and
technology diversification. Further, a case from mobile telecommunications illustrates the role of IP
management in the governance of open innovation systems. Finally, two cases from the automotive
industry illustrate the IP-related problems that arise in connection to divestments and other types of
disintegrations (‘IP disassembly problems’), and how IP management can mitigate them.

This leads to the second purpose, related to the development of models, tools, and frameworks for IP
management in relation to open innovation. First, the thesis provides a conceptual framework of
innovation openness, especially pinpointing the role of IPRs. This framework emphasizes three key
dimensions of innovation openness: resource distribution, technology governance, and technology
accessibility. Second, a framework for managing the IP disassembly problem is presented, enabling
increased exit opportunities and decreased transaction costs. Third, a method for determining fair,
reasonable, and non-discriminatory royalties in licensing collaborations is developed, applicable to
multilateral licensing deals.

It stands clear that contemporary IP management is not (and has never been) only about maximizing
excludability. Strategic IP management must therefore be developed and integrated with technology and

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corporate management in order to foster success at the micro level of firms, and thereby also at macro
level. Developments in IP management skills (e.g., sourcing, control, commercialization, licensing,
valuation, pricing) and IP contracts will then most likely lead to increased efficiency of interorganizational
technological relationships and quasi-integrated organizational forms, and thereby also to increased
innovativeness and economic development.

10.2 DESCRIBE THE ROLE OF IPRS IN THE GROWTH AND DEVELOPMENT OF START-
UPS

The surest way a startup can succeed against larger rivals is by patenting its inventions and ideas. Patents
level the playing field between startups and incumbents by ensuring those who innovate are adequately
rewarded. When a startup patents its ideas, its valuation increases and is likely to attract more investors.
This is because investors are more likely to acquire a startup whose intellectual property rights are
protected. When a startup patents its ideas, it is the only entity that can take commercial advantage of its
patentable ideas. This allows a startup to create unique products and services that have a good chance of
success, thereby increasing profits. Unless a startup protects its intellectual property rights, its rivals can
copy them and steal market share. An unpatented idea, when copied by a rival entity, can also be patented
by its rival making it impossible for the originator of the idea to benefit from it. Hence, patentable ideas
are vital to the success of a company. Intellectual property rights are important reasons for the vast
innovation around us. Disruptive startups are challenging incumbents by patenting ideas. Intellectual
property rights are also an important reason behind the success of the Indian startup ecosystem. IPR allows
a startup that has developed an innovative device to compete effectively against large companies after
patenting its invention. If a startup has a unique unpatented invention, larger rivals can easily copy,
manufacture, and market it, effectively negating the startup's effort to create its invention. Hence, patents
also protect smaller startups against larger rivals that have far greater resources.

It gets too overwhelming a process once you set out to start a new business. It may leave you in doubts,
anxiety and a ton of other legitimate issues. One of the major areas that businesses need to stay aware
about is Intellectual Property Rights. Once the fundamentals of deciding the right business structure are

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 cleared, IPR helps to differentiate your business from the competitors. IPR yields you the following
advantages
 Can sell or license for creating an additional revenue stream.
 Offering distinctive products/services to your customers.
 It can become an essential part of your marketing or branding (Exclusivity).
 Intellectual properties are assets that you can use as security against loans.
Consider exploiting your IP to the fullest as it makes more sense to secure your business in the best
possible manner. You can legally protect your Intellectual property in the following manners:

 Protecting Intellectual Property against any sort of infringement by others.

 You can defend it in the court of law to claim your sole right on it.
 Can legally stop others to use, make, sell or import without your agreement.
 You can earn royalties by licensing it or make money selling it.
 Use your trademark for strategic alliances.
Essentially, there are three different ways through which a new business can secure its Intellectual
Properties. This could be anything – a thought, an idea, an item, images, process, logos, and so forth that
represents a brand.

Here are the types of IPR that businesses can entail:

1. Copyrights
Certain protection is automatically granted to the author for their original, creative or intellectual work.
Works include; Books, lectures, dramatic and musical works, cinematography, drawings, paintings,
architecture, sculpture, photographs, illustrations, maps, plans sketches etc.
Rights: To distribute copies or phonorecords of the work to the public by sale or other transfer of
ownership, or by rental, lease, or lending and to perform the work publicly in person or through an audio
transmission.
Validity: It is not mandatory to register but is highly recommended. The validity of copyright lasts the
lifetime of the author and even till the 60 years after his/her death. The owner is given protection in most
countries.

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 2. Trademarks
Trademark: At first, register trademark online as this acts as a brand element distinguishing your goods
and services from those of your competitors and other traders in the market. It creates a distinct identity
for your company and thereby securing a brand from being counterfeited.
Marks: Word mark, a logo mark or a slogan, shapes, and unconventional marks like colors, sounds,
gestures, animation, holograms etc. can be registered under trademark.
Rights: Gives the exclusive right to use the mark and prevent anyone from using it without permission.
The owner also enjoys the right to license, assign and sell the mark in return of compensation.
Validity: 10 years which can be made perpetual, as along as renewed every 10 years. Should be applied
separately in every country in which protection is required and has a market in.

3. Patents
Patents come to play when you are looking to protect a new invention that is original and can be used to
simplify the lives of people.
Condition: Patent requires an idea to be novel and unique. The industrial procedures can be patented
especially if a non-obvious step is introduced in it.
Rights: It gives an exclusive authority over the patented invention, the right to exclude others and exploit
the patent and earn from it.
Validity: Patent protection is a territorial right and therefore it is effective only within the territory of
India (or the country where applied). Separate patents required to be filed for each country where the
protection is required. A patent is valid for a period of 20 years after which it goes in the public domain.
It is best to consider IP as something that offers an additive advantage that is beyond the concept of making
money or even branding for that matter. It is something with which the business esteem is connected.
Insuring the intellectual property is also a common norm since it is an asset. One of the quintessential
business components is to have IP protection a part of budgeting and business plan as well.

 Startup Valuation can be made on the Basis of IP Rights:

New companies don't really have monstrous products' stocks or workforce to begin with. Subsequently, a
large portion of the estimation of a startup, for the most part, gets from their IP rights. It has been assessed
that on the normal, over 80% of the estimation of a new business depends on their IP portfolio.

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 No Over-Stretching the Finances:
Unless your startup offers something that has zero creation costs, you will need to tighten the pocket
heavily even to make start making profits. Another aspect that the businesses don’t consider is the cost
associated with not taking proper care of the intellectual properties.

 Impose Control on What You Have:

Many businesses echo this - "we couldn't care less on the off chance that somebody duplicates us, it's
simply free promoting!” and this gets me winced on many occasions.

Certainly, it is pleasant to have some other businesses advancing your administrations or merchandise for
nothing. But then, what about the copy that does not matches or justifies the standards that you offer?
Practically, you can do "nothing" in such an event and your brand may have to suffer an irreversible loss.

