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Role Of Intellectual Property Law In The Sports Industry

By: Pallavi Tiwari

  1. INTRODUCTION

Sports are said to form 1-5 percent of the GDP and thus are very important for economy and various related companies. As far as the recent trend is concerned Indian Premier League (IPL) is going on and this is the most appropriate example to understand the connection between sports, marketing and business. Here, every team has its brand value, their advertisements, their theme songs, logos, brand name, tag-lines, marketing strategy and players’ performance strategy and all of this forms a part of IPR.  All these assets need to be protected as part of IPR from being taken away by third parties.  IP in sports came up first as recommended by Kunstadt but only with respect to copyright and trademark as the players who invest labor to develop a new move should be given economic benefit for the same.[1]

Copyright subsists in the photos clicked in the IPL events and the theme song of the themes or the title track of IPL itself.[2] Design rights can be established in the bats used by players which are specially designed and aim to facilitate their game. Trademark relates to the logo of the teams or their merchandise used in the games. All this helps in the branding of the team and also create some value in the eyes of the viewers. Unless and until something is appealable it holds no value in the market, so for investment it is important that it has created some value in the market. These logos and other IP rights have to be protected so that no one else could copy them or use them in their business and gain advantage of the established image of the players or the team, according to trademark dilution under Section 29(4) of the Trademark Act. [3]

Any third party could come up with these marks or designs and thus cause great loss to the owners and can also tarnish their image by selling bad products in the name of the players or teams by creating confusion in the minds of the consumers, which happened in the famous PayPal or Paytm case. Thus sports and IP laws work in intersection with each other and IP is essential for the commercialization of sports.[4]

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  1. PATENT LAW AND SPORTS INDUSTRY

Patent law can be used in the sports industry with respect to the techniques used in the game or in the making of sports equipment to enhance the efficacy. Some examples of such patents are “D.S. Miller’s Dominant Hand Putting Method” or the “Nolan Ryan’s baseball pitch” and both are either to evade the impediments caused due to some handicap or improve the technique involved in a game. Patent can only be granted if something is novel, non-obvious and has industrial use as per Article 27(1) of the TRIPS[5] and also imbibed into the Indian Patent Law. As far as sports patents are concerned and the first requirement of novelty is to be addressed, it is important to note that even if a player has developed a technique or a move to play or designed an equipment to enhance the game it is important that he gets a patent first on it and then use it in front of other players. If he fails to do so, the patent is said to be already in the public and thus not novel or non-obvious. To determine novelty it is important that the technique or anything to be patented should not be in the mind of the public already expert in the field but the moves or techniques used by the players are just movements of limbs  and thus very commonly discussed and seen amongst the players. Thus generally players fail to get patent due to non-fulfillment of the novelty criteria. Another condition is of industrial application and there is no proof that sport related patent can be used commercially or in an industry. It depends on patent to patent and thus this condition may or may not be fulfilled.[6]

Sports is about learning new moves and mostly players learn from one another but if these moves are patented it would cause an unfair advantage on the other competitors. Sometimes another player in between of a match can use a patented move which would cause the game to come to a halt and thus destroy the basic essence of sports. Thus, this would make the players first think and then make a move or use a technique which would not be spontaneous anymore and going against the principles of sports.[7]

As far as India’s position with respect to patenting moves of a game are concerned section 3(m)[8] of the Indian Patent Act clearly debars “a mere scheme or rule or method of performing mental act or method of playing a game” from being granted a patent. Thus India is still not open to patenting of sports or the moves involved as compared to US which observes as laid down in Diamond v. Chakraborty[9] case that anything can be patented.[10]

Thus, the position of patent grant with respect to sports move is still not clear and uniform across the globe so no decision can be called upon the same.

  1. COPYRIGHT AND SPORTS INDUSTRY

As far as sports are concerned copyright exists in a lot of things like slogans for a team, pictures of players, or any other photography associated with the events. As copyright now involves broadcaster and performers’ rights under the Act, it gives a broadcaster a right to telecast a particular sporting event and to possess that right the companies pay huge amounts. So if any other person uses the broadcast for his own channel then it shall also be an infringement of copyright. These broadcasters make available to the public the sport events as each and every event cannot be attended by the viewers. Thus broadcasting is the major area where copyright subsists in case of sports and due to the revenue generated by licensing the broadcasting rights events can be organized and other related events can take place. Apart from the field events there are computer games also which use software which can be subjected to copyright protection and also patent protection when combined with hardware as computer programs or software are per se not patentable.[11] The characters or graphics used in video games are also subjected to copyright protection as now the craze for online games and events including video games are no less than field sports events.[12]

