Chapter - 2

INTELLECTUAL PROPERTY RIGHTS: AN OVERVIEW

2.1 INTRODUCTION

For nearly last two hundred years, neo classical economics had
recognized only two factors of production— labour and capital (Riley,
2003). This is now changing. Information and knowledge are replacing
capital and energy as the primary wealth creating assets, just as the
later two replaced land and labour 200 years ago. In addition,
technological developments in the 20th century have transformed the
majority of wealth creating work from „physically-based‟ to „knowledge-
based‟. Technology and knowledge are now the key factors of
production. With increased mobility of information and the global
work force, knowledge and expertise can be transported instantly
around the world, and only advantage gained by one company can be
eliminated by competitive improvements overnight. The only
competitive advantage a company may enjoy will be its process of
innovation-combining market and technology know-how with the
creative talents of knowledge workers to solve a constant stream of
competitive problems and its ability to drive value from information
(Chawla, 2008). The major challenges before any organization may
have to provide at their cost the service of intellectual property
management consulting firm for drafting/ prosecution of the
Intellectual Property (IP) applications and also provide adequate funds
for making payment for accessing the relevant IP databases for this
purpose. Thus, to make economics of knowledge as the greatest
strength of Indian economy, there would be need for creating an
ecosystem for promotion of particularly knowledge driven
entrepreneurship with major emphasis on creating an environment
and a system to provide due protection to the intellectual properties.

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This can be achieved by creating a stringent IPRs regime.

With the advent of the new knowledge economy, the old and
some of the existing management constructs and approaches would
have to change. The knowledge economy places a tag of urgency on
understanding and managing knowledge based assets such as
innovations and know-how. The time for grasping knowledge has
become an important parameter for determining the success of an
institution, enterprise, Government and industry; the shorter the time
better are the chances of success. IPRs have become important in the
face of changing trade environment, which is characterized by many
features namely global competition, high innovation risks, short
product cycle, need for rapid changes in technology, high investments
in research and development (R&D), production, marketing and need
for highly skilled human resources. Geographical barriers to trade
among nations are collapsing due to globalization, a system of
multilateral trade and a new emerging economic order. It is therefore
quite obvious that the complexities of global trade would be on the
increase as more and more variables are introduced leading to
uncertainties. Many products and technologies are simultaneously
marketed and utilized in many countries. With the opening up of trade
in goods and services, IPRs have become more susceptible to
infringement leading to inadequate return to the creators of
knowledge.

More than any other technological area, drugs and

pharmaceuticals match the above description most closely. Knowing
that the cost of introducing a new drug into the market may cost a
company anywhere between $300 million to $600 million along with
all the associated risks at the developmental stage, no company will
like to risk its intellectual property becoming a public property
without adequate returns. Creating, obtaining, protecting and
managing intellectual property must become a corporate activity in

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the same manner as the raising of resources and funds. The
knowledge revolution will demand a special pedestal for intellectual
property and treatment in the overall decision-making process (Saha,
2008).

Perhaps no other subject has evoked so much attention all over

the world particular in the developing countries like India as the IPR
consequent to the coming into force of „The General Agreement on
Tariffs and Trade Agreement‟ (GATT) and the establishment of „The
World Trade Organization‟ (WTO). In the Indian context integration of
its economy with the global economy is gaining momentum. This
process will not be completed unless the research and development is
also integrated with global research and development.

An intellectual property is increasingly recognized as a vital

asset of the business, its treatment on acquisition is of much
significance.

2.2 INTELLECTUAL PROPERTY RIGHTS (IPRs)

Intellectual property is a class of property emanating primarily

from the activities of human intellect. In other word, intellectual
property relates to information, which can be incorporated in tangible
objects and reproduced in different locations.

Intellectual property refers to the creations of the human mind, of

human intellect. In other words, intellectual property is a „product of
the mind‟ (Kumar and Philip, 2007). Intellectual property is that
property which results from the intellectual efforts of individuals or
organizations. The ownership of property of any kind is always
required to be protected in order to prevent such property from being
misappropriated or misused. The right associated with the protection
of this intellectual property is referred to as intellectual property
rights.

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 Intellectual property (IP) can be loosely defined as a creation of
the human mind, and intellectual property rights as legal rights
governing the use of such creations.

Intellectual property occurs in the form of new ideas,

techniques, products and processes with economic and commercial
potential. The movable and immovable property that a person own
cannot be used without explicit or implicit permission of the owner.
Unlike the author or the creator of the intellectual property should
have a right of permission and its use by others should be with the
permission of the author and hence need to be protected from being
infringed.

The four main types of intellectual property in India are patents,

trademarks, industrial designs and copyrights.

Patents for invention — new and improved products and

processes that are capable of industrial applications;

Trademarks for brand identity — of goods and services,

allowing distinction to be made between different traders;

Designs for product appearance — of the whole or part of a

product resulting from the features, lines, contours, colours,
shape, textile and/ or materials of the product itself and/ or its
ornamentation; and

Copyrights for material — literary and artistic material, music,

films, sound recordings, and broadcasts, including software and
multimedia. In addition, moral rights are the author's right to
integrity of the creation in its original form, to attribution, and
to prevention of unfavorable associations with the author's
creation (Canadian Association for Graduate Studies, 2008).

Intellectual Property Rights (IPRs), very broadly, are rights

granted to creators and owners of the works that are results of
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human intellectual creativity. These works can be in the industrial,
scientific, literary and artistic domains, which can be in the form of an
invention, a manuscript, a suite of software, or a business name.

There are various forms of intellectual property rights. IPR is a

collective term and include the following independent IP rights which
can be collectively used for protecting different aspects of an inventive
work for multiple protections:
1. Patents
2. Copyrights and related rights
3. Trademarks
4. Registered (industrial) design
5. Protection of integrated circuit (IC) layout design
6. Geographical indications, and
7. Protection of undisclosed information (Trade secrets)

In addition to these forms there are many other forms like utility
model, plant variety protection, etc. Out of these, patents, designs,
trademarks and copyrights are the most important and common
forms of IPR.

The protection of these techniques/ materials by patenting/ sui-

generis system is most essential. Today, most of all the countries
protect the intellectual property of its citizen and even the rights of the
citizens of one country will find protection in other countries as well.
„The Agreement on Trade Related Aspects of Intellectual Property
Rights‟ (TRIPS) is the outcome of such a requirement in WTO
framework and has been abridged in the form of the primer.

Intellectual Property Rights grant “Rights of Exclusion” to the

holder. TRIPS attempts to harmonize patent laws in its member
countries and also set up guidelines for minimum standards for
enforcement of these rights (Ganguli, 2001).

The Grant of IPRs ensures protection to the author, designer or

inventor against imitation and copying of the new ideas,
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designs, processes, products, devices and apparatus. The scope of the
term IPR as used under TRIPS is broader as seven types of IPRs are
envisaged under sections 1 to 7 and articles 9 to 39 of part II of GATT
94 negotiations. The corresponding Indian legislations have been
enacted and these are now in total compliance of TRIPS provisions
(Table 2.2).

