India - Commercial Guide
Protecting Intellectual Property

Provides advice on IPR protection, including information on the registration of patents and trademarks.

Last published date: 2020-08-25

Among the major world economies, India continues to be one of the most challenging with respect to protection and enforcement of Intellectual Property (IP).  Despite many positive statements and initiatives upon which the Government of India has embarked, developments have been few, and the pace of reform has not matched the repeated high-level calls to foster innovation and promote creativity.  India is yet to take meaningful steps to address longstanding IP issues being faced by innovation-based industries.  India remains on the Priority Watch List in USTR’s Special 301 report for 2020.  See https://ustr.gov/issue-areas/intellectual-property/special-301/2020-special-301-review.

 

Developments over the last five years

India announced its first National IPR policy in 2016. . After the announcement of the National IP policy, the portfolio of Copyright and Semi-Conductors shifted to the Department of Industrial Policy and Promotion, Ministry of Commerce, which was subsequently renamed as the Department of Promotion of Industry and Internal Trade (DPIIT).

Infrastructural Developments

Under DPIIT, a Cell for IP Promotion and Management (CIPAM) was established and has been tasked with implementing the IP Policy and interagency coordination. 

Following these efforts in 2016, there were many positive initiatives undertaken by the Government of India.  Several of these initiatives focused more on creating IP awareness and capacity building with enforcement officials. The Ministry of Home Affairs announced that IP would become a mandatory subject for all police training academies. The Indian Patent Office (IPO) hired 458 examiners to address the issue of patent and trademark examination backlogs.  Subsequently, IPO’s processing wait-times were reduced.

The Maharashtra Cyber Digital Crimes Unit (MCDCU), was setup in August 2017. The unit has been established as a public-private partnership to enable industry to work directly with state police to combat digital piracy.  The unit follows an opt-in model where the industry member determines the amount of work needed and allocates resources to work with the police, which in turn provides legal authority and intelligence.  The unit serves as a potential model for digital enforcement that other Indian states can emulate and replicate.

Legal/Legislative Developments

The Commercial Courts Act was enacted in 2016; it provided an opportunity to reduce delays and increase expertise in judicial IP matters.  See http://egazette.nic.in/WriteReadData/2018/188688.pdf.

In 2017, the Patent Rules and the Trademark Rules were revised, adopting strict timelines to dispose of cases and streamline examination.  Special discounts for filing and an expedited examination for start-ups was also introduced. 

Examination guidelines for Computer Related Inventions were finalized in 2018.  Between 2016 and 2017, India required the hardware to be novel along with the software.  That specific provision was removed in 2018 and in doing so, it merely restated the law, that computer software per se was not patentable.  In addition, IPO removed all examples of what can and cannot be patentable, replacing them with a statement that it would be left to the discretion of the patent examiner to allow or disallow an application.  See http://www.ipindia.nic.in/writereaddata/Portal/IPOGuidelinesManuals/1_86_1_Revised__Guidelines_for_Examination_of_Computer-related_Inventions_CRI__.pdf

The Patent rules were further revised in September 2019 to clarify and expand the criteria of its expedited examination procedures to include startups and small businesses, agreements with foreign IP offices, and the election of the IPO as a Patent Cooperation Treaty (PCT), International Searching Authority (ISA), or International Preliminary Examination Authority (IPEA).

In 2019, the DPIIT released draft IPO Copyright Rules to amend the 2013 rules currently in place. The draft rules are still under consideration and yet to be finalized.

International Treaties Signed/Acceded

July 2018, India acceded to the World Intellectual Property Organization (WIPO) Internet Treaties, namely the WIPO Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty (WPPT). 

In 2019, India took steps to ratify the Lisbon, Nice and Locarno WIPO Agreements.  In June 2019, India further deposited its instruments of accession with respect to three WIPO treaties, namely the Nice Agreement, Locarno Agreement, and the Vienna Agreement.  These agreements each provide for the classification of certain types of IP.  Specifically, the Lisbon Agreement provides for the protection of appellations of origin; the Nice Agreement provides for classification of goods and services applied for registration of marks; the Locarno Agreement provides classification of goods for the purposes of the registration of industrial designs; and the Vienna Agreement establishes a classification for marks that consist of, or contain, figurative elements. The Nice, Locarno and Vienna Agreements entered into force for India on September 7, 2019.  Presently, the Government of India is working on guidelines to further implement its treaty obligations.

