Decriminalisation of Intellectual Property Laws: The Effects and Defects of the Jan Vishwas Act, 2023

Introduction

Ease of doing business, as a yardstick, has become quintessential for attracting foreign investments.¹ However, lethargic legal machinery coupled with hefty regulatory compliances have been contributed in deterring such investments. Under existing Indian law, even after enormous expenditure on compliances and risk management, a company may find itself charged with not only civil liabilities, but criminal punishment too.

In such cases, incurring financial losses and harm to reputation and goodwill becomes inevitable. Thus, in order to deal with the aforementioned menace and create a business conducive environment, the Government enacted the Jan Vishwas (Amendment of Provisions) Act, 2023 (JV Act)². The JV Act aims to decriminalise and rationalise offences in order to promote ease of living and doing business. Among a gamut of legislations, it also amends the Intellectual Property (IP) Acts to a considerable extent; which shall be the primary focus of this essay.

This essay shall firstly explore as to whether we should have criminal offences in the IP Acts in the first place. Secondly, the amendments brought in by the JV Act in the four major IP Acts shall be briefly explained. Thirdly, an in-depth analysis of the key changes made shall follow. Fourthly, it shall critically analyse the shortcomings and the missed opportunities in enacting constructive reforms. Lastly, the prospective changes which the Government can incorporate through the future JV Act shall be discussed.

Why criminalise IP at all?

Generally, the criminalisation of an Act or omission happens in two scenarios. First, social norms consider a conduct to be against the whole society, necessitating severer punishment than just reparations. Such social norms originate from cultural and historical factors.³ For example, the Bible says “thou shall not steal”⁴ and thus, most Christian states once punished theft with the death penalty; which has now been diluted to imprisonment.⁵ Similarly, in Islam, the hands of the convict were cut off if theft was proved to be committed, something which has been followed in many Islamic countries.⁶ Thus, the belief that such offences must be criminalised had religious and cultural bases.

As IP has been a recent construct of positive law, theorists have put it on the same pedestal as property law.⁷ This allows us to relate certain traditional crimes associated with property to IP as well. Piracy and counterfeiting have been considered as an Act equivalent to theft, vandalism, trespass or criminal breach of property. Thus, the former have been criminally punished in most jurisdictions.⁸

However, this model operates on an assumption that tangible and intangible property can be legally equated, which has been contentious from the beginning.⁹ For instance, theft requires the deprivation of the property for the owner. However, the non-rivalrous nature of IP does not cause it to be “taken away” from the owner. Since the traditional offences cannot be applied mutatis mutandis to IP, criminalisation will be devoid of social legitimation.

In this regard, the alternative condition for criminalisation becomes relevant. Here, the State actively criminalises in law to create a preventive or deterrent effect against a certain conduct.¹⁰ For example, economic offences which are largely non-violent in character acquire a criminal character. This happens not just because of their in rem effects but also the contemporary need to deter such conduct.¹¹

In relation to IP, the national economy has witnessed its immense value.¹² Unlike conventional property, rights in IP exists for limited period or on a renewal basis. Due to such limited nature, stringent recourse must be adopted so that an individual prefers to deter conduct rather than taking the chance of an unlikely civil action.

This was, for example, the rationale behind Article 61 of the Agreement on Trade-Related Aspects of Intellectual Property Rights, 1994 (TRIPS)¹³. It instructed member states that they shall have criminal sanctions for counterfeiting and piracy. For other IP infringements, States have the discretion to criminalise such acts. It was this provision that led to the inclusion and in some cases, strengthening of criminal provisions in the IP Acts of India as well.

The JV Act: Introduction and key changes

In 2020, all the ministries were asked to identify minor offences, which can be decriminalised.¹⁴ Initially, a Bill was introduced in the Lok Sabha which was then sent to the Joint Parliamentary Committee (JPC). After the JPC gave its Report¹⁵, both the Houses of Parliament passed the JV Act which was enacted after the President gave assent on 11-8-2023. Among the 182 amendments in 42 Central legislations, it also amends the four major IP legislations; the Copyright Act, 1957¹⁶, the Patents Act, 1970¹⁷, the Geographical Indications of Goods (Registration and Protection) Act, 1999¹⁸ and the Trade Marks Act, 1999¹⁹.

But why does the JV Act’s intellectual property aspect needs attention? As per available data, IP registration has increased multifold in the recent past.²⁰ The High Courts of Delhi, Calcutta, Madras and Himachal Pradesh have established dedicated IP divisions to deal with the huge inflow of cases, coupled with complex legal and even scientific issues.²¹ Therefore, any decriminalisation of offences under the IP Act will have a direct and significant impact on IP enforcement. In the next section, the specific amendments brought in the IP Acts through the JV Act shall be discussed.

