In today’s technology-influenced world, Intellectual Property Rights are vital elements needed to maintain an edge in the competitive market. It is crucial that the companies understand that which creations of human intellect could be protected, how they could be protected, and in which jurisdiction(s) the protection should be sought. With the fast-paced developments in technology, many new branches in the realm of intellectual property have flourished, one such branch is Layout Designs of the Semiconductor Integrated Circuits.

What is semiconductor integrated circuit?

A semiconductor integrated circuit is an integral part of every computer chip used in modern computers and smartphones. The layout designs of these semiconductor integrated circuits is nothing less of an art work. The computers belonging to fifth generation are using Very Large Scale Integration (VLSI), where numerous transistors are being accommodated on a single chip, reducing the size of the chip and at the same time increasing its processing power significantly. These mechanisms are ultimately aimed to develop smaller and more powerful computers. Thus, in order to promote the development and protection of such technologies, an incentive was taken by various organization across the world to regularize the laws related to protection of Intellectual Property in Layout Designs of Semiconductor Integrated Circuits. The leading organizations amongst these was the World Trade Organization. India being a signatory of WTO, also passed an Act in conformity with the TRIPS agreement called the Semiconductor Integrated Circuits Layout Designs Act (hereinafter referred to as ‘SICLD Act’) passed in the year 2000.

What are the salient features of this Act?

• The SICLD Act was passed in 2000 and it was implemented in stages. It may be noted that the major provisions of the act came into force only in 2011.
• Under SICLD “Semiconductor Integrated Circuit” means a product having transistors or other circuitry elements, which are inseparably formed on a semiconductor material or an insulating material or inside the semiconductor material and designed to perform an electronic circuitry function.
• The objective of the SICLD Act aims to ensure the protection of the intellectual property rights in the realm of semiconductor integrated layout designs and for all aspects pertaining to the same.
• The Act lays down penalties for infringement of layout design.
• While the SICLD Act empowers a registered proprietor of a semiconductor layout design to commercially exploit the same and also seek relief in case of any false representation or any infringement.

Which Layout Design can be registered in India under this Act?

A Layout Design which is first, not original and second, has been commercially exploited in India or in a convention country or third, not inherently distinctive or distinguishable from any other registered Layout-Design cannot be registered as a Layout Design. In order to claim protection for Layout Design, it is mandatory that it should be registered.

What is the duration of protection accorded to a registered Layout Design under this Act?

Registration of a Layout-Design is valid only for a period of 10 years from the date of filing an application for registration or commercial exploitation in any country, whichever is earlier.

What are the remedies prescribed by this Act in case of infringement of a Layout Design?

Along with civil remedies available, an infringement of a Layout-Design is also considered to be a criminal offence in India. Infringement of a registered layout design has been made punishable under the provisions of section 56 of The Semiconductor Integrated Circuits Layout-Designs Act, 2000 with imprisonment of up to three years or fine of Rs. 50,000 up to maximum of Rs. 10, 00,000 or with both.

What are the issues in implementation of this Act?

In the wake of technology in India, the statutes like SCILD have become imperative to serve as an incentive to the technological inventors, developers and researchers. Although, the passing of this law protecting the Layout Designs in a Semiconductor Integrated Circuit was a massive step forward in the Indian history towards incentivizing technological development, the statute still remains plagued with certain provisions which exists in a striking contradiction to its actual essence and objectives. A public interest litigation was filed in the Delhi High Court challenging this Act itself as unconstitutional. According to the PIL which seeks to challenge the provisions of the Act, cites that it violates Article 14, Article 19 (i) (g) and Article 21 under the Constitution of India.

While the SICLD Act empowers a registered proprietor of a semiconductor layout design to commercially exploit the same and also seek relief in case of any false representation or any infringement, some aspects of the act have been challenged in the public interest litigation, particularly with respect to Section 18(4) of the Act.

Section 18(4) reads:

“Where a layout design is created by the process of scientific evaluation or analysis of the registered layout-design as referred to in sub-section (3), the use of such layout design by the proprietor of such registered layout design shall be regarded as infringement within the meaning of sub-section (1) after the date of registration of such layout-design under this Act.”

Breaking down the meaning of this provision, we understand that if a person gets a layout design registered in his name under the provisions of this Act, and subsequently another person comes up with another layout design which is nothing but a result of scientific evaluation or analysis of the former layout design, then the use of such subsequent layout design by the registered proprietor of the former layout design shall be considered as infringement.

This provision is a peculiar one, given the dynamics of the industry where the semiconductor integrated circuit layout design is widely in use. The act basically deals with protection of the Intellectual Property Rights in the electronic chips inside the devices like laptops, tablets, phones etc. It is quite evident from the widespread necessity of technology in the society, that a steady development in the outcomes of this domain is the need of the hour. Although this Act was aimed to provide unwavering protection of underlying Intellectual Property Rights in the electronic chips, the provisions like in section 18(4) came across as defying the very purpose of the Act.

From the perspective of the legislature, along with providing protection of IP rights to the registered proprietor of a layout-design, the act is also significantly motivating other people to come up with a better, improved version of the same layout design through scientific evaluation and research. But in the process, the fundamental IP rights of the actual proprietor is getting compromised, since he is barred to be a user of the new improved version of the layout design, which, in fact, is nothing but an allegedly better reincarnation of his own layout design. Not just that, a third person under Section 18(4) of the Act can still go ahead and make use of the first layout design and the second layout design for the purpose of scientific evaluation, design, research and analysis. This evoked bipolar repercussions from the people involved in development of such layout-designs, on one hand people are incentivized to develop newer and better versions of layout-designs, and on the other their rights are being compromised when someone else is coming up with another version of the same layout-design.

What can be done to rectify such issues?

The only plausible way out of such contradicting laws is to afford IP rights to the subsequent developers of a layout-design but only to the extent of the evident improvement(s), along with imposing a liability on them in form of Royalty towards the registered proprietor of the former layout design. Or, to avoid the cascading effect of such an implementation, the registered proprietor of the former layout design could be deemed as a registered user of the subsequent layout-design, but with certain stringent limitations on his actions upon the subsequent layout design and its commercial exploitation.

 

By: –       Mr. Arjun Banerjee,               Ms. Jaya Bhatnagar

               Junior Associate,                    Founder and Chairperson,

               SiebenIP, New Delhi.             SiebenIP, New Delhi.