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PRICE RIGGING IN THE SUGAR INDUSTRY for their anti-competitive practices and abuse of dominance...

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RSRR BLOG SERIES RGNUL STUDENT RESEARCH REVIEW (RSRR) PRICE RIGGING IN THE SUGAR INDUSTRY By Archit Gupta, 4th Year, B.A.LLB (Hons.), National Law Institute University, Bhopal Section 27 of the Competition Act, 2002 authorizes CCI to impose penalty for the violation of Section 3 and 4 of the Act. These provisions deal with anti-competitive agreements and abuse of dominant position. The Section 27 order in the case of Indian Sugar Mills Association & Ors. v. Indian Jute Mills Association & Ors [i] deals with the monopoly of jute mills to supply gunny bags to the sugar industry. As per the provisions of the Jute Packaging Materials (Compulsory Use in Packaging Commodities) Act, 1987 (‘the JPM Act’), the sugar industry is required to sell its goods in jute bags. Though earlier, cement and fertilizers industries were also subjected to this provision, but they have been exempted by the government. The informants have alleged that the office bearers and executive members of jute mills association were fixing prices of these bags through their daily bulletins. Instead of allowing market forces to determine the price of jute bags, the jute owners were deciding the amount and the rate of increase in price was higher than the rate at which the rate of raw jute had been rising in the market. These associations were interacting frequently which clearly showed that there was some kind of collusion between them to fix the prices. There was a constant increase in the demand of the jute bags on the one hand and a constant reduction in production on the other hand. Further, no steps were taken by the government to stop this practice. Many of these office bearers have a large stake in the jute industry. The Commission held that such practices were against the provisions of the Act and jute mills associations were ordered to stop this practice (cease and desist orders were issued). The Commission held that no single enterprise of jute was in a position to dominate the market within the meaning of explanation to section 4 of the Act. Ministry of Textiles is not considered as “enterprise” under Section 2(h) of the Act. However, the Commission did notice that it was because of the JPM Act, that such practice were prevalent and that the Act was passed to ease the suffering the of jute mill industry and jute farmers. Though no violation of the Competition Act was found against the government/ministry of textiles, the Commission recommended the repeal of this Act as there has been significant change in the market of jute industry and further newer and cheaper technology to manufacture bags is available with the sugar industry. This situation escalates the cost which is borne by the common people. Further, the Commission imposed the penalty on not only the jute mills associations, but also on their office bearers and executive members. This was done under Section 48 of the Competition Act, 2002 which allows the Commission to impose penalty on such person who was in charge when violations under the Act were committed. The Commission has rightly imposed the penalty on the individual office bearers after finding that they havea significant stake in the jute industry. Though the amount may not be significant, but the penalty itself will bring disrepute to individual office holders, forcing them to desist from doing such activities. The Commission should have examined the role of the government in this case more extensively. The Commission should have asked DG to find out that how other industries were granted exemption from provisions the JPM Act while sugar industry was still within its ambit. The government might take notice of the Commission’s recommendation in due time as there is counter pressure fromthe sugar industry too.
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RSRR BLOG SERIES

RGNUL STUDENT RESEARCH REVIEW (RSRR)

PRICE RIGGING IN THE SUGAR INDUSTRY

By Archit Gupta, 4th Year, B.A.LLB (Hons.), National Law Institute University, Bhopal

