LEGAL POSITION

THE ECONOMIC TIMES

SUNDAY, 21 NOVEMBER 2005

CORPORATE COUNSEL

It's Your Property, Protect It

In order to protect intellectual property in an employer-employee or even a company-consultant relationship, great care needs to be taken. Vikram Shroff and Vivek Kathpalia gives you the lowdown

IN order to signify the importance of intellectual property (IP), the founder of the first microchip company rightly chose the name: 'Intel'. In the last 200 years, it was man and machine – the next 100 years are likely to witness vital importance of IP.

Select areas where protection of IP assumes vital importance in an employer-employee or company-consultant relationship are (1) Invention (2) Work made for hire and (3) Trade secrets.

Invention is the first corner of IP where the work created by an employee (where he is also an inventor) is covered.

In Work made for hire, IP is accorded to employers by way of "work made for hire" concept as provided in the US Copyright Act (Section 101), where "work made for hire" includes a work prepared by an employee within the scope of his or her employment.

However, in India, work created under a contract of service is treated as an ordinary IP and the company is accorded ownership only in the person on whose behalf the work is created. In such cases, a written assignment of copyright is a necessity.

The equivalent to the US under the Bombay Stamp Act, an assignment of copyright would now attract stamp duty as the earlier exemption from payment of stamp duty no longer exists. Further, the Act provides that the duration and territorial extent of assignment must be clearly set out in the contract, else it is deemed that the assignment is for a period of five years from the date of assignment if the duration is not stated and its territorial extent extends to within India if the territorial extent is not stated.

Similarly, in case of other types of IP such as patents, an assignment in writing is a necessity. The Act also allows assignment of IP rights in works which are not yet in existence when the work comes into existence. Foreign companies now have to also take into consideration Section 39 of the Indian Patents Act which allows Indian scientists developing Indian inventions would apply to employees or consultants of the Indian company to be first applied for as patents in India, before applying for such patents in any other country, unless there is a written agreement to the contrary.

With respect to the assignment of IP and trade secrets, in the US and other countries, it is common to enter into contracts with employees and consultants to sign a confidentiality/proprietary information and inventions agreement (CI/PI/IA).

The courts have, inter alia, given protection on non-disclosure of the company's or its consumers' confidential information and trade secrets, restrictions on use of such information, disclosure of prior or exit assignment of developed IP, obligation to keep the company informed, enforcement by the company of its IP rights, appointment of the company as a power of attorney holder, as well as assignment of moral rights, etc.

Often, these agreements are extended to employees and consultants of their Indian subsidiaries in the standard form itself, without making any changes with respect to the governing law applicable to the services already executed by the Indian employee.

While in principle, such CI/PI/IAs may comply with Indian law, inter-alia, territorial restraints on confidential information are recognised under Indian law. Therefore, it is necessary that it is suitably modified so an Indian law perspective to the extant Indian laws is given.

CI/PI/IAs are also used when the foreign company is outsourcing services to Indian service providers, where the employees of the service providers are required to execute these agreements and the foreign company to contractually protect its IP and its consumers’ rights.

Absence of such CI/PI/IAs may create tension with the Indian service provider who may not agree that the obligation on the Indian service provider to protect its rights, through a service agreement, should supersede the private agreements with US employees.

Typically, US service providers prefer the US law and courts to retain jurisdiction of law. This would work with a uniform contract across the company. However, the Indian employee is still physically present in India to travel to the US to do the commitment.

A common approach adopted to meet the territorial restraint on these agreements is to have a clause that provides that the IP products an appropriate Indian court to entertain interlocutory reliefs, such as interim injunctions.

It may be noted that suits in enforcement of a US judgement in India and the US courts are currently not reciprocal territories for the purpose of enforcement of judgements. Therefore, a party having to enforce a judgement will have to file a fresh lawsuit in India which would necessarily take its own course of time and therefore, not be practical.

Such awards would have to achieve the same class of enforcement as US arbitration awards are automatically enforceable in India. Though such awards are also vulnerable to challenge, they offer a more practical approach towards enforcement and possible settlement.

In lieu of arbitration, the employees or consultants of the Indian subsidiary would have executed similar agreement with the Indian Company. This may lead to an overlap of the clauses in non-disclosure of confidential information and assignment of IP.

While the former may not cause much concern to the foreign company, it is likely to accede to the request of the Indian employee and would establish over, to which entity the IP has been eventually assigned. Therefore, it becomes important to draft these agreements in a manner in which they complement one another.

