Protecting the Journey: Intellectual Property in SaaS Onboarding Experiences

Introduction

A first-time user's experience with a software-as-a-service app isn't limited to using a product they configure. What they experience is a curated design journey - a carefully contemplated experience.

This experience is the onboarding journey, and for many SaaS companies, it can be a key differentiator. But brand equity has been developed by companies like Duolingo, Notion, and Slack, not only through the functionality of the product, but the unique feeling one gets when they use the product for the first time.

But if a competitor does an extremely similar onboarding experience, the same kind of permission flow used, the same congratulatory messaging, the same setup checklist displayed, it gets confusing where the law comes in. This article explores the question in three lenses - copyright, trademark and trade dress, and competition law - and focuses on the Indian law context.

Applicable Legal Provisions

The major legislation which is utilized is the Copyright Act, 1957, Trade Marks Act, 1999, and Competition Act, 2002. The term 'artistic works' is included as are the terms 'literary works' and 'computer programmes' within Section 13 of the Copyright Act. Computer programmes, tables and compilations are covered by the definition of 'literary work' in Section 2(o) of the Copyright Act, 1957. Under Section 2(c), 'artistic work' is defined as a painting, drawing or work of artistic craftsmanship. Section 2(zb) of the Trade Marks Act confers protection on a mark that is distinctive of a trader's goods/services, which may include a shape, packaging and the combination of colours. The Competition Act is not an IP Act but is relevant if copying of a competitor's interface is incidental to a wider exclusivity/anti-competitive strategy under Section - 4 (abuse of dominance) or Section 3 (anti-competitive agreements).

Under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) under international law, TRIPS member states are obligated to protect computer programmes as literary works, and to expand copyright protection to compilations. Article 10 TRIPS is the one that takes precedence. The obligations have been implemented in India through the Copyright (Amendment) Act, 1994.

Legal Analysis

Copyright Protection for Onboarding Screens and Text : Copyright is the most user-friendly IP vehicle to use for onboarding content. Instructional text, welcome messages are eligible to be copyrighted if they appear elsewhere substantially. There is no registration requirement in India for subsistence of copyright.9 Under Indian law, after Eastern Book Company v. D.B. Modak,10 the requirement of originality is 'skill, judgment, and labour' which is a standard that is easily satisfied by well drafted microcopy.

There is more debate around the screen layout and UI design. In Emergent Genetics India Pvt. Ltd. v. Shailendra Shivam,11 the Delhi High Court held that the way the data is presented visually can be deemed as an artistic work. A copyrighted welcome screen or progress-tracker graphic on an onboarding screen could be considered an artistic work. Ideas and functions, however, are not protected by copyright, only their expression;12 a standard toggle switch, a default form field, will not attract protection.

The most complicated is whether a series of screens - the flow - is protectable. No Indian court has explicitly answered this question. By analogy with 'compilation copyright' under Section 2(o), a 'carefully compiled sequence of steps' (the sort of editorial selection made by a compiler) may be a protectable compilation, provided there are 'editorial selections' as to what is shown, when and in what order. While the 'abstraction-filtration-comparison' test in Computer Associates International v. Altai13 is not binding in India, it is useful to compare it to the Indian analysis. It has been quoted favourably in software IP cases by Indian courts.

Practical problems are scope - even if copyright does exist it only prevents copying of the substance and not independent creation. If a competitor has gone through their own UX research and come up with a similar onboarding process, despite the similarities in the results, that is not infringing.

Trademark and Trade Dress : The Brand Identity Angle : Where the onboarding experience has become distinctive, trade dress - the overall commercial image of a product - is a more powerful weapon. Trade dress protection in India is available under the law of passing off as well as under the general definition of 'mark' in the Trade Marks Act, which also covers shape and packaging. In Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd., the Supreme Court ruled that passing off also applied to the 'overall get up' of the products, as well as the name or logo.

In the context of SaaS onboarding, a brand whose initial interaction has gained iconic status, with elements such as a specific colour palette, a style of animated illustrations, and a voice or tone, can claim passing off against another brand using the same elements together. The test is deceptive similarity: would an ordinary intelligent consumer be misled as to origin?

The problem is, onboarding experiences aren't like packaging; they're happening in a digital world where users have joined in on expectations. These are just standard UX conventions and are what many SaaS products have adopted. Trademark distinctiveness will not be found in the generic UI conventions any more than a rectangular bottle will be found to be trademarked. It has to be the specific, non-functional/non-generic elements that are the distinguishing ones.