Section 27 of the Competition Act, 2002 authorizes CCI to impose penalty for the violation of Section 3 and 4 of the Act. These provisions deal with anti-competitive agreements and abuse of dominant position. The Section 27 order in the case of Indian Sugar Mills Association & Ors. v. Indian Jute Mills Association & Ors [i] deals with the monopoly of jute mills to supply gunny bags to the sugar industry. As per the provisions of the Jute Packaging Materials (Compulsory Use in Packaging Commodities) Act, 1987 (‘the JPM Act’), the sugar industry is required to sell its goods in jute bags. Though earlier, cement and fertilizers industries were also subjected to this provision, but they have been exempted by the government. The informants have alleged that the office bearers and executive members of jute mills association were fixing prices of these bags through their daily bulletins. Instead of allowing market forces to determine the price of jute bags, the jute owners were deciding the amount and the rate of increase in price was higher than the rate at which the rate of raw jute had been rising in the market. These associations were interacting frequently which clearly showed that there was some kind of collusion between them to fix the prices. There was a constant increase in the demand of the jute bags on the one hand and a constant reduction in production on the other hand. Further, no steps were taken by the government to stop this practice. Many of these office bearers have a large stake in the jute industry. The Commission held that such practices were against the provisions of the Act and jute mills associations were ordered to stop this practice (cease and desist orders were issued). The Commission held that no single enterprise of jute was in a position to dominate the market within the meaning of explanation to section 4 of the Act. Ministry of Textiles is not considered as “enterprise” under Section 2(h) of the Act. However, the Commission did notice that it was because of the JPM Act, that such practice were prevalent and that the Act was passed to ease the suffering the of jute mill industry and jute farmers. Though no violation of the Competition Act was found against the government/ministry of textiles, the Commission recommended the repeal of this Act as there has been significant change in the market of jute industry and further newer and cheaper technology to manufacture bags is available with the sugar industry. This situation escalates the cost which is borne by the common people. Further, the Commission imposed the penalty on not only the jute mills associations, but also on their office bearers and executive members. This was done under Section 48 of the Competition Act, 2002 which allows the Commission to impose penalty on such person who was in charge when violations under the Act were committed. The Commission has rightly imposed the penalty on the individual office bearers after finding that they havea significant stake in the jute industry. Though the amount may not be significant, but the penalty itself will bring disrepute to individual office holders, forcing them to desist from doing such activities. The Commission should have examined the role of the government in this case more extensively. The Commission should have asked DG to find out that how other industries were granted exemption from provisions the JPM Act while sugar industry was still within its ambit. The government might take notice of the Commission’s recommendation in due time as there is counter pressure fromthe sugar industry too.

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It must be kept in mind that such practices are prevalent across the country where manufacturers are forced to buy raw material or sell their finished products to certain class due to restrictions imposed by the government regulations. Although in this case, the Commission held that the Ministry of Textiles is not an enterprise, but the real question that arises is about the power of the CCI to quash such regulations. Although the Ministry of Textiles was not indulging in any sort of trade, yet it was facilitating anti-competitive practice and therefore, action could have been taken against it.. Last year, the CCI[ii] had penalized CIL (Coal India Limited) for their alleged anti-competitive practices where it was operating without the control of market forces. CIL is also a state entity and it derives its powers for government regulations.The CCI has ruled that the CIL through its subsidiaries operated independently of market forces, enjoyed undisputed dominance and had imposed unfair/ discriminatory conditions in the matter of supply of non-coking coal to power producers. It must be remembered that the market has changed a lot and the policy of the government of protecting certain industries needs to be curbed, if it encourages anti-competitive practices. Such policies might have been effective when industries were in their nascent stages and required protection.But, now giving them any sort of protection would be equivalent togiving them an unfair advantage, as we can see in the instant case. ________________ [i] Case No.38/2011 of CCI available at http://www.cci.gov.in/May2011/OrderOfCommission/27/382011.pdf [ii] http://www.thehindu.com/business/Industry/cci-penalises-coal-india-for-monopoly-asks-centre-to-introduce-more-players/article5483328.ece

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AUTOMOBILE DEALERS' CASE: SHRI SHAMSHER KATARIA V. HONDA SIEL CARS AND ORS., CCI CASE NO 03/2011

By Archit Gupta, 4th Year, B.A.LLB (Hons.), National Law Institute University, Bhopal

