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Rise of Financial Institutional Arbitration

By: Yamini Daga

INTRODUCTION

Ever since now litigation has been the most used kind of system for the resolution of the disputes. Though nowadays quite many ways are available through which we can seek the resolution of the disputes like Arbitration, Mediation, Litigation, etc. Then also it is difficult for people to decide that which kind of method they want to opt in. Through time all these methods are emerging in their own fields and ways though litigation are believed to be the oldest form and most opted way. As through litigation people go to the court to seek justice and follow the same age old process.

The Arbitration is also one of a kind of dispute resolution process where the parties privately resolve their dispute as when the party faces a dispute in their agreement they seek the help of the arbitrator. Arbitrator is considered as a third party who listen to both the sides of the party and in return try to resolve their dispute by giving their decision in the form of arbitral award. This is the method where party try to resolve their disputes outside of the courtroom which seems less complex then the proper litigation process as less paperwork is required and experienced person are appointed as an Arbitrator.

Mediation is also a part of the dispute resolution process though in India there are no particular laws related to the mediation at present, but it is still opted by many parties though the decision given by a mediator is not binding in nature unlike the arbitral award which has the same binding authority like the decree passed in the court. In the process of mediation, there is a third party who helps in resolving the dispute by guiding them into the right direction through an informal meeting among the parties to the agreement.

And among all of the above mentioned few methods, arbitration has gained more preference over the age old court systems and the informal meetings with the mediator among the financial sector because of the globalization. As of nowadays people don’t have enough time to go to the court to seek remedy or justice they seek a process which is less complex and which is less time consuming. Thus the emergence of Arbitration is rising in the financial sector too.

ADVANTAGES THAT LED TO WIDENING OF ARBITRATION IN FINANCIAL SECTOR:

Firstly, the procedure of arbitration nowadays require the element of confidentiality. Like whatever is being going on the meetings are not supposed to be seen into the limelight unlike happening in the courtrooms. As there are many mergers & acquisitions cases are coming forward because of the globalization. It is a delicate situation as the sensitive information of the companies can be leaked and be used the competitors to gain an upper hand in the market and use that against the parties of arbitration. Therefore arbitration is a process where the third person who is the decision maker or the arbitrator are bound to maintain the secrecy about the case as they are part of contract to maintain the confidentiality about the parties or about the case.

Secondly, the kind of expertise which is being needed by the arbitrator generally is being lacked by the courts. The Institutional Arbitration have a well-qualified arbitrators with the specific knowledge regarding the subject matter, which in return makes it easier for the parties to seek the justice or solution to their argument.

Additionally, the proceedings of arbitration are generally custom made which provides the level of convenience to the parties by suiting the requirements laid down by the parties and applicability of the arbitral award is easier as compared to the decree or judgment of any court.

 

CUSTOM MADE SOLUTIONS[1]:

As we know, Arbitration is a process which is custom made as in the way it gives option to the parties to decide that how, when, where and in which manner they want to proceed further in the process of arbitration. It provides freedom to parties to decide their method unlike the age old court systems.

  • Parties are free to decide the seat of arbitration, like parties can decide that at which place they would like to hold the meetings and where the whole procedure should take place can be completely decided by the parties. Basically the place of arbitration is decided at the convenience of the parties.
  • Parties are free to determine the way of procedure or procedural rules, the procedural rules are to be decided by the parties in the agreement and if they fails to conclude at a mutual decision than the procedure is being set by the arbitrator themselves.
  • Parties are free to determine the language for arbitration, the language in which they want to hold their proceedings during the process of arbitration.
  • Parties are free to select their arbitrators, parties are free to choose an arbitral institution of their choice like by whom they want their case to be taken care of and the qualifications required by the arbitrator chosen by the parties can also be specified by the party.

 

 GUIDELINES THAT LED TO THE GROWTH OF ARBITRATION IN THE FINANCIAL SECTOR[2]

  1. THE ISDA ARBITRATION GUIDE

The International Swaps & Derivatives Association (ISDA) in the year of 2013 September issued a guide relating to how one can use arbitration in ISDA Master Agreement. Earlier it included sample clause in the agreement, later on an expanded range of model clauses were introduced around the year 2018 for huge number of usage of institutional arbitration all over the world.

  1. P.R.I.M.E. FINANCE RULES

When courts were not able to deal with the nexus disputes arose from the financial sector thus this resulted in the creation of international finance center which is known as P.R.I.M.E. Finance. This deals with the cases related to ADR and in return provides resolution by medium if mediation, arbitration and other disputes resolving services. They have their own rules and clauses which was released with this center on 16th January 2012, situated at Hague. The reason behind opening this center was to fulfill the need of arbitration process required in the financial sectors. All the provisions made under this has only one aim that was to encourage the use of arbitration or law in the financial markets also and to provide justice to people who suffered or went through the wrongdoing or scam of others in this area.

  • THE ICC COMMISSION REPORT

This report was prepared after conversing with at least more than or about 50 financial institutions around the globe and banking counsels or sectors with various policies, awards from minimum about 13 arbitral institutions were also being examined while preparing this particular report.

This report speaks about arbitration that is being performed in the regulatory method, in international finances matters, the disputes between the banking sectors, disputes relating to trade finances, etc. and quite huge growth sectors of arbitration were also recognized in this report.

This report turns out to be were helpful in determining the rise of financial institutional arbitrations among the world by classifying the types of disputes and by recognizing the strength of arbitration process too.

  1. RECENT PROCEDURES

Previously the main purpose behind referring to the national courts over the process of arbitration was to assure speedy resolution of disputes via the judgment given in the format of summary elsewhere, in the process of arbitration the arbitrators are bound by their duty that they have to provide equal, fair and full opportunities to the respective parties of the agreement to set out their cases.

Nonetheless this thought process has been changed now, the institutional arbitration centers around the globe like the Singapore International Arbitration Center (SIAC), the Hong Kong International Arbitration Center (HKIAC), the International Chamber of Commerce (ICC) and many other institutions now provide the summary disposal of the disputes just like old court system which makes the process of arbitration more applicable option.

RECOGNIZED LIMITATIONS OF ARBITRATION

Though the process of arbitration is gaining its pace and being more frequently used method for resolving dispute in the financial market or sector, there are still some justifications that why sometimes this method of arbitration can be avoided. Like in few cases like the criminal cases arbitration is not possible as because these issues are not arbitrable in nature, as the third person can resolve the dispute where the parties to the agreement enter into an argument not where a person committed a crime and being guilty of murder or anything as those cases needed proper justice with the relevant punishments prescribed under the law.

The reason why people opt arbitration may be because of the myth that arbitration process are cost effective process. The Ad-hoc method of arbitration is precisely cheaper and affordable but it lacks experience and some required qualifications too that are being needed by the parties but the institutional arbitration is an expensive method.  As in the financial matters the parties sometimes doesn’t belong to same country which means a matter of cross border agreements are usually being held by the institutional arbitration centers, and it does cost a huge amount of money as the expenditure of procedure and transportation is expensive in nature. The arbitrator might also belong to a different country than any of the party to the agreement which make way for delay in the coordination between the parties to the agreement and the appointed arbitrator which ends up resulting in slow remedies.

CONCLUSION

As the P.R.I.M.E. Finance Rules, the ICC report and other initiatives are being encouraged and set as a means for resolution of disputes by the process of arbitration is being more frequently being recognized by the financial institutions or sectors.

The process of arbitration is most favorable as compared to the other methods of ADR and the age old system of litigation. Though there are many advantages and disadvantages of the process of arbitration but it will still be the most favorable option to be considered for resolving the disputes in the financial sector and the demand for arbitration will grow higher only in the near future too.

 

 

 

[1] Allen & Overy, The rise and rise of Arbitration in Banking and Finance Disputes, (2018, 9th February), http://www.allenovery.com/en-gb/global/news-and-insights/publications/the-rise-and-rise-of-arbitration-in-banking-and-finance-disputes

 

[2] Shreya Shrivastava and Sachin Bhatnagar, The Rise of Arbitration in the Financial Sector, (April 11,2020), https://lawcorner.in/the-rise-of-arbitration-in-the-financial-sector/

 

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Role of Intellectual Property in Mergers and Acquisition

By: Nidhi Poddar

Introduction 

Intellectual Property has not always horse around Merger and Acquisition deals. Intellectual Property plays a disguised role in 2 major aspects:

  1. By making certain Intellectual Property intensive industries, for example, life sciences, where the value of pharmaceuticals can often be viewed with the scope of patent protection.
  2. By making certain deal structures, for example, spin-outs and joint ventures where the rational allocation of Intellectual Property Rights is an unavoidable necessity.

Whether directly or indirectly, consciously or unconsciously, Intellectual Property plays a significant role in any Merger and Acquisition activity. However, it was not unusual that the acquirer decides and proceeds with the typical Acquisition, without involving Intellectual Property experts. In most Merger and Acquisition deals, the acquirer determines the valuation, negotiates principal deal terms, and even finalized the structure of transactions whether internal or external. In certain aspects, Intellectual Property is a rattler to the Merger and Acquisition train i.e. delighted to affix along but not driving with equal importance. This is evidently accurate for valuation in Merger and Acquisition deals. While valuing a business, the bankers or any other person involved will not endeavor to value Intellectual Property separately. As the valuation of Intellectual Property separately is a burdensome task. If in any case, the acquirer measures the value of Intellectual Property separately from the business, then it would not be in the acquirer’s interest as the acquirer has to pay the higher value of the business.[1]

Merger & Acquisition

Waves of Merger and Acquisition is a key feature of corporate history and has evolved significantly in India in past decades. Merger and Acquisition has become the most important aspect of growth strategy in the corporate industry. Merger and Acquisition has shown an effective result in businesses like information technology, telecommunication, business process outsourcing and pharmaceuticals. The strategy of Merger and Acquisition has proven to be a surest way to acquire competencies and funds, opening new market avenues, expanding customer base, snuffing out competition. The strategy helped the corporate industry in maintaining and improving profitability.[2] Merger and Acquisition is a tool for reconstruction of the company in order to maximize the wealth of the company and create goodwill in the global market. Merger refers to consolidation of two companies into one company. This Merger of two companies will help in maximizing profit and enhance the work and ensure that the company achieves the desired goals. Whereas Acquisition refers to a takeover of one company by another company by purchasing its ownership stake. Generally, such a stake is above 50%, which provides the acquiring company the control of management.[3]

Intellectual Property

Intellectual Property is an incorporeal Property which is invented or created by human intellect. Intellectual Properties are intangible in nature and possess a right i.e. ” Right in Rem” which means that the inventor has the right towards the property wholly. The different forms of Intellectual Property are- Copyright, Trademark, Patent, Design etc. Intellectual Property Rights refers to the legal rights possessed by the inventor or creator in order to protect the invention or the creation for a certain period of time. Intellectual Property Rights is an exclusive right to the inventor or the creator or assignee, to use, sell or dispose the invention. Intellectual Property Rights promote the economic development of the country by creating healthy competition and encouraging industrial development and economic growth within the country.[4]

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Intellectual Property is referred to as a corporation’s biggest asset. In the New Economy- Brand names i.e. (Trademarks, Service marks and Trade names), Product value, Brand value, Innovation portfolio of the company plays a pivotal role in the management of assets of the company and are equally important as the goods and services. Sounds, smells, colour and product shape comes under the trademark protection. There should be no surprise that Intellectual Property plays a crucial role in the sale or purchase of a business.[5] Intellectual Property plays a vital role in the strategic development of the corporation. Intellectual Property is one of the various reasons for which different corporations merge or acquire any company, because such Merger and Acquisition strengthens their market share and improves and makes their management system efficient.[6] With the technology advancement, the importance and the value of intellectual property of a company has enhanced. The intellectual property possessed by a company is a cornerstone, thus has increased focus on intellectual property while any commercial transaction. In the present era, it has become the most task to identify and adequately analyze the value of intellectual property of the company as it will directly impact the value of the transaction.[7]

IP due diligence

This article intends to highlight and provide a quick overview on how Intellectual Property due diligence is important in Merger and Acquisition transactions. There is great  significance of Intellectual Property due diligence in Merger and Acquisition transactions in relation to the acquisition or investment in technology and biotech companies because the main purpose of acquiring such company is to target the Intellectual Property Assets (IPA) of the company. Intellectual Property Assets mainly refers to Patents, Trademarks, Copyright. Intellectual Property due diligence refers to a deep investigation which is conducted to understand the value of the Intellectual Property of the target company before any Merger or Acquisition.[8]

Role of Intellectual Property in Merger and Acquisition:-

  1. Value addition to the company portfolio:–

Merger and Acquisition of a company helps in adding value to the portfolio of a company. It is very necessary that companies evaluate the portfolio of the company and check whether the current portfolio meets the requirement of the company objective. In the present dynamic and inconstant market environment, it is not possible to invent something new, thus the companies must search for new opportunities and the ways of acquiring existing innovations of the other companies.