India became signatory to „The Patents Cooperation Treaty‟

(PCT) in 1999 and has become a part of it. According to PCT, one can
take patent first for his nation and subsequently patent can be
staggered in other countries over 30 months. In latest amendment of
Indian Patent Act in 2005, regulations have been introduced to
account for the PCT provisions (Singh, 2009).

Table-2.2
Different Types of Intellectual Property Rights under TRIPS
and Corresponding Indian Legislations
Sec TRIPS Article Indian Legislation Amendment
Copyright and
1 9-14 Copyright Act 1957 1999, 2011
Related Rights
Trade & Merchandise
2 Trademarks 15-21 1999
Mark Act 1958
Geographical Geographical Indication
3 22-24 1999
Indications of Goods Act. 1999
4 Industrial Designs 25-26 The Design Act 1911 2000
(I) Patent Act 1970 1999,2002,
2005
(II) Protection of Plant 2001
5 Patents 27-34 Variety & Farmers‟
Right Act
(III) Seed Act 1966 2004
(IV) Biodiversity Bill 2002
Layout Designs (Topo-
6 graphics of Integrated 35-38 Layout Designs 1999
Circuit)
Protection of National Innovation
7 39 2000
Undisclosed Information Foundation (NIF)

The grant of IPRs encourages innovation and inventive activity

which promotes technical, industrial and economic development.
Besides, in corporate sector, Intellectual Capital (IC) is the prime
creator of economic value and accounts for 75% of market value of top

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global corporate. Intellectual capital consists of intangible factors like
human capital (management and employee), internal structured
capital (intellectual properties and processes) and relational structural
capital (brand, network and customers) (Gupta, 2002).

2.2.1 Patents

Protection of IPRs plays a dominant role in boosting up

invention and innovation in the economy. A patent is a legal
monopoly, which is granted for a limited time by a country to the
owner of an invention. Merely to have a patent does not give the owner
the rights to use or exploit patented invention. That right may still be
affected by other laws such as health and safety regulation or the food
and drugs regulation or even by other patents. The patent, in the eyes
of the law, is a property right and it can be given away, inherited, sold,
licensed and can even be abandoned. As it is conferred by the state, it
can be revoked by the state in certain cases even after grant or even if
it has been, in the meantime, sold or licensed.

Patents provide an incentive for the inventor to promote

inventive activity and helps in the commercialization of invention.
According to TRIPS agreement, patent rights are to be available for all
inventions whether products or processes in all field of technology
provided. They are:
1. New (novelty);
2. Non-obvious with respect to the prior art (Inventiveness); and
3. Are capable of industrial application (Applicability)

A patent is a document, issued, upon 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 only be exploited (manufactured,
used, sold, imported) with the authorization 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

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process. The protection conferred by the patent is limited in time
(generally 20 years) (WIPO, 2004).

Patents are legal authority given by Government to an individual

or organization conferring a right granted for the new inventions
employing scientific and technological knowledge. A patent is an
exclusive right granted by a country to the owner of an invention to
make, use, manufacture and market the invention, provided the
invention satisfies certain conditions stipulated in the law. Exclusive
right implies that no one else can make, use, manufacture or market
the invention without the consent of the patent holder. This right is
available for a limited period of time. In spite of the ownership of the
rights, the use or exploitation of the rights by the owner of the patent
may not be possible due to other laws of the country which has
awarded the patent. These laws may relate to health, safety, food,
security, etc. Further, existing patents in similar area may also come
in the way. A patent in the law is a property right and hence, can be
gifted, inherited, assigned, sold or licensed. As the right is conferred
by the Government, it can be revoked by the Government under very
special circumstances even if the patent has been sold or licensed or
manufactured or marketed in the meantime.

A patent awards an inventor the right to prevent others from

making, selling, importing or using the protected inventions without
authorization for a fixed period of time within a country. In return,
society requires that the application be published in sufficient details
to reveal how the technology works, by their increasing the stock of
public knowledge.

The patent right is territorial in nature; the rights conferred by

patent are defined in the patent law of a country. An Indian patent
does not give rights outside India and inventors/ their assignees will
have to file separate patent applications in countries of their interest,
along with necessary fees, for obtaining patents in those countries. A
new chemical process or a drug molecule or an electronic circuit or a

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new surgical instrument or a vaccine is a patentable subject matter
provided all the stipulations of the law are satisfied. The invention
must be disclosed in a specific format in a patent specification.

Term of the Patent

A granted patent confers on its holder the exclusive right for a

limited term (generally 20 years) rights to the new inventions
disclosed. The minimum period of protection required under the
TRIPS agreement is 20 years from the date of application is filed.

Patent must be periodically renewed up to the end of the term to

retain the rights from it. If not renewed periodically as required by the
statute, a patent becomes public property that can be used by anyone
without fear of infringement (Ganguli, 2001).

2.2.2 Industrial Designs

Industrial design refers to aesthetic creation determining the

appearance of Industrial products. The visual appeal is an important
factor, which influences consumer (Qaiser, 2009).

A design is an idea or conception as to features of shape,

configuration, pattern or ornament applied to an article, either in two
or three-dimensional. In short, a design in order to secure legal
protection must consist of a shape which is in three dimensions or of
a pattern which is in two dimensions and that the shape or pattern
must be applied to an article or articles. The industrial process or
means can be manual, mechanical or chemicals, separate or
combined. The main criteria for security protection for a design are
novelty and originality of the design which in the finished article
appeal and are judged solely by the eyes.

We see so many varieties and brands of the same product (e.g.

car, television, personal computer, a piece of furniture, etc) in the
market, which look quite different from each other. If the products
have similar functional features or have comparable price tags, the eye

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appeal or visual design of a product determines the choice. Even if the
similarities are not close, a person may decide to go for a more
expensive item because that item has a better look or colour scheme.
What is being said is that the external design or colour scheme or
ornamentation of a product plays a key role in determining the market
acceptability of the product over other similar products. If a person
has a good design that gives him/ her an advantage, then he/ she
must have a system to protect its features otherwise there would be
wide scale imitation.

Design as per the Indian Act means the features of shape,

configuration, pattern, ornament or composition of lines or colours
applied to any article — whether in two dimensional or three
dimensional or in both forms — by any industrial process or means,
whether manual, mechanical or chemical, separate or combined,
which in the finished article appeal to and are judged solely by the
eye; but it does not include any mode or principle of construction or
anything which is in substance a mere mechanical device. In this
context, an article means any article of manufacture and any
substance, artificial, or partly artificial and partly natural; and
includes any part of an article capable of being made and sold
separately. Stamps, labels, tokens, cards, etc cannot be considered an
article for the purpose of registration of design because once the
alleged design i.e., ornamentation is removed only a piece of paper,
metal or like material remains and the article referred to ceases to
exist. An article must have its existence independent of the designs
applied to it. So, the design as applied to an article should be integral
with the article itself (Saha, 2008).

