IP in business transactions: India overview

A guide to intellectual property law in India. The IP in business transactions Q&A gives an overview of maintaining an IP portfolio, exploiting an IP portfolio through assignment and licensing, taking security over IPRs, IP and M&A transactions, and the impact of IP on key areas such as competition law, employees and tax.

To compare answers across multiple jurisdictions, visit the IP in business transactions: Country Q&A tool.

This Q&A is part of the global guide to IP law. For a full list of jurisdictional Q&As visit www.practicallaw.com/ip-guide.

Revanta Mathur, Swati Sharma, Aditya Gupta, Neeti Wilson, Vidisha Garg, Amita Arora, K Premchandar, Anand & Anand Advocates

Overview of main IPRs

1. What are the main IPRs in your jurisdiction? How are they protected?


Patent protection is provided for an invention relating to a product or a process that is:

  • New.

  • Inventive.

  • Capable of industrial application.

An application for a patent must be filed at the patent offices in Mumbai, Chennai, Kolkata or New Delhi depending on the jurisdiction of the applicant or the address of service.

Patent infringement proceedings can only be initiated after the grant of patent, but can include a claim retrospective from the date of publication of the application for grant.

Trade marks

Statutory as well as common law rights can exist in a trade mark. Accordingly, both registered and unregistered trade marks can be protected. An unregistered trade mark can be protected by the common law remedy of passing off (Trade Marks Act 1999).

In addition, the concept of prior use or first in the market is an established principle of trade mark law. A prior user of an unregistered trade mark takes priority over a subsequent user even if the subsequent user has an earlier registration over a similar/identical mark.


India provides copyright protection in respect of original:

  • Literary works.

  • Dramatic works.

  • Musical works.

  • Cinematographic films and sound recordings.

Copyright protects the work against unauthorised:

  • Reproduction.

  • Communication.

  • Adaptation.

  • Translation.

The rights are acquired as soon as the work is created. Although registration is not a legal requirement, it is advisable to seek registration of copyright since the certificate of registration is prima facie evidence of the ownership and validity of the right.

In addition to the above, moral rights are recognised to acknowledge the authorship of a work and protect the work against distortion, mutilation or modification.

Design rights

Design rights protect features of shape, configuration, pattern, ornament or composition of lines or colours applied to any article.

Registration of an industrial design grants the proprietor the exclusive rights of selling, importing and applying the design to any product. India has adopted the 'first to file' system, which means that the right holder must file the application as soon as possible to minimise the possibility of any other person claiming rights to the proposed designs.

To be eligible for industrial design rights the design must be all of the following:

  • New.

  • Attractive.

  • Previously unpublished in any country.

  • Able to be reproduced by industrial means.

  • Distinct from other, known designs.

  • Not against public order.

  • Not containing any indecent material.

Trade secrets and confidential information

There is no current domestic legislation protecting trade secrets or confidential information.

Harm caused by the breach of trust or of contractual protection of trade secrets can be remedied in the courts.

Case law on this issue includes (notably):

  • General Electric Company v Jebasingh Nelson (CS (OS) 3061 of 2012 Delhi High Court). The court granted interim injunctions preventing ex-employees of the claimant company from disclosing to third parties any confidential information and trade secrets acquired during the course of their employment or otherwise belonging to the company and not falling in the public domain.

  • John Richard Brady v Chemical Process Equipments Pvt. Ltd (AIR 1987 Del 372 (John Richard Brady Case)). The Delhi High Court awarded an injunction even though there was no contract in a suit involving misappropriation of know-how information, drawings, designs and specifications disclosed to the defendants by the claimant.


Geographical indications. Geographical indications can be registered to protect against unauthorised use of a product name or geographical indication.

Registered Geographical Indications are not transferable by assignment or licence and pass to the owner's successor in title.

While registration is not mandatory, proceedings to prevent unauthorised use or to recover damages for infringement cannot be taken if the geographical indication is unregistered (section 20(1), Geographical Indications of Goods (Registration and Protection) Act 1999).

Plant variety protection, farmers' and breeders' rights. Plants or parts of plants are not eligible for patents but plant breeders, researchers and farmers who develop new plant varieties can protect their rights if they are registered in accordance with the Protection of Plant Variety and Farmers Right Act 2001. The denomination of a plant variety also enjoys protection under the statute.

Traditional knowledge (biological resources related). The Biological Diversity Act 2002 recognises the rights of communities in developing traditional knowledge related to biological resources. Though not a specific IP right as such, this statute provides for the equitable sharing of benefit arising out of commercial activities or through any other use and knowledge of biological resource related traditional knowledge.


Maintaining IPRs

Search and information facilities

2. What facilities are available to conduct IP searches and obtain IP information on registered IP rights?


The Indian Patent website www.ipindia.nic.in/patents.htm provides facilities for comprehensive e-filing, application statuses for pending application and patent searches.

The Patent Journal, published by the Indian Patent Office, is also accessible at www.ipindia.nic.in/journal-patents.htm, providing information about published applications.


Trade marks

An e-register of trade marks is available at https://ipindiaonline.gov.in/eregister/eregister.aspx providing details about trade mark applications filed.

A public search tool for searching for trade marks before filing an application is available at www.ipindiaonline.gov.in/tmrpublicsearch/frmmain.aspx.

A comprehensive e-filing facility and WIPO global brand database can also be accessed at www.ipindia.nic.in/trade-marks.htm.

The Trade Marks Journal, published weekly by the Trade Marks Registry, can also be openly accessed at www.ipindia.nic.in/journal-tm.htm.


The Copyright Office maintains an exclusive website at www.copyright.gov.in/frmfaq.aspx, which provides e-filing, a facility to check applications status, details of processing of applications and a database for received applications.

Design rights

The Office of Controller of Patent, Designs and Trade marks provides e-filing, application status and publication details along with public search tool for designs at www.ipindia.nic.in/designs.htm


Geographical indications (GIs). The website www.ipindiaservices.gov.in/GirPublic/DetailsGIR.aspx maintained by the Geographical Indications Registry, provides details of all registered GIs as well as the names, addresses and descriptions of the proprietors or authorised users.

