Commerce (Legal Aspects of Business - III)
15.3 INTELLECTUAL PROPERTY RIGHTS (IPRS)
Concept and Development of Intellectual Property Law in India
One of the important feature of the property is that the owner of the property may use his
property as he wishes and that no body else can use his property without his authorisation. Of course
that right of the proprietor or owner has been limited by the law. Generally, the property can be divided
into following three categories:
(i) Movable property, consisting of movable things;
(ii) Immovable property, consisting of immovable things, and
(iii) Intellectual property, consisting of creation of human mind and the human intellect.
The Concept of Intellectual Property
As the term intellectual property relates to the creations of human mind and human intellect, this
property is called Intellectual property. In other words, intellectual property relates to pieces of information
which can be incorporated in tangible objects at the same time in an unlimited number of copies at
different locations anywhere in the world. The property right does not vest in those copies but in the
information reflected in those copies. Similar to property rights in movable and immovable property,
intellectual property is also characterised by certain rights as well as limitations such as right to use and
licence and also limited duration in the case of copy right and patents.
Kinds of Intellectual Property
Usually intellectual property is divided into two branches, namely, industrial property and copyright.
The Convention establishing World Intellectual Property Organisation, 1967 provides that the intellectual
property shall include rights relating to:
(i) literary, artistic and scientific works;
(ii) performances of performing artists, phonograms and broadcasts;
(iii) inventions in the field of human endeavour;
(iv) scientific discoveries;
(v) industrial designs;
(vi) trademarks, service marks, commercial names and designations;
(vii) protection against unfair competition; and
all other rights resulting from intellectual in the industrial, scientific, literary or artistic fields
activities of a person. These activities may include the activities of industrial or commercial interests.
They may be called inventions, creations, new products, processes of manufacture, new designs or
model and a distinctive mark for goods etc.
Concept of Patent
Generally speaking, patent is a monopoly grant and it enables the inventor to control the output
and within the limits set by demand, the price of the patented products. Underlying economic and
commercial justification for the patent system is that it acts as a stimulus to investment in the Industrial
innovation. Innovative technology leads to the maintenance of and increase in nations stock of valuable,
tradeable and industrial assets.
The grant of first patent can be traced as far back as 500 B.C. It was the city dominated by
gourmands, it was perhaps the first to grant what we now-a-days call patent right to promote culinary
art. For it conferred exclusive rights of sale to any confectioner who first invented a delicious dish. As
the practice was extended to other Greek cities and to other crafts and commodities, it acquired a name
'monopoly', a Greek Portmanteau word from mono (alone) and polein (sale).
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Evidences of grant to private individuals by kings and rulers of exclusive property rights to
inventors dates back to the 14th Century. But their purpose had varied throughout the history. History
shows that in 15th Century Venice there had been systematic use of monopoly privileges for inventors
for the encouragement of invention. Utility and novelty of the invention were the important considerations
for granting a patent privilege. The inventors were also required to put his invention in commercial use
within a specified period. In 16th Century the German princes awarded inventors of new arts and
machines and also took into consideration the utility and novelty of inventions. Early laws in American
colonies served primarily to encourage foreign manufacturers to establish new industries in the colonies
by providing them protected “domestic markets.
By the late 15th Century, the English monarchy increasingly started using monopoly privilege to
reward court favourites, to secure loyalty and to secure control over the industry but these privileges
were not used to encourage inventions. In 1623, the English Parliament adopted a Statute of monopolies
which recognised the inventors patent as a justifiable monopoly to be distinguished from other monopoly
privileges.
The Statute outlawed the awarding of monopoly privileges except for first and true inventor of a
new manufacture.
In England, during the 16th and 17th Century the inventors patent of monopoly had become of
great national importance. From the mid-seventeenth Century through the mid-nineteenth Century, the
laws recognising the patent monopoly spread throughout Europe and North America, but these privileges
were not granted without the opposition. In India, the law relating to patents contained in the Patents Act,
1970, has been amended in the year 1995, 1999, 2002 and 2005 to meet India's obligations under the
agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) forming part of the Agreement
establishing the World Trade Organisation (WTO). The Patents Act has been amended keeping in view
the development of technological capability in India, coupled with the need for integrating the intellectual
property system with international practices and intellectual property regimes. The amendments have
also been aimed at making the Act a modern, harmonised and user-friendly legislation to adequately
national and public interests while simultaneously meeting India's international obligations.
Concept of Trade Mark
A Trade Mark distinguishes the goods of one manufacturer or trader from similar goods of others
and therefore, it seeks to protect the interest of the consumer as well as the trader. A trade mark may
consist of a device depicting the picture of animals, human beings etc., words, letters, numerals,
signatures or any combination thereof. Since a trade mark indicates relationship in the course of trade,
between trader and goods, it serves as a useful medium of advertisement for the goods and their quality.