  1. Acquiring unique capabilities:-

Every company wishes to have a stronghold and be in a dominating position against their competitors. One of the major tools to achieve this is Merger and Acquisition. By Merger and Acquisition, a company may acquire the unique innovation or capabilities of their competitors. This will help the companies to have an edge over others. This result in changing the whole outlook of the company and creating a unique and efficient business model. 

  1. Transfer of Technology: –

A fruitful benefit of acquiring an Intellectual Property is that it allows the transfer of technology from one company to another. This helps in proper exploitation and utilization of the Intellectual Property to its full extent.

  1. Diversification: –

The Acquisition or Merger of a company helps in exploring and enhancing different sectors of a business. Merger and Acquisition open new doors of deals and growth within the market. It is very convenient to start a business through pre-existing or pre-established resources, and even this reduces the cost of operation and helps in creating a diversified asset portfolio for the company.

  1. Growth: –

The main objective to implement the corporate strategy is to promote growth and development and to maximize the profit, resulting in achieving the desired goals. The company must ensure that the product portfolio of the company is updated and is efficient to meet the current demand in the market.[9]

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Some classic example of Merger and Acquisition

  1. In 1988, Nestle acquired Rowntree business. It was the largest foreign takeover of a United Kingdom Company. In this deal, Nestle agreed to pay around US $ 4.5 Billion for Rowntree PLC. The main objective of this deal was to acquire famous brands i.e. Kit Kat, Yorkie, and Rolo.
  2. Another Classic example is Acquisition of Luxury Italian fashion house Versace by Michael Kors. The main objective of this deal is to access new product lines and markets through an established brand and IP portfolio.[10]
  3. Motorola Mobility was acquired by Google Inc. which gave the acquirer complete control of Motorola’s patents. Later Google Inc. sold Motorola Mobility to Lenovo, but retained ownership of Motorola Mobility’s Patent Portfolio. The main objective of Google Inc. was to purchase the patents of Motorola mobility.[11]
  4. Another interesting case study is the Acquisition of Rolls Royce by Volkswagen. Volkswagen has acquired all the assets required for the production of cars but was restricted to use the Logo of Rolls Royce. Volkswagen overlooked the fact that prior to the Acquisition, BMW has already acquired the access to use Rolls Royce Logo for its car.[12] BMW was a direct competitor to Volkswagen. Volkswagen purchased all rights to manufacture Rolls Royce cars but did not have engines for their car as BMW was producing engines for Rolls Royce. Rolls Royce factory was manufacturing both Rolls Royce and Bentley cars. After a lot of twists and turns, in 2003 BMW became the owner of Rolls Royce and Volkswagen is sole manufacturer of Bentley cars. This case study reiterates the importance of intellectual property due diligence before any Merger and Acquisition.

By the above stated classic examples what we get to learn from it.

In any Merger and Acquisition proper due diligence of Intellectual Property asset is a must. The nature of Merger and Acquisition is stated as risky and with the technology advancement in the present era has become riskier. Due diligence of Intellectual Property Assets must be the pertinent question before initiating a formal contact with the target company. Before contacting, the company must do some homework and must collect certain information regarding patents, trademark, copyright, goodwill etc. Needless the same amount of importance must be given to the tangible and intangible assets to get a fair valuation.[13]

Conclusion

Intellectual Property are the intangible assets of the company and plays a vital role in the expansion of the company and even add a great value to the portfolio of the company. Merger and Acquisition help in creating asset portfolio, acquire new capabilities, enhance the growth rate which ultimately help the company achieve their goals. To avoid any uncertainties or defects, a company should ensure a proper due diligence and valuation of Intellectual Property asset before acquisition of the Intellectual Property asset.

A company survival, goodwill and the profit depend on the possession of IP assets. It must be ensured that the deal benefits both the parties. Government is bringing out various policies to encourage Merger & Acquisition in India. The Land Acquisition bill, Labor Law and Good & Sale Tax (GST) will have a great impact on the corporate field.

Any company at any level or a startup company must emphasize on the importance of protecting their Intellectual Property rights. The acquiring company must conduct due diligence to improve their marketability and be able to identify weaknesses.

Due diligence is an integral part of any Merger and Acquisition transaction. Any act of negligence while performing due diligence can lead to over valuation of the company and even lead to an exposure to a unknown risk and liabilities.

[1] https://www.sullcrom.com/siteFiles/Publications/Mousavi-IAM-July-Aug-2011.pdf

 

[2] https://pdfslide.net/documents/Intellectual-Property-the-dominant-force.html

 

[3] http://www.legalserviceindia.com/legal/article-2693-role-of-Intellectual-Property-in-an-acquisition-or-Merger.html#:~:text=Intellectual%20Property%20assets%20are%20the,such%20as%20Merger%20and%20acquisition.

 

[4]  https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3217699/

 

[5] https://norrismclaughlin.com/articles/Intellectual-Property-aspects-of-Mergers-a-Acquisitions-part-i-of-ii-conducting-due-diligence/

 

[6]  https://www.udl.co.uk/insights/the-importance-of-ip-in-Mergers-and-Acquisitions

 

[7] http://www.buildingipvalue.com/05_NA/124_127.htm

 

[8] https://www.corporatelivewire.com/top-story.html?id=ip-due-diligence-in-ma-transactions

 

[9] Supra note (3)

[10]  https://www.udl.co.uk/insights/the-importance-of-ip-in-mergers-and-acquisitions

[11] https://www.businesswire.com/news/home/20150407005604/en/Research-Markets-Strategic-Importance-Intellectual-Property-IP

[12] https://medium.com/@ramkumar1984.rajachidambaram/how-ip-acquisition-unlocks-huge-value-in-technology-m-a-23e2739cf091

 

[13] https://www.origiin.com/2019/01/10/mergers-and-acquisitions-intellectual-property-due-diligence/

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Patent Licensing Agreements and the clauses covered under it

By: Riya Bansal

INTRODUCTION:-

In the later part of 19th century new inventions in various fields of art, processing, manufacturing, apparatuses, machinery and other substances produced by manufacturers were at upsurge. Thus, there was a threat to inventors that their inventions could be infringed easily as there was no law to refrain infringers from using or copying such inventions. So to safeguard the inventor’s interests the British rulers at that time enacted the Indian Patents and Designs Act, 1911. With the evolution of Indian political and economic conditions in the later part of the 20th century, there was need of a comprehensive law to ensure the greater effectiveness and security of the patent rights and to encourage inventors for making new and useful inventions in different fields. Therefore, the Patents Act, 1970 was enacted which repealed and replaced the 1911 Act so far as the patent law was concerned. Now there was no threat to the interests of inventors as there was an option of licensing of patents by mode of a written agreement, which is proved to be beneficial for the inventors as they could protect their inventions and at the same time grant permission to make partial use of their inventions.

PATENT:-

Patent is a monopolistic intangible right granted to a person who has invented a new and useful article or a new process of making an article. In India, such right is conferred upon the inventor through a Government issued Certificate, in which it is explicitly mentioned – what the invention is and inventor is the owner of it; and this government issued certificate is known as “Patent”. The inventor or person who invents is called “Patentee” only when his invention gets approved by Government and thereupon he can make exclusive use of his invention.

The word patent is derived from the Latin term ‘Patene’ which means ‘to open’. There is no exhaustive definition of ‘Patent’, but to get the true essence of the definition of patent one can read Section 2(1) (m) of Patent Act 1970 [1][which defines Patent] along with Section 2(1) (j) of Patent Act 1970[2] [which defines Invention].

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PATENT LICENSING:-

Patent Licensing is a contract between Patentee (known as Licensor) and Licensee; wherein licensor grants permission to a third party (known as licensee) to sell, use, exercise etc. his or her patented invention. In case of grant of Patent license the ownership of a patent remains with the patentee and mere partial use of patent is permitted. Thus partial use of patent is subject to certain terms and conditions which are agreed upon by both licensor and licensee. Since Patent Licensing is a contract, it must satisfy all the essentials mentioned under Section 10 and Section 11 of the Indian Contract Act, 1872, i.e., the contract must be done between persons who are of sound mind, who have attained age of majority and who are not disqualified under any law and there must be a lawful object for a lawful consideration with the free consent of parties. There are various modes of patent licensing like Exclusive Licensing, Non – Exclusive Licensing, Voluntary Licensing, Compulsory Licensing, etc.

PATENT LICENSING AGREEMENT:-

Now a day’s Patent Licensing is used as a source of income for the patentees, as it has become the most easiest and convenient way to transform patent into a reality without incurring any financial or marketing or manufacturing expenses. With patent licensing we have to keep in mind that it is associated with an agreement through which a patent is licensed and such agreement will be considered invalid if it is unregistered and is not in writing[3].

Patent Licensing Agreement is a negotiated agreement between the licensor and licensee, wherein licensor authorizes licensee to make partial use of its patent, in compliance with the terms and conditions of the agreement, in exchange for an agreed pecuniary consideration (technically to be called as Royalty). Once the terms and conditions of the said agreement are negotiated upon, then the parties have to convert it into a written agreement so that it can be duly executed and registered in the official Register of Patents. Generally the said agreement is made, with agreed terms and conditions, for an agreed period of time, for a defined purpose, and in a definite territory.

Also we could say that the Patent Licensing Agreement is legally binding upon the parties as they have certain duties which are to be performed according to the terms and conditions of the agreement. And legally binding means that if any of the party fails to perform its duties in compliance with the terms of the agreement then the aggrieved party can sue the party committing breach accordingly, but for that it is mandatory that the Patent Licensing Agreement is to be registered as per Section 67 of the Patents Act, 1970[4].

CLAUSES OF PATENT LICENSING AGREEMENT:-

The clauses of Patent Licensing Agreement generally, defines the scope of rights and obligations of the parties and; helps in eliminating ambiguity and disputes, as they are written only after being negotiated and agreed upon mutually by both the parties. It is very crucial that the clauses of patent licensing agreement are drafted accurately so as to avoid any kind of disputes down the road. The list here in below is not exhaustive but most important and basic clauses of a patent licensing agreement are tried to be covered and clauses are to be included or excluded in the agreement considering various factors pertaining to type of patent and mutual consent of the parties.

