Q&A – India Intellectual Property

Which are the main laws regulating IP in India that investors should be aware of?

India has recognized various forms/domains of Intellectual Property by way of statutes.

  • The Trade Mark Act, 1999, protects Trade Marks;

  • The Patent Act, 1970 governs the patent law in India;

  • The Copyright Act, 1957 governs the copyright law in India; and’

  • The Design Act, 2000 protects rights in Designs.

The above-mentioned are the main laws which an investor needs to look for when seen from a commercial point of view. Apart from the above, India has also enacted statues for protection of other kinds of Intellectual property, which are:

  • The Geographical Indications of Goods (Registration and protection) Act, 1999

  • The Semiconductor Integrated Circuits Layout- Design Act, 2000

  • The Protection of Plants & Varieties and Farmers Rights Act, 2001

  • The Biological Diversity Act, 2002

Other than the above, an investor may also look into The Commercial Courts Act, 2015 to be aware of the enforcement and appellate procedure.

What are the differences between the procedures for obtaining a patent in India and other jurisdictions?

The general broad procedure of obtaining a patent in India is similar, but there are differences in the types of patent applications that can be filed in India, and the types of inventions for which a patent can be obtained in India. The various types of applications that are available in India are, provisional application, complete after provisional, complete first filing, national phase application, divisional application, patent of addition application. The subject matters which are not considered as invention in India are listed in the patent statute, and the prominent subject matters which are prohibited from patenting in India include: mere discovery of a new form of a new substance, new use for a known substance, a substance obtained by mere admixture, method of agriculture or horticulture, method of treatment, plants and animals and essentially biological processes for production or propagation of plants and animals, a mathematical or business method or a computer programe per se or algorithms, artistic work, and traditional knowledge.

After the filing of an application, it is published and for examination of the application, a request for examination must be filed. Three different types of examination procedures are available, viz., regular examination, in which an application is taken up for examination in the chronological order of filing of request for examination. An express request for examination is available for National phase applications in India, which has to be filed before the expiry of 31 months from the earliest priority date. This is helpful in accelerating the examination in case of early national phase entry. Then a request for expedited examination is available in those application, in which the applicant is startup, or small entity, or when all the applicants are natural person and at least one of the applicants is a woman, of if the applicant is a Government company or a department of Government, or when the Indian Patent Office has been selected as International Searching Authority (ISA) or elected as International Preliminary Examination (IPEA) in the corresponding PCT application, or when PPH is applicable (PPH is currently available only with JPO).

Usually, there are only two office actions in India, wherein the first office action has to be replied in written and to be filed within 6 months (with extension available for upto 3 months). Thereafter, if the objections are retained, a hearing notice is issued whereby the applicant gets an opportunity to orally present the case before the Controller, followed by filing of written submission within 15 days of hearing. Thereafter the patent is granted after issuance of decision. There is no prior notice for issuance of patent in India.

The annuity fee is payable only after the grant of patent, and no annuity fee is required to be paid during the pendency of the application. There is also a requirement of submitting working statement for granted patents by patentees and licensees every year after the grant. Such statement is required to be filed by September 30 of every year, for the working of previous financial year (April – March).

In what ways does obtaining a trademark in India differ from other countries?

In India, trademark rights can be obtained by using the mark or filing application to register mark under the Trade Marks Act, 1999 (“Act”) and rules made thereunder. Indian trademark law follows the ‘first-to-use’ system, and the rights of a prior user to use and register a mark are protected under Section 34 of the Act. In fact, the Indian trademark statutory framework incorporates provisions to protect rights in unregistered trademarks under the laws of passing off. For the marks that are not used in India per se, the proprietors may rely on their trans-border reputation to claim rights in India. However, the threshold of establishing such reputation is high and cogent evidence is required to be submitted to establish trans-border reputation in India.

For filing the application for registration, the fee to be paid by an individual, registered start-up, and small/medium enterprises is 50% discounted in comparison to a company, trust, or partnership. As far as filing basis is concerned, the application can be filed either on proposed to be used basis or with a user claim which has to be substantiated by way of a user affidavit and supporting evidence of use. However, unlike US, once a trademark is registered in India, a proprietor does not have to keep the trademark alive i.e., prove that they are using the mark after obtaining registration, unless their registration is challenged by a third-party or attracts the cancellation/rectification grounds.

