Software: intellectual property rights.

This articles concerns companies that create their own software either in-house or get
software commissioned for themselves outside. This article also concerns companies that
use software as part of their manufacturing, trading or administration activities.

There are two types of statutory protection available for software: copyright and patent.
There are other ancillary rights with which software is involved with and these include
trade marks i.e. the name which created software is called by; contractual obligations and
trade secrets. These ancillary rights in software are also protectable either by special law
as in the case of trade marks or general law as in the case of contractual obligations and
trade secrets.

Copyrights in India are covered by the Copyright Act, 1957. An amendment to the Act in
1994 specifically explained how a computer program, compilations, tables and computer
databases expressed in words, codes schemes or machine readable medium, are deemed
to be literary works. Additional provisions of the Act provided for restrictions on renting
of software and the right of a purchaser of software to make backup copies. The
amendments also provided for heavy fines and punishments for infringing software
copyright which is termed as ‘piracy’.

This is by no means an article meant for lawyers and I do not intend to analyze the
provisions of the Act and the amendments. However, one thing I am certain about is that
had it not been for infringement of copyright in software, i.e. use of pirated software, the
use of computers in India would have been very limited. Even in the current scenario
there is wide spread piracy of software, whether it is in the realm of operating systems or
application programs.

Copyright does not exist in an idea or a theme. It is only when the idea or theme is
written down i.e. created in a material form that copyright comes into being. In the case
of copyright in software therefore two software programs may relate to the same idea
accounting, or travel or food or entertainment they may also have similar themes or
content. Both programs will enjoy independent copyright. All that copyright law requires
is that one program should not be a copy of the other. Copyright exists both in the source
code and the object code.

Copyright in a software program comes into being when a programmer [author] writes
down the software either manually or electronically. The programmer is called the author
of the program and in case the program is written by a team, all members of the team are
joint authors. In no case can a company or a firm be designated as the author of the
program. The term of copyright is the life time of the author or the last one of a team of
authors to survive and sixty years thereafter. The year a software comes into existence
and the name of the copyright owner is generally inserted within the program itself or on
the hardware in which the copyright is recorded or it’s manual. These details are
generally prefixed by the letter C in a circle.
Only if the programmer is a full time employee of a company or firm, one can presume
that ownership of the software has been assigned to the company or firm. In all other
cases assignment has to be done contractually. Even in the case of a full time employee it
is always safer to enter into a general contractual assignment with the employees and a
specific assignment every time a new program is created. This is of paramount
importance when an outside agency is asked to create a program. Before commencement
of the writing of the program the external agency must be tied down properly with a
contract specifying that the copyright in the program created will belong to you. If the
external agency is a firm or a company, it is wiser to tie down by specific contracts the
actual individuals who will be working on creating the software. After the program is
created it is again wise to obtain a specific assignment of copyright from the external
agency and its employees.

After a program is created, particularly, by an employee or an external agency, proper

assignments must be obtained. It is best to register the copyright in the program at the
Copyright Office. It must be stressed that registration of copyright is not compulsory.
Copyright in the program is not created by registration. Copyright is inherent in the
program itself, i.e. it comes into being the instant the program is created. However, it
must be remembered that the Copyright Law is not well understood by the Courts and the
police that will ultimately have to administer any violation of copyright. On registration
of copyright with the Copyright Office the Copyright Office issues a certificate of
registration which mentions all the details of creation and ownership of the copyright in
the program. This certificate is very useful in the practical sense in allaying any doubts
in the minds of Judicial Officers or the Police at the time of prosecuting infringement. It
is recommended that registration of Copyright be obtained before the program is made
public. In this case one copy of the work is returned with the seal of the copyright office
and is a useful exhibit in Court. We further recommend that what should be sent for
registration are all the screens, the manual and one or more trial runs of the program
covering all its aspects. A portion of the source code may also be included. All this
material is typically bound into one volume and sent for registration. Typically, it costs
about Rs 5000 for registration of a work professionally and the registration is
accomplished within six months.

In the case of improvements or subsequent versions. The thumb rule is that if at least a
10 per cent change has taken place in the new version viz a vis the basic program only
then it is suggested that a fresh registration be obtained. Otherwise minor modifications
will be taken care of by the original registration.

Under the Law the owner of a copyright in a computer program enjoys the following
rights exclusively:
1. reproducing the work in any material form; this means making copies of the work
either on a floppy disc or a CD or photo copying the manual;
2. storing the work in a computer; even if a pirated software is found loaded on a
computer infringement has taken place and it is not an excuse that the program was
not in use when the piracy was discovered;
3. performing the work in public this includes sending it by mail or other means to
another computer;
4. making of a translation of the work; this includes converting the program into a
program in another computer language or if the screens appear in a language other
than in which it was originally written;
5. making adaptations or modifications of the program;
6. selling of the computer program or lending or renting it out. This includes the right to
resell. If a computer program is bought by one person he does not have the automatic
right to resell it. All licenses to use a computer program are personal and not
transferable.

