Legal Aspects of Business

Module VI: Intellectual Property Laws (IPR)Overview of Law and Procedure relating to

Patents, Trade Marks and Copyrights, Infringement

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Intellectual Property Laws (IPR)

IPRs are private rights against the whole world. The law confers an interest that is similar to a monopoly with a purpose to encourage innovation and creativity. Protection is granted by law to the IPR holders.

“Intellectual Property Rights are the rights given to persons over the creation of their minds. They usually give the creator an exclusive right over the use of his/her creation for a certain period of time”—WTO.

IPRs are a composition of ideas, inventions and creative expression PLUS he public willingness to bestow the status of property on them and then give their owners the right to exclude others from access to or use of protected subject matter.

The right is not merely an exclusive title but a right to reproduce, distribute and gain commercial returns for their creations.

Governments provide territorial protection to innovations and objects of art. However, globalisation has rendered this terrritorial protection useless.

WIPO (World Intellectual Property Organisation) is a convention in the globalised era.

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Classification of IPRsClassification of IPRs: Basically there are two categories: a)Copyrights and rights

related to copyright and b) Industrial Property• The above two categories cover seven Intellectual properties as per the Uruguay

Round agreement on TRIPs. • 1)Copyright and related rights--Literary, artistic and scientific works (the rights of

performers, producers of sound recordings and broadcasting organisations inventions in all fields of human endeavour)

• 2)Trademarks including service marks, commercial names and designations• 3) Geographical indications including appellations of origin• 4) Industrial Designs (Rights of designers for their distinctive industrial designs• 5)Patents including protection of new varieties of plants (Traditional Knowledge)• 6) The Layout-designs of integrated circuits(Rights of computer technologists for their

Layout designs of Integrated circuits)• 7) Undisclosed information, including trade secrets and test data. Rights of

businessman for undisclosed information of technology and management (trade secrets/confidential information (know how)

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Objectives of Protection of IPRs• Encouraging and rewarding creative work• Promoting technological innovation• Stimulating free and fair competition among producers• Protecting distinctive designs and also protecting customers in helping them

to have choice of various goods and services• Facilitating transfer of Technology: IPRs regime is not to be rigid but also to

facilitate transfer of technology in the form of foreign direct investment, joint ventures and licensing.

• Balancing rights and obligations. Exclusive rights with certain exceptions and limitations which are set for overall social objectives.

• Every useful discovery is the presentation of a service rendered to society. The society which receives such service should compensate the person who rendered this service.

• Protection is by way of punishing or penalising the persons who are guilty of infringement

• When a party uses the Intellectual property of another without permission it amounts to infringement (unauthorised use, intrusion, interference or contravention of legal rights)

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PatentsInventions protected by Patents (including protection of new varieties of plants): The protection is to stimulate innovation, design and the creation of technology. The social purpose is to provide protection for the results of investment in the development of new technology. It also gives incentive and the means to finance research and development activities. Facilities shall also be given for the transfer of technology in the form of foreign direct investment, joint ventures and licensing. Protection is available for a period of 20 years.

Patent Law in India• In India, patent protection started as early as 18th Century. However, a

formal patent protection is by the PATENTS ACT 1911. The PATENTS ACT, 1970 and the Patent Rules 1972 were amended effective from January 1, 2005. (The amended and consolidated law related to patents is in the larger interests of our country)

• A major change in India’s patent law (necessitated by WTO) was the shift from process patent to product patent for food, pharmaceuticals and chemicals.

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Patents

• The major source for amendment to Patents Law in India is the Agreement on Intellectual Property Rights that emerged from the Uruguay Round of multilateral trade negotiations that formed the WTO. Being a member of WTO, India is obliged to align its patent law with the stipulations under WTO with effect from 1st January 2005. Accordingly the Indian Patents Act 1970 and the Patents Rules 1972 were amended w.e.f. 1st January 2005

The amendments cover the following:• The eligibility, procedures and conditions for grant of patents.• Inventions and other subjects not patentable• Rights and Obligations of patentee• Grounds for revocation of patents• Matters related to working of the patent and compulsory

licensing.• Rights of Government regarding patented products.

