INDIA INCORPORATION AND IPR: TIME FOR A RELOOK

By
Dr. Harsh Purohit
Lecturer
International Business and Finance
W.I.S.D.O.M.
Banasthali Vidyapith
Rajasthan-304 022
E-mail :
harsh@banasthali.ac.in / harshpurohit123@indiatimes.com

OVERVIEW

Intellectual property results from original creative thought, as patents, copyright material, and trademarks. Thus it is a product of intellectual activity such as computer software, a screenplay, a music store, or the chemical formula for a new drug. The philosophy behind the law is to reward the originator. Such laws are highly essential for providing stimulus to innovation and creative work. Protecting IPR has become very difficult as given that so much of it can be rendered in digital form and than copied and redistributed a lower cost via the Internet. In the era of KNOWLEDGE MANAGEMENT it has become an increasingly important source of economic value for business. The protection regarding IPR differs from country to country. Beginning with GATT, WTO and TRIPs the economic focus of international trade and global policy has progressively moved from 'the tariff protection of goods' to the 'protection of Intellectual Property.'

TRIPS agreement includes the following intellectual property rights (IPRs):

* Patents
* Copyrights
* Trademarks
* Designs
* Designs Of Integrated Circuit
* Geographical Indications
* Undisclosed Information
* Patenting Of Micro-Organisms
* New Plant Varieties

IPR AND INDIA

Unfortunately Indian Companies have created an impression in the world that India does not respect intellectual property rights, more so as we claim to possess the second largest reservoir in the world of scientists, engineers and skilled technical manpower. The rest of the world finds it difficult to understand the dissonance between the assertion of our brainpower strength and our aversion to the protection of intellectual property. Things are different in reality, for instance let us see copyright and patent.

1. In India; the Intellectual Property Rights (IPR) of computer software is covered under the Copyright Law. Accordingly, the copyright of computer software is protected under the provisions of Indian Copyright Act 1957. Major changes to Indian Copyright Law were introduced in 1994 and came into effect from 10 May 1995. These changes or amendments made the Indian Copyright law, one of the toughest in the world.

The amendments to the Copyright Act introduced in June 1994 were in themselves, a landmark in the India's copyright arena. For the first time in India, the Copyright Law clearly explained:

* The rights of a copyright holder
* Position on rentals of software
* The rights of the user to make backup copies
* And most importantly the amendments imposed heavy punishment and fines for infringement of copyright of software.

Because most software is easy to duplicate and the copy is usually as good as original, the Copyright Act was greatly in demand. According to this Act, the infringer can be tried under both civil and criminal law. Because most software is easy to duplicate and the copy is usually as good as original, the Copyright Act was greatly in demand. It is illegal to make or distribute copies of copyrighted software without proper or specific authorisation. The only exception is allowing a backup copy purely as a temporary protection against loss, distribution or damage to the original copy. The 1994 amendment to the Copyright Act also prohibits the sale or hiring, or any offer for sale or hire of any copy of the computer program without specific authorisation of the Copyright holder. Government agencies have been very actively participating in protecting of the rights of the copyright holder. Both Ministry of Information Technology and Ministry of Human Resource Development have been active in incorporating amendments to the Indian Copyright Act. These agencies are now helping the law enforcing agencies e.g. the Police in enforcing the law. Today, Nasscom officers and those of these government agencies are committed to enforce copyright laws and eradicate the menace of software piracy. The Anti-Piracy raids facilitated by Nasscom and Business Software Alliance (BSA) over the last few years in metros as well as smaller cities have already had salutary effect. The law enforcing authorities also supported these raids actively. Nasscom and BSA launched a new anti-piracy initiative - The Reward Programme to make India's business community take note of the dangers of software piracy. The reward offered, amount up to Rs. 50,000, for information leading to successful legal action against companies using unlicensed software. The reward program was aimed to encourage people to support the fight against piracy and to report software piracy to the NASSCOM-BSA Anti-Piracy Software Hotline on 1600 334455 so that Nasscom and the BSA can remedy the illegal activity.

Software Piracy Statistics

The initiatives taken by Nasscom against piracy have helped in reducing software piracy in India from a high 89 percent in 1993 to 60 percent during 1999 as illustrated in the graph:

SOURCE: www.nasscom.org

2.  The President has given his assent to the patent Bill, 2002 as passed by the parliament in its Budget Session ending May 17, 2002. Recently, In a major relief to electronic major Philips, the Delhi High Court has stopped two Indian companies from infringing the patented "digital transmission system" of the Dutch company to manufacture their VCDs. Justice Manmohan Sarin in an ex parte order directed Mumbai-based Anant Electronics Pvt Ltd and Futuristic Concepts Media Ltd not to use the patented process vide patent nos 175971 of Philips in the manufacture/production of their Video Compact Discs (VCDs) using MPED 1 coding audio compression/expansion system.  

Under the terms of the WTO, India is required to implement WTO-standard IPR protection laws by 2005. It must be acknowledged that there has been remarkable progress in IPR protection the field of software and cinema products.

IPR IMPLICATIONS FOR INDIA

There is a broad range of experience to share among developing countries concerning strategies and structures for the management of intellectual property rights (IPR).

* Awareness in India about the intellectual property regime still tends to be low among key stakeholders such as the business sector, the scientific community and public officials.

* Few developing countries have legislated to regulate access to biological resources and benefits sharing under the Convention on Biological Diversity (CBD), and even fewer have done so for protecting traditional knowledge.

* There are very high levels of IPRs infringement in developing countries, mostly in trademarks and copyright violation by counterfeiting computer software and recorded music.

* In light of the growing volume and complexity of industrial property rights applications worldwide, regional and/or international cooperation in IPR administration, even for developed countries, is now essential.

* Given the institutional challenges and constraints facing many poor countries, the advantages of regional and international cooperation are apparent.

DESIGNING IPR REGIMES IN INDIA: POINTS OF DEPARTURE

There are five fundamentals to considering the design of intellectual property regimes in developing countries.

1. Balancing incentives for IPR holders with access for users

2. Low levels of domestic intellectual property creation

3. Capturing benefits from IPRs through holistic institutional frameworks

4. IPRs as private rights

5. Compliance with international obligations

REQUIRED INITIATIVES

* To increase awareness about the general issues and the latest developments related with Intellectual Property Rights

* To discuss issues pertaining IPRs infringement in developing countries, in trademarks, patents and copyright violation by counterfeiting products

* To analyse the impact on IPR on Service sector & Agriculture

* To discuss Traditional Knowledge and expression of Folklore in context to IPR to encourage domestic intellectual property creation

Dr. Harsh Purohit
Lecturer
International Business and Finance
W.I.S.D.O.M.
Banasthali Vidyapith
Rajasthan-304 022
E-mail :
harsh@banasthali.ac.in / harshpurohit123@indiatimes.com

Source : E-mail October 2003

 

B A C K

 

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