The object of trademark law is to permit an enterprise by registering its trademark to obtain an exclusive
right to use, share, or assign a mark. Closely related to trademarks are service marks which distinguish
the service of an enterprise from the services of other enterprise.
Trademarks are not a creation of our times, even though their current nature and omnipresence
is of rather recent origin. Trademark, a word created only in the 19th century continued to play a
significant role in the trade and commerce throughout the major part of history, including medieval times
and the centuries beyond. The guilds, one of the mainstays of economies in earlier times, often even
required their members, the masters of the various crafts, to affix marks on their products in order to
exercise control over their production. The trademarks began to assume their present day role in the
course of the eighteenth century with the advent of mass production and growing trade in goods with
the establishment of more complicated system of distribution of goods from the producer to the buyer.
In the course of time, remedies were developed by the Courts, or the legislations to stop the infringement
of trademark rights. One of the first countries to enact a comprehensive law on trademarks, was France
in 1857, a law which remained in force for more than 100 years. United Kingdom enacted its Trademarks
Registration Act, 1875 providing for the registration of trademarks. Subsequently, various amendments
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were introduced in the Act of 1857 and finally the Trade Marks Act, 1938 was enacted. As far as the
recognition of modern ways of exploiting trademark is concerned, the Trade Marks Act, 1938, since its
inception, recognised the assignment of trademarks without the simultaneous transfer of the respective
business. The national developments were influenced to a substantial degree by developments in
international field, particularly Paris Convention for the Protection of Industrial Property, 1883, including
trademarks which is supplement by the Madrid Agreement on Registration of trademarks; signed in
1891. In India, the relating to Trademarks is contained in the Trade and Merchandise Marks Act, 1958,
which has now been replaced by the Trade Mark Act, 1999.
In view of developments in trading and commercial practices, increasing globalisation of trade
and industry, the need to encourage investment flows and transfer of technology, need for simplification
and harmonization of trade mark management systems and to give effect to important judicial decisions,
a new Trade Marks Act, 1999 have been enacted to provide for registration of trade mark for goods as
well as services including prohibition to the registration of imitation of well known trade marks, and
expansion of grounds for refusal of registration. The Act also simplified the procedure for registration of
registered user, enlarged the scope of permitted use and allowed the registration of Collective Marks
owned by associations, etc.
The Act also provides for establishment of an Appellate Board for speedy disposal of appeals and
rectification applications. The Act empowers the Registrar to register certification trade marks. So far
this power was vested with the Central Government. Provision for enhanced punishment for the offences
relating to trade marks on the lines of Copyright Act, 1957; restriction on sale of spurious goods; and
use of some one else trade marks as part of corporate names, or name of business concern have also
been made in the Act. The new Act amended the definition of trade marks, provides for filing a single
application for registration in more than one class and extension of period of registration and renewal
from 7 to 10 years. Making trade mark offences cognizable; enlarging the jurisdiction of courts on the
lines of Copyright Act; and amplifying the powers of the court to grant ex parte injunction in certain
cases, are other notable features of the new Act.
Concept of Copyright
The idea of Copyright protection only began to emerge with the invention of printing, which made
it for literary works to be duplicated by mechanical processes instead of copied by hand. This led to the
grant to privileges, by authorities and kings, entitling beneficiaries exclusive rights of reproduction and
distribution, for limited period, with remedies in the form of fines, seizure, confiscation of infringing
copies and possibly damages.
However, the criticism of the system of privileges led to the adoption of the Statute of Anne in
1709, the first copyright Statute. In the 18th century there was dispute over the relationship between
copyright subsisting in common law and copyright under the Statute of Anne. This was finally settled by
House of Lords in 1774 which ruled that at common law the author had the sole right of printing and
publishing his book, but that once a book was published the rights in it were exclusively regulated by
the Statute. This common law right in unpublished works lasted until the Copyright Act, 1911, which
abolished the Statute of Anne.
Copyright is a well recognised 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 as the
name arose as an exclusive right of the author to copy the literature produced by him and stop others
from doing so. There are well-known instances of legal intervention to punish a person for copying
literary or aesthetic out put of another even before the concept of copyright took shape. The concept
of idea was originally concerned with the field of literature and arts. In view of technological advancements
in recent times, copyright protection has been expanded considerably. Today, copyright law has extended
protection not only to literary, dramatic, musical and artistic works but also sound recordings, films,
broadcasts, cable programmes and typographical arrangements of publications. Computer programs
have also been brought within the purview of copyright law.
