Introduction

With the advancement of this information technology, a new branch in the field of intellectual
property flourished, called as the Layout-Design or the of the semiconductor integrated circuits.
The semiconductor integrated circuit ultimately translates into smaller and more powerful
computers. Hence, the development of the layout-design on a semiconductor integrated circuit
as an intellectual property is quite significant.
Hence, a step was taken by various organizations to pass regulations regarding this issue. One
such was the World Trade Organization, and the result was the TRIPS agreement addressing
the intellectual property related issues. India being a signatory of the WTO also passed an Act
in conformity with the TRIPS agreement called the Semiconductor Integrated Circuits Layout-
Design Act (SICLDA) passed in the year 2000.
"Semiconductor Integrated circuits Layout- Design Act 2000" is a supplement act to designs.
It fulfils the obligations of TRIPS agreement (Art.35 to 38) regarding the protection of
semiconductor integrated circuits layout- designs.
• Legal Provisions In India
The Semiconductor Integrated Circuit Layout-Design Act, 2000, protects original, inherently
distinctive layout-designs that have not been previously commercially exploited. Registration
is a necessary pre-requisite for protection. The Semiconductor Integrated Circuits Layout-
Design Act, 2000 gives recognition to a new form of intellectual property, namely, the ‘layout-
designs’ used in semiconductor integrated circuits as has been defined u/s 2(h) of the Act.
• Need of The Semiconductor Act, 2000
The need for a sui generis form of protection developed primarily as a result of chip piracy,
which threatened to undercut the vitality of the semiconductor industry. Chip pirates could sell
identical chips for lower prices than could the companies that originally designed them. This
caused legitimate companies that engaged in chip research and development to cut prices to
compete with pirated chips, which deprived legitimate companies of the funds needed to carry
out further research and development to build the next generation of chips. Legitimate
companies could not get adequate chip protection under patent, copyright, or trade secret law,
so a sui generis form of protection was provided.

• Why Need for Separate Legislation apart from Patent and Copyright
Integrated circuits comprise of numerous building blocks, each block being patentable. Since
an integrated circuit contains hundreds or thousands of semiconductor devices, a claim to an
integrated circuit would have to cover hundreds or thousands of individual elements.
Consequently, a patent claim that attempts to describe an entire integrated circuit may be
hundreds of pages long. Clearly, such a narrow claim would provide almost no protection. Even
if one sought such narrow protection, writing a patent application supporting a claim with
thousands of elements would be extremely complex, cumbersome, and expensive. Obviously,
integrated circuits are not easily describable in a patent specification or the claims. Also, it may
take several years to obtain an integrated circuit patent from most patent offices worldwide.
This is unacceptable given that an integrated circuit’s useful commercial life may be less than
one year. The cumbersome, time-consuming nature of filing combined with extremely narrow
protection often makes patent law an insufficient form of protection for integrated circuits.
Other forms of existing intellectual property protection are also inapplicable to integrated
circuit layouts. Design patents protect the ornamental, but not the functional, aspects of an
article of manufacture described in its drawings. Since integrated circuit layout is more
functional than ornamental, design patent protection is generally inapplicable to integrated
circuits. Finally, trade secret law cannot be used to protect most integrated circuits because an
integrated circuit layout may be reverse engineered.
The layout of transistors on the semiconductor integrated circuit or topography of transistors
on the integrated circuit determines the size of the integrated circuit as well as its processing
power. That is why the layout design of transistors constitutes such an important and unique
form of intellectual property fundamentally different from other forms of intellectual property
like copyrights, trademarks, patents and industrial designs. Given that patent, copyright, and
trade secret law cannot adequately protect integrated circuit design, hence an exclusive
protection for semiconductor integrated circuits layout-design has became necessary to the
semiconductor industry.
• Subject Matter of Protection
The Act affords protection to the layout-design of a semiconductor integrated circuit.
Protection is given to the layout-design itself so that design houses producing layout-designs
would have protection for those products separate from their incorporation in a chip product.
The explanation to Section 17 also lays down that the right conferred by the registration of a
layout-design shall be available to the registered proprietor irrespective of the fact whether the
layout-design is incorporated in an article or not. Moreover, India is a member of the TRIPS
Agreement which itself obliges adherence to Article 2 through 7 of the IPIC Treaty.
Protection under the Act exists only after the layout-design has been registered. Layout-designs
can be registered if they are:
• original,
• inherently distinctive,
• capable of being distinguishable from any other registered layout-design and
• if they have not been commercially exploited for more than two years before date of
application for registration.