On one hand, the new business has a highly dynamic environment to start a new business but the
competition and technology are at peak. One has to remain on edge every time to protect your intellectual
property from being used for other substandard products and service. Protecting your IPR is the best and
the only way that helps you to create a sustainable and defensible differentiator in a highly competitive
market.

10.3 GOVERNMENT OF INDIA SCHEMES:

- Startup Scheme 1: Support for International Patent Protection in Electronics & Information
Technology (SIP-EIT)

Launched In: N/A

Headed by: Department of Electronics and Information Technology (DeitY)

Industry Applicable: IT Services, analytics, enterprise software, technology hardware, Internet of

Things, AI.

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Eligible For: MSMEs and technology startups in the ICTE sector.

Overview: The scheme, launched by the Indian government, aims to provide financial support to MSMEs
and technology startup units for international patent filing to encourage innovation and recognize the value
and capabilities of global IP along with capturing growth opportunities in the ICTE sector.

Fiscal Incentives: Reimbursement will be limited to a total of INR 15 Lakhs per invention or 50% of the
total expenses incurred in filing and processing of the patent application upto grant, whichever is lesser.

Time Period: The scheme is valid up to 30.11.2019.

- Start-up Scheme 2: Multiplier Grants Scheme (MGS)

Launched In: May 2013

Headed By: Department of Electronics and Information Technology (DeitY)

Industry Applicable: IT Services, analytics, enterprise software, technology hardware, Internet of

Things, AI.

Eligible For: Startups, incubator/academia/accelerators. Should have projects in electronics &

information technology.

Overview: The MGS aims to encourage collaborative R&D between industry and academics/R&D
institutions for development of products and packages.

Fiscal Incentives: The Government grants for individual industry would be limited to a maximum of INR
2 Cr per project and the duration of each project should, preferably, be less than two years. For industry
consortiums, these figures would be INR 4 Cr and three years.

Time Period: 2-3 years

- Start-up Scheme 3: Software Technology Park (STP) Scheme

Launched In: N/A

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Headed By: Software Technology Parks of India (STPI)

Industry Applicable: IT services, fintech, enterprise software, analytics, AI.

Eligible For: Software companies

Overview: The STPI has been set up with the objective of encouraging, promoting, and boosting software
exports from India. The STP Scheme, by the Indian government, provides statutory services, data
communications servers, incubation facilities, training and value-added services. The scheme allows
software companies to set up operations in convenient and inexpensive locations and plan their investment
and growth, driven by business needs.

Fiscal Incentives: Sales in the DTA up to 50% of the FOB value of exports is permissible and depreciation
on computers at accelerated rates up to 100% over 5 years is permissible.

Time Period: N/A

- Startup Scheme 4: Electronic Development Fund (EDF) Policy

Launched In: N/A

Headed By: Department of Electronics and Information Technology (DeitY)

Industry Applicable: IT Services, analytics, enterprise software, technology hardware, Internet of

Things, AI, nanotechnology.

Eligible For: Startups pursuing innovation in technology sectors like electronics, IT, and Nano
electronics.

Overview: The agenda was envisaged to develop the Electronics System Design and Manufacturing
(ESDM) sector to achieve “Net Zero Imports” by 2020. The EDF will help attract venture funds, angel
funds and seed funds towards R&D and innovation in the specified areas. It will help create a cell of
Daughter funds and Fund Managers who will be seeking good startups (potential winners) and selecting
them based on professional considerations.

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Fiscal Incentives: The Electronic Development Fund (EDF) is set up as a “Fund of Funds” to participate
in professionally-managed “Daughter Funds” which, in turn, will provide risk capital to companies
developing new technologies. CANBANK Venture Capital Funds Ltd. (CVCFL) is the Fund Manager for
EDF.

Time Period: N/A

- Start-up Scheme 5: Modified Special Incentive Package Scheme (M-SIPS)

Launched In: July 2012

Headed By: Department of Electronics and Information Technology (DeitY)

Industry Applicable: Technology hardware, Internet of Things, aeronautics/aerospace & defence,

automotive, non-renewable energy, renewable energy, green technology and nanotechnology.

Eligible For: Startups in electronic manufacturing

Overview: The scheme aims to support IPR awareness workshops/seminars for sensitizing and
disseminating awareness about Intellectual Property Rights among various stakeholders especially in the
E&IT sector.

Fiscal Incentives: This startup scheme by Indian government provides a capital subsidy of 20% in SEZ
(25% in non-SEZ) for units engaged in electronics manufacturing. It also provides for reimbursements of
CVD/ excise for capital equipment for the non-SEZ units. For some of the high capital investment projects
like the scheme provides for Central Taxes and Duties reimbursement of Central Taxes and Duties.

Time Period: N/A

10.4 GUIDELINES OF IPRS TO FACILITATE START-UPS

Intellectual Property Rights (IP Rights) are like any other property rights which are intangible in nature.
The IP Rights usually give the creator an exclusive right over the use of his/her creation for a certain

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period of time. With the rapid increase in the globalization and opening up of the new vistas in India, the
"Intellectual Capital" has become one of the key wealth drivers in the present era. There are different
country specific legislations, as well international laws and treaties that govern IP rights.

Every startup has IP Rights, which it needs to understand and protect for excelling in its business. Every
startup uses trade name, brand, logo, advertisements, inventions, designs, products, or a website, in which
it possesses valuable IP Rights. While starting any venture, the startup also needs to confirm that it is not
in violation of the IP Rights of any other person to save itself from unwarranted litigation or legal action
which can thwart its business activities. Further, startup ventures should be proactive in developing and
protecting their intellectual property for many reasons like improving the valuation of its business, to
generate better goodwill, to protect its competitive advantage, to use intellectual property as a marketing
edge and to use the IP Rights as a potential revenue stream through licensing.

IP Rights protect several aspects of a business and each type of IP Right carries its own advantages. The
scope of IP Rights is very wide, but the prime areas of intellectual property which are of utmost importance
for any startup venture are as follows:

 Trademarks
 Patents
 Copyrights and Related Rights
 Industrial Designs
 Trade Secrets

10.4.1 Start-up contracts and agreement:

Entrepreneurs are known to speculate with calculated risks as a recipe to success. Startups are a
playground for entrepreneurs to showcase their skills and risk-taking abilities to the world. But one should
ensure that they don’t end up in legal soup by missing out on any of the vital legal documents for startups
that are required by every new startup.

When entrepreneurs embark on that unique business idea that they have no doubt would be a commercial
success in the market, their prime focus initially is how to actually start giving shape to the venture.

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In the midst of numerous things that go into building a startup from scratch, the word ‘Intellectual
Property’ (IP) is often not their priority. And even if they consider IP protection, it seems too expensive a
proposition for a startup to act on.

But what entrepreneurs should remember is that assessing IP implications is not just about protecting the
work you are doing. It is also to check if someone else has an IP for similar work. Often, there could be
others in different parts of the globe working on a similar idea, which you may not be even aware of.

