The Official E-Newsletter of the Institution of Engineers Sri Lanka   |  Issue 51 - February 2021

Beyond Engineering...
Featured Article by an Invitee Non-engineering Professional

Legal Impact of Intellectual Property rights under Information Society

Mr. Sunil D.B. Abeyaratne JPUM
LL.M (London), MBA (IGNOU), Dip. in Forensic Med. & Science (Colombo), Attorney-at-Law, 
Co-Chair-LAWASIA Data Protection, Communication & Technology Committee & BASL IT Committee,
Former Secretary-BASL




The international community has shown their willingness to abide by policies and rules relevant to Intellectual Property Rights (IPR) involved in Information contained in electronic records or electronic communication voluntarily. Such information may be copyrighted, patented, included domain name right, with confidential data including trade secrets or layout designs or involved in unfair competition etc.

After realising the value of IPR in cyberspace, countries have entered into International Conventions and treaties to deal with these emerging issues expressing unequivocal acceptance to provide due legal protection to the authors and owners of work involved in the ICT industry.1 TRIPS Agreement2 protects integrated circuits and semiconductor chips by Washington Treaty 1989 subject to Articles 1-37 of the same. According to the preamble of the WIPO Copyright Treaty, 3 it expresses desirability of the contracting parties to develop and maintain the protection of literary and artistic works including computer programs of the authors in a manner as effective and uniform as possible. Under Article 4 of the same, parties have agreed to protect Computer Programs as literary work within the meaning of Article 2 of the Berne Convention. Article 11 explains obligations concerning Technological Measures. Statements of the same Treaty express the desire of the parties agreed to extend Copyright protection to work in digital form in an electronic medium. The European Union adopted a Directive on the legal protection of Database to deal with the structure of the databases giving sui generis right (right of unique nature) for the same.

Accordingly, countries have introduced legislation fulfilling their international obligation under the said treaties or agreements. These developments are commendable, and it encourages creators and inventors in the ICT industry.

The UK, the USA, Australia, Singapore and India have introduced Intellectual Property Laws follow the said international conventions and treaties relevant to IPR involved in electronic transactions. Development of IP Law will play a vital role to protect authors, inventors, owners, who are involved in Intellectual Property. It encourages the man to create, or invent new product or process to the world. The increment of disputes in the ICT industry is also no second to the growth of the same industry. Where electronic records are communicating it may contain information protected under Intellectual Property laws, e.g. software vendor sends a copyrighted or patented software to a purchaser using the Internet allowing him to use, sublet, rivers engineering as conditions of a licensing agreement signed between them for a while under distant selling.

In the United Kingdom, Copyright, Designs, and Patent Act 1988, (CDPA) has identified IPR. Accordingly, the computer program must be `original’ and `recorded’ to obtain such right. However, it is not `novel’ or unique in some respect. Design Right (Semiconductor Topographies) Regulations 1989 in the United Kingdom brought chip designs (patterns or arrangement for patterns) within design right. In Canter Fitzgerald International v. Tradition (U.K.) Ltd 4 , Mars UK Ltd. vs Teknowledge Ltd 5 , and R.v. Department of Health. Ex-parte Source Informatics 6 it was discussed the development of IPR like confidential information, business know-how, and trade secret in the United Kingdom.

The European Parliament also has introduced several Directives relevant to IPR such as Software Directive (1991), Directive on Electronic Commerce 7 , Directive on the harmonisation of certain aspects of copyright and related rights in the information society, 8 proposed Directive on the patentability of computer-implemented inventions 9 and Common Position concerning the processing of personal data and the Protection of privacy in the electronic communications sector. 10 Article 10 of the Convention on Cyber-crime (Budapest) also apply to the European Union and the countries including Sri Lanka, accepted the same Convention.

In the United States, Code Title 15c. 22 Trade Marks, Code Title 17 Copyrights, Section 2319 of Code Title 18 Crimes and Criminal Procedure and Code Title 35 Patents are some of the legislation introduced to protect IPR for computer programs to fulfil their international obligations. In Apple Computer vs Franklin Computer Corporation 11 and Computer Associates vs Altai, 12 it wasidentified the position regarding non-literal copying of computer program in the U.S.

In Australia, the Copyright Act 1968 (Commonwealth) the Patent Act 1990, Trade Marks Act 1995, Designs Act 2003 and the Plant Breeder’s Rights Act 1994 are the relevant Acts securing IPR. The rights governed by the same law are relevant to digital products also, and Australia Copyright Council administers copyright. To implement the World Trade Organisation Agreement on TRIPS focusing on the health sector of the country, certain amendments have been introduced amending the said Acts by Intellectual Property Law Amendment Act 13 .