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As far as copyright in sports is concerned, there are two categories of sports that can be discussed: purposive or non-aesthetic sports or aesthetic sports.[13] Section 13 mentions about works in which copyright subsists and sports is clearly not a part of it. The case of Institute for Inner Studies v.Charlotte Anderson,[14] was one landmark case which discussed why copyright protection is not offered to sports. The High Court observed that yoga asana cannot be granted copyright protection because they are neither included under literary or dramatic work under the Act. The Court also felt that sports lack the main criteria of fixation in tangible medium with respect to copyright. It is also considered anti-competitive in nature as it will thereby reduce the scope for future players to use similar moves.

This is not the case with aesthetic sports (dance, gymnastics, skating) as they involve some creativity and can come under choreographic works protected under copyright. Dancers, gymnasts can also avail the performers’ rights under Section 38 of the Act. They also fulfill the requirements of performance under 2(q) of the Act and performer under Section 2(qq) of the Act and thus are eligible for protection. As far as uncertainty or originality is concerned with respect to copyright protection, aesthetic sports fulfill this criterion. They are also fixated in nature as most of the copyrighted works are as they constitute of certain specific moves.

Further in the case of Star India Pvt. Ltd. v. Piyush Agarwal & Ors.[15] the Single Bench observed that cricket events are subject to performers’ rights protection under the copyright act. But later on, this decision was overruled and the Delhi High Court observed that performers’ rights are not under copyright as they are clearly mentioned to be “special rights” under Section 38 of the Act. But stand in India relating to copyright protection for sports is still unclear.

  1. TRADEMARK AND PROTECTION OF LOGOS AND BRAND NAMES IN SPORTS

Trademarks are used to distinguish goods and services from one another. These days’ sports events also involve a lot of brands and use them in logos and their marks to gain commercially. This is done essentially to create a brand value for products used in these sports or to catch the viewer attention. For example, champions rise is used for FIFA and like in IPL as well every team has their own logo and mark. It helps the viewers to establish a relation with the team or game and to choose their favorite side. There have been cases where players have trademarked their name like David Beckham. In the recent trend of online games it is important to have brand names for teams and events so the viewers can distinguish between them. If some revenue has to be generated through a sports event or by a team it is important that it should have some recognition in the market and this can be established through trademark.[16]

In a famous case STJUE Arsenal v. Reed,[17] the defendant used the branded goods outside the stadium in a commercial manner unofficially thus causing an infringement. Getting trademark on a team or a player’s name which in turn become very popular helps the sports apparel manufacture to establish goodwill on the brand value of the team or the player. According to Forbes ranking it is established that “the portion of [a sports team’s] enterprise value attributable to local revenue streams like television, advertising, merchandise and tickets, that exceeds what a typical team in the same sports generates.”[18]

There are some associated rights to trademarks which are known as personality rights where a player can control how much his personality in the public can be exploited to create a brand value or use it as recognition for a product. When someone uses a player’s name on their goods and does not do well on the goodwill of the player it is a clear case of trademark dilution under Section 29(4) of the Indian Trademark Act. This brand value created by using team names or players’ names can also be used by broadcasters to attract the audience and thus IP law is all mixed up in the sports industry.

  1. TRADE SECRET IN SPORTS AND GAMES

Apart from these above-mentioned IP rights, there is one right which though not yet recognized under IP is important for the sports industry. It is trade secret which forms part of all the secret strategies of teams to win or secret compounds in their gears to make playing easy and winnable or any other dietary ingredient. It is not be disclosed to the public unlike patent rights. Generally other teams might try to steal these assets but they are to be necessarily protected so that no other team or player can gain undue advantage on the same.

Data analysis is another trade secret which needs to be protected from being used by fellow competitors. It may involve screening the way other team plays, their loopholes and the team’s strength and weakness in the past few matches. This then later on helps the team to decide how they will strategize their game and also observe patterns in the player’s physiological and psychological behavior. This data is also known as big-data and though India doesn’t recognize a specific trade secret law it still has been given special importance in US and UK with newly introduced legislations.

