Intellectual Property Considerations In The

Outsourcing Business
By Poorvi Chothani, Esq.

Mumbai

Overview
Member of the World Trade Organization (WTO) Trade Related Aspects of Intellectual Property Rights TRIPS Compliant Berne Convention Paris Convention Universal Copyright Convention Patent Cooperative Treaty

Some Relevant Indian IP Laws

The Copyright Act, 1957 and the Copyright Rules 1958 The Patents Act, 1970 and the Patents Rules, 2003 The Trademarks Act, 1999 and the Trademarks Rules, 2000 The Biological Diversity Act, 2002 The Geographical Indication of Goods (Registration and Protection) Act, 1999 The Designs Act, 2000 and the Designs Rules, 2001

Significant Provisions
Inalienable moral rights
Waiver Concept does not apply to computer software

Work For Hire Compulsory Licensing Version Recordings Broad fair use exceptions
Non-commercial personal use deemed as fair use and does not constitute infringement.

Significant Provisions
Patents Joint Owners Consent Accounting Rights Infringement Responsibilities Computer Programs and business methods per se not patentable Protect Computer Programs as trade secrets

Controller of Patents First to File vs. First to Invent Compulsory License

Research and Experimental Use

Assignment of IP Rights
Of Copyright
Territory Term Lapse Consent

Of Patents
Joint Owner Needs Consent of other owner (s) to assign rights Valid only if in writing and registered in India

Indian Patent Applications

Patent Applications for:
inventions originating in India; or involving an Indian resident inventor

must first be filed in India, unless a foreign filing license has been granted by the Indian Patent Office

Patents - Some Special Provisions

Compulsory licenses for export of medicines to countries which have lack of infrastructural or production capacity for meeting public health emergencies. In case of Infringement - Only civil remedy of injunction, damages, and accounts for profits.

Data Privacy and Protection

No Specific Statute Existing legislation provides limited protection Information Technology Act - limited protection against certain types of data misuse or computer offences involving unauthorized access to data on computers and networks
E.g. hacking, damage to computer source code, virus introduction Civil and criminal remedies available

Legal framework for Data Privacy

The Constitution of India The Information Technology Act, 2000
Protects against computer offences Provides for both civil and criminal remedies

The Specific Relief Act, 1963

To enforce specific performance provisions in the contract against the Indian service provider

The Indian Penal Code, 1860 and The Indian Criminal Procedure Code of 1973 (corporeal property)
To prosecute incidents of theft and criminal breach of trust and fraud

Legislative Action
Amendment to the Information Technology Act of 2000:
Negligence in implementing and maintaining reasonable security practices damages payable INR 1 Crore (approximately US$ 243,902 at USD1 = INR 41) Disclosing personal data without the data subjects consent - damages are limited to INR 25 lakhs (approximately US$ 60,976 at USD1 = INR 41)

Data Privacy Pending Legislation

An amendment (approved in 2006 by Indian cabinet) to the IT Act to expressly addresses data privacy yet to be passed by Parliament The new bill:
Stipulates security practices to be followed by corporations that handle personal data Impose civil and criminal penalties for negligent handling or intentional misuse of personal data Imposes liability on intermediary only in limited situations Permits private enforcement for civil remedies

Other Protection
Specific Relief Act to Enforce Protective Contractual Provisions Indian Penal Code: Limited criminal recourse available:
To prosecute incidents of theft, criminal breach of trust and fraud involving data Laws extend to offenses against corporeal property only

Common Law Remedies: Civil damages and injunctive relief available:

Breach of contract Breach of confidence

Enforcement
In India, the enforcement system for IP rights includes:
Civil remedies Criminal penalties Settlement out of court without trail

Compensatory damages No punitive damages Registration of copyrights Criminal prosecution in trademark and copyright cases, but not in patents or designs cases

Recommendations
Practices to Safeguard Trade Secrets and Confidential Information between:
Comprehensive operative contracts, specifically providing for ownership of IP Non-disclosure agreements directly with the Indian service providers employees and consultants assigned to the project wherever practicable

Thank You

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