IP protection in India: contracts, registrations and practical controls

What counts as IP in a sourcing programme

In an engineering programme, IP is rarely one thing. It includes the drawing and the CAD model, the tolerance scheme, the tool design, the process know how, the test fixture, the software that runs a machine and the brand on the label. Some of these can be registered. Others can only be protected by contract and by keeping them out of the wrong hands.

The first step is an inventory. List every item that gives the product its advantage and every item a supplier needs in order to make it. Then mark which ones you own, which ones the supplier owns and which ones are shared. A programme without that list tends to discover the gaps during a dispute.

Be realistic about what a supplier can see. A factory that stamps your part knows the material, the die and the process. You cannot hide the fact that the part exists. You can control the drawing, the tool ownership and the right to make the part for anyone else.

Register what can be registered

India has separate routes for patents, designs, trademarks and copyright. A patent protects a technical solution, such as a mechanism or a process, and is examined for novelty and inventive step. A design registration protects the visual appearance of an article, such as the shape of a housing or a terminal. A trademark protects the sign that identifies the source. Copyright protects drawings, software and other original works.

The routes are not interchangeable. A new shape may be a design, a new function may be a patent, and a drawing of either may also attract copyright. Filing the wrong route wastes money and may leave the right unprotected. Take advice on the route before you disclose the part.

Timing matters. A patent requires novelty, so a public disclosure before the filing date can damage the application. A design has a similar novelty requirement. If you must show the part to a supplier before filing, use a written confidentiality agreement and keep a record of the disclosure.

Contracts that travel with the part

A non-disclosure agreement is the starting point, not the whole contract. It should define confidential information, name the permitted use, set the duration and say what happens to the material when the relationship ends. A one page NDA signed by a sales manager may not bind the people who actually see the drawing.

Add an assignment clause for the IP the supplier creates in the course of the work. If a toolmaker improves a die or writes a program for your part, the ownership should be clear. Without an assignment, the supplier may own the improvement even though you paid for the work.

Agree the governing law and the dispute route. Indian contracts often choose Indian law and arbitration under the Arbitration and Conciliation Act 1996, with a seat in a city such as Mumbai or Delhi. Cross border contracts may choose another seat. Whatever you choose, make sure the award can be enforced where the supplier holds assets.

Shop floor and document controls

Most leaks are ordinary, not dramatic. A drawing left on a bench, a CAD file emailed to a subcontractor, a tool photographed for a quote, a former employee who keeps a copy. The controls that reduce the risk are simple and boring: need to know access, watermarked drawings, a document register, a clean desk rule and an exit checklist.

Segment the information. A stamper needs the strip layout and the bend data, not the full assembly model. A plater needs the finish callout, not the tolerances on the other features. Sending the whole pack to every supplier increases the surface area for no benefit.

Visit the floor and look at how drawings are handled. A plant that keeps the current revision at the machine and the obsolete revisions in a locked cabinet is easier to work with than one where every revision is loose on the bench. That observation belongs in the audit, next to the calibration check.

• Drawing register with revision control
• Watermark and named recipient on shared files
• Need to know release, not a full pack to all
• NDA signed by the people who see the data
• Exit checklist for staff and subcontractors
• Tool and program ownership recorded

Tooling, programs and the real asset

In many programmes the tool is the most valuable IP. A die or a mould contains the geometry of the part in a form that is easy to copy. If the tool is held by the supplier and the ownership is not documented, moving the part later can be difficult.

Record the tool with a serial number, a replacement value and a condition report. Put the ownership in the contract and agree the transfer process. The same applies to CNC programs, test fixtures, gauges and any software configuration used to make the part.

Ask what happens if the supplier is acquired, insolvent or simply stops answering. A tool that is physically on a floor you cannot access is not under your control. A periodic tool audit and a photo record are cheap insurance.

Monitoring and customs

Registration gives you a right. Monitoring tells you whether someone is using it. Watch the market for lookalike parts, check the trade mark registers in your main markets and ask your sales team to report suspicious offers. A competitor's catalogue is often the first sign.

Indian customs has an intellectual property enforcement mechanism that lets a right holder give notice to the Commissioner of Customs to suspend the clearance of infringing goods. The notice needs the registration details and a description of the goods. It is a useful tool for a branded product, less so for a hidden component.

Keep the evidence in one place: registration certificates, the drawing history, the tool records, the NDA and the correspondence. A dispute is much easier to run when the file is already assembled.

Enforcement and its limits

Enforcement routes include a civil suit for injunction and damages, criminal remedies for trade mark and copyright infringement, and customs action at the border. The right route depends on the right, the evidence and the commercial value of the case.

Indian courts can grant interim injunctions, but the process takes time and the outcome is uncertain. A case is also public, which may not suit a buyer who wants to keep a supplier relationship. Mediation or arbitration can be faster and more private, but it depends on the contract.

The practical conclusion is that prevention carries most of the weight. Register what you can, contract for what you cannot, control access and keep records. The legal route is the backstop, not the plan.

A practical sequence

Start with the inventory, then file the registrations that fit the part. Put the NDA and the assignment in place before the first drawing is shared. Add the tooling schedule and the access controls before the first order. Then set a review date and check the file.

A programme that does these steps in order has a defensible position. A programme that starts with a purchase order and adds the paperwork later is relying on the supplier's goodwill, which is not a strategy for something as valuable as the design.

1. 01

   Inventory

   List the drawings, tools, programs and know how in the programme.

2. 02

   Register

   File the patent, design, trade mark or copyright that fits each item.

3. 03

   Contract

   Sign the NDA, the assignment and the tooling ownership schedule.

4. 04

   Restrict

   Release only what each supplier needs, with a named recipient and a revision.

5. 05

   Monitor

   Watch the market and the registers, and record what you find.

6. 06

   Enforce

   Use the courts, arbitration or customs only when the evidence supports it.