  1. DESIGN RIGHTS IN SPORT INDUSTRY

Design rights are generally an extension of trademark law and copyright law where the difference is only that design first of all is only to refer to aesthetic beauty of the product and cannot include anything technical or anything attributing to the functions of the products. Teams or sports events use beautiful designs for products to be used in the game like bats, balls and other goods to attract the viewer attention. It is highly creative in nature and it aims to enhance the appearance of the goods to be used so that if someone buys the product later they can associate it with the design of the team or the player.

One such example is development of clever bicycle by Lucio Tortola, a cyclist to reduce issues in the back and any chance of injury in bicycle rides. This was designed to be a shock absorber and help the cyclists in future. Now this design has become very famous and used by most of the cyclists across the globe. So design is just not for beauty but to also remove some issues involved in the game and help the future players. [19]

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  1. CONCLUSION

The author has discussed various IP rights associated with sports and players and how India stands with respect to these rights. There is also another term called ambush marketing apart from these IP rights infringements which is a problem in the sports industry. Generally it is not within the scope of IP law but needs to be addressed whenever any sports issue is under consideration. It is a very prevalent practice these days when some company tries to commercially get advantage on the basis of already established goodwill of an event. They reap commercial gains in this process by unofficially associating themselves with famous sports events and gaining advantage of being a sponsor when they are not.

Relying on afore-mentioned propositions, it is important to recognize the importance of various IP rights in sports and how they can be protected. IP is always an essential ingredient of any commercial activity and since sports is now more of commercial nature it is important to protect it. In this write-up, the author shall discuss how patent, copyright, trademark, designs, trade secret and other IP rights are closely attached to sports and how can they be infringed so that businesses and companies related to sports can avoid such activities. To save a business it is important to save the IP related to it and similar is the stand for sport industry.

[1] F. F. Scott Kieff, Robert G. Kramer &  Robert M. Kunstad, “It’s Your Turn, But It’s My Move: Intellectual Property Protection for Sports Moves”, 25 Santa Clara High Tech. L.J. 765 (2012).

[2] Anita Roy, “Shield of IPR around IPL”,  http://www.legalserviceindia.com/legal/author-616-anita-roy.html.

[3] Vaishali Singh, “The Untapped Emergence of IP Rights and Sports: Faster, Stronger and Higher” (2019) PL (IPR) July 91.

[4] Zia Akhtar, “Sports development, legal infrastructure and protecting Intellectual Property rights” http://www.africansportslawjournal.com/Sports%20development%20legal%20infrastructure%20and%20protecting%20Intellectual%20Property%20rights_.pdf.

[5] Article 27TRIPS 1994, “Patentable Subject Matter”.

[6] “Leveraging Intellectual Property In The Global Sports Economy: Sports As A Tool For Progress And Development”, Global Innovation Policy Centre, https://www.theglobalipcenter.com/introducing-leveraging-intellectual-property-in-the-global-sports-economy/.

[7] Derek Bambauer, “ Legal Responses To The Challenges Of Sports Patents”, Harvard Journal of Law & Technology Volume 18, Number 2 (2005).

[8] Section 3(m), The Patent Act, 1970 “a mere scheme or rule or method of performing mental act or method of playing game”.

[9] 447 U.S. 303 (1980).

[10] Sharada Kalamadi, “Intellectual property and the business of sports management”, (2012), http://nopr.niscair.res.in/bitstream/123456789/14768/1/JIPR%2017(5)%20437-442.pdf.

[11] S.K. Verma, “IP Protection of Software and Software Contracts In India”, Vol. 17 JIPR (2012).

[12] Molly Torsen, “Intellectual Property and Sporting Events: Effective

Protection of Event Symbols through Law and Practice”, International Intellectual Property Institute,  https://iipi.org/wp-content/uploads/2010/07/Sporting_Events_and_Intellectual_Property.pdf.

[13] Seemantani Sharma, “A Copyright Incentive for Promoting ‘Aesthetic Sports’ in India”, The Entertainment and Sports Law Journal, 17(1), 7, http://doi.org/10.16997/eslj.232.

[14] Case Number: CS(OS)–2252/2011.

[15] MIPR 2013 (1) 201; 2013 (54) PTC 222 (Del).

[16] Paras Sharma, “Intellectual Property Rights In Sports” Volume 8, Issue 3, IJCRT, (2020).

[17] [2003] EWCA Civ 696 (21 May 2003).

