Why Intellectual Property Rights matter

While successive governments at the Centre and State lay out the red carpet to foreign investors to partner with locals, a key concern for many entities is safeguarding their intellectual property rights against deliberate or accidental misuse
Representative Image
Representative Image


This week, the British Deputy High Commissioner in Chennai Bharat Joshi had launched the Intellectual Property (IP) Smart Toolkit, a practical tool for companies, in particular SMEs, to navigate IP in India successfully. The toolkit is a free resource, available to anyone with an interest in the field. The “IP Smart Toolkit” on doing business in India, prepared by Chennai-based IP Dome, IP Strategy Advisors, aided by a grant from the UK Intellectual Property Office (UKIPO), discusses practical IP issues that any new business in India might face, including around local partnerships, how and when to bring IP into India, maintaining confidentiality, technology transfer, and other key concerns. 
Joshi said, “It’s easy to dismiss IP as arcane and peripheral to companies making investment decisions, and only incidental to economic growth. That would be a mistake: IP is a vital component of any successful economy as a driver of growth. The UK’s total investment in IP rights – patents, designs, copyright and trademarks – runs at over four per cent of its GDP. In 2011, the UK invested almost half as much again on intangible assets, including IP, as on tangible assets – 127 billion pounds on intangible assets, compared with 88 billion pounds on tangible assets.” 
“That’s why intellectual property matters. Great ideas, properly protected and effectively exploited, help companies compete more successfully both in home markets and overseas”, he said, adding, businesses perform better, grow faster and were more resilient. Observing that India as an active WTO member has in place an intellectual property framework and an enforcement mechanism, Joshi said the Indian Government recognized the importance of IP in the last budget. 
Speaking about the need for SMEs to begin investing in IP rights departments within their own concerns, Swapna Sundar, CEO of IP Dome, says, “Investing in Intellectual Property can ensure long term sustainable competitive advantage for companies of any size. While large size companies invest in generation and protection of IP routinely, Indian MSMEs and SMEs have not sufficiently realized the value of investing in IP. SMEs in Germany and UK are well known for developing niche products and services which add long term value to their business and clients. Parallel, they have understood the value of allocating resources towards protection and enforcement. 
IP experts are of the opinion that foreign companies could be deterred from approaching Indian companies as partners due to such rampant violations of IP rights. When asked to comment on the current scenario in India, with respect to compliance, adherence and protection of IP rights in the corporate sector, Sundar said, “The perception that IP violations are rampant in Indian industries is widely held among different sectors of society. And this perception appears to be discouraging collaboration between foreign and Indian industries. Specific numbers concerning IPR violations in industries in India are unclear. However, in our study, interviewing the leaders in the corporate and SME segments, we found that Indian companies are in favour of protecting and sharing the value in IP led products and business model.” 
She goes on to add, “Companies that pride themselves on ethical behaviour enjoy global reputation and opportunities to collaborate with the leaders in the global market. Failure to adhere to or comply with IP contracts leads to loss of reputation and significant liability in addition to the legal cost. Super IP firms ensure that IP protection is culturally significant and every level of hierarchy undertakes safe IP practices. In fact, efforts taken by the UKIPO such as, the commissioning of the toolkit, will go a long way in changing the perception about the market evolving in India, and also encourage a healthy respect for IP among Indian industry and customer.” 
Criticism concerning grey areas in the protection of IP rights in India has been raised time and again in the solar and pharma sector which prompts the question, are there are enough mechanisms in place to curb violations in the first place. “Enforcement of IP in India has often been cited as a concern by foreign pharma companies. American companies are most vocal about India’s patent regime for its bar on patentability of incremental changes, compulsory licensing provisions and uncertainty regarding computer-related inventions. British companies have more often had issues with the bureaucratic delays, litigation cost and backlog. India, while accepting the need to make the system more efficient, has consistently defended its regime as being TRIPs compliant and necessary for ensuring access to benefits of science and inventions in an economically and socially diverse society,” Swapna says. 
The Government had recently launched an IP info portal called the Indian IP Panorama, which is being seen by experts in the field such as Sundar, as “a positive step in improving India’s global image and attractiveness as an investment destination.” However, he says that more has to be done towards reducing the backlogs in the IP offices. 
Cyber Law Educationist and E-Business Consultant Na Vijayshankar, however says that the matter of IP rights violations in India needs to be taken with a pinch of salt. 
He says, “In many instances, litigations concerning IP rights have been conducted by major multinationals, purely for the commercial exploitation of the innovators and consumers. Many companies have gone so far as to deploy IPR norms as part of their marketing strategies, with an eye on profits alone. One of the primary concerns surrounding the compliance and enforcement of IP laws in India, is that the innovator has many a time, been forgotten or ignored in the scheme of things.”
Citing a recent case when an Indian IT major was pulled up an American company for IP infringement, he says, “In my personal opinion, unless there is a strong and tangible evidence to prove that a certain technology or system has been copied with the intent of making commercial gains, a company cannot be hauled into court on the whims and fancies of a stronger international corporate.”
What is Intellectual Property — IP and IPR? 
Intellectual property (IP) encompasses the expression of ideas, information and knowledge. IP includes not only discoveries and inventions, but also music, literature, and other artistic works, as well as words, phrases, symbols and designs. Intellectual Property Rights (IPR) are the legal rights protecting the owners of IP. The first owner of IP is normally either the person who invents, authors or designs the IP, or his/her employer (depending on the contractual arrangements governing his/her work).
(i) Copyright and rights related to copyright 
  • The rights of authors of literary and artistic works (such as books and other writings, musical compositions, paintings, sculpture, computer programs and films) are protected by copyright, for a minimum period of 50 years after the death of the author. 
  • Also protected through copyright and related (sometimes referred to as “neighbouring”) rights are the rights of performers (e.g. actors, singers and musicians), producers of phonograms (sound recordings) and broadcasting organisations. The main social purpose of protection of copyright and related rights is to encourage and reward creative work. 
(ii) Industrial property — It can be divided into two main categories 
  • One area can be characterised as the protection of distinctive signs, in particular trademarks (which distinguish the goods or services of one undertaking from those of other undertakings) and geographical indications (which identify a good as originating in a place where a given characteristic of the good is essentially attributable to its geographical origin). 
  • Other types of industrial property are protected primarily to stimulate innovation, design and the creation of technology. In this category fall inventions (protected by patents), industrial designs and trade secrets.

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