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  • GRANT OF LICENSE –

This clause mainly deals in what type of licensing is done by the licensor i.e. what type of patent licensing is granted by licensor to licensee (like exclusive license or non-exclusive license etc.) and to what extent the licensed patent can be used by the licensee.

  • TERM OF AGREEMENT –

In this head the term or period to use the licensed patent under the agreement is defined and would specify the expiry of agreement which can be set even without the expiry of patent. And all date and time related conditions pertaining to use of licensed patent would be included under this head. It can be included that what would happen in case of bankruptcy or insolvency.

 

  • ROYALTY –

 This is the pivotal clause to be included in every agreement because receiving Royalty is the primary objective of licensing a patent. Royalty is basically the amount of consideration to be paid by the licensee, in exchange of receiving permission for using patent, to the licensor.

Thus this clause contains terms like how the royalty payment would be made, what amount of royalty is to be paid by the licensee, what rate of royalty is to be charged (if any), how the royalty charged would be calculated i.e. through which method will the royalty to be charged will be calculated etc. Royalty rate of a patent may vary from 0.5% to 25 % depending on the licensee and type of patent.

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  • LICENSOR’S PATENTS RIGHT –

This clause defines the rights of the licensor and the extent to which a licensee can use partial rights of licensor for utilizing the licensed patent to earn profits. Also licensee’s rights are to be defined.

  • LIABILITY AND INDEMNITY –

The said clause helps in determining that in what all conditions a licensee would amount to be liable to compensate the licensor and whether licensee would be held completely liable or not. Also it must be elaborated that what are the duties of the parties and if such duties are not performed or if any obligations are not complied with then party in default would be liable.

  • NOTICES –

Under this it is to be decided and agreed upon the method of service of Notice (like by way registered AD post or by personal delivery or by nationally recognized courier service etc.) And also it has to be decided that from what date such notice will be considered effective or when will such notice be considered effective after receipt of the notice.

  • ENTIRE AGREEMENT –

It has to be discussed whether any previous existing representations or agreements pertaining to the subject matter of the present agreement are to be merged with the present one or not. And whether any changes made to the present agreement are to be validated by written consent of the parties or no such written consent is required.

  • TERMINATION OF AGREEMENT –

It should be clear from this clause that what all acts would amount to termination of this agreement. And what all must be done post termination (like immediately cease use of patent by licensee, handover any profits post termination to licensor etc.)

  • DISPUTE RESOLUTION –

This helps in determining whether parties would like to solve their disputes (if any) through method of litigation or arbitration or any other way of dispute resolution. Also it is to be mentioned well in advance that which state’s law will govern the arising disputes and what would be the jurisdiction to solve or try such disputes in.

IMPORTANT PROVISIONS UNDER LAW PERTAINING TO PATENT LICENSING AGREEMENT:-

Here under we would deal with the aspects of provisions pertaining to patent licensing agreement and the other aspects of the mentioned provisions would not be discussed.

  1. PROVISIONS UNDER THE PATENTS ACT, 1970
  • SECTION 68 [5]– Patent Licensing Agreement is valid only when it is in Writing and is Duly Executed :

License of a patent shall be valid only when it is in the form of a written agreement, between the licensor and the licensee, which is duly executed. Such written agreement must be presented in form of a Document wherein all the terms and conditions are implicitly or explicitly incorporated. Also the terms and conditions of the Patent Licensing Agreement or we can say Document; play a pivotal role in defining the rights and obligations of the licensor and the licensee.

  • SECTION 69 [6]– Application for Registration of title of Licensee :

By Licensee – According to Section 69(1), where any person becomes entitled as a Licensee, he or she shall apply in writing in the prescribed manner to the Controller for the registration of his or her title or registration of notice of his or her interest in the register of the Controller.

By Licensor – According to Section 69(2), without prejudice to the provision of section 69(1), an application for the registration of the title of any person who gets entitled by the virtue of a patent license may be made by the licensor in a prescribed manner to the controller.

  • SECTION 70 [7]– Power of registered proprietor or grantee to issue Licenses for Patent :

This provision of the Patents Act, 1970 empowers the registered proprietor or the grantee to issue licenses for the patent and to give effectual receipts in lieu of consideration received by them for grant of any such license pertaining to patent.

  1. PROVISIONS UNDER THE PATENTS RULES, 2003
  • RULE 90 [8]– Application of Registration of :

Title of Licensee as per Section 69 of Patents Act, 1970 – According to Rule 90(1), Application for registration of the title of Licensee referred in Section 69(1) and Section 69(2) of the Patents Act, 1970 shall be made, in Form 16 to the Controller; within a period of 6 months from the date of execution of patent licensing agreement.

Document of Patent Licensing Agreement as per Section 68 of Patents Act, 1970 -According to Rule 90(2), Application for registration of any document (i.e. document which may affect the rights and obligations of a patentee in any way), like Document of Patent Licensing Agreement, shall be made in Form 16 to the Controller within a period of 6 months from the date of execution of patent licensing agreement.

  • RULE 91 [9]– Power of Controller to direct or call for any document or proof pertaining to Patent Licensing Agreement Application :

This provision of Patents Rules, 2003 empowers the Controller to direct or call for any document like Patent Licensing Agreement as claimed in Applications under Rule 90(1) or Rule 90(2) or any other proof or written consent as he may require. The required documents or proofs must be accompanied by the 2 copies (i.e. copies which is certified to be true copies by the applicant or his agent) of the Document, like Patent Licensing Agreement, for which such Application was made.

 

This Rule of Patents Rules, 2003 prescribes the way in which the Controller will register the entry of title of licensee or of document of Patent Licensing Agreement in its Register only after the receipt and complete enquiry of the application made by the applicants under Rule 90(1) or Rule 90(2).

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CONCLUSION:-

Licensing a patent invokes registration of a written agreement between the licensor and licensee. The aim of execution of agreement is, to reflect the intention of the parties for licensing a patent and; to gather specifications and details, which they have agreed to, in form of written agreement. It is mandatory that the Patent licensing Agreement is written and is registered in the Register of Patents. Clauses of patent licensing agreement plays an important role in deciding the disputes (if any) or to prevent any disputes between licensor and licensee. Even though it is an easy way to license a patent through a definite agreement, but the parties must pay utmost attention while chalking out the terms and conditions of the patent licensing agreement as this is the only document which shall define the grundnorms for the parties for patent licensing i.e. define the rights and obligations of the parties who agrees to patent licensing. So while preparing Patent Licensing Agreement keep your all senses wide open!!!

[1] Refer to “http://www.ipindia.nic.in/writereaddata/Portal/IPOAct/1_31_1_patent-act-1970-11march2015.pdf” for complete Sections, P.6.

[2] Id. at P.5

[3] Refer to case – National Research Development Corp. (NDRC) vs. ABS Plastics Ltd. ,[April 2009]

[4] Supra 1 at P.55

[5] Supra 1 at P.56

[6] Ibid.

[7] Supra 1 at P.57

[8] Refer to http://www.ipindia.nic.in/writereaddata/Portal/IPORule/1_70_1_The-Patents-Rules-2003-Updated-till-23-June-2017.pdf for complete Rules, P.38

[9] Ibid.

[10] Ibid.

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Analysis Of Trademark Laws In USA, UAE, And Germany

By: Jeetu Kanwar

INTRODUCTION

World Intellectual Property Organization (WIPO) is the body which has setup certain rules and regulations for governance of Intellectual Property (IP) services throughout the world. It mainly includes 193 countries which are part of United Nations. [1]

Trademarks are part of such intellectual property. It simply helps to differentiate between the goods of the manufacturers. It helps to distinguish goods with similar or identical owners. Also through trademark one is able  to protect his intellectual property. It confers legal rights upon the owner of the trademark.

Here comes the role of trademark laws. It helps to protect owner of the trademark. An owner can bring a legal action against the other person who causes trademark infringement. Such personal is liable for punishment. The owner of trademark can take legal action which is both civil as well as criminal action. Thus the person is liable to be punished with fine or imprisonment or both.

Different countries have their own regimes of trademark laws. They are governed by various laws and have different set of rules and regulations to counter trademark infringement. This makes the rules to differ from country to country and region to region. Thus there are several blend of regulations making trademark laws unique in nature.

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In this write-up trademarks laws of following countries are explained and a parallel analysis is drawn for a better understanding:

  1. S.A
  2. A.E

TRADEMARK LAWS IN USA

In its basic essence trademark law in the USA is made to protect and distinguish goods made by one person from that of another manufacturer. This helps to protect and differentiate similar kinds of goods and to give due credit to the producer. In the USA most of the service marks originate from their use and thus are totally identical from their mere use in different setups.  In order to protect the mark, it is always suggested to either register the trademark with the federal government and if that is not possible then the mark should mandatorily be registered with the state government to avoid any kind of misuse or infringement.[2]

A trademark in the USA is infringed when another person uses the same mark in a manner such that it likely causes confusion among the common masses.  Several people can use mark but only when it doesn’t cause any confusion among common people. [3]

Next thing to consider here is about the procedure to register the trademark in the USA[4]

All the application with regard to the registration of trademark needs to be moved to the United States patent and trademark office.  After this application, the trademarks are checked for their resistibility. If a mark is found eligible for registration and fulfills all the criteria then it is published in the official gazette. In the case of use based applications, they published and if are not opposed then registration is issued providing detail of the expiration period.

In the case of intent use based application, a notice of allowance is issued which is valid up to a period of three years from the issue of the notice of allowance.  After which registration is issued.

An application for registration must include the following:

  1. It should include the name and address of the owner who wishes to register.
  2. It should include the applicant’s citizenship or residence or place of organization.
  3. It should include details of the goods on which the mark needs to be used.
  4. It should include the details where the mark was first used.
  5. It should include a declaration that needs to be signed and the application needs to reveal the specimen and drawing of the mark.
  6. It should include the meaning of the words which are not in English.
  7. It should also include a claim declaring a prior use of the mark which the applicant is trying to register in order to ascertain whether anyone else is using the same.
  8. It should also include a fee for the goods which come under the category of international goods.

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After due verification and completion of the application for registration of a trademark, the United States Trademark and patent office mails the certification of the registration to the owner of the trademark.

TRADEMARK LAWS IN UAE

Government of UAE has taken strict measures and provisions for the protection of their intellectual property especially trademark. There are stringent provisions for the regulation of trademark laws in UAE. Trademarks in UAE are protected by Federal Trademark Laws, which ensures proper supervision of trademarks and their misuse.[5]

REGISTRATION AND INFRINGEMENT OF TRADEMARK IN UAE

A trademark is widely used to distinguish between goods of one trader from that of another.[6] Registration of trademark in UAE is done by forwarding an application to the trademark section of the ministry of economy and commerce. After due completion of application and procedure for registration, the trademark is registered with the ministry. If in case any other person or organization or other entity uses the same registered trademark then it will amount to trademark infringement.

In this, the owner of the trademark can file a suit or take legal action for trademark infringement. Thus such trademark infringement is liable to be punished and the owner of the trademark can claim compensation for the same.

The trademark law also provides criminal remedies for trademark infringement which is in terms of imprisonment or fine or both. One can also take action against trademark infringement through the means of Dubai customs which filters the trademark infringement cases and products which infringe the trademark. This makes the trademark protection of products more efficient and well protected.[7]

Thus to ensure the rights over a trademark, it is important to register your trademark in UAE. This protects business innovations through the means of a trademark.[8] The registration of a trademark provides validity and protection in case another person copies or uses the same trademark which is similar to yours. If your trademark is not registered in UAE then you cannot take legal action against another business and enterprise.

