An Advisory Note on IPR Protections for Technology Companies

By

Apar Gupta*

 I INTRODUCTION 

I.1.       Human beings have an innate tendency to truck, barter and exchange.[1]  It is only   natural that commercial applications were found for the internet. When Vendors  engage in electronic commerce they need to protect electronic products through   intellectual property rights. The common standpoint is that intellectual property   rights are vital to the future development and vitality of e-commerce.[2] The raison d’ etat of intellectual property law has been the derivation of economic benefit   from the right of exploitation conferred upon the creator of the work and thus is   essential in a web business. 

I.2.       The building blocks of intellectual property law are patents, copyrights, trademarks and service marks, as well as anti-cyber squatting laws, trade secret protection laws, and mask work protection laws.[3]  

I.3.       The management of a software company is advised to protect proprietary software and hardware tools, as well its logo and brand name under the Intellectual Property Regime of India. Its is suggested that it avail the protection of Patents to protect its hardware tools under Part II, further its software maybe protected under the law of copyrights as explained under Part III, the website from which it would offer these services as well the logo, service marks and website maybe adequately protected by the law of Trademark explained in Part IV. These three regimes of Intellectual Property Rights can cohesively protect Intellectual property.

II PROTECTION OF HARDWARE TOOLS UNDER THE LAW OF PATENTS 

II.1.      Patent means a grant of some privilege, property or authority made by the Government or the Sovereign of the country to one or more individuals. The instrument by which such grant is made is known as patent.[4] The term ‘patent’ acquired statutory meaning in India when the Patents Act, 1970 was legislated. Section 2(m) of The Patents Act, 1970 states that a patent is a, ‘a patent granted under this act’. The Government grants patent, under the Act to an inventor over an invention, which is novel, non-obvious and useful. 

II.2.      It conveys to the inventor substantive rights and secures to him the valuable monetary right, which he can enforce for his own advantage either by using it himself or by convening the privileges to others. An individual, a group of individuals or a legal entity e.g. a company can own a patent. A firm can also apply for a patent as an assignee.[5] As per the Indian Patents Act 1970, which was recently amended by the Patents (Amendment) Act 2002, which came into effect on May 20, 2003, the main criteria for patentability are: 

(i)                  Novelty (Section 2(1)(j));

(ii)                Inventive step (Section 2(1)(ja));

(iii)               Capable of Industrial Application (Section 2(1)(a)).

 II.3.      Novelty or newness is the sine qua non of every invention.[6] The provision for novelty is provided under section Section 2(1)(j) of The Patents Act, 1970. An invention will be considered novel if it does not form a part of the global state of the art. Information appearing in magazines, technical journals, books, newspapers etc. constitutes the state of the art. As Cotton L. J. put in Blakey and Co. v. Lathem and Co.,[7] “to be new in the patent sense, the novelty must show invention.”

 II.4.      To state quite simplistically the subject matter has to qualify the novelty as to the creation of a new idea, and to qualify as copyright under originality it has to satisfy the requirement of creation of a new expression of an idea.

 II.5.      In the celebrated case Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries,[8] it was held that the fundamental principle of patent law is that a patent is granted only for an invention and it must be new and useful. It is essential for the validity of a patent that it must be the inventors own discovery as opposed to mere verification of what was already known before the date of the patent. Although the terms “inventive step” and “capable of industrial application” are individually defined in the Patents Act, the meanings are taken from Article 27(1) of TRIPS, which defines the terms as non-obvious and useful.[9]

 II.6.      Section 2(1)(j) of the Patents Act, 1970 defines an invention as follows, “Invention” means a new product or process involving an inventive step and capable of industrial application and section 2(1)(ja) defines an “inventive step” as a feature that makes the invention not obvious to a person skilled in art. It is pertinent to note that an inventive step is equal to non-obviousness under the United States Patent Law.[10]  

II.7.      Thus, the novelty in a patent is not necessarily limited to the production of a new product and extends to producing the same old product more efficiently. In the case of Ram Narain v. Ambassador Industries[11] it was held when an invention is not itself new the particular system producing the advantageous result would be a sufficient element of novelty to support the patent and in a Patent pertaining to an air cooler has been allowed where it was shown that a 25% additional advantage of added cooled air.

 II.8.      The third requirement of patentability is that the invention must be capable of industrial application. This simply means that the invention must have a practical application.[12] The term of every patent granted after the commencement of the Act will be 20 years from the date of filing, provided the renewal fees is paid on due dates according to Section 53.