[18] M Ozanian “The Forbes Fab 40: The World’s Most Valuable Sports Brands 2017”, Forbes, Forbes Fab 40: Teams (2017).

[19] “Reiventing the Frame, Challenging the Status Quo”    https://www.wipo.int/ipadvantage/en/articles/article_0159.html.

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Analysis of Transportation Laws in India, UAE & USA

By: Subham Agarwal

Humankind has always found ways to transport themselves for business, survival, or food. Transportation has always played a significant role socially, economically, culturally, and commercially. Humankind has also always invented new ways to increase the speed of transportation.

The first-ever steam-powered automobile was built in 1769, and the steam-powered railway was built in 1804. In 1885 the first petrol-powered automobile was developed by Karl Benz, and this year is known as the “Birth year of modern car.” This changed the entire landscape of the transporting system, but change comes at a cost. This started causing various traffic deaths and injuries that resulted in many to express concern. In early 1903, New York City introduced the world’s first traffic law regulating speed limit in the city and countryside. With this, many countries started implementing rules to minimize traffic violations. In later years, the government started imposing stricter rules and regulations to reduce traffic violations, deaths, and injuries.

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United Arab Emirates (UAE)

The United Arab Emirates is a country predominated by Muslims. However, in the last few decades, people worldwide have settled there. UAE is famous for various things, one of them being strict laws. UAE has stringent rules for Motor Vehicle. In UAE, transportation law is of recent origin. The first law was “Federal Law No. (21) of 1995 Concerning Traffic”. The transportation system is also of recent origin. The first Bus service in UAE was introduced in Abu Dhabi by the Emirate in 2008 in only four routes.

In addition to it, the first passenger rail was started in 2009, i.e., Dubai Metro, while the Abu Dhabi metro and Sharjah metro are still under construction. Also, the construction work for the goods carrier train network commenced in 2009. The fact that transportation is of very recent origin in UAE, so the transportation law relating to Railways and others still need to be developed.

However, when it comes to Air Transport, Dubai airport is the world’s busiest airport for the last six years. All the airport in UAE is controlled by the General Civil Aviation Authority (GCAA), and they make all the necessary guidelines for the airport and air carriers.

UAE has one of the most strict laws relating to road transport. As we all know, UAE’s laws are mostly based on the Deterrent theory, but it helps UAE reduce its traffic death and injury. In 2006, 190 people died per million in traffic collisions linked to high speed and low safety culture. In 2010 it reduced to 100 per million, and in 2014-2018 it dropped by 34%.

Road and Transport Authority (RTA) regulates and issues licenses in UAE. It also operates jointly with the traffic department to ensure more efficiency in implementing rules. The road transportation in the UAE comprises driving rules, road rules, road types, land, and marine transportation. In Dubai, penalty points system are followed for each violation, and the authority adds black points for every violation. It leads to the seizure of the driving license if it reaches 24 black points within 24 months, the penalty charges are as follows:

  • On the first violation, the driving license is seized for three months
  • On the second violation, the driving license is seized for six months
  • On the third violation, the driving license is seized for a year and is given when the driver passes the driving course signed by the traffic authorities.

Various rules under Transportation Law of UAE are:

  • The minimum legal age for driving is eighteen, and the person has to renew every year up to the age of 21 and then in every ten years.
  • Wearing of seat belts for all the passengers is compulsory. A child seat is mandatory for up to 4 years of age, and no child below the age of ten can sit in the front seat. Violation of any of it is punishable with a fine of AED 400 and 4 black points.
  • Drinking and driving is considered as one of the most severe crimes, and if caught, imprisonment and/or fine of minimum AED 20,000 (4lakhs INR approx.). An additional charge under Narcotics law is filed.
  • Using a mobile phone while driving is strictly prohibited, and if caught, a fine of minimum AED 800 and 4 black points is charged.
  • Driver must also follow the “3-second rule,” i.e., there must be a 3-second distance between two cars, and tailgating is considered an offense.

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These are some traffic rules of the UAE, and the list goes on. Therefore, after looking at these few rules, we can conclude that UAE traffic rules are stringent but needful to avoid accidents and traffic violations. The deterrent model is beneficial, and various country’s legislators should give thought to it.

