India:
Intellectual Property And Its Attributes
13 January 2021
Vaish Associates Advocates
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Article by Vijay Pal Dalmia,
Advocate
Supreme Court of India & Delhi High
Court
Email id: vpdalmia@vaishlaw.com
Mobile No.: +91 9810081079
Linkedin: https://www.linkedin.com/in/vpdalmia/
Facebook: https://www.facebook.com/vpdalmia
Twitter: @vpdalmia
AND
Rajat Jain
Email: rajatjain@vaishlaw.com
Mobile no.: +91 9953887311
The term "Intellectual Property Rights" has not been
defined under any Indian statute. As per the World Intellectual
Property Organization (WIPO), Intellectual property refers to
creations of the mind, such as inventions; literary and artistic
works; designs; and symbols, names and images used in commerce.
Primarily, there are nine categories of Intellectual Property:
- Copyright and related rights
- Trade Marks including service marks
- Geographical indications
- Industrial designs
- Lay-out designs of integrated circuits
- Trade secrets
- Patents
- Patenting of micro-organisms and
- New plant varieties (seeds and other propagating material)
India, being a signatory of Trade-Related Aspects of
Intellectual Property Rights, has enacted various statutes to
protect and deal with the most of the Intellectual Property Rights,
as mentioned above.
Now, let us refer to some of the Indian case laws to find out
the attributes of the intellectual property rights:
- In the case of The Institute of Chartered Accountants
of India vs. Shaunak H. Satya and Ors.
(AIR2011SC 3336), the Hon'ble Supreme Court of India
has relied on the definition of the Intellectual Property as
provided in Black's Law Dictionary, 7th Edition, page 813,
which states as under:
-
- The term 'intellectual
property' refers to a category of intangible rights protecting
commercially valuable products of human intellect comprising
primarily trade mark, copyright and patent right, as also trade
secret rights, publicity rights, moral rights and rights against
unfair competition (vide Black's Law
Dictionary, 7th Edition, page 813)."
- In the case of Gurukrupa Mech Tech Pvt. Ltd. vs. State
of Gujarat and Ors. (2018)4GLR3324, the
Hon'ble Gujarat High Court has defined the Intellectual
Property, as under:
-
- The World Intellectual
Property Organization (WIPO), the apex institution governing the
Intellectual Property Rights, has described the Intellectual
Property as "Intellectual property refers to creations of the
mind: inventions; literary and artistic works; and symbols, names
and images used in commerce."
- 29. The Supreme Court has equated
an intellectual property with tangible property and has upheld its
constitutional validity under Article 300A of the Constitution. In
K.T. Plantations Pvt. Ltd. v. State of Karnataka [MANU/SC/0914/2011
: (2011) 9 SCC 1]. The Supreme Court held that "Article 300A
proclaims that no person can be deprived of his property save by
authority of law, meaning thereby that a person cannot be deprived
of his property merely by an executive fiat, without any specific
legal authority or without the support of law made by a competent
legislature. The expression 'Property' in
Art. 300A is confined not to land alone, it includes intangibles
like copyrights and other intellectual property and embraces every
possible interest recognized by law."
- ... Intellectual property is
basically incorporeal property which is a product of original
thought..
- 71. The
Intellectual Property Law is a negative right which means it is a
right to exclude others from using the property generated by the
registered owner. It is thus obvious that this
law anticipates pre-emptive measures to prevent the misuse, as the
property is intangible per se. Any reproduction in tangible medium
becomes susceptible to misappropriation therefore, the statutory
rights ought to be protected.
- In the case of State of Kerala vs. The Malayala
Manorama Company Limited, 2017(2)KLT36, the
Hon'ble Kerala High Court described the Intellectual Property
Rights, as under:
-
- Intellectual property
rights on the other hand represent monopoly of intellectual
creation of the owner of such rights. It is more understood as
conceptional rights on intangible and incorporeal properties.
