This Blog Post touches upon the subject matter of intellectual property rights and its relationship with energy laws as much as recent trends qua electric vehicles are concerned. It highlights the importance of understanding intellectual property rights to protect ideas, inventions, and designs. Unlike tangible objects, ideas do not hinder others from using them. Thus, the rationale behind intellectual property protection is to find a middle ground between a monopoly’s consumer cost and increased creativity advantages. In the context of electric vehicle manufacturing, this Blog Post highlights the need to protect intellectual property rights in the manufacturing of EVs. It explains the forms of protection, such as patents and copyright, that can be utilized. Additionally, the Blog Post underscores the importance of intellectual property rights in driving innovation and development in the EV sector by discussing the significance of battery technology patents in the EV industry and the current patent filing trends in India.
Keywords: Intellectual Property, Energy Laws, Electric Vehicles, Patent, Copyright, India.
1. Evolution of Electric Vehicles in India
Technological progress has simplified and improved people’s lives, mainly through advancements in vehicle production, structural design, and innovation. To address the harmful effects of carbon monoxide and carbon dioxide emissions from traditional vehicles, the need to adopt Electric Vehicles (“EV”) arose. These emissions harm human health and the environment due to the combustion of fossil fuels like gasoline and diesel. By transitioning to EVs, which produce zero tailpipe emissions, one can mitigate the adverse effects on the protective ozone layer, ultimately combating the urgent threat of global warming.
The introduction of EVs is not new.They have been in the market way back since 1829, but as the human population grows, so grows their penchant for innovation whichresulted in petroleum-fueled Internal Combustion Engines (ICEs) due to factors like the profusion of traditional fuel, non-awareness about environmental impacts and preference of individuals. Currently, under the aegis of National Electric Mobility Mission Plan (NEMMP), the Indian government haslaunched the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME India) scheme to stimulate the manufacturing of hybrid and electric vehicle know-how to ultimately accomplish electrification by 2030.
2. Safeguarding Intangible Rights in EVs
As we speak more of EVs, it raises a question as to how one can “protect” the “intrinsic rights” hidden in the manufacturing of these vehicles. Thus, when we say protection and intrinsic rights, we talk about protecting architectural creations and inventions of EV battery technology. The EV space is not much left behind in the trend. They are a new subject in the automobile sector and the future of the global automobile sector, which is likely to grow at a larger scale. As a result, we are likely to see more applications for filing and protecting intellectual property rights. It may be a filing for patents related to EVs, such as batteries, motors, controllers, chargers, and testing equipment for EVs.
Regarding copyrights, one can go for the protection of EV batteries’ architectural designs since the copyright’s underlying object is one of the images. So, if the original owner creates and announces his work in the form of an architectural design drawing of the EV battery, it would be considered his original work and shall be regarded as his own work and designated with the authorship of the said work. Hence, if any third party makes unauthorized use of an architectural design, the original owner/author may institute a suit for copyright infringement or seek royalties from that party as per the applicable law.
3. Patenting of EV Battery Technology
It is wellsaid by Mark Twain, “A country without a patent office and good patent laws is just a crab and can’t travel any way but sideways and backways.” A patent is anexclusive/monopolized right granted to an inventor for their invention, be it aproduct, design, invention, or process which must have some novelty, offers a new technical solution to a problem, and is a sellable product. The government grants it to advance the economy by disclosing the inventor’s invention, and in return, the inventor gets a monopolized right. It is limited toonly 20 years, subject to renewal.
A. How EV Product and Process fall under the Indian Patents Act, 1970
All the manufacturers of EVs that have patent protection and those who monopolize their invention in the form of their innovative EV product must bear the following in mind to qualify their EV product and process as “invention” under the Indian Patents Act, 1970:
i. The said EV product or process must be new, unique, or novel. In other words, it mustnot be published anywhere in the world at the time of filing the patent application.
ii. The said EV product or processmust be “…an invention that involves technical advance as compared to the existing knowledge or having economic significance or both and that makes the invention not obvious to a person skilled in the art.“ This means that a Person Having Ordinary Skills in the Art (“PHOSITA”)must not be able to reverse engineer the said product or process, duplicate it, and make it evident. This diminishes the likelihood of patentability.
iii. The said EV product must be an inventioncapable of being made or used in an industry. This means the invention cannot exist in the abstract or should be a mere prototype. It must be capable of being applied in any industry, which means that it must have practical utility in respect of patents and can reach the end users of it.