United States of America (USA)

In the United States of America, transportation consists of road, rail, air, and waterways transport. Travel through roads consist of 40% share, followed by airways and others. In the USA, the highest contributor to Greenhouse gas emission is transportation. Now, looking at the history of transportation, in the 18th century, most of the travels were done by rail, horses, or horse wagons. In this century, most of the population was situated in coastal areas, so traveling from one city to another was very difficult. Then in the 19th century, the automobile revolution took place. People started using motor vehicles, and due to the invention of better air travel, there was a significant shift from rail transport to air transport. In the 20th century, the national highway system came, and the road became the most preferred mode of transportation. Rail transport declined drastically.

In the present situation, all the states have their own traffic rules and guidelines regulated, supervised, and funded by the U.S. Department of Transportation. Although there are different rules for all the states, they are unified by the Uniform Vehicle Code (UVC). It is a model act by the National Committee on Uniform Traffic Law and Ordinances, a private non-profit group. Most of the members of these groups are state governments.

Compared to the various countries, the USA prefers motorized transit than any other form of transportation. 91% of the population owns 4 wheel vehicle, and 86% of workers have private vehicles for commuting to work.

In addition to it, individuals can also have their own private airport in the USA, and all the airlines are private. The airport safety, pilot training, and investigations are done by the Federal Aviation Administration and Transportation Safety Board. The USA has the world’s most developed air transportation system. There is a minimal passenger train or rail network present in the USA, but rail is heavily used to carry goods.

In many U.S. states, traffic offenses are distinguished into two, i.e., traffic misdemeanors and traffic felonies. Traffic misdemeanors are those minor offenses that do not require any hefty long trial. Punishment for these are fines or going to driving school. Traffic felonies are those offenses that endanger the lives of others while driving. For instance, driving a vehicle to hit and kill someone. Punishment for those offenses, which are a year or more imprisonment, comes under the category of traffic felonies.

In most states, the Points System is followed. This is similar to the UAE Black points system. For each offense, points are added in the U.S., and one can reduce it by paying fines or attending driving school. Too many points lead to temporary seizure of license.

Every state has a Department of Motor Vehicle or Bureau of Motor Vehicles, which keep records of the license holders, including tickets issued against such license holders. After being ticketed, a person can inform the local court about the alleged violation, either plea guilty, not guilty, or nolo contender (not to contest) for a specific time period (usually 10-15 days are given). On pleading guilty, the violator can ask the judge to reduce the fine. On pleasing not guilty, a hearing is done before a magistrate or judge, and if acquitted, then all the ticket will be waived off.

Therefore, we can conclude that every state has different rules and regulations in the USA, making it difficult for people who are traveling to various states. We can also see that ticketing and getting justice for that is a very lengthy process and is a significant burden on people. On the positive side, this clumsy process somewhere creates a deterrent in people’s minds before violating any rule.

India

In India, transportation consists of air, land, water, and rail. Air transport comes under the Ministry of Aviation, and the regulatory authority is the Directorate General of Civil Aviation (DGCA). Land transportation comes under the Ministry of Road Transport and Highway. Waterways come under the Ministry of Shipping, and the regulatory authority is the Inland Waterways Authority of India (IWAI). Lastly, railways come under the Ministry of Railways.

India’s first legislative law on transportation was the “Indian Motor Vehicle Act, 1914” central legislation passed by British India. The act had 18 Sections and gave local government the responsibility of registration and providing licenses to vehicle and drivers, and some regulations.

In India, the maximum number of people are dependent on public transportation. For example, Indian Railways came to India in 1853, running from Bombay to Thane, which is now the world’s 4th largest rail network with the most extensive workforce globally, i.e., 14 lakhs employees.

The potential of air transport in India was first realized in 1911 when an aircraft carried mail from Allahabad to Naini across river Ganga. The first civil aviation company in India was set up by TATA sons in 1932. Then, the Air Corporation Act, 1953, came into force to nationalize the entire industry. Today, the Indian aviation industry is one of the fastest-growing industries, with less nationalize control and more safety regulations work by the government.

In the present day, we are under the provision of the Motor Vehicle (Amendment) Act, 2019. This act amended the 1989 act and imposed more hefty fines on traffic violators. Some of the provisions are:-

  • Driving a vehicle without insurance is punishable with imprisonment up to three months or a fine of Rs 2000 or both for the first offense. Earlier it was Rs 1000.
  • Using a vehicle without registration is punishable with a fine of Rs 2000 to Rs 5000 in case of the first offense and for second and subsequent offense imprisonment up to 1 year or fine of Rs 10,000 or both.
  • In 2016, Good Samaritan Law was passed as Bill on the Supreme Court of India’s judgment. Ministry of Road Transport and Highway later issued guidelines. This law protects citizens who help accident victims from any delay or harassment.

