Information Technology and Intellectual Property Rights

Information Technology and Intellectual Property Rights

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Description: An overview of prevalent criteria to establish and enforce IPRs, Sui Generis protection of IC Layouts, To appreciate the contribution of protecting IP in gaining global competitive advantage. Economic (and technological) rationale aids overall development, Social benefits Public Domain and Basic Research, Legal monopoly fair regulations within territory are also discussed.

Author: Prof. A. B. Suraj (Fellow) | Visits: 2384 | Page Views: 2403
Domain:  High Tech Category: IT 
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Information Technology and Intellectual Property Rights

Prof. A. B. Suraj PGDIPR, NLSIU January-March 2010

Session Objectives

An overview of prevalent criteria to establish and enforce IPRs

Sui Generis protection of IC Layouts

To appreciate the contribution of protecting IP in gaining global competitive advantage

IPRs � General Bases

Economic (and technological) rationale � aids overall development Social benefits � Public Domain and Basic Research Legal monopoly � fair regulation within territory

Forms of IPRs

Patents � Patents Act, 1970 Copyrights � Copyright Act, 1957 Trade Marks � Trade Marks Act, 1999 Industrial Designs � Designs Act, 2000

Forms of IPRs ...

Layout Designs of ICs � Semiconductor Integrated Circuits Layout-Design Act, 2000 Geographical Indications � Geographical Indications of Goods (Registration and Protection) Act, 1999

Forms of IPRs ...

Plant varieties � Protection of Plant Varieties and Farmers' Rights Act, 2001 Traditional Knowledge � partly by Biological Diversity Act, 2002 Trade Secrets � Contractual � no legislation in India

Across IPRs ...

National legal systems define criteria Territorial applicability only Registration is imperative Enforcement is multi-faceted

Claims of infringement and violation Defenses on grounds of "Fairness" Compensation/damages, interim measures Criminal remedies

Patentability criteria

Patent � a monopoly right to an inventor 20 year period of monopoly granted for inventions that satisfy:
Novelty Inventive Step or Non-obviousness Utility or industrial application

What can you do with a Patent?

Section 48 of the Patents Act, 1970:
Make Use Sell Distribute Import

the invention within India Effect of Patents � only territorial

Subject Matter of Patents

Must relate to any new process and/or a new product � improvements also considered � across any field of technology (TRIPs) Any process, machine, manufacture, composition of matter or material India has a long list of non-patentable subject matter, for example:

Computer programs per se or algorithms; Mathematical or Business methods; Traditional knowledge

US Case Studies

Gottschalk v. Benson (1972) � NO � unless there is a physical effect Diamond v. Diehr (1981) � YES � if part of an otherwise patentable process with a tangible result State Street Bank (1998) � YES � useful computation is in itself a tangible result

EU Case Studies

EPO Board � In re Vicom Systems (1987) � YES � mathematical method must be directed to "technical process"

Digital processing of images Though not tangible or concrete, its utility was of "technological character"

In re Sohei (1996) � YES � despite "mix of technical and non-technical elements" � if for an ultimate technical solution


Statutorily provided privilege to authors, aiming towards:

Creative and Intellectual enrichment of the public Progress of Scientific and useful Arts (literary, artistic, musical, dramatic, cinematographic films, sound recordings and now performances & broadcasting) Open Source and Copyleft

Bundle of rights � right to make copies; communicate to the public; make adaptations and allow translations Fair Use � nature and purpose based factors


Includes � a device, brand, heading, label, ticket, name, signature, word, letter, numeral Also � packaging, combination of colours Or any combination thereof Sound = inherently distinctive and to be graphically represented

"Trade mark"

Any Mark capable of:
Being represented graphically; and Distinguishing goods/services of entity from those of others


3 objectives:
to identify origin; to advertise/propagate the brand; and to indicate quality

IC Layout-Designs

Layout Designs protection:




Originality � "uncommon product of intellect" Not commercially exploited (for more than 2 years) Inherently distinctive Distinguishable from other registered designs

IC Layout Designs ...

Use or sale of whole or original part of registered layout-design without permission is an infringement No violation � if used for scientific evaluation, analysis, research or teaching Creation of an independent original layoutdesign from analysis � can be separately registered

IC Layout Designs ...

Concept of "registered user" � as notified by the Registrar
Licenses regulated strictly Statutory support to Users

Deterrent criminal remedies for:
Infringement Misrepresentation of "registration"


of information is legally protected

Enforcement of IPRs
Key trends from India and across the Globe

Large expectations � driven by small initiatives!!

High stakes

IBM v. Amazon = high profile dispute over 5 e-commerce based patents � settled for unknown value Transmeta v. Intel = dispute over patents in power saving chips � settled at over $150bn RIM v. NTP = Blackberry technology � involved complex legal processes � eventually settled at over $600mn
Negotiations are crucial, failing which litigation for compensation is undertaken

Record verdicts of compensation � $1.62bn

Litigation � Remedies

Injunctions � temporary (immediate) and permanent (final) Damages or compensation � based on account on profits
Actuals; Loss of Goodwill; Deterrent Microsoft cases in India = > Rs.1 crore

Legal and other costs

Police and Court Commissioners

Litigation � Remedies ...

