India’s Semiconductor IP Paradox: Layout-Design Registrations, the SICLD Act, and Domestic Ownership

Introduction: The Paradox

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Semiconductors play a crucial role in the modern economy and are involved in a wide variety of devices, including mobile phones, cars, military equipment and computers. India today is working towards becoming an important player in this sector through various initiatives such as the India Semiconductor Mission (ISM) and the Design Linked Incentive (DLI) Scheme. While the ISM aims to create a strong ecosystem for semiconductor manufacturing, the DLI Scheme seeks to provide financial support and infrastructure for the manufacture of integrated circuits, chipsets, SoCs and IP cores.

Despite the focus on developing the semiconductor industry, India’s activity concerning the Semiconductor Integrated Circuit Layout Design Registry (SICLDR) remains very low. The SICLRD was established in 2000 under the Semiconductor Integrated Circuits Layout-Design Act, and serves as a legal tool to protect original semiconductor layout designs.

This leads to a very significant matter which is: If India is working towards achieving a leadership position in the semiconductor field, why is its technology protected under this registry so limited?

What Is India’s Semiconductor IP Registry?

India has a separate piece of legislation in the Semiconductor Integrated Circuits Layout-Design Act, 2000 (SICLD Act), which provides for a procedure of protection of layout-design of the semiconductor integrated circuits through a special regime. The operation of this Act is governed by the Semiconductor Integrated Circuits Layout-Design Registry (SICLDR) which examines the applications made for the protection of original semiconductor layout-designs.

A layout-design means the arrangement of transistors and other electronic circuitry elements printed on semiconductor material, and the instructions for their interconnection. According to the provisions of the SICLD Act, present in its Section 7, a layout-design should be original, distinctive and capable of being separated from other layout-designs before it gets registered.

The main value of the protection lies in the monetary value that is associated with the design of the chip. Once registered with the Registry, the right holder gains rights for full control over the given layout-design that may be used for reproduction and commercial exploitation of it within a period of 10 years.

Nonetheless, this framework generates an important issue. Why has registration activity not significantly increased in India given that the country already has a specific legal framework for the protection of semiconductor layout-designs? To do so, the analysis needs to go beyond the existence of the law and explore whether the Indian semiconductor innovations are indeed transformed into registered IP of commercial value in the local market.

What Does the Empty Registry Tell Us?

India’s small number of registrations for semiconductor layout-designs should not be seen as indicating that it is not innovating in the field of semiconductors. The Semiconductor Integrated Circuits Layout-Design Act, 2000 protects a specific kind of intellectual property layout-designs of semiconductor integrated circuits and thus the SICLDR does not actually measure all forms of semiconductor innovations. Some innovations may actually be protected through patents, copyrights, trade secrets or other kinds of intellectual property rights. The question thus arises as to whether India is producing little semiconductor intellectual property or whether there is in fact a lot of innovation being done but that is not being recorded due to the peculiarities of the layout-design registration system in the country.

Consequently, one may interpret the lack of activity registered by the SICLDR as a warning signal rather than an indicator of the gap in India’s innovation process. Businesses may be justified in seeking other means of protecting their technologies, such as patents, trade secrets or confidentiality agreements, according to their business strategies and the type of technology being developed. If semiconductor innovations occurring in the country are not being recorded and owned properly, it will be impossible for India to use its technical achievements for creating long-term economic and technological benefits in future. Thus, the real concern should be seen not so much in the small size of the registry, but rather in India’s ability to create an infrastructure for designing semiconductors faster than it is able to create an infrastructure for their owning, protecting and commercializing.

From Semiconductor Design to IP Ownership

Although India has carved out a niche for itself in the semiconductor design and engineering sector, having the design ability alone does not mean that the intellectual property is also owned in India. There can be instances when designing and developing advanced chips can happen in India, but the intellectual property developed will belong to a foreign company in the end. This aspect matters because the government has launched the Design Linked Incentive Scheme specifically to promote local capabilities in design of semiconductors like integrated circuits, chipsets, systems-on-chip and IP cores.1 Thus, the policy aim is not only to increase the volume of semiconductor work taking place in the country, but rather to facilitate Indian involvement in more advanced parts of the semiconductor value chain.