IP Right (Copyright, Trademarks, Patents and Trade Secrets Rights) will impose in Cyberspace according to the law of Singapore. 14 Patent Act 1977, Copyright Act (amendment) 1987, Trade Marks Act No.46 of 1998 (revised Edition 2005) are the primary legislation secured IP Rights in Singapore.

Section 2(ffc) of the Indian Copyright Act 1957 as amended in 1999 identifies copyright for Computer Programs. Further, provisions under Copyright Act 1968 in Australia and Australian Broadcasting Services Act 1992 explain Intellectual Property rights relevant to computer programs 15 .

Position in Sri Lanka 16

The legislature in Sri Lanka has introduced new Intellectual Property Act No.36 of 2003 including areas relevant to Information and Communication Technology industry fulfilling the country obligations under the international treaties and agreements. The new Act defines Intellectual Property rights e.g. Copyright, Patent, Industrial, Trade Marks, unfair competition, undisclosed information, Layout designs for Integrated Circuits etc relating to computer programmes and their related issues like procedures on registration and remedies upon infringement of such rights.

Copyright of Computer Programmes.

A computer program is the result of a modest amount of skill, labour, or judgement. However, spending money for labour for creation is not solely enough to obtain a copyright, 17 and it shall originate from the author. 18 Courts expect creative achievement exceeding the average skills used in the development of computer programs 19 (source code and object code are the two types of codes involved in computer programs 20 ) for consideration of copyright. 21 See analysis in Sudwestdeutsche Inkasse KG vs.Bappert und Burker Computer GmbH 22 .  Source code is defined as a version of a programme, using alphanumeric symbols. Computers cannot process the source code directly without translating the same into a machine-readable form (object code) after compiling with a particular computer language compiler. Object code comprises a long series of ones and zeroes (on and off switch mode) instructions to process data. See page 40 of Computer Law (Chris Reed) and Sega Enterprises Ltd. Vs. Richards 23 and Apple Computer Inc vs.Computer Edge Pvt Ltd 24.

"Computer” and “Computer Programme” are defined in Section 5 of the same Act for the first time under Intellectual Property Law in Sri Lanka. Accordingly, `Computer’ means an electronic or similar device having information processing capabilities; `Computer programme’ is a set of instructions expressed in words, codes, schemes or in any other form, which is capable, when incorporated in a medium that the computer can read, of causing a computer to perform or achieve a particular task of the result. However, this interpretation can bring unnecessary disputes in future. Present Intellectual Property Act No.36 of 2006 in Sri Lanka covers `original intellectual creations in literary, artistic, and `scientific domain’ under copyright.

Any work to be protected as literary, artistic, or scientific domain, Intellectual Property Act in Sri Lanka requires them to be original Intellectual creation. In Wijesinghe Mahanamahewa and another vs. Austin Canter 25 , it was held that whether a re-production is substantial shall be decided by its quality rather than its quantity and the reproduction of a part, which by itself has no originality, will not be a substantial part of the copyright and therefore will not be protected.

Computer programmes are protected works by copyright as a literary, artistic, or scientific domain under Section 6(1) of the Intellectual Property Act.  Other Intellectual Property rights protected under the same Act are patent, protection of trademarks, layout, design, confidential rights, and unfair competition. Further, offences upon violations of the same rights and remedies against such infringements have been explained in the Act.

Copyright for Databases

Collection of works and collection of mere data (databases) also be protected as Derivative works under Section 7(1) (b) of the Act, whether they are in machine-readable, or another form, provided that such collections are original because of the selection, coordination, or arrangement of their contents.

In Macmillan & Co.Ltd vs.K & J Cooper 26it was decided that the final effect of a compilation might be original even though many compilations have nothing original in their parts. On the other hand, linking several programs together also cannot be considered as an original compilation. See Information Processing Systems Ltd vs.Daman Ltd 27 .

Possible copyright violation in the ICT environment

In John Richardson Computers Ltd vs. Flanders 28 the issue to decide was whether a substantial part has been copied or not.

In Ibcos Computers Ltd v Barclays Mercantile Highland Finance Ltd 29 matter brought before courts to decide whether the defendant who had written particular software for the owner of the same has sold competing software to another party violating an agreement he had with the owner not to sell such software for the duration of two years.
Jacob J stated (at 289) `logically, therefore, the claim in copyright calls to be tested in the following order;

  1. What are the work or works in which the plaintiff claims copyright?
  2. Is each such work `original’?
  3. Was there copying from the work?
  4. If there was copying, has a substantial part of that work been reproduced?’

Further, it was mentioned that considerable steps are frequently taken to preserve the confidentiality of the source code. This suggests a doubt that taken by itself it is the subject of copyright.

See Cantor Fitzgerald International v. Tradition (UK) Ltd30 , Mars UK Ltd. vs Teknowledge Ltd 31 , and R.v. Department of Health. Ex-parte Source Informatics 32 for the development of intellectual property rights like confidential information, business know-how, and trade secret in the United Kingdom.