There were many common mistake startup founders make during early growth. While it’s appealing to
dig into the vision for your startup and start making your idea a reality, founders must pause and cover
their legal bases.

Here are the top 10 legal documents startups should possess to stay away from legal troubles down the
road:

Trademark

Trademark registration of a name can help strengthen your brand, which is good. The disadvantage is that
when you register with the trademark office everyone with a similar sounding name is alerted and allowed
to object, so you may find that suddenly people who wouldn’t have otherwise have been interested in what
you are doing start paying attention to particular trademark.

Articles of Association/Incorporation

A common mistake most startup founders make is failing to put the proper business structure in place.
Setting up only a sole proprietorship can result in huge income tax bills and legal liabilities for which
founders are personally responsible. By not filing with the Internal Revenue Service to form a distinct
legal entity for their business, founders risk losing their savings and, in some extreme cases, their homes.
While all options have their positives and negatives, for the most part, startups with multiple
shareholders should form a corporation. Businesses that want fewer tax obligations and want to avoid
heavier fees during early growth should consider forming a company.

A non-disclosure agreement (NDA)

Non-Disclosure Agreement is the first piece of paper that you need to reach out for when dealing with any
client or investor. These startup documents ensure that the privacy of your company, as well as that of the

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other party, remains protected. NDA papers are not limited just too potential customers or clients but are
also a workable asset to keep the reign tight on your employees. NDAs protect your startup by
safeguarding your founder and employees’ ideas and your intellectual property rights.

An NDA should specify the following:

 Employee contracts and offer letters

 What constitutes confidential information
 How confidential information should be handled
 Who owns that information (the company)
 The time range that the information will be disclosed
 The time range of confidentiality will be maintained

Employee contracts and offer letters

Building an A-Team for the startup is crucial to set up your business for success. The reasons why you
need to ensure proper contracts for each new addition to your organization as you grow. It may not seem
important as a startup with limited initial manpower capacity. But it will go a long way in making your
employees understand their values and expectations of the company from them as an asset. E

They should clearly state the following:

 Terms and condition of employment (e.g., compensation, role responsibilities, working hours and
grounds for termination)
 Reporting structure
 IP ownership of work
 Expectations
 Required commitments
 Share vesting
 Company policies (e.g., vacation days, paid time off the structure, dress code)

Shareholder’s Agreement

Once your startup is ready to move ahead with private investments by individuals or corporate as the case
may be, a Shareholder’s Agreement needs to be put in place. It is one of the most crucial startup documents

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that help to determine the rights and liabilities of these shareholders and their ability to exercise these
rights. These contracts are very critical as they define the relationship between the shareholders of a
particular company and are invaluable in case a co-founder decides to leave the organization.

Bylaws

Every startup needs a definite set of working rules or principles that govern that space. Bylaws act as those
sets of rules. They ensure that every startup functions smoothly with correctness and gives voice to
everyone involved in the startup’s working. Bylaws can include but are not limited to voting rights to
select leadership, the election of board members or taking approvals as well as other internal functioning
of the organization.

Intellectual Property assignment agreements

For most organizations, Intellectual Property and strong beliefs constitute the perfect recipe to success.
However, many startups overlook to secure these Intellectual Property rights. Startups also bank heavily
on intellectual property as their portfolio assessment is what sells the company to credible investors.
Having complete ownership of your IPs is of extreme importance.

There are two types of Intellectual Property agreements to take into consideration:

 Technological Assignment Agreements are made between a shareholder and the startup. Here the
shareholder assigns their intellectual property to the respective company. These consist of the
intellectual property of persons before the formation of the company. Invention Assignment
Agreements are relevant when there is an innovative product or service created by a company’s
employees. Invention Assignment Agreements ensure that the company owns all rights of the IP
portfolio in this particular case.

 An Intellectual Property assignment agreement could be one of the key legal startup documents
that determine whether your startup can attract the investments it needs to grow. This is especially
accurate for technology companies because it’s often the value of your IP portfolio that investors
and venture capital firms are evaluating.

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Founder’s agreement

In case of startups with multiple founders or founding parties, it becomes necessary for them to sign an
agreement that defines the working coordination of all parties, and form outlines to define boundaries. It
is to prevent any conflicts in the future. Basically, to avoid any dispute among the founding parties of a
startup; all co-founders should sign a comprehensive operating agreement. The agreement should describe
the relationship of the founders; provide the probability that all work will belong to some entity in the
future and outline a basic communication and conflict-resolution clause that can help prevent disputes.

Web Site Terms of Use Agreement

Most growing businesses have established (or should establish) a Web site to market their startup and their
products. Essential to these Web sites is a Terms of Use Agreement, which is intended to be an agreement
between the Web site owner and the users of the site and any buyers of goods or services from the site.

A well-drafted contract includes limitations on how the site can be used, disclaimers, liability limitations,
disclosure on the site’s privacy policy in dealing with customer information, copyright protection
warnings, the jurisdiction where any disputes must be brought (ideally, the home town of the site owner),
and much more.

Business Plan

A frequent mistake committed by new startups is the failure to check on putting up a proper business plan
in place. Things, like the incorporation of a private limited or LLP and not setting sole ownership, can
cost entrepreneurs huge losses in terms of income tax returns and personal savings and property.

Conclusion

These startup documents are no sure shot instructions to success in your ventures. Nevertheless, evidence
of your dedication to taking your startup to new heights with proper preparation. It is really required to
put some effort into getting the legal formalities out of the way for a brighter future as a company.

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10.4.3 IP Facilitators

- Appointment of Facilitators:

For effective implementation of the scheme, facilitators shall be empanelled by the Controller General of
Patent, Trademark and Design (CGPDTM). The CGPDTM shall regulate conduct and functions of
empanelled facilitators from time to time.
In case of any complaint by a Start-Up about a facilitator or on getting information about professional
misconduct through any source, the CGPDTM can remove the facilitator from the panel.

- Who can be a Facilitator?

 Any Patent Agent registered with the CGPDTM

 Any Trademark Agent registered with the CGPDTM
 Any Advocate as defined under The Advocates Act, 1961 who is entitled to practice law as per the
rules laid down by Bar Council of India from time to time, who is well versed with the provisions
of the relevant Acts and Rules, and is actively involved in filing and disposal of applications for
patents, trademarks and designs
 Government departments/ organizations/ agencies like TIFAC, NRDC, BIRAC, DEITY, DSIR
etc.