To qualify for the design, it:

1. Must be a new or original design; and

2. Must not have been published in India prior to the date of

registration.
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Examples
— Designs as applied to shoes, TV, textiles, etc.
— Shape of Coca Cola bottle, etc.

Term of the Registration of a Design

The total term of a registered design is 15 years. Initially the

right is granted for a period of 10 years, which can be extended by
another 5 years by making an application and by paying a fee of
` 2000/- to the Controller before the expiry of the initial 10 years
period. The proprietor of design may make the application for such
extension even as soon as the design is registered. If design is not
periodically renewed as required by the statute, the registered design
becomes public property.

2.2.3 Trademarks

A trademark is an identification symbol/ distinctive sign used

by an organization to uniquely identify the source of its products/
services to his/ her consumer and to distinguish its products or
services from those of other entities as also its quality. A trademark is
visual symbol in the form of a word, device or a label applied to an
article of manufacture or commerce with a view to indicate the
purchasing member of the public about the origin of the manufacture
of the goods affixed with that mark. Trademarks distinguish such
goods, services from the goods manufactured by others in the trade.
In other words, a trademark enables a customer to distinguish the
products of one manufacturer from the others.

Trademarks may be one or combination of words, letters, and

numerals. They may also consist of drawings, symbols, three
dimensional signs such as shape and packaging of goods, or colours
used as distinguishing feature. Collective marks are owned by an
association whose members use them to identify them with a level of
quality. Certification marks are given for compliance with defined

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standards (Example ISO 9000). A trademark provides to the owner of
the mark by ensuring the exclusive right to use it to identify goods or
services, or to authorize others to use it in return for some
consideration (payment) (Saha, 2008).

A trademark, through its widespread and extensive use in

public, become popular and eventually results in acquiring an
exclusive right on the mark which is legally enforced by the owner of
the mark. The main criterion for security a trademark registration is
its originality.

When a „trademark‟ is registered, the owner will have the

exclusive right to prevent a person from using, without the owner‟s
consent, identical or similar signs for an identical or similar trade or
service.

The trademark used in connection with services is called

„service mark‟. These are used by hotels, restaurants, airlines, tourist
agencies, car rental agencies, laundries and cleaners. Example
KODAK, APPLE, ASHOKA, etc.

„Commercial names and designations‟ are generally names,

terms or designations which serve to identify and distinguish an
enterprise and its business activities from those of other enterprises. A
trade name identifies the entire enterprise and symbolizes the goodwill
and reputation of the business.

Examples
— Coca Cola adopted in relationship with soft drink;
— SONY applied to electronic goods, etc.

Term of a Registered Trademark

The initial registration and each renewal will be for minimum

period of seven years. There will be no maximum limit on the renewal.
It can be perpetually renewed from time to time. If the use of the

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trademark is a condition for maintaining registration, the cancellation
may take place only after a continuous non-use for at least three
years.

2.2.4 Copyrights

Copyright is a right, which is available for creating an original

literary or dramatic or musical or artistic work. Cinematographic films
including sound track and video films and recordings on discs, tapes,
perforated roll or other devices are covered by copyrights. Computer
programs and software are covered under literary works and are
protected in India under copyrights. Copyright grants exclusive rights
to the creators of original literary, scientific and artistic works.
Copyrights protect the original work of an author finding expression in
a tangible media such as books, computer program, engineering
drawings, etc. Such protection is automatically attained from the
moment of creation and prevents unauthorized use of creation,
reproduction, public performance, recording, broadcasting, translation,
or adaptation, and allows the collection of royalties for authorized use.
Copyright protection extends to expression of ideas and computer
programs which are also to be protected as literary work.

It should be understood that copyright laws protect only the

form of expression of ideas and not the ideas themselves. This means
protection against „copy of the form as it is into in which the original
work was expressed by the author‟. For example, many authors write
textbooks on physics covering various aspects like mechanics, heat,
optics, etc. Even though these topics are covered in several books by
different authors, each author will have a copyright on the book
written by him/ her provided the book is not a copy of some other
book published earlier. India is a member of the Berne Convention
for the Protection of Literary and Artistic Works (1948), an
international treaty on copyright. Under this Convention,

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registration of copyright is not an essential requirement for protecting
the right. It would, therefore, mean that the copyright on a work
created in India would be automatically and simultaneously protected
through copyright in all the member countries of the Berne
Convention. The moment an original work is created, the creator
starts enjoying the copyright. However an undisputable record of the
date on which a work was created must be kept. Again whereas the
protected inventions must be disclosed publicly in an official register,
a created work is considered protected as soon as it exists without
requiring any public registration. The copyright is thus the exclusive
legal right given to the originator or his/ her assignee for a fixed
number of years to print, publish, perform, film or record, literary
artistic or musical material and to authorize other to do the same.
When a work is published with the authority of the copyright owner, a
notice of copyright may be placed on publicly distributed copies. The
use of copyright notice is optional for the protection of literary and
artistic works. It is, however, a good idea to incorporate a copyright
notice. As violation of copyright is a cognizable offence, the matter can
be reported to a police station. It is advised that registration of
copyright in India would help in establishing the ownership of the
work. The registration can be done at the Office of the Registrar of
Copyrights in New Delhi. It is also to be noted that the work is open
for public inspection once the copyright is registered.

Copyright refers to artistic creation such as books, poems,

music, painting, film and technology-based works such as computer
programs and electronic database. Copyright is also referred to as
author‟s right. Copyright is a type of intellectual property, like
physical property, it cannot usually be used without the owner‟s
permission. The purpose of copyright is to allow creators to gain
economic rewards for their efforts and so encourage future creativity
and development of new material which benefits us all (Shenoy and
Suhan, 2007). Like the owner of the tangible property, the
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owner of the copyright protected work may use his/ her work as he/
she wishes. He/ she can prohibit or authorize reproduction. The
copyright holder has exclusive rights to authorize others to use the
protected works (e.g. reproduction, performing, recording,
broadcasting, translation, etc).

Provisions

India is a signatory to the Berne Convention for the protection of

literary and artistic works (1948) and Indian copyright laws conform
to all the WTO requirements. The TRIPS agreement requires member
countries to comply with the substantive provisions of the Berne
Convention in respect of copyrights and related rights.

In India, the right is protected by Copyright Act of 1957, as

amended in 1983, 1984, 1992, 1994 and 1999. Under the Act,
registration of a work is not compulsory. There is no requirement of
completion of any formality or registration. The particulars of the work
can simply be entered in Register of Copyrights to constitute prima
facie evidence of ownership of work (Kumar and Philip, 2007).