Rights under copyright

Owner of copyright has the exclusive Economic rights specified under section 9 of the Act 33. The author of a work has Moral Rights defined in the provisions under section 10 (a)-(c) of the Act independent to his economic rights even where he is no longer the owner of such economic rights. 34 Moral rights cannot be transmissible but may pass under a will or operation of law. Further, the author may waive any such moral rights in writing and specifying clearly. After his death, the successor of such right is also entitled to such waiver.

Exceptions to copyright 35

Computer software includes many items like manuals electronically or otherwise, electromagnetic tapes, Compact discs required for the operation of the computer.  Such manuals or printouts may be literary work under section 6(1) of the Act. However, algorithms frequently used in computer programming are not capable of copyright protection since it will be interpreted as `idea of algorithms’ under section 8(a) of the Act.

Economic Rights expressed in Section 9(1) will not apply for `fair use’ of a work. Act of fair use defines in section 12 of the Act. See the judgement in Lalitha Sarachchandra vs.Upul Shantha Sannasgala 36 . The private reproduction of a published work in a single copy shall be permitted without the authorisation of the owner of the copyright, where the reproduction is made by a physical person from a lawful copy of such work exclusively for his purposes. This permission has not been extended under section 12(2) of the Act to the reproduction of the whole or a substantial part of a database 37 , of a computer program, except as provided in subsection 12(7) of any work, in case the reproduction would conflict with a normal exploitation of the work or would otherwise unreasonably prejudice the legitimate interests of the owner of the copyright.

Duration of copyright is specified in section 13 of the Act and the ownership of economic rights explained in section 14 of the same Act. Presumption of authorship, in absence of contrary and assignment of licence of author’s rights, explained in section 15 and section 16 of the Act, respectively.

Remedy for violation of copyright

Any person who infringes or is about to infringe any rights protected (aforesaid) may be prohibited by way of injunction and be liable to damages 38 under Section 22(1) of the Act.

Section 22(2) of the Act explains the jurisdiction of the Court. Further, a person aggrieved by infringement or affected in any other manner of any of his rights (aforesaid) may apply to the Director-General of Intellectual Property of Sri Lanka for determination and such decision shall be binding on the parties 39 subject to making an appeal to the Court by any aggrieved party from the same determination 40 .

Patent Right

Part IV of the Intellectual Property Act No.36 of 2003 deals with Patent rights and Chapter XI defines `Patent’. An invention is patentable if it is new, involves an inventive step, and is industrially applicable according to section 63 of the Act. Section 62 defines "invention” as an idea of an inventor which permits in practice about the solution to a specific problem in the field of technology. The invention may be or may relate to, a product or process 41 .

In UK Patent Act 1977 program for the computer has excluded from the definition of inventions 42 . Computer programs were rejected considering they merely implemented mathematical methods. See section 62(3)(a) of the Intellectual Property Act in Sri Lanka, Section 1(2) of Patents Act in the U.K., Article 52(2) of European Patent Convention 43 .

However, it was considered In re Merill Lynch, 44 and decided that any Software related innovation performing a function could be carried out within the human brain (even though the function would not reflect the normal process of human reasoning) would not be patentable. See Wang 45 , Raytheon 46 and Fujitsu Ltd’s application. 47 In Australia, the Federal Court had decided that a computer program producing an improved curve image was invention was commercially useful  and patentable 48

In Viacom, 49 the patent granted for computer-related invention enhancing of digitised images and decided that there was a unique effect in it. Technical Board of Appeal held that the requirement was that the mathematical method should be applied within a specific technical context, which, being capable of industrial application, would qualify for patent protection. When there is no technical effect, and there is, only a scheme for performing a mental act, a computer program would not be patentable. 50

See Software Patents after Fujitsu by Prof.Ian Lloyd for complete analysis on the said issue 51 . In Japan, the software is directly patentable.

The position under existing Intellectual Property Act No.26 of 2003 in Sri Lanka is that there is no exclusion of programs for computers from patent rights. Intellectual Property rights in the ICT industry especially, relevant to computer programs operate as a global phenomenon and do not limit to a country or region. Online contracts and software industry will not be restricted to any particular geographical area since cross border issues are always involved in it. However major problem arises with Patenting of inventions in the ICT industry since patent protection provides only territorially through their effect and operation is international.

Requirements of Application and procedure for grant of a Patent specified under Chapter XIII of the Act. Other common areas relevant to patent such as duration of Patent (chapter XIV), Rights of owner of Patent (Chapter XV), Assignment, and Transmission of Patent Applications (Chapter XVI) Licence Contract (Chapter XVII), Surrender, and Nullity of Patent (Chapter XVIII) are specified in the same Part IV of the Intellectual Property Act.