 II.9.      The reason why a patent cannot be filed with respect with Software tools developed is that The Indian Patents Act, 1970 under Section 3(k) expressly bars grants of patents for software(s). Thus, we find that computer software is not patentable in its own right, but only as a part of an industrial process. This was identified in Diamond v Diehr [1981][13] a case which involved a process for curing rubber, and included a computer program to control the curing temperature.

II.10.    The court found that the program was patentable only as part of the whole process. This form of identifying with an industrial process is also shown in Re Alappat[14] where a patent application for a computer program, which smoothed out a waveform on an oscilloscope, was found to be patentable as a total package. Thus the court followed the decision in Diamond v Diehr. In such cases as, Merrill Lynch's Application[15], which involved software package for use on the money market and was found not to be patentable as a total package as it does not actually do anything as a whole system machine. As Falkener J said 

            'If some practical (i.e. technical) effect is achieved by the computer or machine   operating according to the instructions contained in the program, and such effect     is novel and inventive (i.e. not obvious), a claim directed to that practical effect will be patentable, notwithstanding it is defined by that computer program'. 

II.11.    In Genetech Inc's Patent [1989][16] it was the Court of Appeal, which held that, inter alia,

 “A patent which claimed the practical application of a discovery did not relate to the discovery as such and was not excluded by P.A. S1 (2), even if the practical application might be obvious once the discovery had been made.”

 II.12.    Thus it would appear that whilst a patent will be refused for a computer program            per se it will be allowed if the purpose of the program is to bring about some      practical effect and it is that effect which is the subject matter of the patent        application. The subject matter should make a technical contribution to the state of the art. In Vicom Systemsa[17] digital image processing package was patentable as it incorporated a complete system.

 III PROTECTION OF SOFTWARE TOOLS UNDER THE LAW OF COPYRIGHT

 III.1.    Copyright is a form of intellectual property which vests the author/owner of a     work with a bundle of exclusive rights, such as exploitation and attribution. The   purpose of copyright is to reward the creation of intellectual property to promote  and reward the creativity of authors.[18]  It expands the edict, “Thou shall not steal”    to intangible property and seeks to safeguard the rights of the author.

 III.2.    Copyright is not only a positive right conferred upon the author, but also a  negative right[19] in the hoffeldian sense, placed upon society to pay royalties for   use of intellectual property. Academics may state, that in the historical context,            the system served the State’s interest in controlling what was published, but it also   usually gave the holder of a royal privilege (normally the publisher) an exclusive   right in the principle of a ‘royal grant’ or a ‘royal assignment’.

 III.3.    The protection of copyright is granted to expressions of ideas, communicated by various methods and containing differing matter. In order to secure copyright a  work requires to be bestowed with, “sufficient judgment, skill and labor or capital”. It is immaterial whether the work is wise or foolish, accurate or  inaccurate, or whether it has not any literary merit.

 III.4.    The Indian statute in this regard is, The Copyright Act, 1957 which in Section 14  states that five categories of works maybe protected under copyright. These are       firstly literary, dramatic or musical works, secondly a computer program, thirdly a         artistic work , fourthly a cinematograph film and finally a sound recording. The   Indian Patents Act, 1970 under Section 3(k) expressly bars grants of patents for     software(s), however protection is provides to this class of goods is defined under section 2(ffc) and granted copyright protection under Section 13 of the Copyrights Act, 1957.

III.5.    The Indian statute granting copyright protection is the Copyright Act, 1957 which contains registration of copyright within sections 44 to 50A, moreover Chapter VI of the Copyright Rules, 1956, as amended, sets out the procedure for the  registration of a work. The registration process places preventative measures   against plagiarism or unauthorized use of an author's material.[20]

 III.6.    While someone else may have the same storyline or idea in his or her material, the          evidence lies in the presentation of the original work. Registering the work does      not disallow others from having a similar storyline or theme. Rather, registering  the work would potentially discourage others from using your work without your  permission.[21] Though the Copyright register cannot prevent plagiarism, it can      produce the registered material as well as confirm the date of registration.

 III.7.    Current development in the copyright of software has raised many questions as to the extent of coverage a copyright confers. In 1992, Lotus sued Borland for copyright infringement claiming that an optional feature of Borland's Quattrospreadsheet known as the 'menu command hierarchy' was a violation of its copyright. After three years of the lower courts ruling in favour of Lotus, the US Court of Appeals finally decided to overturn the decision and rule in favour of   Borland, Lotus Dev. Corp. v. Borland Int'l, Inc.[22]

 III.8.    In Apple Computer, Inc. v. Microsoft Corp.,[23]  copyright infringement was alleged in which Apple Computer sought to prevent Microsoft and Hewlett-Packard from using visual graphical user interface (GUI) elements that were similar to those in Apple's Lisa and Macintosh operating systems, Apple ultimately failed owing to the limitation of copyright law. These shortcomings demonstrate the fallibility of copyright law with respect to software, however presently it is the only protection available to software vendors under Indian law.