TRADEMARK LAWS IN GERMANY

All German trademark applications need to be filed at the German Trademark and Patent Office (DMPA).[9] German trademarks are governed by the trademark act, which is implemented by European Union trademark directives. [10]  Trademarks that are not opposed by DMPA and fulfill all the standards are qualified to be registered as a trademark.  All German trademarks cover the entire federal republic of Germany[11]

In Germany, there are specialized ordinary courts for enforcement of trademarks infringement. They are also competent to tackle the disputes related to unfair competition and domain name dispute resolution policy.

PROCEDURE FOR TRADEMARK REGISTRATION IN GERMANY

One of the steps for the trademark registration procedure is to publish the trademark in the official gazette for three months.  During these three months, anyone in Germany with a similar or identical trademark may file an opposition against the trademark published in the official gazette. No trademark gets an extension from this period of three months.

Opposition to the trademark may be filed by the owner of the already registered trademark or owner of trademark who previously got such a trademark registered. In Germany, a trademark opposition is filed in writing and a nominal fee is to be paid.[12] The German trademark office will see whether the trademark complies with the standards of the trademark.

In Germany trademarks are valid for a period of three years from the date of filing of the application. If the owner wants to do renewal of the trademark then same can be done by filing an application for renewal one year earlier from the date of expiry of the trademark. Also there is a provision of a grace period which consists of six months. In this grace period a renewal application can be filed by paying late fees.[13]

It is mandatory to use the trademark within the five years after registration. If such trademark is not used then it is liable to be cancelled on the ground of non use. Such

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CONCLUSION

Through analysis of trademark laws of different countries, it can be safely concluded trademark registration is of utmost importance. It is vital to know that trademark registration provides various privileges to the owner of the trademark. Registration helps to tackle the problem of trademark infringement.

  1. Trademark infringement is one such common problem which is prevalent in almost every country. Thus to give due credit the owner of trademark, registration is a must.
  2. It can be safely concluded that all these three countries have their own set of statutes to govern trademark laws. Though they different rules but all rules have same essence which to punish the wrongdoer.
  3. Also the procedure for registration of trademark tend to vary when we move from one country to another but the basic outlines which includes publication of trademark in the official gazette remains the same.
  4. Another key aspect to keep in mind is that in all these three countries trademark is registered for a certain time period and after the expiry of that period the trademark need to be file for renewal.

Thus this analysis of trademark laws is essential in order to gain insight about variety of laws prevalent among other countries. This helps to get better understanding of different laws. Hence it helps to understand all kinds of dimensions of trademark laws.

 

 

 

[1] https://www.wipo.int/about-wipo/en/

[2] https://www.bitlaw.com/

[3] https://www.uspto.gov/sites/default/files/documents/tmlaw.

[4] https://iclg.com/practice-areas/trade-marks-laws-and-regulations/usa

[5] http://diazreus.com/protecting-your-trademark-in-the-uae

[6] https://www.wipo.int/edocs/lexdocs/laws

[7] https://www.mondaq.com/trademark/736132/new-trademark-application-procedures-in-uae

[8] https://www.dlapiperintelligence.com/goingglobal/intellectual-property/

[9] https://thelawreviews.co.uk/edition/the-trademarks-law-review-edition-3/

[10] https://www.worldtrademarkreview.com/portfolio-management/trademark-procedures-and-strategies-germany

[11] https://iclg.com/practice-areas/trade-marks-laws-and-regulations/germany

[12] https://www.lawyersgermany.com/register-a-trademark-in-germany

[13] https://igerent.com/trademark-registration-germany

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Impact of Covid-19 on the Aviation Industry

By: Mayank Singh

Aviation is one of the most influenced industry during Coronavirus emergency which has happened because of magnitude of pandemic. This Pandemic has resulted large scale emergency which tends to suspension of flights and limitations on venture out universally to hinder the spread of infection. It is conceivable to watch the effect of COVID-19 on the flight business in every region including Europe, North America, Asia-Pacific and the remaining part of the world. In the country like United States, for instance, after the public Wellness crisis occurred due to COVID-19 episode, practically the entirety of the region is on outright lockdown, which Consequently, limits homegrown travel inside the nation. Nations like Spain, Italy, France, and India are under full lockdown and a wide scope of flights are ended until further notice.

A report of International Air Transport Association says that Aviation industry may endure misfortune on income as much as 113 billion dollar in this emergency. Around 4.2 billion explorers were carried around the globe in 2018, according to the World Bank Organisation. Fragments that were driving the flying business before the COVID-19 pandemic join expanding extra cash the whole course over the globe, the presentation of low-passage planes, developing by and large budgetary exercises, new travel plans, and some more. Besides, substitution of creating business plane has likewise contributed far and away to the market headway.

The primary elements affecting the aeronautics business since the pandemic remember the drop for visits and travel as an enormous number of global and homegrown flights are being dropped worldwide to check the infection’s transmission. Governments over the globe deny outsiders’ visas and lock up affected regions which is also one of the noteworthy purpose behind the log jam of the flying business. The International Aviation division has different portions of Air lines, from which, alongside cooking and other assistance giving firms, traveller aircraft section is required to get generally influenced.

Carrier organizations affecting the airplane producing businesses may likewise be seeing the crossing out of an airplane request in the short term. Driving flying organizations which are in effect universally affected incorporate Airbus, Qatar Airways, Lufthansa, China Eastern Airlines, Emirates, Boeing, American Airlines Group Inc. what’s more, Delta Air Lines. For evident reasons, Qatar Airways has suspended all of its trips to and from Italy it was one of the most noticeably terrible hit nations by the COVID-19 pandemic. The organization has consented to downsize its activity which incorporates diminishing flights and dispensing with less savvy airplane. As a prudent step of COVID-19 episode, Qatar Airways had grounded all its ten A380 airplane until 31 May 2020.

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Furthermore, owing to the pandemic, Emirates likewise finished much of its traveller traffic. By and by, the company looks for rescue classes by aircraft and air terminal guiding partnerships. In Europe , for example, air terminal supervisory organisations are reliant on the procurement of $15.4 billion missing due to a pandemic. It is researched that air terminals in Europe are expected to receive 700 million fewer passengers, 28 percent less than previously expected.

Turning to economical aspect, the phenomenal decrease in avionics and business activity has incapacitated air terminal income sources. In the subsequent quarter, the normal reduction in by and large air terminal incomes on a worldwide scale is figure at $39.2 billion (USD) and over $97 billion for 2020. Air terminals must continue meeting their capital costs responsibilities as they stay depicted by fantastically high repaired costs essential for keeping and working the system sections of the air terminal, including runways, runways, covers, halting stands and terminal structures. The impact of COVID-19 has hence achieved an existential peril to air terminals and to the flying industry unhindered.

The International Air Transport Association ( IATA) has resurrected its study of the financial effect of the general growth emergency of the novel (COVID-19) on the overall air transport market. IATA is also watching cumulative compensation events for the explorer company in 2020 of between $63 billion (in a situation where COVID-19 is contained in new business divisions and over 100 instances in current business divisions beginning at 2 March) And $113 billion (with the broader distribution of COVID-19 in this situation). No estimates of the effect on payload exercises are yet available.

The past IATA analysis (given on 20 February 2020) placed a $29.3 billion decline in income based on a condition that would see the benefit of COVID-19 largely limited to business sectors linked to China. The virus has spread to more than 80 nations since that time, and forward appointments on courses beyond China have been badly affected.

Budgetary sectors of the economy reacted positively. After the start of the flare-up, aircraft share prices have dropped by approximately 25 percent, with about 21 values concentrating more noteworthily than the drop that occurred at a similar point during the 2003 SARS emergency. To a large degree, this decline as of now costs a lot more remarkable than our previous inquiry in a stun to business profits.

To consider the developing circumstance with COVID-19, IATA assessed the likely effect on traveller incomes dependent on possible situations.

The unexplained extension attributable to COVID-19 is almost unimaginable. The possibilities of the company in a large part of the world have gotten ug in minimally more than two months. How the infection can expand is muddled, but whether we see the effects on a few industry sectors and a $63 billion income misfortune, or a more pervasive influence that triggers a $113 billion, loss of income in this pandemic.

“Numerous carriers are cutting limit and taking crisis measures to diminish costs. Governments must observe. Aircrafts are giving a valiant effort to remain above water as they play out the imperative undertaking of connecting the world’s economies. As governments look to upgrade gauges, the carrier business will require thought for help on duties, charges and space portion. These are uncommon occasions,” said Alexandre de Juniac, IATA’s Director General and CEO.

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Impact of Covid-19 on Indian Airlines.

In the budgetary year 2021, the Indian aeronautics division is probably going to lose up to $ 4 billion, warning firm CAPA India has stated, raising the misfortune gauge from the past $3.6 billion.

CAPA India likewise talked about a higher capitalization necessity for Indian carriers, up from $2.5 billion to $3.5 billion of every investigation delivered on July 3. Systematically, the organization said the Indian flight industry could be decreased from the greater part twelve, including Air India, IndiGo, Go Air and Spice Jet , to just a few players now.

“Restructuring seems more likely and would result in a very drastic shift in the industry ‘s structure. If timely recapitalization does not happen, India might be heading for a two-three airline market,” it added. Ongoing traffic has generally included fundamental repositioning traffic, with travellers that were stuck in an inappropriate spot when the lockdown was declared getting back to their headquarters. Optional travel has been restricted, as reflected in the way that in excess of 90 percent of appointments have been for single direction travel, contrasted with 40 percent earlier with COVID,” the report said.

Despite the fact that the administration has permitted carriers to work up to 45 percent of their mid year plan yet it has had little effect as traveller load drifts around the midway imprint. Passages, which have been topped inside a range, have would in general be nearer to the lower end of the band, CAPA India said.

Ahead of Covid-19, one of the fastest rising aviation markets in the world, India is bracing for rough days ahead. Market watchers fear that a complete lack of government support will trigger a shakedown of India’s airline industry, which could have a lasting impact on the once upbeat demand for jet fuel in the country. In seven of the last 10 years, having seen double-digit percentage rise, In the first half of 2020, Indian airlines saw passenger numbers collapse 50 percent year on year to 35.2 million, or the lowest since 2014.

Airfares have also been put under pressure due to a decline of almost 30 per cent in bookings to destinations hit by viruses. As a consequence, airfares to those destinations have declined by 20-30%. With domestic travellers postponing or cancelling their travel plans, domestic traffic growth is also steadily being impacted.

Many companies announced a decline in domestic travel this summer of more than 30 per cent compared to last year. Airfare has been reduced by 20-25% on common domestic routes and airfares are also expected to remain subdued for the summer season. Aircraft transporters’ money adjusts are coming up short and many are nearly insolvency. Likewise, the crisis could provoke loss of occupations and pay cuts. A couple of airplanes have requested various from their laborers to go on leave without pay. Air Deccan has suspended errands and sent laborers on unpaid leaves.

In the interim, the travel industry service has refered to Confederation of Indian Industry (CII) evaluations to recommend the loss of income to the travel industry can run between Rs 72,000 crore and Rs 1.58 lakh crores in 2020-21. As per the service, marked lodgings will endure the greatest shot in the travel industry area, trailed by visit administrators. In view of the fundamental gauges via airlines,the division might be set for a decrease of 50-60% in worldwide rush hour gridlock and up to a half drop in homegrown rush hour gridlock, the note said. It additionally included that “there may be a critical however brief loss of both immediate and circuitous positions in the division.”

