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Importance of IPR to sustain the Commercial Software Model India Habitat Centre, New Delhi December 05, 2003 Presented by: Rakesh Bakshi Director – Law & Corporate Affairs Microsoft Corporation (India) Private Limited Agenda Commercial Software Model What is this model? Its advantages

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importance of ipr to sustain the commercial software model
Importance of IPR to sustain the Commercial Software Model

India Habitat Centre, New Delhi

December 05, 2003

Presented by:

Rakesh Bakshi

Director – Law & Corporate Affairs

Microsoft Corporation (India) Private Limited

slide2

Agenda

  • Commercial Software Model
    • What is this model?
    • Its advantages
  • Intellectual Property Rights
    • Nature of IPR
    • Kinds of IPR
    • IP rights in software
  • Conclusion
    • Importance of IPR for commercial software
    • Other factors commercial software needs to succeed
      • Level Playing field
      • Increasing the size of the domestic IT market
      • Moving from renting IQ to developing IP
commercial software model 1
Commercial Software Model - 1
  • Generate revenue by Licensing IP in the form of Software Programs
  • Mass Market approach
    • Sell many units of the same program
    • Recover up-front costs from revenues
    • Reinvest portion of revenues in Research and Development to fuel innovation and growth
commercial software model 2
Commercial Software Model - 2
  • Other companies compete for the same business
  • Success depends on understanding customer needs better than competition….

....and responding faster to those needs!

commercial software model 3
Commercial Software Model - 3
  • Strong incentives to innovate and stand behind the products:
    • Release stable, tested products
    • Fix bugs and security holes
    • Support partners, developers and customers who use the software product
    • Integrate new features and services that add value for customers
      • Comply with industry and government standards
      • Interoperate with other products and the products of the competitors
strengths of commercial software model 1
Strengths of Commercial Software Model - 1
  • Remarkable economic growth
    • Between 1990 and 1998, annual market growth in the packaged software - over 15% in the USA
    • Generated USD 7.2 billion in US federal and state corporate taxes in 1997 - expected to grow to USD 25 billion by 2005
  • Innovation
    • Dramatic gains in performance and functionality even as the price of these products has remained stable or even fallen
    • In 1998, the US software and computer services industries invested about USD 14.3 billion in R & D - exceeding level of R & D spending by the US motor vehicles, pharmaceuticals and aerospace industries
strengths of commercial software model 2
Strengths of Commercial Software Model - 2
  • Local IT Industry growth
    • Opportunities for hardware manufacturers, software developers, service providers and channel companies
    • Indian software and services market has grown to over $12b
strengths of commercial software model 3
Strengths of Commercial Software Model - 3
  • Drivers of Interoperability through industry wide standardization - Thousands of off-the-shelf products communicate and exchange data
  • Cost Effectiveness –
    • Low TCO including post-purchase costs of customizing the system, maintaining and servicing and training costs
    • Highly productive and quicker return on investment
intellectual property rights 1
Intellectual Property Rights - 1
  • Rights protecting commercially valuable products of the human intellect
  • Property created by exercise of intellectual faculty, a result of a person’s intellectual activity
intellectual property rights 2
Intellectual Property Rights - 2
  • Industrial Designs
  • Patents
  • Trade Marks
  • Geographical Indications
  • Semiconductor Topographies
  • Copyrights /Performing Artists and Broadcasters rights
  • Trade Secrets/undisclosed information – Coke formula
intellectual property rights 3
Intellectual Property Rights - 3
  • Copyright Act, 1957 protects computer programmes, tables and compilations including computer databases as “Literary works”
    • Protects expression of ideas
    • Registration not mandatory
    • Term of protection – Life of the author plus sixty years
intellectual property rights 4
Intellectual Property Rights - 4
  • Confers exclusive rights on the owner of copyright, inter alia, to
    • reproduce the work in any material form
    • issue copies of the work to the public
    • communicate the work to the public
  • Violation of exclusive rights constitutes copyright infringement - both a civil and a criminal proceeding may be maintained
conclusion 1 generates revenue
Conclusion – 1 Generates Revenue
  • Licensing of IP - primary source of revenue - Value of software entirely based upon intangibles
  • License reserves commercial exploitation of copyrights exclusively to the software producer
  • Licenses generate revenue to recover upfront costs of R & D and re-investment for future innovation
conclusion 2
Conclusion – 2

Protect software products from unauthorized copying

  • Software Industry is labour intensive but reproduction is low cost activity making it a target of illegal appropriation/piracy
  • Digital format allows faster ad infinitum reproduction without loss of quality
  • Technologies to breach security are matching up with those to aid security
what does it mean to us
What does it mean to us?
  • Strong IPR regime is essential for the survival, growth and success of the Commercial Software Industry
  • Commercial software industry has vested interests in:
    • Level playing field
    • Growing the domestic IT market
    • Moving from renting IQ to developing IP