From an employee's perspective, it is critical that the employees understand the provisions of such contracts before signing and seek necessary legal advice and explanations/clarifications from the company before signing.

Usually companies are not keen on making modifications based on individual employee's request. However, to differentiate from the employee in India, an addendum to executing such agreements is in the interest of the company to establish the employee's commitment to be educated with respect to the use and protection of IP preventing any inadvertent disclosure of IP.

IP being one of the most critical assets today, companies need to ensure that they are keen both for the owners and the employee/consultants.

In the absence of specific data protection laws in India, including in the employment context, the CI/PI/IAs are extremely necessary to ensure that their policies and IP are put up savvy and their HR functions such as exit interview initiatives provide for the protection of their company’s assets.

Companies may also consider employees undergoing training sessions by external counsel to explain to them the implications of employment contracts and IP.

COURTESY: NISHITH DESAI ASSOCIATES

Eco-Times 26/12/04

A 160 character job-ad ‘transforms’

If You Have To Copy, Do It Right

COPYRIGHT is a job-ad. It depends almost entirely on the expression of an idea, not the idea itself. Almost any expression can be copyrighted, but a concept, a fact, or a theory, or a finding, can’t be. The expression is fixed in some tangible or perceptible form, such as on paper, on an audio tape, or on canvas, or a drawing or an image.

Some things cannot be copyrighted, such as ideas, blanks, forms, facts (but cannot be copyrighted) and words and phrases. It is a job-ad or a resume or a compilation of job-ads.

The core of the right is the right to copy, which is limited by the doctrine of "fair use." The doctrine applies when the copyrighted work is transformed or that are a mere reproduction of new utility such as a photocopying of a published paper and perhaps pieces of a work mixed with a multimedia element for uses such as teaching needs or included in a commentary or criticism of the original.

Nature of work: This factor examines the characteristic of work being used. It does not refer to the attributes of the work that is protected, but more by exercising fair use than the other.

A copyright ensures that no one else can copy a work without the author's permission. Using the work in certain ways is excused, viewing job-ads, or a resume.

Rama Sarma shows you how

(But they can be registered as trademarks).

There are three major defenses to copyright infringement. The first is de minimis use, that is, the amount taken is minute and of little importance. The second is that the work should have not been copyrighted in the first place, or that it is in the public domain. The third, and largest exemption, is fair use.

Fair use is a right to decide whether you are liable for an alleged limited use of copyrighted works without permission. Fair use depends upon balance of four factors.

Use of work: Many characteristics of a work affect fair use. For example, several recent court decisions in the US have concluded that the uncomplicated "nature" of historical correspondence can weigh against fair use, while others found that photocopying papers should have the right to determine rights of 'fair' publication.

Amount of work: The amount is measured both quantitatively and qualitatively; no exact measures of quantity apply. Quality is said to be examined before the legality of the entire picture in light of the entire original. Pictures and drawings use more copyrighted material.

Effect on the market: Market effect is often pressured, where the person copying may or may not affect the market. It doesn't affect the work, but still takes the heart of the work. This "con" factor is a qualitative measure that may weigh against fair use.

Effect of use on the market of the original: Effect on the market can mean more complicated than the other three factors. Some US courts have also held that the market factor is always and not merely a factor to be considered. The factor is often difficult to validate. This factor means fundamentally that an individual who is making a decision on the matter theoretically should have occurred regardless of your individual preference of whether to pay for such purchase. Then, this factor may weigh against fair use.

"Effect" is closely linked to purchase. If your purchase is research or scholarship, market effect may be difficult to show. If it is for purposes of commentary, then adverse market effect is often pressured.

"Effect" is about deciding whether or not a particular use of an author's work is a fair use. The following needs to be considered: are you creating something new or just copying? Are you operating in the market that is served by the work, or are you operating a service (or operating) something else? Are you taking the heart of the work? The more you take, the less fair your use is likely to be. The quantity of material used is as important as the quality.

Under the fair use rule of copyright law, an author may make limited use of another author’s work without asking permission. The fair use privilege is perhaps the most significant limitation on a copyright owner’s exclusive rights. If you write or publish, you need a basic understanding of what is and is not a fair use.

The following types of uses are undeniably fair use: teaching material (for example, summarizing an article, or article with a brief quotation), news reports, parody, and criticism or comment.