Examples

— Poems, artistic drawings, paintings, computer software/

programs, etc.

— Computer programs are also protected by copyrights, as

software source and code have been defined as a literary
expression.

Terms of Copyrights

The Indian copyright laws provide for greater protection to

copyright than in required under WTO obligations in some matter
such as period of copyright protection (60 years in India). The total
term of protection for literary work is the author‟s life plus sixty years.

If published within the life time of the author of a literary work the

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 term is for the life time of the author plus 60 years.

For cinematographic films, records, photographs, posthumous

publication, anonymous publication, work of Government and
international agencies, the term is 60 years from the beginning of
the calendar year following the year in which the work was
published.

For broadcasting, the term is 25 years from the beginning of the

calendar year following the year, in which the broadcast was made
(TIFAC, 2001).

In the 21st century copyright and copyright related rights are

regulated by International agreements (Hofman, 2009). Additionally
India is party to Geneva Convention for Protection of Rights
Procedures of Phonograms and to Universal Copyright Convention
(1952). India is also an active member of World Intellectual Property
Organization (WIPO), Geneva and UNESCO.

2.2.5 Geographical Indications

Geographical Indications (GI) refer to such indications which

identify goods originating in a particular geographical region to which
distinct quality or characteristics is attributed (Article 22, Para 1), like
Basmati rice, herbal medicinal plants, etc, in India. Geographical
indication is in relation to goods originated or manufactured in the
territory or a region or a locality (name of a town, a region or country)
where a given quality/ reputation or other characteristics of goods is
attributed to its geographic origin. In case of manufactured goods one
of the activities either the production or processing or preparation of
goods concerned takes place in such a place, region or locality
(Appellation of origin). Appellation of origin is a specific type of
geographical indication which may be due exclusively or essentially to
its place of origin or may be because of its peculiar conditions e.g. soil
in that area. Geographical indications reinforce the regional and
national identity of select products and system can help developing

45
countries empower underprivileged workers and small entrepreneurs.

Geographical indications are indications, which identify a good

as originating in the territory of a country or a region or locality in
that territory where a given quality, reputation or other characteristic
of the goods is essentially attributable to its geographical origin. There
are certain products which are easily identified as typical of a
geographical region either by tradition or by practice. This gives the
rights to producers only from these regions to name the produce by
these names. Produce from any other region cannot be named by
these geographical indications.

GI refers to the specific geographical origin and posses qualities

or a reputation that are due to that place of origin. Agriculture
products have qualities or a reputation that are due to that place of
origin. Agriculture products have qualities typical to their place or
production because of climatic, soil and other related factors e.g.
Dehraduni Basmati rice. Similarly these may also refer to non-
agricultural products e.g. Swiss watches because of specific
manufacturing skills and traditions typical to Switzerland.

The members will prevent the use of designation or presentation

of a product which indicates that the product originates in a place
different from where it actually originates misleading the public as to
the true geographical origin. In respect of wines and spirits, in
particular, it is provided that such geographical indication will be
prevented even if the true origin of the product is indicated. For
example, Scotch whisky made in country ABC will not be permitted.

In order to provide better protection to geographical indication,

the Geographical Indication of Goods— Registration and
Protection Act (1999) has come into force w.e.f. 15th September,
2003 and Central Government has established the “Geographical
Indication (GI) Registry” at Chennai. After GI is registered, any person
claiming to be the producer of goods designated by the registered GI

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can file an application for registration as an authorized user. The
Geographical Indication Act is to be administered by the Controller
General of Patents, Designs and Trade Marks who is the Registrar of
Geographical Indications (Singh, 2009).

Examples
— Basmati rice, the products and its characteristics are
identified as originating from India or Pakistan;
— Scotch, identified as coming from Scotland, champagne, a
typical produce of France, etc.
— Sambalpuri cloth, cloth designed and manufactured at
Sambalpur (Orissa).

Terms of Geographical Indications Protection

The registration of geographical indication shall be for a period

of ten years but may be renewed from time to time by payment of the
renewal fees. In India, a geographical indication may initially be
registered for a period of ten years, and it can be renewed from time to
time for further periods of 10 years. Indian law place certain
restrictions in that a registered GI is not a subject matter of
assignment, transmission, licensing, pledge, mortgage or any such
other agreement (Ravindran and Mathew, 2009).

2.2.6 Protection of Integrated Circuit Layout Designs (ICs)

The layout designs of integrated circuits (ICs) are creations of

human mind. These involve huge financial resources and expertise.
The high cost of creation of such layouts design and the relative ease
of copying are the main reason why such designs need protection.

It provides protection for semiconductor IC layout designs.

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India has Semiconductor Integrated Circuits Layout Design Act,
2000 to give protection to IC layout design. Layout design includes
a layout of transistors and other circuitry elements and includes lead
wires connecting such elements and expressed in any manner in a
semiconductor IC. Semiconductor IC is a product having transistors
and other circuitry elements, which are inseparably formed on a
semiconductor material or an insulating material or inside the
semiconductor material and designed to perform an electronic
circuitry function.

An IC layout design cannot be registered if it is:

1. Not original;

2. Commercially exploited anywhere in India or in a convention

country;

3. Inherently not distinctive; and

4. Inherently not capable of being distinguishable from any other

registered layout design.

The above Act, if undertaken without the authorization of the

rights-holder, must be considered unlawful reproduction of a
protected layout-design, importing, selling or otherwise distributing
for commercial purposes a layout-design or an integrated circuit
incorporating a protected layout-design or an article incorporating
such an integrated circuit. Those persons who might have purchased
such a product without knowledge of illegality are free from legal
consequences but they must pay to the rights-holder a reasonable
royalty. There are some exceptions to the right of protection for
example, the acts of reproduction for private purposes or for
evaluation, analysis, research or teaching, etc. Reproducing,
importing, selling, distributing the IC layout design for commercial
purposes only constitutes infringement. A person when creates
another layout design on the basis of scientific evaluation of a

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registered layout design shall not be causing any infringement. An
innocent infringer must be free from liability, but once he has received
the notice of infringement, he is liable to pay a reasonable royalty.

The essential provisions for protection of layout-designs of

integrated circuits as contained in the relevant multilateral agreement,
viz., the Treaty on Intellectual Property in Respect of Integrated
Circuits (commonly known as the Washington Treaty) have been
included in this agreement (Singh, 2009).

Terms of Protection for Semiconductor IC Layout Designs

This registration is valid for a term of ten years from the date of
filing an application for registration or from the date of first
commercial exploitation anywhere in the world, whichever is earlier.

Semiconductor Integrated Circuits Layout-Design Registry of

India is currently located in New Delhi, and comes under the purview
of Department of Information Technology (DIT), Ministry of
Communications and Information Technology (IISc, IP Cell, 2010).