An unauthorized doing of any one of the acts specified above amounts to infringement of
copyright. Infringement of copyright is a very serious offense under the Indian Copyright
Act. Infringement is punishable with a term that may extend to five years and a fine of
50 000 rupees for each pirated copy. In addition, the infringing person may also be liable
to pay damages. All pirated copies of the program and the computer on which the
program is loaded are generally seized once piracy is discovered.

Because India is a signatory to the Berne Convention and the Universal Copyright
Convention, a copyright in a computer program created in India extends to almost all
countries in the world. Similarly copyright in a computer program created outside India
extends within India. If copyright in a computer program created in India is infringed
outside India, the copyright owner can file a suit in India for enforcement of its rights.
The reverse may not necessarily be true and will depend upon the Copyright Laws of the
Country in which the computer program was created. Thus if a computer program was
created in New Zealand, then New Zealand Copyright Law will determine whether a suit
will lie in New Zealand or India, if infringement of the Copyright in the computer
program takes place in India.

It must be noted that Copyright also exists in information stored on a web site on the
internet. This copyright is generally violated in two ways:
1. The information is downloaded, printed and used commercially whether by selling or
using the information for business;
2. Uploading the content of the information with or without modification onto another
web site.

Web site developers must ensure that material uploaded on their web sites are original
work and not infringing any other material.

The next intellectual property right to be considered is Patent. Traditionally, software

programs were considered creative work and hence the intellectual property right was
relegated to the field of Copyright. It is only in the last decade or so that patentability of
computer software has been accepted. Patents can now be filed in almost all countries,
including India for inventions that include computer software as a novel component. The
general form of the claims of computer software patents relate to a method of carrying
out a process, typically an engineering or a mechanical process or an apparatus. In the
case of apparatus claims it is essential that the novel software must be applied in such a
manner that it makes the hardware to which it is connected or in which it is installed
behave in a hitherto unknown way. The apparatus claim will therefore include the whole
computer configuration including the CPU, input and output devices, writing devices,
memory storage means, pointing devices, visual display means and power supply means
all interconnected to each other by means of the novel software that is sought to be
patented in such manner that at least one of the hardware components behaves differently
and in an unknown manner.

The apparatus may obviously include one or more other devices to which is connected
such as a machine tool or an engineering process unit and the software will then fall into
the category of a process control device rather than as a software per se. In this form the
novel software has greater patentability.

A patent specification for a novel software has to be carefully drafted both for filing at
the Indian or an International Patent Office. There is still a general resistance world wide
to register pure software as a patent.

There are obvious commercial advantages in registering software under the Patents Act.
Once a patent is granted, the software owner merely has to show that the infringing
software provides the same result as the patented software. In the case of copyright this
is not enough. The copyright owner has to prove that the software is in fact copied from it
which is far more rigorous proof.

For those who are not familiar with the working of the Patent Law, a few salient points
by which a patent, as an intellectual property differs from copyright will be in order:
Patents are pure creatures of statute, which means that a patent is not created
automatically as in the case of copyright. An application for a patent must be lodged at
the patent office. Secondly, the application for the patent must be filed before the
invention; in this case the computer software is made public. Patents have a life time of
14 years in India and 20 years internationally. Infringement of patents can only be
restricted by civil suits and not by criminal action. And finally patents are territorial in
nature. A patent application has to be physically filed in each country in which patent
protection is desired.

A recent trend is to file patent applications for what can be termed as inter net related
inventions. These inventions either relate to devices for better access to the internet or for
a novel method of making use of information stored on web sites or carrying out searches
through databases or a novel use of the internet for conducting business.

It will be in order to conclude this article with a brief discussion on some of the other
intellectual property rights involved with computer software. An important right that is
often ignored the trade mark right. It is a fairly common occurrence that software
developers name a new software they he have created with a name that has already been
applied to a previously created software in India or overseas. Generally, this error is
discovered only much later when the software created later becomes well known or tis
use is wide spread. The software created later has no choice but to eventually
discontinue the use of the infringing name. This may cause a serious setback to the
software developer and may actually throw him out of business particular if the old
owner of the name insists on recall of all the previously sold software under the
infringing name. In my experience this has happened to even the leading software
developers in India when they try to go international with their products. Good business
sense requires these software developers to conduct formal name searches through the
trade mark offices of various countries in which they intend to market their software.
These searches are not very expensive. In India such a search, for example, will cost
under a thousand Rupees. Searches can also be done through the internet and other data
bases. After clearance is obtained on a thorough search, it is imperative that applications
for registering the trade mark rights in the name should be undertaken as early as possible
not only in India but in as many countries as is affordable. Apart from being a prudent
preventive measure, the trade mark registration eventually will augment the asset value of
the software developer company and will increase its goodwill.

A final note on the activities of software companies in India. It is unfortunate that

valuable intellectual property rights developed by Indian software creators and
programmers is lost because of the wordings in software development contracts which
our Indian body shoppers enter into with foreign companies. Most of these contracts, in
order to please contract providers overseas, provide that all intellectual property rights in
software developed by the programmers or developers during the project will belong to
the company for which the project is undertaken, irrespective of the wider application of
the software to other spheres of business. Very valuable tools have been lost in this
process to the detriment of Indian programmers.