India has been a member of WIPO (World Intellectual Property Organization) for nearly 50 years, which means that most intellectual property laws in India meet international standards and Indian courts can provide injunctive relief relatively quickly in the event of infringement. But what options do you yourself have to protect your patents, trademarks, copyrights and designs when setting up your entity in India? Our lawyer Van Lavanya lists them for you.
Intellectual property (IP) registration in India
Intellectual property rights in India are enshrined in several laws, including 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 remedies for the enforcement of IP rights.
Most IP types, such as patents, trademarks or designs, can be registered online at 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 should 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's name, address and contact information.
Proof of ownership: Documents that demonstrate your ownership of the IP. For example, these can be documents that describe the invention in case you register 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 should add a power of attorney so that this person can represent you.
Specification/Description: A detailed description of the IP, depending on the type. For patents, this is the complete specification describing the invention.
Fees: The Indian IP office charges fees for registration applications. These fees vary depending on the type of IP you are registering. Trademark registration costs on average between 4,000 and 10,000 rupees (45 to 115 euros). Patent registration is more expensive, costing on average between 15,000 and 50,000 rupees (170 to 560 euros).
It is advisable to hire an Indian IP lawyer who is familiar with the documentation required for foreign companies for your registration as well, you would be sure not to incur unnecessary costs or delays.
Non-disclosure agreement (NDA).
Commercial business strategies such as trade secrets, know-how, production methods or any kind of information that is kept confidential to maintain an advantage over competitors are covered by trade secrets.
India has no statutory or legal basis guaranteeing the protection of trade secrets. Therefore, if you are going to work with a partner in India, you should take steps to protect this IP yourself. You do this by making arrangements with you partner(s) and recording them in a non-disclosure agreement (NDA).
Therefore, any confidential information that cannot be registered as a patent, trademark, copyright or design with the Indian IP office must be protected in an NDA. Confidential information can be exchanged in an NDA, such as information in the context of negotiations to purchase another company or a patent.
If one expects to share confidential information in order to do 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 involved in the agreement: the IP owner (sharing confidential information) and the receiving party (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 covers the type of information you want to protect. Consider including examples, but avoid an overly comprehensive list. Address whether information independently developed by the receiving party is also considered confidential.
3. Confidentiality Obligations
Outline the obligations of the receiving party regarding maintaining the confidentiality of the disclosed information. State restrictions on the use, disclosure and sharing of the confidential information. Exceptions for permitted use may be stated, such as for the purpose of intended cooperation or disclosure required by law.
4. Duration and termination
Determine the duration for which the confidentiality obligations apply. This may be a fixed period or until the information becomes public. Specify the conditions under which the NDA can be terminated by either party.
5. Consequences if NDA is violated
Outline the possible consequences if the receiving party violates the NDA. These may include injunctive relief (court order to prevent disclosure) or damages.
6. Dispute Resolution
Establish a mechanism for resolving disputes arising from the NDA. This may be negotiation, mediation or arbitration.
7. Applicable Law and Jurisdiction
Specify the legal jurisdiction applicable to the interpretation and enforcement of the NDA.
Again, it is highly recommended that you engage an Indian IP lawyer who is familiar with local IP regulations and experienced in drafting NDAs for collaborations between Indian and European partners. This way, you will avoid missing important elements.
Agreements around the creation of new IP
An NDA can also include agreements on the use of a Background IP. This is the intellectual property that a company already has before partnering with a party in India. In a collaboration, the company will develop new intellectual property (IP) together. It is therefore important to clearly define agreements around the use of the new IP.
This is important in India because much of the technology coming to India from Europe needs to be modified or localized, either to reduce cost or to make it workable for the Indian context. In the absence of clear agreements on the new IP, this IP will be free from infringement by others. It becomes very difficult at a later stage to protect that IP or to dispute that the IP was developed based on 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 U.S. 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 that information in confidence and under secrecy with the Indian IP office. They provide a certificate stating that the owner submitted his information by 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 prove at all times that the information shared at the start of the collaboration originated from the European party and is confirmed as such by the Indian IP office.
This sends an extra strong signal to the Indian party to respect confidentiality. It also makes legal action easier because it can be shown that everything possible was done to protect the information. A PPA can be used for any kind of confidential information.
After the expiration of the PPA registration (12 months), the European and Indian partner should prepare a declaration that the information will continue to be protected by the two partners in the future. This is an additional demonstrable commitment by the Indian party that ensures protection and can be used in a worst case scenario in formal action.
Due diligence
Before a company engages with an Indian business partner, it is important to conduct (or have conducted) a comprehensive background screening of this Indian party. Due diligence helps make the right decision and mitigate 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 information with the MCA.
Furthermore, information can be obtained from the Credit Information Bureau India Limited (CIBIL) website. On this, the credit history of an individual, company, or partnership can be accessed. Any disputes/cases pending against them are listed here and also whether they have ever been declared a willful defaulter in the past.
Finally, the professional federation of the sector in which the company operates can also be an interesting source of information.