MODULE 2: FUNDAMENTALS OF INTELLECTUAL PROPERTY
Intellectual Property (IP) as a subject is getting complex in the world in which we live. IP is
the biggest asset class on the planet in terms of value, estimated to be at least US $5.5
trillion in the United States alone. IP has transformed from a sleepy area of law and business
to one of the driving engines of a high technology economy. Companies that do not protect
their vital IP assets in the future would one day realize that their competitors own all their
inventions and other forms of IP.
The main reason for having IP rights is to secure a monopoly or a near monopoly position in
the market in which an organization operates. The method for achieving this depends on
the legislative environment and, in respect of certain forms of IP, whether registration is
required or not. This, however, is not always the most effective or convenient means of
protecting IP if the enterprise wishes to commercialize its product and derive benefit to the
fullest extent possible. Enterprises as well as individuals should have a robust IP strategy in
place in order to generate maximum financial benefits and also to protect the same from
their competitors.
Protection of IP necessarily involves educating the staff of the enterprise about the
principles of IP and the risks of failing to adequately protect the IP. This aspect is probably
one area in which Indian enterprises fail either to implement at all or implement
inadequately. Staffs are generally trained about locking away files or keeping a ‘clean desk’.
Far fewer are educated about identifying IP and how to maintain records to enable its
protection.
2.1 PATENTS
2.1.1 What is a patent?
A patent is a right granted to an individual who has invented something. Inventions are
characteristically protected by patents.1 The patent system provides a framework for
innovation and technological development by, on the one hand, granting an exclusive right
to the owner of a patent to exploit an invention for a limited period2 and, on the other
hand, balancing this right with a corresponding duty to disclose the information concerning
the patented invention to the public. This information, which is classified and stored in the
patent documentation, is available to anyone and, increasingly, is accessible through online,
Internet-based systems.3 The mandatory disclosure of the invention thus enriches the
1 Virtually every country that accords legal protection to inventions – and there are more than 155
such countries – gives such protection through the patent system. In addition, inventions may also be
protected by other types of rights, such as utility models or trade secrets. The international protection
conferred by a patent is recognized in two multilateral treaties: the Paris Convention for the Protection of
Industrial Property (the Paris Convention), to which 156 States are party, and the Agreement on Trade-
Related Aspects of Intellectual Property Rights (TRIPS Agreement), by which 135 States are bound.
2 The exclusive right to exploit an invention is generally granted for a period of 15 to 20 years
from the date of filing a patent application. See Article 33 of the TRIPS Agreement.
3 A number of offices provide patent information on Internet: for example, the United States
Patents and Trademarks Office (http://www.uspto.gov), Japanese Patent Office (http://www.jpo-
miti.go.jp), European Patent Office (http://www.european-patent-office.org), Canadian Intellectual
Property Office (http://cipo.gc.ca) and Industrial Property Information Center in Thailand
1
available pool of technological knowledge, facilitates technology transfer, and enhances the
opportunities for creativity and innovation by others.4
The patent system has played a vital role in promoting the development of the underlying
technical infrastructure for electronic commerce. Electronic commerce relies in a critical
way on the various computer and network technologies, both hardware and software. The
market exclusivity established through effective patent protection has provided a reward for
investment and has justified the expenditures on research and development to achieve
further technological progress. However, the new technologies pose challenges to the
conventional legal scheme for the patent system. This section addresses several of the new
issues associated with digital media and electronic commerce in the context of patent
protection.
2.1.2 PATENTABLE SUBJECT MATTER
In order to be eligible for patent protection, an invention must fall within the scope of
patentable subject matter. Article 27.1 of the TRIPS Agreement provides that, subject to
certain exceptions or conditions under that Agreement, patents shall be available for any
inventions, whether products or processes, in all fields of technology, provided that they are
new, involve an inventive step and are capable of industrial application. While limited
exceptions are possible under the TRIPS Agreement – and provided for in some national
laws – the general rule is that patent protection for an invention will not be refused simply
because of its field of technology.
Patents have recently been granted to certain inventions concerning financial services,
electronic sales and advertising methods, business methods, including business methods
consisting of processes to be performed on the Internet, and telephone exchange and billing
methods.5 It is expected that the number of these eCommerce-type patents may increase
significantly, bearing in mind the significant potential of electronic commerce to individuals,
companies and national economies, as well as to the global economy. Such patents are
viewed as important for creating incentives and spurring investment in new technologies.
On the other hand, this trend has been criticized by those who would stress that a number
of such patents concerning business practices and methods reflect familiar ways of doing
business which are not new or novel: the only aspect that is different is that they occur in
(http://www.ipic.moc.go.th). For a discussion of WIPO’s plans to make public international patent data
available online, see Chapter V (WIPOnet). See also the list of national intellectual property offices (with
corresponding Internet addresses) in Annex III.
4 The patent system thus encourages the dissemination and transfer of technological knowledge
by granting a fixed-term, market exclusivity to an inventor in return for the clear and complete disclosure
of the invention. See TRIPS Agreement, Article 29.
5 A recent decision in the United States, for example, found a business method to be patentable
subject matter. State Street Bank & Trust v. Signature Financial Group, 47 USPQ 2d 1596 (CAFC
1998) (the decision upheld a patent for a particular business model for managing an investment
portfolio). See also AT&T Corp. v. Excel Communications, Inc., No. 98-1338, 1999, WL 216234, __
F.3d __ (Fed. Cir. Apr. 14, 1999) (“[the focus in determining whether an invention containing a computer
algorithm recites patentable subject matter is] not on whether there is a mathematical algorithm at work,
but on whether the algorithm-containing invention, as a whole, produces a tangible, useful, result”).
2
cyberspace.6 In Europe there is a view that the subject matter of a patentable “invention”
shall have a “technical character” or involve “technical teaching,” i.e., an instruction
addressed to a person skilled in the art as to how to solve a particular technical problem
using particular technical means.7
A similar discussion concerning patentable subject matter has occurred in respect of
software patents, as the significance of software itself extends well beyond the software
industry. The TRIPS Agreement does not allow the exclusion of software in general from
patentability.8 In a recent Communication from the European Commission, it was stated
that the law on patentability of computer programs in the United States of America has had
a positive impact on the development of the software industry there.9 In this context, the
Commission proposed a draft Directive to harmonize the conditions for the patentability of
inventions related to computer programs. Although some patent offices have established
examination guidelines for computer related inventions, including software related
inventions, very little international harmonization has been achieved in this area.10
6 See, e.g., “Are Patents Good or Bad for Business On-Line,” The New York Times, Technology
Law Journal (August 28, 1998). Because the phenomena of cyberspace and electronic commerce are
so new and still emerging, it is argued that gauging the novelty of a business model in this area and
whether it meets the requirements of patentability is not easy. It is also contended that competition may
be harmed in the digital market place if companies are able to obtain patents for basic business
methods that already exist in non-cyberspace. On the other hand, others indicate that patent protection
is merited given the technological innovation reflected in such new business models and that this
protection is needed in order to provide incentive for further investment in new on-line businesses. A
lawsuit filed in October 1999, in which Amazon.com, the Internet book seller, has sued its rival,
Barnesandnoble.com, illustrates the stakes involved. Amazon.com, in September 1997, started using a
“one-click” technology to enable its online customers to make repeated purchases from its web site
without having to repeatedly fill out credit card and billing address information. It received a patent for its
one-click technology in September 1999 (United States Patent no. 5,960,411), and alleged that
Barnesandnoble.com’s one-click checkout system, known as “Express Lane,” infringes its patent. See
“Barnesandnoble.com faces suit by Amazon Over Patent,” New York Times: Technology (October 23,
1999), at http://www.nytimes.com/library/tech99/10/biztecharticles/23amazon.html. Recently, in what
some have considered to be a public relations move, Jeff Bezos, the Chairman of Amazon, has urged
reform in the patent system to reduce the term of patent protection. “Chairman of Amazon Urges
Reduction of Patent Terms,” New York Times Technology section (March 11, 2000). The United States
Patent and Trademark Office has developed an action plan to respond to the new issues concern
business method patents. See http://www.uspto.gov/web/offices/com/sol/actionplan.html.
7 See, e.g., Guidelines for Examination in the European Patent Office, Part C, Chapter IV, 1.
General.