As far as patent right and trademarks are, concerned almost similar systems have been adopted by countries to manage those rights. Registration of patent right and trademark is mandatory and procedure of registration and dispute resolution mechanism upon infringement of such rights are clear under the said jurisdictions.

Also see the decision of the Supreme Court cases, Dr K.Abeyratne, Centre for Policy Alternatives (Guarantee) Ltd and Nihal Fernando are Petitioners reported in (2003) BLR 52 , on the decision of constitutionality of Clauses 62, 83, 84, 90, 91, 92, 93 and 94 of the bill of the present Intellectual Property Act No.36 of 2003 in Sri Lanka. See also Parliament debate 53 upon amendments brought by the legislature of our country after the said Supreme Court decision.

Trade Marks and Trade Names

Applicability of provisions under this Act for Trade Marks and Trade Names for Computer hardware has no distinction from the applicability of the same for other goods or services. The rights of a registered owner of a Trade Mark are exclusive but not absolute.

Definition for `certified mark’, `collective mark’, `enterprise’, `false trade description’ and so on explained in section 101 of the Intellectual Property Act.

Admissibility of Marks is explained in section 102 and 103 of the Act. The Director-General will not register a mark likely to mislead the public under section 104 of the Act. See James Finley vs. Stassen Exports Ltd 54 .

Requirements of Application and Procedure for Registration of a mark, duration of Registration of Mark, Rights of the Registered owner of a Mark, Assignment and Transmission of Applications and Registration of Marks, Licence Contract, Renunciation and Nullity of Registration of a Mark, Removal of Mark, Collective Marks, Certification Marks and Trade Names are specified in Part V of the Intellectual Property Act in Sri Lanka.

Section 121 of the Act explains that the registered owner of a mark shall have exclusive rights with the mark to use the mark, to assign or transmit the registration mark and to conclude licence contracts. Unauthorised use of the mark misleading the public explained in the same section is an offence under this Act.

As far as patent and trademark rights are concerned, almost similar systems have been adopted by countries to manage those rights. Registration of patent right and trademark is mandatory, and procedure of registration and dispute resolution mechanism upon infringement of such rights are clear under the said jurisdictions. Applicability of provisions under this Act for trademarks and trade names for computer hardware has no distinction from the applicability of the same for other goods or services. The rights of a registered owner of a trademark are exclusive but not absolute. 55

Layout Designs of Integrated Circuits.

Part VII of the Intellectual Property Act No.36 of 2003 in Sri Lanka defines Layout Designs of Integrated Circuits, right to protection etc. under the same. According to section 147, it requires `originality’ of layout design to protect the same.

Layout design of computer programme.

Section 146 of the Act states right to protection of such right shall belong to the creator or creators jointly. Further, it belongs to the employer or the person who commissioned the work, as the case may be. However, such creator would be entitled to such protection if only such layout is original. Original means that it neither has been produced by the mere reproduction of another layout design nor any substantial part thereof. Further, it shall be the result of an intellectual effort of a creator and cannot be commonplace among creators or layout designs and manufacturers of integrated circuits at the time of the creation of such layout design. If a layout design consists of a combination of elements and interconnections that are commonplace among creators of layout designs or manufacturers of integrated circuits, the same shall be protected only if the combination, taken as a whole, meets the conditions aforesaid. 56

Scope of such protection

This is defined under section 148(1) of the Act and such protection shall not extend to the matters explained under section 148(2) of the same Act. E.g., reproduction for evaluation, analysis, research or non-profit teaching, education or matters explained regarding incorporated integrated circuit of a layout-design under the same subsection. Protection will be not available under the same Part of the Act for any layout design, which has been commercially exploited in or outside Sri Lanka for more than two years before the commencement of the Act. Commencement and Duration of the right are explained under section 149 of the Act. Registration of layout design is explained in section 151 and the requirements of the Application are explained in section 150 of the same Act. Section 152 explains the right to transfer and rectification of the Register and section 153 provides provisions for changes in the ownership and contractual licenses. Cancellation of a Registration of a layout design explains in section 154 of the Act. Further, infringement of the performance of any act contravenes to section 148 and injunctions as remedial issues explained according to section 156 of the Act.

Interpretation of `Integrated circuits’ given under section 159 of the Act, `a product, in its final form of an intermediated form, in which the elements, at least one of which is an active element, and some or all of the interconnections are integrally formed in or on a piece of material and which is intended to perform an electronic function.’ Further, the same section defines `layout design’ and further states that layout design is synonymous with topography.

Design Right (Semiconductor Topographies) Regulations 1989 in the United Kingdom brought chip designs (patterns or arrangement for patterns) within design right.

Unfair Competition and undisclosed information.

Section 160 (1)(a) of the Act states that any act or practice carried out or engaged in, in the course of industrial or commercial activities, that is contrary to honest practices shall constitute an act of unfair competition. This section provides a broad view for the subject matter and several decided cases have established legal principles applicable under the same section. Similar provisions were under section 142 of the earlier Code of Intellectual Property Act No.52 of 1979 in Sri Lanka 57.