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Patents

• 1)Grant and Revocation of Patents: The Patents Act lays down the eligibility, procedures and conditions for grant of patents and grounds for revocation of patent.

• As per this Act, an “invention” means a new product or process involving an inventive step and capable of industrial application. An “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.

• The Act also provides for grant of patents to the additions to the patentee (in respect of any improvement, modification of an invention which is patented). The period of addition to the patent rights shall be for a term equivalent to that of the main patent.

• Patents shall be revoked on certain grounds such as invalid claims or the government feels that the patent or the mode in which it is exercised is mischievous to the State or generally prejudicial to the public interest

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Patents

• 2)Items not patentable: The Act provides for inventions and other subjects not patentable. Some of them are: a) Inventions which are frivolous or contrary to public interest; b) method of agriculture or horticulture; c) any process of treatment of human beings or animals; d) Plants and animals (other than micro-organisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals); e) a mathematical or business method or a computer program per se or algorithms; f) the mere discovery of a scientific principles or the formulation of an abstract theory or discovery of any living thing or non-living substance occurring in nature; g) a mere scheme or rule a presentation of information; i) topography of integrated circuits; j) an invention which, in effect, is traditional knowledge or which is an aggregation or duplication of known properties of traditionally known component or components.

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Patents

• 3) Product Patent: Earlier, process patent was only allowed for food, pharmaceuticals and chemical products. This meant that anybody was free to manufacture the same or similar product by a process different from the patented one. Now, the amended Act provides for grant of product patent to overcome the threats.

• 4) Patent Period: As per the amended Act, the patents are granted for all products a period of 20 years from the date of application which was 14 years earlier for food, pharmaceuticals and chemicals

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Patents

• 5) Rights and obligations of patentee: The patentee has exclusive right to use, make, sell or import the patented process/product. The Act normally prevents third parties from using, making, selling or importing the patented product/process without the consent of the patentee.

• The objective of the Patents Act is not to create monopolies but to encourage inventions and to secure that the inventions are worked in India on a commercial scale and to the fullest extent possible without undue delay. Also, the patented products should be available to the general public with reasonable and affordable prices. The patent shall not be deemed to be a monopoly right to import the patented article into the country. The patent contributes to the promotion of technological innovation and the transfer and dissemination of technology to the mutual advantage of the producers and the users of the technological knowledge.

• 6) Working of the patent: Patents are granted to ensure that they are properly worked in the country to serve societal interests. Working of the patent in India means that the patented product is produced in India and made available sufficiently at reasonably prices within a reasonable time.

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Patents

• 7) Compulsory Licensing: The Act provides for compulsory licensing of the patent and the revocation of the patent if it is not worked in the country.

• Every country faces a serious concern that the patent of products will result in exorbitant prices for drugs, seriously impairing the health and nutritional requirements of the large majority of the population. The Act wants to protect the public interest and hence compulsory licensing in India. Compulsory licensing means grant of license to a third party to work the Patent in the country.

• Compulsory licensing is intended to check the abuse of patent rights. The license may be revoked if the reasonable requirements of the public particularly w.r.t. affordable prices or satisfying the requirements of the invention and if the invention is not worked out in India. The Act provides for action in case of national emergency, extreme urgency and public non-commercial use and can be invoked without the grace period of 3 years from grant of the patent. The Act also provides for enabling the grant of compulsory licensing to export medicines to countries which have insufficient or no manufacturing capacity, to meet emergent public health situation (DOHA declaration on TRIPs and Public Health)

• 8) Parallel Import: To make available the product at reasonable prices (lowest international prices), the government may allow parallel import of the patented product.

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PatentsExceptions to the rights of the patentee (as per the Act):The following exceptions are provided in the Patents Act:• a)The Government or a person/institution authorised by the

government can make, import or use the patented product/process for the use of the government. The Central Government can even acquire the patent for the public purpose.

• b)Government may import any patented medicine or drug for the purpose of its own use or for distribution in any dispensary, hospital or other medical institution maintained by or on behalf of the government or any other dispensary, hospital or other medical institution in the public interest.

