Innovate or Stagnate: Intellectual Property as a Key Catalyst for Sri Lanka’s Future Growth

In the modern era, there is no doubt that intellectual property (IP) has become an intangible economic asset, widely regarded as the most valuable asset of a business enterprise. Each nation, recognising this, has crafted its own unique IP legal framework, with the fortunes of a country intimately bound to the strength of its intellectual property rights (IPRs). While once viewed primarily as a catalyst for innovation and technological advancement, a global paradigm shift has recast IPRs as potent tools for economic progress and prosperity. Robust enforcement of IPRs can therefore exert a significant influence on a nation’s economic growth and development, hinging upon the effective utilisation of IP.

In Sri Lanka, IP is governed by the Intellectual Property Act, No 36 of 2003 (the “IP Act”). Sri Lanka is a signatory to the Paris Convention for the Protection of Industrial Property, Berne Convention for the Protection of Literary and Artistic Works, Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and also the Patent Cooperation Treaty (PCT). Sri Lanka’s TRIPS-compliant IP Act offers comprehensive protection and enforcement mechanisms across the full spectrum of IP.

Today’s businesses adopt complementary IP strategies, with trade marks holding significant value, and Sri Lanka aligns with this trend. The acquisition of exclusive rights related to trade marks is achievable through proper registration. The IP Act outlines criteria for the acceptance of marks and grounds for inadmissibility, commonly referred to as objective grounds and other third-party rights. Non-visual signs do not fall under the definition of a trade mark in Sri Lanka.

Trade mark owners, once registered, enjoy exclusive rights, allowing them to prevent unauthorised use, albeit subject to certain statutory limitations. It is noteworthy that the use of a trade mark is not a prerequisite for its registration in Sri Lanka. However, non-use and a transformation into a generic name could lead to the cancellation of a registered mark. Consequently, common usage and demonstrably distinct characteristics are crucial for maintaining the validity of a registered trade mark.

The IP Act includes provisions for the protection of unregistered marks in Sri Lanka under statutory provisions for unfair competition. In Sri Lanka, a registered trade mark remains valid for ten years and is renewable for consecutive ten-year periods indefinitely. Notably, a 2022 amendment to the IP Act introduced a dedicated registration system for geographical indications.

Striking a balance between the rights of authors and the legitimate interest of users of such creations is paramount in the present-day context. As Sri Lanka is a signatory to the Berne Convention, works of Sri Lankan authors are protected in all member countries. There is no registration system for copyright in Sri Lanka; subject to limitations provided in the IP Act, copyright is protected during the author’s lifetime and for a further period of seventy years after their death.

In the words of Sri Lankan scholar Kumaratunga Munidasa, “[a] nation that does not innovate will not rise”. This insightful observation, echoed by thinkers throughout the Western world too, underscores the fundamental link between innovation and national prosperity. Recognising this vital connection, the IP Act establishes a framework for fostering innovation through the patenting of novel inventions.

To be deemed patentable in Sri Lanka, an invention must possess three key attributes: novelty, inventive step, and industrial applicability. In Sri Lanka both product as well as process patents are recognised. However, there are specific items that are excluded from the patent regime in Sri Lanka; for example, plants, animals and other micro-organisms other than transgenic micro-organisms are not patentable in Sri Lanka.The IP Act grants a registered patent holder a monopoly right for a period of twenty years from the filing date of application for its registration within Sri Lanka.

Conversely, the Sri Lankan IP regime extends to the ornamental or aesthetic aspects of products, legally termed “industrial designs”. However, this protection hinges upon two key criteria: novelty and adherence to established ethical and societal norms. The design must be demonstrably new and refrain from incorporating scandalous elements or features that run counter to morality, public order, or public interest. Additionally, it must not be likely to cause offence to the religious or racial sensibilities of any community. A registered industrial design is valid for a period of five years, and renewable for two further five-year terms (15 years in total).

In relation to trade secrets, Sri Lanka adheres to Article 39 of the TRIPS Agreement. The IP Act provides statutory protection to individuals and businesses seeking legal recourse against the unauthorised disclosure, acquisition, or use of their confidential information. Additionally, common law remedies remain available in such cases.

The Sri Lankan Commercial High Court has established a strong precedent of upholding and favourably interpreting these provisions, rendering judgments against those who engage in the unauthorised disclosure or utilisation of undisclosed, confidential, and commercially sensitive business information belonging to another party.

In the fiercely competitive arena of international commerce, IPR infringement remains an unfortunate inevitability. Sri Lanka, recognising this reality, has established a robust legal framework for the protection and enforcement of IPRs, employing both civil and criminal litigation pathways. The most suitable course of action is determined by the specific facts and circumstances surrounding each individual case.

Furthermore, Sri Lankan customs authorities are authorised to prohibit the import and export of goods that infringe upon IPRs. Considering the increasing threat posed by piracy and counterfeiting activities, it is highly prudent for rights holders to proactively register their eligible IPRs with Sri Lankan customs authorities.

Mark Getty famously declared intellectual property to be “the oil of the 21st century” *. This holds true for Sri Lanka as well. To fuel its development goals and compete on the global stage, Sri Lanka must prioritise the effective implementation and enforcement of IPRs.

* “Blood and Oil” (The Economist, 4 March 2000).