- Functions of Facilitators:

Facilitators will be responsible for:

 Providing general advisory on different intellectual property rights to Start-Ups on pro bono
basis
 Providing information on protecting and promoting IPRs to Start-Ups in other countries on pro
bono basis;
 Providing assistance m filing and disposal of the IP applications related to patents, trademarks
and Design under relevant Acts at the national IP offices under the CGPDTM;
 Drafting complete/ provisional specifications for inventions of Start-Ups,
 Preparing and filing responses to examination reports 4nd other queries, notices or letters by the
IP office;
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  Appearing on behalf of start-up at hearings as may be scheduled,
 Contesting opposition, if any, by other parties, and
 Ensuring final disposal of the IPR application

10.5 REGISTRATION OF IP: TRADEMARK REGISTRATION

A trademark, identify a company distinctively from that of another, any word, sign or mark which can
identify the origin of goods or services is a trademark. Every business has many trademarks.

Copyright Registration:
The right to a work of literary, music, cinematography or software code arises at the time of its creation,
and it rests with the person who has created it. The registrar of copyright maintains a register of all
copyrights and issues a certificate, as conclusive proof of the ownership of the copyright

Patent Registration:
An invention of goods or Industrial Process, which is unique and for which there is prior art, can be
patented in the name of the inventor or an assigned applicant. The patent is an exclusive right to use or
authorized other to use it for 20 years.

The three-dimensional designs of goods are recognised as an intellectual property right as "design" in
India, and the same can be protected by filing a design registration application. The only requirement is
that it must have an element of distinctiveness and innovation apart from being a novel one.

10.5.1 Examples and case studies of the process and cycle

Design has to do with a product’s performance, quality, durability, appearance and cost and contribute to
humanizing technology. It may be noted that the first level of consumer appeal is indeed its appearance
and competitiveness in designs related to products is based on strong interface aesthetics, convenience,
ergonomics delivered through technology.

The example of the drink maker, the wrapper, the mosquito mat heating device, soap bar given above are
a few simple examples of design registration of articles in India by various enterprises for competitive

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marketing because of their distinctive and novel design features. It may be noted that design registrations
are possible with any object be it a spoon, biscuits, tools, bottles, jewellery, fork, drinking cups, watches,
handicrafts, textiles, furniture, cycle handles, motorcar bodies, electrical switches, airplane bodies, etc.
Not all designs can be registered.

For example a design which

a) is not new or original

b) Has been disclosed in the public domain before the priority date of the application for registration or

c) is not significantly distinguishable from known designs or combinations of known designs, or

d) Contains or comprises scandalous or obscene matter do not qualify for design registration.

A design is generally registered in a specific class. It may be noted that the international system classifies
designs into 31 classes and one miscellaneous class (99) which are further sub divided into subclasses
based on the nature of the goods. The table gives a brief description of the classification system. It should
be noted that an article for which a design may be registered includes “any part of an article if that part is
made and sold separately”. Thus more than one registration may be obtained for the same article where a
different novelty is stated for each.

India has the third largest start-up ecosystem in the world with 2-3 start-ups being born every day. With
the Startup India initiative launched in 2016, to build a robust ecosystem for nurturing entrepreneurship,
a host of benefits have been provided to encourage the growth and development of start-ups in India.
These benefits include facilitation programmes to help the start-ups secure their intellectual property
rights. Apart from start-ups, assistance and monetary rebates with respect to protection of intellectual
property rights are also provided to Micro, Small and Medium Enterprises (MSMEs), Educational
Institutions, Government Bodies, etc. The importance of these programmes and schemes lies in igniting
the spirit in the homegrown industries and market players to innovate and incentivize their efforts.

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A few schemes and policies initiated by the Government of India to promote the creation and protection
of different kinds of IPs by the people of India are as follows:

SCHEMES AND FACILITATION INITIATIVES

1. Scheme for Facilitating Start-Ups Intellectual Property Protection (SIPP)[1]

SIPP is directed at promoting awareness and protection of intellectual property rights amongst start-ups.
The scheme is aimed at providing quality IP services to start-ups to incentivize them to innovate and
commercialize their intellectual property. Under this scheme IP services are provided by facilitators
empanelled by the Controller General of Patents, Designs and Trade Marks (CGPDTM). A facilitator
under the Scheme maybe a trademark or a patent agent registered with the CGPDTM, an Advocate as
defined under The Advocates Act, 1961 or any government department/organization/agency as notified.

The scheme was initially run on a trial basis but has now been extended till March 31, 2023. Under the
scheme, the start-ups are only required to pay the statutory fee for registering a patent, trademark, or a
design and the facilitators are reimbursed directly by the office of the CGPDTM and disbursed by the
respective IP offices.

2. Building Awareness on Intellectual Property Rights for Micro, Small and Medium Enterprises
(MSMEs)[1]

Under this scheme, MSMEs are provided financial assistance to register their patent, GI, and trademark.
Further, financial aid is also provided for setting up IP facilitation centers in the country.

The maximum grant provided under the scheme for registering various IPs is as follow

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3. IPR Facilitation Services by the CII[1]

Confederation of Indian Industry (CII), a non-profit industry association in India, has been at the forefront
of facilitating awareness and providing facilities for protection of IPRs amongst the industrial community.
The CII has set up several IPR facilitation centers such as the one in Hyderabad, Tamil Nadu Technology
Development & Promotion Centre (TNTDPC) in Chennai, Gujarat Knowledge Application & Facilitation
Centre (GKAFC) in Gujarat, and Intellectual Property Facilitation Centre’s (IPFCs) in Indore,
Gandhinagar and Mysore. Its center in Hyderabad has facilitated in filing of more than 28 GIs and has to
its credit the facilitation of the first GI being granted in the textile industry for Pochampally ikkat.

4. Patent Facilitation Centres (DST)[2]

The Department of Science and Technology (DST) set up the Patent Facilitation Centre (PFC) in 1995 as
a unit of the Technology, Forecasting, and Assessment Council (TIFAC) and subsequently 24 other Patent
Information Centres under the PFP were set-up with the aim of creating awareness and providing
assistance in protection of IPRs. The PFC helps in filing and prosecuting patent applications in India and
abroad on behalf of academic institutions and government R&D institutes. The PFC has also aided in
establishing IPR Cells in several universities to lend a helping hand to the academicians in conducting
patent searches, drafting patent applications, etc. The patent applications are drafted and filed by the patent
attorneys on the panel and the costs for filing the applications are borne by the DST.

From the year 2016 till 2018, the PFC has facilitated in filing of 98 patent applications, on behalf of
renowned academic institutions such as IITs, University of Calcutta, Delhi, Mumbai, etc., of which 59
have been granted a patent.[3]

5. Intellectual Property Facilitation Centre (NRDC)[4]

The Intellectual Property Facilitation Centre (IPFC) is a joint venture of National Research Development
Corporation (NRDC) and Ministry of Micro; Small & Medium Enterprises (MoMSME) with an aim to
promote protection of IPRs amongst the MSMEs and provide high quality IP related assistance. IPFC also
organizes training sessions on specific themes related to IP. Further, the IPFC provides the following
services with respect to different IPs:

 Patent: Pre filing services, prior art searches, advice on examination reports, post grant support,
patent valuation, etc.;

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  Copyright, Trademark, Designs, GI: Guidance and assistance in preparation of the required
documents for filing the Applications.