Infringement of trademarks in Cyberspace.

Domain Names will function as a trade or service mark within the definition of the Act. Internet users can be misled by functions of similar domain names with a hyphen, space etc., in between genuine domain name. As far as section 121 of the Act is concerned, the provisions of the same can be applied for trademarks in Cyberspace as well.

Author of the software introduces Meta Tags when he writes the code for a page. The operator will use Meta tags to control the indexing of the website by the search engine. 58 Meta Tags may be a trademark. See Playboy Enterprises Pvt vs.Calvin Designer Laber 59

Purpose of Uniform Domain Name Dispute Resolution Policy (approved on 24.10.1999) is explained as "policies have been adopted by the Internet Corporation for Assigned Names and Numbers (ICANN), is incorporated by reference into one's Registration Agreement, and sets forth the terms and conditions in connection with a dispute between such person and any party other than the registrar over the registration and use of an Internet domain name registered by him”.

Upon applying to register a domain name or renewal of such name applicant represent and warrant to the registrar that the statement made is completed and accurate, such name will not infringe upon or otherwise violate the rights of any third party, the applicant is not registering the domain name for an unlawful purpose and such name will not be used by the applicant in violation of any applicable laws or regulations, knowingly 60 .

However, Domain Name Registry is not obliged to investigate whether a domain name applied would infringe rights of a third party. Domain Name Registry would only ask for a letter from the organisation requesting the domain to confirm that they have a right to the name. However, this can be a challenge.

There are some dispute resolution mechanisms available relevant to domain names disputes. Eg. ICANN, WIPO.

Infringement of Intellectual Property Rights under Act No.36 of 2003 by Internet Browsing.        

To gain access to a website the web user has to enter the web address through a browser (programme to the view of a formatted web document) and that brings up the page requested and display on the screen.

Whenever a user opens a web page, his computer will operate by temporarily storing (temporary copying) the contents of that page in its Random Access Memory (RAM) automatically (facilitate browsing) to display the page on the screen. Even such temporary copy erases at switching off the computer, if this is the unauthorised copying, it may be an infringement of author’s exclusive right explained under copyright and other rights relating to unfair competition and undisclosed information or be covered under implied licence since a RAM copy would amount to a copy under the meaning of the same Act.

Downloading of licensed images from the Internet, clip-art provided with Software e.g. front pages of Adobe, Microsoft etc., and free images of the Internet will not be a violation of copyright. Taking images from a third party and creating a new image may be a violation of copyright.

Further, at the time of browsing of such webpage, it is displayed on the computer screen without authorisation of the owner of the copyright and it would amount to an act of communication to the public under section 9(1)(k) read with section 5 of the Act and violation of his economic rights guaranteed under the copyright of the same Act.

The same violation would cause during Caching. Caching is a high-speed process of storage mechanism in the user’s computer and on servers (peripherals) when the user surf web. From this Caching memory, the browser can retrieve the visited web pages quickly without fetching the same from the original website. When the user regularly visits some particular websites, this is very useful to the browser preventing unnecessary traffic and reducing the waste of time and money. Like in browsing, storing of contents of web pages in caching may be unauthorised copying and an infringement of the author’s exclusive right under the meaning of the Act.

Linking of web pages happen when the user surfing on the webpage and by clicking it will link with another location on the website or a location on another website having similar data/connection automatically. Hyper Linking allows one website to link with another webpage and to provide access for the same. A party surfing on a particular webpage allows information to be hyperlinked or hypertext reference linked within the same website or different websites. When the user logs into the creator’s website, the user’s browser retrieves the data from copyright owner’s Uniform Recourse Locator that commonly has known a URL, which points to the location in the browser. There are two types of linking. They are surface-linking and deep linking. Surface-linking links home (main) page of one website with a home page of another website. Under deep linking, the browser will direct to an internal part of a certain webpage bypassing the home page of the web user, avoiding information of the Home page and advertisements of the web site and so on. As a result, the subsequent web will lose advertisers who contribute to develop the same site, avoid opportunities to obtain consent to disclaim from the web user and finally the quality of the same website would be endangered. This may be a violation of Intellectual Property Rights relating to `unfair competition’ and `undisclosed information’ of the victim under section 160 of the Intellectual Property Act. See Ticketmaster Corp. vs. Microsoft 61

When a user visit website that website fetches content from another into a window and the same content appears on the original website. This is called `framing’.  User may be confused about the website he logs into first and might not find out the details on different websites especially, by framing. In this event, URL, which directs to current location remains the same. Netscape introduced this in version 2. In Framing object code of the original web page will be reproduced and add to create the new frame, and if the author of the website did not create or permit to create such frames it may be unauthorised copying and caused unfair competition and undisclosed information, an infringement of copyright, rights relating to unfair competition and undisclosed information.

