Ensuring that the intellectual property is protected at an offshore location is a question that is most often asked in board meetings of companies that are planning their offshore initiatives in India.

The importance of IP exponentially increases in companies that are planning to execute some of their core projects offshore and in companies that need to provide access to classified company and customer data to the offshore location for BPO/Call center initiatives. It is important for companies to understand IP rights in India and the best practices that can be followed to protect the IP.

World Intellectual Property Organization defines Intellectual Property as legal rights that result from intellectual activity. The intellectual activity may include any activity in the industrial, scientific, literary and artistic fields. According to the Center for Intellectual Property Rights in India, the major Indian Intellectual properties typically fall into 4 major buckets; Copy Right, Patent, Trademark and Design Protection.

In India, the Intellectual Property Rights (IPR) of computer software is covered under the Copyright Law. Accordingly, the copyright of computer software is protected under the provisions of Indian Copyright Act 1957. Major changes to Indian Copyright Law were introduced in 1994 and came into effect from 10 May 1995. These changes or amendments made the Indian Copyright law one of the toughest in the world.

The amendments to the Copyright Act introduced in June 1994 were, in themselves, a landmark in the India's copyright arena. For the first time in India, the Copyright Law clearly explained:

1. The rights of a copyright holder
2. Position on rentals of software
3. The rights of the user to make backup copies

Since most software is easy to duplicate, and the copy is usually as good as original, the Copyright Act was needed. Some of the key aspects of the law are:

According to section 14 of this Act, it is illegal to make or distribute copies of copyrighted software without proper or specific authorization. The violator can be tried under both civil and criminal law.

A civil and criminal action may be instituted for injunction, actual damages (including violator’s profits) or statutory damages per infringement etc.

Heavy punishment and fines for infringement of software copyright. Section 63 B stipulates a minimum jail term of 7 days, which can be extended up to 3 years.