Plant varieties. The website www.plantauthority.gov.in is a government portals maintained by the Protection of Plant Varieties and Farmers' Rights Authority to enable users to track their applications and existing registered varieties. This forum also publishes a monthly Plant Variety Journal which is the official public notification of plant variety related applications and related information..

Maintenance of main IPRs

3. What steps must a business take to maintain the registration and status of its main IPRs?


Renewal fee. A patent is granted for 20 years from the date of filing of the patent. A patentee must pay a renewal fee until the date of possession given by the patent office. If the fee is not paid within a prescribed time, the patent lapses.

The renewal fee is payable from the third year, however the payment starts from the grant of patent.

Statement of working. The following rules apply:

  • The patentee and licensee (whether exclusive or otherwise) must submit a statement of commercial working of the patented invention to the Controller of Patents every calendar year, within three months of the end of the year.

  • Failure to submit the statement is punishable with a fine of up to INR1 million. Providing false information about commercial working of an invention is an offence and is punishable with imprisonment of up to six months and a fine, or both.

  • Failure to submit the statement of working can constitute a ground for the grant of a compulsory licence to a third party (non-exploitation of the patent in the Indian territory by the original patentee or licensee within three years from the grant of patent).

Trade marks

Applications for registration of trade marks can be filed either on a current use basis or on a proposed use basis (section 18, Trade Marks Act 1999).

Cancellation. Where a trade mark has not been commercially used in India for a continuous period of five years from the date of grant of registration, an aggrieved party may file an action for cancellation for non-use either at the Trade Marks Registry or at the Intellectual Property Appellate Board. The onus of proving non-use is on the party filing the cancellation petition. The petitioner can show evidence of non-use by filing trade affidavit and/or market surveys indicating non-use of the mark from the date of registration of the trade mark.

Duration and renewal. A registered trade mark is valid for ten years, after which it needs to be renewed. The registered trade mark owner must pay renewal fees to maintain the trade mark for another 10 years. If no application is filed within six months after the expiry of the last registration, the trade mark expires.

Restoration. An application for restoration of an expired trade mark can be filed, along with the prescribed fee, to the registrar within one year from the expiry of the last registration



Duration. The statutory term of protection of a copyright depends on the subject matter of the copyright:

  • Literary, musical or artistic work (other than photographs) are protected for the lifetime of the author plus 60 years from the beginning of the calendar year in which the author dies. When the work has not been published, performed, or offered for sale or broadcast during the lifetime of the author, the copyright protection continues for 60 years from the end of the year in which any of these acts are done.

  • Cinematographic films, photographs and computer programs are protected for 60 years from the end of the year in which the work is made available to the public with the consent of the owner of the copyright or published work, or for 60 years from the end of the year in which the recording is first published.

Renewal. There is no provision for renewal.


Design rights

The initial term of a design protection is ten years. This can be renewed for five years on request and payment of the requisite fee. However, if the design registration lapses on account of non-payment of the fee, it can be restored by submitting an application within one year from the date on which the registration lapsed.

Trade secrets and confidential information

Methods of protecting trade secrets include:

  • Identifying and marking all documents ''confidential''.

  • Identifying which employees have access to trade secrets and critical material.

  • Ensuring and maintaining computer security and ensuring that non-disclosure agreements are in place.

  • Recording proof of creation of a trade secret either by self-posting the information and retaining postmarked and sealed envelopes, or by depositing a copy of the information with a third party who keeps a dated copy.


Geographical indications (GIs). The registration of a geographical indication lasts for ten years and is renewable for further periods of ten years without limit.

Protection of plant varieties. A certificate of registration issued by the registrar preserves a plant variety owner's exclusive rights to sell, reproduce, import and export the variety and its seed. The certificate can also prevent others from claiming protection or utility patent rights.

Validity is for:

  • Nine years for vine and trees extendable by a further nine years, that is, a maximum of 18 years.

  • Six years for other crops extendable by a further nine years, that is, a maximum of 15 years.

Combined with licensing, this certificate can facilitate further research and future funds, and preserve the financial and other interests of potential investors in a breeding programme.

Monitoring infringement

4. What steps can a business take to avoid committing an infringement of another party's IPRs and to monitor whether a competitor is infringing its IPRs?


Infringement can be monitored by:

  • Regular monitoring of the Patent Journal (see Question 2) to ensure that no other individual or entity has applied for a product or process over which the person already has a right.

  • Awareness and frequent market surveys of the latest inventions being launched by competitors in the relevant industry.

  • Marking on the patented product terms such as ''patent'' and ''patented'' along with the patent number(s).

Trade marks

Infringement can be monitored by:

  • Regular checking in the Trade Marks Journal (see Question 2).

  • Using the public search tool to ensure that no matching trade marks exist.

  • Checking the Ministry of Corporate Affairs records to ensure that the proposed trade mark does not exist as a corporate name or trading style of any company incorporated in India.

  • General internet search on common law rights and checking whether there are any infringing domain names incorporating the relevant trade mark.

  • Review of industry-specific materials such as car magazines for automobile based trade marks.

  • Record registered trade marks rights with the customs authorities under the Intellectual Property Rights (Imported Goods) Enforcement Rules 2007, which empower the authorities to seize or destroy infringing goods.

To monitor whether a competitor is infringing a company's trade mark, regular monitoring of the Trade Marks Journal (published weekly) published by the Trade Marks Registry is recommended. Market surveys and common law searches as mentioned above may also be considered.


Infringement can be monitored by awareness and frequent market surveys to inquire about copyright specific works being published by competitors in the relevant industry and ensuring that they are not a reproduction of an already copyrighted work.

Design rights

Infringement can be monitored by monitoring designs being published and market surveys targeting the business activities of the competitors to ensure they do not end up making fraudulent or obvious imitations of the registered designs.

Trade secrets and confidential information

Companies should regularly identify and label trade secrets. They should use confidentiality and non-disclosure agreements to notify and reinforce confidentiality provisions. In addition, all the files and relevant documents should be marked as confidential and the standards for non-disclosure of such information should be clearly mentioned in the employee handbook. Any disclosure of a company's confidential information to third parties should be governed by a non-disclosure agreement (NDA).


