FICCI Online

Certificate Course
on Intellectual
Property and
Competition Law
(IPComp)

INTELLECTUAL
PROPERTY RIGHTS
(IPR)

MODULE 2
 This section notifies about the fundamentals of Intellectual Property Rights (IPR), its
requirement and significance in distinct sectors including economic expansion and global
market. It also enlightens about the different segments of IPR involving Patents, Trademarks,
Copyrights, Industrial Designs, Geographical Indications, Trade Secrets, Confidential
Information and layout designs of Integrated circuit.

Chapter Title Page No.

1 BASICS OF IPR 2-6
2 NEED AND IMPORTANCE OF IPR 7-10
3 DIFFERENT SEGMENTS OF IPR 11-31

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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
CHAPTER 1:
BASICS OF IPR
In recent decades, the economy of the world has moved from being dominated by
perceptible assets (e.g., factory equipment and inventory) to being conquered by intangible assets
(e.g., intellectual property, or “IP”). Further, worldwide innovation is progressively coming from
Small and Medium-Sized Enterprises (SMEs). Each form of intellectual property (IP) has
many shades and involves many planned deliberations. These strategic concerns can differ
extensively for different industries, for different types of innovations and entities having
different sizes and different amount of funds.

Investment in IP Protection

For almost every successful SME, its competitiveness is tied to one or more types of IP,
whether technical inventions, creative expressions, corporate identity and brand recognition,
proprietary know-how or in any other form. Timely and properly protection of IP can often allow
the SME to maintain, influence and even monetize its competitiveness. For example, IP
protection can help an SME in several ways as mentioned below:
 Obtaining a profit on its savings in research, development, branding and goodwill;
 Preventing its opponents from entering markets or proposing certain types of products or
services;
 Distinguishing its product or service offerings with protected brands; and
 Positioning its intellectual assets for use in legal and financial negotiations, for example,
in levitating capital, entering licenses or other contracts, establishing sales channels and
planned partnerships, franchising etc.

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Some Key Intellectual Property Rights (IPR) Concepts:

1) Territoriality- Most IPRs are jurisdictional, each jurisdiction has its own set of intellectual
property laws and its own enforcement system, and IP rights approved by one jurisdiction
cannot be enforced in another. A number of international treaties concerning to IP rights have
been joined by most countries in the world and countries are progressively generating and
joining regional IP systems.

2) Transferability- Generally, IP rights are fungible assets (i.e., they can be bought and sold).
Assignments can be used to transfer an entire right in a particular IP asset (e.g., effectively a
sale of the asset to another entity), while licenses can be used to transfer less than the entire
right in a particular IP asset. For example, a copyright license can be used to permit
reproduction rights in a work that are restricted in number, format, and timeframe.

3) Interplay- The forms of IP should not be considered as a means of storage. The most
successful corporations tend to weave different types of IP into a strategic, defensive fabric.
For example, certain technologies can be maintained as a trade secret while widely disclosing
other technology in the form of patents.

4) Public Domain – Certain works or inventions are deemed to be in the public domain, so that
the public is free to utilize the works without violating anyone’s IP rights. In some cases,
work is originally protected for some time under one or more forms of IP eventually for some
time then enter the public domain. This can occur, for example, when the IP rights expire, are
allowed to lapse, or become unenforceable. In other cases, works are dedicated to the public
from their beginning or shortly thereafter. This can occur obviously (e.g., through certain
open source licenses, certain types of public disclosure, or through other instruments) or
implicitly (e.g., by allowing opportunities to protect the IP to lapse).

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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
Risk Transfer for Intellectual Property
There are four basic types of strategies for risk transfer of intellectual property, these are:

1. IP Infringement Coverage
IP infringement coverage, also known as intellectual property accountability coverage,
defends patent from patent breach, claims against the protected and protects the insured’s
person’s ownership rights in the IP. It also provides insurance to guarantee customers and
distributors for accusations that the insured’s person’s IP is violating another’s IP rights and
indemnifies against damages the insured person is legally liable for royalty, as a result of a
verdict or settlement. This is the most typical type of coverage bought when customers think of
or ask for IP obligation insurance. This is also the most elusive, as insurers have historically
experienced considerable losses with this type of coverage due to the self-selection of
purchasers, who tend to be those who are more controversial or subjected to more frequent
litigation.

1. IP Enforcement Coverage
IP enforcement coverage is the fund provided by insurers to reimburse the insured legal
expenditures in seeking of enforcement or protection of the IP rights against breach. It provides
IP owners with the financial resources to fund the fees and expenses made while chasing the
infringers. This coverage does not insure against counterclaims or against any other loss. It can
be prolonged with optional extensions to include contractual disputes and action against a third
party for non-payment, enforcement of an agreement to indemnify the insured and action against
the insured for breach of a stated agreement. This extension also include enquiry costs to
determine if there are grounds for pursuit.

2. IP Representations and Warranties

One of the least known and most used types of coverage is IP representations and
warranties coverage infringement liability insurance, is generally associated with mergers and
acquisitions or purchase agreement. It certifies that the IP involved in the transaction is valid,

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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
similar to the function of title insurance in home acquisitions. This type of coverage protects
against infringement/misappropriation liability and provides compensation for defense expenses
and/or loss (awards or settlements). It is designed precisely for the representations and warranties
applying to immaterial assets, whether the sale or purchase of a single asset, a collection of
assets, or as part of a corporate sale or merger.