The Indian trademark regime allows filing of multi-class applications and priority can also be claimed from foreign applications. Unlike EU, the Indian trademark examination procedure involves scrutiny on the basis relative grounds i.e., on the basis of prior applications and prior registrations. Therefore, before a third-party can oppose a mark in India upon its advertisement, the Trade Marks Registry also objects the application on the basis of earlier marks. Another facet of the Indian trademark laws is that it imposes criminal liabilities to counter trademark infringement actions which provides trademark owners another route to enforce rights in their marks.

Dos and don’ts of licensing intellectual property in India?

The owner of intellectual property rights (IPR) can grant permission to another party to use, manufacture, sell the intellectual property (patents, trademarks, copyrights, industrial designs, etc.) through a license.

There are few points to be considered by the parties before executing the license agreement:

  • It is advisable to do the due diligence of the parties in advance i.e. before signing the agreement.

  • The license agreement should be drafted as per the goals and objectives of the parties. Never use a template.

  • The terms and conditions of the agreement should not be vague.

  • The ownership and title of IP rights should be defined properly in the agreement.

  • The jurisdiction of Rights and the type of the license agreement (exclusive, non-exclusive) should be mentioned clearly.

  • The license agreement should be written and have the binding terms.

  • The tenure of the license agreement and termination clause should be specified.

  • The royalty amount and payments terms should be included in the license agreement

  • The governing laws should be mentioned specifically in case of any dispute between the parties

After the Special 301 Report of 2021 from the Office of the United States Trade Representative (USTR) of April 30, 2021 in which India was placed under the Priority Watch List, do you expect IP laws in India to change in areas such as trade secret protection?

The Special 301 Report of 2021 of the USTR (“the Report”) has certainly highlighted some areas for discussions and collaborations between the two countries to create more opportunities and incentives for IP owners/creators. However, India has already been taking necessary steps to build a robust IP system which is evidenced by the implement of its National IP Policy and the recent amendments in the Rules or accession to agreements.

As far as trade secret protection is concerned, there is no separate statute but the said domain is governed through contract law or by way of common law. While there are no specific criminal remedies for trade secret misappropriation, such cases can be dealt under the offences of criminal breach of trust, theft, or cheating defined under the Indian Penal Code, 1860 to enforce rights. Further, even the Information Technology Act, 2002 deals with trade secrets in the form of Section 72 of the said Act which provides penalty for breach of confidentiality and privacy. In addition to this, trade secrets may also be protected under copyright laws in certain cases such as confidential information stored in computer database.

Regarding the issue pertaining to online piracy of copyright, the Indian Government has recently sought comments from the public and stakeholders on the Draft Cinematograph (Amendment) Bill, 2021 by 2nd July, 2021. In addition to other changes, the said bill includes two provisions pertaining to piracy – (i) prohibition of unauthorised recording of a film and (ii) penalty for violation of the said prohibition with imprisonment ranging from 3 months to 3 years and fine ranging from 3 lakh rupees (approx. USD 4000) to 5% of the audited gross production cost.

The Report has also touched upon the backlog in trademark opposition and cancellation proceedings. In this regard, it is pertinent to mention that in case an applicant wants to fasten the process of registration, he can file a request for expedited process which is also applicable to opposition proceedings. One important point to highlight is that the Report incorrectly says that “there is little clarity concerning whether trademark owners can apply directly for recognition of “well-known” trademark status without having to rely on Indian court decisions”. After the advent of the Trade Mark Rules 2017, the applicants can directly file application at the Trade Mars Registry for securing well-known status without any necessity of relying on any court decision.

On the point of counterfeiting, it is undoubtedly one of the main concerns for India and the Government has been coming up with new rules and amendments time to time. Recently, in 2020, e-commerce rules were implemented in India, these rules have imposed certain liabilities on marketplaces and sellers which will hopefully help in curbing counterfeiting. For instance, one of the rules is that marketplaces have to take reasonable steps to maintain a record of relevant information allowing for the identification of all sellers who have repeatedly offered goods or services that have previously been removed or access to which has previously been disabled under the Copyright Act, 1957, the Trade Marks Act, 1999 or the Information Technology Act, 2000. Furthermore, to deal with the menace of counterfeiting, the Union Health Minister of India has also inaugurated the 7th edition of Movement against Smuggled & Counterfeit Trade (MASCRADE 2021) which essentially focusses on the rising tide of counterfeit, smuggled and spurious products especially in the COVID era.

With 13% of India’s high-value patents related to clean tech, could clean technologies IP pave the way to environmental sustainability in the country?

There are specific provisions in the Constitution of India to protect and improve environmental conditions. Therefore, investing in clean technology also called green technology or green tech is a necessity. Considering the current scenario of urbanization, depletion of natural resources, and climate change, clean technology is important for our survival.