8 Article 27(1) of the TRIPS Agreement requires that patents be available “in all fields of
technology, provided that they are new, involve an inventive step and are capable of industrial
application.” This broad requirement of patentability has prompted a discussion on the subject of where
to draw the line between copyright and patent law protection for computer programs. See e.g., “The
Relative Roles of Patent and Copyright in the Protection of Computer Programs,” 17 J. Marshall J.
Computer & Info. L. 41 (Fall 1998).
9 Communication of the European Commission to the European Council, the European
Parliament and the Economic and Social Committee, February 5, 1999 COM (1999) 42.
10 In 1996, the United States Patent and Trademark Office issued its Examination Guidelines for
Computer-Related Inventions, 61 Fed. Reg. 7478 (1996), which indicate that if the practical use of an
abstract idea is patentable, subject to the denial of protection for scientific principle, then its disembodied
instruction (expressed on a tangible media) is patentable, because patents provide control over the
making of an invention and functionally descriptive computer instruction serves that purpose. The
Japanese Patent Office published, in 1997, the Implementing Guidelines for Inventions in Specific
Fields, Chapter 1 of which contains examination guidelines for computer software related inventions.
3
2.1.3 PATENT APPLICATION – KEY QUESTIONS TO BE ASKED BY THE ENTREPRENUER
2.1.3.1 HAS THE INVENTOR KEPT “THE IDEA” CONFIDENTIAL?
An idea for the purposes of this chapter would mean an invention, which is new and
original.
Disclosure to others under a confidentiality agreement is broadly no bar to patenting. if the
inventor has described “the ideas” in print or verbally or shown it at an exhibition, then
patent protection cannot cover what was disclosed. However, there may be a commercial
value in filing an application so that the marking “patent applied for” can be used.
“Patent applied for” means that the applicant (who files the patent application) shall have
the like privileges and rights as if a patent for the invention had been granted on the date of
publication of application.
2.1.3.2 IS “THE IDEA” A NEW PRODUCT (A TANGIBLE OBJECT); A NEW MATERIAL (E.G. A
NEW PLASTIC); A NEW PROCESS FOR MAKING SOMETHING (E.G. A CHEAPER WAY?
• If so, it may be patentable.
• If the idea is a business plan, or an aesthetic creation, or a way of presenting
information, it is not patentable.
• If the idea is a computer program and it is a fundamentally new concept, it may be
patentable under special or exceptional circumstances. Software is protected by
Copyright under the Copyright act 1957 and may also be protected by confidentially.
2.1.3.3 IS “THE IDEA” A VARIATION IN A PRODUCT OR MATERIAL OR PROCESS?
If so, it is still likely to be patentable; most patents protect improvements of previous
inventions. This has been provided under the Patents Act section 54 read with section 3(f).
2.1.3.4 IS THERE A WRITTEN DESCRIPTION OF “THE IDEA"?
This will be needed so as to prepare a Patent Application. A working model is not necessary,
but it is advisable that application should contain more technical information along with
sketches or drawings so as to make the application more explanatory and understandable.
2.1.3.5 WHO GENERATED “THE IDEA”?
If an employee makes an invention, the rights often belong to the employer. This principle
has been derived from two landmark English court cases. They are: Worthington Pumping
Engine Co. v. Moore (1903) 20 RPC 41. And Triplex Safety Glass Co. Ltd. v. Scorah, (1938) Ch.
211.
It is also important to note that the inventor is always named as such, even if it is the
company/enterprise which applies for the Patent
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2.1.4 TYPES OF PATENTS
Patents are of various forms and at times it becomes really confusing and difficult to know
which Patent should be applied and which one should not be applied. A standard patent
may be either provisional or complete. An application for a provisional patent is a method to
‘hold the line’ until the applicant is better prepared to proceed with a complete application.
A grant of a standard patent in response to a complete application will bestow the full
patent rights on the grantee/inventor.
The second form of patent is an ‘innovation patent’. Innovation patent is a ‘lower form’ of
patent protection as compared to a ‘standard patent’. If an individual files for an innovation
patent, he does not get the benefits of a thorough analysis and examination by the Patents
office prior to the grant of the patent. He would get these benefits if he files a standard
patent protection. There are certain different tests which the Patents Office applies on an
innovation patent. The extent of an innovation patent protection is also limited. The reason
for this is because an enterprise can apply for a maximum of five claims whereas with a
standard patent an enterprise can make as much number of claims as it wants. Claim here
means the description of the unique functionality embedded in the invention.
PATENTS
Standard Innovation
Patent Patent
Provisional Complete
It gets even murkier when your IP advisers refer to other forms of patent applications. A
‘divisional application’ is essentially a child of an application for either an existing standard
or an innovation patent. One of the basic principles for the examination of patent
applications is that an application must deal with only one invention. A divisional application
is usually used to cover an invention which has been rejected by an examiner on the
grounds that the main patent application (sometimes known as the ‘parent application’)
deals with more than one invention.
The enterprise may also choose to apply for a ‘patent of addition’. ‘Patent of addition’ is
designed to enable additions to be made to an existing patent in order to pick up single
improvements or modifications of the earlier patent. This is a cost-effective way to ensure
protection for improvements, although the duration of that protection is limited to the
same period that applies to the parent application.
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2.1.5 OWNERSHIP OF A PATENT
The right to apply for a patent lies with the inventor or a person who has derived title from
the inventor. The inventor may well be an employee. If this is so then the general principles
of employment law will apply to determine whether the employer actually owns the right to
apply for the patent or the employee. This involves looking at the entire relationship
between the employer and the employee to determine the nature and extent of the duties
of the employee and whether they encompass the task of invention.
Sometimes it is not always clear as to who is the true inventor? The principle for
determining this has been set out in the case of Row Weeder Pty Ltd. v. Nielsen (1997) 39
IPR 400 where the court held:
“A person has entitlement to an invention if that person’s contribution, either solely or
jointly with others, had a material effect on the final concept of the invention. A secondary
issue is whether that person’s contribution involved a key inventive step.”
To identify the inventor is a fundamental and an important step in commercialising
inventions. The process to identify the inventor would generally involve the entrepreneur,
with the assistance of IP advisers, getting as much information as possible about the
contributions by various persons involved in the project that resulted in the innovation.
The rules as to ownership have a range of other factors. There can be joint owners of a
patent who, without any other agreement to the contrary, will own the patent as ‘tenants in
common’ and share equally in the proceeds of exploitation. Co-ownership as enshrined in
Section 50 of the Patents Act presents added complexities to the commercialisation of IP.
Under Indian law a co-owner is able to exercise the patent rights itself, without seeking the
consent of another co-owner, such as selling the patented product or manufacturing it.
However, a co-owner cannot bestow the monopoly rights to a third party, such as through
assignment or licence, without the consent of that co-owner. But it is unclear as to whether
a co-owner can enforce a patent without the consent of another co-owner.
The implications for commercialisation are obvious. A disgruntled co-owner can apply
effective guerrilla tactics on the enterprise’s commercialisation strategy and can have
significant bargaining power even though his inputs to the invention and the
commercialisation may have been minimal. In these circumstances the best approach is to
secure full ownership. If that is not possible the next best step is to secure as many rights
from the co-owner as early as possible when the bargaining power of the disgruntled co-
owner is at its minimum. The closer that the project gets to successful commercialisation
the greater degree of power will be able to be exercised by the disgruntled co-owner.
2.1.6 TIME DURATION FOR PROTECTION OF A PATENT
The time period of protection depends on the type of patent. It is also complicated by the
recent amendments to the Patents Act 1970 which extend the period of protection for a
standard patent from 15 years to 20 years, depending on when the grant of patent was
made or when the application was lodged. In essence, if an application for a standard patent
6
were to be accepted and granted today, the invention would be protected for a period of 20
years from the date of lodgement of the application as enshrined under Section 53 of the
Act.
2.1.7 MONOPOLY RIGHTS TO THE OWNER
Given all of the effort and complexity involved in obtaining a patent it would be reasonable
to think that the Patents Act would set out a long list of rights to the owner of the patent. In
fact the statement is short and brief. The owner of a patent has the exclusive right, during
the term of the patent, to exploit the invention and to authorise another person to exploit
the invention. The magic here is that the word ‘exploit’ has a broad meaning. It covers
hiring, selling, licensing, importing and using a process to do any of those things.
2.1.8 DISCLOSURE TO THE PATENTS OFFICE
An important element in obtaining a patent is disclosing the invention to the Patents Office,
and eventually to the world at large. This is the trade off for receiving the monopoly rights.