In 2019, the Indian Patent Office (IPO) and Japan Patent Office (IPO) entered into a Patent Prosecution Highway (PPH) agreement between their two offices.   The IPO-JPO PPH is a three-year pilot program and limited to certain technical fields, namely electrical, electronics, computer science, information technology, physics, civil, mechanical, textiles, automobiles, and metallurgy.  IPO subsequently published guidelines for making PPH requests and established expedited procedures for processing PPH applications.  

USG Engagement

Engagement with India on Intellectual Property Rights (IPR) continues, primarily through the Trade Policy Forum’s Working Group on Intellectual Property.  Further, the GOI and USG continue to engage in dialogue across various platforms, such as the US-India IP Dialogue and routinely through bilateral interactions on specific IP issues as they arise. In addition, USG maintains several positive interactions with Indian Customs, Police and Judiciary officials, as well as with industry representatives to discuss ways to strengthen India’s important enforcement ecosystem.

In October 2019, the US and India signed a Science and Technology Agreement, which provides a framework for collaboration between the two countries in supporting all fields of science, technology, and innovation.

Legislative Climate

Pharmaceutical and agro-chemical products can be patented in India.  Plant varieties are protected by the Plant Varieties and Farmers’ Rights Act.  However, Indian law does not protect against the unfair commercial use of test data or other data submitted to the government during the application for market approval of pharmaceutical or agro-chemical products. 

India generally has adequate copyright laws. The Copyright Act is in keeping with international standards barring a few exceptions, like provisions related to registration of Collective Management organization (CMO’s).

The Designs Act allows for the registration of industrial designs.  The Designs Rules, which detail classification of design, conform to the international system and are intended to take care of the proliferation of design-related activities in various fields.  India’s Semiconductor Integrated Circuits Layout Designs Act is based on standards developed by WIPO; however, this law remains inactive due to the lack of implementing regulations.

Up until 2018, the Intellectual Property Rights (Imported Goods) Enforcement Rules, or Customs Rules on IPR, included provisions for the recordation of all categories of IP.  A 2018 change to the Customs Rules on IPR removed patents from the scope of customs protection. Accordingly, the new customs redecoration system permits owners of trademark, designs, copyright, and geographical indications to record their IPR with Customs and seek affirmative enforcement action in the event of counterfeit activity at the ports. Customs officers have ex-officio authority to seize and destroy counterfeit goods, though rights holders must pay for storage and destruction of counterfeit materials.

There is no statutory protection of trade secrets in India.  Business interactions must rely on contract law to secure sensitive information exchanged between parties, which can be challenging to navigate or enforce.

Legislation/Bills Pending Parliamentary approval

  • The Pesticides Management Bill: The Pesticides Management Bill (2008), would allow data protection of agricultural products. See https:/www.prsindia.org/billtrack/pesticide-management-bill-2020 
     
  • The Cinematographic Bill: In 2019 the cabinet approved anti-camcording language to be inserted in the Cinematographic Bill. The bill contains provisions criminalizing illicit camcording.  Click here for details.

Regulatory Climate/Hurdles

Despite, several positive developments, there have also been many regulatory hurdles and challenges that may affect the commercialization of intellectual property in India.

In April of 2017, the Ministry of Health and Family Welfare (MoHFW) by way of a notification removed the requirement for companies to inform whether a drug is under patent at the time of filing for a manufacturing license.  This is viewed as a regressive step and goes against India’s National IP Policy that calls for better center and state coordination on IP. 

The threat of price control for patented pharmaceuticals continues to concern rightsholders.  In 2017, several pharmaceutical drugs and medical devices have come under price control.  The use of Para 19 of the Drug Price Control Order was implemented to bring drugs not under the essential medicine list under price control.  Until now, only one patent drug is under price control.  In 2018 and 2019, a series of pharma price controls have been administered bringing more patented drugs under price control.

 

In January 2019, the Department of Pharmaceuticals (DOP) amended the 2013 Drug Price Control Order (DPCO) to exempt highly-specialized, or “orphan drugs” as defined by the GOI, from price-controls for a period of five years by removing all localization requirements.  .  While this is viewed as a positive development, this has raised serious concerns from the pharmaceutical industry as they continue to seek clarity from DOP on the following questions:

 

  • Would the five-year price-control exemption for patented drugs allow the National Pharmaceutical Pricing Authority (NPPA) to place price controls on such drugs under the National List of Essential Medicines (NLEM) after five years, regardless of how much longer the drug was protected by patent?
  • Because it is rare for the date of commercialization and patent grant to coincide, would this mean that patent holders would not be given an exemption if they receive the patent more than five years after they bring their product to market?

