Overview of IP Protection of Software Industry

Software or computer programme are the complex asset. The software is intangible asset which diverse uses and create various value adds impact. Hence, Intellectual Property [IP] an essential tool to secure value generated by software.

Issue of software in IP:

 The Software industry in India is protected under copyright law as computer programme, but the scope of a ‘literal’ part of the programme and the limits of substantial copying are not clearly settled. The issue of ‘fair use’ rights and licence use rights are not protected under the Patent Act. They are merely protected as a trade secret under the common law. Hence, software contracts are protected under common law, such as Contract Act, Consumer protection Act, Competition Law and Tax Law.

Computer software is subject to fierce competition with shorter life cycles and can be easily copied. Because of its nature, the owner will have main two problems;

  1. Economic- Others can access it without payment.
  2. Competition- Anyone can easily first copy and capture the market.

Copyright for software protection:

Section 2(ffc)and Section 2(o) of the Copyright Act 1957 defines computer programme and consider computer programmes as “literary works”. It must be expressed in print or writing irrespective of the question of its merit or quality. Also, expressed in some of material, i.e. write or print, notation or symbols which has the capability to recreate with representation of the original work.

The Act defines what computer programmer is but fails to differentiate between the sources of code and object code. Example- computer programme in the form of print as discs or information storage device is protected under the term of database. But, the concept of algorithms frequently used by computer programmer is not protected.

The computer programmer in Indian law and British law does not require the disclosure of code as its emphasis originality of copyright is its expressive form such as a literary work, but lacks to consider for creativity, selection skills, labour and minimal on originality.

Unlike the United States approach in the Fiest vs Rural Telephone in the US Supreme Court held that the protection of the white pages of telephone directory is not valid as the copyright law only protects on ground of involvement of creativity, judgement or skill excluding the labour.

Ownership of Copyright:

Section 17 of the Act defines the employer as the owner of copyright if the work is made during the course of employment between the employer and the employee. The owner of the copyright has the exclusive right to reproduce and distribute that work. Section 14 and 57 of the Act protect the economic and moral rights of the owner.

The use of a computer programme under ‘fair use’ and reverse engineering exemption under the section 52 of the Act are not considered as infringement of copyright. Copyright Act has limited scope for software protection

Patent Law for software protection:

Computer Software in form of algorithm or a technical invention can be protected under the patent laws.  Article 27.1 of the TRIPS Agreement provides patent to be available for any inventions, whether products or process in any field of technology provided they are new.

Section 2(1)(j) of the Patent Act (Amendment) 2005, allows an invention to be patented if only to be new, useful and resulted in ‘non-living’ and ‘tangible things’. An invention to be patentable has to be any new and useful. It fails to define for computer software by definition and invention  in the form of ‘mathematical algorithm’ cannot be patented.

Section 3(k) of the Act, defines that a merely mathematical or business method or a computer programme or algorithm per se are non-patentable.

Trade secret for software protection:

It is highly advisable to seek registration. Protection is an essential aspect for software in nature for the differentiation of asset in the market. Remedy for trade secret is mainly under the contract law and tort law.

Section 27 of the Indian Contract Act, 1972 helps to emphasis on agreement in restraint of trade such as non-competition and non-disclosure agreement. Trade secrets have limited protection in nature.

Software Contracts:

Software contract with nature of the sale of good or license agreement is protected under the Contract.

The computer programmer considered as good is protected under Section 2(7) of the Sale of Goods Act, 1930. The question arose if the software is tangible or intangible goods. As the section 2(7) included only moveable properties.

The Supreme Court in Tata Consultancy Services vs State of Andhra Pradesh held that computer software is goods and stated with out of the scope of intellectual property, irrespective if conveyed in material form such as CD, floppy etc. it considered computer software as good as it possessed characteristics of it such as;

  1. Its utility.
  2. Capable of being bought and sold.
  3. Capable of being transmitted, transferred, delivered, stored and possessed
  4. Tribeka Ltd in United Kingdom.
  5. Tribeka Ltd had revolutionized the way people buy and sell digital content. The company had created technology called as “SoftWide” which allowed customers to choose a secure copy; identical to the traditionally distributed version of the range of software or digital entertainment products.  It is revolutionary because it was “virtual” where it operated by using the advantage of Tribeka’s licensing agreements with digital content to manufacture their products to meet the demand to use by PC, Pocket PC’s and phones.

Conclusion:

Software is essential protected under the copyright law in India, but scope limited to literary work. Patent Law in India protects its software without per se i.e. software itself cannot be protected. A Trade secret is limited to protect software as no clear indication for legislation and its scope for protection.

Software programme is either in the form of sale of goods or license agreement. Because of its nature of work, license agreement is preferred to do the business. As license agreement is have issues for fair use by the licensee and subject to competition law.

If the software programme is used as sale of goods, it is subject to consumer protection act, tax and warrant and liability regulations.

Reference:

  1. http://iipi.org/wp-content/uploads/2012/10/India-Software-Study-2004.pdf
  2. http://nopr.niscair.res.in/bitstream/123456789/14456/1/JIPR%2017(4)%20284-295.pdf
  3. https://www.iipta.com/intellectual-property-indian-software-industry/
  4. https://iprhelpdesk.eu/sites/default/files/newsdocuments/Fact-Sheet-IPR-Management-in-Software-Development.pdf

The author is Akshata Pai.

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