Geographical indications (GIs). Infringement or passing off can be identified by market survey, field visits and general awareness about the origin of products and trade practices.

Protection of plant varieties. Applications filed for plant variety in the Plant Variety Journal (see Question 2) should be monitored and the market should be checked for similar denominations as well as similar characteristic varieties.


Exploiting IPRs

5. What are the main steps in an IP audit in your jurisdiction to determine the content of an IP portfolio?


An IP audit should include:

  • Determining valuable product and process features that are not yet patented.

  • Finding correctable defects in existing patents.

  • Analysing mergers and acquisitions in the relevant industry.

  • Exploring licensing possibilities.

  • Checking/conducting enforcement of patent rights.

  • Cost reduction measures for obtaining and maintaining patents.

Trade marks

Trade mark audits should include:

  • Determining the status of current applications.

  • Checking details of current and proposed products of the company.

  • Examining product catalogues, annual reports, product brochures and press releases.

  • Searching online databases for trade mark availability.

It is also advisable to determine signs or wording central to a company's identity, for example, logos and slogans developed by marketing or advertising teams which may need to be classified as trade marks for protection.


An IP audit for copyright requires in-depth analysis of copyright ownership, assignments and licences. The audit should consider whether the copyrightable work was created under a contract of service or contract for service, and accordingly whether it belongs to the company or the creator (see Questions 22 and 23).

Design rights

This should cover:

  • Status and scope of protection.

  • Ownership and control.

  • Validity of unregistered or pending applications.

  • The strength of the registered designs.

Trade secrets and confidential information

Audits of trade secrets and other confidential information include:

  • Reviewing and careful drafting of contractual obligations such as non-disclosure agreements and employment contracts.

  • Monitoring access to company information and the security steps undertaken to ensure confidentiality.

  • Identifying the company's internal data and measuring the control over it. In the case of Burlington Home Shopping Pvt. Ltd. v Rajnish Chibber (1995 PTC (15) 278), the Delhi High Court decided that the compilation of a customer database/list qualified as a trade secret, as well as warranting protection under copyright laws


Geographical indications audit:

  • Source or the origin of products, especially geographical limits, must be determined.

  • Characteristics of the product owing to the geographical location.

  • The ownership and legitimate claims involved.

  • List of authorised users and the documents to establish their claims.

  • The extent of protection sought and the status of applications along with statutory deadlines.

Plant varieties audit:

  • Checking for varieties registered.

  • Checking for varieties seeking to be registered.

  • Licensing and assignments of all the valid varieties.

  • Matching ownership of the contended IP as communicated by the owner to that mentioned on the website.

  • Checking for validity of the registration by way of payment of annuities.



Scope of assignment

6. On what basis can main IPRs be assigned?


A patentee may assign the whole or any part of the patent rights. There are three kinds of assignment:

  • Legal assignment.

  • Equitable assignment.

  • Mortgage

An assignment (or an agreement to assign) of an existing patent is a legal assignment, where the assignee can enter their name as the patent owner. A specific share given to another person is called an equitable assignment and a mortgage is when the patent rights are wholly or partly transferred to obtain money.

Trade marks

Assignment of a trade mark occurs when the ownership of the mark is transferred from one party to another with or without the goodwill of the business. If the trade mark is registered it must be recorded in the register of trade marks.

Both registered trade marks and those pending registration can be assigned.

Assignments that could confer multiple exclusive rights to more than one person, due to the similarity of the trade marks, and could cause confusion, can be refused (section 40(1), Trade Marks Act 1999). However, the similarity may not be a bar to assignment if the goods or services are to be sold or offered in different export markets (section 40(2)).

Registration of the assignment is compulsory.

A mark can be assigned or transferred in any of the following ways:

  • Complete assignment to another entity: the owner transfers all its rights in a mark to another entity, including the rights to further transfer and to earn royalties.

  • Partial assignment to another entity: the transfer of ownership is restricted to specific products or services.

  • Assignment with goodwill: the rights and goodwill in a trade mark are transferred to another entity.

  • Assignment without goodwill': also known as gross assignment, this is where the owner of the brand restricts the right of the transferee to use the brand, that is, the goodwill in the brand is not transferred to the buyer.


The following applies:

  • A right to assign work under the Copyright Act 1957 arises naturally when the work comes into existence.

  • Unless the assignment is in writing and is signed by the assignor, the agreement is not valid.

  • The rights assigned along with duration and territorial extent must be clearly established.

  • The amount of royalty or any other consideration payable must be clearly specified.

  • If the assignee fails to exercise the assigned rights within one year of the date of assignment, the assignment is deemed to lapse unless otherwise agreed.

  • The period of assignment is for five unless otherwise agreed.

  • Territorial extent is presumed to extend within the territory of India unless otherwise agreed.

Significantly, for an assignment of copyright in any future work, the assignment takes effect only when the work comes into existence.

Where the assignee does not exercise the rights assigned to him within a period of one year from the date of assignment, the assignment for such rights is deemed to have lapsed unless otherwise mentioned in the assignment.

Design rights

The document assigning the design right must be in writing and must include all the terms and conditions governing the parties' rights and obligations. Any contravention of this requirement renders the instrument invalid. The document is effective from the date of its execution on entry of its particulars in the register of designs. An application for registration of title must be filed within six months from the date of execution. This period is extendable by a maximum of six months.

Confidential information

As there is no defined legal framework governing trade secrets and confidential information, it is usually assigned through contracts defining the:

  • Scope and nature of the information to be assigned.

  • Rights of each party.

  • Geographical extent.

  • Duration.

  • Choice of law and jurisdiction.


Geographical indication (GI). Registered Geographical Indications cannot be assigned (section 24, Geographical Indications of Goods (Registration and Protection) Act, 1999).

Protection of plant varieties. These can be assigned exclusively or non-exclusively and can be limited to a territory or market. The assignment must fulfil all the requirements of a valid contract, that is, be made with the free consent of parties competent to contract for lawful consideration, with a lawful object.

An assignment to a registered agent or licensee must be registered before the registrar of plant varieties. Assignable rights are the rights to produce, sell, market, distribute, import or export the registered variety.

