Semiconductor chips are the backbone of technological advancement. Hence countries recognise the need to prevent innovation involved in making a semiconductor chip. The semiconductor chips requirement has led the countries to develop new branches to protect intellectual property in semiconductor integrated circuits.
Taking a leap forward in 1984, the United States became the first nation to give protection to semiconductor chips through the Semiconductor Chip Protection Act (SCPA), and soon its impact was felt throughout the world. This led to the formation of the Intellectual Property in Respect of Integrated Circuit (IPIC) treaty in 1989 under the auspices of WIPO, which later on was made part of the TRIPS Agreement.
In conformity with TRIPS Agreement, India passed an act called the Semiconductor Integrated Circuit Layout Design Act, 2000 (hereinafter referred to as “The Act“), protecting layout design on an integrated circuit and developing a favourable ecosystem for the manufacturing of semiconductor chips.
Non-feasibility of patent and other IP laws
The layout design of the integrated circuit defined under Section 2(h) of the Act for the creation of human intellectual demanding investment of time and money and hence require adequate protection from piracy who have the capability to replicate original layout design on an integrated circuit at a fraction of original cost. However, patent, copyright, trade secret, or industrial design does not adequately protect layout design in integrated circuits. Hence exclusive protection is granted under the Act to semiconductor integrated circuits.
An integrated circuit probably contains thousands or even lakhs of semiconductor devices. Hence a patent claim of the integrated circuit will have to cover multiple elements, thus running in hundreds of pages. Drafting a patent application supporting a claim with thousands or even lakhs of elements would be extremely complex, cumbersome, and expensive and also would take several years to be accepted. This would be unacceptable to any semiconductor business as integrated circuits have small commercial life in this rapidly evolving technological world.
Also, other forms of intellectual property like industrial design will protect only the external appearance of the integrated circuit. In contrast, the layout design of the integrated circuit is much more than just an ornamental appearance. The functional aspect of the integrated circuit layout needs more protection than its external appearance, hence leaving the design act ineffective for the protection of semiconductor chips.
Lastly, trade secret law cannot protect semiconductor chips from piracy as integrated circuit layout can be reverse-engineered with minimum hardship.
What does the Act hold?
The implementation of The Act comes under the Ministry of Communication and Information Technology, and section 16 of The Act makes it mandatory to register a layout design if protection is sought as an unregistered layout design is not entitled to institute any proceedings to prevent or to recover damages for infringement of layout design.
The subject matter of protection
Protection under the Act is granted to a registered layout design only. As per Section 7(1), layout designs can be registered if they are original, inherently distinctive, capable of being distinguishable from any other registered layout design, and if they have not been commercially exploited for more than two years before the date of application for registration.
The Act focuses on acquiring distinctiveness and being original rather than being novel as required under patent law. The originality is considered when a layout design so created by the creator is not common amongst the layout design creators or the semiconductor integrated circuits manufacturers.
Duration of protection
The Act under Section 15 grants registration for a layout design for a maximum period of ten years which is non-extendable. Duration of protection is calculated from the date of filing of an application for registration of layout design or from the first commercial exploitation of the layout design.
Thus, if a chip were released in the market for commercial exploitation in January 2020 and registered in December 2021, protection would commence from January 2020 for a period of ten years, i.e., up to January 2030. Upon registration, the proprietor is entitled to claim damages not only for the infringement of his rights, which occurred in December 2021 or thereafter, but also for infringements that occurred from January 2020.
Exclusive rights provided to the registered proprietor
Section 17 of The Act gives the registered proprietor of the layout design to use of the registered layout design exclusively and entitles the registered proprietor to obtain relief regarding infringement. The Section further clears 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 one significant exception to the exclusive right, which is provided under Section 18(2) of the Act. As per the Section, any act which is performed for the limited purpose of scientific evaluation, analysis, research or teaching shall not constitute an act of infringement, thus leaving a scope of reverse engineering.
Enforcement of exclusive rights
The Act expressly lays down provisions dealing with criminal remedies for the infringement of a layout design. Still, the Act does not explicitly provide any civil remedies as in other IP laws in India. Though, it can be inferred from the Act that it doesn’t bar from any civil remedies either as Section 16 merely refers to ‘damages‘ by saying: ‘no person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered layout design‘. Thus, it can be concluded that the civil remedies, such as injunctions, an account of profits, and damages shall be applicable to enforcement rights with respect to layout-designs as well, as in the case of patents, copyright, etc.
Anyhow unlike the law of patents and designs in India, the registered proprietor has criminal remedies for the infringement of a layout design. Section 56 of the Act states that whoever knowingly or willfully infringes a layout design shall be punishable with imprisonment up to three years and/or a fine not less than fifty thousand, which may be extendable up to ten lakh rupees.
How to register a layout design?
An application for protection of layout design can be submitted by a person who claims to be the creator of that layout design, by the legal representative, or a person registered in a prescribed manner as a layout design agent. The applicant must have a principal place of business in India. If he does not carry business in India, he must mention an address for service located in India.
An application can be filed either alone or jointly within the territorial limits where the principal place of business is located, or address of service is mentioned.
Firstly, a written application to the registrar at the SICLD registry shall be made on form LD-1 accompanied by a registration fee and three sets of drawings or photographs of mask layout, which describe the layout design applied for registration.
The registrar may accept, refuse or guide you to make a few modifications to the application. Section 9 of The Act gives the registrar the discretionary power to withdraw the acceptance and proceed if the application had not been accepted.
Further, the accepted applications shall be advertised within 14 days of the acceptance for any objections. Anyhow, the opposition to the accepted application can be filed within three months from the date of advertisement.
Finally, Suppose the application is not opposed, or the opposition has been decided in favour of the applicant. In that case, the registrar shall register the said layout design in the layout design register and issue a certificate sealed with the seal of the SICLD Registry.
Conclusion: The Act provides legal protection to semiconductor integrated circuit layout design and is in conformity with the TRIPS Agreement. The Act is self-sufficient to fulfil the semiconductor industry requirements and aims to maintain a healthy competitive environment through its detailed provisions that outline criminal remedies in case of infringement. The Act is in conformity with other countries’ IP laws and builds confidence amongst the investors to invest in the Indian semiconductor industry.
Disclaimer: The present article intends to provide general guidance on the subject, and you can also consult us in your specific case.