The policy is intended to "protect and preserve the intellectual properties of the people 'which are under assault' in the context of globalization and liberalization", said Chief Minister V S Achuthanandan during a speech on June 27, when the policy was released.

The Law Minister for the State, M Vijayakumar, stated at the launch that the policy focuses on protecting traditional medicine or ayurveda and biodiversity and is designed to address fears that creating databases of traditional knowledge might make it easier for companies to appropriate information that may not otherwise be available.

The authors of the policy distinguish between two types of traditional knowledge: "knowledge which is the preserve of particular communities, especially tribal communities, or particular institutions, or particular families, often located in specific regions, and passed down from one generation to the next in a variety of traditional ways" and "knowledge whose practice sustains the livelihoods of many persons scattered across the state, which does not have any specific community or family custodian".

Under the new policy, all traditional knowledge of the first category will be held under a so-called commons licence, which will allow rights holders to allow others to use the knowledge for non-commercial purposes.

The policy also states that any development on this knowledge should go back into the "knowledge commons" and cannot be patented.

The policy also calls for the creation of a body called the Kerala Traditional Knowledge Authority (KTKA), which will collect and store information about registered traditional knowledge.

All rights holders of traditional knowledge, particularly traditional medicine, will be required to register the traditional knowledge with the KTKA, indicating what is unique about their practice, the details of the nature of the practice and the details of the community/group/individual that constitutes the custodian of the practice.

In the case of traditional knowledge with no tangible custodian, Kerala state will be deemed to be the right holder and "all actual practitioners of this type of knowledge in Kerala, provided they are not classifiable as medium or large enterprises, have an automatic licence for right of commercial use given by the Kerala state which is the original right-holder, but are not empowered to transfer this right of commercial use to anybody else".

Shamnad Basheer, a research associate at the Oxford Intellectual Research Centre and founder of the blog Spicy IP has praised the "laudable intent" of the law but thinks that it may create constitutional problems because Indian states do not have authority to pass IP related legislation.

Under the Constitution of India, intellectual property is on the list of subjects to be legislated on by the central government.

Although the description of IP does not include traditional knowledge, and the term traditional knowledge is not mentioned in the constitution, Basheer argues that Article 248 of the Constitution says that power over any subject matter not mentioned rests with the centre.