3. IP Value Insurance
The last type of risk transfer product is IP value cover, which is a direct loss cover rather
than a defense cover. It is triggered by legal claims against the IP that result in loss of income or
value associated with inadequacy of findings or other legal claims against patents in an insured
person’s portfolio. This type of attention is generally associated with IP-rich products’ future
revenue streams, licensing revenues, royalty receipts, valuation by IP experts of patent portfolios,
research and expansion expenditures, and financial arrangements involving IP such as IP loans,
securitization, monetization, and investments in IP-rich companies.

Intellectual Property Risk Management

Another important element in the conversation of intellectual property estimations and

protection in the modern economy includes the strategic management and mitigation of IP risks.
Firms of all sizes and purpose are inspired by similar goals in the making of such programs:
 to identify what establishes a risk sensitive intangible asset;
 to address new and developing threats to IP;
 to properly assign available risk resources in given limited funds; and
 to achieve acquiescence within the legal and regulatory environment in which they
operate.

In this context, there are several trends evolving within the space:

First, IP is transitioning from exclusively a legal matter to that of a business/strategic issue; this

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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
is evidenced by the increasing number of organizations trying to influence the value for their
intellectual property, launch joint ventures utilizing IP, gain from the value of their patents and
utilize IP as a central tenant of a Mergers And Acquisitions (M&A) strategy.

Second, IP risk management is migrating from a self-justifying to an offensive effort, which will
have significant consequences for firms’ overall risk management strategies.

Third, a “collective relationship” model for handling risks is developing and its maturity is being
accelerated through technological advancements. Empowering technologies, such as cloud
computing, will allow for greater sharing of intellectual property in defined ways as firms look
for amplified efficiencies. Simultaneous to this trend, the increased sharing of proprietary
material creates complex questions that will be central to defining risk management strategies.

While such measures can prove challenging, the realisms of the contemporary business
environment require a robust valuation and risk mitigation effort to realize the upside potential of
an organization’s intellectual property.

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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
CHAPTER 2:
NEED AND IMPORTANCE OF IPR

Intellectual property protection is the key factor for economic growth and advancement in
the high technology sector. They are good for business, benefit the public at large and act as
catalysts for technical progress. For India one among the developing countries, as we have a
vulnerable collection of traditional, oral, folklore, customary, agricultural, traditional medication
like Ayurveda etc. and besides not having much wealth and infrastructure. Lack of awareness of
IPRs among all strata’s of people, is a major setback to a developing country like India. Today
the aggressive and targeted patenting is the need of the hour. The points that describe basics of
the intellectual property rights are:

i. To make the economy knowledge-based, to the maximum scope possible and build up
international competitiveness based on knowledge than based on cheap labor and raw
materials, it is imperative to encourage, accumulate and protect its IPR.
ii. An effective and enabling administrative and legal regime for IPR bestows confidence to
the IP-owner and creator allowing them to manage and ultimately create the crucial link
between research (innovation) and its economic applications.
iii. An effective IPR protection system is a basic requirement agreed upon by all 149 World
Trade Organization (WTO) members. World Trade Organization (WTO) has well
recognized the importance of IPR by including Trade Related Aspects of Intellectual
Property Rights (TRIPS) in its multi-lateral rule- based trading system.

Changes in the global economic environment have prejudiced the development of business
models where IP is a central element launching value and potential growth. In addition to these
systemic changes, U.S. and international accounting practices force companies to recognize and
value all perceptible intangible assets of a firm as part of a transaction.

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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
IMPORTANCE OF IPRs

Intellectual property (IP) contributes extremely to our national and state economies. Dozens of
industries across our economy rely on the satisfactory enforcement of their patents, trademarks,
and copyrights, while consumers use IP to ensure they are purchasing safe, guaranteed products.
It is believed that IP rights are worth defensive, both domestically and abroad. This is why:

 Intellectual Property Creates and Supports High-Paying Jobs;

 Jobs in IP-intensive industries are expected to grow faster over the next decade than the
national average;
 Intellectual Property helps in generate breakthrough solutions to Global Challenges;
 IP-driven discoveries in alternative energy and green technologies will help progress
energy security and address climate change;
 Intellectual Property Rights encourage innovation and reward entrepreneurs;
 Risk and occasional failure are the lifeblood of the innovation economy. IP rights
incentivize entrepreneurs to keep assertive for new advances in the face of adversity; and
 IP rights facilitate the free flow of information by sharing the protected know-how which
is critical to the original, patented invention. In turn, this process leads to new
innovations and improvements on existing ones.

Fetching all of these important and diverse points together is the fact that protecting IP is a
non-partisan issue that is mutual by a broad association of interests. These rights are incorporated
by all sectors of industry i.e. small, medium and large companies alike and by labor
organizations, consumer groups, and other trade associations.

Importance of IPR in Business Growth

Intellectual property assets have become the coinage of business, used not just to protect
technology rights, but also to advance competitive advantage and drive new revenue

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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
opportunities. In many organizations, however, there is still disconnection between IP strategy
and business strategy. Old-fashioned IP tools and processes can increase a company’s exposure
to risk and results in missed opportunity costs.

There is a way, however, to leverage your IP assets more strategically to grow your
business in new and different ways. A righteous cycle of innovation has to be created that
integrates three critical elements into a holistic patent strategy as mentioned below:

1. Protective IP
At basic level, patents protect IP investments by providing exclusionary rights. However,
the methods for protecting intellectual property are growing more sophisticated, requiring
companies to rethink the tools and processes they use for research and publishing.
Exclusionary rights must remain strong throughout a product’s entire lifecycle. That is
why defensive publishing is becoming an important part of IP strategy. By revealing an
enabling description of an invention to the public, with a verifiable publication date and
legitimacy, it becomes “prior art.” Defensive publishing can also protect against two
significant threats: “patent trolls” also known as non-practicing entities, which apply for
patents solely to collect license fees or damages and “picket-fence” strategies in which
competitors patent incremental improvements around your core patent to erode its value
and give them leverage to license your core technology on preferential terms.

