IP Ownership in Open-Source Hardware Projects

Introduction : Open-source hardware (“OSHW) is the modern way under which the underlying design information and technical documentation are made publicly available which allow the individuals, researchers, start-ups, manufacturers, and communities to study, modify, manufacture, and distribute the hardware under an open license which are subjected to the terms of that license. The information or documentation which is made publicly available includes circuit diagrams, PCB layouts, CAD files, technical drawings, manufacturing information etc. upon which the public or the community study and make modification. Unlike the conventional proprietary products, where all this information is normally kept confidential as it is a traditional, privately owned & legally owned method. CERN has developed the CERN Open Hardware Licence (CERN OHL) as a legal tool to promote collaboration among hardware designers and support the freedom to use, study, modify, share and distribute hardware designs, and products based on those designs.  (endnote)

The public has access to the information & documentation doesn’t mean it is free from “Intellectual Property”, as the open-source hardware includes Intellectual Property Rights. A creator may own Patent, copyrights, design rights, or trademark in the case of Open-source hardware as it is the innovation of his own and he had the rights to protect it from getting infringed even when it is publicly available and this is done under the license. It means that the owner of the hardware gets the intellectual property rights and he can make it available for the public under the Open Hardware license, which provides certain conditions to the public while using the open hardware and making changes in it. Thus, the primary legal issue is not who owns the hardware but who owns the intellectual-property rights underneath it and what permission has been granted by other participants.

This becomes the important point when the community members contribute improvements, make changes and commercial manufacturers distribute physical products based on publicly available designs.

IP Ownership in Open-Source Hardware  

An Open-Source hardware project includes a physical product which may contain several layers of IP rights. The product technical invention protected by a patent, the products CAD drawings, circuit diagrams, documentation or software may include copyrights, and the product design, visual appearance may be protected by design act and the product name or logo may be protected by the trademark. In this blog, the discussion will be on the ownership rights and the permissions granted by the license under various conditions.

Hardware Licenses vs. Software Open-source Licences

The Software Open-source primarily includes only the software system, which primarily governs the rights relating to software and source code. Licences such as the GNU General Public License (“GPL”) regulate copying, modification, distribution, and, importantly, certain patent rights associated with the software. (endnote) 

Whereas on the other hand, Hardware open-source is more complicated than the software as it includes both the intangible design information and a physical product. This source may include circuit diagrams, PCB layouts, CAD files, technical drawings, manufacturing information, which also have various layers of Intellectual property for the protection of the product. There is a license which is particularly developed to address these characteristics and support the use, study, modification, sharing and distribution of hardware designs and products. (endnote). 

The current CERN-OHL Version 2 has three variants: CERN-OHL-S (strongly reciprocal), CERN-OHL-W (weakly reciprocal), and CERN-OHL-P (permissive). (endnote) The differences essentially concern how much obligation is imposed on a person who modifies and redistributes the licensed hardware.

Key Intellectual Property and Licensing Issues in Open-Source Hardware 

There are various inter-related issues of intellectual property and license that have to do with open hardware design use and distribution, as well as the modification thereof. Patent retaliation could work as a licensing defence strategy under some licenses for open hardware, where certain patent litigation by the licensee could lead to license revocation. It is a licensing mechanism which is designed to protect the open-source community members from certain forms of patent litigation by its participants. There is no explicit provision of “Patent Retaliation” in Indian patent law. Nevertheless, it can be introduced into the contract under an open hardware license. The CERN Open Hardware License v.2 is a useful case in point. There are three types of CERN-OHLv2 licenses namely CERN-OHL-S, CERN-OHL-W, and CERN-OHL-P and they lay down conditions to use, modify, and distribute hardware design (endnote1). The highly reciprocal form of license has the provision of terminating a patent through litigation brought by a licensee against the patent holder. (endnote 2) With regard to India, this contractual process must be separated from the statutory provisions regarding the rights of the patent owner under Section 48 of the Patents Act, 1970, whereby the patent owner is granted exclusive rights regarding a patented invention or process with reference to the Act.[3] In addition, Section 68 provides that a patent license must be in writing and signed and that all conditions and terms regarding the rights and obligations of the parties must be provided for in the document.