2.2.7 Protection of Undisclosed Information

Trade secret or undisclosed information is any information that

has been intentionally treated as secret and is capable of commercial
application with an economic interest. It protects information that
confers a competitive advantage to those who possess such
information, provided such information is not readily available with or
discernible by the competitors. They include technical data, internal
processes, methodologies, survey methods, a new invention for which
a patent application has not yet been filed, list of customers, process
of manufacture, techniques, formulae, drawings, training material,
source code, etc. Trade secrets can be used to protect valuable “know
how" that gives an enterprise a competitive advantage over its
competitors.

49
 Trade secret remains confidential for indefinite period of time as
per the will of the proprietor provided the security and its
confidentiality is not breached (Business Knowledge Resource
Online, 2010).

Provisions

The WTO obligations require member countries to protect trade

secrets (undisclosed information). The WTO obligations require
suitable legislation to be in place, which enables persons having such
information will have the right to prevent such information lawfully
within their control from being disclosed to acquired by or used by
others without their consent in a manner contrary to honest
commercial practices. Similarly, they will also have the right to
prevent such information being disclosed to or acquired by others
without their permission. The condition is that such information
should be secret, it should have commercial value because of secrecy
and the person having the information has taken reasonably
implications.

Protection of undisclosed information is least known to players

of IPRs and also least talked about, although it is perhaps the most
important form of protection for industries, R&D institutions and
other agencies dealing with IPRs. Protection of undisclosed
information/ trade secret is not really new to humanity; at every stage
of development people have evolved methods to keep important
information secret, commonly by restricting the knowledge to their
family members. Laws relating to all forms of IPRs are at different
stages of implementation in India, but there is no specific legislation
regulating the protection of trade secrets in India. The Contract Act of
1872 would however cover many aspects of trade secrets.

A trade secret is a valuable piece of information with the

essential requirement that the information be treated as such i.e. as a
secret. The value of a trade secret resides in the fact that

50
competitors or other interested parties do not have access to it.
Therefore, a trade secret must be kept secret so that no one could,
without the consent of the owner, can acquire it. Trade secrecy is
basically a do-it-yourself form of protection. You do not register with
the Government to secure your trade secrets. The only way to acquire
it without the consent of the owner would be through devious or
unlawful means. The owner has the exclusive right to use/ exploit a
trade secret as long as it remains a secret. As a result, theoretically
speaking, the term of a trade secret could be indeterminate or infinite.
It is said that the trade secret of Coca-Cola still has not entered the
public domain despite the fact that the common ingredients of Coca-
Cola are known. A chemical composition falling in this category need
to be protected through a trade secret rather than patent which is a
publicly known document. It is usually said that the term of the trade
secret relating to a machine tool is only as long as the company keeps
it internal secret. The moment the product is in the market, many
people will know how to copy the product and the moment the
product is copied the trade secret associated with the copied aspects
will no longer remain valid and secret, hence the protection will be lost
and the term of the protection will be over. By and large, this would be
true for design features but trade secret can be maintained about say,
composition of materials used and the process conditions adopted for
manufacturing (Saha, 2008).

Example

— Trade secrets include formulae, patterns, methods,

programs, techniques, processes or compilations of
information that provide one‟s business with a competitive
advantage. The owner of a trade secret may recover damages
resulting from the improper disclosure or use of its trade
secret by others.

Terms of Protection of Undisclosed Information

51
 Trade secret protection exists as long as the information is kept
secret or confidential by its owner and is not lawfully and
independently obtained by others.

2.2.8 Plant/ Animal Variety Protection/ Breeders Right

Like patent, copyright, trademark and industrial design

protection a special protection for new plant varieties is available. On
the subject of protection of plant varieties, there is a multilateral
agreement at present; popularly called UPOV 1978 (UPOV stands for
Union Internationale four la Protection des Obtentions Vegetales, i.e.
International Convention for the Protection of New Varieties of Plants).
The Act of UPOV Convention is 1991 save this important protection to
the plant breeders. The UPOV Office is situated in Geneva and it
coordinates the protection of new plant species. There is a debate in
many countries that the plants developed do not satisfy the non-
obvious requirement in a patent application system as existing
techniques are used and the new breed is obvious. Therefore a unique
„sui generic‟ system is utilized for the protection for 25 years in case of
trees and wines while the protection for other plants is 20 years (BITS,
2007).

TRIPS Provisions of WTO Agreement makes it mandatory to the

member countries to provide protection for new plant varieties. TRIPS
provisions have given the member countries two options for the
protection of new plant varieties:

(i) under the patent law itself; and

(ii) by a separate system (called sui generic system).

India has opted second category namely „sui generic‟ system.

Accordingly, the Indian Parliament has finally passed „The Protection
of Plant Varieties and Farmers Right Act 2001‟.

2.2.9 Utility Models

Utility models involve some of the inventions in the

52
mechanical field. The objects of utility models are sometimes
described as devices for useful objects. These types of inventions are
also referred to as „petty inventions‟. As the name suggests, the degree
of inventive step required in these types of inventions are usually very
small as compared to that required for the inventions to be protected
by patents.

The maximum term of protection under this category of invention

is generally shorter than that available in the case of patents. The utility
model system facilitates creating a culture of creativeness and builds up
the mind for enhancing creativity (inventing).

There is no utility model law in India.

2.2.10 Protection of Living Organisms

In the recent times — due to the dramatic developments in the

ability to select and manipulate genetic materials, interests have been
developed in the commercial use of living organisms. When the patent
system was evolved many years ago, it was the presumption that
technology can be developed only using the tools of physics, chemistry
and engineering. The possibility of using the tools of biology was not
recognized. Further all matters connected with life were presumed to
be the property of the almighty God.

Human interventions for the development of inventions

employing living matters were to be given recognition or importance.
But during the years consequent on the development of technologies
based on tools of biological sciences such as microorganism to
produce industrial products such as alcohol, enzymes, antibiotics
resulted in the recognition of such tools and slowly the steadily
patents covered the inventions in the areas of biotechnology also.

According to the TRIPS provisions, all member countries should

provide protection for new microorganisms. Accordingly in the Patent
Amendment Act (2002) passed by the Parliament provides protection

53
for new microorganisms.

2.2.11 Protection to Microbiological Inventions

In 1873, LOUIS PASTEUR was granted patent by US (US

141072) for claim on yeast free from organisms or germs of disease as
an article of manufacture and recognizing microorganisms as handy
work of nature. Thus biological systems can have effective written
description, principle of operability and reproducibility of written
instructions. Indian Patent Act 1970 do not patent animals and
plants. However, industrial processes using microorganisms such as
in fermentation, antibiotics, waste matter degradation, etc can be
patented. Also patentable are the processes for producing new
microorganisms through genetic engineering and the products that
result out of this process, such as microorganisms including plasmids
and viruses, if they are non-living (Singh, 2009).

