Intellectual Property Considerations in the Outsourcing Industry

Mumbai, May 4, 2010

Presented by

Poorvi Chothani, Esq.

LawQuest, Mumbai www.lawquestinternational.com
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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
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Some Relevant Indian IP Laws

The Copyright Act, 1957 and the Copyright Rules, 1958 The Patents Act, 1970 and the Patents Rules, 2003 * with relevant Rules and Amendments 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* with relevant Rules and Amendments.

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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.

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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

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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

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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

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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.

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Penalties
Imprisonment up to 2 years or with fine or with both. Amount of fine is not specified. Unauthorized claim of patent rights - fine up to Rs.1,00,000. Wrongful use of words, "patent office" - imprisonment for a term up to 6 months, or with a fine, or with both. Refusal or failure to supply information - fine up to 10,00,000. Furnishing false information knowingly - imprisonment up to 6 months or with fine or with both. Offences by companies the company as well as every person in charge of and responsible to, the company shall be liable.

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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
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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 Criminal Procedure Code of 1973 (corporeal property)
To prosecute incidents of theft and criminal breach of trust and fraud

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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)

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Data Privacy Pending Legislation

An amendment to the ITA to expressly address data privacy approved by Indian cabinet of ministers in 2006 (Executive branch) 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 Permits private enforcement for civil remedies
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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

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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 and in certain cases for patents, but not in designs cases

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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

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