6. Biotechnology Patent Facilitation Cell (Department of Biotechnology)[5]

The Department of Biotechnology (DBT) established the Biotechnology Patent Facilitation Cell (BPFC)
in 1999 with a view to provide one body for awareness as well as a facilitation mechanism for Intellectual
Property Rights amongst the scientists and researchers. The BPFC aims to create awareness amongst the
biologists and biotechnologists regarding patents, facilitating filing of Indian as well as foreign patent
applications, etc. As per the policy of (DBT) all patent applications filed by DBT will be in the name of
DBT and the host institution, however DBT will not accrue any financial benefits from the patent.

7. IPR division of DeitY[6]

Department of Electronics and Information Technology (DeitY) has a dedicated IPR division with the
objective of creating and promoting IPR awareness in the field of Information and Communication
technology. DeitY provides facilitation support for filing patents, copyrights, trademarks and design
applications to its R&D societies and institutions that have executed R&D projects using DeitY’s grants.
DeitY has assisted in filing 248 patent applications of which 65 have been granted a patent and filing of
168 trademark applications of which 117 have been registered.

8. SIP-EIT Support for International Patent Protection in Electronics & IT[7]

SIP-EIT is a scheme initiated by DeitY for providing monetary aid to start-ups and MSMEs in order to
brace their competitiveness by encouraging inventiveness and its protection. The scheme aims at
providing financial aid of upto INR 15 Lakh per invention or 50% of the expenses incurred in international
patent filing for inventions in the field of Information, Communication or Electronics sector.

9. Intellectual Property Facilitation Cell (Ministry of Defence and Department of Defence production)[8]

Intellectual Property Facilitation Cell (IPFC) was set up to formulate a comprehensive policy for creation
and management IP in the Indian Defence Sector. The main objectives of IPFC are to create awareness
amongst the personnel of Defence Public Sector Undertakings and Ordnance Factories including their
sub-vendors; stimulate and promote creation of IP Assets during design/ development/ manufacturing of
new products or improvements in the indigenization of components; management of IP rights by
commercialization of IPRs, strengthening the mechanism for combating IPR infringements.

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10. Intellectual Property Facilitation Centre (IPFACE)[9]

Venture Center supported by the Ministry of MSMEs and National Chemical Laboratory, Council of
Scientific and Industrial Research, India started the project IPFACE for entrepreneurs and MSMEs.
IPFACE provides cost effective advisory services to MSMEs relating to filings of all kinds of IPs. Till
2019, IPFACE has assisted in 152 patent filings, 126 trademark filings, 26 design registrations and 25
copyright registrations.

CONCLUSION

As can be derived from above, the various schemes and IP facilitation bodies are an indica of the
identification of the growth of IP awareness and proper guidance in IPR protection in India. With these
policies, schemes, and facilitation bodies, India is looking to be at the forefront of IP protection and
promote development of homegrown technologies.

Questions related to intellectual property that every budding entrepreneur should consider.

When is the Right Time to Consider IP Protection?

If you ask intellectual property agents and corporate lawyers, they’ll say the sooner you protect your
intellectual property the better. Whether it is grabbing an opportunity or securing protection, timing
matters. Most entrepreneurs give in to the misconception that obtaining IP rights are expensive and time-
consuming. And, as a result they delay protecting these valuable assets. Your IP differentiates you from
competitors and you do not want to risk it. It is best to protect it as soon as you can.

Who Owns the Intellectual Property?

While protecting your intangible assets is important, it is also crucial to consider the ownership of the
intellectual property. Ask yourself whether or not you own all your intellectual property. Typically, during
the initial stages, entrepreneurs collaborate informally with individuals to develop their idea or get
employed at companies while waiting for their startup to launch. In the absence of a formal agreement or
entity, any IP generated may be owned by different individuals or a company. It is important to identify
the assets you own, before proceeding to protect them.

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How do you keep your IP Safe during Initial Discussions?

During the early stages of a startup, you may have to discuss your business plan or give away details of
your IP to receive feedback from advisors or attract potential investors. You cannot avoid these
discussions, but you should ensure your groundbreaking ideas are safeguarded. While it is possible for
your idea to be stolen, the bigger risk is the possibility of losing IP rights as the result of discussing your
ideas openly in public. As an entity you should have a plan on how to keep your IP safe. A patent agent
or lawyer can help you analyze and protect your ideas while marketing.

Do you have an IP Strategy?

Not every single intellectual property needs protection. There are different types of intellectual property –
trademarks, patents, copyrights, industrial designs, and trade secrets. Certain aspects of your branding
should be trademarked, while others can be left out. Similarly, not all innovative ideas may need to be
patented. Identify potential assets and formulate an IP strategy. Remember that an IP strategy goes beyond
filing and obtaining protection. It provides you with a plan on how to pursue and protect your IP and it
aligns with the short-term and long-term objectives of your business. A strong IP strategy offers value,
reduces risk, and is achievable.

 Check your progress:

1. Hall Mark is
(a) Trademark
(b) Certification Mark
(c) Collective Mark
(d) Both (a) and (b)
2. Khadi is
(a) Trademark
(b) Certification Mark
(c) Collective Mark
(d) Both (a) and (b)

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 Summary

 Intellectual Property (IP) is often an early stage venture’s most valuable asset. But who really
“owns” the IP a startup uses? In many cases the answer isn’t clear, and problems frequently
aren’t identified until an investor or acquisition partner starts due diligence.

 IP ownership problems can be easy to address at the outset by establishing the right
procedures, but difficult (and expensive) to fix down the road.

 Ownership of IP, often a new venture’s most valuable asset, is unquestionably complicated.
But if you start early, using good NDAs, founder agreements, services agreements, and the
like, you can avoid expensive complications down the road. Recognizing the different kinds
of IP and the ownership issues related to each is the first step.

 Keywords
- Cyber-squatting is related to unauthorized use of trademark. The registration of well-known
trademark as domain name with the intention to sell/assigned others to use same is known as cyber-
squatting.

- Certification mark provides quality whereas collective mark both quality and source. The
proprietor can register certification mark whereas association of persons can register collective
mark. The proprietor of certification cannot use the same whereas collective can be used by
proprietor.

- While startups are constrained by a paucity of funds when it comes to protecting intellectual
property, what is important is that they should still continuously work on identifying IP and at the
same time consciously work on setting aside funds to protect IP.
- Since international patents may prove to be expensive at this stage, a good start would be to apply
for a domestic patent/trademark/copyright. As the company scales up, it can set aside a budget for
patent/trademark/copyright in the international market. Failure to do so can affect the company’s
prospects to scale up.

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 - It’s not just at the startup stage that IP is important. Businesses are constantly reinventing and
redefining themselves in today’s day and age, where change is the only constant. This means
greater focus on innovations, which in turn, means a greater need to protect IP.
- The importance of IP cannot, (and should not) be undermined by startups, and established
companies alike, because of the long-term sustainable advantages it offers.