In 1971, Anand Chakrabarty was granted patent on modified

bacteria that digests hydrocarbon. The patent was claimed on bacteria
itself, its method of production and introduced vector. The bacteria eat
away oil spills. Under TRIPS Article 27, sub-section 2, patents are
granted on the utility function of the gene i.e. the sequence or
Expressed Sequence Tag (EST) can be patented if it is useful. The
United States Patent and Trademark Office (USPTO) has now included
a new section in its „Manual of Patent Examining Procedures‟, where
by microorganisms qualify for patenting if it is shown that the hand of
man has been involved in their procurement (Singh, 2009).

Microbiologists have accepted scheme of classification such as

„Bergey's Manual for Protection of Microorganisms‟. In 1949, the
USPTO recommended deposit of microorganism with a culture
collection, which is given an accession number of the deposit of a
culture. World Intellectual Property Organization (WIPO) in 1973
worked on procedure of deposition which leads to signing of „The
Budapest Treaty on the International Recognition of the

54
Deposit of Microorganisms‟ for the purpose of patent procedure.
Amendment of 2005 in Indian Patent Act also recognized Budapest
Treaty and procedure of culture deposition for the purpose of Patent
on microorganisms.

In India, national depositories for fungi, algae, bacteria, cells,

tissue culture organism, etc have been established at Delhi, Chandigarh
and Pune. Agriculture will be affected if our efforts to develop bio-
fertilizers and bio-pesticides, both based on microorganisms are
hindered by foreign patents.

2.2.12 Bio-Diversity Protection

In „The International Convention on Biological Diversity‟ (CBD)

signed at Rio in 1992, nations agreed to recognize the sovereign rights
of nations with respect to their genetic resources. The transfers of
genetic resources will be made under material transfer agreements
designed to protect source nations' interests in any resulting profits. If
a country wants biological resources from another country, it can get
them only with „prior informed consent‟. Likewise others, only with the
consent and involvement of the concerned community and after
entering into a benefit-sharing arrangement, can use community
knowledge. Under the compromises of the CBD, this sovereign right
applies only to genetic resources possessed in in-situ conditions.
Resources already outside of the nations, as in international
repositories, are not subject to such rights. The task of registration
and conservation of plants and animal genetic diversity has been
entrusted to National Bureau of Plant Genetic Resources (NBPGR),
New Delhi and National Bureau of Animal Genetic Resources
(NBAGR), Karnal, respectively (Singh, 2009).

The National Bio-diversity Bill 2002, seeks to safeguard the

country‟s biological resources from being destroyed and stolen, and
empower the tribal, farmers and the like who protect our genetic
wealth. The legislation prohibits transfer of Indian genetic

55
material outside the country without the specific approval of the
Government. It provides for establishment of Bio-diversity Heritage
Sites and funds at national, state and local levels to support
conservation and benefit sharing. A National Bio-diversity Authority
(NBA) shall be set up which will scrutinize proposals for transfer of
genetic resources and guide the center on conservation, sustainable use
and benefit sharing.

The 30 nation trading bloc of which India is a leading country,

has evolve a strategy in which an applicant for the patent relating to
biological materials or traditional knowledge would have to provide
certain information as a precondition to acquiring patents rights. This
would include international disclosure of biological origin or evidence
to show that traditional knowledge holder is aware and equitable
benefit sharing under the natural regime of country of origin has been
settled. Thus various Governments would turn down patent
applications, if knowledge about the „innovation‟ is already in public
domain and shall be treated as „prior art‟. India is pursuing similar
deals of international disclosure of biological origin with 11
international patent search agencies. It is a low cost strategy for
patent opposition and benefit sharing is only a distant possibility.

2.3 IMPORTANCE OF IPRs IN THE MODERN ERA

It is being increasingly acknowledged world over that

competitiveness of an enterprise and its ability to capture the market,
depend largely on its ability to manage „internal‟ environment on
developing innovative technologies. The development of new
technologies and industries not only depend on the ingenuity of the
scientists, engineers and others but also on investments particularly
on research & development and setting up of new enterprises. The
investments costs in research and development is also increasing
rapidly along with the competitiveness (Subbaram, 2003).

56
 The potential knowledge as a creator wealth is gaining currency
all around the world. But only knowledge that is protected or
protectable can have the potential of wealth creation. The inclusion of
Intellectual Property Rights in the form of Trade Related aspects of
Intellectual Property Rights is an indication of this realization.
Integration at a global level will require paying urgent attention to
enhance the levels of innovations and creativity substantially.
Innovation is a defining trait of successful organization.

2.3.1 IPRs and Value Generation

"A good idea is seldom enough to succeed in today’s competitive

market. Delivering value in the market place and securing
worldwide IPRs are the key differentials in competitiveness"
(Prabhuda Ganguly).

Leading companies are distinguished by their success in

managing the innovations. Meaningful national policies on intellectual
property rights largely aid in the building up of a nation's innovation
tempo and spirit. The most effective way to survive and succeed in
global market has not been explored by most of the Indian companies.
During the last decade, the CEOs were judged on their ability to
redesign. Now the trend is different, they will be judged on the front of
core competence. The global leadership is determined by core
competencies and companies must gear themselves up to build these
competencies. A global competitive advantage exists when a company
can differentiate itself from its competitors, thereby succeeding not
only by making profits but also by creating mind set among the global
customers. The importance of IPRs in business strategy can no more
be ignored. Intellectual property is a valuable asset that drives the
business strategy to create revenue stream, while it also fuels a
nation's growth. It acts as a driver of business strategy, constitutes a
valuable business asset, generates steady revenue stream and acts as
a catalyst of growth (Singhal, Gupta and Kohli, 2007).

57
2.3.2 Driver of Business Strategy

An intellectual property strategy defines the principles that

intellectual property rights are designed to serve and the way patents
matter and the other way intellectual property issues are handled
within the enterprise. The purpose of patent policy is to support the
business operations of an enterprise. Neglecting it may turn into a
threat to development in an internationally expanding business.

If we look at the definition of business strategy, the importance

of IPRs will be apparent. Business strategy refers to those set of
perspective management measures that are taken with a view to
ensuring the survival and long-term success of an enterprise in a
competitive environment. It aims at distinguishing itself from all kinds
of business planning. There is a sole purpose of strategic planning
and it is to enable the company to gain as effectively as possible a
sustainable edge over its competitors. According to Kenichi Ohmae in
The Mind of The Strategist "What business strategy is all about, what
distinguishes it from all other kinds of business planning is, in a
word, competitive advantage. Without competitors, there would be no
strategy, for the sole purpose of strategic planning is to enable the
company to gain, as effectively as possible, a sustainable edge over its
competitors. Business strategy/ corporate strategy, thus implies an
attempt to alter companies' strength relative to that of its competitors
in the most effective way."

