Layout-Designs of Integrated Circuits: Articles 35 to 38

In one line

The topography of an integrated circuit is protected for at least ten years, and an innocent purchaser of an infringing chip may keep using it on paying a reasonable royalty.

In exam wording: Section 6 of Part II of TRIPS, Articles 35 to 38, protects layout-designs, that is topographies, of integrated circuits by incorporating substantive provisions of the Treaty on Intellectual Property in Respect of Integrated Circuits and adding to them.

Why the Section exists

Because a chip is expensive to design and cheap to copy. The value of an integrated circuit lies in the arrangement of its elements, and that arrangement can be recovered by photographing successive layers of a finished chip and reproducing them. Design costs run to millions; copying costs a fraction.

And because neither patent nor copyright fitted. A layout is rarely inventive enough for a patent, and it is a functional article rather than an artistic work, so the industrialised countries created a sui generis right in the 1980s, beginning with the American Semiconductor Chip Protection Act of 1984.

The Washington Treaty of 1989, formally the Treaty on Intellectual Property in Respect of Integrated Circuits, was concluded under WIPO auspices and never entered into force, because the principal chip producing countries considered it too weak. TRIPS revived it by incorporation and strengthened it.

What TRIPS does

Article 35, the incorporation. Members agree to provide protection in accordance with Articles 2 to 7 (other than Article 6(3)), Article 12 and Article 16(3) of the Washington Treaty, and in addition to comply with Articles 36 to 38 of TRIPS.

The exclusion of Article 6(3) is the point. That provision of the Treaty permitted compulsory licensing of layout-designs on relatively easy terms, and TRIPS replaces it with the narrower Article 37.2.

Article 36, the scope of protection. Members shall consider unlawful, if performed without the authorisation of the right holder, the importing, selling or otherwise distributing for commercial purposes of a protected layout-design, an integrated circuit in which a protected layout-design is incorporated, or an article incorporating such an integrated circuit only in so far as it continues to contain an unlawfully reproduced layout-design.

Notice the reach. The right extends through three levels: the design itself, the chip embodying it, and the product containing the chip. That is what makes the right commercially useful, since infringing chips are usually encountered inside finished goods.

Article 37.1, the innocent infringer provision, and it is the most distinctive rule in the Section. Notwithstanding Article 36, no member shall consider unlawful the performance of those acts in respect of an integrated circuit incorporating an unlawfully reproduced layout-design or any article incorporating such a circuit where the person performing or ordering the acts did not know and had no reasonable ground to know, when acquiring it, that it incorporated an unlawfully reproduced layout-design.