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While a few carriers have begun tolerating advance appointments fully expecting facilitating of the lockdown after April 14. In resuming domestic operations, Indian carriers are using a hawk-eyed approach; however, the pace of PLFs would be a main concern. For both 30-day/15-day ticketing periods, the brokerage said its airfare tracker indicates average yield across subway routes has decreased by ~30 percent year to date.

According to flight regulator Directorate General of Civil Aviation, local air explorer traffic hung 82.3% in July differentiated and the very month a year back. From January to July, airplanes passed on a whole of 37.28 million voyagers, a rot of 54.84% appeared differently in relation to the relating time period a year back.

It likewise assessed that because of such misfortunes, “all things considered, some airplane may must be grounded” and “a critical decrease is additionally expected noticeable all around payload took care of at air terminals across India.” 

  Conclusion

Aviation Industries are investing additional amounts of energy to guarantee appropriate sterilization and fumigation of air terminal terminals just as the purification of planes. Be that as it may, notwithstanding taking such prudent steps it is as yet hard to manage the dread ingrained in the psyches of travelers voyaging which consequently is influencing the general business of the flying business. On head of that, so as to control the spread of this deadliest infection government confined all worldwide trips to land in India. This will bring about loss of income and money related pressure.

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Analysis of Competition Law Issues in the Facebook-Jio Deal

By: Abishek TK

Jio – Facebook Crossover: A Financial Entente:

Facebook is one of the only apps used by almost 2.5 Billion users, making the social media platform the world’s largest. While Facebook conquers the world, Whatsapp conquers India with approximately 200 million users, making it the country’s largest. On 21st April 2020, Facebook CEO, Mark Zuckerberg, told the world that the Facebook was teaming up with Reliance Industries. Facebook had purchased a total of 9.99% stake in the Reliance Industries. The 5.7-billion-dollar deal pushes Reliance Industries ahead in its plans of facilitating the launch of its new commerce business. In 2019, Reliance Industries Chairman Mukesh Ambani had other primary contributors to his debt reduction plan with approximately $15 billion deal with Saudi Aramco for a 20% stake in Reliance Industries’ refining and petrochemicals business and a ₹7000 crore for a 49% sale in its fuel retail joint venture to a British firm BP. Usually, any merger between companies or corporations is a tedious process. Out of some approvals, be it regulatory or otherwise, the most critical one is the approval of Competition Commission of India. In order to complete a deal that crosses the thresholds given under Sec. 5 of the Competition Act, 2002[1], the approval by Competition Commission of India is compulsory. Another rule is that, Section 6(2) of the Competition Act, 2002, examined with Regulation 5 of the Combination Regulation confirms a suspensory reign, i.e., the approval must be obtained before the deal is finalized within the United States. Though the deal sounds bold and strong, which it does, can still encounter anti-trust issues. Starting with the multi-billion-dollar investment into Jio will have to be appraised and authorized by means of India’s opposition regulator. For this to happen, the Competition Commission of India will have to go forward and look at the proposed deal and verify that it does not cause appreciable adverse effect on competition within the marketplace. The responsibility of the Competition Commission of India is to analyze now not only the capacity of destructive results on competition how much ever additionally the capability worries it may offer upward rush to. It would be more intriguing and interesting to see if the minority stake purchase in India’s major telecom empire would provide any regulations to Facebook.

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Section 4 of Competition Act, 2002 sets down arrangements identifying with maltreatment of predominance which obviously expresses that a prevailing element ought not utilize its situation of solidarity to make hurt the contenders and customers in the business sectors of the nation. The Competition Act, 2002 in segment 19(4) has set out specific variables which help in deciding if an element is predominant in an applicable market or not. Prior to deciding if the arrangement among Facebook and Jio Platforms can prompt the act of maltreatment of strength by the two substances, it is basic to realize whether Facebook’s WhatsApp pay and Jio Platform’s JioMart are prevailing in their pertinent market or not.

Establishing Dominance:

Jio and Facebook are both emperors in their respective fields. According to the Telecom Regulatory Authority of India, 32% stake is owned by Jio in the 1.15 billion Indian mobile services industry. It possesses the highest number of customer base and revenue-sharing share in the telecom industry. This means, Jio has an overall customer base of 369.93 million, exceeding its rivals, Bharti Airtel and Vodafone- Idea. Regarding Facebook, it basically operated via three platforms- Facebook, Instagram and Whatsapp. As for Whatsapp, it currently has a solid 400 million users in India[2]. These 400 million users are among the 600 million people who get right of entry of internet. A fragment of effectiveness compared to Whatsapp can be seen in applications like Hike, WeChat and Telegram.

JioMart is an online staple help which gives conveyance administrations of basic food item and fundamental things from close by kirana stores of the nation. JioMart right now works in just three spots of the nation for example Navi Mumbai, Thane and Kalyan. The important market of JioMart is by all accounts an online staple conveyance administration. It is appropriate to take note of that JioMart in this market has under 5% piece of the pie and furthermore is another major part in this market. It can influence neither the opposition nor the rivals in the online basic food item administration market of the nation. Subsequently, in the wake of investigating the components referenced in segment 19(4) of the Competition Act, 2002, it tends to be reasoned that JioMart is certainly not a prevailing part in its important market.

Jio is looking forward to revolutionize ‘JioMart’ in order to merge small and medium sized ‘kirana’ businesses. This would firstly enhance mother-pop shops within the domestic and local markets by tying them to the digital platforms. Once this is over, it would try to penetrate another market by utilizing the dominance of Whatsapp. If all these are successful, Whatsapp might allow JioMart to function through the messaging platform itself. If this is carried out in the manner that Whatsapp comes with default JioMart platform, it could cause an abuse of dominance under Section 4(2)(d) as downloading Whatsapp would be the main agreement the JioMart will be kind of a given in itself. The disadvantage in that kind of a strategy is, customers will not be able to use any other embed e-commerce portal on Whatsapp. This will become unfair and cause disturbances in the market as it might leave the customers with no choice but to accept the given deal.

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The said deal may have an impact on payment apps due to the establishment of Whatsapp Pay project long-stalled by Facebook. The partnership with Jio will establish the payment service for itself. Once Whatsapp Pay enters the field, industry players like Google Pay, Paytm, and Pay will face a tough competition. People will easily be able to text and pay simultaneously without switching apps. To keep things in balance, the Competition Commission of India will have to consider whether Facebook and Jio would become dominant in the relevant markets, potentially abusing the dominant position in order to monopolize the field using Whatsapp Pay. Since the combined power of Jio and Facebook would make it difficult for any other platform to compete, the CCI should analyze whether it would be likely that any anti-competitive acts by Jio or Facebook would create new monopoly in the other relevant markets.

Appreciable Adverse Effect on Competition:

Determining the resources and market positions of the combines techno-heads is difficult, especially in the technology sector. Google LLC[3], CCI found that there is a need to now not only depict the standard applicable marketplace but also related to relevant markets which have been anguished by the behavior of the concerned parties. Section 20 (4) lists that factors that the Competition Commission of India should not forget to include if there is any substantial destructive effect on the competition arising from the said combination.

The quintessence of this combination is to check for horizontal or vertical overlaps. If there is no appearance of horizontal overlaps, there is a strong possibility of vertical integration. For example, Jio introduces internet access to smartphones, smartphones with internet can access Whatsapp, which can ultimately be combined with JioMart. Though this is not the ideal vertical integration, but the use of dominant function in a single market to move into a new marketplace would possibly be to have an adverse effect on the natural competition in the ‘physical’ trade market. Strategic investment, when seeks to impale a specific segment by making use of the leverage on their respective fields to arrive at a completely new product, criteria has to be comprehensive in order to check and verify the potential adverse effect on competition, if any. The United States court imposed 5 billion dollars fine on Facebook for violation of privacy is itself a warning on the Indian regulators to intervening in this a way achieving the deal specifically, to protect the Indian Start-Up movement, which is probably an important bulkhead of the Digital India ship.

Platform Neutrality:

Platform Neutrality, as the name proposes, comprises of impartiality toward any item showed on a market. This standard is abused in occurrences of combination, in which the stage holds a double job through acting each as a mediator and a commercial center contender. Since the stage is a pool of customer insights, it offers the owner business endeavor and side to improve its administrations through dominatingly dispensing bogus hunt rankings and serving one-sided pointers sooner than its customers. Courses of action like these outcomes in the special treatment being concurred to the office’s in-living arrangement cloud kitchen brands, building up an irregularity in the reasonable resistance in the pertinent zone.

It is appropriate to take note that the monstrous e-exchange associations, for example, Amazon and Flipkart have constantly been underneath the examination of the Courts for disregarding the stage impartiality strategies. All India Online Vendors Association had blamed each of those organizations for manhandling their strength inside the relevant commercial center by giving special solutions for there to some degree possessed producers. After due examinations concerning this depends, the CCI had unnoticed the cases of them disregarding any popular rivalry standards. Notwithstanding, rehashed charges by the method of equivalent organizations made the NCLAT award a test into this issue again.

Network Effect:

The Network Effect, additionally called network externality, is the increase picked up by method of the officeholder clients while an additional individual joins the gathering. Its utilization is particularly generally far reaching inside the time area in which the enormous network is a bit of leeway to the clients and the got data fills in as a little something extra for its proprietor. Henceforth, there lies no competition inside the truth that having an enormous base of records can bring about an endeavor achieving a prevailing situation inside the market. This predominance, in sure occasions, can go about as an essential for organizations in leading enemy of forceful conduct. The organizations with the guide of keeping up their matchless quality in a solitary pertinent market contribution to each other material market, in this manner mishandling its energy to develop predominant in both those business sectors. Such moves are named as utilizing and are denied underneath Section four(2)(e) of the Competition Act, 2002 (“the Act”).

Carefully predominant associations like Google have utilized their strength in the past, utilizing its got realities to sell its own administrations for example Google Flights, Google Maps, etc. The creators battle that the arrangement whenever did, might be each other case of this type of misuse. As each Facebook and Jio are at prevailing situations in their particular business sectors, they have an unbridled admittance to realities which can be utilized for their own one of a kind business advantage. For example, WhatsApp by means of its settlement with JioMart can assemble a tremendous heap of data at the admission styles of the customers in India, which later can be used for the ad of the JioMart stage through Facebook. Also, if WhatsApp goes to a choice to make Jio Payments Bank on the grounds that the on line UPI-principally based value elective, it’ll achieve Reliance Companies accessing its total client base, which incorporate the records of its adversary telecom partnerships. Each one of those points of interest blended have the capacity of making Jio and its auxiliaries predominant exclusively dependent on the realities that it recognizes associations own, subsequently which remember it for the ambit of utilizing underneath Indian Competition Act.

Deep Discounting:

Deep Discounting, normally named as ruthless evaluating, happens while a monetarily wealthy organization costs its item at a significantly decline charge contrasted with the contrary organizations inside the commercial center. While the partnerships secure such developments as a component of their expansion approach, the overwhelming development inside the reliance of its client’s outcomes in them achieving a place of intensity, unjustly. This can be mounted by method of depending on Section 19(4)(f) of the Act, which offers for ‘buyer reliance’ as one of the justification for evaluating the predominance of an organization. So as to downsize the burden of such enemy of forceful tendencies, such estimating has been described as maltreatment of strength under Section four(2)(a)(ii) of the Act, making it violative of the standards that ensure honest rivalry in the business sectors.