2. Augmenting R&D operations

Traditional patent search technologies are so complex, and patent databases have become
so large, that comprehensive patent searches can take days, if not weeks, to execute. One
can optimize both the search process and the ability to deliver actionable insights by
getting advanced analysis tools into the hands of business users. Empowering frontline
personnel to conduct their own searches, using natural-language queries rather than
arcane syntax, will speed up decision-making and foster a more agile and competitive
organization.

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 3. Monetizing IP assets
An IP strategy is ultimately judged by the top- or bottom-line value it creates for any
organization. Monetization involves more than just getting products to market faster with
exclusionary rights. An inclusive portfolio management strategy also will improve your
ability to identify infringers and/or potential licensing partners in the public or private
sector. Strategically managing an IP portfolio can also help companies to identify the
opportunities in adjacent markets- or new markets altogether- for new product launches
or cross-licensing deals.

The main benefit that appealed for strong IPR protection is by allowing pacesetters to
avail a share of the benefits of their creative activities, which leads to innovation and higher
long-run growth. Generally, we may expect IPRs to impact on innovation differently in countries
with significant innovative capacity as opposed to those with few resources available for
domestic innovation.

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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
CHAPTER 3:
DIFFERENT SEGMENTS OF IPR
Patents

Patent is a monopoly right approved by the Government to exclude others from

exploiting or using a particular invention. This exclusive monopoly granted by a Patent is
delivered in return to the inventor for revealing the details of the invention to the public.
Therefore, the patent is a cartel right, which offers exclusivity to the patentee to exploit the
invention for 20 years after which it falls to the public domain.

While filing a patent for the invention, there are several critical aspects required to be
followed especially in drafting the claims, which define the scope of the invention. Drafting
patent specification is an art by itself and requires the proficiency of skilled professionals in this
field.

A patent is a document, allotted to an application, by a government office (or a regional

office acting for several countries), which describes an invention and creates a legal situation in
which the patented invention can normally exploited (manufactured, used, sold, imported) with
the sanction of the owner of the patent. “Invention” means a solution to a specific problem in the
field of technology. An invention may relate to a product or a process. The protection deliberated
by the patent is limited in time (generally 20 years). In a number of countries, inventions are also
protectable through registration under the name of “utility model” or “short-term patent.” The
necessities are somewhat less stringent for patents, in specific respect of inventive step and in
contrast with patents, the fees are lower, and the period of protection is shorter, but otherwise the
privileges under the utility model or short-term patent are similar.

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 The effects of the grant of a patent are
that persons other than the owner of the patent
may not exploit the patented invention in the
country unless the proprietor agrees to such use.
Thus, while the owner is not given a
constitutional right to practice his invention,
rather he is given a statutory right to prevent
others from commercially exploiting his
invention, which is frequently referred to as a
right to eradicate others from making, using or
selling the invention.

A certificate of grant of patent from

Indian Patent Office

The right to take action against any person misusing the patented invention in the
country without his authorization constitutes the patent owner’s most significant right, since it
permits him to produce the material benefits to which he is entitled as a reward for his
intellectual effort and work, and reimbursement for the expenses for his research and
experimentation.

Conditions of Patentability

An invention must meet several standards if it needs to be eligible for patent protection.
These include, most expressively, that the invention must consist of a patentable subject matter,
the invention must be industrially applicable (useful), it must be new (novel), it must unveil a
sufficient “inventive step” (be non-obvious) and the complete revelation of the invention in the

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patent application must meet assured standards. The three main patent eligibility criteria are
described as below:

a) Novelty
Novelty is a fundamental requirement in any examination as to substance and is an
undisputed condition of patentability. It must be highlighted, however, that novelty is not
something, which can be proved or recognized; only its absence can be proved. An invention is
new if it is not anticipated by the prior art. “Prior art” is all the information that existed prior to
the relevant filing or priority date of a patent application, whether it existed by the way of written
or oral disclosure.

b) Inventive Step (Non-Obviousness)

In relation to the requirement of inventive step (also referred to as “non-obviousness”),
the question as to whether or not the invention “would have been obvious to a person having
ordinary skill in the art” is perhaps the most challenging of the criterions to determine in the
examination as to substance.

The annexation of a requirement like this in patent legislation is based on the evidence
that protection should not be given to what is already known as part of the prior art, or to
anything that the person with ordinary skill could assume as an obvious consequence thereof.

c) Industrial application
An invention must have an industrial application in order to be patented. Section 2 (ac)1
of The Indian Patent Act, 1970, states about “capable of industrial application” if any invention
can be made or used in any kind of industry including agriculture then it is known to be a subject
matter with industrial capability. This criterion is similar to the US Criteria of utility.
In order to be eligible for patent protection, an invention must plunge within the scope of
patentable subject matter. Patentable subject matter is established by statute and is usually

1 https://indiankanoon.org/doc/65643/
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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
defined in the terms of exceptions to patentability; the general rule being that patent protection
shall be available for inventions in all the fields of technology (Article 27.1 of the TRIPS
Agreement).

