The aim of this article is to analyse the implications of and opportunities arising out of the TRIPS Agreement to which India is a signatory. The most important aspect of the TRIPS Agreement is that it protects Intellectual Property Rights (IPRs) very efficiently and effectively. The IPRs can act as a lever for economic growth and India could be one of the countries for which IPRs can do this task.
I. INTRODUCTION
The law regulates the conduct of the society in its most desirable and benign form. It maintains the order in the society and eliminates unhealthy delinquencies and deviations. Thus, law plays an important role in developing a civilised society. The law of a country is generally based on its social, economic, and political ideologies and notions. These ideologies and notions are essentially different in various societies. This usually gives rise to “conflict of laws” which is generally taken care of by the “Private International Law”. An important aspect of the Private International Law is that it is territorial oriented and society specific. Thus, the laws of the country in question prevail, if there is a conflict between the two laws of the different sovereign States. The position is, however, totally different when it comes to “Public International Law” that primarily encompasses within its ambit the law(s), which are, required to be uniformly followed by the “Member Countries”. The Treaties and Conventions entered under the banner of a common platform like WTO bind these “Member Countries” and they cannot plead that the same is against the notions and ideologies of their nation. That is why countries are very cautious while entering into various Treaties and Conventions. The Treaties and Conventions so entered are not automatically incorporated in the “Municipal Legal System”, though some countries endorse the concept of “automatic incorporation” of the same. In India, we have to take an independent action of “legislation” U/A 253
[1] of the Constitution of India to make the Treaties and Conventions functional. This shows the legislative superiority of Parliament over the respective States. The laws concerning Intellectual Property Rights (IPRs) are also part of Public International Law and the TRIPS
[2] Agreement governs most sturdily and persuasively the protection requirements of IPRs in India. In fact, with effect from 01-01-2005 the provisions of Indian Patents Act, 1970 also allows “product patent” along with the “process patents” for medicines. It is interesting to note that India was sternly against extending the protection of product patents to “medicines”, but as a trade-off
[3] it has accepted to confer the same protection to pharmaceutical industry
[4]. It must be noted that by acceding to the TRIPS Agreement India has secured for itself a “golden path of economic development”. Thus, to appreciate the value and importance of IPRs a brief evaluation of TRIPS becomes essential.
II. THE TRIPS AGREEMENT
The provisions of TRIPS Agreement are the most extensive and rigorous in nature. They protect all the forms of IPRs collectively. The protective umbrella of TRIPS covers the following IPRs:
(1) Copyright and Related Rights,
(2) Trademarks,
(3) Geographical Indications,
(4) Industrial Designs,
(5) Patents,
(6) Layout designs of Integrated Circuits, and
(7) Protection of Undisclosed Information.
It must be noted that by virtue of Article 1(2) of the TRIPS Agreements
[5], the Control of Anti-Competitive Practices in Contractual Licences has been excluded from the definition of “intellectual property”. Thus, the TRIPS Agreement covers virtually the entire gamut of IPRs. The protection to these IPRs is provided by India in the following manner:
(1) Copyright and related rights: The Indian Copyright Act, 1957 protects the copyright and related rights of their owners. The rights under this category can be further sub-divided as:
(a) Copyright: The Copyright Act, 1957 protects the copyright of the holders of the same,
(b) Neighbouring rights: Copyright has some closely related rights that confer similar principles of protection. These are known as “related rights” or “neighbouring rights”. These rights protect persons, other than the creators, who are involved in the dissemination of copyrighted work. These rights are confined to three specific categories of persons: performers, producers of phonograms and broadcasting organizations. In some countries such rights may be a part of the copyright law,
[6] while in others there is different legislation to protect these rights.
(c) Data property rights: The Copyright Act, 1957 protects “databases” as “literary works” under section 2(o) of the Copyright Act
[7]. It must be noted that the definition of “literary work” is “inclusive” in nature and it is capable of encompassing more categories. Secondly, the concept of “compilation” used in this section is itself inclusive in nature and the compilation of “databases” is one of them. Thus, the expression “compilation”, as used in section 2(o), includes at least two forms of compilation. The one is compilations for the purpose of conferment of Copyright and the other is compilation for the purpose of Data Protection. Thus, when the section 13(1) (a) of the Copyright Act uses the expression “original literary works, it is used not only in an “inclusive” manner but also in a “multifunctional” manner. It should not be confused to mean the literary work vis-à-vis copyright only. The inclusive nature of the definition of “literary work” is permeating the entire Copyright Act and it cannot be allowed to be whittled down while interpreting section 13(1) (a) of the Copyright Act. In short, the copyright Act protects original compilations as “both” copyright and databases. It would be wrong to suggest that copyright and data protection are one and the same thing. These two are different Intellectual Property Rights, which are expressly protected not only under the TRIPS Agreement but also equally under the Copyright Act. The erroneous treatment of databases as copyright and with similar parameters has created a position where the government is planning to make a separate law for data protection. The present requirement is only to issue an “explanatory notification” clarifying this position. In fact, the definition of “literary work” is capable of accommodating “other materials” as well, which may be non-data in nature. This possibility has been expressly recognised and provided by both the TRIPS Agreement and the Copyright Act
[8].