Ownership rights cannot be synonymously understood as intellectual
property rights though such rights may overlap other rights in
certain circumstances. The distinction however narrow or thin as
the case may be, the legal distinction is copious and
lucid. Consider, 'A' goes to buy the DVD
of a cinema or a book over which 'B' has the copyright; the
owner of the DVD or the book will be 'A' and all the right
to use the DVD or book would be governed by the copyright owned by
"B"; thus it is possible one may be the owner of a
material article and other may be the owner of a
copyright...
- In the case of McDonalds India Pvt. Ltd. and Ors. vs.
Commissioner of Trade & Taxes, New Delhi and Ors.
2017VIIAD(Delhi)350, the Hon'ble
Delhi High Court described the Intellectual Property Rights, as
under:
-
- 47. The
peculiarity of intangibles or incorporeal property, of the kind
this court has to deal with, i.e. intellectual property, is that
unlike real property, its boundaries are unset. These rights are
only real and effective to the extent they enable the owner or
transferee to "keep out" from use those who are not
permitted to do so. In other words, the nature of intellectual
property and the remedies provided for their enforcement, hinge
upon the right to exclude others from using it..
- In the case of. Mangalore Ganesh Beedi Works vs.
Commissioner of Income Tax, Mysore and Ors. (2016)2SC
C 556, the Hon'ble Supreme Court of India has held that
the intellectual property such as
trademarks, copyrights and know-how fall within the definition of
'plant'. The relevant extract from the judgment is
as under:
-
- 31. The question is, would
intellectual property such as trademarks, copyrights and know-how
come within the definition of 'plant' in the 'sense
which people conversant with the subject-matter with which the
statute is dealing, would attribute to it'? In our opinion,
this must be answered in the affirmative for the reason that there
can be no doubt that for the purposes of a large business, control
over intellectual property rights such as brand name, trademark
etc. are absolutely necessary. Moreover, the acquisition of such
rights and know-how is acquisition of a capital nature, more
particularly in the case of the Assessee. Therefore, it cannot be
doubted that so far as the Assessee is concerned, the trademarks,
copyrights and know-how acquired by it would come within the
definition of 'plant' being commercially necessary and
essential as understood by those dealing with direct
taxes.
- In the case of CUB PTY Limited vs. UOI and Ors., New
Delhi and Ors. [2016]241TAXMAN278(Delhi), the
Hon'ble Delhi High Court while dealing with a question relating
to the place of taxability, leviable on the transfer of trademarks,
held as under:
-
- 2 0 . Thus, the legislature, where
it wanted to specifically provide for a particular situation, as in
the case of shares, where the share derives, directly or
indirectly, its value substantially from assets located in India,
it did so. There is no such provision with regard to intangible
assets, such as trademarks, brands, logos, i.e., intellectual
property rights. Therefore, the well accepted principle of
'mobilia sequuntur personam' would have to be
followed. The situs of the owner of an intangible
asset would be the closest approximation of the situs of an
intangible asset. This is an internationally accepted rule, unless
it is altered by local legislation. Since there is no such
alteration in the Indian context, we would agree with the
submissions made on behalf of the petitioner that the situs of the
trademarks and intellectual property rights, which were assigned
pursuant to the ISPA, would not be in India. This is so because the
owner thereof was not located in India at the time of the
transaction.
From the above judgments, the attributes of Intellectual
Property Rights can be summarized as under:
- Intangible and Incorporeal in nature
- Creation of the mind
- Article 300A of the Constitution of India even protects
Intellectual Property
- They are negative rights which means it is a right to exclude
others from using the property generated by the owner
- Intellectual property rights represent monopoly of intellectual
creation of the owner of such rights
- The peculiarity of intellectual property is that unlike real
property its boundaries are unset
- The intellectual property such as trademarks, copyrights and
know-how fall within the definition of 'plant' for the
purpose of taxation
- The situs of the owner of an intangible asset would be the
closest approximation of the situs of an intangible asset
© 2020, Vaish Associates Advocates,
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Advocates, 1st & 11th Floors, Mohan Dev Building 13, Tolstoy
Marg New Delhi-110001 (India).
The content of this article is intended to provide a general
guide to the subject matter. Specialist professional advice should
be sought about your specific circumstances. The views expressed in
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