Therefore, we can conclude that the 2019 amendment is going in tune with the UAE deterrent model by imposing hefty fines on violators and also creating awareness among people.

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Impact of Real Estate Laws in India and USA

By: Raj Mehta 

What is Real Estate means?

Real Estate is real property that consists of land and improvements, which include buildings, fixtures, roads, structures, and utility systems. Property rights give a title of ownership to the land, improvements and natural resources such as minerals, plants, animals, water, etc.[1]

Real estate law is the area of law that governs buying, using and selling land. It’s the law that governs how people acquire property and what they can do with the property that they own. Real estate law is also called real property law. Real estate law is called real estate because it’s about real property. Real property is land as opposed to personal property which is objects. Fixtures that are permanently on the land like buildings or other large structures are also a part of real property.

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Types of Real Estate

There are several types of real estate. The main categories are:-

  1. Land

Land is the baseline for all types of real property. Land typically refers to undeveloped property and vacant land. Developers acquire land and combine it with other properties and rezone it so they can increase the density and increase the value of the property.

  1. Residential

Residential real estate consists of housing for individuals, families, or groups of people. This is the most common type of estate and is the asset class that most people are familiar with. Within residential, there are single-family homes, apartments, townhouses & other types of living arrangements.

  1. Commercial

Commercial property refers to land and buildings that are used by businesses to carry out their operations. Examples include shopping malls, individual stores, office buildings.

  1. Industrial

Industrial real estate refers to land and buildings that are used by industrial businesses for activities such as factories, research and development, construction.

 What is Real Estate Contracts?

In the Real Estate sector, the contracts regulating the transfer and use of immovable property are generally in the nature of agreements for sale, sale deeds, development agreements, lease deeds and leave and license agreements. The impact of Force Majeure event is considered on some of the aforesaid contracts as under:

  1. Sale Deed:
    • Acts as a evidence of sale and transfer of ownership of property in favor of the buyer
    • Acts as the main document for further sale by the buyer
    • Things to ensure as a buyer:
      • Title of the seller
      • Check whether there is any charge or encumbrance on the property
      • Ensure that all clearances, approvals, and permissions to transfer or sell the property has been addressed
      • All the pages of the deed to be signed
      • Deed should be witnessed by at least two witnesses
      • Finally, get it registered at the jurisdictional sub-registrar office.
      • Details of the parties
  1. Lease Deed:
    • If the term of lease is exceeding one year or reserving yearly rent has to be registered.
    • This agreement binds both lessor and the lessee for the decided duration
    • Things to ensure:
      • The subject matter of lease must be immovable property
      • Duration of lease should be fixed
      • No interest passes to the lessee before execution
      • Termination clauses can be included based on requirements
      • Details of the parties
  1. Leave and License:
    • There is no transfer of the interest of property as that of Lease
    • Licensee acquires personal right to occupy the property
    • Things to ensure:
      • Duration of the rights
      • Details of the parties involved
      • Details of the property
      • Terms of agreement
  1. Mortgage Deed:
    • The funds lent against which the property is used as security is the mortgage money.
    • The Agreement which instruments the transfer is mortgage Deed
    • Things to ensure:
      • Enforceability and validity depends on the type of mortgage
      • Cross verify the agreed interest rate
      • Tenure of the land should be checked up and mentioned
      • Provision for payment of the amount due in the event of mortgagor failing to pay interest

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INDIA

Real state in India is governed infected by a combination of federal and state specific laws. This is largely because, in accordance with article 246 of the Constitution land is the subject matter of state list or less second of the seventh schedule of the Constitution of India, which covers subjects for which only state can legislate, while transfer of property other than the challan, registration of deeds and documents and contracts other than for agriculture land fall under the concurrent list or list third of the seventh schedule of the Constitution of India, which are subject for which both Centre and states can legislate. Additionally, since India is a country with diverse sects, Laws relating to aspects such as devolution inheritance et cetera draw a large influence from various customs and practices, in addition to codified laws. Over the years various judicial presidents and judgements have also adjudicated upon various aspects relating to real state which are either binding or have a strong relevance value, depending upon the form or court which adjudicated.