Parody is a use that makes another usually well known, work by imitating it in a comic way. News reports involve research and scholarship or commentary on a scholarly paper, quoting a short scientific paper, or an article with a brief quotation, or an article with a brief quotation for the purpose of criticism and comment.

Criticism and comment is a fair use. For example, quoting or observing a work in a review or criticism for the purposes of a commentary or a criticism, or in a student’s paper, is a fair use. However, through the study of a copyrighted work, uses that are not teaching, news, or work, may not be fair use.

In most other situations, you are not legally fair use, without an author’s permission, such use violates the author’s copyright.

In India, there is a provision under Section 52 of the Indian Copyright Act 1957, which holds that if the work will not cause any irreparable damage of copyright, this is it is a private use. For criticism or review of the work. For making back-up copies of the work. For reporting the work in a newspaper on face judicial proceeding. For the sole purpose of the proprietor of the copyright author to do work, or for reporting the work in a newspaper about current events. If you are a subscriber of the copy right owner (or have a previous work), you may use it with a fair use without an unfair method. Borrowing the heart of a work is considered as "unfair" and would violate the opposite premise.

We can have that JAM because “Substantial Benefit/Advantages" to “Profits & employers."

and indeed the free re-presentment of a work, or the information may be in the public domain and therefore free for any other use of the work. But many works appear on the Internet with out the author's permission.

Besides, authorising Internet distribution of a work does not mean authorizing a user to either copy or publish and articles.

So, unless you have proof for the material you found is the personal writing activity analyse the fair use of works found on the Internet, so you know what your rights are. If you do not know your fair use is for copyright, it is a good idea to apply the above principles and follow the golden rule: Do not use the work for purposes of less than you would have them take from you.

Courtesy: Kochhar & Co

Copyrights Beware, It's All In The Right

COPYRIGHT is a right given by the law to creators of literary, dramatic, musical, artistic works and producers of cinematograph films and sound recordings. In fact, it is a bundle of rights including, among other things, the rights of reproduction, communication to the public, adaptation and translation of the work. There could be slight variations between the content of the rights depending on the work.

Copyright subsists in all original published or unpublished literary, dramatic, musical, and artistic works, cinematograph films, photographs, tables and compilations, including computer databases and programs.

You should therefore, have to do nothing but to record the program on some tangible medium to get copyright protection. Copyright protection is automatic from the moment the work is embodied in some medium like paper, magnetic tape or film, etc.

According to Indian law, you do not necessarily have to register with the Copyright Office to get copyright protection. Registration of any work is, however, a good idea. Registration gives you a prima facie evidence of the facts stated in the Certificate of Copyright and helps in giving the necessary particulars to be copied of any entries in or extracts from it certified by the Registrar of Copyrights and helps the courts and police to be able to act on the basis of the facts stated in the certificate, without need for additional proof or production of the originals.

When someone is authorised by the copyright owner, he/she may publish a notice of copyright placed on the work. Under the Berne Convention, for copyrights, the notice of copyright provides protection to literary and artistic works, which India has signed, use of notice is not essential. It is, however, a good idea to incorporate a copyright notice. A copyright notice consists of the following: the symbol $\copyright$ (letter 'c' in a circle) or the word copyright, the year of first publication, and the copyright owner's name.

Copyright is always considered to be infringed when any person without a license granted by the owner of the copyright, does the whole or a substantial part of the work that contains the copyright.

When any person makes for sale or hire, or sells or lets for hire, or by way of trade, displays or offers for sale or hire or distributes, either for the purposes of trade or to such an extent as to affect prejudicially the owner of the copyright by way of trade exhibits in public, any infringing copies of the work, it is not necessary that the alleged infringer has copied an exact or verbatim copy of the original but a resemblance with the original is a test and that the resemblance is sufficient to indicate that it is a copy.

Piracy in an alleged infringing work may be detected by making a careful examination of the work as to whether any of the deviations and mistakes, which the licence permits, and which are due to human error, have been reproduced into alleged infringing copy.

Courts are empowered to grant the following relief which may include, among other things, temporary and permanent injunctions, impounding and destruction of all infringing copies, awarding statutory and actual damages, plus the infringers' profits, statutory damages, court costs and reasonable attorneys' fees, damages for conversion can be claimed when an infringer stages a play, based on portions of the work.

Courts are also able to make impoundment and destruction of the accused or imposition of a fine or both and to order seizure of infringing copies. Any person, not below the rank of sub-inspector, may with out a warrant, also search and seize infringing copies.

