Intellectual Property: Presentation on IP in IT : Global Strategy - BananaIP BananaIP Counsels, formerly Brain League IP Services, founded in 2004 at the Indian Institute of Management (IIM) Bangalore’s incubation center (NSRCEL), is recognized as an IP/Patent trailblazer in India. The firm’s mission is to help clients maximize business value from their Intellectual Property (IP)/Patents, and gain competitive advantage in the market place. In its evolution from Brain League, BananaIP carries forward the firm’s core values – Merger of Technology,Management and Law, Swift Adaptation to changes in competitive environment, and business driven approach to Intellectual Property (IP)/Patent Services. Contact Us for Intellectual Property Services BananaIP Counsels Regd Office No.40,3rd Main Road,JC Industrial Estate, Kanakapura Road,Bangalore – 560 062. Email: contact@bananaip.com Telephone: +91-80-26860414 /24/34

1. IP in IT:
Global Strategy
Prof. Anil B. Suraj
Intellecture Seminar Series
Copyright, Brain League IP Services, Now BananaIP
Non-commercial use is permitted

2. Session Objectives
 To recognize the importance of
TRIPs in ensuring global
standards
 To understand the prevalent
criteria to establish and enforce
IPRs

3. “Interests” in Globalization
 Rebuilding by “developed”
economies – UN, IBRD, IMF,
GATT/ITO
 Strategic incorporation of
“developing” nation concerns –
UNCTAD & Part-IV GATT
 Building of “consensus” in WTO

4. IPRs – General Bases
 Economic (and technological)
rationale – aids overall
development
 Social benefits – Public Domain
and Basic Research
 Legal monopoly – fair regulation
within territory

5. Forms of IPRs
 Patents – Patents Act, 1970
 Copyrights – Copyright Act, 1957
 Trade Marks – Trade Marks Act,
1999
 Industrial Designs – Designs Act,
2000

6. Forms of IPRs …
 Layout Designs of ICs –
Semiconductor Integrated Circuits
Layout-Design Act, 2000
 Geographical Indications –
Geographical Indications of Goods
(Registration and Protection) Act,
1999

7. Forms of IPRs …
 Plant varieties – Protection of
Plant Varieties and Farmers’ Rights
Act, 2001
 Traditional Knowledge – partly by
Biological Diversity Act, 2002
 Trade Secrets – Contractual – no
legislation in India

8. COPYRIGHTS
 Statutorily provided privilege to
authors, aiming towards:
 Creative and Intellectual enrichment of the
public
 Progress of Scientific and useful Arts (literary,
artistic, musical, dramatic, cinematographic
films, sound recordings and now performances
& broadcasting)
 Bundle of rights – right to make copies;
communicate to the public; make
adaptations and allow translations

9. “Mark”
 Includes – a device, brand, heading, label,
ticket, name, signature, word, letter,
numeral
 Also – packaging, combination of colours
 Or any combination thereof
 Sound = inherently distinctive and to be
graphically represented

10. “Trade mark”
 Any Mark capable of:
 Being represented graphically; and
 Distinguishing goods/services of one
person from those of others
 3 objectives:
 to identify origin;
 to advertise the brand; and
 to indicate quality

11. IC Layout-Designs
 Layout Designs eligible for IPR
protection:
 Originality – uncommon product of
intellect
 Not commercially exploited (for more
than 2 years)
 Inherently distinctive
 Distinguishable from other registered
designs

12. IC Layout Designs …
 Use or sale of whole or original part of
registered layout-design without permission
is an infringement
 No violation – if used for scientific
evaluation, analysis, research or teaching
 Creation of an independent original layout-
design from analysis – can be separately
registered

13. Evolution of IPR regime
 Early 17th Century Monopolies
Statute
 Maximum flexibility to national
governments – no global enforcement
 Paris Convention (1883); Berne
Convention (1886); Madrid
Agreement (1891)
 Minimum obligations but with flexibilities
 National Treatment; and Reciprocal
obligations – though not mandated

14. TRIPs Regime
 TRIPs (1995) – common minimum
institutional framework – what about
flexibilities?
 Scope of Patents
 Patentability criteria
 Enforcement mechanisms

15. TRIPs Regime –
Salient Features
 Basic Principles
 MFN status; National Treatment
 Forms of IPRs and bases of
protection
 Aiming for uniformity
 Multilateralism – impact on national laws

16. TRIPs – Features …
 Special Provisions for
Developing nations
 Accent on technology transfer &
promotion – Brazil & Korea comparison
 Enforcement Mechanisms
 Civil and Criminal; Border measures

17. Enforcement of IPRs
Key lessons from India
and across the Globe

18. Large expectations –
driven by small initiatives!!

19. High stakes
 IBM v. Amazon = dispute over 5 e-
commerce based patents – valued
more than $10 bn
 Transmeta v. Intel = dispute over
patents in power saving chips –
valued at about $100 bn
 RIM v. NTP = Blackberry
technology – settled at over $600 mn