Formalities for assignment

7. What formalities are required to assign each of the main IPRs?


An assignment of a patent must be made in writing and duly executed, and must contain all the terms and conditions governing the parties' rights and obligations. The document must be submitted within six months of the commencement of the Patents Act 1970 or of the execution of the document, whichever is later. The Controller of Patents may call for other proof of title or written consent to the assignment.

Trade marks

Assignment of a trade mark can be made by making a request on the prescribed form with the fee. The application must contain full particulars of the instrument, if any, under which the applicant claims to be entitled to the trade mark. The instrument or a duly certified copy must be produced at the Trade Marks Registry at the time of application.

Documents required for registration of the assignment are:

  • A duly executed and notarised assignment deed (no notarisation of a power of attorney is required).

  • For registered trade marks, a notarised affidavit is also required stating that the trade mark has not been questioned in any legal proceedings.

  • A power of attorney from the assignor to the attorneys.



An assignment of copyright must:

  • Be in writing.

  • Be signed by the assignor.

  • Identify the copyrighted work

  • Specify the rights assigned.

  • Include terms relating to revision, royalty and termination.

  • Specify the amount of royalty payable, if any, to the author or their legal heirs.

If an assignee does not exercise its rights within a year of the assignment, the transferred rights are deemed to lapse unless otherwise specified in the agreement.

If the period of assignment is not stated, it is deemed to be five years from the date of assignment and if no geographical limits are specified, it is presumed to extend within the territory of India.

Design rights

The document assigning the design right must be in writing and in the form of an instrument containing all the terms and conditions governing the parties' rights and obligations. Any contravention of this requirement will render the instrument invalid. The instrument is effective from the date of its execution, on entry of its particulars in the register of designs. An application for registration of title must be filed within six months of the date of execution of the instrument. This period is extendable by a maximum of six months.

Trade secrets and confidential information

See Question 6.

An assignment of trade secrets and confidential information is usually made by a written contract setting out the scope, extent, duration and rights.


Geographical indication. These cannot be assigned (see Question 6).

Protection of plant varieties. The certificate of registration for a plant variety confers an exclusive right on the breeder or their successor or its agent or licensee, to produce, sell, market, distribute, import or export of the variety. This includes the right to license the plant variety for any period of time by means of a document embodying all the terms and conditions governing the rights and obligations of both parties, duly executed by both.

The Protection of Plant Varieties and Farmers' Rights Authority can grant a compulsory licence to a third party or parties to undertake production, distribution and sale of the seed or other propagating material if any complaints are made about the availability of the seeds of the registered variety at a reasonable price. The compulsory licence can be granted to any interested party after the expiry of three years from the date of issue of certificate of registration.

Main terms for assignments

8. What main terms should be included in an assignment of IPRs?

Assignments of intellectual property rights should be in writing and signed by legally competent parties who are contracting with free consent, lawful object and lawful consideration. The main terms of an assignment deed should contain the:

  • Name, legal status and other particulars of the parties.

  • Duration or term of assignment.

  • Whether the assignment is with or without goodwill.

  • Consideration or royalties.

  • Description of the work/product/process/trade mark being assigned.

  • Rights of assignor and assignee.

  • Effective date of assignment.

  • Territory or geographical extent.

In addition, specific requirements for each IPR, where applicable, as set out in Questions 6 and 7, must be observed.



Scope of licensing

9. On what basis can the main IPRs be licensed?


The types of licences recognised are:

  • Express.

  • Statutory.

  • Implied.

  • Exclusive.

  • Non-exclusive.

  • Compulsory.

Compulsory licences can be granted under section 84 of the Patents Act 1970 to prevent the abuse of a patent as a monopoly and to allow commercial exploitation of an invention by an interested party. Any person can make an application for a compulsory licence after three years from the date of grant of the patent, on any of the following grounds:

  • The reasonable requirements of the public with respect to the patented invention have not been satisfied.

  • The patented invention is not available to the public at a reasonably affordable price.

  • The patented invention has not been exploited in the territory of India.

Trade marks

A licensee can be a registered or unregistered user and enjoys the same rights as that of a registered trade mark proprietor. Non-registered licensed use is recognised by the Trade Marks Act 1999 provided that the proprietor has licensed the right in writing and all conditions of that agreement are met by the user.

A registered user can institute infringement proceedings in certain circumstances, while this option is not available to an unregistered user.

The parties to a licence agreement are also free to choose the territorial scope of the agreement as well as the duration of the licence.


The owner of a copyright in an existing work or the prospective owner of the copyright in a future work can license any interest in the right.

The Copyright Board is empowered to grant compulsory licenses on suitable terms and conditions in respect of literary, dramatic , musical or artistic work created by a citizen of India or a cinematograph film or record made or manufactured in India where the work has been published or performed in public and the author has either:

  • Refused to republish or allow republication of the work or has refused to allow public performance so that the work is withheld from the public.

  • or

  • Unreasonably refused to allow the work to be broadcast to the public or recorded.

Where the author of an unpublished Indian work is an Indian citizen or is dead, unknown or cannot be traced, any person can apply to the Copyright Board for a licence to publish the work or its translation (section 32, Copyright Act 1957).


Design rights can be licensed for consideration or for royalties. The licensee must show proof of their title on request on the appropriate form along with the requisite documents and fees.

Trade secrets and confidential information

Licensing of trade secrets and confidential information is usually carried out through written contracts which set out the scope, extent, duration and rights of parties.


Geographical indication (GIs). Registered GIs are not licensable (section 24, Geographical Indications of Goods (Registration and Protection) Act 1999).

Registered Geographical Indication can be used by a person who registers himself as an authorised user under the Act.

Authorised users of GIs must satisfy statutory requirements including using it in the location covered by the GI and/or being a member of the registered proprietor of the GI.

Plant variety. A licence must be made in writing in the form of a document containing all the terms and conditions governing the rights and obligations of both parties, duly executed by both. Plant varieties can also be the subject of a compulsory licence (see above, Patents).

Any person can apply at least three years after the date of registration to the Protection of Plant Varieties and Farmers' Rights Authority for a compulsory licence for undertaking production, distribution, and sale of the seed or other propagating material on the grounds that the:

  • Reasonable requirements of the public for seeds or other propagating material have not been satisfied.