The mantle of IP ownership outlines the extent of commercial use of innovation. An Indian semiconductor company capable of semiconductor IP licensing can leverage it to obtain investments, as well as earn royalties as a result. India also has access to jobs and high-tech skills when the relevant semiconductor technology is owned overseas, which means that she can obtain economic activity but not the full value of the technology. This does not mean however that foreign IP is necessarily detrimental, or that all semiconductor innovations must be introduced in SICLDR. Rather, given that the activity of the Registry in India is limited, the question arises whether the increasing semiconductor capabilities of the country lead to increasing national ownership of valuable semiconductor technology.

In contrast to patents and industrial designs, semiconductor layout-designs are safeguarded under a unique legal framework offered by the Semiconductor Integrated Circuits Layout-Design Act, 2000. This distinction is critical because the SICLDR protects the arrangement or configuration of components of an integrated circuit as opposed to the chip’s inventive quality or outer look. The IP India management acknowledges that layout-designs do not usually fall under the standard industrial design or patent protection due to the specific nature of their subject. Because of this, a semiconductor innovation may be covered by multiple layers of IP protection, with a patent covering a certain technical invention, the SICLD regime covering the original layout-design, and additional parts obtaining copyright, trade secrets, or contractual protection. The small number of SICLDR registrations should not be interpreted without reference to the general IP activity in the semiconductors industry in India and should make us raise the question of whether the Indian chip designers use other methods of protection or the ownership of the original IP is simply staying outside of India.

Costs of Weak Semiconductor IP Ownership

The lack of domestic ownership of semiconductor intellectual property limits the economic potential that India is able to capture from the boom in its capability to design semiconductors. When the proprietary technology is in the hands of foreign companies or clients, the local firms may benefit from job creation or technical skills development, but there are less chances to earn licensing fees, royalties or long-term returns from it. This may also increase the dependence on the foreign technology and reduce the bargaining power of Indian firms in the global semiconductor industry. This raises the question about the number of registration with SICLDR and the extent to which India is transforming its large engineering talent and investments into proprietary technologies that would be owned and commercialized by Indians. Thus, the problem of Indian semiconductor IP ownership comes forward.

Bridging India’s Semiconductor IP Gap

India’s approach must include both boosting semiconductor manufacturing and ensuring that innovation leads to IP ownership and commercialization. The authorities can raise awareness of SICLDR registration among semiconductor startups, researchers, and design companies, make the registration process more straightforward, and offer more assistance in protecting and commercializing indigenous chip designs. Existing programs like the Design Linked Incentive Scheme could also make further connections to long-term IP creation, tech transfer, and domestic ownership. Universities and techno parks would need to identify promising semiconductor designs and find mechanisms for transferring them to Indian companies in a more efficient manner. In the end, India’s semiconductor strategy must be measured not in terms of the number of fabs, chips, or engineers, but also in terms of the domestic semiconductor IP ownership that generates technological and economic value in the long run.

Conclusion

India’s semiconductor aspirations cannot be measured merely by how many chips are produced, companies set up or engineers hired. The basic activities of the Semiconductor Integrated Circuits Layout Design Registry do not necessarily mean that the country lacks semiconductor innovation as crucial technologies may still be secured in patents, trade secrets, copyright or in other forms of intellectual property protection. Nevertheless, this fact serves as a serious warning whether India’s improving technical possibilities are turned into patentable intellectual property owned, secured and exploited commercially. If India intends to go beyond being a semiconductor design and manufacturing centre and become a true technological leader, it should make a shift in its policies towards ownership. Raising the awareness and accessibility of the SICLDR coupled with encouraging local IP creation and linking the semiconductor incentives with the long-term commercialization can help to fill the gap. Lastly, India should not be judged by the number of chips produced, but by the amount of technology it created and secured.

Also Read: How to Register a Design in India Under The Designs Act, 2000: Procedural Framework, Protection Terms, and Overlaps

References

1. India Semiconductor Mission, Ministry of Electronics and Information Technology (MeitY), Government of India: ISM Official Portal; and Design Linked Incentive (DLI) Scheme.
2. Office of the Controller General of Patents, Designs & Trade Marks (CGPDTM), Semiconductor Integrated Circuits Layout-Design Registry (SICLDR), Government of India.
3. Government of India, Semiconductor Integrated Circuits Layout-Design Act, 2000 (Act No. 34 of 2000).
4. Office of the CGPDTM, SICLDR Frequently Asked Questions (FAQs), Government of India.
5. Office of the CGPDTM, Protection of Layout Designs Overview, Government of India.
6. Ministry of Electronics and Information Technology (MeitY), Annual Report 2024–25, Government of India (Reviewing domestic semiconductor ecosystem and IP generation).