Subject matter, which may be excluded from patentability, comprises the following
(Article 27.3 of the TRIPS Agreement). The example of fields of technology which may be
excluded from the scope of patentable subject matter includes the following:
 discoveries of materials or elements already existing in nature;
 scientific theories or mathematical methods;
 plants and animals other than microorganisms and basically biological processes for the
production of plants and animals, other than non-biological and microbiological
processes;
 schemes, rules or methods, such as those for doing business, performing purely mental
acts or playing games;
 methods of treatment for humans or animals or diagnostic methods practiced on
humans or animals (but not products for use in such methods).

TRADEMARKS
“A trademark is any sign that individualizes the goods of a given enterprise and
differentiates them from the goods of its competitors.” It comprises two aspects, which are
mentioned to as the different functions of the trademark, but which are, nevertheless,
interdependent and for all the practical purposes should always be looked at together.

In order to personalize a product for the consumer, the trademark must designate its
source. This does not mean that it must notify the consumer of the actual person who has
manufactured the product or even the one who is trading in it. It is adequate that the consumer
can trust in a given enterprise, not necessarily known to him, being accountable for the product
sold under the trademark.

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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
Different types of
Trademarks are:

a) Service Marks
In modern trade,
consumers are challenged not
only with a massive choice of
goods of all kinds, but also with an increasing diversity of services, which tend more and more to
be offered on a national and even international scale. Therefore there is a need for signs that
permit the consumers to distinguish between the different amenities such as insurance
companies, car rental firms, airlines, etc. These signs are called service marks and fulfill
essentially the same origin-indicating and distinctive function for services as trademarks do for
goods.
Since service marks are signs that are very similar in nature to trademarks, the same
criteria can be applied, so service mark protection has sometimes been introduced by a very short
amendment to the existing trademark law, simply providing for the application to service marks,
mutatis mutandis, of the provisions on the protection of trademarks.

b) Collective Marks
A collective mark may be owned by an association which itself does not use the
collective mark but whose members may use the collective mark; the members may use the
collective mark if they fulfill the necessities fixed in the regulations regarding the use of the
collective mark.
The protocols concerning the use of the collective mark normally have to be involved in
an application for the registration of the collective mark and any alterations to the regulations
have to be notified by the Trademark Office. In several countries, the registration of a collective
mark may be canceled if that mark is used conflicting to the provisions of the regulations or in a
manner, which misrepresents the public. Collective marks, therefore, play a significant role in

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the protection of consumers against misleading practices.
The Paris Convention contains provisions on collective marks in its Article 7 bis2.
Those provisions, in specific, ensure that collective marks are to be acknowledged for
registration and protection in countries other than the country where the association possessing
the collective mark has been established. This means that the fact that the said association has
not been established in accord with the law of the country where protection is wanted is no
reason for refusing such protection. On the other hand, the Convention specifically states the
right of each Member State to apply its own conditions of protection and to refuse protection if
the collective mark is conflicting to public interest.

c) Certification Marks
The certification mark may only be used in accord with the distinct standards. The main
difference between collective marks and certification marks is that the previous may be used
only by precise enterprises, for example, members of the association, which retains the collective
mark, while the latter may be used by anyone who complies with the well-defined standards.
Thus, the users of a collective mark form a “club” while, in respect of certification marks, the
“open shop” principle relates.
An important requirement for the registration of a certification mark is that the entity
which applies for registration is “competent to certify” the products concerned. Thus, the owner
of a certification mark must be the demonstrative for the products to which the certification mark
applies. This is an important safeguard for the defense of the public against misleading applies.
The definition of “certification mark” is not same in all the countries. In the United States
of America, for example, a certification mark may not be used by anybody who obeys with the

2 Article 7 bis - [Marks: Collective Marks]

 (1) The countries of the Union undertake to accept for filing and to protect collective marks belonging to
associations the existence of which is not contrary to the law of the country of origin even if such
associations do not possess an industrial or commercial establishment.
 (2) Each country shall be the judge of the particular conditions under which a collective mark shall be
protected and may refuse protection if the mark is contrary to the public interest.
 (3) Nevertheless, the protection of these marks shall not be refused to any association the existence of
which is not contrary to the law of the country of origin, on the ground that such association is not
established in the country where protection is sought or is not constituted according to the law of the latter
country.

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defined standards, but only by enterprises, which have been authorized by the owner of the
certification mark to use that mark. Thus, in the United States of America, the difference
between a certification mark and a collective mark is smaller than in other countries; it only
relates to the purpose of those two kinds of marks: the certification mark refers to certain
standards of products or services, while the collective mark refers to the membership of its users
in a particular organization.

COPYRIGHT
Copyright law is a branch of that part of the law, which compacts with the rights of
intellectual creators. Copyright law deals with specific forms of creativity, concerned primarily
with mass communication. It is apprehensive also with almost all forms and methods of public
communication, not only printed publications but also matters such as sound and television
broadcasting, films for public display in cinemas, etc. and even computerized systems for the
storage and retrieval of information.

Copyright deals with the rights of intellectual creators in their formation. Most works, for
example books, paintings or drawings, exist only once they are personified in a physical object.
However, some of them exist without personification in a physical object. For example, music or
poems are works even if they are not, or even before they are, written down by a musical
notation or words.

Copyright law, though, protects only the form of expression of ideas, not the ideas
themselves. The creativity protected by copyright law is creativity in the choice and arrangement
of words, musical notes, colors, shapes and so on. Copyright law protects the rights of the owner
in artistic works in contradiction of those who “copy”, that is to say those who take and use the
form in which the original work was articulated by the author.