From a commercialisation perspective it presents the entrepreneur with a fundamental
decision. Does the entrepreneur apply for protection knowing that the invention will be
disclosed to its competitors or should the entrepreneur endeavour to keep it a secret and
not apply for a patent?11
The specification for a complete application for a standard patent will be disclosed by the
Patents Office 18 months after the earliest priority date. This is known as ‘early publication’
and the date is known as the ‘OPI date’ (open for public inspection). At this time any person
can inspect the specification plus any provisional application (although not the
correspondence that related to the application). It is common for an application of a
standard patent not to be accepted for a period longer than 18 months. This presents
another dilemma for the enterprise wishing to commercialise the invention. The applicant
for a standard patent cannot commence an action against an infringer until the patent has
been accepted, although once that acceptance has been granted the owner of the patent
will be entitled to seek damages or account of profits for infringements after the OPI date.
In relation to innovation patents, the specification is published upon the grant which is
within a few weeks or months of filing the application. Again there is a potential difficulty
for the entrepreneur. The specification becomes public almost immediately. Yet the owner
of an innovation patent cannot sue on the basis of the innovation patent unless the
Controller of Patents has issued a certificate. The certificate involves an examination of the
patent and often this cannot be issued until some time after the innovation patent
specification has been published. The examination generally involves a lot of time, which
may prove to be hindrance for the entrepreneur.
The practical implications for the gap between publication of the details of the innovation
and actual power to protect the innovation will depend very much on the nature of the
11. Roger. E. Schechter and John R. Thomas, Intellectual Property at pp. 528-529. 7
invention and the length of time involved. If the invention is complex then the gap may not
be of much practical relevance. However, if it is simple and easily “re-engineered” then it
may give the competitor, who is willing to take the risk, the ability to compete directly
against the enterprise which has filed the publication. One of the critical steps in
commercialisation is, being able to capitalise on any competitive advantage. An enterprise’s
ability to enjoy any competitive advantage may be lost if the competitor takes the
advantage of the protection gap.
2.1.9 GENERAL PATENT PROCEDURE: A CHECK LIST
The documents required during the initial filing process are as follows:
• The application in the prescribed Form 1, in duplicate, as modified to suit the
application;
• Provisional specification describing the nature of the invention [Form 2] or the
complete specification, in duplicate, describing the essential and complete details of
the invention;
• Drawings, if necessary, to illustrate the invention should accompany the
specification;
• Statement and Undertaking on Form 3 in appropriate cases if the applicant intends
to file the corresponding application outside India;
• Abstract of the invention in approximately 150 words, in duplicate. This is not
required when filing a provisional application.
• The prescribed fees for filing the application accompanied by a provisional or
complete specification [Rupees 750 if the applicant is an individual or Rupees 3000 if
the applicant is a legal entity other than an individual].
2.2 COPYRIGHT
2.2.1 BRIEF INITIAL HISTORY OF THE COPYRIGHT REGIME
The concept of copyright first originated in the United Kingdom with the enactment of
“Statute of Anne (1710),” whereby the author of a work was given a right to copy that work
and the concept for a fixed duration.12 The concept originally was to protect publishing of
books and maps, which has now so grown as to encompass a wide array of creative,
intellectual, scientific or artistic forms which include software, television and broadcasts.
The first multilateral treaty that established copyrights between countries was the Berne
Convention 1886 which did not require the author to follow any of the formalities for the
creation of a copyright, such as “register” or “apply for registration” or “incorporate symbol
or legend,” in the work.13 The fixation of the work on to any physical modicum whereby the
idea-expression dichotomy was satisfied was sufficient to create a copyright in the work or
its derivatives, provided the author did not expressly disclaim such a right or the copyright
had not expired.
12 http://en.wikipedia.org/wiki/Copyright.” 8
13 Ibid.
The Copyright Act, 1957 addresses the regime for copyright in India. It should be noted with
delight that there are no registration formalities in order to protect copyright in India. This is
a relief to enterprises as well as individuals, as it would not involve alot paperwork as
compared to the filing of patent application. The Copyright Act has an entire array of ‘works’
for which a copyright can be registered, in particular, literary (that includes software),
dramatic, musical and artistic works as well as things which are not ‘works’ that includes
sound recordings, films and broadcasts. Given the breadth of copyright this material does
not deal with the commercialisation of copyright in sound recordings, films or broadcasts.
These areas have their own rules, both from a commercial and legal perspective, which have
been addressed by other authors.
It is important to note that an ‘idea’ can not be protected under the Copyright law Of
India.14. The Gregory committee report which submitted its report to the government of UK
in 1952 as well as the Whitford Committee report of 1977 both have stated that Copyright
is concerned with the material expression of the idea, whether it is in writing, in source code
or a drawing15. There have been various judgements on this aspect in the UK courts of which
some of them are:
Mirage Studio v. Counter Feat Clothibf (1991) FSR 145
King Feature Syndicate Inc. v. Sunil Agnihotri (1997) PTC 303 (Del)
The Copyright Act does not give monopoly rights in relation to the end result of the material
expression. In fact, it is possible for a person to create the same software or book
independently of the enterprise. If this occurs the same work may exist and have two
separate copyright owners. The dilemma for the copyright owners in this case, is being able
to establish that the work that is later in time was created without reference to the earlier
work.
2.2.2 WHO OWNS THE COPYRIGHT?
The basic premise for copyright is that the author will be the owner of the copyright. This is
the person who actually makes the work and was the source of originality. A person who is
merely acting as a scribe would not be considered to be the author. A person who used the
computer to generate a work would not be the author if he or she were acting slavishly
under direction.
The usual exceptions to this basic premise apply. If the author was an employee and the
work was created in accordance with the terms of employment then the employer will own
the copyright. Alternatively, the author can assign ownership of the copyright in writing.
14“There can be no copyright on an idea” R.G. Anand v. M/s. Delux Films & Ors., AIR 1978 SC 613;
(1978) 4 SCC 118; William Hill (Football) v. Ladbroke (Football), [1980] RPC 539 (CA Lord Denning
MR).
15 Gregory Committee Report 1952, para 9, quoted in Whitford Committee Report (1977), p.4.; Mirage
Studio v. Counter Feat Clothing [1991] FSR 145; King Feature Syndicate Inc. v. Sunil Agnihotri (1997)
PTC 303 (Del). 9
It is possible to have joint ownership of copyright in which case the joint owners will share
the copyright equally and as ‘tenants in common.’ This is subject to any agreement between
the co-owners. A co-owner can commence infringement action without joining the other co-
owner, although each co-owner may have to account to the other for any benefits received
arising from that infringement action.
2.2.3 DURATION OF THE COPYRIGHT PROTECTION
The general rule is that the owner of a copyright is entitled to the relevant monopoly rights
for a period of 60 years plus the life of the author. There are exceptions to this relating to
whether their work has already been published (60 years after publication), which have
been laid down under Section 22 of the Copyright Act.
2.2.4 MONOPOLY RIGHTS
The owner of a copyright has monopoly rights to do the following in relation to a literary,
dramatic or musical work:
• reproduce the work in a material form;
• publish the work;
• perform the work in public;
• communicate the work to the public;
• make an adaptation of the work.
In relation to an artistic work the copyright owner has the exclusive right to:
• reproduce the work in a material form;
• publish the work;
• communicate the work to the public.