Jio, inside the past, has been blamed for savage valuing for its net administrations. In truth, following this system, it has developed to be one in everything about most significant telecom producers in India. Subsequently, the creators battle that the arrangement has the capacity of monetarily backing the stage to present profound limits for their items, building up a tremendous distinction in the expenses inside the market. This differential valuing by method of drawing in the clients by means of its uncommon decreases can pressure out the contrary e-staple brands inside the relevant commercial center. While these limits may prompt a fast time-frame advantage for its clients, the minimization in their decisions will achieve a drawn out misfortune. JioMart by utilizing sorting out its imposing business model will in the end be equipped for help its expenses unnecessarily, in this way constraining its customers to search for their items at some random charges.

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Conclusion:

The objective of Competition Act, 2002 is to guarantee the free progression of exchange and keep the elements from stopping rivalry on the lookout. In the 21st century, the idea of shopper government assistance can’t be deserted in any of the situations. The intensity of the CCI gave by the Competition Act, 2002 is restricted to a degree. Indian Competition Law doesn’t punish endeavor to turn into a prevailing element and this is the greatest downside.

In the current arrangement, Facebook and Jio Platforms through its administrations WhatsApp Pay and JioMart separately will endeavor to get prevailing in their pertinent market by utilizing unscrupulous strategic policies. Notwithstanding, CCI can’t stop such practices because of absence of arrangements in the Competition Act, 2002. The ideal opportunity for a change has shown up and the Indian Legislature should embed such arrangements in the demonstration so as to enable the CCI to manage such unreasonable practices in the nation.

[1] Section 5, Competition Act, 2002.

[2] Manish Singh, WhatsApp reaches 400 million users in India, Tech Crunch, (26.07.2020), https://techcrunch.com/2019/07/26/whatsapp-india-users-400-million/.

[3] Umar Javeed v. Google LLC, Case No. 39 of 2018, dated 16-4-2019.

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Comparative Study of Laws relating to Corporate Governance in USA, UAE and UK

By: Parul Sagar

  • What is Corporate Law?

Corporate law is the array of laws, rules, rules, and practices that manage the course of action and action of organizations. It’s the gathering of law that guides legitimate components that exist to lead business. The laws address the rights and responsibilities of the aggregate of people related with molding, having, working, and managing an endeavor.

  • Corporate governance –

Corporate administration is the blend of rules, cycles or laws by which organizations are worked, directed or controlled. The term incorporates the inside and outer variables that influence the interests of an organization’s partners, including investors, clients, providers, government controllers and the board

  • UNITED ARAB EMIRATES

In January 2020, new guidelines came into the image by the name of Organizations Guidelines, 2020. These were delivered by DMCC (Dubai Multi Items Center) and Legislature of Dubai. These standards have been given for the solace and adaptability of the current organizations just as the organizations to be set up later on in the deregulation zone. These are the corporate consistence rules gave by the experts in Dubai.

  • UNITED STATES OF AMERICA

The US of America directs enterprises on three distinct levels, neighbourhood, state, and government. While neighbourhood and state fluctuate, the government corporate consistence laws are a bunch of cover laws to be followed as essential compliances. What’s more, the nearby, just as the state laws, apply. These base principles by the government are illustrated in the Protections Demonstration of 1993 and the Protections and Trade Demonstration of 1934. The US Constitution permits a partnership to set up in any state and not with respect to where the settle of the organization is arranged.

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  • UK Corporate Governance

It expressed that various guidelines, suggestions and rules structure the guideline of corporate administration inside the UK, for example, custom-based law rules, for example, trustee obligations of chiefs, protected reports of an organization including notice and articles of affiliation, sculpture explicitly Organizations Act 1985, the posting rules applying to all organizations recorded on the Point Rules or Authority Rundown, the Consolidated Code on

Corporate Administration; however, the Code’s arrangements are not fundamental, yet it is obligatory

for the recorded organizations to give their yearly report an announcement displaying consistence with the Code and give reasons if not agreeing. Keasey, Thompson and Wright (2005) found that the Code is joined by the Smith Direction alluding review boards and evaluators; the Turnbull Direction identified with

Code’s inner control necessity and the Higgs Audit and proposed proposals of good practices. Besides, non-legitimate rules appropriated by bodies speaking to institutional financial specialists, for example, ABI PIRC (the Benefits and Venture Exploration Experts and NAPF are basic. All the recorded organizations will undoubtedly follow these rules. Likewise, in the event of public organizations’ takeovers, Mergers and the guidelines of the Takeover alongside the City Code on Takeovers are relevant. Also, Code of Market Direct of Budgetary Administrations Authority is significant as it identifies with the data exposure, which is profoundly delicate and secret and on the off chance that it isn’t followed, it may prompt make a bogus market.

  • ANALYSIS

The business laws of the USA and UAE vary on numerous grounds. Starting with the language of the agreements, in the USA, the English language works fine when agreements are considered. In any case, in the UAE, any agreement which is in the English language must be deciphered in Arabic also. In a circumstance where a debate emerges, the content written in Arabic is treated over the English language text. This may make an issue for English talking partnerships.

In the USA, enterprises are represented at different levels, i.e., government law, state law, and the nearby law. Then again, in the UAE, an individual body chooses the guidelines and all the companies need to hold fast to it. In the USA, cover rules are given to be clung to and further the state applies the relatable principles alongside the organizations which fuse rules into their by-laws. With the end goal of tax collection, each level forces its own assessment which the company needs to pay. State laws are distinctive in each of the 50 states. This expands the multifaceted nature of the cycle of business. The partnership is limited by first the government rules, at that point the state rules, lastly the neighborhood rules. UAE has a uniform framework. The administration alongside specific organizations chooses the guidelines for all the organizations and there is no middle level. Both for the terrain organizations too the ones in streamlined commerce zones, there is just one level at which the guidelines are set down just as the duty strategy is taken.

In UAE, the business and the part of the business are treated as independent substances and the income created from the branch is considered as the income of the branch itself, though, in the USA, the branch is treated as a piece of the business and not a unit of the business. Henceforth, the assessment to be charged on that specific branch is charged on that of the entire business.

The basic rules of the UAE give restricted obligation to the investors of the organization as the business and the investors are viewed as independent substances. USA gives a choice to the proprietors of the partnership to either get burdened independently on the business and the investor’s pay similarly as UAE or the other alternative is get the business income likewise burdened as the proprietor’s very own pay. Nonetheless, for the subsequent choice, certain conditions are to meet.

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The two nations have no base capital prerequisites. Yet, UAE, may in specific exercises set out a base capital of AED 50,000.

Decisively, the correlation of corporate administration practices and laws of the UK and the U.S. are comparable or there is an identical norm. In any case, for organizations and their in-house guiding, the changing essence of the authoritative scene of the two nations advances numerous difficulties. Truth be told, after the disastrous budgetary emergency of 2008 and 2009, the laws request completely recorded organizations to hold fast to code of morals and related laws and guidelines. Taking everything into account, it has been reliable with the Sarbanes-Oxley Act and 2004 Act; be that as it may, for non-U.S. firms, SEC has been exceptionally obliging giving them an open door through exclusions to cultivate their organizations as they may confront clashing difficulties in view of neighborhood laws. In the U.S., SOX assume a significant part for successful corporate administration while in the UK, Demonstration 2004, Smith Direction and different laws cooperate to straightforward monetary detailing

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Software Licensing Agreements and the Clauses Covered Under it

By: Subham Saurabh

A software license agreement is an agreement/contract between a company and the user of that software who has the rights to use. It laydowns details for the users how to exactly run and use the particular software. The agreement tells a user how the software can be installed and what is the procedure to install it also how many times a user can install it. It additionally has clauses for the intellectual property rights (IPR) through which users know the copying, modifying and redistributing policy of the software. Thus, to prevent any kind of infringement of IPR a software owner needs to have a software license agreement with their customers.

The software license agreement does not have any particular format, the agreement differs as much as the software if there is a change in the software the agreement has to be changed. There is novation in the contract as soon as there is a software change. A software license agreement is important for both the licensor and the licensees along with the other stakeholders who have interest in the software as it lay downs the important clauses, jurisdiction, rights, modification, transferability etc. As an owner, a lot of money and time is being invested in developing the software and it is always in the mind of the developer that he could derive some monetary benefits out of it. If one individual is putting so much effort, he or she must put an effort to protect his or her IPR and other related rights. Here a software license agreement comes in the picture. Below are the reasons why to have a license agreement.

  1. It limits the liability: It is one of the most important parts of the agreement since if an owner did not limit his liability as to the software developer, then he is exposing himself for a lawsuit, people all the times are ready to file frivolous lawsuits and demand compensations for no real reason. Such lawsuits not only waste the money but also precious time. If a developer limits his liability though an agreement, he is ensuring the others from filing frivolous lawsuits as they have agreed to the software terms as soon as they buy it or in some case download it. Limiting liability can be from both sides.
  2. The agreement prevents others to sell it: Such an agreement with the customers restrict them to copy the software and redistribute it to others. There is also a huge difference between the developer licensing the software and not selling it. When the owner sells the software to a user, the owner still has all the rights also the owner can restrict the use. By this way, the developer/ owner has more control over the software in contract to the actual user of the software. For the long run and to derive more monitory benefit from the software the owner should not sell the rights of software rather license it.
  3. The license agreement allows the developer to terminate at any time: The owners have an extra advantage clause at their rescue which may state that owner can terminate the license at any period of use. The clause may also provide the owner to terminate it without providing any explanation. This is another important clause which helps the owners to maintain comprehensive control over the software at all times. At any time if licensor wishes to revoke the license and institute a suit instead, he can refer the licensee this particular clause.
  4. It avoids misappropriation of software: The hackers and such person who are always ready to make a replicate or a copy an individual’s intellect are always at the hurry to do it if the owner fails to have an agreement with the users. There is very less probability that others can sell the software however if a pirated version is circulated it would be a huge loss. A person would not buy the software if he is getting it for free and it will be unfair to the developer and owners.
  5. License agreement permits to disclaim warranties: Nothing can be in software, no matter what a developer do there is always an error with the technology it may be a bug, crash or downtime etc. and such errors allows a user to dissatisfactions. The license agreement may have clauses which would contain a disclaimer from such errors for which the user would eventually escape the liability.

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Main Section included in the Software License Agreement

Fundamentally, there are four primary sections for software license agreement and these four sections provide key information which is essential to the accomplishment of a software license agreement which is as follows:

  1. General Information – In the first section, we will get information about the execution of the agreement that when it will go into effect, for what duration of time the software will be active and what is the type of this agreement. This is the key part of any agreement although it provides general information because it sets the tone for the whole agreement.
  2. Parties Involved – This particular section provides information about the parties who are going to agree. When any person or company enters with the developer company or owner company of software the agreement must detail both the company or individual’s details. The full name and complete addresses and other key information should also be included in such agreement. Also, it is essential to state whether the party who is forming the agreement is a company or an individual.
  3. Terms of the agreement – This section includes all the other primary information regarding the terms of the agreement. Information such as price to be paid for using the software, information about the maintenance, support, warranty if any etc. will be listed which are offered by the software company. The other information that “whether you will be including the code along with the license and if it is a site license or not” is included.
  4. Fine details – The last section included all the miscellaneous details which are missed out in above three sections of the software license agreement. This section is drafted more carefully and according to the specific situation instead of wide clauses. At last, where the agreement is signed along with the dates are mentioned.

