CHALLENGES FOR IPR SYSTEM

……………………………………………………………………

An Assignment submitted to
Nims School of Law,
NIMS UNIVERSITY, Rajasthan, JAIPUR
In partial fulfillment of LL.M– I Semester (IPR & CYBER LAW)) one year
program
For the degree of
MASTER OF LAWS

SUBMITTED BY SUBMITTED TO
Ms. Shobha Chauhan Dr. Manish Kumar Singh, HOD, Assistant
LLM (I Sem.) Professor
NIMS school of law , JAIPUR
(RAJASTHAN)

NIMS SCHOOL OF LAW

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INTRODUCTION

Intellectual Property Rights (IPR) encompass legal safeguards that protect the tangible

expression of ideas, thereby serving as valuable assets of knowledge.

NEED FOR INTELLECTUAL PROPERTY RIGHTS

Over time, we have witnessed a shift to the industrial age where products served as the

centrepiece of the economy. Currently, we find ourselves in the information age, where

intellectual content and ideas hold greater importance. Consequently, the protection of these

intellectual assets, ideas, and innovations becomes increasingly crucial, necessitating the

existence of Intellectual Property Rights (IPR).

The protection provided by IPR laws extends beyond artistic works such as movies, songs,

and other forms of creative expression. Even well-established companies like Burger King,

Coca-Cola, and Flipkart are considered intellectual property companies, encompassing a wide

range of IP rights including patent, design, trademark and copyright etc. In essence,

intellectual property rights can be likened to “plate tectonics” due to their significant

influence.

The scope of IPR is not limited to specific fields like electronics, pharmaceuticals, biology, or

genetics; it extends to software, business, finance, innovation, and even new patentable

algorithms. These laws prevent organizations or individuals from misusing and copying ideas

through patent, design, copyright and trademark etc.

TECHNOLOGICAL CHALLENGES AND THREATS

The emergence of new technologies and advancements in the digital realm have introduced

new obstacles to intellectual property. Ensuring digital enforcement of these rights has

become a pressing concern. Protecting intangible assets in a globalized environment has

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become increasingly challenging, with organizations facing the common threat of imitation

and exploitation of their brand features, resulting in consumer confusion. The following are

some serious threats to intellectual property :

3D Printing: Advancements in technology and improvements in material quality have

facilitated the mass production of printed objects, leading to potential IP infringement.

Existing legislation generally addresses these violations, although some amendments or

modifications may be required, particularly in the context of nanotechnology or 3D printing.

Artificial Intelligence: AI presents both challenges and opportunities for IP protection. While

AI can be used to protect digital content, it can also be utilized to imitate layouts, logos,

designs, and other elements, posing a threat to IP rights. Policing crimes such as audio and

video impersonation, cyber-squatting, typo-squatting, and unauthorized live streaming of

copyright-protected digital content necessitate changes in legislation and an updated legal

environment capable of addressing AI-related concerns.

Spatial Computing: Spatial computing is still in its early stages, lacking explicit anti-piracy

measures and protection against infringement. The use of augmented reality (AR) can lead to

manipulation of patented products, layouts, copyrights, and trademarks. Introducing a

certification stamp for authentic information and establishing a digital system can help

address the misuse of spatial computing.

Digital Challenges and Copyright:

The advent of the internet and digital technologies has posed new challenges to copyright

laws. Online piracy and copyright abuse have become rampant, causing significant losses for

content creators and rights holders. Legislators struggle to enforce and protect copyright in

the digital age.

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The landmark case of MGM Studios, Inc. V. Grokster, Ltd. (2005) in the United States dealt

with file-sharing services’ liability for copyright infringement. The Supreme Court ruled that

distributing a product with the intent to facilitate copyright infringement could result in

liability. This is even if the service provider did not directly participate in the infringing

activities. This case demonstrates the need for courts to adapt copyright laws to address

emerging technologies and punish those who enable copyright infringement.

Patent trolling and abuse:

Another issue plaguing the IPR landscape is patent trolling. This is where entities acquire

patents not for legitimate business purposes but to extract financial gains through aggressive

litigation and licensing demands. Patent trolls exploit the system, burdening legitimate

innovators with frivolous lawsuits and stifling innovation.