The automobile industry is one of the largest industries in the world as well as in India. With increasing globalization and urbanization, the demand for motor vehicles is on the rise. The consumers are willing to pay a hefty amount to ensure that they have the latest technology and well known brand in their garage. The growth of this industry has been substantial after 1991 reforms in India and large scale development of roads in urban areas. Now the country in not only self-sufficient in manufacturing of various automobiles, but is also exporting to other countries. The recent decision where 14 automobile manufacturers[i] were fined by the Competition Commission for their anti-competitive practices and abuse of dominance throws light on why automobile industry has to be worried about competition laws[ii]. The complaint was filed by one Shamsher Kataria alleging anti-competitive practices and abuse of dominance by 3 car manufacturers. However after the request of DG of the Commission that similar practices might be happening in the entire automobile industry, the ambit of the investigation was extended to these 14 manufactures. The informant alleged that the components and parts used in the manufacture of automobiles were often sourced from independent, original equipment suppliers (“OESs”) while other suppliers were restrained by the car manufacturers from selling in the open market. Such restrictions on the OESs limited the access of such spare parts/components in the open market. One of the main arguments given by the car manufacturers was against the existence of two separate relevant markets. It was argued that there is one automobile market, which also includes after sale services and spare parts. However, this contention was turned down by the Commission observing that there are two separate relevant markets, one for the manufacture and sale of cars and other for the sale of spare parts and after sale repair services. It was also observed by the Commission, that each automobile manufacturer is a dominant entity in the aftermarket for the spare parts of its products. Since every spare part has a unique specification, it was not possible for a customer of one automobile to use spare parts and repair services for other automobile manufacturers. In most cases, the owners of the automobiles were completely dependent on the authorized dealer network of the automobile manufacturers and were not in a position to avail services of independent repairers. In addition to this, nearly all the automobile manufacturers had warranty clauses which effectively denied any warranty to the owners of automobiles, if such owners availed the services of the independent repairers or other multi brand service providers. Further, none of the automobile manufacturers allowed their diagnostic tools, repair manuals etc., to be sold in the open market, thereby foreclosing independent repairers from the aftermarket for repairs and maintenance. The Commission in addition to imposing a penalty of about Rs. 2545 crores along with a cease & desist order, inter alia, directed the automobile manufacturers to ensure that spare parts and diagnostic services are available in open market to the independent dealers without any restriction on them.

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This is the first order of the Commission which covers the concept of ‘aftermarkets’ and in which an agreement under Section 3(4) of the Act[iii] was found to have an appreciable adverse effect on competition in India. There is a connection of Section 3(4) and Section 4 of the Act in the instant case, since dominance in the aftermarket for sale of spare parts and repair of automobiles is created through a series of agreements and arrangements of the nature prohibited under Section 3(4). The Automobile manufacturers were abusing their dominance in violation of Section 4 of the Act, thus resulting in a vicious circle where the OES’ bargaining position is progressively weakened and the Automobile manufacturers continue imposing restrictive clauses; further strengthening their dominance. Although this order has gone through various aspects involved in the market of spare parts and repair services, yet it had failed to lay down essential criteria for deciding a relevant market. The CCI has simply stated that the dependence of customers on the automobile manufacturers for the purchase of spare parts is the reason behind the determination of a single relevant market. Further, the order has been criticized by SIAM[iv]. The order may also affect other industries like electronic and software companies, where manufacturers impose unnecessary restrictions to force customers to buy spare parts from them. It is interesting to note that cases with similar facts are being examined in other jurisdictions also where competition regime is quite strong. China has imposed a penalty of approximately $200 Million on ten Japanese auto-parts and bearings manufacturers[v] and South Africa is examining allegations that automotive component manufacturers colluded while bidding for tenders floated by car manufacturers.[vi] Many of these automobile manufacturers had approached the Delhi High Court against this order, but they were asked to take their case before Madras High Court where the appeal was pending. [vii] ________________ [i] BMW India, Ford India, General Motors India, Hindustan Motors, Mahindra & Mahindra, Maruti Suzuki, Mercedes-Benz India, Nissan Motor India, Skoda Auto India, Tata Motors, Toyota, Honda India, Volkswagen India and Fiat India. CCI is yet to pass final order against Hyundai India, Mahindra Reva and Premier. [ii] Shamsher Kataria v. Hondo Siel Cars and Ors CCI Case No 03/2011 [iii]http://www.livemint.com/Companies/l7xoA5HRji17Rv2yRLxaHK/CCI-imposes-Rs2554-crore-penalty-on-14-car-makers.html [iv] Car, component companies differ on CCI Order available at http://www.hindustantimes.com/business-news/car-components-cos-differ-on-cci-order/article1-1264010.aspx [v] China Fines Japan Auto-Parts Makers $ 200 Million available at http://online.wsj.com/articles/china-fines-japan-auto-parts-makers-200-million-1408530257

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[vi] Competition Commission moves to investigate car industry available at http://mg.co.za/article/2014-10-13-competition-commission-to-investigate-collusion-in-car-industry/. [vii] Delhi High Court grants 3-weeks protection to Mercedes Benz from CCI Order available at http://articles.economictimes.indiatimes.com/2014-09-24/news/54279448_1_trade-norms-bmw-india-spare-parts.

