INSURING DATA PROPERTY

BY

PRAVEEN DALAL*

            The aim of this article is to explore the potential business prospects originating out of the protection of “Data Property”. The insurance companies exploring and conquering the “unexplored and unconquered insurance base” first, will alone be the lead maker. A successful insurance business venture not only requires the “futuristic prospects determination in present’ but equally requires the “first initiative”.

 I. Introduction

The world has witnessed a sea change in the last decade, particularly in the field of national and international trade. It is evident from the initiatives and activities undertaken both at the national and the international level. The conclusion of TRIPS Agreement[1], to which India is a party, witnessed the inclusion of the Intellectual Property Rights (IPRs) under the protective umbrella of the World Trade Origination. Thus, now IPRs are also part and parcel of “International Trade Obligations”. The signing of TRIPS Agreement by India is under the regime of “Public International Law”, whose most significant attribute is to “adhere” to the assurances given at the time of signing the Treaty or Convention. Thus, the assurance of protecting the IPRs in India has been “substantially complied with” by India and the remaining obligations will also be taken care of very soon. The insurance companies must have a close watch over these developments occurring at the national and international level since these developments have tremendous “insurance potentials”[2].

 II. Insuring Data Property

             The “Data Property” has a great commercial value for its holder. It is the result of his/her intellectual efforts and arduous labour that not only requires a ‘public recognition” but equally the “protection” of the law. The importance of “Data property” has significantly increased after it has been included as one of the categories of “Intellectual Property Rights” in the TRIPS Agreement. Thus, the significance of “Data Protection” has gained not only the national support but equally the international will as well. This necessitates the “insurance” of the same.

The insurance of “Data Property” cannot be effectively managed unless the ‘Insurance companies” are fully aware of the laws concerning “Data Protection”. The laws, till now, governing the protection of “Data Property” can be found in the Copyright Act, 1957 and the Information Technology Act, 2000.

The Copyright Act is the most important law, which is providing the most effective and strongest protection to “Data Property”. It is supplemented by the Information Technology Act that is taking care of ‘Data stored in electronic form”. Thus, presently the two laws are sufficiently and adequately protecting the “Data Property”.

The insurance companies must get “specialised knowledge” about these two Acts before starting the “Data Protection Insurance Business”. The costs involved in that process is much lesser than the revenue that will be generated by this exercise.

In the foreign countries this business is flourishing in a fantastic manner. It would not serve any purpose when the same is brought to India and accepted by one and all insurance companies. The smart move is to appreciate its benefits first and “acquire” the unexplored insurance base first. This process is not a one-day exercise but it will take many months to acquire expertise and perfection in this field. The flaws and inadequacies, which are bound to be there despite best efforts, have to be eliminated as earliest as possible.

An insurance company having complete knowledge and flawless infrastructure alone will be able to compete at the international level. It must be appreciated that with effect from 01-01-2005 India has to make its trade and business atmosphere conducive with the mandates of TRIPS Agreement and other “International Obligations”. The insurance companies cannot afford to sideline this important and far-reaching development except at the cost of elimination from the competition.

The Hon’ble Government is planning to make a new law on “Data Protection” and has already accepted the grant of “Product Patent” along with “Process Patent”. These developments are taking place because of the “growing international concerns” regarding IPRs protection.  Thus, insurance companies must closely monitor the international as well as the national developments in this regard.

 III. Conclusion

             The importance of “IPRs insurance” has not been realised and accepted by the insurance sector in India. It seems the insurance sector is waiting one of its competitors to take the lead and then follow the path shown by it. This seems to be a flaw on the part of management policy making. The benefits and profits are tremendous when the field is unexplored. The golden rule of profit making is “more the risk more will be the profit and vice-versa”. The scope of profit making reduces when the number of competitors increases.   It would be appropriate to mention in this regard “the future belongs to those who focus on it sharpest”. Thus, there is no scope in any business venture but the scope lies in the person holding and managing the same.  

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