Subject Matter of Copyright Protection

The subject matter of copyright protection comprises every production in the literary,

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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
scientific and artistic domain, whatever the mode or form of expression. For a work to enjoy
copyright protection, nevertheless, it must be an original creation. The ideas in the work do not
need to be new but the form, be it literary or artistic, in which they are articulated must be an
original creation of the author. And, finally, protection is independent of the quality or the value
attributing to the work it will be sheltered whether it be deliberated, according to taste, a good or
a bad literary or musical work and even of the purpose for which it is envisioned, because the use
to which a work may be put has nothing to do with its defense.

Works eligible for copyright protection are, as a rule, all original intellectual
constructions. A non-exhaustive, illustrative enumeration of these is contained in national
copyright laws. To be protected by copyright law, an author’s works must be originated from
him; they must have their origin by the hard work of the author. However, it is not necessary to
qualify for copyright protection, that works should pass a test of ingeniousness, of inventiveness.
The work is protected irrespective of the quality thereof and when it has little in common with
literature, art or science, such as purely technical guides or engineering drawings, or even maps.
Exceptions to the general rule are made in copyright laws by specific enumeration; thus laws and
official decisions or mere news of the day is usually omitted from copyright protection.

Virtually all national copyright laws provide for the protection of the following types of work
such as:
i. Literary works: novels, short stories, poems, dramatic works and any other writings,
irrespective of their content (fiction or non-fiction), length, purpose (amusement,
education, information, advertisement, propaganda etc.), form (handwritten, typed,
printed book, pamphlet, single sheet, newspaper, magazine); whether published or
unpublished; in most countries “oral works,” that is, works not transformed to writing,
are also protected by the copyright law;
ii. Musical works: whether serious or light; songs, choruses, operas, musicals, operettas; if
for instructions, whether for one instrument (solos), a few instruments (sonatas, chamber
music, etc.), or many (bands, orchestras);

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 iii. Artistic works: whether two-dimensional (drawings, paintings, etchings, lithographs,
etc.) or three-dimensional (sculptures, architectural works), irrespective of content
(representational or abstract) and destination (“pure” art, for advertisement, etc.); maps
and technical drawings;
iv. Photographic works: regardless of the subject matter (portraits, landscapes, current
events, etc.) and the purpose for which they are made; motion pictures
(“cinematographic works”): whether silent or with a soundtrack, and irrespective of their
purpose (theatrical exhibition, television broadcasting, etc.), their genre (film dramas,
documentaries, newsreels, etc.), length, method employed (filming “live,” cartoons,
etc.), or technical process used (pictures on transparent film, videotapes, DVDs, etc.).
v. Computer programs (either as a literary work or independently).

Many copyright laws also protect

“works of applied art” (artistic jewelry,
lamps, wallpaper, furniture, etc.) and
choreographic works. Some regard
phonograph records, tapes and broadcasts
as works.

INDUSTRIAL DESIGNS

Some examples of Designs

Industrial design protection is mainly relevant for
cartoon characters exemplified in the form of aesthetic designs for three-dimensional articles
which mainly belong to the toy or costume jewellery areas (dolls, robots, puppets, action figures,
brooches, “pins”) which generally originate in cartoons, but which may sometimes represent real
persons. The significance of design protection will be of prominence particularly when copyright
protection is omitted or reduced, mainly when a character has been created with the intention of
being industrially exploited.

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Furthermore, since design protection is often subject to registration, a design application will be
supportive to establish prima facie proof of ownership as from the date of the application,
although effective protection will only commence on the date of registration of the design.

Definition of Subject Matter of Protection Design as Conception or Idea: The subject matter
of the legal protection of industrial designs is not articles or products, but fairly the design or
aesthetic appearance, which is applied to or embodied in such articles or products.

The emphasis is on an abstract conception or idea as the subject matter of design

protection. Design protection does not apply to articles or products in such a way as to grant the
proprietor of the design exclusive rights over the commercial exploitation of those articles or
products. Rather, design protection only applies to such articles or products as embody or
reproduce the protected design. Protection does not, therefore, exclude other manufacturers from
producing or dealing in similar articles satisfying the same utilitarian function, if such temporary,
articles do not embody or reproduce the protected design.

Industrial design is not an abstract idea instead it is a pattern or shape drawn on a paper
which will be applied to an article giving it a distinct feature which appeals to the eye of a person
for its appearance and not for the use of the article. The industrial design needs to be registered
in order to get protection under industrial design law in India as well as in other countries
(member countries to the Paris convention for protection of industrial property) by the way of a
proper application.

GEOGRAPHICAL INDICATIONS
Geographical Indications of Goods are defined as that aspect of industrial property which
refers to the geographical indication referring to a country or to a place situated therein as being
the country or place of origin of that product. Typically, such a name conveys an assurance of
quality and distinctiveness which is essentially attributable to the fact of its origin in that defined

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geographical locality, region or country. Under Articles 1 (2)3 and 104 of the Paris Convention
for the Protection of Industrial Property, geographical indications are covered as an element of
IPRs. They are also covered under Articles 225 to 246 of the Trade Related Aspects of
Intellectual Property Rights (TRIPS) Agreement, which was part of the Agreements
concluding the Uruguay Round of GATT negotiations.

India, as a member of the World Trade Organization (WTO), enacted the

Geographical Indications of Goods (Registration & Protection) Act, 1999 has come into
force with effect from 15 September 20037.