Copyrights & TMs � registration is best proof � else, legal presumptions apply

"Passing off"

Civil remedy � enforceable by a District Court � compensatory and injunctions Criminal remedy �� law provides for minimum imprisonment and fines � offence is cognizable and non-bailable

Prevalence of Piracy

Total counterfeit trade = $624 bn Total online piracy = $84 bn Software piracy: Global = 35%; India = 73%; China = >90% Top Hollywood studios spend more than $40 mn on counter-measures
Figures from data sources of 2008

Liability in Cyberspace

"Deep pocket" strategy � ISPs; Credit Card agencies Service Providers are exempted from liability if lack of knowledge despite "due diligence" Comprehensive Search & Powers given to the Police Seizure

The "Intangibles"

Goodwill and reputation Consumer perception/identification Scientific and literary acclaim Advertising reach Traditional usage and "prominence" enjoyed Media fame

One form of IPR leads to the other!

Pressures of Enforcement

IPRs = fiercely competitive usage; justifies criminal remedies too IPRs and Global recognition
IPRs are territorial in nature No single authority or uniform standards National systems and interests continue to preside

Principles of Traditional Management

Organizing towards:

Perfect replicability & standardization Ever-increasing scale Incremental process efficiency

Efficiency + Productivity = Growth

Role of IPRs � game-changer?

RoI = Return on Innovations Maximizes interests; with minimal efforts

Intellectual assets
Key Principles:

Visibility and full exploitation Internal and external � aggressive pursuit of IP protection Role of Intellectual assets in business alliances and joint ventures

Intellectual assets ...
Key Issues:

Identifying the key geographical areas � for marketing and registration of IPRs Study the level of innovative behaviour among the competitors; and suppliers Role of building brand equity

Offshore Collaboration

Typically of three types:

Captive entity � wholly owned subsidiary � IP is fully owned; but has other legal implications Joint venture � a new combined company � IP is based on the Shareholding Agreement

BOT Model � involves transition risks

Contracting - with a local Supplier � Enforcement with due diligence � e.g., Confidentiality; Parentsubsidiary relations

Determining factors = cost, commitment, control, flexibility and liability models

IP issues in Contracting

Sharing regime + sustained ownership Disparities in applicable laws & IP rights Identify, define and document � processes and products Due diligence & IP Valuation

IP issues ...

Enforcement � involves local issues too Employer-employee relations � framework of trusteeship Data protection and security Dispute settlement enforcement and arbitral

Emerging issues

Licensing in IPRs

Emerging trends in global supply chain Minimum level of "reasonable control" � as evidenced in Contracts and practices Raises anti-trust and RTP claims as well

Securitization of IPRs

Methods of valuation and their accuracy Procedure of affirming "secured interest"

Liability of Service Providers in ECommerce

Scope and content of "due diligence" Increasing burden on the ISPs to be "IP-Police"

Domain names and related legal disputes

Domain names

Essential to `connect' � identify and access � online resources Wide online exposure leads to being highly reputed and valued Most effective depiction of Trademarks in the cyberspace

Are Domain names protected as Intellectual Property? Extensions through Top-level Domain � several and exclusive

Emergence of the ICANN and in 1999 the Uniform Domain Name Dispute Resolution Policy [UDRP]

UDRP is akin to Arbitration proceedings Though mandatory to all registrants, no binding effect Lacks legitimacy of binding arbitration clauses Level of deference by Courts is very low

Typology of Domain name disputes

Classical Cyber-squatting "Non-commercial" form of cyber-squatting � may correspond to Fair Use terms Involving Personal names Cultural names and Geographically significant

Deliberate misspelling of domain names � intention to confuse the user


Results in a Civil action in the US

US Anti-cybersquatting Consumer Protection Act, 1999 Protects even Personal names which are protected as a trademark Regardless of the nature of goods or services Applies even against � Fan sites; gripe sites

"Intentional" act of registration is also sought to be penalized

Element of intentional deception Periodic registration and its implications

Cyber-squatting ...

Cyber-squatting = plaintiff must be the owner of a "famous mark" and show:
(1) that a domain name "is identical or confusingly similar to, or dilutive of" the owner's mark; and (2) that the defendant registered the domain name with a "bad faith intent to profit" from the name.

Grounds for a Complaint

To complain and invoke the UDRP process the following are the grounds:

that the disputed domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and that the registrant has no rights or legitimate interests in respect of the domain name; and that the domain name has been registered and is being used in bad faith.

Intentional acts to be proved � bad faith of commercial use of trademark ACPA provides for forfeiture/cancellation and transfer of the disputed domain name