  • Seed or other propagating material is not available to the public at a reasonable price.

Formalities for licensing

10. What are the formalities to license each of the main IPRs?


The patent owner and the licensee must conclude a written agreement which includes the terms and conditions of the licence.

Within six months of signing of the licence agreement, the party acquiring the licence must write to the Office of the Controller of Patent, Designs and Trade Marks (Controller) to register the title or interest in the patent. The application must be accompanied by the agreement. The terms and conditions of the licence can be kept confidential by the Controller on a request by either party.

Trade marks

It is not mandatory to record trade mark licences but it is advisable in case infringement proceedings are necessary. Only a licence for a registered mark can be recorded. The licensor can apply to the Registrar of Trademarks to record the licence as registered user (section 49, Trade Marks Act 1999).

The application must include the agreement and an affidavit containing:

  • Particulars of the relationship between the licensor and the licensee, and whether the licence agreement is exclusive or non-exclusive.

  • A statement of goods and services in respect of which the licence is granted.

  • A statement of the goods or services in respect of which registration is proposed, including any proposed conditions or restrictions on the permitted use, or any other matter.

  • Quality control provisions.

  • Any limitations on the duration of the licence.

  • Any other documents or evidence that the Registrar may require or prescribe.


The owner of a copyright in an existing work or the prospective owner of a copyright in a future work can grant a licence in writing signed by them or by an authorised agent. The requirements for assignments also apply for licences (see Questions 7 and 8). A licence agreement must contain details of the subject matter of the licence, its duration and geographical extension, royalties and rights of the parties.


An application for registering a design licence must be submitted to the Controller within six months of the execution of the instrument. This can be extended by six months at the discretion of the Controller. A licence is not valid unless it is in the form of a written instrument containing detailed terms of the agreement.

Trade secrets and confidential information

Trade secrets and confidential information can be licensed by written contract.


Geographical indication (GI). Registered GIs cannot be licensed (see Question 9).

Plant variety. Licensing agreements must be submitted to the relevant authority with documentary evidence proving title.

A compulsory licence application must contain a statement of the nature of the compulsory licence, the applicant's interest and the facts on which the application is based. The Protection of Plant Varieties and Farmers' Rights Authority determines the duration of the licence on a case-to-case basis but the term must not exceed the total remaining rights protection period.

Main terms for licences

11. What main terms should be included in an IP licence?

The following typical terms should be included in an IP licence:

  • Whether it is exclusive or non-exclusive.

  • Royalty audits.

  • Advertising and brand promotional activity.

  • Sub-licensing including any specific restrictions or commercial considerations.

  • Commercial terms such as:

    • lump sum fee;

    • periodical fees;

    • royalty fees on sales;

    • escalations.

  • Specific restrictions or limitations on the use of IP.

  • Incorporating a part or whole of the IP in another work or combining the use of the IP with another product or work.

  • Ownership of improvements made to the IP.

  • Warranty or restrictions on use of the IP.

  • Duration of the licence.

  • Termination conditions.

  • Business continuity plan if a party is not able to conduct business, including, for example, terms of source code escrow.

  • Change of control of the licensee.

  • Rights and obligations post-termination of the licence, especially those relating to confidentiality.

  • Applicable governing laws.

  • Mechanism for resolving disputes.

  • Quality control.


Taking security

12. Is security commonly taken over IPRs?

Security is commonly taken over trade marks, copyright, design and patents as intangible assets of a business.

The valuation of intellectual property and the estimating of guaranteed returns are key issues.

Creating security over registered IPRs is generally preferred as this offers higher returns in terms of valuation than security over unregistered trademarks, copyrights, designs and pending patent applications.

It is advisable to address concerns relating to existing charges or liens on registered IPRs before any transfer of rights in order to maximise the valuation of the rights. Valuation can also be adversely affected by cancellation actions or litigation pending against the registered IPRs.

13. What are the main security interests taken over IPRs


Security interests can be defined and created both under general commercial law as well as under specific statutes for different types of IP.

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (SARFAESI Act) deals with the creation of security interests over intangible assets, which include "know-how, patents, copyright, trade marks, licences, franchises or any other business or commercial right" (section 2(t)(v), SARFAESI Act).

A security interest includes a right, title or interest in property created in favour of any secured creditor and includes a mortgage, charge, hypothecation or assignment (section 2(t)(zf), SARFAESI Act).

Security can be created over intellectual property (excluding registered geographical indications) by an assignment in writing. Where the copyright, trademark or, design is registered or the patent is granted, the creation of security over the registered copyright, trademark, design and granted patent can be recorded by giving a notice to the:

  • Indian Copyright Office (for registered copyright).

  • Indian Patent Office (for granted Patent and registered designs).

  • Indian Trademark Office (for registered Trade Marks).

If the security provider is a corporate entity, the security interest must be registered with the Registrar of Companies by filing the form required under the Companies Act 2013. Documents evidencing the creation of security have to be duly executed after payment of stamp duty in accordance with the local state laws.

Security can be created on unregistered rights by way of assignment in writing provided that there are no cancellation actions, oppositions or litigation pending pertaining to the title and ownership. There are no specific requirements for creating security over unregistered rights.

The Companies Act 2013 allows a company to create a charge on its property or assets or any of its undertakings, whether tangible or otherwise in or outside India (section 77).

Companies are required to register the particulars of the charge signed by the company and the chargeholder together with the instruments, if any, creating the charge in the prescribed form and manner and with the required fees within thirty days of its creation. The period of 30 days can be extended at the discretion of the Registrar of Companies on an application by the company within 300 days of creation of the original charge with payment of the prescribed additional fees.

Central Government is entitled to provide further extensions on such conditions as it deems fit, depending upon the facts and circumstances of the case. (section 87, Companies Act 2013).

Trade marks

The Trade Marks Act is silent on the creation of a security interest in a trade mark but such an interest can be created under common law. There is no requirement to register the interest for validity or enforceability but it is advisable to file a simple cover letter about the creation of the security interest in the Trade Marks Registry for evidential purposes.


