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An example of overlapping categories is copyright of a literary or scientific work. A literary work is copyrightable but a scientific work can also be in literary form and therefore copyrightable. It may therefore fit in the category of both literary and scientific work. Some of the intellectual properties are present in the definition both in the form of protected rights and unprotected rights. Thus a copyrighted secret formula may enjoy protection under Copyright Act, if expressed in a literary medium or a patented process may also be protected under Patent Act but even if they are not protected by intellectual property rights legislations, they will nevertheless be covered by the term 'secret formula' or 'process' if the consideration is for use of such a property. The fact that computer programme fits into more than one category is recognized in IRS Regulations also when it is considered under categories of copyright as well as know-how.

Broadly the aforesaid definitions cover the payments for the use or a right to use intellectual property rights specified therein or for certain specified categories of equipments. The assessee submits and rightly so that the payments made by it for the purchase of software are payments for the acquisition of software products and is not consideration for acquisition of any intellectual property rights specified in the aforesaid definitions of the term 'royalty' for the reasons mentioned below.

The genesis of these special rights to these three categories of rights has been explained in Intellectual Property Law by Lionel Bently & Brad Sherman Oxford Indian Edition at pages 43, 44, 130, 132 in the following terms:

7.1 Computer Programmes Directive (1991).-The first European initiative in the copyright field was the Computer Programmes Directive, which had to be implemented by 1-1-1993. The Computer Programmes Directive addressed the question of whether computer programmes should be protected by copyright, patents or a sui generis right. Fearing that the member States might have responded differently, the Commission sought a swift and unified response. After consulting with interested parties, it was decided that computer programmes should be protected by copyright. This is reflected in the fact that the Directive requires member States to protect computer programmes as literary works under the Berne Convention. To ensure that this operates as a matter of substance as well as form, the Directive also harmonized the criteria of protection. Prior to the Directive, there were wide divergences as to what member States required of computer programmes before they could be regarded as original, with German Law setting the level of originality at a particularly high level. Ultimately, the Directive requires member States to protect computer programmes as long as they are original in the sense that they are their author's own intellectual creation.

The exclusive rights that constitute the intellectual property known as copyright are different from rights to a particular copy of the copyrighted work. When one buys a copy of a copyrighted novel in a bookstore or a recording of a copyrighted song in a record store, one acquires ownership of that particular copy of the novel or song but not the intellectual property in the novel or song. In other words, by acquiring a copy of a copyrighted work, one does not require the copyright the intellectual property.