Indians are reluctant to file for a patent!

Mr. Akhilesh Kumar Rai

Legal know how with respect to licensing is of utmost importance. People are not really updated with the subject thus License India takes initiative to throw some light on the subject by establishing a conversation with Mr Akhilesh Kumar Rai, IP Head, AZB & Partners on the sidelines of Brand Licensing Conference 2009 recently held in Delhi.

License India (LI): How will you define legal know-how with respect to licensing?
Akhilesh Kumar Rai (AKR): Know-how can be defined as confidentially held, information in the form of unpatented inventions/ formulae/designs/drawings/procedures/methods, together with skills and expertise of a licensor which could assist a transferee/licensee in the manufacturing of an object/product and bring to it a competitive advantage. It can be further supported with privately-maintained expert knowledge on the operation, maintenance, use/application of the object/product and of its sale, usage or disposition.

Know-how, in short, is ‘private intellectual property’. The 'trade secret law' varies from country to country, unlike the case for patents, trademarks and copyright where there are formal 'conventions' through which subscribing countries grant the same protection to the 'property' as the others; examples of which are the Paris Convention for the Protection of Industrial Property and the World Intellectual Property Organization (WIPO), under United Nations, a supportive organization designed "to encourage creative activity, to promote the protection of intellectual property throughout the world".

LI: What is the difference between Patents, Trademarks/ Servicemarks, and Copyrights?
AKR: A patent for an invention is the grant of a property right to the inventor, issued by Intellectual Property India (IPI), Government of India. What is granted is not the right to make, use, offer for sale, sell or import, but the right to exclude others from making, using, offering for sale, selling or importing the invention. Once a patent is issued, the patentee must enforce the patent without aid of the IPI.

A trademark is a word, name, symbol, or device that is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others. A servicemark is the same as a trademark except that it identifies and distinguishes the source of a service rather than a product. Trademark rights may be used to prevent others from using a confusingly similar mark.

Copyright is a form of protection provided to the authors of “original works of authorship” including literary, dramatic, musical, artistic, and certain other intellectual works, both published and unpublished. The copyright protects the form of expression rather than the subject matter of the writing.

LI: Do you think people in India are aware about the legal know how with respect to licensing?
AKR: The awareness is not really as per the required standards and a lot has to be done in this regard. People do not really understand the position they can enjoy by sealing their intellectual property with a copyright.

LI: What factors should be considered before sealing a brand licensing contract?
AKR: There are various aspects like market viability, track record, quality management, determining royalty, termination act, use of trademark, litigation acts, whether to sign a joint venture or a simple clear contract among others. It should be understood that licensing for a retailer is based on trust implying that his established name and fame would grow higher with the arrangement and not otherwise.

LI: What do you think about the licensing market in India? Which are the companies that have taken the licensing route to expand overseas?
AKR: India is undoubtedly emerging to be a hot market when it comes to fashion, characters, sports, and art licensing etc. India’s unprecedented economic and individual income growth along with Indians’ desire for Western entertainment and fashion brands undoubtedly implies the advent of a new industry to be explored in the coming years. Indian government’s support of trademark protection is also something very positive in this regard.

Companies born in India that have taken the licensing route to expand overseas include Ranbaxy, TATA, TCS and others.

LI: What is the difference between franchising and licensing?
AKR: Franchising and licensing are means of expanding a business and the two are often confused with one another. It should be understood that franchising and licensing come from two distinct areas of the law which implies that franchising is based on securities law and licensing is a form of contract law.

It means that if one takes up franchising as a means of expanding a business, then compliance with the franchise laws, like the securities laws, requires registration of the franchise in the applicable jurisdictions. On the other hand, licensing is merely a contract between two independent contractors and franchise registration is not required.

In simpler words, Licensing can be a part of franchising but not the other way round. Also, in licensing only intellectual property (IP) is involved whereas in franchising, product/services, infrastructure along with IP are involved.

LI: Which industry in India, in your opinion is into licensing since a long time?
AKR: It is pharmaceuticals which is present in this business since a very long time.

LI: IP originating abroad is being licensed in India and not vice-versa. Why?
AKR: In India, people are not really aware about making their brand secure with the help of legal know how, which would result in sealing their brand name/logo/character etc as an intellectual property. Unlike the west, people in India, are reluctant to file patents for their novel ideas. However, the scenario is changing.

Interviewed by Vrinda Oberai