Trade Secret And Layout And Design Protection Of Integrated Circuits
keywords – Layout and design protection, integrated circuits, trade secrets
Written By – Diksha Bhargav
Introduction
In the recent past, Intellectual Property Rights (IPR) and their protection have taken a centre stage, both at the national and the international level. This has resulted in the creation of varying IPRs. Therefore it is important to ensure a systematized registration, regulation, and dispute resolution about such IPRs.
Businesses, inventors, and designers can gain an edge over and maintain the uniqueness of their product/service and use creative as well as innovative ideas that are unknown to their competitors. The aim is to protect the owner of original work from others who could wrongly profit from their creations or inventions. It also allows them to earn the money they have invested in developing a product.
This article aims to understand the trade secrets and Layout and Design Protection of Integrated Circuits while the Layout and Design of Integrated Circuits are protected by a specified law in its name the same is not for Trade Secrets. Let us understand these concepts more.
What are Trade Secrets?
A trade secret can be defined as information that is not generally known or readily ascertainable it also has an independent economic value and therefore it is the subject of efforts to maintain secrecy.
According to Article 39.2 of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, any information which has the following features will be termed a trade secret:-
- The information has to be secret i.e, it should not be known in general or easily accessible to the people ‘within the circle, which normally deals with these kinds of information,
- The information must have a commercial value, and
- The information must be subject to reasonable steps, by its owner, to keep it secret
Protection of Trade Secret
There is no specific law or enactment on trade secrets in India. But being a signatory of the TRIPs Agreement, India has the flexibility to frame laws protecting trade secrets by preventing unauthorized disclosure of information.
The Indian courts and tribunals have upheld the protection of trade secrets through various other laws these are contract law, copyright law, principles of equity, and common law action of breach of confidence. In addition to the above, the Information Technology law of 2000 also sets legal means of protection for confidential information in the form of electronic records.
The most common tool through which businesses can protect trade secrets is a Non-Disclosure Agreement, which through contract law can be made bound contractually. An NDA must be specific about the confidential information that should be considered secret and therefore not disclosed to third parties. Hefty penalties can be specified in the NDA upon its breach.
Enforcement of trade secrets in India
The discovery of a trade secret by improper methods is understood as the misappropriation of a trade secret. Misappropriation or unauthorized disclosure of trade secrets would attract civil action for breach of contract and wrongdoing due to misappropriation; and criminal action for theft and breach of trust.
An injunction can be granted by courts that can restrain the wrongdoer from disclosing trade secrets as well as damages can be sought by the trade secret owner. Other civil actions that the courts can grant to the trade secret owner in case of trade secret leakage is the return of trade secrets or materials containing trade secrets. A fine or imprisonment can be granted by courts under penal code, copyright, and information technology law.
Trade Secrets- case
In the case of Burlington Home Shopping Pvt Ltd v. Rajnish Chibber [61 (1995) DLT 6], the Delhi High Court outlined the unfair acquisition of trade secrets by employees, the question in the case was whether a database of a compilation of customers and their mailing addresses could be the subject matter of copyright. The court answered that Such data containing the compilation of mailing addresses of customers can be subject to copyright and if used unauthorized would amount to infringement.
Copyright and trade secret protects the different elements of complied business data, on one hand, copyright protects the expression in the compilations, and on the other trade secret laws protect the underlying data. However, in practice, these two elements often converge so much so that any infringement of the copyright can also harm the secrets of the business.
Layout and Design Protection of Integrated Circuits Under the Intellectual Property Rights
An Integrated Circuit layout design is a form of three-dimensional arrangement of the circuit in which various semiconductor devices like transistors, diodes, etc. are connected in a pattern or layout in a tiny chip to carry out a specific function. An integrated circuit (IC) is basically an electronic circuit in which the various semiconductor devices as mentioned above are fused into some media to act as a single unit. Devices like watches, TVs, traffic lights, Computers, etc, use integrated circuits.
By TRIPS Agreement, India enacted the Semiconductor Integrated Circuit Layout Design Act, 2000 (hereinafter referred to as “The Act. Any original layout design which is registered is protected under the Semiconductor Integrated Circuits Layout-Design Act of 2000, and the Semiconductor Integrated Circuits Layout-Design Rules of 2001.
Registration Criteria
Like any other IPR, the criteria for registrability of layout design is that it should be original, distinct, and able to stand out from other layout designs.
A layout design is considered to be unique if it is the result of the originator’s intellectual work and such design is not used among other layout designers and integrated circuit makers at the time of its development.
The Act under section 7(1) prohibits the registration of layout designs:-
- that are not original; or
- that has been commercially exploited anywhere in India or any other conventional country, Provided, that if a layout design that is commercially exploited for not more than two years from the date on which an application for its registration has been filed either in India or in a conventional country is not treated as commercially exploited; or
- that are not inherently capable of being distinguished from any other registered layout design.
Time Limit
A layout design as per the Act under Section 15, grants registration for ten years from the date of submission of an application or the date of its first commercial exploitation anywhere in India or in any nation, whichever happens first.
Exclusive rights provided to the registered proprietor
Section 17 of The Act exclusively entitles the registered proprietor of the layout design to use the registered layout design and to obtain any remedies when there is any infringement. The Section further directs that the right shall be available to the registered proprietor of the layout design irrespective of the fact as to whether the layout design is incorporated in an article or not.
However, there is an exception to the exclusive right, as Section 18(2) of the Act any act which is performed for the limited purpose of scientific evaluation, analysis, research, or teaching shall not constitute an act of infringement.
Violation of Layout Design
The Act provides criminal remedies for the infringement, Section 56 of the Act states that any infringement of a registered layout design is punishable by up to three years in jail or a fine of Rs 50,000 up to a maximum of Rs 10,00,000 or both.
Notably, the Act does not provide any civil remedies like other IP laws in India. However, it does not bar any civil remedies such as injunctions, an account of profits, and damages shall apply to enforcement rights concerning layout designs as well, as, in the case of patents, copyright, etc, this can be inferred from the reference of ‘Damages’ in Section 16 that says “no person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered layout design”.
Conclusion
In today’s competitive and high-tech world IP rights help in maintaining an edge in the market. These rights not only protect both individual and national interests by giving opportunities for economic growth. The unique expression of ideas or products is important in all commercial endeavours. In today’s digital world, there are more chances of misappropriation of trade secrets or illegal use of registered properties, as the entire world is connected through the internet. Loss of Intellectual Properties may be detrimental to the overall development of the whole nation itself. For protecting the wealth of the nation, stringent laws should be enacted in all fields associated with handling Intellectual properties.
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References
- Trade Secrets and their Protection under IPR Law, Dhruv Gupta
- Intellectual property rights (IPR): An overview, Sreeragi R.G.
- Indian IP Regime in Semiconductor Chip, Shlok Bansal
- India: Integrated Circuit Layouts And Designs, Khurana and Khurana