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Copyrights• The rights of authors of literary and artistic works (such as books

and other writings, musical compositions, paintings, sculpture, computer programs and films) are protected by copyright, for a minimum period of 50 years after the death of the author. Protection is also available to related rights (“neighbouring rights”)—Examples are: the rights of performers—actors, singers, and musicians, producers of phonograms (sound recordings) and broadcasting organisations.

• The agreement on protecting copyrights and related rights requires compliance with the provisions of BERN CONVENTION to which India is a signatory. The new Copyrights Act of India meets the requirements of TRIPs. In India, the Trade Marks Act 1999(which has replaced the Trade and Merchandise Marks Act 1958) provides for the protection of Service Marks.

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Copyrights

• The Indian Copyright Act, 1957 governs the system of copyrights in India. Copyright Law in the country was governed by the Copyright Act of 1914, was essentially the extension of the British Copyright Act 1911 to India,and borrowed extensively from the new Copyright Act of the United Kingdom of 1956. Now Indian Copyright is governed by the Indian Copyright Act, 1957.

• The Indian Copyright Act today is compliant with most international conventions and treaties in the field of copyrights. India is a member of the Berne Convention of 1986, the Universal Copyright Convention of 1951 and the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs) Agreement of 1995.

• Though India is not a member of the Rome Convention of 1961, WIPO Copyrights Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT),the Copyright Act is compliant with it.

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Copyrights

Copyright--Meaning• 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. There could be slight variations in the composition of the rights depending on the work.

“Indian Work” --meaning• "Indian work" means a literary, dramatic or musical work,• The author of which is a citizen of India; or• Which is first published in India; or• The author of which, in the case of an unpublished work is, at the

time of the making of the work, a citizen of India.

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CopyrightsDescriptions of Work:

• Artistic work - An artistic work means – A painting, a sculpture, a drawing (including a diagram, map, chart or plan), an

engraving or a photograph, whether or not any such work possesses artistic quality;

– A work of architecture; and– Any other work of artistic craftsmanship.

• Musical work – "Musical work" means a work consisting of music and includes any graphical

notation of such work but does not include any words or any action intended to be sung, spoken or performed with the music. A musical work need not be written down to enjoy copyright protection.

• Sound recording – "Sound recording" means a recording of sounds from which sounds may be

produced regardless of the medium on which such recording is made or the method by which the sounds are produced. A phonogram and a CD-ROM are sound recordings.

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CopyrightsAuthor--Meaning• In the case of a literary or dramatic work the author, i.e.,

the person who creates the work• In the case of a musical work, the composer.• In the case of a cinematograph film, the producer.• In the case of a sound recording, the producer.• In the case of a photograph, the photographer.• In the case of a computer generated work, the person

who causes the work to be created.

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Copyrights

Duration of the Copyright: (sixty years from the beginning of the calendar year next following the year in which the author dies)

• Literary• dramatic,• musical and• artistic works (other than a photograph)

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Copyrights

Duration of the Copyright: (sixty years from the beginning of the calendar year next following the year in which the work is first published.)

• Anonymous and pseudonymous works• Posthumous work• Photographs• Cinematograph films• Sound records• Government work• Public undertakings work• International organisations work

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Copyright

• The author of a work is the first owner of the copyright( Section 17).However, for works made in the course of an author's employment under a contract of service, the employer is the first owner of the copyright. The owner of the copyright in an existing work or the prospective owner of the copyright in a future work may assign to any person the copyright either wholly or partially and either generally or subject to limitations and either for the whole term of the copyright or any part thereof: Provided that in the case of the assignment of copyright in any future work, the assignment shall take effect only when the work comes into existence. (Section 18)

• Section 19 lays down the modes of assignment- assignment can only be in writing and must specify the work, the period of assignment and the territory. Section 19(5) provides that if period of assignment is not specified it shall be deemed to be 5 years and section 19(6) provides that if the territorial extent of assignment is not specified it shall be presumed to extend within India. After the period it reverts to the origjnal owner.

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Copyright

Rights of Broadcasting Organisation and of Performers

Broadcast reproduction right• 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.

Performer’s right• The performer's right shall subsist until fifty years from

the beginning of the calendar year next following the year in which the performance is made.

