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IP Protection of Software and Software Contracts in India: A Legal Quagmire!

Received 21 May 2012 Software in India are protectable under copyright law as computer programmes, but the scope of a ‘literal’ part of a programme and the limits of substantial copying are not yet settled. Author’s ‘fair use’ rights and licence use rights are similarly not clear. Software per se is not patentable, but there are no guidelines as in when software is patentable under the Patents Act. But they are protectable as trade secrets under the common law. Software contracts, like any other transaction, are governed by common law principles as embodied in the Contract Act. Contracts can be in the nature of sale or assignment/licence, hence subject to different laws - Sale of Goods Act, Consumer protection Act, Competition Law, tax laws, apart from the relevant IP laws. Because of their peculiar nature, sale of software is not at par with the sale of goods; hence they are generally licensed where the owner has wider rights. Presence of the Internet element in licensing makes these contracts subject to conflict of laws. In contrast to open source licences, proprietary licences curtail substantially the ‘fair use’ rights. These issues require clarification through a proper legislation. This study examines the Indian law on legal protection of software and takes stock of the types of software contracts and the nature of licences that are generally entered into by the parties.