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RESTRICTIVE TRADE PRACTICES IN THE CONSUMER PROTECTION ACT, VIS-A-VIS THE COMPETITION ACT

By Rishika Lekhadia, 4th Year, B.A LL.B (Hons.), West Bengal National University of Juridical Sciences

Restrictive Trade Practice refers to any action by the producer that results in manipulation of price or conditions of delivery of the goods or affects the flow of supplies in the market relating to goods or services in such a manner so as to impose on the consumers any unjustified costs. Restrictive Trade Practice has been prohibited under both the Consumer Protection Act, 1986 as well as the Competition Act, 2002. Even though both these legislations aim at protecting the rights of the consumer, the primary objective of the Competition Act is to promote competition in the market and thus, 6picenter6 consumer welfare while the main aim of the Consumer Protection Act is to prevent the exploitation of the individual consumer. This is evident from the fact that the definition of ‘consumer’ differs in both these legislations. While the Consumer Protection Act limits the scope of the consumer, to any entity buying the goods for personal use only, the Competition Act, 2002 is wide enough to cover any person who buys goods for resale, and hires services and has goods for commercial purpose and personal use. Judicial pronouncements have furthermore concluded that a small scale enterprise run either by an entrepreneur or by Hindu undivided family can approach consumer forum if the goods purchased by them will be used for earning the livelihood.[i]Therefore, a cab driver who has brought a taxi for plying and earning his livelihood will be a consumer under the Consumer Protection Act while an individual who employs another individual to ply his taxi will not be a consumer within the Consumer Protection Act. Moreover, under Section 18 of the Competition Act, the competition commission is given the power to take action suo moto for eliminating ‘practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade carried on by other participants, in markets in India’. Individuals as well as the government can ‘inform’ the competition commission of any violation of Section 3 or 4 of the Competition Act upon which the commission can act. In contrast to that, one of the petitioners under Consumer Protection Act, no third party can on its own accord independently file a complaint under Consumer Protection Act for violation of the consumer’s rights. This means that the Competition Act gives a wider scope to the consumer for addressing the need of restrictive trade practice which affects the public interest at large. Both, the Competition Commission as well as the Consumer Forum, award damages. The aim of both these acts is to provide restitution as well as to function as a possible deterrence in future. But under consumer forum, the aggrieved consumer will receive the money that he spent on goods or services on account of restrictive trade practice[ii] and compensation for mental agony while in competition act, if the seller is found to have abused his dominant position or have entered into a cartel, the Commission has the power to impose penalty up to ten per cent of the average of the turnover for the last three preceding financial years, upon each of such person or enterprises which are parties to such agreements or abuse[iii]. Therefore, it is observed that the penalty imposed by the Competition Commission will have more deterrent effect than the damages awarded by the Consumer Forum. But one could argue that the remedy given under the Consumer Protection Act in the form of compensation directly compensates the aggrieved consumer while the remedy under the Competition Act aims at creating a deterrent effect in the producer’s community against such practices in general.

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Section 3 of Consumer Protection Act and Section 62 of the Competition Act have been couched in the similar language and both say that the respective acts are ‘in addition to and not in derogation of any law for the time being in force’. Judiciary has interpreted Section 3 to mean that the legislature intended to provide additional remedy to the petitioner and therefore, the petitioner is free to approach the consumer forum even when there is a standard arbitration clause in the consumer contract.[iv] Thus, the petitioner is given the choice to either proceed under the Competition Act or under the Consumer Protection Act by taking into consideration the relevant facts and circumstances of each case.[v] If the case relates to the market wide practice which has detrimental effect not just on the consumers but also on the community as a whole, then one could proceed under the Competition Act.[vi] But if the restrictive trade practice relates only to the individual consumer, then it would be advisable to proceed under the consumer protection Act.[vii] The petitioner could likewise take the procedural aspects of both the forums into consideration as well. In Consumer Protection Act, the petitioner can present his own case as there is no strict requirement of appointment of a counsel.[viii] But in the Competition Commission, the petitioner needs to prove the market practice and how the same is detrimental to the competition in the market[ix] and to prove the same, the petitioner will require the aid of 7picenter7d legal professionals. Consequently, while the Competition Act protects the larger interest of the community of consumers, the Consumer Protection Act will be taken recourse to when an individual consumer is aggrieved by the action of the seller. Thus, public interest is at the thrust of the Competition Act while individual consumer protection is the 7picenter of the Consumer Act. Furthermore, one could argue that the Competition Law is more prone towards producers by ensuring that the small producers are protected while the Consumer Protection Act adopts a protectionist approach towards the consumers by ensuring that they are not misled or harmed by unscrupulous sellers. Therefore, looking at the way both these Acts have been drafted, one can conclude that there is no apparent contradiction or overlap between the scopes of both these Acts although we do regularly witness petitioners erroneously approaching the ‘other’ forum. ________________ [i] Laxmi Engineering Works v P.S.G. Industrial Institute AIR 1995 SC 1428 [ii] Section 11 Consumer Protection Act, 1986. [iii] Section 27 (b) Competition Act, 2002. [iv] Fair Air Engineers Pvt. Ltd. And Anr. V. N.K. Modi AIR 1997 SC 533. [v] The Secretary, Thirumurugan Co-operative Agricultural Credit Society Vs. M. Lalitha (Dead) through Lrs. And Ors, MANU/SC/1025/2003.