The competitive advantage of firms in today‟s scenario stems not

from the market position but from difficulty to replicate knowledge
assets and the manner in which they are deployed because easy
imitation leads to rapid dissipation of supernormal profits. Intellectual
property can alter competitive landscape. In most industries, IPRs,
especially patents and their exploitation, hold the key to significant
development and commercialization of new products. Therefore,
business now-a-days attempts to have an intellectual property

58
strategy as part of the corporate planning and strategy. According to
Porter, there are three underlining principles that define a good
strategy and intellectual property rely on it:

A good strategy is concerned with the structural evolution of the

industry as well as with the firm's own unique position within
that industry;

A good strategy makes company different, giving the company a

unique position, involving the delivery of a particular mix of
value of some array of customers, which represents a subset of
the industry; and

It is not good enough to be different; a company has to be

different in ways that involve tradeoffs with other ways of being
different. That is, if a company wants to serve a particular target
customer group with a particular definition of value, this must
be inconsistent with delivering other types of value to other
customers.

In this turf of being different and safe, new innovations should

be protected, using the tools of IPR to convert them to intellectual
assets that have a potential and realizable value. It should be
appreciated that the realizable value of intellectual property relating to
the potential value of intellectual property increases as the innovation
moves from the development of idea to marketing. Intellectual
property can help drive business strategy by changing competitive
landscape. It can be used as a tool for gaining competitive advantage.
Take the example of the portfolio of 35 patents that protected Gillette
mach “it raises the entry barrier for competitors wanting to enter the
triple blade razor market.” Patent licensing has generated $120 billion
in revenue in 2000; IBM licensing revenue grew from $31 million in
1990 to $1 billion in 2000. Stanford University makes $87 million
through licensing fees of just one basic biotech patent (Singhal,
Gupta and Kohli, 2007).

59
2.3.3 Valuable Business Asset

Investors generally prefer companies which have marketability

that provides future gains. Intellectual property gives recognition to
the company and increases the value of the firm. This is an important
reason because of which investors invest in such companies. We can
say that investors‟ value intellectual property and the company can
use these as a valuable business asset. Take the example of Microsoft
which acquired web TV for $125 million primarily for its 35 patents
that cover transmission of Internet over television. Intellectual
property also helps in raising venture capital — takes the case of Tri
CN Inc, a leading developer of semiconductor interface technology
which raised over $4.5 million on the basis of its intellectual property
assets (Singhal, Gupta and Kohli, 2007).

2.3.4 Revenue Stream

Intellectual property can generate huge financial gains. Several

small companies with niche technologies may be partnered by very
large companies to market their product(s) internationally and it can
generate revenue. Other sources of revenue yield from intellectual
property could be from:

Royalty claimed on use of the intellectual property during its

duration or validity;

Enforcement revenues (settlement and court awarded damages).

The Indian companies need to file for patents to ensure they are
not infringing on the IPRs of other companies; and

Returns on investment into IP through valuation based on

potential future earnings.

2.3.5 Catalyst of Nation's Growth

The role of intellectual property in economic development

involves initiating and constituting change in the structure of
business and society. One theory of economic growth depicts
60
innovation as key not only in developing new products (or services) for
market but also in stimulating investment interest in new ventures
being created. Demand is a central prerequisite for business and also
for new products and methods. Consumer buy new products and
industries require better and more efficient equipment to keep up with
the domestic and international competition. To make a product
succeed, enterprise needs inventions, product development and
aggressive marketing. New products also have great impact on
employment as they secure existing jobs and create new ones.
Innovations change the fabric of the economy and facilitate an
improved standard of living and the creation of new jobs. Growth of
the economy is largely based on know-how and jobs requiring
expertise (Singhal, Gupta and Kohli, 2007).

2.4 BENEFITS OF IP SYSTEM, ESPECIALLY PATENT SYSTEM

Amongst the intellectual property system commonly known as

IP system, patents can be said to be the most common, important and
complicated one. This is because of its technical-cum-legal nature and
the widest and the strongest legal protection one can secure.

The benefits of IP system are, therefore, explained with reference

to patent system. However it should be kept in mind that similar
benefits are also there in other species of IP.

2.4.1 Patents Are Very Useful

As they can be utilized as devices to advance knowledge and to

bring new knowledge eventually into the public domain.

As instruments of competitiveness by the enterprises against

potential or actual competitors and by the Governments in their
bid to strengthen their own countries against foreigners.

2.4.2 Patents Encourage Inventive Activities in a Country

A patent system contributes to the stimulation of inventions in

the following ways —
61
 i. Rights accrued to work the invention covered in a patent for a
limited period of time provides an important incentive for inventive
and innovative activities. If the inventions, which are the fruits of
research & development (R&D), are not protected by patents, they
would be available for free exploitation by anyone, including those
who have not invested in R&D. The inventive organization and the
personnel, under these circumstances, will be placed in a
disadvantageous position.

ii. A patent system of rewarding the inventor and/ or the patentee is

based on the idea that the grant of monopoly will automatically
secure to him/ her a reward which is commensurate with the value
of the intellectual input provided and the investment made for the
development of the invention. In theory, if the invention is
commercially good, the inventor should be able to exploit it or sell
the patent, thereby making profit. If, on the other hand, it is not
commercially good, he/ she would receive nothing. In practice,
even if the invention is not good, owing to the factors beyond the
control of the inventor, the inventor might not be able to make a
profit out of his patent. On the other hand, in certain other cases,
the reward of the inventor obtained for his/ her invention might be
out of all proportions. But the desire for economic reward is
undoubtedly an important factor for activating and stimulating
creative activities.

iii. If the patentee has no financial resources to work the invention

commercially, he can grant license or assign the rights in the
patent to others for its commercialization and obtain financial
reward.

iv. Securing patents will help the inventor (patentee) to make his
invention commercially viable with the assistance of a third party,
if required, with the legal protection on the invention. Such a
position protects the inventor from unfair competition.

62
 v. Securing a patent would enable the inventor to establish an official
record of the inventorship.

vi. In order to obtain patent, the invention has to be disclosed in detail

in the patent document (specification). The patent law also
stipulates that the invention should not be made open to public
before the date of filing of the application for patent. Therefore, in
most cases, the information contained in a patent document is the
first available information on the particular subject, which is not
available from any other source. Therefore the patent documents
are richest, latest and unique source of technological information
in the world.

vii. The information contained in the patent documents published

anywhere in the world can be freely used for R&D purposes at any
point of time anywhere in the world, including the country which
has granted the patent and where it is still in force. Such a use will
not constitute an infringement. A patent, which has lapsed,
become public property and therefore can also be commercially
utilized by any person interested.

viii. Thus the patent system enables the dissemination of valuable

technological information to the benefit of the society.

ix. The inventor (patentee) can secure a patent for the invention
developed and if desired make the said protected invention to the
public and/ or interested person freely for exploitation without
demanding any benefits. In such a situation, if somebody misuses
or abuses the rights in the patent, the inventor (patentee) can
initiate legal proceedings for preventing such misuse or abuse. On
the other hand, if such protection has not been secured, then the
inventor will remain as a silent spectator for the abuse or misuse of
the invention.

x. The country which grants patents can take advantage of the patent
system to improve its economic status. To take advantage
63
 the country has to satisfy the following factors.