The author conferred under copyright are to reproduce the work; make copies of the work; communicate the work to the public; issue copies; adapt; allow the work to issue or sell or give on hire copies of the work to the public; program the work on to a computer.

There are certain differences between trademark matter and copyright matter as trademark is a right which is conferred on a device with another (the public), which is the issue, while in copyright, it is a slavish copy-ing of a work that attains infringement of rights of another.

Copyright in your work must be protected zealously, Rama Sarma shows you how

What is the requirement for copyright protection in an artistic work? The requirement is that the work is original. There is a theory behind the work, but the expression of the work, which requires to be original.

The originality required according to the Act is a minimum amount of originality. Work is permitted under copyright only when it is making copies without permission of the author. A copy is one, which is either a reproduction of the original work or a work which closely resembles the original.

The creation of a literary, artistic, musical, cinematograph or dramatic work usually calls for the application of creative and intellectual effort. Such engagement can be practicable or in addition to when the work is individually engaged in. Such creative work spurred the bother of marketing his work, managing the monetary rights related to the enforcement of the work and constantly protecting the rights of the original work and rights against the instances of infringement.

The copyright society is a suitability which a patent holder safeguards the interests of the creator of the work in which a copyright subsists. This author of an artistic work is assured of compensation for the use of his work by these societies.

Since the Copyright (Amendment) Act, 1994 came into force, sections 33 to 36 dealt with performing rights societies which were the entities entitled to grant and administer performing licences for performance in India of any work in which copyright subsists. These performing rights societies are now regulated and controlled by the appropriate society of the state, that is, granting licences for the performance of a literary, dramatic or musical work in which copyright subsists. The structure of the Act is amended for the rights in a musical and dramatic work in a public performance.

The Copyright (Amendment) Act, 1994 extended the scope of operation as it changed the nomenclature from performing rights societies to copyrights societies. The copyright societies are entitled to grant and collect licences not only in respect of performance of the work in public but also in respect of all rights relating to the work in which copyright subsists during that period.

The copyright societies discharge the following functions: grant licence of the copyright on the work for reproduction, performance or communication to public; locate and deal with the instances of infringement and initiate legal action against the infringers. Sections 33 to 36A of the Copyright Act are the relevant provisions dealing with copyright societies. The laws of copyrights are to protect the writings, but they deal with intellectual property as well.

The protection of ideas falls not within the laws as to copyright, but within the patent law. Under the patent law, a patent is a patent that gives the sole right to use his invention within certain limits, and if anybody uses the patent without his sole independent investigation, he infringes the patent. But, in the case of copyright, that is not so. It is always enough to argue at the court, or get from independent sources and the fact that the defendant produces some thing like the plaintiff's earlier work does not necessarily create an infringement; it must be shown that the defendant has derived the work from the plaintiff. The test, therefore, is in essence, concerned with the negative right of preventing the copying of physical material, and not with the reproduction of ideas and it does not give a monopoly to any particular form of physical expression.

The law does not permit one man to make a profit and to appropriate for himself the work which has been produced by the labour, skill, and capital of another.

Courtesy: Kochhar & Co

Abhi

• A job-advt is NOT a "literary work" - hence not covered by Copyright act.
• "Job-Advt pages" are NOT password protected.
• I don't think any jobsite carries "Copyright notice". Even if some sites do, I don't think, their notice, specifically "forbids Copying". According to Mr. Pavan Duggal, such a notice has to spell this out, explicitly.
• The very fact that jobsites provide "Email to a Friend" link below each job-advt, it is clear that they want users to "copy" these advts!

Newspaper Clippings (Snippets):

• [Top Right Snippet]: I AM planning to put up a website of my articles, stories and poems so that my visitors can read or even print copies of them. I would like to know if I stand to lose my copyright on what I put down on the internet. Would it mean that once downloaded, it, lose out printouts are safe and distribute it through e-mail?
• [Middle Right Snippet]: Having copyright in a work means that only I can decide who can copy, modify or sell my literary work is a creation of the mind. Copyright even without registration with the Copyright Office, provided the original work does not take away one's copyright in one's work. My work does not belong to the public domain unless I decide otherwise. The right to make copies of the said book.
• [Bottom Right Snippet]: Some people do think that once something is put up on the internet, the author loses all copyright in it. This is not true. The fact is that an original literary work like a story, poem, article or play is protected under the Indian Copyright Act of 1957. On the Internet, even electronic emailing is an act of making a copy. The law says that for copying on the internet starts the moment a person clicks on the screen. The Internet Explorer's temporary files make a copy of the webpage. So, even browsing makes a copy, unless one presumes, is permitted, unless the website owner is expressly allowing this. You are allowed to take printouts for your own personal use. Copying and taking out printouts would be safe only if the website owner gives an explicit notice which says that this is allowed. In order to protect yourself, you may put up a copyright notice on your website. In the copyright notice, you must specifically include a line. If you wish that no one should copy any material from your website, then you must specifically say that copying of any work or electronically, or even get a print out from my website, is expressly prohibited. This will serve to reinforce the idea. It is always better to have such a copyright notice accompanied by appropriate technological devices to keep the contents on your website protected. The safest way is to refrain from hyperlinking the website.