During transmitting materials on the web, the server reproduces materials in the file-sharing system. Considering the provisions under the Act this may be an unauthorised copy. Dr Tissa Hemaratne 62 has expressed his view on this peer-to-peer (P2P) files sharing mechanism. There are no provisions relating to the liability of service providers in Sri Lankan copyright law unlike in some other jurisdictions. Further, it could argue that even though the service provider would not be liable for direct infringement of copyright, he would be liable for indirect infringement, if he knew or should have known that he facilitated the infringement of copyright materials.

If downloading of contents to internet temporary files, caching, deep linking, framing, and file-sharing will not be offences if the same activities took place legitimately under section 12(7) of the Act. Otherwise, violator infringes copyright secured under the Act. The Internet allows Linking and framing under normal circumstances unless prohibited expressly. Spamming, Junk mail, Mouse Trapping, Sniffing and Cookies, Phishing etc. are also IPR violation under section 160 of the Act

It is not easy to prevent users from downloading and copying creators’ web pages and contents by a person browsing the web pages. Author or owner is well aware of this matter considering the nature of technicalities and mechanism of downloading web pages. A person may be not liable for copyright violation or other violations of rights like unfair competition and undisclosed information if there is no indication on the website itself that the same contents are protected under the copyright or clear warning expressing the effect of the prohibition against unauthorised downloading. Otherwise, the creator of the webpage can insert special software preventing linking or framing illegitimately.

This will be a violation of rights relating to undisclosed information under the Act as well as an offence under section 4 of the Computer Crime Act in Sri Lanka.

Intellectual Property Rights violation under cloud computing

When the cloud magic is enjoyed, the last thought anyone would want is to be subjected to the vulnerabilities caused by malicious actors in the cloud. According to Verizon's 2014 Data Breach Investigations Report 63 , more than a quarter of cybercriminals are intellectual property spies. However, considering the operation of cloud computing, the cloud may prove safer than traditional network servers. With appropriate safeguards, IP data stored in the cloud will be safer than on any single physical network 64 . The cloud provides ways not only to share resources but also facilitates to protect Intellectual Property rights.  

In infringement of I.P. rights under cloud computing, the main challenge posed is the difficulty in investigating physical hardware and process used by cloud resources. Cloud computing services are scattered nationwide or worldwide, and CSPs tend to be somewhat secretive about the physical locations and technical details of their service centres for security purposes. As a result, there may be no public access methods for investigating the process and resources of cloud platforms. 65        

As far as the litigation against patent infringement of cloud service providers is concerned, there may be geographical limitations and uncertainty regarding licensing rights. Borderless nature of cloud computing and maintenance of the different level of laws and policies relating to patents in different jurisdictions will be main barriers for dispute resolution. Under these circumstances, considering the rapid growth of the ICT industry, some Cloud Computing Services do not apply for a patent of their services since it is profitable to keep their technology as a secret.

Cloud-based distribution services 66

Protection of copyright, layout design right, trademark, trade secrets, against unfair competition etc. are also applied for cloud computing. Terms and conditions of the contract between the cloud service provider and the user have to be considered and interpreted to decide the liability of infringement of such I.P. rights. It is unclear what responsibility cloud services (intermediaries) have in the supply of copyright-protected material.

According to Copyright Acts or Intellectual Property Acts, RAM reproductions are considered as copies of the copyrighted work of the owner while precise RAM reproductions that exist for only a period of transitory duration are not considered as copies. Under these circumstances, what is the position of Cablevision when in buffering the data? The RS-DVR system made transmissions to only the subscriber at a time, using a copy made at the request of that subscriber. Some decisions in the U.S. declared that such transmission was not a performance to the public, and there was no infringement of the right of public performance of the copyright owner. 67

In American Broadcasting Inc et al. vs Aereo Inc 68 , a Supreme Court case of the U.S., the main issue involved in the case to decide was whether a cloud service transmitting broadcast television to internet users infringes copyright law in the U.S. or not. Aereo offered a service enabling people to watch broadcast television programs on a digital device (personal computer, smartphone, tablet etc.) claiming that copyright royalties do not apply on its service since it was functionally equivalent to a digital video recorder and only a mere equipment provider that can be remotely controlled by the user. Aereo based its argument citing Sony Betamax case 1984 and the `fair use' doctrine of U.S. that it was not liable to pay copyright fees to the broadcasters since its users were entitled to make copies for private use. The Aereo's position was that each transmission was a private performance. On the other hand, broadcasters took up the position that Aereo was transmitting very high volumes of a T.V. program at any one point in time and not possible to say that the transmissions were individual and private performance and it was engaged in public performance. According to the ruling on 25th June 2014 based on the majority of judges' decision, Aereo has infringed exclusive right by selling its subscribers a technologically sophisticated service allowing its users to watch television programs over the Internet at about the same time as the programs are broadcast over the air that amounts to public performance. 69 However, no legal guidelines were provided for technology by the court on this issue. 70 As a result of this judgement, cloud computing service providers may be liable for a copyright fee if multiple users use the same program.