 Self-Assessment Questions
1. Discuss the process of registration of IP.

- Answers to Check your Progress

1. B
2. C

- Suggested Reading

1. [Link]

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 Case Studies

MODULE

Structure:
11
11.1 Real industry examples where the companies had learned the importance of IP via case laws,
IP licensing, IP infringement suits and had implemented that learning in growing their
businesses; enforcement and infringement defence strategies
11.2 Turmeric Patent Case in US
11.3 Basmati Rice Patent Case in US
11.4 Diamond v. Chakraborty
11.5 Myriad Case
11.6 D. C. Comic v. Towle
11. 7 Impression Products Inc. v. Lexmark International Inc

11.1 REAL INDUSTRY EXAMPLES WHERE THE COMPANIES HAD LEARNED THE
IMPORTANCE OF IP VIA CASE LAWS, IP LICENSING, IP INFRINGEMENT SUITS
AND HAD IMPLEMENTED THAT LEARNING IN GROWING THEIR BUSINESSES;
ENFORCEMENT AND INFRINGEMENT DEFENCE STRATEGIES

11.1.1 Case study 1

SME background
Nationality: Dutch

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Industry: Producer of additives

Status in China: WFOE

- Case
A Dutch SME produces their additives in China under the name Roi Jaguar. Their general manager in
China is tasked with making sure that the brand is protected in accordance with Chinese law. At one point
the Chinese general manager leaves the company. Soon after he leaves, the Dutch SME discovers a very
similar product on the Indian market called Roi Lynx. Both brands thus exist with the same word followed
by the name of a species of big cat.

After some research, the Dutch SME finds out that after quitting the job its former general manager has
started competing against it with very similar products. Also, after consulting the China IPR SME
Helpdesk, the SME finds out the manager has registered the trademarks of the company in China in his
own name instead of under the Dutch company in China.
The situation escalates due to some other related outstanding issues for which the former general manager
still demands certain payments. The Dutch company refuses, so the former general manager goes to the
local Authority of Industry and Commerce (AIC) and shows them the trademark certificate of Roi Jaguar,
which results in the AIC confiscating the infringing products of the Dutch SME that carry the name Roi
Jaguar. As the Chinese trademark registration is in the name of the former general manager, and the Dutch
SME does not have the legal right to the name Roi Jaguar, the former general manager legally closes down
the business of the Dutch SME with regard to the brand Roi Jaguar.

- Action taken
The trademark registration carried out by the former general manager was done in bad-faith due to his
existing relationship with the Dutch SME. The Dutch SME thus filed for a trademark cancellation as the
trademark was registered in bad faith, and then subsequently applied for the trademark itself.

After first having filed the trademark cancellation, which temporarily stopped infringement of the Roi
Jaguar trademark, the Dutch SME continued to produce the product, but under a different product name.
Before the new product name was used, the company checked that there were no conflicting trademarks
that had already been registered in China, with regard to additives for that new name. The Dutch SME
then registered the wordmark, logo and the Chinese character name of the new product. Once the

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cancellation was concluded and the trademark was applied for in the Dutch SME’s name, the Dutch SME
was able to put its products under the Roi Jaguar name back on the market.

- Lessons learned
 Be on top of trademark registrations in China, and make sure the registration of the trademark is
conducted in your own company name.
 Draft your contracts with care and with the assistance of legal professionals and translators to make
sure that all terms, conditions and obligations are clear for both parties.

11.1.2 Case study 2

SME background
Nationality: Spanish

Industry: Scientific research and development

Status in China: Market entry

- Case
A Spanish SME in the scientific research and development industry has patents on certain cutting edge
surgical instruments, all around the world, including China. At an international exposition of surgical
instruments the Spanish Company discovers a Chinese company advertising their patented products under
the name of the Chinese company. The Spanish company obtains flyers and photos of the products.
However, the Spanish company is also concerned that the Chinese company might have defensive utility
model patents in place. Since utility model patents are approved quickly (usually within one year) and do
not require an official examination of novelty, inventiveness and industrial applicability, this could
potentially bar the Spanish company from entering the Chinese market.

- Action taken
The flyers and photos of the products obtained by the Spanish company were not recognized as evidence
under Chinese law. In China, potential evidence must be notarized by a Chinese notary public before it is
recognized as official evidence. Therefore, the Spanish company hired a law firm and a Chinese notary
public to facilitate this process.

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The company first employed a patent attorney to make correct assessments on whether infringement
actually occurred and on the patent portfolio of the Chinese company. This was necessary because Chinese
companies often use defensive patents against foreign companies to scare them away from the Chinese
market and from going through the financial burden of a patent infringement case.

If it were to go to a defensive patent case, the Chinese company would claim the original patents of the
Spanish SME to be invalid and that the SME is therefore infringing upon the patents of the Chinese
company, which are often utility model patents.

After conducting a patent search, it was revealed that the Chinese company indeed owns many utility
model patents.

The Spanish company’s patent attorney will now need to carry out a patent assessment with regards to the
infringement case after the notarized evidence is obtained. After obtaining the evidence, the Spanish
company then has three options. The first would be to negotiate with the Chinese company to stop the
infringement. The second would be to take administrative action through the local Intellectual Property
Office where the infringer is located in order to raid the premises and confiscate and destroy the infringing
goods and to penalize the company. The Spanish SME also has a third option of starting a court action
against the Chinese company in order to obtain a long-term solution to the infringement.

Lessons learned
 Make sure evidence is notarized in China by a Chinese notary public.
 Assess a competitor’s patent portfolio before taking action.
 Assess whether or not a Chinese patent is infringed before you start any enforcement against a
Chinese infringer.

11.2 TURMERIC PATENT CASE IN US:

Notably, under the Agreement on Trade Related Aspects of Intellectual Property (TRIPS), countries are
under no obligation to extend protection to a particular geographical indication unless that geographical
indication is protected in the country of its origin. India did not have such a specific law governing
geographical indications of goods which could adequately protect the interest of producers of such goods.

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This resulted into controversial cases like turmeric, neem and basmati. In the case of turmeric, in March
1995, a US Patent was granted to two NRIs at the University of Mississippi Medical Centre Jackson, for
turmeric to be used as wound healing agent. This patent was challenged by CSIR at the USPTO on the
ground of "Prior Art" claiming that turmeric has been used for thousand years for healing wounds and
rashes and hence this was not a new invention. Even CSIR presented an ancient Sanskrit text and a paper
published in 1953 in the Journal of the Indian Medical Association as documentary evidence. Upholding
the objections, the US patent office cancelled the Patent.