“Champagne,” “Cognac,” “Roquefort,” “Chianti,” “Pilsen,” “Porto,” “Sheffield,”

“Havana,” “Tequila,” “Darjeeling”-are some well-known examples for names which are related
all over the world with products of a certain nature and quality. One common feature of all those
names is their geographical implication, that is to say, their function of designating existing
places, towns, regions or countries. However, when we hear some names we think of products
rather than the places they entitle.

Those examples show that geographical indications can obtain a high reputation and thus
may be appreciated commercial assets. For this very reason, they are often exposed to
misappropriation, counterfeiting or forgery, and their protection- national as well as
international- is highly desirable.

3 Articles 1 (2) (Paris Convention ) states that ; However, no requirement as to domicile or establishment in the
country where protection is claimed may be imposed upon nationals of countries of the Union for the enjoyment of
any industrial property rights.
4 Article 10:False Indications: Seizure, on Importation, etc., of Goods Bearing False Indications as to their
Source or the Identity of the Producer
(1) The provisions of the preceding Article shall apply in cases of direct or indirect use of a false indication of the
source of the goods or the identity of the producer, manufacturer, or merchant.
(2) Any producer, manufacturer, or merchant, whether a natural person or a legal entity, engaged in the production
or manufacture of or trade in such goods and established either in the locality falsely indicated as the source, or in
the region where such locality is situated, or in the country falsely indicated, or in the country where the false
indication of source is used, shall in any case be deemed an interested party.
5 https://www.wto.org/english/docs_e/legal_e/27-trips_04b_e.htm
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 The Paris Convention for the Protection of Industrial Property does not contain the
notion of geographical indication. Article 1 paragraph (2) defines as subjects of industrial
property, inter alia, indications of source and appellations of origin. This is the vocabulary
conventionally applied and still formally used in the conventions and agreements managed by
WIPO.

According to this terminology, the following difference is made between suggestions of

source and appellations of origin: “indication of source” means any appearance or sign used to
indicate that a product or service originates in a country, a region or a specific place, whereas
“appellation of origin” means the geographical name of a country, region or specific place which
serves to designate a product originating therein the characteristic qualities of which are due
exclusively or essentially to the geographical environment, comprising natural or human factors
or both natural and human factors.

It is important to focus on the difference between suggestions of source and appellations

of origin. The use of an appellation of origin requires a quality link between the product and its
area of production. This qualitative link consists of assured features of the product, which are
completely or essentially attributable to its geographical origin such as, for example, climate, soil
or traditional methods of production. On the other hand, the use of an indication of source on a
given product is simply subject to the situation that this product initiates from the place
designated by the indication of source. Appellations of origin can be assumed as a special kind of
indication of source. According to the vocabulary traditionally applied, the term “indication of
source” comprises all appellations of origin, but, in its broad use, it has become rather a label for
those indications of source, which are not measured appellations of origin.

The Madrid Agreement for the Repression of False and Deceptive Indications of Source on
Goods
The Madrid Agreement for the Repression of False or Deceptive Indications of Source

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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
on Goods is a special agreement within the outline of the Paris Union. The Agreement aims at
the repression not only of false, but also of misleading, indications of source.

Article 1(1)8 of the Madrid Agreement provides that any product bearing a false or
deceptive indication by which one of the States party to the Madrid Agreement or a place
situated therein is directly or indirectly indicated as being the country or place of origin, must be
seized on importation into any of the States party to the Madrid Agreement.

The other paragraphs of Articles 1 and 29 specify the cases and the way in which seizure
or similar measures may be requested and carried out. There is no express provision to the effect
that private individuals may request appropriation directly. Thus, member States are free to
provide that such persons have to apply through the public prosecutor or any other competent
authority.

The Lisbon Agreement for the Protection of Appellations of Origin and their International
Registration
The limited geographical scope of the Lisbon Agreement10 for the Protection of
Appellations of Origin and their International Registration is due to specific characteristics of the
functional provisions of the Agreement.

Article 2(1) contains a definition according to which appellation of origin means “the
geographical name of a country, region or locality which serves to designate a product
originating therein, the quality and characteristics of which are due exclusively or essentially to
the geographical environment, including natural and human factors.” It follows that only names

8Article 1: Membership in the Madrid Union: The States party to this Protocol (hereinafter referred to as “the
Contracting States”), even where they are not party to the Madrid Agreement Concerning the International
Registration of Marks as revised at Stockholm in 1967 and as amended in 1979 (hereinafter referred to as “the
Madrid (Stockholm) Agreement”), and the organizations referred to in Article 14(1)(b) which are party to this
Protocol (hereinafter referred to as “the Contracting Organizations”) shall be members of the same Union of which
countries party to the Madrid (Stockholm) Agreement are members. Any reference in this Protocol to “Contracting
Parties” shall be construed as a reference to both Contracting States and Contracting Organizations.
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conforming to the definition may be protected by asset of the Lisbon Agreement. Simple
indications of source (which can be used for products whose characteristics do not result from
the geographical environment) are omitted from its purview. This limitation has prohibited the
accession of countries that do not know the idea of appellation of origin.

The first element of the definition is that the appellation must be the geographical name
of a country, region or locality. The second element of the definition is that the appellation of
origin must serve to entitle a product originating in the country, region or locality referred to.
The third element of the definition is that there must be a qualitative link between the product
and the geographical area: the “quality and characteristics” must be due solely or essentially to
the geographical environment; if the qualitative link is insufficient, that is, if the characteristic
qualities are not due essentially, but only to a small extent, to the geographical environment, the
name is not an appellation of origin but merely an indication of source; as for the geographical
environment, it can be natural factors, such as soil, climate or human factors, such as the special
proficient traditions of the producers established in the geographical area concerned.