Competition Law and the UI Copying Problem : When a dominant SaaS company tries to recreate a smaller company's interface it erodes the competitive advantage and kills what we call the edge, Competition Act remedies come into play. Section 4(2)(c) of the Competition Act bans an enterprise in a dominant position from rendering another enterprise unable to access the market.16 If an enterprise with market power simply copies the distinctive UI of a rival, because that competitor is prevented by the copying from competing on the quality of the 'experience', it could be said that it is engaging in such a practice.

The Competition Commission of India (CCI) has not yet made any decision on a case exactly in this nature. In Matrimony.com Ltd. v. Google LLC & Ors.,17 however, the CCI looked into the extent to which a dominant platform can use design features to take an advantage over competitors. The principle extends: when a dominant enterprise uses design to copy and therefore undercut a smaller one's brand investment, it's not a competitively neutral use of design.

This area of IP and competition law is the least developed. If a SaaS company is targeted by a big player for deliberate copying of its UI, it would have to pursue concurrent remedies, such as infringement/passing off action under IP law and Section 4 action before the CCI. Both are slow paths and interim injunctions in IP disputes need to be based on the existence of irreparable harm in a hurry.

Practical Implications

Documentation is the first practical thing SaaS businesses have to do. Having no requirement to register a copyright does not imply that documentation is of no importance. Version histories and timestamped design files not only clarify priority but also document the relationship of creation and other important elements of any infringement case. Businesses should also evaluate their onboarding experience and its distinctiveness for a trade dress claim and whether it should seek trademark registration for the shape or configuration of their product interface.

The second is contractual : when the Internet strikes, it brings both the buyer and the seller into the game. Reverse engineering is usually forbidden in EULAs and TOS but usually not forbidden by the competitor who observes the product and then replicates it, as a free trial user. However, depending on the structure of the investor and partnership agreements, access to the wireframes and flow documentation that are shared during due diligence may be limited by a well-drafted confidentiality clause.

A third, largely neglected implication is to the obligation of disclosure in passing off. If a competitor has shown to have 'scraped' the product, then using the same method of service in the onboarding process may also constitute an unlawful means to be relied on when seeking an injunction.

Last but not least, in policy terms, the Indian IP law should have a more definite stance on the protection of UI and UX. The existing system allows SaaS companies to use case comparisons from previous software and physical product trade dress rulings. Litigation uncertainty would be greatly reduced if there were a sector-specific clarification, either by amending the Copyright Rules or by a DPIIT policy note on software interface protection.

Conclusion

Onboarding a SaaS product is like a piece of software, a book, an art, a brand name, a competitor. While existing Indian IP law can touch all these aspects, all of them are not clearly and certainly. Specific expression, such as textual and graphical expression, is protected by copyright; a distinctive overall image acquired by secondary meaning is protected by trade dress; a remedy for those cases where copying is a weapon to foreclose the market is found in competition law.

There is a wide disconnect between the law as it is and what teams believe they can protect. The solution is to have better legal strategy, documentation, registration, contractual protection, as well as incremental judicial and legislative development, to bridge it. So, until then, the most well-thought-out onboarding process is still susceptible to emulation, which the law does not fully address.

Author: Saumyaa Upadhyay, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.

Endnotes

1. Copyright Act, 1957 (India).

2. Trade Marks Act, 1999 (India).

3. Competition Act, 2002 (India).

4. Copyright Act, 1957, § 2(o) (India).

5. Trade Marks Act, 1999, § 2(zb) (India).

6. Competition Act, 2002, §§ 3, 4 (India).

7. Agreement on Trade-Related Aspects of Intellectual Property Rights art. 10, Apr. 15, 1994, 1869 U.N.T.S. 299 [TRIPS Agreement].

8. Copyright (Amendment) Act, 1994 (India).

9. Copyright Act, 1957, § 17 (India) (copyright vests in the author upon creation without registration).

10. Eastern Book Company v. D.B. Modak, (2008) 1 SCC 1 (India).

11. Emergent Genetics India Pvt. Ltd. v. Shailendra Shivam, 2011 SCC OnLine Del 1690 (Delhi H.C.).

12. R.G. Anand v. M/s Deluxe Films, (1978) 4 SCC 118 (India) (no copyright in ideas; protection extends only to expression).

13. Computer Associates International, Inc. v. Altai, Inc., 982 F.2d 693 (2d Cir. 1992).

14. Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd., (2001) 5 SCC 73 (India).

15. Parle Products Pvt. Ltd. v. J.P. & Co., Mysore, (1972) 1 SCC 618 (India) (deceptive similarity assessed from the perspective of a consumer of ordinary intelligence with imperfect recollection).

16. Competition Act, 2002, § 4(2)(c) (India).

17. Matrimony.com Ltd. v. Google LLC & Ors., Case No. 07 of 2012 (Competition Commission of India, Feb. 8, 2018).