2.4.3 The Country Must Be Technologically Advanced

In other words the country should have adequate facilities both

by way of qualified and experienced personnel and infrastructure to
commercialize the invention covered in the patent and thereby derives
economic and other benefits. Some of such facilities are —

The degree of diffusion of scientific and technological knowledge

available in the country;

The number of personnel available having the proficiency for

exploitation of the invention (technology);

The infrastructure available for the commercial production based

on the invention technology;

The strength of investment; and

Appropriate environment for the working of the invention in the

country, etc.

Under the circumstances explained above, the patent system

would not yield the same results, as in the case of a developed country
when applied to a developing country or under developed country.

As mentioned earlier, similar advantages can also be accrued in

respect of other species of IP.

2.4.4 Enhancing Competitiveness Through IPRs Protection

The survival of small-scale industries and their ability to

enhance competitiveness will depend heavily on how effectively they
are able to imbibe innovation technology. It depends on the ability to
manage technology. The companies that dedicate time and resources
for protecting their intellectual property can enhance their
competitiveness and efficiency in a variety of areas. Intellectual
property protection will help in:

Preventing competitors from copying or closely imitating a

64
 company‟s products or services;

Creating a corporate identity through trademark(s) and branding

strategy;

Negotiating licensing, franchising or other IP-based contractual

agreement;

Increasing the market value of the company;

Acquiring venture capital and enhancing access to finance; and

Obtaining access to new markets.

Finally, it can be said that inventions and innovations are

crucial to Indian economy for successfully participating in a highly
competitive global market. A well functioning national intellectual
property system will contribute to raise inventions and innovations. It
will also serve the Indian economy by providing an impetus for
upgrading the technological base of production, which will encourage
creating and exchanging technology (Kumar and Philip, 2007).

2.5 CURRENT GLOBAL IPR SCENARIO

The global IPR scene is in a process of dynamic transformation.

Business pressures are driving corporate to aggressively protect their
derived, acquired and created knowledge to forge leadership position
in the market. The major shift in emphasis has been to view global
markets as playing grounds by exploiting transnational multi-sourcing
of expertise, material and manufacturing facilities.

As patents help to build fortresses around inventions that are

novel, non-obvious with respect to prior art and display some
usefulness or industrial applications, there is an increasing demand
for patenting the inventions all around the world. Under the Patent
Cooperation Treaty (PCT), member countries are filing patent
applications in several member countries of PCT without any loss of

65
priority date (Fig. 2.5).

The Patent Cooperation Treaty is a multilateral treaty entered

into force in 1978. Through this treaty, an inventor of a member
country (contracting state) of PCT can simultaneously obtain priority
for his/ her Invention in all/ any of the member countries, without
having to file a separate application in the countries of interest, by
designating them in the PCT application (Patent Facilitating Centre,
2010). The PCT provides an international system for filing patent
applications. The PCT procedure consists of an international phase
followed by a national or regional phase. There are total 144
contracting states member countries under the PCT till Sept 2011.
India joined the PCT in December 7, 1998 (PCT, 2011).

Figure 2.5 depicts the global demand for patents filed through
PCT as the total number of PCT international applications filed
worldwide from 1990 to 2006 are increasing.

Figure 2.5
Trends in the PCT International Applications Around the World

Source: WIPO Statistics (http://www.wipo.int)

Intellectual property protection is an important tool for

66
countries at every stage of development and a proven incentive for
domestic and foreign investment, technology transfer, economic
growth, and high-paying jobs in every area of technology.

For meeting challenges arising out of the new intellectual

property regime and to drive maximum benefits from the intellectual
wealth of nation, the innovative and creative activities have to be
stimulated, encouraged, protected and exploited.

2.6 STRENGTHENING OF INTELLECTUAL PROPERTY REGIMES

Intellectual property is an aspect of property rights, which

augments the importance of know-how assets. Knowledge assets are
often inherently difficult to copy; moreover, like physical assets, some
knowledge assets enjoy protection against theft under the intellectual
property laws of individual nation states. These laws typically embrace
patents, trademarks, trade secrets, and copyright. Intellectual
property systems have been strengthened since 1980s. Moreover,
intellectual property is not just important in the new industries such
as microelectronics, biotechnology and the internet. It remains
important in pharmaceuticals and chemicals and receiving renewed
interest in more mature industries such as petroleum and steel.

2.7 CONCLUSION

The modern IPR tool kit provides a range of distinct legal

platforms for protection of the fruits of human creativity that span
from innovations in technical fields, products and services, literary/
artworks, performances, computer programs, etc. It should be
appreciated that each of these instruments is governed by a set of
laws with frameworks that offer varying degrees of protection, rights,
obligations, enforcement procedures and reliefs.

Therefore, every country interested in protecting intellectual

67
property within its geopolitical control, has to enact laws related to
patent, copyright, trademark and geographical indication, etc. For
business and trade, Intellectual Property Rights (IPRs) act as key
components of strategy formulation that influence global business
policies.

In the 21st century, creativity is the driver of wealth and

transformation of creativity into knowledge assets is the pivot. It is the
key source of development of modern world economy. The pace of
change in modern times is dynamic and knowledge requirement is
complex. Each and every organization is adopting the strategy of
differentiation and core competency and when they are unable to go
for authentic differentiation, they adopt fake differentiation. In such a
competitive environment, one has to protect its innovation to have
competitive advantage over others. But in the developing countries
like India, the strategic role of intellectual property is yet to be
appreciated by most of the corporate houses. These assets have to be
creatively managed. All Governments, policy makers, academicians,
corporate houses, entrepreneurs and industry associations must view
intellectual property rights in terms of their impact on our economy
and formulate their intellectual property management policies,
strategies and a legal framework that would nurture innovations
(Singhal, Gupta and Kohli, 2007).

68
 References

BITS (2007). A manual on intellectual property rights (IPR). Pilani:

Entrepreneurship Development and IPR Unit, Birla Institute of
Technology and Science; p.41.

Business Knowledge Resource Online (2010). Managing your

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<http://business.gov.in/manage_business/protection.php>

Canadian Associations for Graduate Studies (1999). A guide to

intellectual property for graduate students and post doctoral
scholars.
<http://www.cags.ca/documents/publications/Guide_Intellectual_Property.pdf>

Chawla, Loveleen (2008). Knowledge based economy with special

reference to India. Articlesbase.
<www.articlesbase.com/business-articles/knowledge-based-economy-
684400.html>

Ganguli, Prabuddha (2001). Intellectual property rights : Unleashing

the knowledge economy. New Delhi: Tata McGraw-Hill Publishing
Company Limited; p.32 and 166.

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