American dominance and Indian Challenges
Abstract
This article aims to analyse the economic and historical factors that lead to the United States of America’s difficult-to-challenge dominance in the semiconductor industry, focusing on the development of its groundbreaking sui generis law that created a new intellectual property category for semiconductor topography. It analyses its provisions and compares them to those of India, which passed a similar bill a decade later. It concludes that the statutory provisions of both acts are largely similar, but emphasises enforcement in India as a major area that needs improvement.
Introduction
The inventions of consumer electronics like laptops and smartphones wouldn’t have been possible without specialised chips, and these chips couldn’t have been made without semiconductor material. They’re the bedrock of modern-day technology, and with the emergence of advanced artificial intelligence, will continue to rise in importance. Often described as the new oil, their geopolitical significance cannot be overstated. Recognising the importance of chips, the Indian Semiconductor Mission was launched to develop domestic capabilities.
Facts and Stats
More than half of the semiconductor industry’s global share comes from the United States. Despite consistent annual dwindling in domestic manufacturing, instead relying on Taiwan and South Korea, their lead in innovation and sales will remain unmatched for a while. Part of it is natural. After all, the first integrated circuits were created by two American engineers in 1959, paving the way for microchip technology, most progress in the area revolving around their creation.
But gradually, intellectual property struggles started stunting innovation. Microchips involved so many patentable components that intersecting rights became inevitable. Filing patents for each part of a design so complex and process so multifaceted was costly and time-consuming. And as difficult as it was to create these from scratch, reverse engineering them was a comparative piece of cake, leading to “chip piracy”. Navigating this landscape made freely inventing a challenge. Foreign competition started cropping up.
Establishing Laws
Semiconductors didn’t fit inside the existing framework for IP laws. They were too important to be shoved under the carpet. Semiconductor Industry Association did something unheard of in response advocated for a completely new form of intellectual property protection exclusively for semiconductors. They succeeded, leading to the passing of the Semiconductor Chip Protection Act of 1984. The key provision under the act protects the specific design of a semiconductor as a “mask work”. Instead of filing patents for each part of the design, a company could rely on the protection of its layout as a whole. It was more efficient than the long, costly process of filing a patent for every element.
This is not to say that the United States is flawless in its execution. As mentioned earlier, while it leads in innovation, as long as it’s dependent on Taiwan and South Korea for manufacturing purposes, the threat of supply chain disruptions looms overhead. But whether it’s because it’s the birthplace of the industry, its tendency to spare no expense on R&D or being the first country to understand how to leverage intellectual property to best use semiconductors, its results are undeniable. The question is whether its USA’s unique conditions that enabled its exponential rise, or whether other countries can replicate its success. Returning to the India Semiconductor Mission, in India’s mission to become a fellow industry titan, it is not possible to follow exactly in the USA’s footsteps. But their statutory provisions and implementation can be laid out against India to look for gaps.
India established the Semiconductor Integrated Circuits Layout Design Act in 2000 to fulfil its obligations to create sui generis protection for circuit layout designs under TRIPS. Protection in both India’s SICLDA and USA’s SCPA grants the creator exclusive rights for 10 years. Key differences include the fact that India protects the design, even in an intangible form, while the USA requires the layout to be accompanied by an actual semiconductor chip. The USA relies on civil remedies, while India has additional criminal sanctions for semiconductor topography infringement explicitly mentioned in the act to act as a deterrent.
Theoretically India’s lower entry of barrier and comparatively high deterrent against punishment, would lead to greater ease of innovation and stronger protection. But somehow, it is rarely leveraged. The IP India 2024-25 report showed no new filings under the SICDLA in three out of the past five years, and only 5 combined in the other two. Perhaps this doesn’t say much by itself. The US only recorded 7 registrations in 2025. But this was an outlier, since it usually averages around 40 registrations per year, even touching 160 in 2018. What is the cause of this phenomenon?
Even though the act was passed in 2000, there is a major caveat – the registry only became fully operational in 2011. This means it was effectively not operational for eleven years. Because of its recency, the problem is uncertainty regarding the provisions of the SICLDA. Judicial interpretation is necessary to clarify doubts regarding ambiguous provisions of such complex acts. The lack of defining case law has discouraged the registration of semiconductors under the act. They are unwilling to invest time and money in registration because of the doubtful return. In America, along with having an older statute with more time to mature, has generally had stronger civil remedies. Broader compensation rights in civil cases and significantly higher damages incentivize litigation in the situation of infringement. America’s sui generis patent protection being created as a consequence of existing IP issues such as chip piracy made leveraging the protection more natural than India implementing the TRIPS framework out of obligation and then-underdeveloped ambitions in the industry.
It is clear that legislation alone is insufficient, and proper institutional backing is needed for the implementation of these acts. The first step towards more efficient protection of semiconductor topography in India is two-sided awareness. On the part of the industry, knowing the provisions of the act and understanding their benefits. And on the part of the judiciary, the technical depth to rule on the merits of semiconductor related cases. This can be done through industry outreach and integration with businesses. It will hopefully be the first prod of a domino effect more awareness leading to increased registrations, followed by increased cases ruled accurately and a deeper settled understanding of the act, and finally, a level of innovation that potentially positions India as a genuine competitor.
Conclusion
The USA’s position as a leading semiconductor base has been built by a combination of bright minds, good timing and existing advantages in its legal system. India does not need to copy paste their statutory provisions to strengthen the SICLDA. It needs to find out how the act fits in its unique context, and resolve gaps in awareness to improve enforcement.
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