One must also remember that if anyone tries to innovate any product or process qua EVs, it must not affect human life, plants, health, or the environment. It must not be a mere arrangement or re-arrangement of machines, devices, or an independent re-assembly of previously existing parts. Otherwise, it will be disqualified from the patentability criteria as it would suffer from the bar provided underSection 3 of the Patent Act, 1970.
B. India, TRIPS Agreement, and EV Batteries
A country must beTRIPS compliant to exercise Intellectual Property (“IP”) rights over its invention. India is a signatory and a member country to the Trade-Related Aspects of Intellectual Property Right (“TRIPS”) Agreement. Due to this, the Indian IP laws must be mandatorily made compliant with the TRIPS Agreement. In other words, it is mandatory for India to follow the TRIPS Agreement’s provisions. This means that India can apply the broad IP-related provisions of the TRIPS Agreement and exercise IP rights over its inventions.
For any invention, including the present subject matter of EVs, to be covered under the purview of the TRIPS Agreement, the invention must fall within the ambit ofArticle 27 of the TRIPS Agreement, which provides as follows: “Patent shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. And patent shall be available and patent right enjoyable without discrimination as to be place of invention, the field of technology and whether products an imported or locally produced. And Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect public order or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law”. Thus, when we speak of Indian EV technologies, they include technologically advanced EV batteries. Such EV batteries can be patentable under Article 27 of the TRIPS Agreement as such batteries can be new, involve an inventive step, and be capable of industrial application. These EV batteries assist in cutting down carbon emissions significantly and provide technological advancement to the automobile sector as they enable automobiles to run on EV batteries and not on fossil fuels. However, if the EV technologies, including the EV batteries, cause serious prejudice to the environment in India, such EV technologies shall not be covered under “patentability inventions” under Article 27, and India shall not be able to exercise its IP rights over its EV sector-related inventions under the TRIPS Agreement. There are several implications associated with this scenario that could have negative consequences for India:
i. Innovation Disincentives: Patent rights provide a strong incentive for companies and individuals to innovate, as they provide a period of exclusivity during which the patent holder can commercialize their invention and recoup their investment in research and development. If India cannot exercise its IP rights over EV technologies, it might discourage Indian inventors and companies from investing in the research and development of new EV technologies in the EV sector.
ii. Loss of Competitive Advantage: IP rights also offer a competitive advantage in the global market. Without the protection of these rights, other companies in foreign countries may freely use and benefit from the EV inventions created in India without offering any compensation, thereby leading to a potential loss of revenue for the Indian EV sector.
iii. Potential for Technological Dependence: If India is unable to patent its EV technologies, it may have to rely more heavily on imported EV technologies. This could increase India’s technological dependence on foreign countries for EV technologies, which can pose economic and strategic risks.
iv. Potential Threat to Domestic Industry: Domestic EV industries could be at risk if they cannot protect their EV technologies. Foreign players with deep pockets could mimic EV technology, undersell the EV products in the market, and disrupt the domestic EV industry.
v. Reduction in Foreign Direct Investment (“FDI”): IP rights protection is a critical factor foreign investors consider when investing in a country. A weak IP rights regime can thus deter FDI in the Indian EV sector, which is often essential for developing and expanding industries like EVs.
C. The trend of Rising Patent Applications for EV Batteries
One can see thatIndia is not far behind in innovation and cutting-edge technology, along with the EV sector, for which India is a sizable future prospective market due to the quantity ofrising EV patent grants and the ever-increasing patent filing graph. Thus, the rising number of patent filings and grants are early signs of how competitive the EV innovation field will be in defending its intellectual property rights.
Thenumber of patents for EV charging stations has increased globally. Further, over the years, the popularity of EVs hasincreased the number of EV patent applications in India for lithium batteries in EVs. This is because, though India was running on crude oil,its consumption of the same was meager, and carbon emissions were also at their minimum. This is attributable to therising demand for clean transportation technology and the deterrent effect caused by a hike in petrol and diesel prices. This has inevitably led to a substantial shift in customers to EVs, creating a massive consumer market for EVs and the urgent need for EV patent filings.
Interestingly, most people mistakenly believe that one should only file for a patent when one has a fantastic new product, yet this is untrue. India is conceivably one of the very few nations where people either use innovation or “makeshift” solutions to everyday issues. Many of these ideas are patentable, but few people know this. In an ideal world, India should rank first for patent filing, notsixth as it currently does until 2021. According to the United Nations World Intellectual Property Organization (“WIPO”), thenumber of patents awarded by India increased by 50% in 2017 compared to the previous five years, continuing a pattern of sharp growth.
