Section 2 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 2 lists 22 defined terms, from clause (a) to clause (v), and every later section of the Act uses them. The three that decide what is protected are "layout-design", "semiconductor integrated circuit" and "commercial exploitation". This article takes every clause in order and groups them into technology terms, register terms and Appellate Board terms.
This article reflects the Act as amended up to 3 October 2026 (the Act has not been amended since it was enacted in 2000). Check sicldr.gov.in for later notifications. Section 2 has been in force since 1 May 2011 under S.O. 746(E).
A layout-design is "a layout of transistors and other circuitry elements" including the lead wires connecting them, expressed in any manner in a semiconductor integrated circuit. Commercial exploitation means to sell, lease, offer or exhibit for sale or otherwise distribute the circuit for a commercial purpose. A registered proprietor is the person entered in the register as proprietor, and a registered user is a person registered under section 25. Clause (v) treats a reference to the Registry as including any of its offices.
Technology terms
These three clauses define the subject matter. If you design chips, read them first, because protection depends on fitting inside them.
| Clause | Term | What the Act says |
|---|---|---|
| 2(e) | commercial exploitation | In relation to a layout-design, "to sell, lease, offer or exhibit for sale or otherwise distribute such semiconductor integrated circuit for any commercial purpose" |
| 2(h) | layout-design | "A layout of transistors and other circuitry elements" and includes lead wires connecting such elements, "expressed in any manner in a semiconductor integrated circuit" |
| 2(r) | semiconductor integrated circuit | "A product having transistors and other circuitry elements which are inseparably formed on a semiconductor material or an insulating material or inside the semiconductor material and designed to perform an electronic circuitry function" |
Three points follow from the wording.
First, the layout-design is the layout, not the chip's function. A layout-design is the arrangement of the elements and the wires, wherever it is expressed. The circuit is the product on which it sits.
Second, the circuit definition requires elements that are "inseparably formed" on or inside the material and "designed to perform an electronic circuitry function". A board of loose components soldered together does not fit that wording.
Third, "commercial exploitation" is defined in terms of the circuit, not the layout alone. Offering a sample for sale or exhibiting it for sale counts, so a start-up that shows prototype chips at a trade event with a price list should check whether that is "exhibit for sale". This matters under the originality bar in section 7, where commercial exploitation before filing can block registration, subject to a two-year allowance.
Register terms
These clauses tell you who is on the register and how the register is reached. If you need them applied to a chip portfolio, a legal consultation is a sensible first step.
| Clause | Term | What the Act says |
|---|---|---|
| 2(b) | assignment | "An assignment in writing by act of the parties concerned" |
| 2(t) | transmission | Transmission by operation of law, devolution on the personal representative of a deceased person, or any other mode of transfer that is not assignment |
| 2(l) | register | The Register of Layout-Designs referred to in section 6 |
| 2(m) | registered | Registered under this Act, with grammatical variations |
| 2(n) | registered layout-design | A layout-design "which is actually on the register" |
| 2(o) | registered proprietor | The person for the time being entered in the register as proprietor of the layout-design |
| 2(p) | registered user | A person for the time being registered as such under section 25 |
| 2(q) | Registrar | The Registrar of Semiconductor Integrated Circuits Layout-Design referred to in section 3 |
| 2(j) | notify | To notify in the Semiconductor Integrated Circuit Journal published by the Registrar |
| 2(k) | prescribed | Prescribed by rules made under the Act |
| 2(f) | convention country | A country notified as such under section 93 |
| 2(v) | Registry | A reference to the Registry includes any office of the Registry |
Why the difference between assignment and transmission matters
Assignment is by written agreement between the parties. Transmission covers a company merging, a proprietor dying and the layout passing to heirs, and other transfers that are not assignments. Both lead to the register: section 23 requires the new owner to apply to register title.
"Actually on the register"
Clause (n) defines a registered layout-design as one "actually on the register". An application that has been accepted but not yet entered does not meet that wording. This ties to the rights in section 17, which belong to the registered proprietor.
"Notify" means the Journal
Clause (j) says "notify" means to notify in the Semiconductor Integrated Circuit Journal published by the Registrar. Wherever the Act or Rules requires a notice or advertisement to be notified, the Journal is the place. A separate article on the Rules covers advertisement in the Journal.
Appellate Board terms
Seven clauses define terms for the Layout-Design Appellate Board: (a) Appellate Board, "established under section 32"; (c) Bench; (d) Chairperson; (g) Judicial Member; (i) Member; (s) Technical Member; and (u) Vice-Chairperson. Clause (g) refers to the qualifications in section 34(3), and clause (s) to those in section 34(4).
| Clause | Term | Reference |
|---|---|---|
| 2(a) | Appellate Board | Established under section 32 |
| 2(c) | Bench | A Bench of the Appellate Board |
| 2(d) | Chairperson | Chairperson of the Appellate Board |
| 2(g) | Judicial Member | Appointed under the Act; includes a Chairperson or Vice-Chairperson with the qualifications in section 34(3) |
| 2(i) | Member | A Judicial Member or Technical Member, including the Chairperson and Vice-Chairperson |
| 2(s) | Technical Member | A Member who is not a Judicial Member; includes a Chairperson or Vice-Chairperson with the qualifications in section 34(4) |
| 2(u) | Vice-Chairperson | Vice-Chairperson of the Appellate Board |
These definitions are in force. The Board itself is a different matter: no notification bringing sections 32 to 53 (and 55) into force was found in the India Code record or on the Registry's notifications page (checked 3 October 2026); check the current position before relying on them. The definitions do not by themselves create a Board.
A worked example
A fabless start-up in Pune draws a layout for a sensor chip and has foundry samples made. It sends sample chips to a prospective customer with a quotation. Reading the definitions together, the layout is a "layout-design" in clause (h), the sample is a "semiconductor integrated circuit" in clause (r), and sending it with a quotation may be an "offer for sale" under clause (e). If the start-up later applies, the date of that offer feeds into the section 7 question. If the start-up's layout is entered on the register, the start-up becomes the "registered proprietor" in clause (o), and a licensee it later names under section 25 becomes a "registered user" under clause (p). See registered users.
Need help with layout-design terms in your contracts?
If a licence, foundry agreement or registration application turns on a defined term, our legal consultation team can read it against section 2 and the later sections for you.
Key takeaways
- Section 2 has 22 clauses; (e), (h) and (r) define the protected subject.
- Commercial exploitation means selling, leasing, offering or exhibiting for sale, or otherwise distributing the circuit for a commercial purpose.
- A registered proprietor is the person entered in the register; a registered user is registered under section 25.
- Clause (v) includes any office of the Registry when the Registry is mentioned.
- Board definitions are in force, but no commencement notification was found for Chapter VIII.
Read next
- Section 7: originality and commercial exploitation
- Sections 16 and 17: rights of the proprietor
- Sections 24 and 25: registered users
Disclaimer: Based on the Semiconductor Integrated Circuits Layout-Design Act, 2000 (never amended; commencement as notified in 2004, 2011 and 2014) and the Semiconductor Integrated Circuits Layout-Design Rules, 2001 as amended by G.S.R. 689(E) of 14 September 2012, as consulted on 3 October 2026. Check sicldr.gov.in for later notifications and current forms and fees. This article is general information, not legal advice; check the official text before acting.