Design rights are another method of protection for open-source community developers. Open-source hardware usually makes design information available to users for analysis and modification, though this shouldn’t confuse the statutory definition of “design” under Indian law. Section 2(d) of the Designs Act, 2000 describes the attributes of a design which can be its shape, configuration, pattern, or ornamentation, and it gives the design its aesthetic value. In other words, the patent could protect the invention of the device, while design rights could apply to its visual appearance. Section 11 provides a protection term of ten years with a possibility of five years’ extension. As for Section 22, it deals with the design piracy issue, while Section 4 doesn’t allow designs to register if they were made available to the public before the date of application for registration. That is why the open hardware license must clearly state what design rights it protects.

Attribution, modifications, and downstream distribution are the other significant licensing factors in regard to open-source hardware projects. Attribution is sought when an attribution of the original creator and other contributing parties is required by the relevant license. In India, such attribution is very likely to require copyrights arising in respect of CAD designs, technical manuals, and other works protected by the Copyright Act of 1957, more specifically under Section 17 of the Act. In spite of this, downstream distribution will require a more specific approach to the license provisions, particularly regarding attribution requirements and modification obligations, when it comes to the modified hardware being distributed to manufacturers, distributors, and other end-users. Therefore, an efficient open-source hardware license should include clear definitions concerning attribution requirements, modification rights, as well as duties of the modified hardware recipient.

Proposed Governance Framework for Indian Maker Communities and Hardware Start-ups 

The use of a written governance document can help avoid disputes among Indian open-hardware organizations and startups. This document should contain certain stipulations as given below:

1. Clause on IP ownership: The document should specify the owner of pre-existing patents, designs, copyright, and other forms of IP.
2. Contributor agreement: The contributors should make it clear if their contribution will be licensed, assigned, or retained.
3. Hardware license: Rights regarding the study, modification, manufacture, reproduction, and distribution of the design.
4. Policy on patents: Whether there are any licensed patent rights and whether the license contains a patent retaliation clause or not.
5. Policy on modifications: Obligations related to modifications and improvements.6. Attribution policy: How the original creator and contributors need to be credited.
6. Attribution policy: Indicate how to credit the people who created the source material.
7. Commercialization policy: The policy should clarify whether it is allowed to produce and sell the product commercially.
8. Downstream distribution: What responsibilities remain with the manufacturers and distributors and the future users of the product?
9. Design registration strategy: Register the design before releasing it if necessary.
10. Trademark policy: Distinction must be made between the ability to manufacture the product and to use the product names/logos/brands.

Conclusion

Open hardware shows that “open” does not mean no intellectual property, but instead presents a possibility for intellectual property rights to be intentionally waived under specific licensing conditions. Regarding issues of IP, the key challenge for India with hardware initiatives is handling a range of IP layers including patents for inventions, design IP for appearance and function, copyright for relevant creative works and documentation, and trademarks for product branding. The experience with patent retaliation demonstrates the capacity of open hardware licenses to create binding legal arrangements related to some patent disputes. Furthermore, design rights make it clear that IP considerations are necessary prior to public release. Therefore, open hardware’s future is not only rooted in making its design available to the public but also in the development of concepts of ownership, agreements with contributors, licenses, patent policies, credits, and distribution channels.

Author:- Bhoomi Jain, in case of any queries please contact/write back to us at support@ipandlegalfilings.com or   IP & Legal Filing.

Endnotes

1. CERN, CERN Open Hardware Licence, https://cern-ohl.web.cern.ch/home  (explaining that the CERN-OHL supports the freedom to use, study, modify, share, and distribute hardware designs and products based on those designs).
2. GNU General Public License v3.0, § 11 (addressing patent rights and specified patent litigation), Open-Source Initiative,  https://opensource.org/license/gpl-3.0.
3. CERN, CERN Open Hardware Licence, supra note 1.
4. CERN Open Hardware Licence Version 2, CERN-OHL-S, CERN-OHL-W & CERN-OHL-P,  https://cern-ohl.web.cern.ch/home.
5. The Patents Act, 1970, No. 39 of 1970, § 48 (India).
6. CERN Open Hardware Licence Version 2—Strongly Reciprocal, § 7.2, Open Source Initiative.
7. Monsanto Technology LLC v. Nuziveedu Seeds Ltd., (2019) 3 SCC 381 (India).
8. The Patents Act, 1970, No. 39 of 1970, § 68 (India).
9. Id. § 69.
10. The Designs Act, 2000, No. 16 of 2000, § 2(d) (India).
11. Id. § 11.
12. Id. § 22.
13. Id. § 4.