Transfer of Intellectual Property Rights in India

Introduction

Intellectual Property, as the term suggests, refers to the intangible or tangible mental creations, inventions, literature and artistic works, designs, trademarks, logos, names etc., which afford a unique identity to a business or a brand. Intellectual Property Rights promote and improve innovation in the business and economic sector by enabling the creators to protect their economic interests and exclusive rights over their ideas and inventions and protect their inventions from unwanted infringements. Additionally, the creators get liberty to monetise and promote their intellectual property rights in the form of trade marks, copyrights and patents.

Transfer of Intellectual Property Rights

Intellectual property rights which can broadly be classified in forms of trademarks, copyrights and patents can be transferred in terms of ownership or right to use depending upon the type of intellectual property.

1. Copyright

In case of a copyright, which may be a single right, or a bundle of rights vested in the owner’s literary, artistic, musical, dramatic or other type of work, is governed by the Indian Copyright Act 1957. Copyright Act therefore grants not only the substantive rights to the parties for their original works but also lays down the procedure to be followed for the assignment or transfer of original work.

According to Section 2(d) of the Act, author refers to the individual who has created the artistic work and is the first owner of the creation. However, in the event of transfer of such right to a third party, such party becomes the owner of the creation post transfer. Additionally, according to Section 17 of the Act, the above rule is subject to certain exceptions. For instance, in the case of a contract of employment, the owner or the employer of the employees becomes the first owner of such creation and the copyright automatically transfers from the creator to the employer.  Under Section 2(z) of the Act, the concept of “Joint Ownership” is laid down wherein work produced under collaboration or joint efforts of two parties is concerned. Under such circumstances, the rights of one party are not separate or distinct from the other party and both of them collectively own the rights.

Assignment of Intellectual Property Rights

Assignment, as the term suggests, refers to transfer of interests of intellectual property from the assignor to the assignee. According to assignment, the ownership and rights of a particular work are transferred to the second party either in full or part as per the provisions of Section 18, 19 and 19A of the Copyright Act. For instance, an author of a book can assign the rights to make an adaptation of a movie while retaining the original rights of the book.

The assignor is entitled to receive the consideration for the same in form of royalty or pecuniary consideration as opposed to lumpsum settlement. Any assignment contrary to the provisions laid down under the statute is void and can only be made in writing and be duly signed by the authorised signatory. Moreover, any assignment in the future work is also valid if the territory, terms and duration of the assignment are duly satisfied.

Assignment merely results in the transfer of title as opposed to ownership and deprives the assigned rights to the owner and vests the same to the assignee or person authorised to exercise such rights on their behalf. Assignment is also devoid of any conditions and bars the assignor from restricting the exercise or usage of the assigned rights in any manner. In event of any disputes, the Intellectual Property Appellate Board is vested with the power to adjudicate the same and revoke the assignment in event of discovery of sufficient costs along with invoking other contractual remedies.

License

License refers to the limited interest created by one party by withholding the ownership of such rights which may either be exclusive or non – exclusive. In such a case, the title remains with the licensor while the exclusive licensee can prevent the exercise of the rights by the licensor by restraining them from monetising their rights. Licenses may be narrow, specific or highly restricted in nature.

In terms of license of intellectual property rights, all those provisions which bind the assignment of intellectual property also equally bind the parties for license and apply mutatis mutandis to the license. In cases of licenses, not only parties are eligible for granting licenses but compulsory statutory licenses can also be granted by the Intellectual Property Appellate Board as per the facts and situations of the case.

Conclusion

Transfer of intellectual property rights is one of the ways through which both the transferor and the transferee can benefit from the intellectual property rights by mutual exchange of rights. The owner of the rights can derive monetary benefits from the rights without causing prejudice to their ownership of the rights while the transferee can also benefit by utilising the rights without owning them.

Such transfer of rights is not limited to only copyrights but also extends to patents, trademarks, designs and copyrights which are governed by the respective statutes. Additionally, any disputes arising out of the transfers can also be resolved via mechanism of Intellectual Property Boards.

King Stubb & Kasiva,
Advocates & Attorneys

Click Here to Get in Touch

New Delhi | Mumbai | Bangalore | Chennai | Hyderabad | Mangalore | Pune | Kochi | Kolkata
Tel: +91 11 41032969 | Email: info@ksandk.com