Semiconductor Integrated Circuits and Layout-Designs

1. What is protected

An integrated circuit (a chip) is a product in which transistors and other circuit elements, and the connections between them, are formed on or in a piece of semiconductor material to perform an electronic function. The layout-design (in the US, the “mask work”) is the three-dimensional arrangement of those elements and interconnections. Designing a layout costs enormous sums; copying it, by photographing each layer of a chip and reproducing the masks, costs little. That gap is the economic case for protection.

2. Why a sui generis right

• Patent law requires an inventive step; most new layouts are skilled engineering improvements, not inventions.
• Copyright protects expression, but a layout is dictated largely by electrical function, and copyright’s long term and idea–expression rules fit poorly.
• Design law protects appearance judged by the eye; a chip layout is invisible to the buyer and judged only by function.

The United States responded first, with the Semiconductor Chip Protection Act, 1984, creating a ten-year right in registered mask works and, through a reciprocity clause, pressing other countries to follow. Japan (1985) and the European Community (Directive 87/54/EEC) did so.

3. International framework

The Treaty on Intellectual Property in Respect of Integrated Circuits (the Washington Treaty) was concluded under WIPO in 1989. It never entered into force, largely because the US and Japan considered its terms on compulsory licensing and innocent infringement too weak. TRIPS rescued it:

• Article 35: members shall protect layout-designs in accordance with Articles 2 to 7 (other than Article 6(3)), 12 and 16(3) of the Washington Treaty, plus the TRIPS additions.
• Article 36: it is unlawful, without authorisation, to import, sell or otherwise distribute for commercial purposes a protected layout-design, an integrated circuit incorporating it, or an article incorporating such a circuit (so far as it continues to contain the unlawfully reproduced layout). The extension to articles goes beyond the Washington Treaty.
• Article 37: an innocent purchaser who did not know and had no reasonable ground to know of the unlawful reproduction is not liable; after notice he may deal in stock on hand but must pay a reasonable royalty. Compulsory licences are allowed only on the conditions of Article 31.
• Article 38: protection lasts at least ten years from the filing date (where registration is required) or from the first commercial exploitation anywhere in the world; members may also provide that protection lapses fifteen years after creation.

4. The Indian Act

India enacted the Semiconductor Integrated Circuits Layout-Design Act, 2000, with rules in 2001. A Registry under the Ministry of Electronics and Information Technology administers it. Its scheme:

1. Registration is compulsory for protection. An unregistered layout-design has no statutory right.
2. Conditions. A layout-design is registrable only if it is original (the result of its creator’s own intellectual effort and not commonly known to creators of layout-designs and chip makers), inherently distinctive, capable of being distinguished from any other registered layout-design, and has not been commercially exploited anywhere in India or a convention country beyond a short permitted period before filing. A layout made of elements that are commonplace is original only if their combination, taken as a whole, is original.
3. Procedure. Application, examination, advertisement, opposition, registration and certificate, on a pattern borrowed from the Trade Marks Act.
4. Term. Ten years, counted from the date of filing or the date of first commercial exploitation anywhere, whichever is earlier, consistent with Article 38.
5. Rights. The registered proprietor has the exclusive right to use the layout-design and to obtain relief for infringement.

5. Infringement of layout-design

A registered layout-design is infringed by a person who, without authorisation:

• reproduces the whole or any part of it, whether by incorporating it in a semiconductor integrated circuit or otherwise (unless the part reproduced is not original); or
• imports, sells or otherwise distributes for commercial purposes the layout-design, a chip incorporating it, or an article incorporating such a chip.

Exceptions:

• Evaluation and research. Reproduction for the purpose of scientific evaluation, analysis, research or teaching is not infringement.
• Reverse engineering. Where a person, on the basis of such evaluation or analysis, creates a new layout-design that is itself original, incorporating it is not infringement. This is the critical difference from copyright: the law encourages competitors to study a chip and design around it.
• Innocent infringement. A person who acquired a chip without knowing it embodied an unlawfully reproduced layout is not liable for dealing in it before notice, and afterwards may continue on paying a reasonable royalty, following TRIPS Article 37.
• Exhaustion. Once a chip is put on the market by or with the consent of the owner, further sale is not infringement.

Remedies are civil (injunction, damages or account of profits, delivery up) with criminal penalties for infringement and for falsification of the register.

6. Ownership, assignment, transmission and the register

The syllabus asks specifically for the effect of registration, assignment and transmission. The Act borrows these provisions from the Trade Marks Act.

• Commissioned and employee layouts (section 7(3)): unless the contract says otherwise, the right to register belongs to the person who commissioned the work or to the employer.
• Date and effect of registration. A layout-design is registered as of the date of the application (section 13(1)). Registration gives the registered proprietor the exclusive right to use the layout-design and to obtain relief for infringement, whether or not it is incorporated in an article (section 17), and is prima facie evidence of validity (section 19). No infringement action lies for an unregistered layout-design (section 16).
• Power to assign (section 20): the registered proprietor may assign and give effectual receipts for the consideration. “Assignment” means an assignment in writing by act of the parties (section 2(b)).
• Assignable and transmissible (section 21): a registered layout-design can be assigned or transmitted with or without the goodwill of the business.
• Assignment without goodwill (section 22) takes effect only if the assignee applies to the Registrar for directions on advertisement within six months (extendable by up to three months) and advertises it as directed.
• Registration of title (section 23): a person who becomes entitled by assignment or transmission must apply to be registered as proprietor. If validity is disputed, the Registrar may wait for a court’s decision. An unregistered instrument is not admitted as proof of title unless the Registrar or court directs otherwise.
• Registered users (sections 24 to 29): a licensee may be registered as a registered user, may sue for infringement in the circumstances the Act allows (section 28), but has no assignable or transmissible right (section 29).
• Rectification and correction: any person aggrieved may apply to the Appellate Board or the Registrar to make, expunge or vary an entry (section 30); the Registrar may correct names, addresses and descriptions on the proprietor’s application (section 31).
• Appeals: from the Registrar to the Layout-Design Appellate Board within three months (section 42), and from the Board to the High Court (section 53). The Tribunals Reforms Act, 2021, which abolished the IPAB and moved appeals under the other IP Acts to the High Courts, did not amend this Act.
• Penalty (section 56): knowing and wilful infringement is punishable with imprisonment up to three years, or fine of fifty thousand to ten lakh rupees, or both. Cognizance only on complaint of the registered proprietor or registered user (section 64).

7. Assessment

• The Act was passed to meet TRIPS and has been little used: registrations are very few. Most chip design work in India is done for foreign firms, and the chips are fabricated abroad, so protection is sought where they are made and sold.
• Layouts now change with each process generation in a year or two; a ten-year right is longer than the useful life of most layouts.
• The growth of Indian semiconductor fabrication under the India Semiconductor Mission may make the Act matter more, and calls have been made to align its procedure with design law and to protect layouts without compulsory registration.

How this is examined

Usually an 8-mark short note: “Integrated circuits” or “Infringement of layout design”. For the first, explain the subject matter, why a sui generis right was needed, the Washington Treaty and TRIPS Articles 35–38, and the Indian Act’s conditions and term. For the second, list the infringing acts and the exceptions (research, reverse engineering, innocent infringement), with Brooktree as the leading illustration.