IV PROTECTION OF COMPANY NAME AND LOGO UNDER THE LAW OF TRADEMARKS

IV.1.    Trademarks are generally distinctive symbols, pictures, or words that sellers affix  to distinguish and identify the origin of their products. Trademark status may also be granted to distinctive and unique packaging, color combinations, building  designs, product styles, and overall presentations. Trademarks are symbols representing essential element of the competitive process. The Senate Committee in America while reposting the bill that became the Federal Trademark Act of 1946 (Lanham Act) explain the fundamental basis of trademark protection thus:

             “Trademarks, indeed, are the essence of competition because they make possible a choice between competing articles by enabling the buyer to distinguish one from the other. Trademarks encourage the maintenance of quality by securing to the producer the benefit of the good reputation which excellence creates. To protect trademarks, therefore, is to product the public from deceit, to foster fair competition, and to secure to the business community the advantages of reputation and goodwill by preventing their diversion from those who have  created them to those who have not….”[24]

 IV.2.    Trademarks serve mainly three purposes viz.

 (i) encourage the production of quality products;

(ii) reduce the customer’s costs of shopping and

(iii) help the customer to make decisions on purchasing products.

 IV.3.    They have received statutory protection and recognition as intellectual property vide passage of the The Trademarks Act, 1999. A trademark registered under the Act has the backing of the infringement and passing off remedies. An  unregistered trademark is not protected by the Act, except to the extent of availing   of passing off remedy.[25] The definition of the terms “mark” and “trademark” is so widely given that it conveniently covers domain name.[26] It must be noted that a   “mark” is used, rightly or wrongly, if it is used in printed or other visual   representation.[27]

 IV.4.    Section 18 of the Trade Marks Act 1999 says that any person, claiming to be the proprietor of a trademark used or proposed to be used by him, who is desirous of  registering it, shall apply in writing to the registrar in the prescribed manner for   the registration of the mark. Any mark, which is not hit by the definition and  section 9, qualifies for registration. However, a mark qualified under section 9 has to meet the positive objections under section 11 to be finally registered. Section 11 is the qualification of section 9.

 IV.5.    The strength of a trademark is its ability to distinguish the goods or services of    one from the goods or services, where another mark is deemed to be deceptively  similar to another mark if it is so nearly resembles that other mark as to be likely        to deceive or cause confusion is called deceptive similarity. No rigid criteria is set  for deciding what constitutes as deceptive similarity under the The Trade Marks    Act 1999. In this connection, reference may be made to the decision of the Supreme Court in Cadila Health Care Limited v. Cadila Pharmaceuticals   Limited[28] . In the aforesaid decision of the Supreme Court, the question that was raised and decided was whether the mark “Falcigo” and “Falcitab” were     deceptively similar, and it laid down 7 important criteria which would aid in determining what constitutes deceptive similarity.

 IV.6.    Every computer on the Internet has a unique address called its “IP address” (Internet Protocol address) which  is expressed by a strings of numbers which  are hard to remember, the Domain Name allows a familiar string of letters (the “domain name”) to be used instead. Moreover it has come to signify much more than a assigned name for a string of number, usually being associated with a company, hence 192.123.12.87, is microsoft.com really means the website of the Microsoft Corporation. This is reflected in the demand for names, which has increased following a very steep curve, to the point that today there are well over 10 million registered names; at the same time the number of non occasional users of the Internet has kept increasing, and today it is estimated to be between 200 and 300 millions (these numbers vary widely depending on the source), with a domain name every 20 or 30 users. Courts have often afforded relief to owners of registered trademarks in cyberspace   with regard to their intellectual property.[29]

IV.7.    The Supreme Court, recently in Satyam Inforway Ltd. v. Sifynet Solutions (P)   Ltd.,[30] observed as under:

“The original role of a domain name was no doubt to provide an address for computers on the Internet. But the Internet has developed from a mere means of communication to a mode of carrying on commercial activity. With the increase of commercial activity on the Internet, a domain name is also used as a business identifier. Therefore, the domain name not only serves as an address for Internet communication but also identifies the specific Internet site. In the commercial field, each domain-name owner provides information/services which are associated with such domain name.”

Back to Index

[Ed: Views expressed herein are the vies of the author only]