The owner of a copyright can assign the copyright by executing an assignment agreement in writing between the owner and the assignee (section 19, Copyright Act 1957). The assignment can be for the whole term or part of the term of the copyright and can be for the entirety or part of the copyright. Registration of the document that creates a security over copyrighted work is not required (sections 18 and 19, Copyright Act 1957 (as amended by the Copyright (Amendment) Act 2012)) but a document can be filed in the Registry with a simple cover letter for evidential purposes.

Design rights

A licence, mortgage or any other interest in a registered design is not valid unless it is in writing and clearly sets out terms and conditions governing the rights and obligations (section 30, Designs Act 2000). The agreement creating a mortgage or any other interest must be filed with the Controller General of Designs on Form 12 within six months of the execution of the instrument or within a period not exceeding six months in total.


Plant variety. The SARFAESI Act 2002 (see above, Patents) has been interpreted to include plant varieties under the Plant Variety Act 2001. Accordingly, a charge, right, title, or interest can be created on a plant variety by way of mortgage, lease, charge, hypothecation and/or assignment.



Due diligence

14. What IPR-related due diligence is commonly carried out in both a share sale and an asset sale?

IP due diligence is commonly carried out to identify valid intellectual property rights in intangible assets and to examine the scope of their protection, analysing any risk elements and assessing their potential value.

Identification of relevant assets IPR includes reviewing:

  • Specific IP rights that have been accrued and/or registered in favour of the target or are potentially registrable.

  • The term and territory of each applicable IP right identified.

  • Ownership status: if the ownership of an IP asset is not vested with the target, it cannot transfer the title, rights and interests to others.

  • Third party claims or interests relating to the target's relevant IP.

  • Rights of third parties in allied and connected businesses.

Necessary checks on existing databases usually involve:

  • Assignment records: chain of titles and corporate name changes can be traced through the documents uploaded on the Registrar of Companies website.

  • Information about trade marks including name of the proprietor, date of first use, pending opposition, registration renewals can be obtained from the Trade Marks Office website.

  • Information about patents, including ownership, name of the inventors, renewals, and third party oppositions can be traced through the Patent Office website.

  • Information about copyright, ownership, date of first publication, renewals, third party claims can be ascertained through the Copyright Office website.

  • Trade Secrets: the employment agreements, policies of the target company, and any non-disclosure agreements need to be examined.

  • Checks on pending and/or settled litigation can be conducted on the official websites of the High Courts as well as of the lower courts by citing the name of the target company/promoters/directors in the search engine for defendants/respondents.

15. What IP-related warranties and/or indemnities are commonly given by the seller to the buyer in both a share sale and an asset sale?

Warranties and indemnities given by the seller both in a share sale and asset sale typically cover:

  • Ownership of the IPR.

  • Authorisation to licence rights.

  • Indemnity for claims arising out of third party actions for rights infringements.

Infringement indemnity clauses usually impose on the seller obligations to:

  • Defend the buyer against IP infringement claims.

  • Protect the buyer from liability for obligations arising from IP infringement.

  • Reimburse the buyer for costs arising from infringement obligations.

  • Reimburse the buyer for any damages resulting from the breach of confidentiality.

  • Reimburse the buyer for breach of any representations pertaining to pending litigation and title.

Transfer of IPRs

16. How are the main IPRs transferred in both a share sale and an asset sale?

Share sale

In a share sale, there is generally no need to separately transfer the intellectual property of the target company since the buyer effectively inherits the ownership of the IPR by virtue of owing the shares/capital stock of the target company


Asset sale

In asset sales, the intellectual property rights are transferred by way of agreements such as assignments.

In asset sales, the intellectual property rights are transferred by way of agreements such as assignments which must be recorded in writing. The assignment can be incorporated in the purchase agreement except in cases involving a transfer of obligations relating to existing licenses for the rights granted to third parties.

In such cases it is advisable to enter into a separate assignment agreement with the third party(ies).

Joint ventures

17. Is it common for companies to set up joint ventures in your jurisdiction to develop projects that heavily involve IPRs?

It is common to have joint ventures where intellectual property is one of the primary considerations. Prime considerations in such a venture are the ownership and protection of the joint brand and/or the intellectual property rights arising out of the joint enterprise.

Joint venture agreements should therefore specify:

  • Ownership of the IPR and how this is shared/divided.

  • Transfer arrangements.

  • Rights of each party in the IPR and the division of rights on termination of the joint venture.

  • Definition of background IP and of new joint IPR to be created.

  • Identification of party responsible for payment for IPR, registrations, applications, infringement proceedings and getting necessary government approvals.

  • Confidentiality arrangements.

Parties typically enter into a Memorandum of Understanding before concluding the main agreement which should include clauses relating to reserved matters, exit options and dispute resolution mechanisms.


Competition law

Main provisions and common issues

18. What are the main provisions of your national competition law that can affect the exploitation of the main IPRs?

The Competition Act 2002 contains general anticompetitive provisions that can affect the exploitation of IPRs by third parties. Provisions under the Competition Act that may affect exploitation of IPRs are sections 3 and 4, which govern concerted and unilateral actions that may have appreciable adverse effect on competition in the relevant market.

While section 3 of the Competition Act can apply to vertical and horizontal restraints imposed by an IPR holder, section 3(5) permits a rights holder to impose reasonable restrictions as may be necessary for protecting any of the rights conferred under IPR statutes such as the Trademarks Act, the Copyright Act, and the Patents Act.

Section 4 of the Competition Act can apply in cases where abuse of dominance by the IPR holder is alleged.

Agreements by a group of licensors to enter into a combination that may be detrimental to competition are also void (section 6).

19. What are the most common national competition law issues that arise in the exploitation of the main IPRs?

In the past few years, the following competition law issues have arisen in the context of exploitation of IPRs:

  • The Competition Commission's competence to decide IP licensing issues including those arising out of Fair, Reasonable and Non-Discriminatory (FRAND) commitments for Standard Essential Patents. The Delhi High Court decided in March 2016 that the Commission can decide issues arising out of Ericsson's FRAND commitments for Standard Essential Patents. The court held that there is no conflict between the provisions of the Patents Act and the Competition Act and the Commission's jurisdiction to decide patent related issues affecting competition in the relevant market is not curtailed by the Act.