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Thus, the copyright deals with the rights of intellectual creators in their creation. The copyright
law deals with the particular forms of creativity, concerned primarily with mass communication. It is also
concerned with virtually all forms and methods of public communication, not only printed publications
but also with such matters as sound, and television broadcasting, films for public exhibition etc. and
even computerised systems for the storage and retrieval of information. The copyright law, however,
protects only the form of expression of ideas themselves. The creativity protected by copyright law is
creativity in the choice and arrangement of words, musical notes, colours, shapes and so on. 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. The amendment introduced in 1984 included computer
program within the definition of literary work and a new definition of computer program was inserted by
the 1994 amendment. The philosophical justification for including computer programs under literary work
has been that computer programs are also products of intellectual skill like any other literary work.
In 1999, the Copyright Act, 1957 has been amended to give effect to the provisions of Article 14
of the TRIPs agreement providing term of protection to performers rights at least until the end of a period
of fifty years computed from the end of the calendar year in which the performance took place. The
Amendment Act also inserted new Section 40A empowering the Central Government to extend the
provisions of the Copyright Act to broadcasts and performances made in other countries subject to the
condition however that such countries extend similar protection to broadcasts and performances made
in India. Another new Section 42A empowers the Central Government to restrict rights of foreign
broadcasting organisations and performers.
Emerging Issues
While the IPR system in India comprises of strong Intellectual Property laws but it has many
loopholes as it lacks effective implementation, for which "least priority given to adjudication of IP matters"
is often quoted as a reason. Major challenge is to inform the enforcement officials and the Judiciary to
take up issues of Intellectual Property rights, at par with other economic offences, by bringing them
under their policy locator. There are also many issues in having an Intellectual Property fund, which can
be utilized for further developing the IP culture in the country. It is necessary to devise a National IP
Policy for India, which will help in working towards realizing the vision of India in the area of Intellectual
Property rights. This will enable the establishment of a strong socio-economic foundation and deep
international trust.
In recent years, the issue of intellectual property rights protections is debatable among public
policy approaches to issues in developing countries. The TRIPs agreement, implemented in 1993
among World Trade Organization member nations, sets minimum standards of intellectual property
rights protections and enforcement in many developing countries, with the threat of negative repercussions
if these guidelines are not followed.
Since many decades, intellectual property law has developed legal rules that cautiously balance
the above competing interests. The objective is to provide enough legal protection to maximize incentives
to engage in creative and innovative activities while also providing rules and policies that minimize the
effect on the commercial marketplace and minimize interference with the free flow of ideas generally.
In short, the law has developed a careful balance between competing interests. It is observed that
legislative enactments and judicial decisions have adopted an extensive view of intellectual property. The
subject matter eligible for protection has continued to expand significantly in recent years. This expansion
has removed the clear description between patent, copyright, and trademark law. It has also led to
overprotection of intellectual property in the form of overlaps that allow multiple bodies of intellectual
property law to concurrently protect the same subject matter. Such overlapping protection is difficult
because it interferes with the carefully developed principles that have evolved over time to balance the
private property rights in intellectual creations against public access to such creations.
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Plagiarism is a major issue. It is the act of theft of another person's intellectual property which
comprises of ideas, inventions, and original works of authorship, words, slogans, designs, proprietary
information, and using them as own without giving credit to main author or inventor.
Today, digital technologies are major tools for creating and storing information for its speed and
easy access. Intellectual property rights apply on the Internet but the main issue is to make them
enforceable. The ease of reproducing works if they are in digital format is low-cost and there is a near-
perfect quality of copies. Publishers argue that the Internet harms their intellectual property interests by
fundamentally transforming the nature and means of publications and thus making their works extremely
vulnerable to Internet piracy. The distributed nature of Internet's management makes it possible for any
user to widely circulate a work on the electronic network termed as Cyberspace through any number
of channels. A user can easily distribute a work to news groups through e-mail or on personal website.
Intellectual Property Rights Law has presented problems for advanced technologies such as computer
programmers. The law adopts that something is either in writing protectable through copyright or a
machine protectable by a patent but not by both concurrently.
In Indian situation, Indian Copyright Act kept track of international conventions, the current copyright
law has many deficits as compared to the west. As India did not sign the "WIPO Internet Treaties" there
is no corresponding legislation in India to the US DMCA. The present Copyright Act of India does not
have requirements regarding the 'technological protection measures' nor the protection of electronic
rights management information. Some provisions of the Indian Penal Code, 1860 (IPC) may serve to
provide for legal protection for technological measures. Section 23 of the IPC speaks of 'wrongful gain
or wrongful loss'.
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