(a) Copyright Act, 1957

Chapter XIII titled as “offences”, provides the various offences in relation to copyright, all of which are criminal in nature. The JV Act, however, only chose to omit one offence under Section 68. The said section provided a “penalty for making false statements for the purpose of deceiving or influencing any authority or officer”.²² This provision was omitted because a similar provision already exists under Section 212²³ of the Nyaya Sanhita, 2023²⁴, which is equivalent to Section 177²⁵ of the Penal Code, 1860²⁶.

(b) Patents Act, 1970

The JV Act omitted Section 121 which penalised the wrongful usage of the word “patent office’”.²⁷ Offences related to unauthorised claim of patent rights²⁸ and practice by non-registered patent agent(s)²⁹ were also substantially amended. In these provisions, the fines and imprisonment were replaced with substantially higher penalties with a recurring component if the breach continued. On the contrary, the punishment for refusal or failure to supply information under Section 122³⁰ was considerably decreased from 10 lakhs to 1 lakh.

Apart from these, the provision for adjudication under Section 124-A³¹ and appeal under Section 124-B³² for deciding on penalties were also added. While adjudication was to be carried out by the Controller itself, appeals were to be heard by an officer above the rank of the Adjudicating Officer. To provide clear timelines for such adjudication, the Central Government has proposed amendment to the Patent Rules as well in 2024³³. Notably, identical adjudication and appellate mechanisms for penalty were also added in the Trade Marks Act, 1999 under Sections 112-A³⁴ and B³⁵ as well as Geographical Indications of Goods (Registration and Protection) Act, 1999 under Sections 37-A³⁶ and B³⁷.

(c) Trade Marks Act, 1999

Offences such removing of piece goods, etc., contrary to Section 81³⁸,³⁹, improperly describing a place of business as connected with the Trade Marks Office⁴⁰ and falsification of entries in the register⁴¹ were omitted. Earlier, misrepresentation of a mark as to be registered was punished by imprisonment or fine or both.⁴² After the JV Act, this has now been was changed to penalty only.

(d) Geographical Indications of Goods (Registration and Protection) Act, 1999

In Geographical Indications of Goods (Registration and Protection) Act, 1999 as well, certain provisions were omitted while some were converted to mere penalties. The offences of improper description of a place of business as connected with the Geographical Indications Registry⁴³ and falsification of entries in the register⁴⁴ have been omitted. Like the Trade Marks Act, 1999 the false representation of a geographical indication (GI) as registered was subjected to imprisonment and fine.⁴⁵ Now, a maximum penalty of 5 lakhs can only be imposed for this offence.

Missed opportunities and oversights

On a primary level, the efforts, or at least the intention of these amendments are laudable. This enactment was definitely unprecedented as the Parliament has never decriminalised such large number of offences in a single instance. However, so far as IP is concerned, the JV Act suffers from certain shortcomings and oversights. These emanated from the opaque legislative process that was followed. Additionally, the changes made were arbitrary and unreasonable which can possibly have severe ramifications.

(a) No public consultation

On 5-2-2014, the Central Government had adopted a Pre-Legislative Consultation Policy. This was done to bring transparency and public participation in the legislative process.⁴⁶ However, the JV Act was enacted without following the policy. Neither any comments were sought on the draft Bill from the stakeholders, nor did the JPC invited the opinions of the general public.

(b) Arbitrary and unwarranted changes

Secondly, decriminalisation took place without providing any proper rationale as to why certain provisions were omitted, while others were not. Even the JPC failed to provide any objective reasons for exponentially increasing or decreasing the penalty amount(s).⁴⁷ The amendments are arbitrary to an extent that some offences which should not have been decriminalised were in fact diluted.

For instance, as mentioned above, under the Patents Act, 1970, the fine under Section 122 for refusal or failure to supply information has been converted into a penalty and reduced substantially.⁴⁸ The reason this punishment should have been increased rather than decreased is because the patentees have to provide Form 27 to the Controller to testify as to the fact that the patent is being used.⁴⁹

This mechanism has been used to keep a check on the non-use of registered patents. This is because knowledge should not be restricted if the patentee does not aim to commercially exploit the patent. It has been observed that this mandate has not been fully complied with. The further decrease in penalties against non-compliance further weakens the possibility of its actual implementation.

(c) Decriminalisation or de-incarceration

When looked at closely, the JV Act does two things. It removes imprisonment as a punishment and converts the fines into penalties from certain offences. The consequence of this is “decriminalisation” i.e. now those acts or omissions are no longer offences but a breach of their respective acts for which only penalty can be imposed.⁵⁰ These penalties shall be imposed by a separate authority which has been also provided under the amendments.

But instead of this, the Government could have taken a much simpler route. Rather than decriminalising such offences, it could have simply removed imprisonment from these provisions and inserted procedures for summary trial to decide offences and ascertaining fines instead. This way, it could have achieved the objective of omitting severe punishments without introducing a new internal dispute mechanism.