(2) Trademarks: The Trademarks Act, 1999 (TMA) protects the trademarks and their infringement can be challenged by a passing off or/and infringement action. The Act covers the remedies peculiar to Indian legal system as well as the well-known common law principles of passing off. At the same time it is in conformity with the recognised international principles and norms set by TRIPS Agreement. Thus, the protection provided under the Act is reliable and secure. It is interesting to note that the TMA also protects the trademarks from being acquired in the form of “domain names”. A domain name, though properly registered as per the requirements of ICANN
[9], is still subject to the Trademarks Act, 1999 if a person successfully proves that he has “rights’ flowing out of the Act. A domain name may have all the characteristics of a trademark and could found an action for passing off
[10] by applying the principles of TMA. The protection of domain name under the Indian legal system is standing on a higher footing as compared to a simple recognition of right under the UDNDR
[11] Policy. The ramification of the Trademarks Act, 1999 are much wider and capable of conferring the strongest protection to the domain names in the world
[12].
(3) Geographical Indications and Plant varieties: The occupational structure of India is dominated by the “agricultural sector” and the “manufacturing sector” and the “service sector” is lagging far behind in this context. This shows that India is predominantly an agricultural economy and hence it requires strongest protection of its “agricultural resources”. The attempts to acquire patent rights in “Basmati rice”, “Neem”, “Turmeric”, etc were the outcome of non-enactment of laws on “Plant Varieties” and “Geographical Indications”. The Indian Government immediately reacted by not only winning back these “agricultural resources” but equally by enacting the Protection of Plant Varieties and Farmers Rights Act, 2001(PVA) and the law concerning Geographical Indications. The Geographical Indications Act, 1999 protects the IPRs flowing out of the “geographical indications” in India. The TRIPS Agreement defines geographical indications as an indication which identifies a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin
[13]. Article 23 of TRIPS provides additional protection for Geographical Indications concerning Wines and Spirits.
Similarly, the Plant Varieties and Farmers Act, 2001 protects the “plant resources” of India. It must be noted that the TRIPS Agreement protects the “plant varieties” as an Intellectual Property Right under Part II, Section 5, which is dealing with “Patent protection”. Article 27(3) (b) of the TRIPS Agreement provides that “Members” shall provide for the protection of Plant Varieties “either” by Patents or by an effective sui generis system or by a combination thereof. It is interesting to note that the TRIPS Agreement is “encouraging” the Member Countries to adhere to well recognised International Treaties and Conventions already in force. Surprisingly enough it is not requiring its members to follow the rules laid down by the UPOV Convention of 1978 and UPOV Convention of 1991. It has given a choice to the members to protect plant varieties either through “Patent law” or through an “effective sui generis system”. Thus, no fixed criteria is available that is compulsorily required to be followed by the members. The general provisions and limitations of the TRIPS Agreement will still permeate the laws providing the protection to plant varieties. The law of India combined the provisions of both UPOV 1978 and UPOV 1991 by taking the best of both. The adoption of a sui generis law by India is a good step in the right direction
[14].
(4) Industrial Designs: Article 2.1 of TRIPS Agreement obligates its members to comply with Articles 1 to 12 and Article 19 of the Paris Convention. Article 25.1 obligates the members to provide protection of independently created industrial designs that are new or original. However, members may provide that designs are not new or original if they do not significantly differ from known designs or combinations of known design features. In addition countries are free to exclude protection of designs that are dictated essentially by technical or functional considerations. Article 25.2 mandates each member to ensure that requirement for securing protection for textile designs, in particular in regard to any cost, examination or publication, do not unreasonably impair the opportunity to see and obtain such protection. This obligation can, however, be met either through copyright law or design law. Article 26.1 confers upon the owner of a protected industrial design, the right to prevent third parties not having his consent from making, selling or importing articles bearing or embodying a design which is a copy, or substantially a copy, of the protected design when such acts are undertaken for commercial purposes. Article 26.2 provides limited exceptions that do not unreasonably conflict with the normal exploitation of protected industrial designs and do not unreasonably prejudice the legitimate interests of the owner, taking account of the legitimate interests of the third parties. Article 26.3 provides for a minimum term of protection of at-least 10 years.
