Protecting IP Ownership and Rights in India: 5 Things Employers Need to Know.
Intellectual property ownership is a vital asset that protects a company’s ideas, and it should be top-of-mind for any global company hiring in India. Over the past decade the Indian government bolstered its IP regulations to combat counterfeiting and digital piracy. And its exact rules on trademarks, inventions, and designs differ from those in other countries.
So how can employers protect their IP? Read our primer on IP ownership rights in India for the basics, but keep in mind this guide is for informational purposes and not intended to provide legal advice.
1. NDAs are enforceable in India
In India, the courts have historically upheld non-disclosure agreements (NDAs) as enforceable, governed by the Indian Contract Act of 1872. In past rulings, Indian courts differentiated them from certain kinds of outlawed restrictive agreements, so long as they don't restrain an employee from carrying out a separate job in the future.
While not required, NDAs gain credibility if they're certified under India's Registration Act. They also must meet requirements for being reasonable and within the public interest.
To ensure a confidentiality agreement stays legally binding, it should include the full names of the consenting parties, a thorough definition of the information that can’t be disclosed, situations where the NDA is nullified, and reasonable provisions for maintaining confidentiality after an employee is terminated.
2. India recognizes 7 different types of Intellectual Property Rights
Indian laws administer Intellectual Property Rights (IPR) for the following:
Patents:
Patents can protect third parties from profiting off an invention. According to the Patents Act in India, patentable inventions must:
- Be an original product or process.
- Offer a novel, substantial technical improvement.
- Be useful.
The Indian Patent Office accepts patent applications from inventors, their legal representatives, or corporate assignees. If granted, patent holders have exclusive rights to the invention for 20 years from the date of filing the application. According to Indian patent law, third parties need consent from the inventor before using the product for any commercial purposes.
Copyrights:
Under India’s Copyright Act, authors of original ideas can get copyright protections for:
- Literary works
- Artistic works
- Musical works
- Cinematograph films
- Sound recordings
The original authors of the work own the copyright. They can seek copyright registration through the Indian government’s Copyright Office. Owners of this IP also have the exclusive right to use, make, or adapt the copyrighted work. They can sell the work to third parties via a written contract. According to Indian copyright law, authors have these protections for 60 years after their death, after which the work becomes public domain.
Trademarks:
Trademarks distinguish a company’s brand by protecting symbols representing a good or service. Companies can apply for trademark registration online. Under the Trade Marks Act, authorities can reject registration if the mark isn’t distinct or original, or if it’s offensive, confusing, or deceptive.
According to trademark rules, rights holders get protection for 10 years, which can be renewed at the end of every term.
Industrial Designs:
IP laws for industrial designs are set by the Designs Act. The Indian Patent Office manages applications and will only certify registrations if the design is a novel innovation, isn’t already in the public domain (in or out of India), and is distinguishable from other registered designs.
Owners of registered designs get IP protection for 10 years, but you can apply for a five-year extension.
Geographical Indications of Goods:
A geographical indication (GI) is a tag qualifying businesses can put on products to market their origin (e.g. “Darjeeling Tea” or “Basmati Rice”). Applications for a GI tag need to include a statement about how the product’s geographical origin impacts its quality. Successfully registered GI tags get IP protection for 10 years and are eligible for renewals.
Plant Varieties:
Under the Protection of Plant Varieties and Farmers’ Rights Act, farmers can register the discovery of new, distinctive plants that haven’t been sold yet. Registered trees and vines are protected for nine years while crops are protected for six years.
Semiconductor Integrated Circuits:
New inventions of this type of electronic equipment that powers semiconductors can be registered as IP. Under the Semiconductor Integrated Circuits Layout Design Act, eligible products need to be distinctive and commercially unexploited at the time of the application. Accepted designs are protected for 10 years.
3. Always clarify IP ownership and protections in your employee agreement
Employers should include a clause in every employment agreement outlining IP protections with new hires. This can include:
- Who owns the IP created by the employee
- Rules for commercialization of IP
- Conditions for a transfer or IP ownership
- Confidentiality agreements for trade secrets and other proprietary information
- Non-compete agreements
- A power of attorney clause
Under Indian laws, which follow World Intellectual Property Organization (WIPO) guidelines, employers own the IP created by employees on the job, so long as it’s relevant to the underlying business. For any exception to this rule to be legally binding, it needs to be in the employee agreement.
4. Contractors own the IP to their work unless you explicitly rescind their ownership
IP protections are only enforceable if an employment relationship exists—so make sure you’re not misclassifying contractors. In India, independent contractors own IP they’ve developed for a company unless their contract states otherwise. Contractors automatically own the copyright to any ideas that fall under certain “work-for-hire” categories, including:
- Contributions to a collective work
- Motion pictures
- Translations
- Instructional texts
- Test materials (and answers to them)
- Atlases
5. You have to follow domestic IP protection laws in India
India is a member of several international trade organizations that provide consistent IP protections and guidelines across participating countries. This includes:
- WIPO: A UN agency that provides global IP “services, policy, information, and cooperation.”
- Berne Convention: Provides minimum copyright protections for authors and artists across borders.
- Paris Convention: Protects international trademarks, patents, industrial designs, and trade names.
- Madrid Protocol: Allows for registering trademarks internationally.
- Patent Cooperation Treaty: Upholds international patent rights for 157 contracting countries, but requires a separate patent application.
- Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement: A legal agreement between all World Trade Organization (WTO) members, India included, that sets international norms and standards for the different types of IP.
That said, India has domestic IP protection laws that are different from many other countries. Unless filed internationally through one of the above treaties (or if the underlying IP complies with the treaty), registering IP in one country won’t automatically transfer over to India, and vice versa. Because of this, it's crucial for companies doing business in India to localize their IP ownership clauses to ensure they comply with Indian laws.
Frequently asked questions about IP law in India
Who owns IP in India: employee or employer?
Employers own IP created by employees as part of their work. For instance, if an employee creates new software for a tech company on company time, the employer owns the underlying IP. Any exceptions to this must be written into the employee agreement.
Employers generally stipulate this policy with a Proprietary Information and Inventions Assignment Agreement (PIIA). This is a legal contract between an employer and an employee or contractor that establishes the ownership and protection of IP created by the employee or contractor during their employment or work arrangement with the company.
What are the documents required for trademark registration in India?
To register a trademark in India, you should provide the Indian Patent Office with:
- Applicant’s identity proof
- Permanent Account Number (PAN)
- Aadhar card
- Passport
- Certificate of Incorporation of your business
- Company logo (if applicable)
- Proof of address
Successful trademark registration is valid for 10 years and eligible for renewal.
What are the different types of patent applications?
Under Indian patent law, inventors (or their assignees) can submit the following:
- Provisional application: if the invention isn’t finalized
- Ordinary application: if versions of the invention haven’t been filed before, or through any international conventions
- Convention application: for applications filed in conjunction with an international convention
- PCT Application: for applications filed via the Patent Cooperation Treaty. You can file both an international and domestic version of this application.
- Patent of Addition: for modifications of an earlier registered patent
- Divisional Application: for applications involving multiple inventions
Can you transfer ownership of IP in India?
Yes, IP can be assigned from one owner to another via a written contract signed by the rights holder or their legal representative. The assignment agreement should state what the IP is, what it’s for, and who it’s being transferred to.
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Rippling and its affiliates do not provide tax, accounting or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any related activities or transactions.