Furthermore, as per Rule 7-D of the Draft Patent Rules 2024⁵¹, the penalties that shall be charged on the breach of provisions, should go into the Consolidated Fund of India. Ultimately, it could not be used to compensate the aggrieved or the loss of the authority which might have incurred. However, if the proceedings were held before the trial court, as per Section 396⁵² of the Nagarik Suraksha Sanhita, 2023 (BNSS), the fine can been used as compensation for the aggrieved parties.⁵³

Recommendations for prospective reforms

During the 2025 Budget speech, the Finance Minister announced that the JV 2.0 shall be coming soon to decriminalise and rationalise a variety of other offences.⁵⁴ Therefore, to plug the shortcomings of the JV Act and include necessary amendments, this essay shall suggest certain reforms which can incorporated in the JV 2.0.

(a) Disproportionate punishment

Under the Copyright Act, 1957, copyright infringement can be punished as a criminal offence under Section 63⁵⁵. A convict under section can be incarcerated for six months to maximum three years. The Supreme Court in Knit Pro International v. State (NCT of Delhi), went on to held that any offence under this section would be a cognizable non-bailable offence.⁵⁶

This would mean that if a first information report (FIR) is lodged against any person for an alleged infringement, the police can immediately arrest and detain without any warrant from the court. This shall happen even though there lies no means with the police to ascertain the subsistence of a copyright in the infringed work.⁵⁷ Thus, the criminal justice system can be easily misused for such ambiguous cause of actions. Clearly, there lies a need to at least dilute the stringent nature of Section 63, because as the awareness about such lacuna increases, abating false cases shall be difficult.

(b) Criminalising patent infringement

As per Section 53 of the Patents Act, 1970, a patentee enjoys the right over the patent for only 20 years.⁵⁸ This period is neither subjected to renewal like in trade mark, nor it is long enough as in copyright. Still, unlike both copyright and trade marks, there lies no provision to initiate criminal proceeding for wilful patent infringement. This would mean that a person committing a theft of 1 lakh rupees can be subjected to imprisonment but only civil actions can be taken against mala fide infringement of a patent which might effectively value in crores.⁵⁹

Several European Union States have already criminalised patent infringements.⁶⁰ In Japan, an infringer can be even sentenced an imprisonment for 10 years along with fine.⁶¹ Keeping in mind the focus on innovation in technology and pharmaceuticals, therefore, the criminalisation of patent infringement should be discussed and subsequently, introduced as well.

(c) Amending Designs Act, 2000

The Designs Act, 2000⁶² provides protection to a design for a maximum period of 15 years which cannot be renewed further.⁶³ As per the latest data, the applications for design registrations under the Designs Act, 2000 have been increased almost 10 times.⁶⁴ But still, there exist no penal offences under the Act. Like the Patents Act, 1970, at least the wilful infringement of the design right cannot be left from criminalisation. Otherwise, just civil remedy will be insufficient to create the required deterrence.

(d) Other Ignored Acts

Aside from the Acts amended, the Protection of Plant Varieties and Farmers’ Rights Act, 2001 (Plant Varieties Act)⁶⁵ and the Semiconductor Integrated Circuits Layout-Design Act, 2000 (SICLA)⁶⁶ also had similar criminal provisions. For example, Section 72 of the Plant Varieties Act punishes false representation of a variety as registered.⁶⁷ In SICLA, Section 59 punishes the falsification of entries in the register.⁶⁸ These exact provisions were decriminalised in the other IP Acts but left untouched in these two Acts. The fact that these IPs have not extensively commercialised does not justify the Government neglect towards these Acts. Thus, an appropriate amendment should be expected in these Acts in the JV Act 2.0.

Conclusion

Recently, the Vidhi Centre for Legal Policy launched a comprehensive database on the criminalisation in India. While speaking on the event, Justice V. Ramasubramanian, the Chairperson of National Human Rights Commission, underscored the tendency to convert civil cases into criminal actions.⁶⁹ The Report highlighted that the JV Act could only decriminalise and rationalise 5% of the existing offences amongst all Central Acts.⁷⁰

The tendency to over-criminalise definitely exists. But at the same time, instances of necessary criminalisation remain absent as well. It is here, where the JV Act faulters. The ideas of “trust based governance” and “minimum Government and maximum governance” require the reasonable protections of every stakeholder. This becomes even more relevant for IP where public interest always remain a perennial consideration. Therefore, the JV Act’s ambit should not just be limited to decriminalisation, but rather be tailored to criminalise conduct which is necessary to proscribe.

Note: This article was selected as one of the winners in an essay writing competition organised by the Centre of Artificial Intelligence and Intellectual Property Rights, Himachal Pradesh National Law University, Shimla.