A noteworthy case is Alice Corp. V. CLS Bank International (2014) in the United States. The

Supreme Court held that abstract ideas implemented using generic computer technology are

not eligible for patent protection. This decision provided a framework to curb software patent

abuse by patent trolls. It promoted clarity and discouraging overly broad or vague patents.

Section 3(d) Indian Patent Act: focuses on the issue of patents that never expire. This section

is problematic because it prohibits the renewal of a product’s patent for minor modifications.

For the MNCs to be granted patent protection for already-issued patents, the courts require

substantial “Therapeutic Efficacy.”

Section 84 India Patent Act: One of India’s major IPR issues is this Act. It manages

Mandatory Permitting which urges organization proprietors holding licenses to efficiently

manufacture a few medications. This is a problem because some businesses might take

advantage of it and charge too much for their products. While then again, a few organizations

probably won’t have the option to bring adequate supplies.

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Tackling IP Challenges for Businesses

1. Registry Issues, Backlogs, and Delays

Trademark registration typically takes 1 year, according to available data. For patents, time is

on your side because there are considerations beyond just novelty and patentability by experts

at the registry before registration is commenced.

Within six months or less of filing an application, a trademark or invention is typically

assigned to an examining attorney. Any material update, such as an office action or a notice

of publication, is typically received after approximately 7 months. Applicants in developed

nations, like the United States, can file oppositions within 30 days of the publication date,

which is specified in the notice of publication.

As a result of these setbacks, the company may not be able to immediately expand into more

lucrative markets, especially given that its products are not yet well-known outside of its

immediate vicinity.

Two strategies exist for addressing late registration: first, choose a powerful trademark; and

second, where it is an invention, make sure it meets all of the criteria for patentability.

In this manner, the time required to fully appreciate its singularity is reduced. Secondly, if

there is any office action or opposition, make sure to respond as soon as possible so as not to

further delay the registration process.

2. Lack of Experts in Patent Claims Drafting for Eligible Works

Among the many steps involved in applying for a patent, the most important is probably the

drafting of the actual application itself. Legal protection for an invention includes the ability

to prevent others from making use of it, but only if the patent claims are written correctly.

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Patent claims need to encompass as much of innovative processes as possible while they are

still in their infancy.

Additionally, the scope of the invention shifts as more experiments are carried out,

necessitating multiple revisions of the patent claims.

For some advice, consider the following:

Patent claims should be written with the expectation of opposition in mind, and the

application should include details that can be used to address concerns that may be raised.

Preface your claim with language that does not restrict its applicability, and avoid using

functional jargon whenever possible.

3. Cost of Protection

To register a trademark, you can expect to pay between $225 and $325 per class code (not

including search or attorney fees). The expense of obtaining a patent is greater and more

dispersed among numerous specialists.

Copyright and industrial design protection costs are typically proportional to the maturity of a

country’s copyright and identification (ID) infrastructure.

Taking advantage of the IP funds made available in many countries for business is the most

effective way to deal with the cost of IP protection.

For instance, in January 2022, the European Commission unveiled the EU SME Fund, which

contains roughly 47 million euros and is aimed at safeguarding the intellectual property of

EU SMEs during their COVID-19 recovery and digital transitions. Businesses can save up to

60% on IP protection thanks to policies similar to those in place in China, the United States,

South Africa, and Malaysia.

4. Lack of Awareness

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When it comes to problems like this, African countries have it worse. The information shows

that in Africa, over half of the small and medium-sized enterprises (SMEs) have never heard

of intellectual property.

The reason for this is not far-fetched. Despite the fact that businesses are among the most

directly impacted by intellectual property rights, little to no effort is made to raise awareness

of these rights in the business world.

Businesses miss out on opportunities to increase profits, broaden their reach, and spread their

risk by not understanding the value of intellectual property.

The first step in solving this issue is raising public awareness of intellectual property (IP) in

media outlets like radio, television, and newspapers, with which business owners frequently

engage. Government initiatives promoting IP should be expanded beyond the classroom and

into commercial settings.

5. IP Lawsuits

Typically, the price tag for patent litigation processes is between $2.3 and $4 million.