11.3 BASMATI RICE PATENT CASE IN US

The case which triggered a lot of controversy was granting of a US-patent to Texas based Rice Tec Inc
who claimed that this invention pertains to a novel breed of rice plants and grains. The USPTO granted
the patent on ‘Basmati Rice Lines and Grains’ in September 1997 after three years examination and
accepted all the 20 claims put forward by them. India challenged the patent. A team of agricultural
scientists screened several research papers, reports and proceedings of seminars, conferences, symposia,
journals, newspapers and archives for relevant supporting information to establish the existence of prior
art in this area in India.
The documentary evidences against the claim Nos. 15, 16 and 17 of the company for novelty were so
strong that Rice Tec had to withdraw these claims. The company further withdrew 11 claims. Thus only
five of the Rice Tec's original 20 claims survived the Indian challenges. The patent granted simply gives
three hybrid varieties Bas 867, RT 1117 and RT 1121. The new rice has nothing to do with basmati.
Importantly, none of the claims granted by the patent pertains to basmati rice as a generic category. Also,
the Rice Tec. application was for a patent and not for basmati as a trade mark, so there is no question of
Rice Tec getting exclusive rights to use the term basmati. The patent granted, therefore, neither prevents
Indian Basmati from being exported to the US nor puts it at a disadvantage in the market.

11.4 DIAMOND V. CHAKRABORTY

- Facts:

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Chakrabarty (Plaintiff) developed a new species of bacterium capable of metabolizing hydrocarbons in a
manner unknown in naturally occurring organisms using recombinant DNA processes. The
microorganisms exhibited great promise in the treatment of oil spills. Plaintiff applied for a patent, which
was denied by the Patent Office (Defendant) on the basis that the microorganisms were products of nature
and therefore unpatentable. The Board of Appeals affirmed. The Court of Customs and Patent Appeals
reversed, and the United States Supreme Court granted review.

- Issue:

May a live, man-made microorganism be patented?

- Held:

(Burger, C.J.) Yes. A live, man-made microorganism is a non-naturally occurring composition and
therefore may be patented. Resolution of this issue is, regardless of its philosophical implications, strictly
a matter of statutory construction. The relevant statute here, 35 U.S.C. 101, defines as patentable any new
and useful manufacture or composition of matter, among other things. It is a basic rule of construction
that words are given their natural, ordinary meanings. There can be little doubt that microorganisms
produced by recombinant DNA technology may be said to be manufactured and to be compositions of
matter. For purposes of patent law, the fact they are alive is not relevant. Although it is true that naturally-
occurring products may not be patented, a genetically-engineered microorganism is not naturally
occurring. While this Court recognizes that recombinant DNA technology is a controversial field, it is ill-
equipped to balance the competing values and interests manifested therein; this is a task for
Congress. Since the patent laws clearly include materials such as are at issue here within their scope, and
no specific law exists to exclude it, the only appropriate holding is that recombinant DNA-produced
microorganisms are patentable. Hence it was affirmed.

- Dissent:

(Brennan, J.)Â Congress, in enacting the Plant Patent Act in 1930 and the Plant Variety Protection Act in
1970, has indicated that bacteria are excluded from patentability. Patent protection must not be extended
further than Congress intended. Congress has not left a legislative vacuum regarding the type of patent at
issue. The Plant Patent Act gives patent protection to developers of certain asexually reproduced

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plants. The Plant Variety Protection Act extends protection to certain new plant varieties capable of sexual
reproduction. Therefore, contrary to the majority’s assertion, the patent at issue does not pose the problem
of unanticipated inventions. In these two Acts, Congress has addressed the general problem of patenting
animate inventions and has chosen carefully limited language granting protection to some kinds of
discoveries, but specifically excluding others. These Acts show strong evidence of a congressional
limitation that excludes bacteria from patentability. The Acts evidence Congress’s understanding, at least
since 1930, that 101 does not include living organisms. If newly developed living organisms not naturally
occurring had been patentable under 101, the plants included in the scope of the 1930 and 1970 Acts could
have been patented without new legislation. Therefore, Congress believed that it had to legislate in order
to make agricultural human-made inventions patentable, and, because the legislation Congress enacted is
limited, it follows that Congress never intended to make items outside the scope of the legislation
patentable.

- Discussion:

The general rule is that things occurring naturally in the universe may not be patented. Neither a type of
plant occurring naturally nor a natural principal could be patented. The laws of motion could not have
been patented by Newton. This legal principle appears straightforward, but as demonstrated by this case,
modern science has made it less so.

11.5 MYRIAD CASE:

- Facts of the case:

Myriad Genetics, Inc. is a Utah based American Molecular diagnostic company. In the year 1994, the
company discovered two genes, namely BRCA1 and BRCA2 and was subsequently granted a patent over
them by the US PTO. These genes were instrumental in diagnosing breast and ovarian cancer among
women as women possessing these genetic mutations were more susceptible of having breast cancer
(nearly 50-80%) and ovarian cancer (nearly 20-50%) later in their lives.

Myriad threatened to sue any lab which was offering tests for BRCA or related genes. The company took
complete advantage of the exclusive rights that the patent has vested on it. It charged humongous costs

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for the diagnostic tests. The actual price accrued was not even a fraction of the amount that was charged.
Gradually, it stopped sharing data with the international scientific community. The most bothersome issue
was that for several years, it denied to upgrade the lists. These lists included the subsidiary and ancillary
mutations. The major drawback of not upgrading the lists was that several women who have taken the test
within this time frame received the wrong result. As a result of the gene monopoly, no other lab was in a
capacity to provide for the tests, prompting the suffering of numerous women with no fault of theirs.

Subsequently in the year 2010, a case was filed against Myriad Genetics by a group of several experts,
physicians, geneticists, patients, advocacy and scientific research groups challenging the validity of
patents granted over the BRCA1 and BRCA2 genes.

- Judgment:
The matter was brought up by the plaintiff before the Southern District Court of New York. The Court
ruled in favor of the plaintiffs in March 2010. Judge Robert W. Sweet in his 152-page decision ruled that
"the patents at issue directed to isolated DNAs containing sequences found in nature are unsustainable as
a matter of law and are deemed as non-patentable subject matter" and thereby invalidating patents on the
BRCA1 and BRCA2 genes. Myriad moved to the US Court of Appeals for the Federal Circuit by way of
an appeal. In a vital and significant move in the case, the US government switched sides. Where previously
in the district court, the submissions of the government were being made in Myriad's favor, however in
the appellate court it blatantly made submissions favoring the opposition side by contending that isolated
DNAs are not eligible for patent protection. The Court of Appeals reversed the decision of the district
court in part and affirmed in part, stating that patent can be granted over an isolated DNA that does not
occur alone in the nature.5

This led to filing of a petition before the SCOTUS and the question resurfaced that' Are human genes
patentable?'. The Supreme Court finally ruled in favor of the plaintiff stating that "a naturally occurring
DNA segment is a product of nature and not patent eligible merely because it has been isolated..." Thus,
differentiating between the concepts of 'invention' and 'discovery', SCOTUS had rightfully stated that
nothing new was created by Myriad and only discovery of an important and useful gene was made by it,
which does not come under the ambit of an invention.

