Promising reform aims to modernise IP management and protection in India 

‘First published on WTR’

By: Safir Anand

In summary

This article explores the new IP Reforms 3.0 initiative in India and various developments in the country related to intellectual property.

Discussion points

• Technological integration in IP management
• AI and IP rights
• Blockchain in IP
• NFTs
• IP financing
• Anti-piracy

Referenced in this article

• IP Reforms 3.0

Introduction

In the rapidly evolving landscape of the 21st century, intellectual property (IP) stands at the forefront of innovation, creativity and economic growth. As technological advancements continue to reshape industries and societies, the frameworks governing IP must adapt to address new challenges and opportunities. IP Reforms 3.0 represents a forward-looking initiative aimed at modernising the principles and practices surrounding intellectual property, ensuring that they remain robust, relevant and responsive to the dynamic needs of our time.

The announcement of Modi 3.0 signifies the third term of Prime Minister Narendra Modi’s leadership in India. This era is characterised by a strong mandate for continued reform and development across multiple sectors. Mr Modi’s previous terms were marked by significant initiatives such as the Digital India campaign, Make in India, and the introduction of the goods and services tax (GST), all aimed at modernising India’s economy and infrastructure. With Modi 3.0, the government is expected to push further for comprehensive reforms that build on past successes and address lingering challenges. The focus is likely to be on sustainable development, technological innovation, economic resilience and positioning India as a global leader in various domains. This period is seen as a transformative phase, with high expectations for policy shifts that can drive long-term growth and modernisation.

Just as Modi 3.0 aims to drive forward a new era of growth, development and modernisation for the country, IP Reforms 3.0 seeks to usher in a new paradigm for managing and protecting intellectual property. Both symbolise a commitment to adapting to contemporary needs and future challenges through innovative strategies and forward-thinking policies.

The digital revolution has ushered in an era where intangible assets hold unprecedented value. From groundbreaking advancements in artificial intelligence (AI) to the decentralisation potentials of blockchain technology, and the nature of creation, ownership and utilisation of IP has fundamentally transformed. Traditional methods of IP protection and enforcement are being tested by these new paradigms, necessitating a comprehensive re-evaluation and reform.

First, we will delve into the intersection between AI and IP. We will then go on to analyse the transformative potential of blockchain and NFTs in IP. Furthermore, the potential of IP financing will be explored.

Technological integration in IP management

In the rapidly evolving digital age, integrating advanced technologies into IP management is crucial for enhancing efficiency, transparency and security. IP Reforms 3.0 recognises the potential of technologies such as AI, blockchain, cryptocurrency, drones, gaming and data protection to revolutionise the way IP is managed and enforced.

AI and IP rights

AI has revolutionised various aspects of our lives, including the creation of original works of art, music, literature and other forms of creative content. As AI systems become increasingly ubiquitous, they are now capable of generating content that closely resembles human creations, blurring the line between human and machine authorship. However, this remarkable progress has also raised complex legal and ethical questions, particularly concerning the rightful ownership of AI-generated content. Thus, AI-created output has certain key implications for copyright law.

Copyright, a fundamental legal concept protecting intellectual property, grants exclusive rights to creators, incentivising innovation and creativity. Traditionally, copyright ownership has been straightforward, merely assisting the creative process of a human, thereby attributing authorship to human creators. But in the realm of AI-generated content, the lines of authorship and ownership have become blurred. Who should be considered the rightful owner of content created by AI? Is it the creator of the AI, the AI itself or the user who operates the AI?

Given the complexities surrounding AI-generated content, it is imperative to explore potential legal and regulatory solutions that can effectively address these challenges. Policymakers, legal experts and industry stakeholders need to collaborate to develop a framework that is both robust and flexible, and capable of accommodating the rapid advancements in AI technology.

Blockchain in IP

The dawn of Modi 3.0 marks a transformative phase for India, characterised by ambitious reforms across various sectors. Among these, the realm of IP is poised for significant evolution, driven by technological advancements and strategic policymaking. A cornerstone of this evolution is the integration of blockchain technology, a revolutionary tool with the potential to reshape IP management and protection. This paper delves into the implications of blockchain for IP Reforms 3.0, highlighting its benefits, challenges and the anticipated changes in the IP landscape.

