Module 3

MODULE 3: UNDERSTANDING THE IP ECOSYSTEM

1.1 INTRODUCTION TO INTELLECTUAL PROPERTY

To understand the concept of intellectual property we need to understand some basic
fundamentals about such type of property.

Salmond a leading jurist defines property as:

Property




Jura in re aliena Jura in re propria




Leases Servitudes Securities, etc. Intangible Tangible


Patents, Copyrights, Land,Chattel
Trademarks etc., (IP)


INCORPOREAL PROPERTY CORPOREAL
PROPERTY


There are two types of property Incorporeal Property and Corporeal Property

Corporeal Property: This is also known as tangible property. In other words they are
material things. Corporeal property can be divided into two kinds.
Movable Property - Chattels
Immovable Property – Land, buildings

Incorporeal Property: Incorporeal property as the word suggests are property that is
intangible in nature. The right in Incorporeal property is a “right in rem” that is a right which
is against the entire world. Incorporeal Property can be divided into two categories
Immaterial things – Patents, Copyrights, Trademarks etc.,
Rights over other property or Jura in re aliena - Leases, Servitudes, Securities etc.,

Intellectual property is, as the word denotes, a property of the intellect. The creativity and

labor of the authors, inventors and creativists is what this property purportedly gives rights
to. The law relating to intellectual property regulates the creation, use and exploitation of

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mental or creative labor.1 The subject matter of Intellectual property laws is very diversified,
stretching from the design of a simple utilitarian object like a paperclip to as complex as a
space shuttle design produced by a commercial firm. It also pervades all genres of life, be it
food, health or commerce subject to restrictions in the light of the utilitarian and greater
good principle. The world around us has made it so that we are constantly in contact with
various intellectual property laws. Take, for example, the shirt you are wearing or the pen
with which you write, the razor you use every morning. The objects are protected under
various Intellectual Property laws. It may be protection of the design that the object carries,
or the function that it carries out, or even the name on the object may be a subject matter
of Intellectual property protection. Another vivid example is the cellular phone, which is
comprised of parts. These parts are obviously protected by intellectual property laws
pertaining to trade marks, patent and design.

The various Intellectual Property rights, while differing in their inherent characteristics and
the subject matter they protect, share a common feature in that they protect the creation
of the intellect and labor of the creator, which are intangible in nature. Also, it is an
attribute of every Intellectual property, that there is a commonality in the image of what it
means to “create.” It is, however, pertinent to note that while we can attribute an inherent
relationship between the tangible medium that carries the intellectual property and the
intangible nature of the right itself, the intellectual property right confers on its creator a
distinct and succinct right that is divorced from the property rights in the tangible medium.

Illustration:
Mr. A sends a letter to Mr. B. In this case the personal property right that exists in the ink
and the paper is transferred to Mr. B. However, Mr. A, retains the intellectual property
rights (copyright) in the letter. The conclusion derived is that Mr. A has the right to stop Mr.
B or anyone from copying the letter and posting it on the Internet.2

Intellectual property began to be recognized as a form of property only in the late
nineteenth century.3 One can define the rights in a tangible property by following a set of
fixed rules and procedures.

Illustration:
Mr. A buys a property from Mr. B. In this case the law lays down that to transfer the title of
the property, Mr. A needs to follow some set rules and regulations to properly and validly
transfer the title to Mr. B, such as executing a valid agreement to sell and registering the
sale agreement, etc.,

In the same way, each intellectual property has to define its own set of rules and regulations
to set the parameters of the intangible property. These parameters include how the
deposits and registration techniques of representation be made, such as trademark

1 Article 2, para. VIII, WIPO Convention (1967) “Intellectual Property” is “the rights relating to – literary,
artistic and scientific works – performances and performing artists, photographs and broadcasts –
inventions in all fields of human endeavour – scientific discoveries – industrial designs – trade marks,
service marks, and commercial names and designations – protection against unfair competition and all
other rights resulting from intellectual, scientific, literary or artistic fields.”
2 Bently, Lionel and Sherman, Brad, Intellectual Property Law, (Oxford University Press, 2009), p. 2
3 Ibid.