In 1911 the Designs Act was passed by the then British Government in India, since then extensive amendments have been made in the designs Act. In the meanwhile India has made tremendous progress in the field of science and technology. There has been considerable increase in the registration of designs. To provide more effective protection it had become necessary to make the legal system of providing protection to industrial designs more efficient. It was also intended to ensure that the law does not unnecessarily extend protection beyond what is necessary to create the required incentive for design activity while removing impediments to the free use of available designs. To achieve these objectives and in order to repeal the Designs Act, 1911, which had been extensively amended, the Designs Act, 2000 was enacted
[15].
It is interesting to note that the protection under the Design Act is provided in the form of “copyright in design”. Copyright means an exclusive right to apply a design to any article in any class in which design is registered
[16]. If a design is registered under Design Act, it is not eligible for protection under Copyright Act
[17]. In case of a design capable of being registered under Designs Act, but not so registered, copyright will subsist under the Copyright Act, but will cease to exist as soon as any article to which design has been applied has been reproduced more than 50 times by an industrial process by the owner of copyright or with his license by any other person
[18].
(5) Patents: The Indian Patents Act, 1970 provides patent protection in India. The same is in accordance with the provisions of the TRIPS Agreement. The recent conferment of “product patent” along with the “process patent” is an example of such compatibility. The protection to plant varieties has been excluded from the realm of patent law and a separate Act has been made for that purpose. Further, the provisions of “international patent application” and “compulsory licenses” are also in conformity with TRIPS Agreement and Doha Declaration respectively. Thus, the interest of the public at large has also been taken care of by the Indian Patents Act, 1970 and there is no need of being panicked from product patent of medicines.
(6) Layout designs of Integrated Circuits: The Semiconductor and Integrated Circuits Act, 2000 provides protection to them in the Indian context and it is sufficient to meet the requirements of the time. Further, it is in conformity with TRIPS Agreement.
(7) Protection of Undisclosed Information: An intellectual property right (IPR) has no value if it cannot be asserted and protected. If an individual cannot protect what he owns, he owns nothing. This is more so in case the right falls under the “Trade Secret” category. The trade secret presupposes the existence of valuable business information, which provides an additional benefit or competitive advantage over the competitors. The right in trade secret remains so long the owner can prevent its disclosure. The moment it is disclosed or becomes public, the right in it ceases to exist. Thus, if properly protected, trade secrets may last forever. It is believed that the formula for COCA-COLA is locked in a vault with no person having access to it. This shows that information, which provides a competitive edge over rivals, must be protected on a priority basis. Thus, recognizing the importance of this right, the countries all over the world provide protection to trade secrets. If trade secrets were not legally protected, the companies would loose incentive for investing time, money and labour in research and development, which is very important for the overall development of the country. Further, the existence of law also works as a deterrence for wrongdoers and discourages unfair conduct of the business
[19].
This is the only area where India lacks drastically. The undisclosed information is protected by providing “trade secrets” protection all over the world. This field of IPR has, however, not aroused much interest in the minds of the legislature and India is still struggling for a good law on trade secrets. It is hoped that very soon we will also have a good law on trade secrets
[20].
III. THE GOLDEN PATHThe signing of TRIPS Agreement by India has given birth to new opportunities and challenges for India. For a proper analysis of the same they have been categorized as:
(1) Opportunities due to TRIPS, and
(2) Implication due to TRIPS.
(1) Opportunities due to TRIPS: The TRIPS Agreement has the potential of providing a sound and stable economic growth for India. Firstly, it will provide ‘employment opportunities” to many skilled and trained Indians. It cannot be doubted that the Indian workforce is the best in world when it comes to IPRs and Information Technology. This may take the form of direct employment in the firms and organizations dealing in IPRs and Information Technology in India. It may also be in the form of providing “business process outsourcing” (BPO). The scope of BPO is gaining momentum in India and the same has been used to provide legal outsourcing and outsourcing for matters pertaining to information technology. These employment opportunities will also bring valuable “foreign exchange” to India and this can make the Indian currency stronger against the foreign currency. At the same time these foreign dealings will also bring technology and infrastructure into India that is very important for the overall development of the nation. The insurance sector can also be benefited from this phenomenon as there will be a need to insure IPRs and technology assets in India. Thus, all that is needed is to explore the “golden path” of the TRIPS in its true perspective.