The right to ‘communicate’ the work is designed to enable exclusive rights to be exercised in
the era of the Internet
2.2.5 PUBLICATION, COMMUNICATION AND MAKING AVAILABLE
Meaning of “publication” in relation to copyright has to be considered in relation to the
usage in national laws and various international instruments. Literally, in its common English
language usage, “to publish” in the copyright sense means to give exclusive right to
reproduce or authorize others to reproduce artistic, dramatic, literary, or musical works and
make them available to the public.16 Accordingly, Professor Sterling summarizes
Conventional uses of the term “publication” and its related terms as follows:
1. Under the Berne Convention expression ‘published works’ is deemed to indicate the
works published with the consent of their authors irrespective of the means
employed for manufacturing the copies, provided that the availability of such copies
has satisfied the reasonable requirements of the public in relation to the nature of
16 http://www.oxfordreference.com 10
the work. However, under Article 3(3) the performance of a dramatic, dramatico-
musical, cinematographic or musical work, the public recitation of a literary work,
the communication by wire or the broadcasting of literary or artistic works, the
exhibition of a work of art and the construction of a work of architecture do not
constitute publication.17
2. Under Article VI of the Universal Copyright convention, ‘publication’ has been
defined as reproduction in a tangible form and the general distribution to the public
of copies of a work from which it can be read or otherwise visually perceived.18
3. Under Article 3(d) of the Rome Convention, ‘publication’ means offering of copies of
a phonogram in reasonable quantity.19
4. In Article 2(e) of the WIPO Performances and Phonograms Treaty, ‘publication’ of a
fixed performance or a phonogram means the offering of copies of the fixed
performance or phonogram to the public, with the consent of the right holder and is
made available to the public in a sufficient reasonable quantity.20
The internet has made it possible for artists’ works to be reproduced, accessed,
communicated and distributed in myriad ways through a virtual communication network on
the internet. Online streaming has been a new way of distributing audio/video content to
the listeners/viewers via the internet, which has radically changed the structure and
economics of the business models under which copyrighted works are published and
distributed to the public.21 A virtual market place exists in cyberspace, which is not
constrained by existing national boundaries, which challenges the traditional concept of
copyright as most of the national laws of copyright are territorial in nature. In the context of
the Berne Convention, the two requisites for something to be considered a ‘publication’ are
the presence of ‘copies’ and the ‘availability of copies’ to satisfy reasonable requirements of
the consuming public. However, in the digital era where the technological advancements
have done away with the need of having a hard copy to satisfy the requirements of the
Berne Convention, it is generally agreed that by the act of transmitting a work to an internet
website, a copy is made by the simple fact that the work has been stored on the website.
‘Communication’ and ‘making available’ are definitely two distinct concepts in this age of
digital communications and their original meanings as encapsulated in the Berne
Convention have also undergone substantial variations. The latest version of these rights
can be found in the wordings of Article 8 of the WIPO Copyright Treaty 1996 (‘WCT’).22 The
wording clearly shows that there are two separate and distinct rights conferred on the right
17 J.A.L Sterling, World Copyright Law 1124 (3rd Edition 2008).
18 Ibid., p.196.
19 Ibid.
20 Ibid.
21 Susanna H.S. Leong and Cheng Lim Saw, Copyright Infringement in a Borderless World – Does
Territoriality matter? International Journal of Law & Information Technology, 2007.
22 Article 8 WCT states that “. . . authors of literary and artistic works shall enjoy the exclusive right of
authorising any communication to the public of their works, by wire or wireless means, including the
making available to the public of their works in such a way that members of the public may access these
works from a place and at a time individually chosen by them.” See also, Article 10 of the WIPO
Performance and Phonogram Treaty 1996 which states: “Performers shall enjoy the exclusive right of
authorizing the making available to the public of their performances fixed in phonograms, by wire or
wireless means, in such a way that members of the public may access them from a place and at a time
individually chosen by them.”
11
holder, namely, the right of ‘communication’ and the right of ‘making available’. The act of
‘communicating’ can be equated with the act of ‘transmitting’, which means that there is a
starting point and an end point of the whole process. What it implies is that the
communicating process cannot be deemed to be complete without the means of proper
transmission and reception.23 Any ISP which has helped in transmitting digital material on
the internet from a host website/server to an end user has participated in acts of
communication and the same holds true for those engaged in broadcasting and cable
casting.24 The distinguishing feature of ‘making available’ is that there is only one point of
reference to the act, that is, a work is made available to the public once the consumers can
access the work from a place and at a time individually chosen by them. Therefore, the act
of ‘making available’ is complete as soon as the act of providing access to the work in
question is performed. It shows that a content provider who uploads digital content on to a
web server would have made the necessary information available to the public at the point
of uploading regardless of the fact of recipients and their location.25 It was for this reason
that Professor Sterling stated that ‘making available’ of content on the internet can take
place at any of the following places:26
1. a place where the content provider transmits to a server site or provides material
for online transmission to an end user;
2. the server site;
3. the point(s) of reception where the subject matter which is available online is or may
be accessed.
2.2.6 REPRODUCTION
‘Reproduction’ may mean the action of repeating in a copy or “a representation in some
form or by some means of the essential features of a thing” or the action of bringing it into
existence again.27
Information in digital form is intangible and can be reproduced accurately and
instantaneously without any difference from that of the original work. Article 228 of the
Directive 2001/29/EC of the European Parliament and the Council of 22 May 2001 “on the
Harmonization of Certain aspects of Copyright and Related Rights in the Information
Society” (“InfoSoc Directive”)29 harmonizes the broadly defined right of reproduction.30
23 Supra fn 15 at pg 43.
24 Ibid.
25 Ibid.
26 Supra fn 11 at p. 472.
27 http://www.oxfordreference.com
28 Article 2 stipulates: “Reproduction Right: Member States shall provide for the exclusive right to
authorise or prohibit direct or indirect, temporary or permanent reproduction by any means and in any
form, in whole or in part.
for authors, of their works;
for performers, of fixations of their performances;
for phonogram producers, of their phonograms;
for the producers of the first fixations of films, in respect of the original and copies of their films;
for broadcasting organisations, of fixations of their broadcasts, whether those broadcasts are transmitted
by wire or over the air. Including by cable or satellite.”
29 OJL167,22.6.2007, p. 10-19. 12
Although most of the international conventions and treaties consist of provisions regarding
the right of reproduction, the InfoSoc directive harmonizes the broadly defined exclusive
right of reproduction and can be used as a basis for understanding the concept of
reproduction in the context of the digital age.
The means and kind of carrier material become irrelevant when a reproduction is created; it
can also occur if the form is substantially changed during the copying process, for example,
photographs, photocopies, CD or DVD burning as well as copies of works in the RAM
memory of a computer.31 The reproduction may be direct or indirect, temporary or
permanent, whole or partial. The ‘right of reproduction’ is broader than the ‘right of
communication’ in the sense that the right of reproduction can be infringed upon
irrespective of the fact that there has not been any communication of the work to the public
in the course of reproduction. Therefore, an unauthorized service which allows for digital
download without the consent of the author of the copyrighted work would infringe both
the ‘reproduction’ and ‘making available’ rights of the respective right holders, unless such
download falls within any of the exceptions or limitations provided by national or
international laws of the place where the supposed infringement is ascertained to have
taken place.
2.2.7 TRANSMISSION ON THE INTERNET
Transmission in the context of wireless or cabling may be defined as “the act of sending
signals or the signals being sent in a particular act of sending.”32 Transmission in the context
of the internet and other online services may be classified, according to Professor J. A. L.
Sterling, on the basis of four characteristics. The first characteristic would relate to the
content of the transmission in determining whether the content of such transmission
consists of static material (i.e., visual material perceptible in a static form, such as texts,
charts, photographs, etc., which can be perceived otherwise than in moving images) or
whether the content is one of audio and/or moving image material (i.e., material
perceptible in sound, like live performance of music, sound recording, or material
perceptible in moving images without sound, film with sound track), or is the content one of
composite nature (i.e., combining static, audio and/or moving image material like a website
on which text, audio and moving image material are all perceptible).33
The second characteristic conveys the classification on the basis of the mode of
transmission, that is, whether such content is ‘non-streamed’ where the sound or moving
images are perceptible as such on the receipt of the transmission, or ‘streamed’ where
sounds or moving images are perceptible as such on the receipt of the transmission.34 Both
streamed and non-streamed transmissions incorporate a degree of reproduction in the
process of transmission and reception of the data.
30 Peter Mukascsi, The Reproduction Right and Collective Management in the Context of the Information
Society, Ankara Law Review, Vol. 3, No.1 (Summer 2006), pp 67-87.