There is a controversy over the issue whether the mere making of a file available in a cloud for distribution through P2P file-sharing network or otherwise constitutes a violation of copyright or not.

In Japan, Internet service providers are not generally liable for any damages caused by any infringement caused by the transmission of information via the Internet unless (a)(i) it is aware of the infringement or (ii) it is aware of the information and should have known of the infringement and (b) it could technically prevent the transmission of information. 71

In Google case, soon after launching Google, Buzz met criticisms regarding its protection of users' private data. The complaint filed by the Electronic Privacy Information Centre (EPIC) to the U.S. Federal Trade Commission (FTC) in particular, the way that Buzz made public Gmail data on a user’s profile without their consent. Australia has looked into this issue. The Australian Law Reform Commission (ALRC) has looked into the collection of private data and notification of such collection. This has directly aimed at preventing the kind of problems raised by the Google Buzz incident.

Conduct and participation of stakeholders of a cloud can be unfair competition, violation of I.P. rights of other parties. According to Prof. Ian Walden 72 "Competition could be distorted when a standard is developed by consortia or for a without the participation of all the interested parties…The standard-setting process may create barriers to entry in respect of excluded firms. Restriction of data portability within cloud computing services may be a barrier to entry facilitated by a firm to enhance network effects and achieve dominance; although such practices only raise competition law concerns once the firm is dominant".

Remedies Available against IP Rights violation in cloud computing

In Australia, under Copyright Amendment (Online Infringement) Act 2015, section 115A inserted after section 115 of Copyright Act 1968, it provides provisions for the owner of the copyright to obtain Injunctions against carriage service providers providing access to online locations outside Australia if the Court is satisfied that (a)  a carriage service provider provides access to an online location outside Australia; and the online location infringes, or facilitates an infringement of, the copyright; and the primary purpose of the online location is to infringe, or to facilitate the infringement of, copyright (whether or not in Australia) 73 . Similar remedy has been given to IP owners under Article 8(3) of the Directive 2001/29/EC and Article 11 of the Enforcement Directive 74 .

In L'Oreal 75 case in relation with trademarks rights infringement of L'Oreal, the Court of Justice of European Union directed the Member States to ensure national courts can order a website operator to take measures to prevent further infringements of that nature. However, eBay was not liable for the infringement of trademark violation of L'Oreal in the present case. The same decision can be applied as guidance to prevent infringement of I.P. Rights in future.

In E.U., Users' confidential data is disclosed to a service provider only if all of the following three conditions are satisfied simultaneously:
1) The service provider knows where the users' confidential data is located in the cloud computing systems
2) The service provider has the privilege to access and collect the users' confidential data in the cloud computing systems.
3) The service provider can understand the meaning of the users' data. 76
Further, violation of such IP right is under individual liability, or secondary liability of CSP will be decided on the liability imposed under the relevant legal system of the jurisdiction 77

Encryption of data and security solutions layered onto the cloud etc. is the key to secure cloud-based storage. Most of the I.P. Acts in the region are technically neutral, e.g., the E-Transactions Act in Sri Lanka 2006, and they recognise cryptography legally. The said I.P. Acts and laws had provided legal remedies subject to variations in different jurisdictions against infringement of a patent right, copyright, trademark, layout design, trade secrets etc.

The injunctive remedy is available as a preventive measure in most of the countries in the world. However, there is a question arise as to whether a party could obtain injunctive relief against Internet Service Provider as non-violator of I.P. rights as a preventive measure in a country like Sri Lanka?

Criminal offences involved in Intellectual Property Rights.

When there is a violation of Intellectual Property rights, Codes of IP Law in most of the countries have treated the same as local criminal offences in addition to other civil rights. Even the International Criminal Court accepts matters when States refer it to the Court or if local Courts fail to adjudicate the matter.

We can consider preamble of the Convention on Cyber-crime (Budapest) as model provisions to establish and maintain international co-corporation to handle cyber-crimes in the world and the Articles in the same provide the measures to be taken at the National level to fulfil the task.

Article 45 of the same convention states that the European Committee on Crime Problems (CDPC) shall be kept informed regarding the interpretation and application of this convention and in case of a dispute between parties as to the interpretation or application of this convention, they shall seek a settlement of the dispute through negotiation or any other peaceful means of their choice, including submission of the dispute to the CDPC, to an Arbitral Tribunal (binding upon the parties) or the International Court of Justice as agreed by the parties.

Most of the violations under IP rights in the ICT industry take place as international criminal offences.



