No separate IFSC regime
The IFSCA Act regulates financial products, services and institutions. It does not create IP rights. A trade mark, copyright or patent held by an IFSC unit is governed by the Trade Marks Act, 1999, the Copyright Act, 1957 or the Patents Act, 1970, administered by the Office of the Controller General of Patents, Designs and Trade Marks and the Copyright Office. Enforcement is through the courts in the usual way.
Brands: trade marks
- What can be registered. A trade mark is a sign capable of graphical representation: words, letters, numerals, logos, colour combinations, shapes, packaging and sounds.
- Classes. Goods and services are grouped under the Nice Classification: classes 1 to 34 for goods and 35 to 45 for services. Financial services fall among the service classes, and software products among the goods classes. File in each class the business will actually use.
- Basis and term. Applications may be filed on a proposed-to-be-used basis or on prior use (with a user affidavit). Registration lasts 10 years from the application date and can be renewed indefinitely for further 10-year periods. Failure to renew can lead to removal.
- Registration is not compulsory, and unregistered marks may be protected at common law, but registration gives exclusive rights in the registered classes, a clearer basis for infringement action, and an asset that can be licensed or assigned.
- International filings. India is a member of the Madrid Protocol. An applicant with an Indian application or registration can file an international application electronically through the Trade Marks Registry, designating the countries where protection is wanted. Each designated country examines the mark under its own law.
Software and data: copyright and confidence
- Copyright is automatic. It arises without formality. Registration is optional, but the certificate is prima facie evidence of the particulars entered, which helps in an ownership dispute. Computer programmes, tables and compilations, including computer databases, are literary works.
- Ownership in employment. Where a work is made in the course of employment under a contract of service, the employer is the first owner unless agreed otherwise. Work by consultants, contractors and group companies is different: the author owns it unless it is assigned. That is the most common gap.
- Term. For literary works, including software, copyright generally lasts for 60 years counted from the year after the author's death.
- Data and know-how. Datasets, models, trading strategies and client lists are often better protected as confidential information than by registration. Protection depends on contracts (employment, consultancy, vendor and group agreements) and on access controls that show the information was in fact kept confidential.
Patents
A patent is a statutory right, granted for a limited period, to exclude others from making, using, selling or importing the invention without consent. The invention must be novel, involve an inventive step and be capable of industrial application, and must not fall within the exclusions in sections 3 and 4 of the Patents Act, 1970. Many financial-technology innovations will meet those exclusions, so take advice on patentability before relying on a patent strategy, and keep the invention confidential until a filing decision is made.
In practice
- Clear the name and file early in India and in each target market, before launch materials are printed and domains are bought.
- Decide which group entity owns the IP. If the brand or platform is owned outside the IFSC unit, put a licence in place and price it at arm's length. See transfer pricing.
- Assign IP clearly in employment, consultancy, development and group services contracts, including IP created before the contract is signed. See group services agreements and employment law.
- Protect source code and data with confidentiality terms, access controls and escrow or exit rights where a vendor holds the code. See cloud, outsourcing and data location.
- Keep a register of marks, registrations, renewal dates, licences and assignments, and review it annually.