31 Ibid.
32 Supra, fn 11 at p. 1251.
33 Ibid., p. 455.
34 Ibid., p. 456.
13
The third characteristic on which a transmission may be classified is on the basis of whether
the content has originated at the server site or has been retransmitted from another
transmission point (which means, it originates from another server site or from a wireless
broadcast or some other alternative source).35 When streamed transmissions originate at
the server site in the sense that they are available on the internet for distribution to the
public, it can be termed as “Webcasts.” Webcasting is defined as “delivery of content as
real-time and recorded audio and video signals by broadcasting them over the internet.”36
Streaming software creates a ‘buffer’ of memory in the RAM of the computer which then
allows it to download video and audio few seconds at a time, which in turn allows for real-
time playback of the music or video files by a continuous refreshing of the buffer facilities.37
The final characteristic on which a transmission may be classified is on the basis of its access
mode in its digital form, which means, depending on whether or not the transmission
process permits access to a particular digital content “on demand.”38 “On demand”
Webcasting allows the transmission of compressed audio or video content most commonly
employed in viewing live events, which allows the user to control the scheduling and
appearance of the Webcast and to have features and effects which are analogous to the
effects, such as fast-forward, rewind, stop, pause, replay, record, which are obtained on a
Video Cassette Recorder.39
The classification of types of transmission over the Internet is fundamental to the
determination of the subject matter, the rights involved, the rules to be applied in assessing
the rights involved and the consequent liability.40 When the question would relate to the
origination of work in relation to the server, such classification of transmission and
retransmission would be helpful in determining issues of unauthorised use and appropriate
licensing (meaning, as to whether the license is applicable for world-wide accessibility), and
when the classification is on the basis of the access mode, such determination would
directly affect the applicable right.41
Transmission and retention of content from a server site may involve the traditional
economic rights of reproduction, distribution, communication, and so on, depending on the
definition of the particular right involved in the act of transmission and retention. The
categories of persons in respect to internet transmission on the factual basis of the activity
may include content providers, site operators, general service providers and location tool
providers.
2.2.8 MORAL RIGHTS
35 Ibid.
36David Wittgenstein and M. Lorrane Ford, “The Webcasting Wars 91999) 2 J.I.L.1, available at
http://www.gwcf.com/articles/journal/jil_feb99_2.html
37 Lorna E. Gillies and Alex Morrison, Securing Webcast Content in the European Union: Copyright,
Technical Protection and Problems of Jurisdiction on the Internet, E.I.P.R 2002, 24(2) 74-80.
38 Supra fn 11 at p. 456.
39 Peggy Miles, Internet World Guide to Webcasting: the Complete Guide to Broadcasting on the Web
(1998).
40 Supra fn 11 at p. 457.
41 Ibid. 14
The Copyright Act was recently amended to enable an author to exercise his or her ‘moral
rights’ in relation to any literary, dramatic, musical or artistic work and cinematograph films
created by him or her. These moral rights belong to the individual author. They cannot be
transferred to another person, although the author may elect to consent to another person
infringing his or her moral rights.
There are three essential moral rights bestowed by the Copyright Act:
1. the right to be attributed as the author of a work [droit a la paternity];
2. the right not to have authorship of the work falsely attributed to someone else;
3. the right for the work not to be subject to derogatory treatment [droit au respect de
louvre].
The impact of moral rights on the commercialisation of IP remains to be seen. In essence the
moral rights regime is aimed at giving the individual author a ‘non -commercial’ benefit.
Many authors will, having become aware of their moral rights, nevertheless choose not to
make a scene about those rights in a way that would upset a commercial environment. An
enterprise would be foolish to disregard the power that the Copyright Act gives an individual
author to exercise those moral rights. This will be discussed in more detail in Chapter 4 IP
Enforcement. The easiest solution for the enterprise is to seek consent to use the works in a
manner which may otherwise constitute infringement of those moral rights.
2.2.9 SOFTWARE: CAN IT BE PROTECTED UNDER THE COPYRIGHT ACT?
Computer programs are expressly addressed in the Copyright Act and comprise a ‘literary
work'. Computer programs are defined as ‘a set of statements or instructions to be used
directly or indirectly in a computer in order to bring about a certain result.
Generally the copyright in relation to computer programs is expressed in the source code. A
source code is a computer programme written in any of the several programming languages
employed by computer programmes. Indian cases have yet to decide as to whether the
‘look and feel’ of the results of a computer software application would be protected by
copyright or not.
2.2.10 COMMERCIALISATION OF A COPYRIGHT
The commercialisation of copyright presents the following general issues that are distinctive
to it:
• a competitor may independently create the same product or service in which
copyright may subsist. In those circumstances the enterprise has little recourse
unless it can establish that the competitor’s product or service was created by
reference to the enterprise’s works;
• copyright may be the only formal IP on which an enterprise can rely where its
business is based on ‘know-how'. This know-how can be easily captured in the
enterprise’s operational manuals and the like. Although this does not give a robust
foundation for commercialisation, but it can at least present a starting point for
15
asserting that competitors are leveraging off that copyright work in an unauthorised
manner;
• copyright presents probably the most favourable conditions for international
commercialisation. This is because the international treaties42 which have been
adopted by India provide for true reciprocal rights and do not require an Indian
enterprise to go through the registration systems of other countries in order to
obtain the same rights that it has already achieved in India.
2.3 PLANT BREEDER’S RIGHTS
One of the most pressing issues of our times is the development of crops that can enable farmers to
feed the increasing world population in a sustainable fashion without causing environmental
degradation. In the past, significant investments in crop breeding and development were primarily
funded by the public sector. These investments took place through national and international
research systems.43 Thanks to various factors, the funding for these systems has grown enormously.
There is, therefore, increasing reliance throughout the world upon crop breeding research and
product development that is funded by the private sector.44 Strong intellectual property protection
will encourage the investment needed to maintain continued crop improvement required to feed
the world and add value to agriculture and society through new products. Formal seed sector in
India throughout the 1960s was dominated by the public sector.45 In 1961, the National Seeds
Corporation (NSC) was established under the Ministry of Agriculture. The NSC was at the centre of
seed production for breeders, foundation and certified seeds and their quality control. In 1967, the
Indian government put together a National Seeds Project (NSP) with the assistance of the World
Bank. The National Seeds Project set up seed processing plants in 17 states. These huge processing
plants were supposed to provide ‘certified’ seeds of food crops, mainly self-pollinating crops, to
farmers.46 These processing of plants operated mostly below capacity, and for all practical purposes,
turned into white elephants. It was primarily due to the lack of demand for the certified seeds that a
majority of the seed processing plants were deep in the red and often burdened with carryover
stocks.47 In fact, if we were to reason out the causes that led to this disastrous effect of the new
seeds, it would be quite obvious that these seed plants were not required in the first place. Thus, it
was a classic example of a faulty technology being pushed onto India.48
42 Section 3 of the International Copyright Order, 1999.
43 William Lesser, Intellectual Property Rights and Concentration In Agricultural Biotechnology,
available at < http://www.agbioforum.org/v1n2/v1n2a03-lesser.pdf> accessed on (17th October, 2012).
44 G. Moschini, Intellectual property rights and the welfare effects of agricultural R & D, American
Journal of Agricultural Economics vol. 79, 1235 (1242).
45India's new Seed Bill, 12 July 2005, available at <http://www.grain.org/article/entries/457-india-s-
new-seed-bill#_ftn33>, accessed on (1st October, 2012).
46 G. Moschini, Competition Issues In The Seed Industry and the Role Of Intellectual Property,
available at <http://www.farmdoc.illinois.edu/policy/choices/20102/2010203/2010203.pdf>
accessed on (17th October, 2012).
47 Ashish Kothari and Anuradha R.V., 'Biodiversity, Intellectual property Rights, and GATT Agreement:
How to Address the Conflicts ?', Economic and Political Weekly (October 25 1997 issue) 2814
(2820).
48 Devinder Sharma, India’s New Seed Bill, available at < http://www.grain.org/es/article/entries/457-
india-s-new-seed-bill> accessed on (17th October, 2012). 16
“Currently there are several ways that intellectual property resulting from such investment and risk
taking can be protected by an inventor.”49 One avenue is to rely on trade secret protection coupled
with either licenses or use agreements. Unlike other forms of protection, as long as trade secrets are
maintained, the intellectual property never enters the public domain. A second way to protect
intellectual property is through utility patents. “Utility patents, which in most countries are granted
for a term of 20 years from application, provide a broad and strong form of protection that in many
ways is preferential to license or use agreements.”50 However, plant varieties are ineligible for
patent protection in countries other than the United States, Japan, and Australia. Another approach
to protection, limited to plant varieties, is through specialized Plant Variety Protection laws, like
those In India. The current UPOV system as enacted in 1991 provides exclusive marketing rights for
varieties, their harvested material, and, optionally, for products made directly from them.51 These
rights extend for a fixed period of not less than 20 years from the date of the grant of the right.52 In
certain circumstances, PVP also provides exceptions for experimental use by third parties for the
purpose of plant breeding and new variety development. An optional exception for farmers permits
them to save seed for propagating use on their own holdings within reasonable limits and subject to
the safeguarding of the legitimate interests of the breeder.53 Protection of intellectual property
through utility patents and a UPOV-based Plant Breeders’ Rights (PBR) system ultimately puts the
protected invention in the public domain because the protection of the invention is of limited
duration. In 1961, the International Convention for the Protection of the Plant Varieties was held in
Paris, and it resulted in the creation of the International Union for the Protection of New Plant
Varieties (UPOV).54 It is a multilateral agreement with norms for the recognition and protection of
the intellectual property of the breeders on the new varieties by certificates of Plant Varieties
Protection (PVP) in local legislations.55 When plant variety protection (PVP) was first standardized by
the UPOV convention in the 1960s, it was a mostly copyright-like form of intellectual property. The
variety owner had a monopoly on the commercial propagation and marketing of the variety, but
little control over other uses. Farmers were free to multiply seeds for their own use for as long as
they wished. Other breeders could freely use protected varieties to develop their own material.56
49 Dick Crowder, American Seed Trade Association Position Statement on Intellectual Property Rights
for The Seed Industry, available at < http://www.amseed.com/newsDetail.asp?id=97> accessed on (17th
October, 2012).
