National Innovation Act

2008

A. Lakshminarayanan

Advocate

A Probe On The Proposed

• The draft legislation on the National Innovation Act of 2008 has been released by the Dept. of Science and Technology. The Government in the pursuance has invited comments to the same. Department of Science and Technology, Government of India has taken a bold step by putting the draft of proposed National Innovation Act for wider public scrutiny.

The National Innovation Act of 2008

• An Act to facilitate public, private or public- private partnership initiatives for building an Innovation support system to encourage Innovation,

• Evolve a National Integrated Science and Technology Plan and

• Codify and consolidate the law of confidentiality in aid of protecting Confidential Information, trade secrets and Innovation

Confidential Information

• “Confidential Information” means information, including a formula, pattern, compilation, program device, method, technique, or process, that:

• (a) is secret in that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;

• (b) has commercial value because it is secret; and • (c) has been subject to reasonable steps under the

circumstances by the person lawfully in control of the information, to keep it secret.

Innovation

• “Innovation” means a process for incremental or significant technical advance or change, which provides enhancement of measurable economic value, and shall include: (a) introducing new or improved goods or services (b) implementing new or improved operational processes; and (c) implementing new or improved organizational / managerial processes;

• Explanation: measurable value enhancement or economic significance may include one or more of the following: (i) increase in market share; (ii) competitive advantage; (iii) improvement in the quality of products or services; (iv) reduction of costs.

Key features

• Annual Integrated Science and Technology Plan, (Section 3) • in February of each year

• Basic research/development of scientific manpower/ infrastructure/ restructuring and revamping universities, monitoring and implementing programs/ industry academia collaborations, establishing globally competitive research facilities, centre of excellence, Special Innovation zones in public, private sector, facilitating cooperation , establishing National Science and Technology commission,

Measures for supporting innovation

• Special measures for low cost technologies like waiver of development fee, waiver of stamp duties on acquiring movable and immovable properties for establishing R&D facilities, tax holiday, fiscal incentives, long term short tem waivers on capital gain.

Incentives for Angel Investors

• “Angel investors” a person, entity, provides risk capital to start up ventures.

• Waiver of stamp duty on physical transfer of share, waiver on capital gain on transfer of investments in securities , investments in securities of unlisted companies established in special innovation zone, investments made in universities.

Facilitating measures

• Appropriate Government shall, regulate zoning of Special Innovations Zone or as Innovation park, registration tax exemptions ,assistance in registration of IP, encourage

innovation by providing fiscal incentives and waivers,

Private and Public-private partnerships

• Exchange or market for trading Innovations,• Finance for facilitating Innovations on confessional rate of

interest. • Special rules and procedures for maintains of

confidentiality and secrecy whilst promoting or licensing of Innovation for commercialization.

Confidentiality and Confidential information and

Remedies and Offences

• “Confidential information” information including a formula pattern, compilation, program device, method, technique ,or process, that is secret, has commercial value, controlled information

• Obligations for confidentiality, non-contractual relationship,

• Remedies misappropriation on confidential information courts shall preserve the secrecy of the subject matter disputed by holding in-camera hearings, sealing information,

• Courts can grant injunction/ order damages up to three times.

Primary areas of importance to maintain and improve innovation

1. Increasing research investment,

2. strengthening education opportunities in science, technology, engineering, and mathematics from elementary through graduate school, and

3. developing an innovation infrastructure.

Fiscal Benefits to be granted to Innovation Parks and Special Innovation Zones

• Exemption from payment of customs/excise duties on goods sourced for use by the unit, including equipment or machinery which is sourced under lease agreements and second hand capital goods.

• Exemption from payment of central sales tax• Exemption from payment of excise duty• Exemption from payment of service tax

THANK YOU

Any Questions?