Provisions of the TRIPS Agreement on Geographical Indications

Part II, Section 311 of the TRIPS Agreement is devoted to geographical indications. The
general norm of protection is provided by Article 22.212, which reads as follows:
“In respect of geographical indications, members shall provide the legal means for
interested parties to prevent:
 The use of any means in the designation or presentation of a good that indicates or
suggests that the good in question originates in a geographical area other than the
true place of the origin in a manner which misleads the public as to the
geographical origin of the good;
 Any use which constitutes an act of unfair competition within the meaning of
Article 10bis13 of the Paris Convention (1967).”

11 https://www.wto.org/English/docs_e/legal_e/27-trips_03_e.htm
12 Article 22 (2)Protection of Geographical Indications: “In respect of geographical indications, Members shall
provide the legal means for interested parties to prevent:”
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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
TRADE SECRET

Broadly, any confidential business information, which provides an enterprise a

competitive edge, may be considered as a trade secret. Trade secrets incorporate manufacturing
or industrial secrets or commercial secrets. The unlawful use of such information by persons
other than the holder is regarded as an biased practice and a violation of the trade secret.
Depending on the legal system, the protection of trade secrets forms part of the general concept
of protection against unfair competition or is based on specific provisions or case law on the
protection of trusted information.

The subject matter of trade secrets is typically defined in

broad terms and includes sales methods, distribution methods,
customer profiles and advertising tactics, lists of suppliers and
clients and manufacturing processes. While a final determination
of what information constitutes a trade secret will be contingent on
the circumstances of each individual case, clearly unfair practices
in respect of secret evidence include industrial or commercial
intelligence, breach of contract and breach of confidence.

Trade secrets are essentially of two kinds. On the one hand,

trade secrets may concern inventions or manufacturing procedures that do not meet the
patentability criteria and therefore can only be protected as trade An example of Trade Secret
secrets. This would be the case of customer’s lists or
manufacturing processes that are not satisfactorily inventive to be granted a patent (though they
may qualify for protection as a utility model). On the other hand, trade secrets may concern
inventions that would fulfill the patentability criteria and could therefore be protected by patents.

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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
In the latter case, the SME will face a choice: to patent the invention or to keep it as a trade
secret.

Some advantages of trade secrets include:

 Trade secret protection has the advantage of not being limited in time (patents last in
general for up to 20 years). It may therefore continue open-endedly as long as the secret
is not exposed to the public.
 Trade secrets involve no registration costs (though there may be high costs related to
keeping the information confidential).
 Trade secrets have instant effect.
 Trade secret protection does not require obedience with bureaucracies such as disclosure
of the information to a Government authority.

There are, however, some concrete disadvantages of protecting confidential business

information as a trade secret, especially when the information encounters the standards for
patentability:
 If the secret is embodied in an innovative product, others may be able to inspect, dissect
and analyze the invention (i.e. "reverse engineer" the invention) and discover the secret
and thereafter entitled to use it. Trade secret protection of an invention in fact does not
provide the exclusive right to exclude third parties from making commercial use of it.
Only patents and utility models can provide this type of protection;
 Once the secret is made public, anyone may have access to it and use it at will;
 A trade secret is more difficult to implement than a patent. The level of protection
granted to trade secrets varies suggestively from country to country, but is generally
considered weak, particularly when compared with the protection granted by a patent;
 A trade secret may be patented by someone else who developed the relevant information
by legitimate means.

LAYOUT DESIGNS OF INTEGRATED CIRCUITS

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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
 The layout-designs of integrated circuits are creations of the human mind. They are
usually the product of a massive investment, both in terms of the time of highly qualified experts
and financially. There is an ongoing need for the creation of new layout-designs which reduce
the dimensions of existing integrated circuits and concurrently increase their functions. The
smaller an integrated circuit, the less the material needed for its manufacture, and the smaller the
space needed to accommodate it. Integrated circuits are utilized in a large range of products,
including articles of everyday use, such as watches, television sets, washing machines,
automobiles, etc., as well as sophisticated data processing equipment.

Definition of Subject Matter of Protection

Article 214 of the Intellectual Property in Respect of Integrated Circuits (IPIC)
Treaty gives the following definitions:
“(i) ‘integrated circuit’ means a product, in its final form or an intermediate form, in
which the elements, at least one of which is an active element and some or all of the inter-
connections are integrally formed in and/or on a piece of material and which is intended to
perform an electronic function,
(ii) ‘layout-design (topography)’ means the three-dimensional disposition, however
expressed, of the elements, at least one of which is an active element, and of some or all of the
interconnections of an integrated circuit or such a three-dimensional disposition prepared for an
integrated circuit intended for manufacture ... ”

CONFIDENTIAL INFORMATION
Confidential information is defined as information that can be legally protected
and provides a business advantage to the owner of that information by virtue of the fact that it is
retained secret. The two fundamental requirements are that the information must have value by
virtue of being kept secret and it must be capable of being legally protected. The word
confidential information and trade secrets are identical. It can also be defined as that type of

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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
information, which is privileged information, classified information, or specific information of a
type for which there is a clear and convincing need to withhold from disclosure. It was remarked
in the case of Stephen John Coogan v News Group Newspapers Limited and Glenn Michael
Mulcaire that while confidential information might not be “property” as a matter of law, it is
often preserved as part of intellectual property.