50 Position Statement On Intellectual Property Rights for the Seed Industry, available at
<http://cuke.hort.ncsu.edu/cucurbit/wehner/541/hs541readings/IPR10ASTA.pdf> accessed on (17th
October, 2012).
51 Gauri Sreenivasan, Intellectual Property, Biodiversity, and the Rights of the Poor, available at
<http://www.ccic.ca/_files/en/what_we_do/002_global_trade_paper_3.pdf> accessed on (17th October,
2012).
52 P. Sadashivappa and M. Qaim, Bt Cotton in India: Development of Benefits and the Role of
Government Seed Price Interventions, available at <http://www.agbioforum.org/v12n2/v12n2a03-
sadashivappa.htm> accessed on (1st October, 2012).
53 Anil K Gupta, Rewarding Conservation of Biological and Genetic Resources and Associated
Traditional Knowledge and Contemporary Grassroots Creativity, available
atwww.sristi.org/day2/D2S1R1%20Rewarding%20Conservation.rtf accessed on (17th October, 2012).
43 Suri Sehgal, IPR Driven Restructuring of the Seed Industry, available at
<http://biotechmonitor.nl/2907.htm>, accessed on (1st October, 2012).
55 Ajeet Mathur, Missing Markets In World Trade: The Case for ‘Sui Generis’ Protection Of Traditional
Knowledge, available at < http://www.icrier.org/pdf/wp141.pdf> accessed on (17th October, 2012).
56 Roht-Arriaza, 'Of Seeds and Shamans: The Appropriation of the Scientific and Technical Knowledge
of Indigenous and Local Communities', Michigan Journal of International Law, vol. 17, 919 ( 932).
17
This changed dramatically with the 1991 revision of UPOV. Based on successful lobbying from the
private players in the seed industry, the revision turned PVP into something very close to a patent
though in a diluted manner.57 Seeds saved by farmers were allowed only as an optional exception,
but additional restrictions were put on further breeding, and monopoly rights were extended all the
way to harvest products.58 This is the version of UPOV which is now being rapidly rolled out across
developing countries as a result of the WTO TRIPS agreement. The industry, however, is still not
content.59 Over the past few years, the private sector seed industry has started gearing up its lobby
machine for a final attack on the remaining loopholes in the PVP system. If it succeeds, it will
certainly spell the end of farm-saved seed, probably the end of free access to PVP-protected
material for plant breeding, and a general tightening of the ropes with longer terms, stricter
enforcement, and wider scope for monopoly rights.60
Eighty per cent of all seeds in India are still saved by farmers for further use. Farmer’s indigenous
varieties are the basis of our ecological and food security. For example, the coastal farmers of
southern India have evolved salt resistant varieties. Bihar and Bengal farmers have evolved flood
resistant varieties, farmers of Rajasthan and the semi-arid Deccan have evolved drought resistant
varieties, Himalayan farmers have evolved frost resistant varieties. Pulses, millets, oilseeds, rice,
wheat, vegetables provide the diverse basis of our health and nutrition security.61 These seeds are
indigenous farmers varieties of diverse crops – thousands of rice, hundreds of wheat, oilseeds such
as linseed, sesame, groundnut, coconut, pulses including aghast, arrange, raja, rued, mooing, maser,
turn, vegetables and fruits. The Seed Act is designed to “enclose” the free economy of farmer’s seed
varieties.62 Once farmers’ seed supply is destroyed through compulsory registration by making it
illegal to plant unlicensed varieties, farmers are pushed into dependency on corporate monopoly of
patented seeds. The Seed Act is thus the precursor to the Patent Amendment Acts, which have
introduced patents on seed.63
Methods of agriculture and plants were excluded from patentability in the Indian Patent Act 1970 in
order to ensure that the seed, the first link in the food chain, was held as a common property
resource in the public domain.64 In this manner, it ensured that the farmers’ the inalienable right to
57 Proposed seed laws to Restrict Farmers’ Rights, available at
<http://www.thegreentimes.co.za/stories/news-from-other-sources/item/1152-proposed-seed-laws-to-
restrict-farmers%E2%80%99-rights>, accessed on (17th October, 2012).
58René Royon, Plant Variety Protection, available at
<http://www.ciopora.org/fileadmin/assets/pageDownloads/2004/05/CIOPORA_Greenpaper_en.pdf>,
accessed on (17th October, 2012).
59 A. J. C. Visser, E. H. Nijhuis, J. D. Elsas, and T. A. Dueck, Crops of Uncertain Nature? Controversies
and Knowledge Gaps Concerning Genetically Modified Crops. An Inventory available at
<http://www.psrast.org/visserabstr.htm>, accessed on (1st October, 2012).
60 Vandana Shiva, The Indian Seed Act and Patent Act: Sowing The Seeds of Dictatorship, available at
<http://www.countercurrents.org/gl-shiva150205>, accessed on (1st October, 2012).
61 Melinda Smale, Local Markets, Local Varieties, Rising Food Prices and Small Farmers’ Access to
Seed, available at < http://www.ifpri.cgiar.org/sites/default/files/publications/ib59all.pdf> accessed on
(17th October, 2012).
62 Jayashree Watal, Intellectual property rights in Indian agriculture, available at
<http://www.icrier.org/pdf/jayashreeW.pdf> accessed on (1st October, 2012).
64 J. M. Spectar, “Patent Necessity: Intellectual Property Dilemmas in the Biotech Domain and
Treatment Equity for Developing Countries,” HOUS. J. INT’L L, vol. 24, 227 (234).
18
save, exchange and improve upon the seed was not violated. But recently, two amendments have
been made in the 1970 Patent Act.65 The second amendment makes changes in the definition of
what is NOT an invention. This has opened the flood gates for the patenting of genetically
engineered seeds. According to Section 3 (j) of the Indian Patent Act, the following is not an
invention: “Any process for the medical, surgical, creative, prophylactic or other treatment of human
beings or any process for a similar treatment of animals or plants or render them free of disease or
to increase their economic value or that of their products.”66
However, in the second amendment, the mention of “plants” has been deleted from this section.
This deletion implies that a method or process modification of a plant can now be counted as an
invention and therefore can be patented.67 Thus the method of producing Bt. cotton by introducing
genes of a bacterium thurengerisis in cotton to produce toxins to kill the bollworm can now be
covered by the exclusive rights associated with patents. The second amendment has also added a
new section (3j) which allows for the production or propagation of genetically engineered plants to
count as an invention.68 But this section excludes as inventions “plants and animals including seeds,
varieties and species and essentially biological processes for production or propagation of plants and
animals.” Since plants produced through the use of new biotechnologies are not technically
considered “essentially biological,” section 3j has found another way to create path for
biotechnology companies to acquire for extreme profitability seeds which are most important for
human consumption or cottage industry.69 This loophole, which is couched in the guise of scientific
development, thus allows patents on GMOs and thus opens the flood gates for patenting transgenic
plants and crops
What causes much concern is how the language of section 3j is a verbatim transposition into Indian
patent law of Article 27.3 (b) of TRIPS Agreement. Article 27.3 (b) of TRIPS states: Parties may
exclude from patentability 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.70 However, parties shall provide for the protection of plant varieties either by patents or
by an effective sui generis system or by any combination thereof.
65 Denis Borges Barbosa, Exclusions from Patentable Subject Matter and Exceptions and Limitations to
the Rights, available at <www.wipo.int/edocs/mdocs/scp/en/scp_15/scp_15_3-annex3.doc>, accessed
on (17th October, 2012).
