Friday, November 30, 2012

Draft National IPR Strategy Discusses Future Regimes for Utility Models and Trade Secrets

In September this year, there were news reports of a National IPR strategy being prepared by the government. The 25-page Discussion Paper on the National IPR strategy is available here and the feedback received from stakeholders is available here.

On Pages 20 and 21 of the Paper, there is a discussion on creation of new IP rights such as Utility models and trade secrets to "address the specific needs of the country and existing gaps". Following are the relevant extracts from the paper on the need for creation of a framework for these rights:

Protection of Utility Model
48. Indian is one of the largest markets in the globe, and while advanced concepts borrowed from developed countries find their audience in India, the bulk of the trade is centered around indigenous products and services. A salient feature of such products and services is incremental innovation - either in technology or business models. Introduction of a separate legal regime that recognizes and protects these incremental improvements which are otherwise not fit for patent grant can address this Indian requirement.

Utility Patents or Utility Models with their less stringent patentability criteria, and faster examination/grant although with shorter term of protection of 5-7 years could also be an efficient and a cost effective way to incentivize incremental innovation and encourage creation of IPRs. Needless to say, there could however be certain sector specific exemptions to ensure that objectives and principles enshrined in Article 7 and 8 of the TRIPS Agreement are respected and followed.

49. A glaring gap in Indian IP system is the lack of awareness and hence adoption of formal methods of IP creation which are expensive from the point of view of individual innovators and small industry units. Utility patents are an answer as they can potentially bridge this gap by reducing the effort, time and cost, which are considered the key entry barriers to creation of IPRs.

Consequently, in the longer term, a utility patent system is bound to develop awareness on benefits of procuring patents which have more stringent requirements of inventive step. Such a model can especially be useful for small industry units, schools and colleges, NGOs and  thousands of grass-root innovators who are silently transforming the lives of the under-privileged and under-empowered.

Protection of Trade Secret
50. Any confidential business information which provides an enterprise a competitive edge may be considered a trade secret. Trade secrets encompass manufacturing or industrial secrets and commercial secrets. The unauthorized use of such information by persons other than the holder is regarded as an unfair practice and a violation of the trade secret.

Depending on the legal system, the protection of trade secrets forms part of the general concept of protection against unfair competition or is based on specific provisions or case law on the protection of confidential information.

51. The subject matter of trade secrets is usually defined in broad terms and includes sales methods, distribution methods, consumer profiles, advertizing strategies, lists of suppliers and clients, and manufacturing processes. While a final determination of what information constitutes a trade secret will depend on the circumstances of each individual case, clearly unfair practices in respect of secret information include industrial or commercial espionage, breach of contract and breach of confidence would come within its ambit.

52. At present trade secret is protected through the contract law in India and is part of the concept of protection against unfair competition. Trade Secret is an important form of intellectual property and most innovative companies rely upon this confidential/proprietary information to gain business advantage. A predictable and recognizable trade secret regime will improve investor confidence and create a facilitative environment for flow of information.

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