  • The Competition Commission has also directed an investigation into the licensing activities of Monsanto for its Bt (genetically modified) cotton technology in India.

  • Another issue is whether restrictive terms are justified and will pass scrutiny under section 4 of the Competition Act where the subject matter of the license is protected as an IP. In the Auto Parts case, the Competition Commission did not apply the "reasonable restrictions to protect Intellectual Property Rights" exemption provided in section 3 of the Competition Act to an abuse of dominance claim under section 4 of the Act. This decision is under challenge and it remains to be seen whether such an exception will be extended to conduct covered by section 4 of the Competition Act.

  • Using IPRs as justification for alleged anti-competitive conduct. The Competition Commission directed an investigation into resale price maintenance by a brand owner who attempted to control price of goods sold under its trademark online.

  • Whether seeking an injunction in litigation involving Standard Essential Patents can amount to anti-competitive conduct is being investigated by the Competition Commission in the Ericsson Standard Essential Patents dispute.

  • The issue of litigation based on allegedly invalid IPRs is also being investigated by the Competition Commission.


20. What exclusions or exemptions are available for national competition law issues involving the exploitation of the main IPRs?

Conditions necessary for protecting IP rights are exempt from the general prohibition on anticompetitive practices in section 3 of the Competition Act 2002 provided they are reasonable (section 3(5)). This includes the right to restrain any infringement of the rights held (see Question 19)

Exemptions to the provisions on illegal combinations (see Question 18) are loan or investment activities relating to share subscriptions, financial activities or acquisitions by (section 6):

  • Public financial institutions.

  • Foreign intuitional investors.

  • Banks or venture capital funds



21. To what extent do advertising laws impact on the use of third party trade marks?

The Trademark Act 1999 does not prevent comparative advertising provided it is in accordance with the honest practices in industrial or commercial matters (section 29).


Employees and consultants

22. Who owns each of the main IPRs created by an employee in the course of his employment? Is compensation payable to the employee? What main steps can an employer take to ensure it owns each of the main IPRs?


Ownership. Ownership of an invention created during the course of employment is governed by the terms of the employment agreement or can be transferred from the employee to employer by an assignment agreement.

Compensation. As there is no specific statutory provision on the ownership of inventions created in the course of employment, there is no legal obligation to pay compensation to an employee for the transfer of rights in an invention to the employer. Ownership and rights are governed by the terms of the contract between the employer and the employee.


Ownership. The ownership of copyright to work created in the course of employment depends on the type of contract involved, that is, whether it is a contract of service or a contract for services.

In a contract of service, the employer is regarded as the first owner of copyright vesting in the work, in the absence of any agreement to the contrary.

In a contract for service, the employee or the external consultant or agent has the first and true ownership of the copyrightable work.

Compensation. Where a copyright needs to be assigned in the course of employment, specific royalty or consideration to be paid must be set out in the assignment deed by the parties.


Ownership. The ''proprietor'' of a registered design is one of the following (section 2, Designs Act 2000):

  • The person for whom the design is executed by the author for good consideration.

  • The person by whom the design or right is acquired exclusively or otherwise.

  • The author of the design or another person on whom the right to apply the design has devolved.

Compensation. An employee who is the author of a design is normally remunerated for the work by the employer on the basis of the employment contract or as otherwise agreed..

23. Who owns each of the main IPRs created by an external consultant? What main steps can a business take to ensure it owns each of the main IPRs?

For IPRs created by external consultants under a contract for service, ownership vests with the external consultant unless otherwise agreed between the parties.

To ensure that businesses retain the ownership of work created by external consultants, specific contractual obligations should be agreed to ensure that the IP assets and rights are transferred to the employer.



24. What are the main taxes payable by a licensor on the licensing of the main IPRs?

Withholding tax applies on royalties paid.

Royalty is defined as consideration for the transfer of rights, including the grant of a licence, for property including:

  • Patents.

  • Inventions.

  • Models.

  • Designs.

  • Secret formulae or processes.

  • Trade marks

This includes any lump sum consideration but excludes consideration which would be the income of the recipient chargeable as a capital gain (Explanation 2, section 9(1)(vi) Income Tax Act 1961)

Foreign transactions that involve technical know-how, including rights assignments, are liable to be taxed as income. This includes the sale of designs, lending services of technicians and royalties and licensing.

Special methods for calculating income from royalties and technical services of foreign and non-resident Indian companies are set out in sections 44D and 115A.

25. What are the main taxes payable by a seller on the disposal of the main IPRs?

The sale of IPRs attracts capital gains tax as a sale of intangible assets.


Cross-border issues

26. What international IP treaties is your jurisdiction party to?


India is party to the:

  • WTO Agreement on Trade-Related Aspects of Intellectual Property Rights 1994 (TRIPS).

  • WIPO Paris Convention for the Protection of Industrial Property 1883 (Paris Convention).

  • Patent Cooperation Treaty 1970 (PCT).

  • Budapest Treaty on the International Recognition of the Deposit of Micro-organisms for the Purposes of Patent Procedure.


India is party to the:

  • Berne Convention for the Protection of Literary and Artistic Works.

  • Universal Copyright Convention 1952.

  • Geneva Convention for the Protection of Producers of Phonograms against Unauthorised Duplication of Their Phonograms.

  • Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled.

Trade marks

India is party to the:

  • Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks.

  • Nairobi Treaty on the Protection of the Olympic Symbol.

Plant varieties

India is party to the:

  • TRIPS (see above, Patents).

  • International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA).

A detailed list of treaties can be found at www.wipo.int/wipolex/en/profile.jsp?code=IN

27. Are foreign IPRs recognised in your jurisdiction?


Patent rights are territory-specific and to obtain statutory protection, a foreign patent must be registered under Indian law.

Trade marks

A trade mark originating in foreign jurisdiction but not registered in India will be duly protected under the doctrine of use of trade mark, spill-over reputation or transborder reputation.


The works of a foreign country are protected in India under section 40 of the Copyright Act 1957, as amended by the International Copyright Order 1999,

implementing the principles of the Berne Convention on Copyrights and the Universal Copyrights Convention to which India is a party.