Thus, the Act does not require ‘novelty’ but ‘distinctiveness’ for the purpose of registration. A
layout-design normally consists of a combination of elements and interconnections that are
commonly known among creators of layout-designs and manufacturers of semiconductor
integrated circuits and hence are considered original only if such combination taken as a whole
is the result of its creator’s own intellectual efforts. Thus, the Act has recognized that layout-
designs will usually contain design elements already existing or protected in the semiconductor
industry which is an important issue for semiconductor layout-designs as they are, in the vast
majority of cases, new compilations of well-known commonplace elements. The Act calls for
‘creator’s own intellectual effort’ and also lies down that such designs should not be
commonplace among the creators of layout designs and manufacturers.
This may be shown by the original combination of elements of design that are not by
themselves original. Thus, a new topography may be the result of a combination of
commonplace elements, which have not been combined in precisely the same way as before.
Also, the chances are that any newly designed layout-design which is not simply a copy of an
existing design will have at least some features or combination of features which are dissimilar
to features already well-known in respect of semiconductor products.
• Enforcement of Exclusive Rights
The Act expressly lays down provisions affording criminal remedies for the infringement of a
layout design. But the Act does not provide expressly for civil remedies as in other IP laws nor
does it bar these remedies. It merely refers to ‘damages’ in Section 16 which says: ‘no person
shall be entitled to institute any proceeding to prevent, or to recover damages for, the
infringement of an unregistered layout-design’. Thus, it can safely be said that the civil
remedies, such as injunctions, the account of profits and damages would be applicable to
enforce rights with respect to layout-designs as well, as in the case of patents, copyright etc.
Though, it would have been preferable if a more express provision to this extent had been
incorporated within the Act.
Unlike the law of patents and designs in India as well as other international instruments for the
protection of semiconductor topographies, the registered proprietor has criminal remedies for
the infringement of a layout-design. Thus, whoever knowingly or willfully infringes a layout-
design shall be punishable with imprisonment up to three years and/or a fine between fifty
thousand and ten lakh rupees. In case of infringement, the registered-proprietor is required to
submit a written complaint to the Court of Judicial Magistrate First Class, which can take
cognizance of this offence. The court may order forfeiture to the government of goods related
to the offence, and the same may be destroyed in case of a conviction.
Again, the Indian Act is distinctive from the existing laws on semiconductor protection. The
usefulness of providing for criminal sanctions for intentional acts of infringement lies in the
fact that the prevention of infringement of layout-design rights is in the public interest. Criminal
sanctions are usually an effective deterrent. The Act exempts from liability innocent purchasers
of infringing chip products with respect to the importation or distribution of those products
before they had notice of the layout-design protection. It also allows innocent purchasers who
receive notice of infringement, to import or distribute infringing chip products purchased
before they had notice, provided they pay the proprietor of the registered layout-design a
reasonable royalty.
• Exceptions/Defence
the exceptions under this act have been provided under S-18
The registration of the layout design gives to the registered proprietor of the layout design the
exclusive right to the use of the layout design and to obtain relief in respect of infringement.
Only a registered proprietor of the layout-design or a registered user can make use the layout
design..
The proprietor of a registered layout-design has powers under the Act to assign the layout-
design for any consideration. The registered layout-design may be transferred with or without
good will. However, the person who becomes entitled by assignment or transmission to a
registered layout-design shall also have to register his title with the Registrar as per the
procedure provided in the Act. Moreover, s. 18 provides following cases which do not
constitute infringement.
Reverse engineering
The Act also allows persons to ‘reverse-engineer’ layout-designs for the purpose of analysing
the layout-designs and incorporating the insights of their analysis into an original layout-design
of their own. S. 18(3) states that where a person, on the basis of scientific evaluation or analysis
of a registered layout-design, creates another layout-design which is original within the
meaning of sub-section (2) of section 7, that person shall have the right to incorporate such
another layout-design in a semiconductor integrated circuit or to perform any of the acts
referred to in sub-section (1) or sub-section (5) in respect of such another layout-design and
such incorporation or performance of any act shall not be regarded as infringement within the
meaning of sub-section (1).
Such a provision is considered to be justified, in accordance with Article 6(2)(b) of the IPIC
Treaty and the provisions in the TRIPS Agreement, as there is a need to encourage creativity
through the improvement of existing layout-designs. Moreover, to successfully enter an
integrated circuit market segment with a new product, the new entry must usually be
compatible with established products. However, the information needed to achieve
compatibility is often not publicly available. Thus, aspiring competitors must gather this
information another way. However, they must do so without infringing layout-design rights
under the Act.
