Intellectual Property in India: How to Protect Your IP
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India has been a member of WIPO (World Intellectual Property Organization) for almost 50 years, which means that most intellectual property laws in India are up to international standards and the Indian courts can grant injunctive relief relatively quickly in cases of infringement. But what options do you have to protect your patents, trademarks, copyrights and designs when setting up your entity in India? Our legal team will guide you through them.
Intellectual Property (IP) Registration in India
Intellectual property rights in India are governed by various laws, including the Trademarks Act 1999, Copyright Act 1957, The Patents Act 1970, The Designs Act, The Geographical Indications Act 1999 and The Customs Act, 1962. These laws provide a system of legal remedies for enforcing IP rights.
Most types of IP, such as patents, trademarks or designs, can be registered online with the Office of the Controller General of Patents, Designs and Trademarks. The registration process and required documents vary depending on the type of IP you are registering, but in all cases you will need to prepare the following documentation:
- Application form: The Indian IP Office uses specific forms for each type of IP (Patent – Form 1, Trademark – Form TM-1 etc.).
- Applicant information: Your company name, address and contact details.
- Proof of ownership: Documents that prove your ownership of the IP. For example, these could be documents describing the invention in the case of a patent.
- Power of Attorney (if applicable): If you are using an IP attorney to file the registration (such as an Indian IP lawyer), you will need to attach a power of attorney so that person can represent you.
- Specification/Description: A detailed description of the IP, depending on the type. For patents, this is the full specification describing the invention.
- Fees: The Indian IP office charges fees for applications for registration. The fees vary depending on the type of IP you are registering. Trademark registration typically costs between Rs 4,000 and Rs 10,000 (US$45 to US$115). Patent registration is more expensive, typically costing between Rs 15,000 and Rs 50,000 (US$170 to US$560). It is advisable to also hire an Indian IP lawyer for your registration who is familiar with the necessary documentation for foreign companies, so you can be sure that you do not incur unnecessary costs or delays.
Non-disclosure agreement (NDA)
Commercial business strategies such as trade secrets, know-how, production methods or any form of information that is kept confidential to maintain an advantage over competitors fall under trade secrets. India has no legal or judicial basis that guarantees the protection of trade secrets. Therefore, it is important that if you are going to work with a partner in India, you take steps yourself to protect this IP. You do this by making agreements with your partner(s) and recording these in a non-disclosure agreement (NDA).
All confidential information that cannot be registered as a patent, trademark, copyright or design with the Indian IP office must therefore be protected in an NDA. An NDA can be used to exchange confidential information, such as information in the context of negotiations to acquire another company or to discuss a patent. If confidential information is expected to be shared in order to conduct business or collaborate, an NDA ensures that this information is not disclosed to outsiders. At a minimum, an NDA should include the following information:
1. Parties Involved
Clearly identify both parties to the agreement: the IP owner (who is sharing confidential information) and the receiving party (who is receiving confidential information). Include full legal names, addresses, and contact information.
2. Definition of Confidential Information
Define what constitutes “confidential information” in the NDA. Use clear and concise language that encompasses the type of information you want to protect. Consider including examples, but avoid an overly extensive list. Address whether information independently developed by the receiving party is also considered confidential.
3. Confidentiality Obligations
Outline the receiving party’s obligations to maintain the confidentiality of the disclosed information. Include restrictions on the use, disclosure, and sharing of the confidential information. Exceptions to permitted uses may be included, such as for the purpose of the intended collaboration or disclosure required by law.
4. Duration and Termination
Determine the duration of the confidentiality obligations. This may be a fixed period or until the information becomes public. Specify the conditions under which the NDA may be terminated by either party.
5. Consequences for Breach of NDA
Outline the potential consequences if the receiving party breaches the NDA. This may include injunctive relief (a court order to prevent disclosure) or damages.
6. Dispute Resolution
Establish a mechanism for resolving disputes arising from the NDA. This can be negotiation, mediation or arbitration.
7. Applicable law and jurisdiction
Specify the legal jurisdiction that applies to the interpretation and enforcement of the NDA.
In this case too, it is strongly recommended that you hire an Indian IP lawyer who is familiar with local IP regulations and has experience in drafting NDAs for collaborations between Indian and European partners. This will prevent you from missing important elements.
Agreements on the creation of new IP
An NDA can also contain agreements on the use of a Background IP. This is the intellectual property that a company already has before it starts working with a party in India. In a collaboration, the company will jointly develop new intellectual property (IP). It is therefore important to clearly record agreements on the use of the new IP.
This is important in India because much of the technology that comes to India from Europe needs to be adapted or localised, either to reduce the cost or to make it workable for the Indian context. In the absence of clear agreements on the new IP, this IP will be open to infringement by others. It will be very difficult at a later stage to protect that IP or to dispute that the IP was developed on the basis of the background technology.
Provisional Patent Application (PPA)
For trade secrets that a European company wants to share with an Indian partner, a PPA registration can also be used: a Provisional Patent Application. This is a legal tool that does not exist in Europe, but is widely used in countries such as India, the US and South Africa as an additional means of protection. A PPA means that an owner of confidential information (both patents and unregistered trade secrets) can register this information in confidence and under confidentiality with the Indian IP office. They issue a certificate stating that the owner has filed his information on a certain date. This information, unlike formal patent applications, will never be made public.
The PPA certificate can be added as an attachment to an NDA to be able to demonstrate at all times that the shared information originates from the European party at the start of the collaboration and is confirmed as such by the Indian IP office. This gives an extra strong signal to the Indian party to respect confidentiality. It also makes legal steps easier, because it can be demonstrated that everything possible has been done to protect the information. A PPA can be used for any form of confidential information. After the PPA registration has expired (12 months), the European and Indian partners must draw up a statement that the information will continue to be protected by the two partners in the future. This is an extra demonstrable commitment from the Indian party that guarantees protection and can be used in a worst-case scenario for formal steps.
Due diligence
Before a company does business with an Indian business partner, it is important to have the background of this Indian party screened extensively. Due diligence helps in making the right decision and limiting the risks associated with the business transaction. Much of the due diligence can be done online. Important sources of information are the Ministry of Corporate Affairs (MCA), which regulates business affairs in India. All companies in India must file their financials and shareholder details with the MCA.
Further information can be obtained from the website of the Credit Information Bureau India Limited (CIBIL). Here, the credit history of an individual, company, or partnership can be consulted. Any disputes/cases that have been filed against them are mentioned here and also whether they have ever been declared a wilful defaulter in the past. Finally, the professional association of the sector in which the company operates can also be an interesting source of information.