(2) Implication due to TRIPS: The TRIPS Agreement has provided numerous opportunities for India but at the same time it also requires India to fulfill certain “minimum standards” for the protection of IPRs in India. It has eliminated the possibility of conferring any “special treatment” to any particular nation. It has also provided the basic standards that have to be followed so that IPRs can be enjoyed up to their fullest extent. Thus, to enjoy the fruits of TRIPS India is required to make its IPRs regime compatible with the TRIPS mandates. The recent conferment of “product patent” is an example of the same. There is, however, a long distance to cover yet. The enforcement of these IPRs requires a dedicated and arduous effort on the part of India. Thus, we must be very cautious about the legal protection of these IPRs in India. The biggest threat to IPRs is coming from the frontiers of Internet. This is so because Internet recognises no boundary and sovereignty. The “jurisdiction problem” is still vexing the legal systems of the worlds. The jurisdictional issues, particularly those relating to on-line violations of IPRs, are not easy to handle. The legal system of each nation reacts differently to these violations. At the international level various treaties and reciprocal arrangements have been adopted to deal with these violations of IPRs. This will definitely help in providing strong and effective IPRs protection to their owners. The ultimate success of these laws and arrangements would, however, depends upon a pro-active role played by the judiciary of the respective nation. If the judiciary recognising the need of the hour takes IPRs violations seriously, then the chances of their future violations become nominal.
IV. CONCLUSION
The TRIPS Agreement is a blessing in disguise for India and the only thing which we have to appreciate is its proper utilisation as per Indian socio-economic conditions. The golden path of TRIPS cannot be explored unless we venture upon it with full dedication and seriousness. It must be noted that the benefits of TRIPS are too numerous to be ignored. The possibility of India being a leader in the field of IPRs cannot be doubted and India will emerge as a leader in this field. The ultimate success of India, however, depends upon public awareness and vigilant citizenry. A person does not own anything unless he can protect it and a person cannot protect an IPR unless he is aware of it. The basic frame and guidelines have been prescribed by the TRIPS and it is now for India to encash them for its benefit.
© Praveen Dalal. All rights reserved with the author.
* Arbitrator,Consultant and Advocate, Delhi High Court
Contact at: pd37@rediffmail.com/ perry4law@yahoo.com Telephone No: 9899169611.
[1] Article 253 reads- Legislation for giving effect to international agreements: Notwithstanding anything in the foregoing provisions of this Chapter (Part XI, Chapter 1-Legislative Relations), Parliament has power to make any law for the whole or any part of the territory of India for implementing any treaty, agreement or convention with any other country or countries or any decision made at any international conference, association or other body.
[2] The Trade Related Aspects of Intellectual Property Rights
[3] The benefits of acceding to TRIPS Agreement are numerous and tempting enough to allow product patent and to adhere to the requirements of TRIPS Agreement.
[4] Praveen Dalal, “The mandates of WTO”,
www.naavi.org, posted on 27-02-05.
[5] Article 1(2) reads- For the purpose of this Agreement, the term “intellectual property” refers to all categories of intellectual property that are the subject of Sections 1 through 7 of Part II. The Control of Anti-Competitive Practices in Contractual Licences falls in the 8th category; hence it is excluded from the protective umbrella of intellectual properties.
[6] For instance, in countries like US or India, copyright law covers the rights of producers of phonograms.
[7] Section 2(o) provides that unless the context otherwise requires, literary work includes computer programme, tables and compilations including computer databases.
[8] Praveen Dalal, “Mandates of WTO”,
www.naavi.org, posted on 27-02-05. Kindly see the article for more details.
[9] The Internet Corporation for Assigned Names and Numbers.
[10] M/s Satyam Infoway Ltd v M/s Sifynet Solutions Pvt. Ltd, (2004) 6 SCC 145.
[11] Uniform Domain Name Disputes Resolution Policy.
[12] Praveen Dalal, “Domain name protection in India”,
www.naavi.org, posted on 04-11-05.
[13] Article 22 (1).
[14] Praveen Dalal, “Plant variety law in India”, (Under publication).
[15] Shruti Gupta, “Design protection in India: An overview”, (Under publication).
[16] Sec.2(c)- Design Act,2000
[17] Sec.15(1) of Copyright Act,1957
[18] Sec.15(2) of Copyright Act,1957
[19] Praveen Dalal. “Trade secrets law in India”, IJIPR, Nov-04 issue, page 21.
[20] Till then the concerned IPR holders can avail the remedies and solutions provided by the author in the abovementioned article on trade secrets.