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Important Clauses of Software License Agreements

The above four-section provides the overview in brief of what features a user can assume from any general software license agreement. However, the company or developer to exclude its unsolicited liability and frivolous suits should include other key clauses which will guarantee their protection from liability in future also. It is important to include such clauses in the license agreement as the future is unpredictable and anything can happen, and from this unpredictable situation, the agreement must guarantee protection. Below is the list of such clauses:

  • Limitation of liability – It is one of the important clauses as it limits the software owner’s liability form uncertain future events. This clause laid down that the fact that the user should accept the software without any changes from the third party and they will not be able to claim any injury compensation, also it may be stated that no warranty could be claimed from the software and the usage.
  • Non-exclusivity –When a licensor wants to license the software to an individual or a company, he should make sure that the agreement has the clause that does not leave details that the rights of the licensee are non-exclusive. By providing such a clause in the agreement the software will the developers to stay longer in the market with the product and make a profit from the software.
  • Non-transferability – This is another important clause from the point of view of earning the profit. The non-transferability clause helps to restrict if the developer did not want the license to be transferred to another third party. If not restricted it will allow the licensee to transfer the software to any other person or even business that will amount to a loss of profit and future clients. Lastly, developers will not like to come in force in a situation where they have to deal with the agreement with such a party with whom they have not contracted with.
  • Rights – Every information that the right to the software will remain the property of the licensor even after execution of understanding will be included in this clause. This clause also includes the original programming, the name, the copyright, the trademarks rights, and all other intellectual property rights. Licensor does not want somebody else buying a permit to then steals any crucial information regarding the software and creates its monetary benefit. This is a significant consideration since it secures owner item from its users.
  • Modification Clause– If the developer does not permit the software to be novated in any capacity toward the back, then it should make that reasonable with a provision which states as much and subtleties what the expression ” modification ” signifies for this agreement. Except if this is what the software owner wants to occur, it will probably just purpose issues for them afterwards. The best option available is to the limit any modification, if not limit them. Because this is a software license agreement, this isn’t typically normal. Your users will probably comprehend that the product is made in that manner in which it is and will remain that way.
  • Breach of agreement – The owner has to incorporate a provision which expresses that on the off chance that any terms are not followed, at that point it will bring about a breach of agreement where a developer can renounce the agreement, therefore. The user does not want that breach of an agreement to happen, yet for the situation that it does, it ought to have this set up so it can assume back responsibility for the software product and better ensure it.
  • Number of Device-Based upon how the developer permits the software if the developer incorporates that the licensee is permitted to utilize the software on one single PC or numerous PCs in a similar area, for example, the corporate area. This keeps organizations from exploiting the software and attempt to need more at the price they paid. It is not common that all licensee will attempt to find a sneaky tricky path around, however in the case that they do, it is ensured that developer has this point by point so there is no doubt.
  • Terms of the end – this clause must be included in the agreement as if the developer or user need to end the understanding, this provision will detail the moves that must be made by the licensee or otherwise. This is by and large something like terminating the software on-site or uninstalling it from the gadget. Also, it to likewise incorporate that the software can be ended or terminated whenever and, in any capacity, whatsoever with no consequences.
  • Governing law – The last important clause which should be included in the details about the administering law for settling any disputes. No one wants to wind up in the Court that is far away from his state of location or is in another jurisdiction. Also, the last thing important is to ensure that this recorded as a written so that any court procedures will just occur in you’re the choice of jurisdiction.

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Analysis of Cyber Laws in USA, UAE and Germany

By: Anamika G

 With the advent of the Information Revolution and the dawn of the Artificial Intelligence driven world of the Internet of things, the Global Internet community has witnessed a sporadic expansion of the virtual space. From Business to education to travel and recreation, the Cyber world is today’s generation’s first and last resort. Unsettlingly, however, users’ extreme dependence on the internet for day-to-day activities without being chary of the potential caveats it harbours has been a matter of concern. While the internet has indeed unleashed hitherto impossible possibilities to fuel human efficiency, the vastness of the World Wide Web has also spawned concerns around ‘security’ in the Cyber Space.

Consequently, sovereign nations of the world have presented a modest attempt to chart frameworks regarding their part of the borderless cyberspace in order to ensure that their citizens’ rights and national security and sovereignty is protected, as in the physical world. To that end, the recent decades have seen the formulation of numerous Cyber laws that enumerate the regulatory guidelines and the limits and protections in the virtual world. These laws include protection of intellectual property rights, freedom of speech, and public access to information, among others[1]. Among the existing Cyber laws and policies across the world, there are similarities as well as differences.

Of these, United States of America has the oldest and arguably the most robust cyber laws and cyber security frameworks. In Germany, there is a fast advancing cyber security technology and legal architecture, whereas the United Arab Emirates is an emerging arena for cyber security practices. Cybercrimes and frauds cause huge financial losses and security threats to the internet and economic ecosystems in these countries, to combat which the existing laws, although useful, are insufficient. Also, while each of these countries have delineated legal frameworks that lend themselves to national contexts, attention should also be given to voicing the need for a comprehensive and universally recognised international cyber law framework. Through a comparative study of the Cyber laws in the aforementioned three countries, this paper shall attempt to provide a critical analysis of the cyber security practices of three powers in the virtual arena.

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 CYBER LAWS – THE U.S SCENARIO

 The U.S views cyberspace as an integral component of all facets of American life, including their economy and defence[2]. Being the cradle of the Internet and a superpower in the cyber domain, U.S was also among the first to discover the lethal threats that lay entwined in World Wide Web. Hence, the country has time and again returned to the question of legal regulations on the seemingly ‘un-governable’ cyberspace. As a product of continuing deliberations, the country now has a robust cyber la infrastructure.

In the U.S cyber-security concerns are tackled at the federal level through sector-specific statutes and regulations. The main cyber-security regulations include the 1996 Health Insurance Portability and Accountability Act (HIPAA), the 1999 Gramm-Leach-Bliley Act, and the Federal Information Security Management Act (FISMA). While the HIPAA addresses concerns in the health sector, The FISMA maintains cyber-security standards for federal government agencies and their contractors.  Some other statutes are specific to a single subject matter like the Veterans Affairs Information Security Enhancement Act[3], passed in 2006 and they focus closely on a single government agency, which, in this case is the Department of Veterans Affairs (VA). Besides, populous states like Massachusetts, New York and California already have diverse individual cyber laws.

Some laws, however, have been subject to criticism for being too regulatory and invasive. For instance, Computer Fraud and Abuse Act (CFAA) enacted by Congress in 1986, which makes it a crime to access and subsequently share protected information, have been widely criticized for being too restrictive and dis-incentivising legitimate security research[4]. The Electronic Communications Privacy Act was passed in 1986 allows the U.S. government to access electronic communications such as email, social media messages, and more with a subpoena[5].

Furthermore, given that challenges in the cyberspace are becoming complex and multi-sectoral by the day, an acute need as felt for a uniformly defined national cyber security framework. The existence of cyber regulations at multiple levels and sectors has affected compliance, as companies must wade through different federal and state laws. Thus, in 2018, US President Donald Trump signed into law the Cyber security and Infrastructure Security Agency Act of 2018[6]. In addition to this, U.S has actively pushed the case for international cooperation and some uniformity in regulations in order to face the growing challenges in the cyberspace today.

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GERMAN LAW IN THE CYBERSPACE

Germany has a long history and well implemented tradition of data privacy and the right to personal freedom. German data protection laws are strict and governmental rights to observe people in the cyberspace are limited. However, as cyber-attacks on companies and individuals are becoming much more prevalent, legal developments and deliberations show the necessary, but difficult balancing act between safety and freedom in cyberspace.

Cyber security is governed by several acts in Germany. Sec. 202a and 303a of the Strafgesetzbuch [German penal code] protects data and communication against misuse, hacking and sabotage. Section 303b of the same Code directs punitive action against computer sabotage[7]. The main legal act relating to cyber security is the German IT Security act of 2015. Under the act, Critical infrastructure operators are required to adhere to a minimum level of IT security as well as to report any IT security incidents to the Federal Office for Information Security [BSI], which is Germany’s national Cyber security agency. Also, every company in Germany which processes personal data is subject to the surveillance of either the federal or one of the 16 local data protection authorities

In 2017, Germany passed its new Federal Data Protection Act (Datenschutz-Anpassungs- und -Umsetzungsgesetz EU, the Act). The Act implements the European General Data Protection Regulation (GDPR) and entered into force on 25 May 2018[8] It replaced the former German Data Protection Act (BDSG). Although the Act is only a supplement to the GDPR, it includes various additional provisions that need to be followed: the appointment of Data Protection Officers (DPOs), sensitive personal data, the rights of data subjects; the change of the purpose of processing; video surveillance; fines and sanctions; creditworthiness and scoring etc.

So far, the German legal system has been able to put a good fight against the pressing problems of cybercrime. However, as the German data privacy regime is one of the strictest worldwide[9], the trade-off between security and freedom in cyberspace is a nuanced arena. Nevertheless, Germany has put in a robust cyber law regime to defend it digital sovereignty and data security.

 

UNITED ARAB EMIRATES AND CYBER-LAWS

  The UAE, though an emerging economy, has increasingly been targeted by cybercriminals in the recent past[10] owing to its high levels of economic activity, booming oil industry and fast-paced technological advancements. For instance, one of the major threats during the recent COVID-19 pandemic was sinister cyber-attacks launched by hackers on the servers of the companies thereby causing fear and financial insecurities[11]. Catching up with the time, UAE also has one of the most comprehensive cyber law structures in the Arabian-Middle east region.

The UAE-Law No. 5 of 2012, better known as the Cyber Crimes Law 2012, deals with the Combating of Information Technology Crimes. This law replaced the earlier Cyber Crimes Law 2006.

The UAE CERT (Computer Emergency Response Teams) was established under the supervision of Telecom Regulatory Authority of UAE to help the Government for cyber security information sharing and improving the overall Cyber Security condition in the country. They collaborate with different law enforcement agencies to design policies and methodologies to counter the Cyber Threats. aeCERT collaborates and shares data with other countries CERTS around the globe, which provides opportunities for researchers to improve the posture of information security. UAE’s National Electronic Security Authority (NESA) is the federal body set up to oversee the country’s cyberspace.

The National Cyber Security Strategy 2019 of UAE aims to ‘create a safe and strong cyber infrastructure in the UAE that enables citizens to fulfil their aspirations and empower businesses to thrive.’[12] . The legal framework will cover data privacy and protection, artificial intelligence, block chain, cloud services, and digital signatures etc.

 CONCLUSION

From an analysis of the Cyber security legislations and practicing the three countries – USA, UAE, and Germany – Cyber safety is an actively discussed domain in the develop world as well as emerging economies. While all three nations have certain fundamental regulations in common, there are areas of differences as well. Germany, for instance, has a relatively strict policy on protection of citizens’ privacy which puts limits on states surveillance practices.

Considering the rapid advances in technology, cyber-security is still an evolving realm, which requires nation states to be constantly vigilant about emerging threats while concomitantly correcting the existing ambiguities in the Cyber laws.

At the same time, because Internet is a ‘Borderless’ ecosystem, mere national legislations will not solve the issue of cross border cyber terrorism, fraud or conflicts in determining jurisdictions. Hence, there is a need for international basic law that creates a basic uniform cyber law practice across the nations. Therefore, an effort by the three countries that are cognisant of the importance of cyber safety to make allowance for international cooperation in their cyber-security legislations should be forthcoming.