 

  • Would paragraph 19 of the DPCO, which gives NPPA the authority to place drugs and devices not listed in the NLEM under price control, override the changes to paragraph 32 and therefore negate the exemption all together?

 

In the pharmaceutical sector, Section 3(d) of the India Patents Act restricts patent-eligible subject matter in a way that fails to incentivize innovation that would lead to the development of improvements with benefits for Indian patients.  India still lacks an effective system for notifying interested parties of marketing approvals for follow-on pharmaceuticals which would allow for the early resolution of potential patent disputes.

 

The lack of an effective patent linkage mechanism, coupled with liberal price controls and potentially abusive use of procedures like pre-grant and post-grant opposition proceedings under the Patent law, complicate an effective IPR regime for the pharmaceutical and medical device industries, and create uncertainty for these sectors.
 

There is currently no effective coordination between Department for Promotion of Industry and Internal Trade (DPIIT) and the Central Drugs Standard Control Organization (CDSCO), which creates complications for innovative pharmaceutical and medical device industries.  DPIIT provides for patent protection of pharmaceuticals, while CSDCO provides for the granting of a manufacturing license for the drug. The lack of coordination between the two agencies through either patent linkages or an effective notification system invites abusive infringing activities, which further complicates the ability for these industries to effectively commercialize and enforce their rights in India.

 

India announced its Government Procurement Policy, which called for localization requirements.  In keeping with this new Policy, MIETY introduced a Government Procurement of Cyber Products Policy, that requires all

IP ownership to be transferred to the Indian Company. Click here for details.
 

In 2018, GOI of India formed an inter-ministerial group to investigate reinstating royalty caps for all technology collaborations and brand licensing, limiting the amount of foreign exchange that can leave the country.  If implemented, such caps would negatively affect all sectors of the economy – including defense – where a company licenses its brand name or enters into a technical collaboration.  India had a similar provision prior to 2009, but it was abandoned in favor of attracting higher levels of foreign investment.

 

The National Biodiversity Authority has proposed mandated royalties to be paid under the access and benefit sharing agreements by companies that use genetic resources occurring in India.  See http://nbaindia.org/uploaded/pdf/Gazette_Notification_of_ABS_Guidlines.pdf

 

Copyright holders continue to report high levels of piracy particularly on the Internet and through commercial broadcasts.  Court cases and government memoranda also raise concerns that a broad range of published works will not be afforded meaningful copyright protection.  In 2019, the Department for Promotion of Industry and Internal Trade (DPIIT) proposed draft Copyright Amendment Rules that would broaden the scope of statutory licensing to encompass not only radio and television broadcasting but also Internet broadcasting, despite a Mumbai high court ruling earlier in 2019 that held that statutory broadcast licensing does not include Internet broadcasts.  If implemented, the Amendment Rules would have severe implications for Internet content-related right holders.  This proposal, along with the granting of licenses under Chapter VI of the Indian Copyright Act and overly broad exceptions for certain uses, has raised concerns about the strength of copyright protection and complicated the functioning of the market for music licensing.  Furthermore, industry has reported continuing problems with unauthorized file sharing of videogames, signal theft by cable operators, commercial scale photocopying and unauthorized reprints of academic books, and circumvention of Technology Protection Measures (TPMs). See https://dipp.gov.in/sites/default/files/Draft_Copyright_Amendment_Rules_2019.pdf.

Form 27 of the Indian Patent Act: Section 146 read with Rule 131 of the Indian Patent Act requires the patentees to file the details of commercialization on Form 27. The objective of requiring annual submission of Form 27 is to ensure that patentees are working their inventions in India, though in actuality the form may be hindering rather than fostering innovation in India. The form as it is in use today, requires disclosure of sensitive and confidential information such as pricing policy, licensee information, area of operation, accounting of units sold per annum, etc.  Since this information made publicly available, there is a likelihood that information on Form 27 may be used by anyone for competitive or alternative purposes. GOI has been working with Industry to revise the form with the hopes that such efforts would dilute the disclosure requirements, notwithstanding other concerns with respect to the form’s use.

 

The interpretation and application of the patent law in India lacks clarity and consistency in its implementation, particularly in several important areas, such as: 1) pre-grant opposition proceedings; 2) the scope of patentable subject matter (e.g., with respect to software and whether patents are limited to new chemical entities rather than to incremental innovations); and 3) the application of provisions governing use of compulsory licenses.