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applications and accompanying visual representation of the trade mark, statutory rules and
legal concepts, and the originality requirement in some Intellectual property.4

1.2 GLOBAL INFLUENCES

Intellectual property rights are national or territorial in nature, that is to say, they usually do
not operate outside the legal regime of the national territory under which they are granted.5
Internationally, intellectual property law has been largely governed by two conventions.
First, the Paris Convention of 1883 which was intended to protect “industrial property,”
such as patents, industrial design, trade marks, service marks and indications of source of
origin.6 The Berne Convention of 1886 protects “every production in the literary, scientific
and artistic domain, whatever may be the mode or form of its expression.”7 Both the
treaties have as their central criteria for protection the principle of ‘national treatment’,
which means one country will provide to citizens of another nation the same protection the
first affords to its own citizens.8 This doctrine allows for international protection without
harmonization. However, the principle of national protection only offers a partial solution,
that is, if country A requires registration as a pre-requisite for protection of the right
holder’s right, then the right holder who is a citizen of country B will have to wait and
endure the cost of registration to protect his rights in country A.9 In the areas of
trademark,10 patents11 and copyright,12 this has been addressed.

The most important treaty that forms the benchmark of all intellectual property standards is
the Trade Related Aspects of International Law Agreement (TRIPS), which covers all the
main areas of intellectual property.13 The TRIPS agreement requires the WTO members to
recognize the existing standard of protection provided for by the Berne and Paris
Conventions.14 WIPO, in its role to develop, supervise and propagate new intellectual
property initiatives at an international level, formulated two new treaties, namely, the WIPO
Copyright Treaty 1996 and WIPO Performances and Phonograms Treaty 1996.

Some people argue that all the treaties and protection granted to intellectual property law
is no more than incorporation into the sphere of public international law the wish list of

4 Ibid.
5 Ibid.
6 Paris Convention for protection of industrial property, March 20, 1883, last revised at Stockholm, July
14, 1967, 21 U.S.T. 1583
7 Berne Convention for the Protection of Literary and Artistic Works, September 9, 1886. An additional
protocol was agreed at Paris in 1896, and revised version agreed in 1928 (Rome), 1948 (Brussels) and
1967 (Stockholm). A further minor amendment was made in the Paris text is 1979.
8 TRIPS: Historical Overview and Basic Principles, May L. Harris, 12 J. Contemp. Legal Issues (2001-
2002), p. 454.
9 Supra 3, p. 5.
10 Madrid Agreement concerning the International registration of Marks 1891.
11 The Patent Co-operation Treaty 1970.
12 Berne Convention requires its members to give copyright protection regardless of the need for
formalities, such as the need for registration.
13 P. Drahos, “Global property rights in information: The story of TRIPS at the GATT” (1995) Prometheus
6.
14 TRIPS Art. 2 (1), Art. 9; see also, J. Reichman, “Universal Minimum Standards of Intellectual Property
Protection under the TRIPS Component of the WTO Agreement” (1995) 29. The International Lawyer
345.

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developed nations.15 However, it is pertinent to note that this may not be the case as
showed through the Convention on Biological Diversity (CBD). The CBD treaty recognizes the
right of indigenous peoples who preserve biological resources to share in the benefits
arising from the commercial exploitation thereof.16

In recent times, intellectual property law has witnessed a gradual shift from multilateral
treaties to bilateral treaties in which the aims of the standardization and harmonization of
intellectual property are pursued.

1.3 INDIAN PERSPECTIVE

A major portion of intellectual property laws in India are derived from the statutes of
England. However, most of the statutes were reformed by the Indian Legislators to suit the
national needs. The Indian patent laws is an example. The East India Company on the
recommendation of the Lord Macaulay Law Commission introduced the Patents Act of
1856.17 At the time of Independence, the Indian Government appointed two committees,
the Tek Chand Committee (1948-1950), and the Ayangar Committee (1957-1959).18 The Tek
Chand Committee, after seeing that the existing patent laws enabled multi-national
companies to gain patent rights beyond the scope of their inventions, recommended the
incorporation of license provisions to reduce the potential for abuse of monopolies.19 The
changes were incorporated and the Patents and Design Act of 1911 was modified in 1952
and in 1953, the Controller of Patents became authorized to grant licenses, not patents, on
foods, medicines, etc.20 However, the new patent amendments in the Act have been
incorporated to make the Indian patent regime comply with the provisions of the TRIPS
Agreement.