Blockchain is a decentralised ledger technology that ensures secure and transparent recording of transactions across multiple computers. It underpins cryptocurrencies like bitcoin and ethereum but extends beyond financial applications to various sectors, including IP. The core attributes of blockchain – immutability, decentralisation and transparency – make it a promising solution for addressing longstanding challenges in IP management. The future of IP under Modi 3.0 envisions a robust integration of blockchain technology, fostering a more transparent, secure and efficient IP ecosystem. Anticipated changes include policy reforms, capacity building and public–private partnerships.

NFTs

The future of IP with respect to non-fungible tokens (NFTs) holds transformative potential, reshaping how IP is created, managed and monetised. NFTs introduce a new paradigm known as decentralised IP, offering an alternative to traditional IP systems governed by statutory law and industry intermediaries. This shift promises significant changes across various dimensions of the IP landscape.

For NFTs to achieve their full potential in IP, existing legal frameworks must evolve. Governments and regulatory bodies are expected to develop clearer guidelines and regulations surrounding NFTs. These new legal frameworks will address issues such as copyright infringement, the enforcement of digital rights and the legal recognition of NFT transactions. Enhanced legal clarity will provide greater security for creators and investors, encouraging more widespread use of NFTs.

IP financing

IP financing is rapidly emerging as an innovative financial strategy, representing a significant step forward in the economic reforms surrounding intellectual property. This practice allows companies to leverage their intangible assets, such as patents, trademarks and copyrights, as collateral for securing loans or raising capital. Recognising the substantial value that intangible assets hold, IP financing provides an alternative funding source, especially for technology-driven and creative industries where traditional physical collateral might be limited. As economies increasingly shift towards knowledge-based and innovation-driven models, the ability to leverage IP assets for financing is becoming crucial. The mechanisms of IP financing are varied and complex, designed to convert potential future revenue streams into immediate capital, thereby providing liquidity and financial flexibility.

One common method of IP financing is through IP-backed loans. In this model, companies use their IP assets as collateral to secure loans from financial institutions.

Another advanced mechanism is the securitisation of IP assets. This involves bundling IP assets into financial instruments that can be sold to investors.

Sale-leaseback transactions are also a notable method within IP financing. Here, a company sells its IP assets to a financial institution and then leases them back. This allows the company to retain the use of its IP while simultaneously unlocking capital for other purposes.

However, the challenges associated with IP financing are significant and require careful consideration. One of the primary hurdles is the complexity of accurately valuing IP assets. Regulatory issues also present a significant hurdle.

Looking forward, several developments could enhance the landscape of IP financing. Standardising methods for IP valuation and establishing best practices for IP financing transactions would enhance transparency and confidence. Legislative reforms to provide clearer guidelines on IP treatment and enforcement can also create a more supportive environment for IP-backed financing.

Anti-piracy

The Cinematograph (Amendment) Bill 2023, introduced in the Indian Parliament on 31 July 2023, represents a significant overhaul of the Cinematograph Act 1952. This amendment aims to address various issues related to film certification, piracy and the overall regulatory framework governing the Indian film industry. The bill’s provisions have substantial implications for IP rights, aiming to fortify the protection and enforcement mechanisms within the cinematic domain. This detailed analysis explores the key features of the amendment and its potential impact on IP rights. The Cinematograph (Amendment) Bill 2023, has far-reaching implications for the protection and enforcement of intellectual property rights in the Indian film industry.

It has provisions to mobilise anti-piracy efforts, enhancing IP enforcement, facilitating fair use and creative freedom, increasing administrative efficiency and IP management and many such positive changes.

The strengthened IP protection framework could enhance India’s reputation as a safe market for film investments and collaborations. International filmmakers and production houses often consider the robustness of IP laws and enforcement when deciding on locations for shooting and releasing films. The amendment’s strong stance on anti-piracy can attract more international projects to India, boosting the local film industry and promoting cultural exchange.