In India, over117,336 patent applications were still outstanding in 2020, a sharpdecrease of 23.4% from 2019. This sharp decline may be due to a variety of reasons. For one, it could be attributed to the effects of the COVID-19 pandemic, which might have led to a slowdown in research and development activities, and, consequently, a decrease in patent applications. Also, it could reflect procedural inefficiencies in the Indian Patent Office, which might be struggling with a backlog due to insufficient resources or other operational challenges.
In 2020,275,900 international patent applications were submitted through the WIPO’s Patent Cooperation Treaty (“PCT”). This illustrates the global trend of increasing innovation, as more inventors and companies are looking to protect their inventions internationally.
The only nation to have double-digit yearly growth between 2019 and 2020 wasChina (+16.1%), whereas India experienced a -6.5% fall during that time. This could highlight China’s strategic focus on fostering innovation and intellectual property rights protection as a key part of its economic development. It could also be a testament to China’s significant investment in research and development. On the other hand, the decline in India may again point toward the potential challenges in its patent application process or perhaps a broader shift in its economic and innovation activities.
Fast forward to 2022,278,100 PCT international applications were filed, a rise of 0.3% from 2021. This could suggest a gradual recovery from the potential slowdown in patenting activity due to the COVID-19 pandemic, although the growth rate appears quite modest. It might also imply that while the global innovation ecosystem is robust, the growth rate is not as high as it could be, perhaps due to persisting challenges in the global economy, uncertainties surrounding the post-pandemic effects, or other structural barriers to innovation and patenting.
In sum, the above statistics suggest that while considerable innovation is happening globally, the trends in patent applications vary significantly between countries. Addressing these disparities and challenges in the patent application process will be crucial to foster innovation and promote economic growth in the EV sector.
Undoubtedly, the EV sector holds substantial potential to revolutionize the future of mobility, driven by the continuous evolution and development of the automobile industry. This rapid advancement is fueled by the synergistic convergence of related technologies, a defining characteristic of the EV industry. This convergence, however, is anticipated to lead to a proliferation of new patents, potentially igniting a flurry of litigation, disputes, and licensing negotiations throughout the EV sector. It is, therefore, incumbent upon all stakeholders within the EV ecosystem to assertively protect and defend their intellectual property rights. However, amidst this dynamic landscape, the prevailing issue — or the “elephant in the room” — remains the requirement for backup power for EV charging stations, given India’s frequent power outages. This significant challenge underscores the need for innovative solutions to ensure the EV sector’s robust growth and its anticipated transformative impact on mobility in the coming years.
4. Copyrights for EV Battery Technology
As soon as a piece of IP is created and fixed, copyright law bestows a slew of rights on the creator of that work or anybody who derives those rights from the inventor. However, the expanding idea of “work for hire” states that unless the parties have expressly agreed differently, the “employer or another person for whom the work is generated” is considered to be the author of the work and owns all rights resulting from it.
TheCopyright Act, 1957 (“Copyright Act”) governs the laws pertaining to copyrights in India. The phrase “work for hire” is recognized by the Copyright Act and is classified into two broad categories:
i. Works produced under an apprenticeship or job contract.
ii. Works that are mainly commissioned.
The Courts showed great respect for the employee’s ownership rights during the 19th century.Until 1860, there was general agreement that the individual who created the work, even if that person is employed by someone else, is the default owner of the copyright. This is evident from the U.S. Supreme Court’s ruling inWheaton v. Peters. As a result,the acknowledgment of employer ownership began around 1860. In the first ten years of the 20th century, employers had a default right to the creative works of their employees. An understanding between the employer and the employee was required for this. The cases ofWheaton v. Peters andBoucicault v. Fox rendered it theoretically possible to ignore the traditional master-servant paradigm and allowed for the focus on the employer-employee relationship.
If it is determined that the author is an employee under the terms of the employer’s employment, the employer will hold the copyright. If the work does not fall under one of the legal classifications and is not acknowledgedas “work done for hire” in a contract, the employer will not be the copyright owner for that work.
According to the Indian laws on Copyright, the Copyright Act 1957 provides for the following as to who is the first owner of the work:
i.Section 17(b) of the Copyright Act, 1957 states that, in the absence of a written agreement between the parties, the person who requested for valuable consideration that a work be created by an author shall be the first owner of the copyright.
ii.Section 17(c) of the Copyright Act, 1957 states that, in the absence of an agreement between the parties, the employer shall be the first owner of the copyright in cases where an author creates a work while employed under a contract of service or apprenticeship.