Educational purpose
S. 18(2) provides that any person may reproduce the layout-design “for the purposes of
scientific evaluation, analysis, research, or teaching and it will not constitute infringement
within the meaning of this clause. This is similar to the fair dealing exception in copyright law.
This is a significant exception to the exclusive right of the registered-proprietor to reproduce
by any means the registered layout-design or any substantial portion of it.
Defence of innocence
S. 18(5) provides that where a person does not possess any knowledge or has no reasonable
ground to know while performing or directing to be performed such act in respect of such
semiconductor integrated circuit or article that it incorporated a registered layout-design, it will
not amount to infringement.
But, after the time when such person has received notice of such knowledge, if continues to
perform or directing to be performed such act then, he shall be liable to pay the proprietor of
the registered layout-design a sum by way of royalty. The amount shall be determined by
negotiation between registered proprietor of the registered layout-design and that person or by
the Appellate Board having regard to the benefit accrued to such person by performing or
directing to be performed such act.
Innocent purchaser
S. 18(6) provides that where any other person purchases a semiconductor integrated circuit
incorporating a registered layout-design or any article incorporating such a semiconductor
integrated circuit referred to in sub-section (5) from a person referred to in that sub-section,
then, such other person shall be entitled to the immunity from infringement in respect of that
semiconductor integrated circuit or article.
Independent creation
S. 18(8) where any person by application of independent intellect has created a layout-design
which is identical to a registered layout-design, then, any act of such person in respect of the
layout-design so created shall not be the infringement of the registered layout-design. Paper
trail evidence can be brought by such an independent creator to prove that his creation was an
exercise of “intellectual efforts”, and it was not copied.
CASES
Brooktree Corporation v. Advanced Micro Devices (reverse engineering)
Brooktree had registered layout design and claimed that AMD copied their layout design.
Although, it was not copied entirely but Brook tree claimed that qualitatively material part has
been copied. Whereas AMD claimed reverse engineering.
The US Court of Appeals for the Federal Circuit has held in the case of Brooktree Corporation
v Advanced Micro Devices that a ‘paper trail does not exclusively prove a reverse engineering
defence’ under the SCPA. The Court explained that the statute does not excuse copying where
the alleged infringer first tried and failed to reverse engineer a chip layout without copying.
The Court rejected the claim that the reverse engineering defence can be established by the
sheer volume of paper, pointing that the paper trail is evidence of independent effort but not
incontrovertible proof of either originality of the end product or the absence of copying. The
registered-proprietor also has the exclusive right to import, sell or distribute for commercial
purpose any semiconductor chip products in which the registered layout-design is embodied.
Thus, the rights under the Act extend not only to the registered layout-design or chips
containing such registered layout-designs, but also over products containing such chips, e.g. a
watch or cell-phone.
• Nintendo Vs Centronics (Australia) (miniature version of already existing layout
design)
Nintendo holds the EL rights in its video games. The defendant, Centronics, imported video
game circuits which were unauthorised copies of Nintendo's circuit layout which Nintendo
manufactured and marketed in regard to its game products. Nintendo initiated proceedings
against Centronics and three of its directors for infringement of various intellectual property
rights, including Nintendo's circuit layout rights. The chip was copied in entirety. Size of chip
copied was smaller than original layout design, which was registered, so copied was miniature.
The Court held such copying to be infringement. Only the size of the chip was minimized. It
was not an original work, as it was not result of creator’s own intellectual efforts.
CONCLUSION
The SICLD Act fulfils India’s obligation under the TRIPS agreement as approved by the
members of WTO. The intellectual property protection for Integrated Circuit layout design is
a key factor throughout the world, and more so in India because it does not have a strong
intellectual property protection policy in software. As integrated circuit layout designs is in its
early years in India, it’s important that the country boosts of a strong protection policy right in
the beginning itself and the SICLD Act provides such a strong protection policy.
The number of Indian companies focusing on integrated circuit design is beginning to grow
and this would force major semiconductor companies to set up their offices and address the
needs of the domestic market. This will encourage a lot more companies to base their operations
in India. The Indian legislation therefore provides a comprehensive protection to the layout
designs of the semiconductor integrated circuits as recognized intellectual property and bundle
of rights to the proprietor of the registered layout design.

Originality in copyright v SICLDA