“In Focus: Awakening to IP Rights”

India, one of the fastest growing markets in the world and is being eyed as a lucrative playground for many international players. As many foreign businesses venture forth to set up their businesses in India, the legal aspects of owning a license are a must for them to know to have long and legal operations. Safir Anand, Senior Partner, Anand and Anand, one of India’s leading IP law firm, shared his insight as he shared the processes and procedures involved….

Vrinda Oberai (VO): What, in your opinion, is the current scenario, with regards to the intellectual property (IP) environment in India?

Safir Anand (SA): The Intellectual Property law is fairly advance in India in terms of both the statute as also in terms of enforceability of Intellectual Property through courts.
In fact, in several areas, particularly those relating to brands, licensing issues, franchising, trade dress, India protects Intellectual Property fairly aggressively, almost at par with some of the advance countries. Intellectual Property is protected irrespective of whether there is registration or not, i.e., even based upon usage or what is called as common law rights based upon international reputation and goodwill.
Until the year 2005 there was no damages culture before courts but since 2005 courts have duly recognized the commercial importance of Intellectual Property and its economic implications and have started imposing damages particularly in cases of counterfeiting and look-alikes.

VO: How different is the market abroad? Where are the legalities involved relatively more complicated (with regards to licensing and intellectual property rights) – abroad or India?

SA: As stated above, the position in India is almost at par with position in advance markets such as UK & US. If we specifically talk here about franchising, there is not much of litigation in India on the franchising front or on licensing except for issues relating to breach of contract. In many of such disputes, there is an arbitration provision and matters usually get resolved out of courts in settlement.
Consequently, they are not brought within the public domain.
However, if an agreement has been effectively drafted and vetted in compliance with local laws and have provided adequate amount of “safety nets”, there is no reason why it cannot be enforced in India effectively whether through court or through any dispute resolution mechanism as may be identified in the agreement. This includes indemnities.

VO: How have you witnessed this market mature over the years? How big is the role, which is being played by intellectual property rights in the country?

SA: The market relating to Intellectual Property is at a progressive stage. Not only is this on account of a greater awareness and awakening of Intellectual Property rights throughout India but also on account of the fact that there is now growing recognition even amongst Indian companies to the effect that Intellectual Property constitutes one of the most powerful tools of wealth as bulk of the country’s wealth lies in intangibles.
Moreover, the companies are now progressing from a mere protective regime, i.e., the protection of their Intellectual Properties through statutory registrations and due diligences, to effective commercial exploitation through the tools of licensing, franchising, cross licensing etc. Brand valuations are also now souring notwithstanding the fact that we do not currently have a valuation matrix accepted by the tax authorities for the purpose of audits. This is bound to change sooner or later.
Further, with more sustainable database involving competition and the differential pricing arising due to use of Intellectual Property in products or processes, companies are now able to commercially plan better at their own products or services using Intellectual Property as also are able to attack competition for unfair use and claim damages.
Intellectual Property is thus playing a humungous role in wealth creation although even now the level of awareness can multiply hundred folds.

VO: How would you classify intellectual property rights? Which ones are the most prominent and essential ones?

SA: Intellectual Property is classified based upon statute and common law. Within statute, the usual rights are trademarks, copyright, design, patents etc. Intellectual Property also includes domain names.
Within the provision of common law, the enforceable rights include trade dress, trade secrets and other confidential information.
Within the element of a cluster of laws including Contract Act, Competition Act and having regard to certain Government policies, form agreements including franchise and license agreements.

VO: What should be a layman’s approach who is interested in attaining a right to an intellectual property?

SA: A layman should concentrate on an initial identification of some Intellectual Properties, be it brands or processes, as would be critical to his sustained competitive edge. Once identified, he should conduct a search to find out the availability of these Intellectual Properties not only in the Indian jurisdiction but also having regard to some of the international jurisdictions where he intends to extend his rights. He should then seek appropriate protections.
The Intellectual Property approach involves being defensive, i.e., not stepping on somebody else’s rights and being aggressive, i.e., adequately protecting your own rights for your own use and for future commercial exploitation.

VO: The licensing and merchandising industry in the country, though at a nascent stage, is gearing up. What is your take on the same?

SA: The licensing and merchandizing industry in India, although at a nascent stage, is on a fast track mode.
Here the valuation paradigm will cause greater awareness. Similarly, exposure of the masses to wealth creation stories involving Intellectual Property and to instances of legal disputes involving Intellectual Property will create a higher degree of awareness.

VO: What can be the different ways in which people can be educated in a better way about the intellectual property rights and the need for attaching a legal status to the same?

SA: In order to educate people better, continuous workshops are commissioned by organizations both at a public and private level.
These not only include trade organizations such as CII, FICCI etc. but also through private participation where clients seek workshop from their own Intellectual Property lawyers. The second model, in my view, works better as it enables companies to discuss issues at length without fearing the persons not known or competitor’s force in the room.
Overall, the Intellectual Property has an extremely bright future and should be spread amongst the masses for creating a high degree of intangible wealth within India.

Interviewed by Vrinda Oberai