People ought to keep secrets if they have. From nineteenth century, the courts have
established this simple moral percept into the form of legal liability, which is of considerable
range. This development has run counter to the traditional unwillingness of judges to adopt broad
proposition as ground rules for burden of liability, and they have added to face some of the
difficulties inherent in their unusual course. The passing of Human Rights Act 1998 and
recognition of states obligation to
confer a right of privacy, has caused the
breach of confidence action to twist of
a satellite that is establishing its own
orbit. On a different front, the elasticity
of breach of confidence has allowed
many issues to which it is germane to
be dealt with in the civil courts.

Confidential information as property

First, the property right typically gives owner the power not only to license but also to
transfer ownership and engage in other transactions with respect to the subject matter. For
established type of intellectual property such as patent, trademark, copyright etc. these basic
powers are defined in the governing statues. In case of assignment of know-how, the assignor by
itself remains the only person permitted to sue an outsider for misuse of it, which makes a critical
aspect of property missing.
Secondly, if confidential information is per se classified as reasonable property, when it
is misused the profits should be recoverable not just by the personal remedies of account or

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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
compensations but also by remedy of a fruitful trust in any observable asset establishing a
property.
Thirdly, the central significance given to the undertaking to respect the assurance makes
liability turn to initial personal compulsion.
It means that if the person with technical know-how assigns it or licenses it exclusively to
two different people in an unpredictable manner the receivers are each left to their rights in
contradiction of the provider of the know- how subject to any remedy which may independently
arise in law or equity directly against the other.

Subject matter capable of protection

The breach of confidence action lies in respect of technical, commercial, personal and
other information without alteration by subject. It has been accepted that outrageous or dishonest
material may be ineligible from protection just as it is not conferred copyright. An idea for
something yet to be expounded may attract legal protection as confidential information where
there is nothing that creates copyright. It is sufficient that the content of idea is clearly
recognizable, original, of potential commercial attractiveness and capable of being perceived in
reality and of potential commercial importance.
It is flawlessly possible to have a confidential document; be it a formula or something of
a kind, which is the result of work done by maker on material which may be available for the use
of anybody. However, what makes it trustworthy is the fact that the maker of the manuscript has
used his brain and thus produced a result, which can only be reached who goes through same
procedure.

Remedies Available

In India, only public or equitable remedies are existing for an action of breach of
confidence. The remedies available include the award of a ban “preventing a third party from
disclosing the trade secrets,” the reoccurrence of all “confidential and proprietary information,”
and recompense or damages “for any losses suffered due to disclosure of trade secrets The court

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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
may also order the party at fault to “deliver-up” such material. Criminal trial can be launched,
only against a person who, in pursuance of any of the powers deliberated under Information
Technology Act, 2000 has protected access to any information and discloses it without consent
of the person concerned. A maximum punishment of 2 years and a fine, which may extend to Rs.
1, 00,000 has been prescribed.
Injunctions may be interlocutory, temporary or permanent. The information may remain
confidential only for a limited period in such case the ban will not extend beyond that period.
Moreover, since the information alleged to be confidential may be of value to the plaintiff only
for a specified period, provisional injunction will ordinarily be granted only for a listed period
depending upon the circumstances and the nature of the confidential information.

The jurisprudence surrounding confidentiality responsibilities is still in its infancy in

India. It appears that confidentiality obligations, whether expressed or implied, will be enforced
against any revelation or apprehension during and after the tenancy of the agreement, provided
information exists independently, is not in the public domain and reasonable precautions to
preserve its privacy and sanctity have been taken. After an employee’s termination, onerous
provisions camouflaged as maintaining secrecy can be struck down and deemed unenforceable.
Without doubt, courts have attempted to adopt a balanced outlook and have promoted a case-by-
case approach. This has led to slight irregularities and resulted in uncertainty in the interpretation
of secrecy provisions in contracts. Even the TRIP’s mandates the member countries to prevent
undisclosed information from being disclosed to, acquired by, or used by others without accord.
Legislation in intellectual property, such as the Copyright Act and the Designs Act, has
been used to prevent the use of appealed confidential information. Of course, the courts have
upheld such policies only when the subject matter crosses the threshold of rights protectable
under the statutes.

The courts have predictable common law relating to confidential information and not
hesitated to hold certain agreements to be contracts of trust and faith. It has been suggested that
the right to hinder the use of confidential information is broader than the copyright law, though

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INTELLECTUAL PROPERTY RIGHTS (IPR) 1.3
the law of pledge is different.

There is no whisper of confidentiality in Indian criminal jurisprudence, however, there

are equivalent provisions such as offences of theft, fraud, criminal breach of trust, which has
been used to fill the vacuum and attract imprisonment or fines (sections 37915, 42016, 40617 of the
Indian Penal Code). Furthermore, the Information Technology Act envisages the disclosure of
any material containing personal information by a service provider without the permission of the
person concerned or in breach of lawful contract punishable.

Disclaimer: the study material mentioned in the module is for academics purpose to
provide information and understanding, it should not be interpreted as a legal advice or opinion.

15 Section 379 in The Indian Penal Code: “Punishment for theft.—Whoever commits theft shall be punished with
imprisonment of either description for a term which may extend to three years, or with fine, or with both.”
16 Section 420 in The Indian Penal Code, “ Cheating and dishonestly inducing delivery of property.—Whoever
cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter
or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable
of being converted into a valuable security, shall be punished with imprisonment of either description for a term
which may extend to seven years, and shall also be liable to fine.”
17 Section 406 in The Indian Penal Code, “ Punishment for criminal breach of trust.—Whoever commits criminal
breach of trust shall be punished with imprisonment of either description for a term which may extend to three years,
or with fine, or with both.”
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