66 Susan K. Sell, “Industry Strategies for Intellectual Property and Trade: The Quest for TRIPS, and
Post-TRIPS Strategies,” CARDOZO J. INT’L & COMP. L., vol. 10, 79 (87).
67 Simon Walker, The TRIPS Agreement, Sustainable Development and the Public Interest, available at
< http://data.iucn.org/dbtw-wpd/edocs/EPLP-041.pdf> accessed on (17th October, 2012).
68 Carl E. Pray, Liberalization’s Impact on the Indian Seed Industry: Competition, Research, and Impact
on Farmers, available at <http://ageconsearch.umn.edu/bitstream/34217/1/02030407.pdf>, accessed on
(17th October, 2012).
69 Henrique Freire de Oliviera Souza, Genetically Modified Plants: A Need for International Regulation,
ANN. SURV. INT’L & COMP. L., vol. 6, 129 (138).
70 P. P. Rao. “Private Research and Public Benefit: The Private Seed Industry for Sorghum and Pearl
Millet in India.” Research Policy, vol. 20, 315 (325). 19
The provisions of the TRIPS Agreement have widened the scope of protection of intellectual
property rights relating to agriculture through plant variety protection.71 A reference to Article 27 of
the TRIPS Agreement will show that all inventions, regardless of the field of technology, are eligible
for protection. Member countries will have to provide a legal framework for the protection of
inventions relating to plant varieties. Indian Patent Act 1970 does not permit the patenting of plant
varieties and animal breeds which are existing in nature or, in other words, falls under the category
of discoveries.72 To protect the rights of the breeders and farmers, the Government of India has
enacted the Plant Varieties Protection and Farmers Rights (PVPFR ACT, 2001) which took effect from
January 2006. It has become imperative on the part of the Government of India to develop our own
sui-generis (a Latin phrase meaning, ‘of their own kind’) system to provide a framework for Plant
Variety Protection and Farmers Right.73 Plant variety rights are a form of intellectual property
protection granted to breeders of new varieties of plants. In a very general sense, a plant variety is a
strain of a plant (or, more often, a crop) that is a pure breed. In other words, for a plant variety to be
protected, it must produce the same type of plant in every generation, and should be distinct in
appearance and distinguishable from others.74 Plant variety rights include, inter alia, royalty rights
over a certain identified time period and restrictions on the propagation and subsequent use of
seeds derived from such varieties.75
The protection of plant varieties around the world is guided by Article 27 (3) (b) of the World Trade
Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs).76 This
sub-clause contains three conditions binding on sovereign states.
It States: “may exclude from patentability plants, animals and essentially biological processes for the
production of plants and animals must allow patents for micro-organisms and non-biological and
microbiological processes for the production of plants or animals must provide protection for plant
varieties, either by patents or by an effective sui generis system or a combination.”
The PPV & FR Act is "more than UPOV," and "looks at India's lasting requirement for food.77 There
have been concerted efforts at promoting information about the rights and protection offered under
the Act. NGOs representing communities and State Agricultural Universities had all been roped in to
disseminate information at the local level. Modes of awareness generation include direct awareness
71 Lara E. Ewens, Seed Wars: Biotechnology, Intellectual Property, and the Quest for High Yield Seeds,
23 B.C. INT’L & COMP. L. REV., vol. 23, 285 (295).
72 Latha Nagarajan, Local Seed Systems for Millet Crops in Marginal Environments of India: Industry
and Policy Perspectives,available at < http://www.ifpri.org/sites/default/files/publications/eptdp151.pdf>
accessed on (17th October, 2012).
73 United States Department of Agriculture, Agriculture Biotechnology FAQ’s (April 2001), available at
<http://www.nal.usda.gov/bic/>, accessed on (2nd October, 2012).
74 P. P. Rao, Private Research and Public Benefit: The Private Seed Industry for Sorghum and Pearl
Millet in India, Research Policy, vol. 20, 315 (326).
75 Samantha M. Ohlgart, “The Terminator Gene: Intellectual Property Rights v. The Farmers’ Common
Law Right to Save Seed, DRAKE J. AGRIC. L., vol. 7, 473 (474).
76 Samantha M. Ohlgart, The Terminator Gene: Intellectual Property Rights vs. the Farmers’ Common
Law Right to Save Seed, available at <
http://nationalaglawcenter.org/assets/bibarticles/ohlgart_terminator.pdf>, accessed on (17th October,
2012).
77 Susan K. Sell, “Industry Strategies for Intellectual Property and Trade: The Quest for TRIPS, and
Post-TRIPS Strategies,” CARDOZO J. INT’L & COMP. L., vol. 10, 79 (91).
20
campaigns via handouts, regular participation in farmers' Agricultural Fairs and workshops,
advertisements in newspapers and other media.78
2.3.1 WHO OWNS IT?
The ‘breeder’ means a group of persons or a farmer or group of farmers or any institution,
which has bred, evolved or developed any variety, who is nominally entitled to apply for
PBRs. If the variety has been bred or discovered and developed during the course of
employment the employer will be the breeder. As with other forms of IP there may be co-
owners of PBRs.
2.3.2 DURATION FOR PROTECTION
A grant of PBR will entitle the owner of the PBR to exercise monopoly rights for a period of
20 years after the date of the grant. However, it is not possible to renew registration.
Monopoly rights: The grant of a PBR gives to the owner, the exclusive rights in relation to
the propagating material for the plant variety to:
• produce or reproduce the material;
• condition the material for the purposes of propagation;
• offer the material for sale;
• sell the material;
• import or export the material;
• stock the propagating material for any of the above purposes.
Unlike patents, PBRs are exhausted when the propagating material is sold, unless the
purchaser uses the propagating material to further produce the resulting crop. This
exhaustion of rights is confined to one production cycle. The ‘exhaustion of rights’ principle
will also not apply if the propagating material is exported to a country which is not
subscribed to the convention relating to plant breeder’s rights and the propagating material
is to be used for purposes other than final consumption.
There are certain express exemptions specified in the PBR Act. These include:
• the private non-commercial use of the propagating material or use for experimental
purposes or breeding of other plant varieties;
• if the farmer harvests a crop and saves the propagating material and uses it for
conditioning that propagating material for reproductive purposes or reproduction;
• use of propagating material as food, food ingredients or fuel.
Reasonable steps must be taken by the owner of the PBR to ensure there is a reasonable
access of the plant variety to the public. Reasonable steps include, a) the making of plant
variety available at cheap prices and in sufficient quantities to meets its demand. The
withholding of a plant variety to achieve a strategic position in the market is consequently
limited.
78 Debra L. Blair, Intellectual Property Protection and Its Impact on the US Seed Industry, DRAKE 1.
AORIC. L. vol. 4, 297 (310) (1999). 21
2.4 REGISTERED DESIGNS
Historically, the emergence of protection for industrial designs is intimately connected with the
growth of industrialization and methods of mass production. In the United Kingdom, the first law
giving protection to industrial designs was the Designing and Printing of Linens, Cotton, Calicoes and
Muslins Act of 1787, which gave protection for a period of two months to “every person who shall
invent, design and print, or cause to be invented, designed and printed, and becomes the Proprietor
of any new and original pattern or patterns for printing Linens, Cottons, Calicoes or Muslins.” The
contribution and importance of design in the growing textile industries was thereby recognized.
Industrial design, in a lay or general sense, refers to the creative activity of achieving a formal or
ornamental appearance for mass-produced items that, within the existing cost constraints, satisfies
both the need for the item to appeal visually to potential consumers, and the need for the item to
perform its intended function efficiently. In a legal sense, industrial design refers to the right granted
in many countries, pursuant to a registration system, to protect the original ornamental and non-
functional features of an industrial article or product that result from design activity. The subject
matter of the legal protection of industrial designs is not articles or products, but rather the design
which is applied to or embodied in such articles or products.
The regime for registration of designs is aimed at protecting the ‘appearance’ of an article.
In India it is governed by the Designs Act, 2000. There is a formal registration process to
obtain the monopoly rights bestowed by the Designs Act. That process is similar to that set
out in the Trade Marks Act.
The designs regime concerns features of ‘shape, configuration, pattern or ornamentation’.
The Act is designed to protect the appearance of an article, not its function, although the
article may well have a function, such as a jug. There is a significant overlap between
designs and copyright. The policy intended to be reflected in the Copyright Act, 1957 is that
copyright protection should not apply where a copyright work, that would otherwise qualify
for registration as a ‘design, is applied to an article for industrial purposes. Unfortunately it
is not easy to interpret the Copyright Act to determine whether in fact copyright protection
is lost or not.