Apart from creating the technologies for environmental sustainability, it is also important to protect the innovations by way of filing patent applications. The patent is a right given to the patentee to exclude others from making, selling, offering for sale, importing, or commercially exploiting the patented invention without the permission of the patentee.

India is a key market for clean technology and creates employment opportunities. Patents give legal protection which eventually promotes innovation and economic growth. Therefore, investing in clean technologies and protecting the same will increase economic growth, along with environmental sustainability.

What IP developments and legal changes can we expect in India in the near future?

Being a developing country, India’s IP regime is constantly undergoing changes. Amendments are being introduced in the existing legislations to be in consonance with the digitized era and policy changes are being undertaken to strengthen the IP regime.

Changes and improvements can be expected in the administrative component with a view to improving the efficiency of IP protection system. Though hearings via video conferencing were being conducted by the Patent Office since a long time, however, the same route has been seamlessly adopted by the Trade Marks Registry during the pandemic.

Concerning the legal changes, recently Copyright (Amendment) Rules 2021 have been introduced and now amendments in Copyright Act of 1957 are expected. In view of the increased digitisation, comments were sought from the stakeholders in 2020 by the Copyright office of the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry for amendments to the 1957 Act. Some of the expected changes may include specific provisions for copyright protection to AI work and alignment between the provisions of the Copyright Act and the IT Act in view of the recent amendments to the Intermediary Guidelines.

The IP regime concerning protection and enforcement of innovations led by Artificial Intelligence, IoT and Big Data is likely to be evolved, especially since the role of intellectual property and innovation has becomes all the more significant after the current pandemic.

In the near future, is it expected that India will sign any new international treaties, conventions, or agreements?

To further the objectives of National IPR Policy, India has signed MoUs with some countries recently.

Recently, on May 8, 2021, a Joint Statement on India-EU Leaders’ Meeting was published, which stated that both the countries recognise their mutual interest in protecting geographical indications and underlined the benefits of a balanced bilateral agreement on the protection of geographical indications. It has been stated that India looks forward to early conclusion of the Memorandum of Understanding between the EU Intellectual Property Office and Department of Promotion of Industry and Internal Trade.

In 2020, India signed a Memorandum of Understanding on Intellectual Property (IP) with the United States to increase the IP cooperation between both the countries in many ways such as conducting programs and events to provide details of the practices, experiences and more such information on IP to the public as well as the industry, universities, research and development (R&D) and small and medium-sized enterprises; exchanging information between the experts, development and implementation of automation and modernization projects; and discussing best ways to approach the registration processes and examine applications for patents trademarks, copyrights, geographical indications, and industrial designs, including the protection, enforcement and use of IP rights. The MoU is also aimed at ensuring cooperation between the two countries to understand the issues pertaining traditional knowledge that include the databases and raise awareness on the usage of existing IP systems in order to protect the same traditional knowledge.

In 2020, India had also signed an MoU with Denmark on Intellectual Property Cooperation.

Indian entities and individuals can avail of a number of schemes and IPR facilitation bodies. Are you expecting to see more initiatives like setting up a digital platform to facilitate the application and capturing of IPR?

The Government of India (Central and State) has initiated various policies and schemes to spread IP awareness in the Country. The objective includes IP training & mentorship, facilitating IP protection, providing financial support, providing support for IP commercialization and technology transfer etc.

The Government of India also approved National IPR Policy on 12th May 2016 to stimulate a dynamic, vibrant and balanced intellectual property rights system in India.

Apart from the policies and schemes, the Government of India has also taken initiative to provide a digital platform

In the Budget 2021, few initiatives have been proposed to streamline the process related to the creation and protection of intellectual property which includes setting up an IPR digital platform for a seamless application process and capturing the IP rights.

Over the next 12 months, which sector in India do you expect to see the most growth in IPR needs? (For example, pharmaceuticals, intellectual property software markets, etc.?)

These are unprecedented times due to global COVID pandemic and these times have also created circumstances and opportunities for COVID oriented innovations. Hence, in the next 12 months, an increase in IPR protection is likely to be seen in pharmaceutical and nutraceutical industry which is working towards finding new drugs, vaccines and immunity boosting products. An increase in IPR protection is also expected to be seen in the AI and Machine Learning applications, especially in the healthcare sector to take out meaningful information from vast healthcare database. The IOT sector is also expected to see an increase in IPR protection to streamline for interaction between the technologies and gadgets around us.

Manisha Singh gets down to the brass tacks and expounds on the Indian intellectual property laws & procedure and shares her insights on the future of IP in India in a comprehensive Q&A with Conventus Law.