hcp To: pduggal@vsnl.com Cc: pavanduggal@hotmail.com Subject: RE: Query - Cyber Law

Dear Mr. Duggal,

I am a frequent reader of your column on Cyber Laws.

I intend to download job - advts. published on various jobsites, aggregate the same on my website and make these job - advts. available to jobseekers who visit my website or through email to those who request for the same.

In doing so, would I be contravening any provisions of Indian Cyber Law?

Personally, I believe, I am not doing anything wrong for the following reasons:

• The job - advts. posted by corporate job - advertisers are a "public domain" information and meant for downloading.
• Most job - advts. explicitly encourage visitors to "Email to a Friend" by providing an online link.
• Job - advertisers are in any case keen/ anxious to see that their job - advts. reach out to millions of jobseekers. The more the merrier! If job - advts. reach many more candidates, they will get many more resumes.
• On my website (or in email), I will be boldly indicating the "source" i.e. the name of the jobsite from where I have downloaded each job - advts. I would even mention the job - advts. reference no., so that, if in doubt, the jobseeker can visit the original website and personally verify the authenticity of the advt.

I wish to ensure that my website enjoys a very high credibility amongst the jobseekers.

• I will not modify / alter the original content, so that there is no question of "mis - representation" of facts.
• I am not trying to pass - off the "content" as my own / original creation, nor claiming any intellectual property rights with respect to these job - advts.
• I am not making any money by directly "selling" this content, which will be given away "free" to jobseekers.
• In light of the foregoing, could you please enlighten me whether I am "safe" within the provisions of Indian Cyber law?

Thanking you in anticipation

With regards,

Hemen C. Parekh (hcp@3pjobs.com)

4/12/04

Newspaper Clippings (Snippets):

• [Top Left Snippet]: I have uploaded an analytical piece, which contains my original thoughts on a particular subject, on my website. It is possible that my piece has been used in the writing of another person, wholly or in part, without giving me any credit. Can I still claim my piece? Has he violated my rights in the original piece?
• [Middle Left Snippet]: The issue takes us to the concept of fair dealing in copyright over the internet. Fair dealing, in essence, is using the original work for your own purpose. In your case, the analytical piece was a product of your thought process, skills, time, effort, and energy, and hence, is deemed to be your original creation. The copyright law embodied in Section 13 of the Indian Copyright Act protects the following original works: (a) Original literary, dramatic, musical and artistic work; (b) Original cinematograph films; and (c) Original sound recordings.
• [Bottom Left Snippet]: However, it is important to note that a person is permitted to make fair use of a copyrighted work under the law without the ambit of the offence of copyright infringement. The law permits you to use a copyrighted work for the purpose of research, criticism, review, or reporting of current events, etc. The law permits you to use someone else's original work, provided you give due credit to the author of the original work. In your case, it will boil down to the question whether you have used your original writing for criticizing the piece. This would come within the ambit of the exemption of fair use and, thus, your rights in your original piece are not impacted.

Abhi - Kartavya - Vicky - Inder - Deepa

• This has relevance to our downloading thousands of job-advts from various job-sites, processing through AUTO-CONVERTER to create a database & then, plotting "JOB MARKET PROFILE" graphs to make available to job-sites (or portals) etc.
• Newspapers/magazines/TV channel/
• #1 Job-Advts. cannot be considered "original analytical piece".
• #2 Job-Advts do not fall into any of these categories.
• #3 On "Job Market Profile" graphs, we are going to give credit to the original website (publisher) by saying, "Data Sourced From: [] / []".
• #4 We are engaged in such a "CRITICAL ANALYSIS" of job-advts when we create "Job-Market Profile".
• #5 We are not "selling" this analysis for profit.