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Copyright

Copyrights Act 1957• This Act has been amended five times since its

enactment in 1957 (1983, 1984, 1992, 1994 and 1999. It is said the 1994 amendment is the most substantial

• The Copyright (Amendment) Bill 2010 presented to Rajya Sabha

• A bill to further amend the Copyright Act 1957

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Copyright

Important Provisions of Copyrights (amendment) 1994• Now, the definition reads as follows :

"Literary work" includes computer programmes, table and compilations including computer data bases.“

• "Computer programme" means a set of instructions expressed in words, codes, schemes or in any other form, including a machine readable medium, capable of causing a computer to perform a particular task or achieve a particular result.“

• "Computer includes any electronic or similar device having information processing capabilities."

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Copyright

Important Provisions of Copyrights (amendment) 1994"Author means in relation to any literary, dramatic,

musical or artistic work which is computer-generated, the person who causes the work to be created,"The purpose of the amendment was two fold. Firstly, it seeks to clarify the position that computer generated work need not necessarily fall only under ambit of literary work but includes artistic, dramatic and musical work. Secondly, it provides that the "author" with respect to computer generated work is the person who actually causes the generation of such work i.e. a person who is directly involved in the process of generation of work.

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Copyright

Important Provisions of Copyrights (amendment) 1994• Meaning of the Copyright is extended to Computer

programme--By the above amendment, the scope of Copyright in case of computer programme has been amplified to include the right to sell or give on hire or offer for sale or hire any copy of a computer programme irrespective of the fact that such copy may have been sold or give on hire on earlier occasion.

• Major amendment is relating to Assignment of copyright (shall include all particulars including period, royalty, purchase consideration, territorial jurisdiction etc)

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Copyright

Important Provisions of Copyrights (amendment) 1994:Infringement of copyright in case of computer programs

• The following acts shall not constitute an infringement of the Copyright namely : the making of copies or adaptation of a computer programme by the lawful possessor of a copy of such computer programme, from such copy - – in order to utilise the computer programme for the purpose for which it was supplied: or – to make up backup copies purely as a temporary protection against loss, destruction or

damage in order only to utilise the computer programme for the purpose for which it was supplied;"

• By this amendment a general right to reproduce computer programmes for private use has been totally excluded. However, protection would be provided for a lawful possessor of a copy of a computer programme to make backup companies purely as temporarily protection against loss, destruction or damage.

• However, Any person who knowingly makes use on a computer of an infringing copy of a computer programme shall be punishable with imprisonment for a term which shall not be less than seven days but which may extend to three years and with fine which shall not be less than fifty thousand rupees but which may extend to two lakh rupees :

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Copyright

Civil remedies for infringement of copyright.

• Civil remedies like injunction, Damages, Accounts and otherwise as are or may be conferred by law for the infringement of a right are available.

Exception:

provided that if the defendant proves that at the date of the infringement he was not aware and had no reasonable ground for believing that copyright subsisted in the work, the plaintiff shall not be entitled to any remedy other than an injunction in respect of the infringement and a decree for the whole part of the profits made by the defendant by sale of the infringing copies as the Court may in the circumstances deem reasonable

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Copyright

Power of police to seize infringing copies.

• Any police officer, not below the rank of a sub inspector, may if he is satisfied that an offence under section 63 in respect of infringement of copyright in any work has been, is being, or is likely to be, committed, seize without warrant, all copies of the work, where ever found, and all copies and plates so seized shall, as soon as practicable, be produced before a Magistrate.

• Any person having an interest in any copies of a work, or plates seized under sub section (1) may, within fifteen days of such seizure, make an application to the Magistrate for such copies or plates being restored to him and the Magistrate, after hearing the applicant and the complainant and making such further enquiry as may be necessary, shall make such order on the application as he may deem fit.

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Trade Marks and Service Marks

• Trade Marks including Service Marks: Trade marks or Service marks are those marks (symbols or distinctive signs) which distinguish the goods or services of one undertaking from those of other undertakings. Protection of Trade marks or Service Marks is to stimulate and ensure fair competition and to protect the customers. Consumers will also have a choice of the sellers/manufacturers/industries. This protection is for an indefinite period of time provided the sign continues to be distinctive

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