Design rights are territory-specific and to obtain statutory protection, a foreign design must be first registered under Indian law.


Plant varieties. Plant variety rights are territory-specific and to obtain statutory protection, a foreign right must be first registered under Indian law.

In addition, India is not a member of International Convention for the Protection of New Varieties of Plants (UPOV)

However, the Plant Variety Act 2001 provides for applications for registration from citizens of convention countries that provide reciprocity which includes the right to claim priority from an earlier filed application in a convention country.



28. Are there any proposals for reform?

The National Innovation Bill 2008 has been introduced to codify and consolidate the law of confidentiality for protecting confidential information, trade secrets and innovation.

The National IPR Policy brought out in 2016 aims to promote IPRs as a marketable financial asset, promote innovation and entrepreneurship, while protecting public interest.

The Trade Marks Registry has proposed amendments to the Trademark Rules, the key ones being:

  • Expedited filing and examination. The draft rules propose changes to effectively streamline trade mark prosecution including:

    • service of documents by email and by uploading documents on the Trade Marks Registry's website;

    • expedited examination;

    • acceptance and registration of applications upon payment of fee;

    • signing of oppositions and counter statements by agents/counsels on record.

  • Recognition of well-known trade marks. The draft rules propose a procedure for declaring a trade mark as well-known by filing an application before the Trade Marks Registry. The registry expects a court order/order in opposition/cancellation or rectification proceedings declaring a trade mark as well-known.

  • Mediation before the Trade Marks Registry. In March 2016, the Trade Marks Registry in Delhi introduced a mediation procedure for pending oppositions and rectifications. Submission of joint consent form by parties is a pre-requisite for referring a matter for mediation.


Online resources

Legislation website

W www.lawmin.nic.in/Legis.htm

Description. This is the official government legislation website with the text of Acts of Parliament from 1980-2015 in English (updated to 11-07-2016).

Office of the Controller General of Patents, Designs and Trade Marks

W www.ipindia.nic.in

Description. The website provides guidelines for e-filing, important statutes, published journals, search tools and other relevant information.

Copyright Office

Whttp://copyright.gov.in ( www.practicallaw.com/5-524-2911)

Description. The website is maintained by the Controller General of Patents, Designs and Trade Marks. It provides guidelines for e-filing, application status important statutes, useful forms, search tools and other relevant information.

Registrar of Plant Varieties

W www.plantauthority.gov.in

Description. This is the official website is maintained by the Protection of Plant Varieties and Farmers' Rights Authority. It provides application status important statutes, useful forms, published Journal and other relevant information.

Contributor profiles

Aditya Gupta, Managing Associate

Anand and Anand

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Professional qualifications. Harvard Law School, Research Associate to Professor William W. Fisher III, 2013–2014 (Harvard Law School), Master of Laws (LLM), Intellectual Property Law 2013 – 2014, National Law University Bachelor of Laws LLB, Law 2010

Areas of practice. Patent litigation, patent law, antitrust law

Recent transactions. Actively involved in some of India's most high-profile pharmaceutical patent litigation, including the Novartis case before the Indian Supreme Court.

Professional associations/memberships. Convener, Academic Support and Literary Committee; Member, Committee on IPR Training for Micro, Small and Medium Enterprises set up by the Ministry of Human Resource Development, Government of India; Member, Placement Cell; Member, Infotech Committee; Advisor, Moot Court Committee

Publications. Patent Litigation 2nd Edition 2012

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Areas of practice. Biotechnology, biochemistry, pharmaceutical, agricultural Sciences, life sciences, bio resources

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Areas of practice. Trade marks, domain dispute resolution, customs and brand strategy

Professional associations/memberships. Bar Council of Delhi, Delhi High Court Bar Association, International Trade Marks Association (INTA), INTA Emerging Issues Committee, 2016-17


  • India chapter in the book 'Use of Trademark Q & A' published by Fukami Patent Office, Japan in the year 2009,

  • Co-authored the India Chapter in the World Trademark Review Yearbook 2012/2013.

  • Co-authored the India Chapter in the World Trademark Review Yearbook 2014/2015.

  • Co-authored the India Chapter in the World Trademark Review Yearbook 2016/2017.

Swati Sharma, Partner

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Professional qualifications. Postgraduate in organic chemistry from University of Lucknow (2001), Law (LLM) from University of Lucknow (2010), Qualified UGC-CSIR Net Examination Chemical Science (2001).

Areas of practice. Trademarks, brand strategy, packaging and labelling laws, advertising laws, contractual and commercial, IP, licensing and franchising

Vidisha Garg, Partner

Anand and Anand

Professional associations/memberships. Registered Patent Agent, APAA, AIPPI, FICPI, Admitted to Bar, member Bar Council of Uttar Pradesh (India)

Areas of practice. Pharmaceuticals, medical devices, natural products, industrial chemicals, metallurgy and materials, polymers, drug delivery systems, nutraceuticals, agricultural chemicals, food processing, biotechnology and life sciences

K.Premchandar, Partner

Anand and Anand

Areas of practice: Intellectual property litigation

Recent transactions

  • advised and managed large portfolios of several Indian based multinationals

  • counsels clients on assignments, licensing, co-existence, franchise and other transactions related to intellectual property.

  • appears for major US based clients before the Trademark Office and has conducted proceedings related to IP infringement before Air and Sea customs for MNC companies.

Amita Arora, Managing Associate

Anand and Anand

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Professional qualifications. LLM Intellectual Property, Institute of Chartered Financial Analysts of India University, Tripura 2009 to 2011, BA Academics Law, LLB, Dr Ambedkar Government Law College, Pondicherry University 1999 to 2004

Professional qualifications. LLB, Patent Agent

Areas of practice. Intellectual Property Law

Languages. English, Hindi and Punjabi

Professional associations/memberships. Bar Council Of Delhi, Bar Council of Tamilnadu, Madras High Court Advocates Associations, Chennai, Intellectual Property Association of South India (IPASI) Founding Member, Advisory Member TANSTIA FNF Service Centre collaborative venture between Tamil Nadu Small and Tiny Industries Association, Chennai and Friedrich Naumann Foundation, Germany

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