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 - Conclusion:
The whole Myriad judgment on the gene-patenting hoopla can be beautifully summed up by way of a
simple analogy- if the DNA is metaphorically understood as gold and isolating DNA is extracting gold
from a mountain or taking it out of a stream bed, then the process or the procedure of mining the gold may
be patented but not the gold itself. In spite of enduring a lot of efforts in digging the gold out of the
mountain, gold per se can still not be patented.

11.6 D. C. COMIC V. TOWLE

- Background :

DC Comics is the publisher and copyright owner of books featuring Batman. Batman first appeared in
comic books in 1939, and in 1941 the Batmobile was introduced as Batman’s primary mode of
transportation. The Batmobile has varied in appearance over the years, but its name and key characteristics
as Batman’s high-tech personal crime-fighting vehicle have remained consistent. Since its creation in
comic books, the Batmobile has also appeared in numerous television programs and motion pictures,
including the 1966 television series, Batman, starring Adam West, and the 1989 motion picture
BATMAN, starring Michael Keaton. Defendant Mark Towle produced full-size, operational replicas of
the Batmobile as it appeared in both the 1966 television show and the 1989 motion picture, and sold them
for approximately $90,000 each to car collectors. In 2011, DC Comics brought suit for copyright
infringement and other grounds. Mr. Towle argued that the 1966 and 1989 versions of the Batmobile were
not subject to copyright protection. The district court granted summary judgment to DC Comics. The
Ninth Circuit affirmed in DC Comics v Towle, 802 F.3d 1012 (9th Cir. 2015).

- Analysis:

The central question presented in this case is whether the Batmobile is entitled to copyright protection.
Although some early decisions cast doubt on whether literary characters were copyrightable, it is now
clear that they can be independently copyrighted in certain circumstances. Although comic book
characters are not listed in the Copyright Act, courts have long held that, as distinguished from purely
“literary” characters, comic book characters, which have “physical as well as conceptual qualities”, are

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copyrightable. See Walt Disney Productions v. Air Pirates, 581 F.2d 751 (9th Cir. 1978). Characters in a
television series or motion picture may also be entitled to copyright protection. See Olson v National
Broadcasting Co., 855 F.2d 1446 (9th Cir. 1988). An automotive character may also be copyrightable. See
Halicki Films, LLC v Sanderson Sales & Marketing, 547 F.3d 1213 (9th Cir. 2008). Not every comic
book, television, or motion picture character, however, is entitled to copyright protection. Copyright
protection is available only “for characters that are especially distinctive.” Halicki, 547 F.3d at 1224. To
meet this standard, a character must be “sufficiently delineated” and display “consistent, widely
identifiable traits.” Rice v. Fox Broadcasting Co., 330 F.3d 1170 (9th Cir.2003). Copyright protection can
apply for a character even if the character’s appearance changes over time. See Toho Co., Ltd. v. William
Morrow & Co., Inc., 33 [Link].2d 1206 (C.D. Cal. 1998) (Godzilla characters); Metro-Goldwyn-Mayer,
Inc. v. Am. Honda Motor Co., 900 F. Supp. 1287 (C.D. Cal. 1995) (James Bond characters). Based on
those precedents, the Ninth Circuit established a three-prong test to determine whether a character in a
comic book, television program, or motion picture is entitled to copyright protection, as follows: 1. The
character must generally have physical, as well as conceptual qualities; 2. The character must be so
“sufficiently delineated” to be recognizable as the same character whenever it appears; it must display
consistent, identifiable character traits and attributes, although the character’s appearance may change;
and 3. The character must be distinctive and contain unique elements of expression; it cannot be a stock
character. In applying this test to the Batmobile, the Ninth Circuit found that each element was met, and
that the Batmobile is entitled to copyright protection. Also finding that Towle’s production and sale of the
Batmobile replicas infringed on the copyrights, the Ninth Circuit affirmed judgment for DC Comic.

11.7 IMPRESSION PRODUCTS INC. V. LEXMARK INTERNATIONAL INC.:

- The Impression Products Decision:

- Background:

Lexmark manufactures and sells printers and printer cartridges in the United States and abroad. It sells
cartridges in the United States under two purchasing options:

1. Buyers can purchase a “Regular” cartridge at full price that is not subject to any restrictions, or

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2. Buyers can purchase a “Return Program” cartridge at a discount, subject to the restriction that the
buyer will not reuse the cartridge and will not transfer the cartridge to anyone other than Lexmark after
the toner runs out.

Impression Products collected the used return-program cartridges sold in the U.S. and abroad, refilled the
cartridges, and resold them in the United States.

Lexmark sued Impression, alleging that the sale of the refurbished return-program cartridges and the
importation and sale of foreign-sold cartridges in the Unites States infringed its U.S. patents. Impression
responded that Lexmark’s sales of the cartridges both abroad and in the United States exhausted
Lexmark’s patent rights. The Federal Circuit, who heard the case en banc, determined that none of
Lexmark’s rights were exhausted. Impression then appealed to the U.S. Supreme Court.

- The Impression Products Decision:

The Supreme Court reversed the Federal Circuit’s decision, holding that “a patentee’s decision to sell a
product exhausts all of its patent rights in that product, regardless of any restrictions the patentee purports
to impose or the location of the sale.”

1. Authorized Sales Exhaust All Patent Rights Regardless of Intended Post-Sale Restrictions
First, the court held that while the restrictions in Lexmark’s return program might be enforceable under
contract law, they do not entitle Lexmark to retain patent rights in the items sold. The court noted that the
doctrine of patent exhaustion has its origins in the common law’s refusal to permit restraints on the
alienation of goods and acts as a limitation on a patent owner’s right to exclude.

The court also rejected Lexmark’s argument that the Supreme Court’s decision in General Talking
Pictures Corp. v. Western Electric Co. dictated a different result. In that case, the patent owner granted a
license to sell patented products in a defined field of use. The court held that when the licensee sold the
product outside its licensed field to a customer who knew the sale was unauthorized, both the licensee and
customer could be sued for infringement. The court stated that patent licenses and product sales implicate
different ownership concerns. Because licenses exchange rights, not goods, patent owners can restrict the

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licensee’s use or sale of covered products because the license does not transfer ownership. Although patent
owners can restrict a licensee’s actions, those licensees cannot enforce post-sale restrictions on customers.

Patent Owner’s International Sales Exhaust U.S. Patent Rights

The court also held that foreign sales of patented products exhaust U.S. patent rights if the patent owner
authorizes the sale of the product abroad. The court explained that exhaustion principles are not
geographically dependent and relied on its recent copyright exhaustion decision in Kirtsaeng v. John
Wiley & Sons, where it held that foreign sales of copyrighted material exhausted United States’
copyright protections. Thus, patent exhaustion applies regardless of where the sale occurred.

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