 The main laws which regulate real estate in India are:

  • The Transfer of Property Act, 1882
  • RERA (Real Estate Regulatory Authority) Act, 2016
  • The Registration Act, 1908
  • Stamp duty has to be paid as per state requirements
  • For Non-Resident Indians (NRIs) FEMA( Foreign Exchange Management Act, 1999) also apply
  • Investors have to abide by local laws and bylaws
  • Clearance as per environmental laws have to be taken before starting with any project for construction of immovable property
  • The specific relief Act, 1963
  • Other labour laws including for regulating minimum wages and safety insurance provisions
  • Land Acquisition Act, 2013

 Impact of Real Estate Laws &Contracts in India

  1. Timely delivery of flats: Developers often make false promises about the completion date of the project, but hardly ever deliver. As per the bill, strict regulations will be enforced on builders to ensure that construction runs on time and flats are delivered on schedule to the buyer.
  2. Furnishing of accurate project details: In the construction stage, builders promote their projects defining the various amenities and features that will be part of the project. But not everything goes as per plan, with several features missing. As per this bill, there can’t be any changes to a plan. And if a builder is found guilty of this, he/she will be penalized 10% of the project’s costs or face jail time of up to three years.
  3. Specifying carpet area: Generally, builders sell flats on the basis of built-in area, which includes a common passage area, stairs and other spaces which are 20-30% more than the actual flat’s area. But, not all buyers are aware of the concept of carpet area. With this bill it will become mandatory to declare the actual carpet area.
  4. All clearances are mandatory before beginning a project: Builders often attract buyers with huge discounts and pre-launch offers. And, the buyer, enticed by the offers, does not bother about the clearance. But, due to delays in getting clearance, the buyer does not get the flat on time. This bill ensures that developers get all the clearances before selling flats.
  5. Each project should have a separate bank account: Developers raise funds through pre-launch offers and use them to purchase some other land or invest it in other projects. This bill will make it compulsory that a separate bank account be maintained for each project. Each transaction will have to be recorded, and diversion to another project will not be entertained.
  6. 6. After sales service: As per an interesting clause in the bill, if the buyer finds any structural deficiency in the development of the building, the buyer can contact the builder for after sales service. But, the buyer should approach the builder within a year of purchase to rectify such defects without further charges.[2]

USA

Real estate laws & Contracts

Each state within the United States follows a mix of statutory and common-law. There are three levels of law in US:-federal, state and local. Under a common law changes in law come by way of case law and a new legislation, each of which is given equal weight. Rules on parent evidence and requirements that agreement in writing to be in force where is from state to state. Courts will generally rely on the express terms of document unless the intent of the parties is unclear. Courts in the US may consider the conduct of the parties in if the terms of the document are in question is ambiguous. In general, contracts for the sale or transfer of real state should be in writing.

Real estate transactions are governed by a wide body of federal statutes and a combination of state statutes and common law. The requirements established by state law often differ significantly from one state to the next. Real estate brokers are employed as the agent of the seller in order to obtain a buyer for their property. The contract between the broker and seller is called a listing agreement. The agreement may be an open agreement whereby the broker earns a commission only if he or she finds a buyer. It is commonly required in real estate contracts that the title to the property sold be marketable. This requires that the seller have proof of title to all the property he or she is selling and that third parties not have undisclosed interests in the title. A title insurance company or an attorney is often employed by the buyer to investigate whether the title is, indeed, marketable. Title insurance companies also insure the buyer against losses caused by the title being invalid.

In order to pass title, a deed with a proper description of the land must be executed and delivered. Some states require that the deed be officially recorded to establish ownership of the property and/or provide notice of its transfer to subsequent purchasers. The most common method of financing real estate transactions is through a mortgage.

Impact of Real Estate Laws & Contracts in USA:-

  • Clarity in business relationships, agreements, and rights of parties
  • Avoiding potential contract disputes and litigation
  • Preventing misinterpretation of communications and agreements
  • Protecting intellectual property, real property, and asset values
  • Better management of commercial relationships
  • Built-in agreements about resolving disputes through arbitration, mediation, or a court in a particular jurisdiction
  • Documentation to allow comprehensive representation and review by an experienced business law attorney[3]

 

[1] https://corporatefinanceinstitute.com

 

[2] Online ISSN 2395-602X|VOLUME 3 | ISSUE 8| 2017 IJSRST

 

[3] https://www.themyerslg.com/contract-benefits/

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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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