Depending on the complexity of the case, patent litigation can take anywhere from one to

three years to reach trial.

In addition to the time and money involved, having your IP legally challenged can be

disastrous for your company’s reputation. To settle intellectual property (IP) disputes,

businesses are often urged to look into non-traditional dispute resolution processes.

Although this route can be more expensive overall (due to arbitration fees), it spares

businesses the embarrassment and potential ruin that come from losing a high-profile

intellectual property lawsuit.

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These alternate dispute-resolution strategies also involve subject-matter experts and can be

implemented quickly.

6. Portfolio Management

It’s safe to say that a company’s patent portfolio is its single most valuable asset. A

company’s intellectual property (IP) portfolio would consist of all of the company’s IP assets,

including patents, trademarks, designs, trade secrets, and industrial designs.

In-house legal counsel or outside IP attorneys can be retained for the management of the

intellectual property portfolio.

Portfolio managers are required to monitor the expiration dates of applications and renew

them as necessary; maintain constant communication with clients and the patent office, and

perform docketing and budgeting.

If a deadline is missed, the IP owner risks losing their rights to the property. Effective IP

portfolio management can affect customer satisfaction, reveal untapped market opportunities,

and mitigate risk.

7. Piracy

Every year, piracy costs the music industry a whopping $2.7 billion in revenue. The future

looks grim for these numbers, experts say. Piracy impacts creators, companies, and

employees alike. In the United States alone, the annual loss of revenue from piracy is

equivalent to nearly 70,000 jobs.

Companies are seeing a decline in their brand awareness and customer confidence as a result

of this. A good case in point is the well-known board game manufacturer CATAN, which has

seen an uptick in complaints from dissatisfied customers ever since the market was flooded

with online counterfeits.

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In an effort to combat online piracy, many businesses are turning to anti-piracy programs.

Experts in intellectual property (IP) who can keep an eye on the market for signs of

infringement are employed to combat more conventional forms of piracy.

8. Protecting Business Concepts and Invention Stages

A company’s underlying concept is the idea that drives its success. A business plan, in its

simplest form, is a well-thought-out framework outlining the essential elements needed to

launch and sustain a successful enterprise, such as the company’s offerings, its products or

services, the reasons why the concept is novel, and the means by which the products or

services will be delivered to the intended market.

Business ideas are the equivalent of the various phases of the invention. Until an invention is

finished and in a fixed form, it is not protected by intellectual property law. The implication

of this is that should these ideas be stolen, a prospective business loses out completely. This is

one of the common cases of IP challenges.

One possible solution is to write down these ideas and procedures in a clear and concise

fashion; this would make them eligible for protection under copyright legislation.

In addition, companies can use WIPO Proof, a piece of software created by the World

Intellectual Property Organization, to assist companies in producing evidence of the digital

file of a completed asset.

9. Outdated IP Laws

The trend toward commercializing the internet in business has reduced the importance of

personal contact. Plant variety protection (PVP) and other technological developments are

also being accounted for in modern IP law.

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Plant Variety Protection (PVP) rules are in place to safeguard farmers’ legal rights and unique

plant varieties, while also providing exemptions for the private use of protected genetic

material. Intellectual property benefits for businesses are constrained by the absence of IP

laws that take into account the development of technology in the digital space and PVP.

For instance, despite Africa’s high concentration of farmers, the continent’s antiquated legal

codes make no mention of PVP. This problem can be tackled by policymakers as well as the

government.

10. IP Documentation

The term “IP documentation” is used to describe comprehensive IP agreements that safeguard

a company in every way. Inexperienced IP attorneys hired by companies to resolve IP issues

often struggle to properly document their work; however, any shortcoming on the part of the

Attorney inevitably impacts the company.

Typical IP agreements should include non-disclosure clauses, representations and warranties,

employee-related issues, and indemnifications, as well as anticipate future challenges that are

likely to arise.

Conclusion

Protecting IPRs can be a tough proposition in India, where awareness is low and enforcement

weak. But protecting patents, trademarks and copyrights are vital for innovation and

development. However, even with rapid progress on the industrial, scientific and economic

front, we lag behind countries like China. Good IPR protection will foster a culture of

creativity and innovation that could help us close that soon.

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