 

The Ministry of Finance released a draft requirement to include an article on IPR in the Defense Procurement Procedure (DPP).  Titled “Buyer’s Rights to Optimise Life Cycle Support Costs and Systems Enhancement,” the clause would give the buyer the right to procure any equipment from the original equipment manufacturer (OEM) or third-party – or to design and develop their own equipment – and integrate said equipment into an OEM platform.  The buyer would also gain the right to locally develop a system, sub-system, or assembly with its own original designs.  The existence of such clauses directly conflicts with the protections, privileges, and rights given under the statute.  Clauses like this have an impact of overriding the statutory provisions.  See https://mod.gov.in/defence-procurement-procedure

Enforcement climate

Weak enforcement of IP laws by police and courts is a significant problem in India.  The GOI’s enforcement activities are gradually growing, with positive steps seen in IP courts and Maharashtra IP Crime Unit, yet implementation remains faulty. 

India’s overall IP enforcement, despite progress made online, remains inadequate.  During the last year, India has taken steps against websites with pirated content.  Nonetheless, weak enforcement of IP by the courts and police officers, a lack of familiarity with investigation techniques, and the continued absence of any centralized IP enforcement agency, combined with a failure to coordinate actions on both the national and state level, threaten to undercut any progress made.

In the pharmaceutical and agricultural chemical sectors, India continues to lack an effective system for protecting against the unfair commercial use, as well as the unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approval for such products. 

The Intellectual Property Appellate Board (IPAB), was established in 2003 to adjudicate appeals over patents, trademarks, copyrights, and other decisions.  Now many years later, the IPAB still lacks the necessary number of technical members to form a quorum and make judicial determinations, which has led to a significant backlog of IP cases. This has further implicated copyrights as the Copyright board has been being folded into the IPAB, which has also resulted in mismanagement of copyright management organizations (CMOs).

The Commercial Courts Act, which was enacted in 2016, in order to reduce delays and increase expertise in judicial IP matters.  However, to date, only a limited number of courts have benefited under this Act, and right holders report that jurisdictional challenges have reduced their effectiveness and that inadequate resources for staffing and training continue. 

Positive Enforcement Developments

The Maharashtra Cyber Digital Crimes Unit (MCDCU), which has been operating since August 2017, has succeeded in suspending over 453 websites since its inception.  The unit was established as a public-private partnership where industry worked with state police to combat digital piracy.  The unit follows an opt-in model where the industry member determines the amount of work needed and allocates resources to work with the police, which in turn provides legal authority and intelligence.  The unit serves as a potential model for digital enforcement that other Indian states can emulate and replicate.

Confronting online piracy, the Delhi High Court decided that approved site take- down requests will apply to those sites with addresses specifically listed in the request; and similar sites that operate under different addresses.  This “dynamic injunction” has been lauded as it is meant to eliminate the need for complainants to approach courts with new requests should a banned site reappear under a new address. See https://indiankanoon.org/doc/47479491/.
 

Ruling on “Tips Industries vs. Wynk Music Ltd.& Anr,” the Bombay High Court stated that the extension of the Copyright Act, 2016’s Section 31(D) to the internet is flawed logic and unsound in law.  The court also noted that Section 31(D) is an exception to copyright and must be strictly interpreted.  It is to be seen if this judgement helps the Government of India in withdrawing the DPIIT memo of 2016. See https://indiankanoon.org/doc/129995201/

In a positive move, the Delhi High Court clarified in January, the exclusion from patentability  under Section 3(k) of the India Patents Act, ruling in Ferid Allani vs Union of India & Others that computer-related inventions (i.e., based on a computer program) demonstrating ‘technical effect’ or ‘technical contribution’ are patentable even though they may be based on a computer program.  The Court indicated that technical effect and technical contribution must be evaluated when determining the patentability of an invention based on a computer-program. See https://indiankanoon.org/doc/90686424/

In any foreign market companies should consider several general principles for effective protection of their intellectual property. For background, link to our article on Protecting Intellectual Property and Stopfakes.gov for more resources.

Contact for:

Mr. John Cabeca

U.S. Intellectual Property Attaché for South Asia,

American Center, 24 Kasturba Gandhi Marg, New Delhi, 110001

Phone: +91 11 2347 2000

 

For more information, contact ITA’s Office of Intellectual Property Rights Director, Stevan Mitchell at Stevan.Mitchell@trade.gov