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2 Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), Article 36

3 World Intellectual Property Organisation (WIPO) Copyright Treaty adopted by the Diplomatic
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4 [1999] The Times, 19 May 1999

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6 [2000] 1 All ER 786

7  2000/31/EC

8  2001/29/EC

9 VICOM [1987] 2 EPOR 74

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12 982 F.2d 693 (2nd Cir.1992)

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16 Prior to 2003 - British Inventors Ordinance 1888, Designs Ordinance 1904, Patents Ordinance 1906, Trade Marks Ordinance 1925 and Copyright Act of 1911 enacted and later, following Model Law of World Intellectual Property Organisation (WIPO), our legislature introduced `The Code of Intellectual Property Act’ No.52 of 1979.

17 Feist Publications Inc vs Rural Telephone Service Co. Inc [1991] 111 S Ct 1282 (US judgement)

18 University of London Press Ltd. vs University Tutorial Press Ltd [1916] 2 Ch 601

19 SudwestdeutscheInkasse KG vs.Bappert und Burker Computer GmbH [1985] Case 5483, BGHZ94, 276 (a decided case in Germany)

20 Prof. Reed Chris, Computer Law (5th edn), 40

21 < -Article of the researcher> accessed 12 August 2020

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23 (1983) FSR 73.

24 (1984) FSR 481.

25 (1986) 2 SLLR 154, (1986) C.A.L.R.Vol.1, Page 620,

26 (1923) 40 TLR 186

27 (1992) FSR 171

28 (1993) FSR 497

29  (1994) FSR 275

30  (1999) The Times, 19 May 1999.

31  (2000) FSR 138

32  (2000) 1 All ER 786

33  Judgement in Joe Abeywickrema and Another vs.Kapila Tissa Kumara Kotalawala Case No.15/2003(3) decided on 12.02.2004 by the High Court (Civil Jurisdiction), Colombo

34  Sections 10(2) and (3) of the Intellectual Property Act No.36 of 2003.

35 Copyright shall not be extended to any idea, procedure, system, method of operation, concept, principle, discovery or mere data, even if expressed, described, explained, illustrates or embodied in a work, any official text of a legislative, administrative or legal nature, as well as any official translation thereof, to news of the day published, broadcast or publicly communicated by any other means under section 8 of the Act.

36 Case No.05/2004(3) decided on 1.7.2004 by the High Court (Civil Jurisdiction), Colombo.

7 Section 12(2)(c ) of the Intellectual Property Act No.36 of 2003.

38 See William vs.Settle (1960) 1 WLR 1072            

39 Section 22(3) of the Intellectual Property Act No.36 of 2003.

40 Section 22(4) of the Intellectual Property Act No.36 of 2003.

41 According to section 62(2) of the Act an invention may be, or may relate to, a product or process and section 61(1) states that `invention’ means an idea of an inventor which permits in practice the solution to a specific problem in the field of technology. This is subject to exceptions specify in section 62(3) (a)-(f) of the same Act.

42 Fujitsu Ltd's Application (1996) RPC 511

43 Windsurfing vs.Tabor Marine ; PLG Research Ltd. Ardon Industernational Ltd

44 [1989] RPC 561

45 [1991] RPC 463

46 [1993] RPC 427

47 [1996] RPC 511

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56 Section 147 of the Intellectual Property Act No.36 of 2003.

57 Sumeet Research and Holdings Ltd. Vs. Elite Radio & Engineering C.Ltd

59 44 USP Q 2nd (BNA) 1156 (N.D.Cal.1997)

60 Rules are available at‑drp/udrp-rules-24oct99.htm

61 CV 97-3055 RAP

62 Seminar Paper on `Intellectual Property Rights in the IT Environment’ presented for the National Information Technology Law Conference 2006 by Dr.Tissa Hemaratne, Senior Lecturer of OUSL.

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65 Caliskan Emin & Peterson Raimo, Technical Defence Methods, Tools, Techniques and effects, Peacetime Regime for State activities in cyberspace, 61-99

66 MGM Studios, Inc vs. Grokster Ltd, 545 US 913 [2005]

68 [2014] 573 U.S.431

69 Lemley, Mark, and Mark McKenna. ‘Unfair Disruption.’ Boston University Law Review, Vol. 100, No. 1, Boston     University School of Law, Jan. 2020, 71.

70 Margot Kaminski, ‘The Supreme Court’s Cloud’ Confusion < courts-cloud-computing-confusion>  accessed 21 November 2020

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72 Millard Christopher, Cloud Computing Law, Chapter 12

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74 Directive 2004/48/EC

75 L’Oreal SA and Others vs. eBay International, AG and others [2009] EWHC 1094, [2009] R.P.C. 21

76 Stephen S. Yau, et al.: Confidentiality protection in cloud computing systems    <> accessed 21 November 2020

77 E-Commerce Directive (2000/31/EC)

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