Engineering & Law

e-commerce often involves selling products and services that are based on intellectual property (IP) and its licensing. Music, movies, photos, software, designs, training modules, various products etc. are being traded through e-commerce, in such scenario IP plays the main component of value in such transactions because the things that are traded on the internet must be protected using technological security systems and IP Laws, or else they can be stolen, pirated or passed off and the whole business can be destroyed.

​How Is Intellectual Property Important to E-commerce?
Intellectual property Law protects against disclosure of trade secrets thereby resulting against unfair competition, making the intellectual property an asset that is perhaps worth more than any tangible asset. This can be explicitly seen in relation to technology and the digital economy.

In case of absence of intellectual property practices and laws, hard work is stolen and spread around the globe without paying the creator for their labor. Who, then, wants to create new works? Technical security is essential to deter the less proficient thief and Intellectual Property laws are required to deal with the more serious crimes.

Areas of concern are –

  • Safeguarding your own intellectual property
  • Violating someone else’s intellectual property

A common mistake is disclosing intellectual property prior to filing for the protection of that property. Similarly, in many countries making trade secrets public automatically dissolves one of any protection. One can consult with legal adviser prior to disclosing anything pertaining to your intellectual property.

Violating Someone’s Intellectual Property
e-commerce websites generally contains product descriptions and images. Do the owner of the e-commerce website have the legal right to publish those descriptions and images? What about all those logos, videos, photos, clip art, icons, sound effects, and background music? One must make sure make one’s site to be more engaging one. But, once again, does one have the rights to be use them?

One must have come across about many small e-commerce entrepreneurs who disregard intellectual property issues using the dictum, “whatever is available on the Internet is free for use!” The fact that they seem to get away with such violations of the IP makes the rest of us ponder that are we spending our money right.

Any content one puts on its website must be –

  • Its own
  • One should have the express permission to use
  • It is in the public domain
  • It is covered under fair use.

Intellectual Property is not limited to content
Does one sell branded goods? Surety that the goods are authentic? Is it possible that one is selling fakes? One might feel that this should be the headache of your supplier. But as a retailer, one too can fall into trouble if one does not take adequate measures to ensure that one is selling goods that the supplier was authorized to supply in the first place.

​An Intellectual Property Audit
An important administrative task for an e-commerce business is to take stock of your intellectual assets. In-spite of being intangible assets, they are often more valuable than the tangibles. Generally IP inventory consists of designs, sketches, artwork, website designs, photos, music, scripts, unique alterations of the product, new processes developed for the services, etc.

Starting by listing any symbols, names, motto’s, or slogans one can use to identify one’s business. In some territories, one doesn’t have to register to enjoy protection, but it is advised to register whenever one can.

One should take inventory of its trade secrets. Whichever information consisting the commercial value, is not typically known, and any laymen cannot just figure it out on his own, is a trade secret. One might not even be able to place a value on it, but one realises it has a commercial value.

Lastly, one should document all contracts that could have any sort of impact on the intellectual property as listed above. The aspect to be taken into consideration are the contracts with design companies (think logos and websites), non-disclosure agreements, and agreements signed with any employees one might have. Do not forget those pesky licenses on the materials and programs one used to build one’s own intellectual property.

Properly documented intellectual property could enhance the salability of your business

If one ever have a plan to sell its e-commerce business, one is going to need to prove that the intellectual property is protected. For that, one needs to have done an intellectual property audit at least once. If one wants to take on investors at any point, intellectual property security could become a deal breaker.

​Elements protected in Intellectual Property
There are several aspects of websites which are vested with the protection of different kinds of Intellectual Property.

  • E-Commerce systems, search engines or any other technical Internet tools is also granted protection under Patents or utility models.
  • Software’s including the text-based HTML code which are used in websites and it is vested with a shield under The Copyrights Act or The Patents Law, depending upon the National Law.
  • Website design is protected under the Indian Copyright Act.
  • All the website content in the form of written material, photographs, graphics, music and videos are also protected under The Indian Copyright Act.
  • Databases can be also protected by The Indian Copyright Act or by sui generis database laws.
    Business Name’s, Logo’s, Product Names, Domain Names and any other signs posted on the website are covered under The Indian Trademark Act.
  • Computer generated graphic symbols, displays, graphic user interfaces (GUIs) & even web-pages are protected under The Industrial Design Law.
  • Hidden aspect of a website for eg. (confidential graphics, source code, object code, algorithms, programs or other technical descriptions, data flow charts, logic flow charts, user manuals, data structures and database contents) are protected under Trade Secrets.

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