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Making Your Mark
May 2009, India Business Law Journal

Intellectual Property rights owners in India should not allow the economic downturn to deter them from their efforts to protect and build their IP portfolios.

"Companies, particularly in the outsourcing area, should discuss the issue of (IP) retention with their clients and attempt to build in pricing to provide bonuses or retention compensation to ensure some consistency in the workforce," said Bijal Vakil, a partner at White & Case LLP. "The use of appropriate contracts with all personnel together with adequate, or slightly above market, compensation may help to protect client and company property from subsequent unauthorized disclosure and avoid unnecessary enforcement costs."

Vakil agrees that unlocking the value of a company's core products is a vital and complex process that requires careful assessment. "Today's economy dictates that patents are not commodities," he says. "The days of simply referring to the size of a patent portfolio are long gone. The quality of a patent is much more important today. We have encountered numerous situations where a single patent was much more valuable than hundreds of patents in a portfolio."

Vakil notes that companies entering India (through outsourcing or otherwise) often lack an adequate understanding of how the litigation process works in the country. "While injunctive relief is available [in India]," he says, "damages awards are rare and often not commensurate with the harm caused by an infringement. US companies would not typically expect this result given the awards given through [the US] legal system."

"Companies outside India may be well advised to seek arbitration in India or in accordance with the appropriate legal principles for the ease of enforcement in India to remedy this," said Vakil.

Indian parties often prefer disputes to be adjudicated by Indian courts, Vakil adds, but "this is often a difficult provision to obtain in view of the seemingly endless time to trial along with the perceived bias in favor of Indian parties as compared to non-Indian parties."

Daren Orzechowski, a partner at White & Case in New York, says it's especially important for companies with international IP portfolios and exposure in India to include IP related clauses in all contracts with employees and consultants who may have access to (or may create) IP or other sensitive information. "Such contracts should focus on securing confidentiality and locking up intellectual property rights, and avoiding any reversion rights, from the moment of creation," says Orzechowski. "Possessing a breach of contract claim may ultimately prove more advantageous than ordinary intellectual property protection," he adds.

Regular, commonsense security measures are also important, says Orzechowski. "In addition to legal protections, practical physical protections should be put in place, including computer and office security policies and restrictions. The legal protections should be the second line of defense because by the time the legal rights are analyzed the actual security measures have often already been breached."

Litigation of any sort has the tendency to be slow and extremely costly, but as Orzechowski explains, costs can be reduced substantially if the action is run through one lead counsel and resources are shared. For example, co-defendants of infringement claims can cooperate to slash costs and maximize their access to prior art or other assets that may be useful for leveraging a group settlement.

	In the Media
Expertise Intellectual Property Lawyers Daren M. Orzechowski Bijal V. Vakil	Making Your Mark May 2009, India Business Law Journal Intellectual Property rights owners in India should not allow the economic downturn to deter them from their efforts to protect and build their IP portfolios. "Companies, particularly in the outsourcing area, should discuss the issue of (IP) retention with their clients and attempt to build in pricing to provide bonuses or retention compensation to ensure some consistency in the workforce," said Bijal Vakil, a partner at White & Case LLP. "The use of appropriate contracts with all personnel together with adequate, or slightly above market, compensation may help to protect client and company property from subsequent unauthorized disclosure and avoid unnecessary enforcement costs." Vakil agrees that unlocking the value of a company's core products is a vital and complex process that requires careful assessment. "Today's economy dictates that patents are not commodities," he says. "The days of simply referring to the size of a patent portfolio are long gone. The quality of a patent is much more important today. We have encountered numerous situations where a single patent was much more valuable than hundreds of patents in a portfolio." Vakil notes that companies entering India (through outsourcing or otherwise) often lack an adequate understanding of how the litigation process works in the country. "While injunctive relief is available [in India]," he says, "damages awards are rare and often not commensurate with the harm caused by an infringement. US companies would not typically expect this result given the awards given through [the US] legal system." "Companies outside India may be well advised to seek arbitration in India or in accordance with the appropriate legal principles for the ease of enforcement in India to remedy this," said Vakil. Indian parties often prefer disputes to be adjudicated by Indian courts, Vakil adds, but "this is often a difficult provision to obtain in view of the seemingly endless time to trial along with the perceived bias in favor of Indian parties as compared to non-Indian parties." Daren Orzechowski, a partner at White & Case in New York, says it's especially important for companies with international IP portfolios and exposure in India to include IP related clauses in all contracts with employees and consultants who may have access to (or may create) IP or other sensitive information. "Such contracts should focus on securing confidentiality and locking up intellectual property rights, and avoiding any reversion rights, from the moment of creation," says Orzechowski. "Possessing a breach of contract claim may ultimately prove more advantageous than ordinary intellectual property protection," he adds. Regular, commonsense security measures are also important, says Orzechowski. "In addition to legal protections, practical physical protections should be put in place, including computer and office security policies and restrictions. The legal protections should be the second line of defense because by the time the legal rights are analyzed the actual security measures have often already been breached." Litigation of any sort has the tendency to be slow and extremely costly, but as Orzechowski explains, costs can be reduced substantially if the action is run through one lead counsel and resources are shared. For example, co-defendants of infringement claims can cooperate to slash costs and maximize their access to prior art or other assets that may be useful for leveraging a group settlement.