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[1] US Legal, I. (n.d.). Find a legal form in minutes. Retrieved November 13, 2020, from https://definitions.uslegal.com/c/cyber-law/

[2] The White House, 2018, National Cyber Strategy for USA. Retrieved November 8,2020 from https://www.whitehouse.gov/wp-content/uploads/2018/09/National-Cyber-Strategy.pdf [pg.3]

[3] Craig, L. (2006, December 22). S.3421 – 109th Congress (2005-2006): Veterans Benefits, Health Care, and Information Technology Act of 2006. Retrieved November 8, 2020, from https://www.congress.gov/bill/109th-congress/senate-bill/3421

[4] Reforming the Computer Fraud and Abuse Act. (2018, July 30). Retrieved November 09, 2020, from https://www.charleskochinstitute.org/blog/is-the-computer-fraud-and-abuse-act-ripe-for-reform/

[5] Electronic Communications Privacy Act of 1986. (n.d.). Retrieved November 09, 2020, from https://it.ojp.gov/PrivacyLiberty/authorities/statutes/1285

[6] McCaul, M. (2018, November 16). H.R.3359 – 115th Congress (2017-2018): Cybersecurity and Infrastructure Security Agency Act of 2018. Retrieved November 12, 2020, from https://www.congress.gov/bill/115th-congress/house-bill/3359

[7] Cyber Crime Law. (n.d.). Retrieved November 10, 2020, from https://www.cybercrimelaw.net/Germany.html

[8] Federal Data Protection Act of 30 June 2017 (Federal Law Gazette I p. 2097), as last amended by Article 12 of the Act of 20 November 2019 (Federal Law Gazette I, p. 1626). (n.d.). Retrieved November 10, 2020, fromhttps://www.gesetze-im-internet.de/englisch_bdsg/englisch_bdsg.html#p0014

[9]Germany: Land of Data Protection and Security – But Why? (2018, December 05). Retrieved November 11, 2020, from https://www.dotmagazine.online/issues/security/germany-land-of-data-protection-and-security-but-why

[10] Freelance, M. (2020, May 19). Four of five organisations in UAE faced at least one ‘cyber-attack’ in  2019-study. Retrieved November 11, 2020, from

https://gulfbusiness.com/four-of-five-organisations-in-uae-faced-at-least-one-cyber-attack-in-2019-study/

[11] Sanderson, D. (2020, April 26). Coronavirus: Cyber criminals launch Covid-19 attack barrage. Retrieved November 11, 2020, from https://www.thenationalnews.com/uae/coronavirus-cyber-criminals-launch-covid-19-attack-barrage-1.1009181

[12] National Cyber Security Strategy. (2019). Retrieved November 11, 2020, from https://u.ae/en/about-the-uae/strategies-initiatives-and-awards/federal-governments-strategies-and-plans/national-cybersecurity-strategy-2019

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Role of Intellectual Property In Artificial Intelligence

By: Sweta Mishra

INTRODUCTION TO ARTIFICIAL INTELLIGENCE:

There has been a huge advancement in the sphere of technology and moreover, huge resources are being invested may it be by human beings/organisations into these advancements.  The term “Artificial Intelligence” was coined by John McCarthy in a conference in the year 1956 which meant “science and engineering of making machines-intelligent machines that can process and interpret language; mine and analyse data; and create artistic and original works”.[1]

British and United States Governments had invested huge amount of resources into AI during 1956 and 1980 and thus, it was considered as a golden period for the AI. In the first place, AI is attractive for information collection due to three factors- speed, scale and automation. The speed at which AI performs calculations is much faster than that of human analysts and can also be constantly improved by more hardware addition. AI is capable of using large data sets for analysis as well and is perhaps the only way in which big data is processed in a reasonable amount of time. Finally, the designed tasks can be carried out without supervision, which considerably improves the efficiency of analysis.

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Many consumer products have functions that make them susceptible to AI data use. In order to make the situation worse, people often ignore how much data they produce process or share with their software and devices and as we are increasingly dependent on digital technology in our daily lives, the potential for exploitation only increases. Voice-recognition and recognition of the face are two ways of recognising AI’s performance and these methods are capable of seriously compromising public anonymity. Moreover, AI can use sophisticated algorithms for machine learning to draw sensible data from non-sensitive data forms. AI not only carries out data collection tasks. The data can also be used as input to sort, classify, evaluate and grade people. AI can be further used for identifying, Tracking and monitoring individuals, whether on- the job, at home or in public plays across several devices. This allows to de-anonymize your personal information on the basis of inferences from other. This flushes the distinction that is to be maintained in accordance with present legislation between personal and non-personal data. Moreover, AI is used to make recipes, make designs for clothing purpose and also helps in making music. It is predicted that these AI and other machines may be considered as the creators and drivers of these unique innovations though, it is considered to be impossible in order to gain rights over such creations on behalf of AI and in this way, Intellectual property law’s role comes to action in case of Artificial Intelligence.

INTRODUCTION TO INTELLECTUAL PROPERTY:

The government grants every creation of an intellect certain exclusive right for its creation and the holder is able to protect his property that includes literature, music, symbols, brands, inventions and innovations for a certain period of time, preventing others from tampering it. These rights, included widely in the property rights, are known as Intellectual Property Rights. Starting with the Harappa civilization, the scavenged potteries had special marks that determined the maker’s ideology and ownership. In Germany, special privileges were given to the constructors of model mills to store grains. The establishment of the Paris convention from the evolvement of the Vienna exhibition led to the recognition of protection of Intellectual Property Rights. In India, the Act VI on protection of inventions of 1856 surpassed the British Patent Law of 1852. The latter was the basis of creation of the latter. Since then, there have been many modifications in the Act based on the necessity of making stricter rules for protection of creation of work. Act VI was modified into Act XV whereby, regulations were made to reconsider the 14year period granted to inventors for protection of their creations. In 1872, the Act was renamed into the Patents and Design Protection Act, followed by the Protection of Inventions Act, 1883 and The Inventions and Designs Act and The Indian Patens and Designs Act, in 1888 and 1911 respectively. The right to Intellectual Property is not a right provided for tangible objects but also for the mind considered as a property. Intellectual property can also be described as ‘knowledge goods’ which was mentioned in the case of Bayer Corporation v. Union of India and Others[2]. The main reason of providing laws to protect intellectual property by many countries is to promote designing and innovation to furnish the social and economic development. Intellectual property is broadly divided into two subsets, Copyright and industrial property. Copyright persists in original literary, musical and artistic works, cinematograph films, sound recording, etc. in India. Whereas industrial property specifically deals with inventions and creations of human mind which includes patents, trademarks, integrated circuits, geographical indications and protection against unfair competition.[3]

Conventions based on IPR:

In 1960, United International Bureaux for the Protection of Intellectual Property [Bureaux Internationaux Réunis pour la Protection de la Propriété Intellectually (BIRPI)], was shifted from Berne to Geneva for increasing awareness of protection of IPR and bringing it in the consideration of United Nations. Later, the name of the international organization United International Bureaux for the Protection of Intellectual Property was changed to World Intellectual Property organization (WIPO).[4]

WIPO was signed in Stockholm on July14, 1967 and came into force in 1970 with an amendment in 1979. The two main objectives of WIPO were to promote the protection of IPR worldwide and to ensure administrative cooperation among the intellectual property Unions established by the treaties that WIPO administers.[5] In 2002, WIPO organized a study regarding IPR on the Internet. The survey focused on the international aspects of the effect of Internet evolution on IPR rights and duties of related individuals and organizations. In the process, the techno-savvy world has reorganized the very basis of copyright jurisprudence, thereby shattering the basic laws pertaining to it. Hence, the survey explains about the need to adhere to the set legal rules and ensure that technology and Internet do not undermine the basic tenets of copyright and related rights. Berne Convention for the Protection of Literary and Artistic Works (1886).

The Berne convention is based three important principles:

  1. Works originated by an author in a particular state must be given the same protection in

each of the other contracting states.

  1. Protection must not be conditional upon compliance with any formality.
  2. If contracting State provides for a longer term of protection than the minimum prescribed by the Convention and the work ceases to be protected in the country of origin, protection may be denied once protection in the country of origin ceases.[6]

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RELATION BETWEEN INTELLECTUAL PROPERTY AND ARTIFICIAL INTELLIGENCE:

There has been a paradigm shift which is being experienced by AI in its theory application to commercial application.   According to the World Intellectual Property Organization (‘WIPO’), “early 340,000 patent families related to artificial intelligence [have been] published from 1960 until early 2018.”[7] The Copyright Law also tries in protection of the software codes which are an integral part of the AI programming. As a matter of fact, these AI algorithms which aren’t easy to be reversed are entitled to protection under the scope of trade secrets and thus the Trademark Law intends in protection of the names of such robots.

It is pertinent to mention here that the existing Intellectual Property rights affect the Artificial Intelligence in some way or other. IBM has the largest portfolio of AI patents with 8,290 patent applications, followed by Microsoft with 5,930 patent applications.[8] The creators/owners of original works not only intend to acquire Intellectual Property rights but also exploit such rights in the Artificial Intelligence mode of technologies. For instance, “the Chinese Academy of Science has between 2008 and 2016 transferred and transformed 7,000 IP assets (transfer, license, self-implementation, price-for-share, technology development and technical services) with a contract value of more than RMB12 billion”[9]. Therefore, it can be said that the Intellectual Property Law not only protects the inventions but also prevents exploitation of such rights in the inventions pertaining to AI. The invention needs to be novel and should be capable enough for industrial production in order to be patented under the existing laws and provisions of India.

The question of difficulty arises when the AI technologies and AI inventions start playing a role in creation of certain works. As seen earlier, Ais are playing a huge role in making recipes, designing of clothes etc and thus, it is being even more complicated and difficult to acquire rights to protect such works which are being invented by the Ais on their won and such works are even considered of the best quality than if being prepared by huma beings.  For instance- “In a related trend, an AI conceived and executed a masterpiece known as ‘The Next Rembrandt’ using huge set of raw data and deep-learning algorithms in 2017.”[10]

The human being usually puts his labour and skill and uses the abilities of AI in order to make certain data which are then put into the AI in order to invent on the basis of such data. Thus, it wouldn’t be justifiable if such human being is not being permitted to acquire rights under Intellectual Property Law in order to protect such inventions. Therefore, it wouldn’t act as an incentive in order to motivate such human being who created such inventions through the help of his own skill and AI’s learning abilities.

Thus, it can be concluded by saying that there are numerous questions which need to be answered after years regarding the actual meaning of “Author”, what comes under the purview of “Patentable”, who is an “Inventor”, liability in case of AIs hampering the IP rights of the human beings, status of ownership and whether AIs can be granted rights under the Patent Law when they become independent enough to invent things on their own without the help or efforts of human beings.

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[1] Meaning of Artificial Intelligence, http://jmc.stanford.edu/articles/whatisai.html

[2] Bayer Corporation v. Union of India and Others, 2014(5) ABR 242: MIPR 2014 (3) 53: 2014 (60) PTC 277

(Bom)

[3] “Intellectual, industrial and commercial property | Fact Sheets on the European Union | European Parliament” (September 17, 2019; 20:00 pm)

[4] “WIPO — A Brief History”. World Intellectual Property Organization (WIPO).

[5] Summaries of Conventions, Treaties and Agreements Administered by WIPO

[6] Supra 6

[7] Kathleen Walch, ‘Artificial Intelligence Is Not A Technology’, (2018) Available from: https://www.forbes.com/sites/cognitiveworld/2018/11/01/artificial-intelligence-is-not-a-technology/#7b4dc6645dcb, Accessed on 11th November, 2020 at 6:00 pm.

[8] Ibid, Pg. 58

[9] Ibid

[10] Kavita Iyer, ‘Google’s AI Creates Its Own AI That Is Superior Than The Ones Made By Humans’, (2017) Available from: https://www.techworm.net/2017/12/googles-ai-creates-ai-superior-ones-made-humans.html, Accessed on 12th November, 2020 at 8:00 am