In yet another instance, the Supreme Court made the following comment on the existing
copyright in D. B. Modak:21 “The development of copyright law in India is closely associated
with the British copyright law. Statute of Anne, the first Copyright Act in England, was
passed in 17th century which provided that the author of any book already printed will have
the sole right of printing such book for a term mentioned therein. Thereafter came the Act
of 1814, and then the Act of 1842 which repealed the two earlier Acts of 1709 and 1814.
The Copyright Act of 1911 in England had codified and consolidated the various earlier
copyright acts on different works. Then came the Copyright Act of 1956. In India, the first
Copyright Act was passed in 1914. This was nothing but a copy of the Copyright Act of 1911
of the United Kingdom with suitable modifications to make it applicable to the then British
India. The Copyright Act of 1957, which is the current statute, has followed and adopted the
principles and provisions contained in the U.K. Act of 1956 along with introduction of many

15 P. Gerhart, “Why Lawmaking for Global intellectual Property Is Unbalanced” (2000) EIPR 309.
16 S.Kadidal, “Subject Matter Imperialism? Biodiversity, Foreign Art and the Neem Patent Controversy”
(1996) 37 IDEA 371.
17 Coming into compliance with TRIPS: A discussion of India’s new patent laws, 25 Cardozo Arts & Ent.
L.J. 877 (2007-2008), p. 877.
18 Ibid, p 879.
19 Srividhya Ragavan, Of the Inequals of the Uruguay Round, 10 MARQ. INTELL. PROP. L. REV. 273,
278 (2006)
20 Supra n. 17 at p 879.
21 EBC v D.B.Modak 2008 (1) SCC 1.

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new provisions. It was followed by the Copyright (Amendment) Act 1983, which made a
number of amendments to the Act of 1957 and the Copyright (Amendment) Act 1984 which
was mainly introduced with the object to discourage and prevent the widespread piracy
prevailing in video films and records. Thereafter, the Copyright (Amendment) Act 1994 has
brought about many major amendments in the Copyright Act of 1957.” The copyright act
has been amended five times in 1983, 1984, 1992, 1994 and 1999 and the 1994 amendment
has been the most substantial amendment by far.

The above excerpts show that India is still in the phase of making the intellectual property
regime comply with the TRIPS Agreement.

Another important concept that has immense bearing on intellectual property is the
principle of exhaustion of rights.


Principle of exhaustion applies to all kind of intellectual property.22

Consent by the intellectual property right owner includes the consent of person or
persons legally or economically dependent on the proprietor.23
Consent by the intellectual property owner does not include the consent of a person
who is an independent assignee of the right or who happens to be the holder of a
right that once has a ‘common origin’.24 Illustration: If for example a movie is
released in countries A and B, and the owner may assign the copyright to the work in
country B. But if the new owner of the copyright has a market in country A, then the
principle of exhaustion will not bar him from exercising the rights in country A as he
has not exhausted his rights there.
National intellectual property rights may be used to prevent the further circulation
of pirated, counterfeited and other illicitly manufactured goods which, by definition,
have not been placed on the market with the right holder’s consent.25
Prevention of import of goods that have not been placed in a particular market with
the consent of the right holder.26
If the imported goods are legitimately placed in a market of a country where the
right holder has no intellectual property rights, the right owner can be said to have
implicitly given his consent for the marketing of such goods and thereby exhausted
his rights.27
If intellectual property rights subsist in country A, but are subject to a compulsory
license, the rights are not exhausted when goods are manufactured under such a
license. Here, the intellectual property right owner is entitled to use national laws to
prevent import into country B.28




22 Deustche Grammophon GmbH v metro GmbH, Case C-78/70 (1971) ECR 487.
23 Warmer Bros. v, Christiansen, Case C-158/86 (1988) ECR 2605.
24 Supra n. 22.
25 Supra n. 2, p. 14.
26 EMI Electrola GmbH v. Patricia Im-und Export, Case C – 341/87 (1989) ECR 79.
27 Merck & Co. v. Stephar BV &Exler, case C -187/80 (1981) ECR 2063.
28 Pharmon v Hoechst, Case C -19/84 (1985) ECR 2281.

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