InIndian Performing Right Society Ltd v. Eastern Indian Motion Pictures Association, the Supreme Court ruled that clauses (b) and (c) of Section 17 of the Copyright Act 1957, hold the key to resolving the dispute over whether a filmmaker can invalidate a composer’s or lyricist’s rights by hiring them. The court held that the cinematographic film becomes the first party under Section 17(b) when a music composer or lyricist accepts a cinematographic film’s payment offer. Therefore, whether the composer of the music or lyrics is engaged to write the work under a service or apprenticeship contract, the result would be the same under clause (c).
The Delhi High Court, inKhemraj Shrikrishnadass v. M/s Garg & Co., held that unless there is an explicit contract to the contrary, the copyright is often passed to the publisher when a work is completed by an author for another writer instead of remuneration.
It is up to the parties to a contract to figure out how to get out of those obligations.Freelancers are consequently regarded as the original owners of copyright in Indian law due to the lack of contractual liability. In contrast, periodicals, magazines, and newspapers are regarded as original works produced by employees while being employed under a contract of service.
Similarly, in the arena of EVs, its author or owner must be mindful of the fact that, in any architectural design of EVs batteries, if the original owner creates and announces their work in the form of an architectural design drawing of the EV batteries, they shall be the first owner. However, the same is subject to two possible scenarios underSection 17(b) and (c) of the Copyright Act, 1957, as follows:
(i) Whether such designs are requested by a person for valuable consideration; or
(ii) Was the work performed when the author/owner was employed under a contract of service or apprenticeship?
If either of the aforementioned scenarios is true, then accordingto Section 17 (b) and (c) of the Indian Copyright Act, 1957, the original author/owner shall cease to have any right over the architectural designs of the EV batteries and the person who offered a valuable consideration or an employer under whose employment such work was performed shall be considered as the first owner of the said architectural designs of the EV batteries.
Given the aforementioned discussion, it is amply clear that scientific progress has streamlined and enhanced people’s lives, and EVs are an apt living example of a present scenario where inventors have brought in vehicles that run entirely on electricity and extinguish the use of crude oil altogether while providing a viable alternative to the end consumers especially. Speaking more about EVs, it raises questions about its IP protection of architectural creations and inventions of EV battery technology. Regarding copyrights, one can go for protecting architectural designs of EV batteries. If the original owner creates and announces his work in the form of architectural design drawings of the battery, it would be considered his original work. It shall be regarded as his own work and would be designated with the authorship of the said work provided the said work is not performed either: (i) under the request of a person for a valuable considerationunder Section 17(b) of Copyright Act, 1957; or (ii) while being employed under a contract of service or apprenticeshipunder Section 17(c) of Copyright Act, 1957.
So far as the patentability of EVs is concerned, the inventor of the EVs must bear in mind that their invention must not hitby Section 3 of the Indian Patents Act, 1970, as there is a thin line between mere arrangement or re-arrangement of existing technology and to prove technological advancement in such an arrangement when it comes to patentability.
Intellectual property rights shall be crucial in determining the future of the Indian automobile industry and ensuring its survival to protect its IP. Manufacturers and inventors will likely concentrate on developing, designing, and producing goods that offer them a competitive edge over other market participants. Patents are likely to serve as a tool to aid in protecting their invention and contribution. Eventually, the entire system will contribute to the push for a more dynamic market structure in the EV transportation industry.
India is on the verge of becoming a leading manufacturer of EVs soon. In that attempt, every inventor/author/trademark owner must bear in mind that whatever IP rights they hold must not be assigned altogether but be licensed effectively to a third party to maintain one’s supremacy over their own work and to avoid the counterfeit and reverse engineering of the work. Moreover, every invention must pass the requirements underSection 3 of the Indian Patent Act, 1970. In other words, inventors must work independently per se and not depend on any other dynamics, as failure to do so would disqualify their inventions from patentability. In case of such a disqualification, the inventors would inevitably have to clarify this in their claims section while filing their application for patentability. Therefore, in the chase of winning a race, the prize shall be given to the one who first applies for the invention’s patentability.
The contents of this article/manuscript do not intend to infringe any of the Intellectual Property Rights as contained in the works as specified in the links attached in this article.
About the Author
Mr. Pranav Gupta is a former Judicial Law Clerk to Justice Sanjay Kishan Kaul. He has been a practicing Advocate for the past five years in the area of Intellectual Property and has completed his LL.M. in Intellectual Property from the New York University (NYU). His office is located at Chamber-412, Lawyer’s Chamber Block-1, Delhi High Court, New Delhi-110003.
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Preferred Method of Citation
Pranav Gupta, “Driving towards Innovation: The Interplay of Electric Vehicles and Intellectual Property” (IJPIEL, 3 July 2023)