20. High Stakes …
 Volkswagen take over of Rolls
Royce - $712 mn – but missed the
most important asset!!
 Total value of IPRs owned by US is
estimated at about $6 trillion
 IPR valuations in M&As – rising the
stakes further

21. IP Litigation
 If negotiations fail then litigate for
compensation
 Alcatel-Lucent matter – record verdict of
compensation = $1.53 bn
 Suing could estrange potential partners
(IPTV venture) – negotiate for licensing
 EU – enforcement mechanism varies
among member nations – a common
directive for software patents failed

22. Litigation – Remedies
 Injunctions – temporary (immediate)
and permanent (final)
 Damages or compensation – based
on account on profits
 Actuals; Loss of Goodwill; Deterrent
 Microsoft cases in India - > Rs.1 crore
 Legal and other costs
 Police and Court Commissioners

23. Litigation – Remedies …
 Copyrights & TMs – registration is best
proof – else, legal presumptions apply
 “Passing off”
 Civil remedy – enforceable by a District
Court – compensatory and injunctions
 NASSCOM matter
 Criminal remedy –– law provides for
minimum imprisonment and fines – offence
is cognizable and non-bailable

24. Prevalence of Piracy
 Total counterfeit trade = $624 bn
 Total online piracy = $84 bn
 Top Hollywood studios spend more
than $40 mn on counter-measures
 Software piracy: Global = 35%; India
= 73%; China = >90%

25. Online infringements
 Online auctions, sales or passing off
of proprietary software
 eBay; iOffer
 Monumental task of monitoring
 China has 5 auction sites, 8 lakh
websites and about 2 lakh registered
cyber cafes!!

26. Online counter-
measures
 New breed of Cyber investigators –
set a thief to catch a thief!!
 Fictitious impersonations in chat rooms
and internet message boards
 Counter attacks through hacking
 Privacy concerns and fraudulent acts

27. Main Features of the IT
Act
 Information Technology Act, 2000
 Allows for admissibility of electronic
evidence in general procedure
 Defines essential terms – computer,
network/resource/system, electronic
record, data, information, secure
system, etc.

28. Cyber Crimes and
Penalties
 Section 43 – “damage” to computer or
computer system – destroy, alter,
delete, add, modify or rearrange any
computer resource – Fines up to Rs.
1 Crore !!
 Factual factors = unfair advantage;
amount of loss caused; the repetitive
nature

29. Cyber Offences
 Tampering/copying computer source code
or related documents – 3 yrs + 2 lakhs
 Hacking into computer resource – 3 yrs +
2 lakhs
 Breaching confidentiality of electronic
documents – 2 yrs + 1 lakh
 Publishing or transmitting obscene
material in electronic form = 5 yrs + 1 lakh
 Extra-territoriality application of the law –
if Indian computer is affected

30. Liability in Cyberspace
 “Deep pocket” strategy – ISPs; Credit
Card agencies
 Service Providers are exempted from
liability if lack of knowledge despite
“due diligence”
 Comprehensive Search & Seizure
Powers given to the Police

31. Principles of Patentability

32. What is a Patent?
 Patent – a monopoly right to an
inventor
 20 year period of monopoly granted
for inventions that satisfy:
 Novelty
 Inventive Step or Non-
obviousness
 Utility or industrial application

33. What can you do with a
Patent?
 Section 48 of the Patents Act, 1970:
 Make
 Use
 Sell
 Distribute
 Import
 the invention within India
 Effect of Patents – only territorial

34. Subject Matter of
Patents
 Must relate to any new process
and/or a new product – improvements
also considered – across any field of
technology (TRIPs)
 Any process, machine, manufacture,
composition of matter or material

35. Non-patentability
 Section 3 of the Patents Act, 1970
enlists:
 Frivolous or opposed to natural laws;
 Mere discovery or an abstract
formulation;
 No new product or reactant;
 Mere admixture or aggregation;
 Mere arrangement of known devices;

36. Non-patentability …
 Section 3 enlists … :
 Mere method of a mental act or game;
 Mere presentation of information;
 Mathematical or Business methods;
 Computer programs per se or
algorithms;

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

38. EU Case Studies
 EPO Board – In re Vicom Systems (1987) –
YES – mathematical method must be
directed to “technical process”
 Digital processing of images
 Though not tangible or concrete, its utility was
of “technological character”
 In re Sohei (1996) – YES – despite “mix of
technical and non-technical elements” – if
for an ultimate technical solution

39. Patentability – Novelty
 Prior art (not just documents) – i.e.,
open to public before the “priority
date” (first filing of provisional
application)
 Known, used, published, patented
elsewhere, offered for sale,
abandoned, in priority elsewhere
 Prior disclosure – must have been
clear (and inevitable)

40. Patentability:
Non-Obviousness
 Not State of the art – not previously
known or used publicly
 Obvious – as to a person ordinarily
skilled in the art – a hypothetical
construction
 Identify inventive step; compare
combined prior knowledge; establish
similarities; evaluate if it is obvious to
skilled person

41. Patentability: Utility
 Current – contemporary requirement
 Substantial and significant value
 Credible – to be made and to be used