A design is defined as the features of shape, configuration, pattern, ornament, or
composition of lines in two dimensional or three dimensional or in both forms by any
industrial process or means.
2.4.1 OWNERSHIP OF A DESIGN
The author of the design is the person who is entitled to apply for registration. This is the
person who conceives the design and reduces it to material form. Exceptions to this rule
are:
• if the design is commissioned for valuable consideration;
• if the design was made in the course of employment;
• if the design is transferred by way of assignment.
22
As with other forms of IP it is possible to have co-owners who hold the registered design as
tenants in common. However, a co-owner may license the registered design without the
consent of other co-owners.
2.4.2 DURATION
Registration of a design entitles the owner to exercise monopoly rights for a period of 12
months and to renew for three terms, each of which accrue five years from the date of
lodging the application. This means that the maximum protection available for a registered
design is 15 years. The exposure draft designs bill proposes a maximum period of 10 years’
protection for a registered design, which is consistent with the protection for designs in
other countries.
2.4.3 MONOPOLY RIGHTS
The owner of a registered design has the exclusive right to apply the design to the article in
respect of which it is registered, import such an article or sell or hire such an article or
authorise a person to do any of those things.
2.5 CIRCUIT LAYOUTS
Simply put, integrated circuit design has to do with the meticulous logic and techniques
applied to the design of integrated circuits.
Integrated circuits (IC) are "miniature electronic components built into an electrical network
on a monolithic semiconductor substrate by photolithography", which in more layman's
terms, essentially means they are dozens or even billions of tiny inter-connecting electrical
paths meticulously arranged onto a single piece of material, such as silicon.
In the past few decades the development of IC has arguably been the main driving force
behind a majority of advances in technology. We find them in everyday goods, controlling
the spin cycles of washing machines, keeping time in digital watches, and crunching
whatever processes we are running on computers.
As markets drive toward smaller, faster, better electronics products, new IC chips must be
produced to meet these demands. Due to the nature of IC, the majority of progress arises
from the new, more effective and efficient designs and arrangements of the circuits. As a
result, IC design is one of the most important fields in modern electronics.
The regime for protection of circuit layouts is addressed by the Semiconductor Design Act,
2000. This legislation is designed to give protection to the layout of integrated circuits which
form the engineering basis of the wealth of electronic equipment and gadgets that are
found in our daily life. Like the Copyright Act, there is no formal registration system required
to obtain the protection under this Act.
2.5.1 WHO OWNS THE RIGHTS?
23
The person who makes the circuit layout is nominally the person who will be the owner of
the monopoly rights. Exceptions to this are where the eligible layout (or ‘EL rights’ as it is
known in the Act) is made in the course of employment, in which case the employer will
own the EL rights. If the circuit layout made was commissioned by another person then the
person who commissioned the making of the circuit layout will own the EL rights.
2.5.2 DURATION OF THE RIGHT
The ‘protection period’ varies depending on whether the circuit layout has been
commercially exploited. The general rule is that protection applies for 10 years.
2.5.3 MONOPOLY RIGHTS
The Act gives the owner of the EL rights exclusive right to:
• copy the layout in a material form;
• make an integrated circuit in accordance with the layout or a copy of the layout;
• exploit the layout commercially in India.
2.6 TRADEMARKS
Trademarks already existed in the ancient world. Even at times, when people either prepared what
they needed themselves or, more usually, acquired what they needed from local craftsmen, there
were already creative entrepreneurs who marketed their goods beyond their localities and
sometimes over considerable distances. As long as 3,000 years ago, Indian craftsmen used to
engrave their signatures on their artistic creations before sending them to Iran. Trademarks started
to play an important role with industrialization, and they have since become a key factor in the
modern world of international trade and market-oriented economies. “A trademark is any sign that
individualizes the goods of a given enterprise and distinguishes them from the goods of its
competitors.” This definition comprises of two aspects, which are sometimes referred to as the
different functions of the trademark, but which are interdependent, and for all practical purposes,
should always be looked at together. In order to individualize a product for the consumer, the
trademark must indicate its source. This does not mean that it must inform the consumer of the
actual person who has manufactured the product or even the one who is trading in it. It is sufficient
that the consumer can trust in a given enterprise, not necessarily known to him, being responsible
for the product sold under the trademark. The function of indicating the source as described above
presupposes that the trademark distinguishes the goods of a given enterprise from those of other
enterprises. Only if it allows the consumer to distinguish a product sold under a particular trademark
from the goods of other enterprises offered on the market, can the trademark fulfill this function.
Trademarks are the principal form of IP that is used in the branding or marketing of an
enterprise and its products or services. In many respects the trademarks can be of greater
value to the business than the actual services or products supplied. The value of the
trademarks of Coca Cola, Microsoft and IBM are US$ 65 billion, US $59 billion and US $57
billion respectively. The value of the Coke Brand is nearly half of the company’s market
capitalization. In the words of Roberto Goisuetta, the former CEO of Coca Cola “if all of Coca
24
Cola’s physical assets went away, they could still go to the bank and borrow more that US $
6o billion because they own the Coke trademark.”79
Trademarks can be protected without recourse to the formal registration process under the
Trade Marks Act, 1999 if the enterprise has established a reputation in relation to its
trademarks. In these circumstances the enterprise can also rely on the Competition Act,
2000 or the tort of passing off. The great advantage of registering the trademarks is that
when seeking to enforce its monopoly position the enterprise is not required to present
evidence of reputation. It can merely rely upon its certificate of registration. This has
significant implications in terms of costs and time in protecting its position.
The trademark regime is focused on a mark that designates the origin of the goods or
services that are branded with the mark. The mark can be a ‘sign’ of any description and
now includes shapes, colours and forms of packaging.
Protection under the Trade Marks Act should be compared with business names registration
which merely identifies who runs the business and does not provide any protection for the
enterprise against use of the trademark by third parties. Similarly domain names are
registered for the purpose of identifying a domain website and its registration does not
provide any rights per se against third parties using the trademark without the authorisation
of the owner of the mark.
2.6.1 OWNERSHIP OF A TRADEMARK
An applicant for registration of a trademark must claim to be the owner and must have an
intention to use the mark or an intention to authorise somebody else to use the mark.
2.6.2 DURATION OF PROTECTION
A trademark is registered for a period of 10 years and can be renewed perpetually for
periods of 10 years.
2.6.3 MONOPOLY RIGHTS OF THE OWNER
The owner of a registered trademark has the exclusive right to use the trademark as a
trademark in respect of the goods or services in which the mark has been registered. The
trademarks register contains 42 classes of goods or services. When submitting its
application, the enterprise must describe the nature of its goods or services against which
the mark is, or will be, applied. The monopoly rights extend to only those goods or services.
Accordingly, the description of those goods or services and the choice of classes is a critical
element in establishing protection and forming a basis for commercialisation.
The advent of the Internet presents some special issues in relation to enforcement of a
registered trademark particularly in respect of domain names, meta tags and hyperlinks.
79 Scott W. Cooper and Fritz P. Grutzner, Tips and Traps for Marketing Your Business, McGraw-Hill
Professional, 2008 p.38 25
2.7 CONFIDENTIAL INFORMATION
There is no act which has been enacted by parliament to govern confidential information.
The law relating to confidential information has been built up over many decades and
emanates from English Common Law. There is no registration system.
Confidential information may be the only way of protecting an idea. Although colloquial use
often involves stating that confidential information is ‘owned', Indian law has yet to
conclude that this is so. This is because the courts have yet to commit to the proposition
that confidential information is a form of ‘property’. It is essentially a question of who has
the ability to control the release of the information. Nonetheless, English cases have held
that it is possible to have ‘co-ownership’ and that each co-owner is entitled to use the
information for their own benefit. This was laid down in Murray v. Yorkshire Fund
Managers Ltd., [1998] 2 All ER 1015.
The great advantage for the commercialisation process is that there is no limit to the period
of protection. If the enterprise can maintain confidentiality then it essentially holds
monopoly rights in relation to the use of that confidential information forever. Of course,
the downside is significant. Release of the information into the public domain, even if done
in an unauthorised manner, means that protection is potentially lost forever. For this reason
the mechanisms and processes employed by the enterprise to retain confidentiality are
critical.
26
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