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[vi] Belaire Owners’ Association v DLF Limited CCI Case number 19/2010 decided on 03 January 2013. [vii] Giriji Meena v Mohan Gas Service, Rajasthan 2010 Indlaw CCI 11. [viii] Section 12 Consumer Protection Act, 1956. [ix] Sonam Sharma v Apple Incorporated USA 2013 Indlaw CCI 18.

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COMPETITION LAW AND PUBLIC PROCUREMENT

By Archit Gupta, 4th Year, B.A.LLB (Hons.), National Law Institute University, Bhopal

A sound procurement policy is essential for ensuring national security, safety and health of the citizens and for providing quality social and physical infrastructure to citizens in a cost effective manner. According to a World Bank (2003)[i] report, the total value of public procurement represents 13 percent of the national budgets and over 20 percent of the GDP, which are valued at US$100bn. According to a paper by the Competition Commission of India (CCI), out of the total public procurement, public sector enterprises (PSEs)[ii] alone procure to the extent of 8 lakh crore annually (the figure relates to 2008-09). The government wants best goods and services at lowest value possible. The competition amongst suppliers helps this objective. There are multiple guidelines in the conduct of procurement and it creates confusion for procurement officials. There is neither a single public procurement standard nor a single department to deal with it. In India, expect for Railways and DGS&D (Director General of Supplies and Disposal), no other department has a dedicated cadre for public procurement. [iii] Competition Act 2002 prohibits any sort of anti-competitive agreements and abuse of dominant position. It also mandates competition advocacy for government organizations and it also prohibits bid-rigging and collusive bidding where suppliers engaged in same business enters into an agreement to control supply of goods and services or influence sales or purchase prices. Bid rigging means any agreement, between enterprises or persons referred to in sub-section (3) of Section 3 of the Act, engaged in identical or similar production or trading of goods or provision of services, which has the effect of eliminating or reducing competition for bids or adversely affecting or manipulating the process for bidding. The role of Competition Commission is important to enforce competition laws in public procurement. It is empowered to engage in advocacy measures to help government indentify bid-rigging and provide for better tender process. It can issue cease and desist orders, impose such penalty as it may deem fit not exceeding 10% of the average of the turnover for the last three preceding financial years upon each of person or enterprise, direct that agreements shall stand modified to the extent and in the manner as may be specified in the order of the Commission and pass any such orders as it may deem fit.[iv] Bid-rigging is a criminal offence in many countries such as UK, USA, Japan and Canada. OECD has also issued guidelines to fight bid-rigging. This is a sufficient financial deterrent on individual vendors / suppliers which will be apart from their blacklisting for 2 to 3 years prescribed under the various existing guidelines. CCI has imposed penalties in hundreds of Crores of rupees on individual companies on complaints filed by or in respect of procurement in Central public procurement agencies such as IOCL, Coal India Ltd., Food Corporation of India, Safdarjung Hospital, DGS&D etc. and cases are now increasingly being filed by other large procurement agencies such as the Railways etc. In India, CAG and Central Vigilance Commission are responsible to flag out irregularities in public procurement. It has done so pointing out anti-competitive practices in Railways, Defense, etc. Apart from bid-rigging other anti-competitive practices such as limited tendering, bureaucratic hassles and limited advertising are also harmful for public procurement. A meager 2-3% saving in government deals can matter a lot in country like India. The CCI is creating awareness about such practices and government is also trying to deal with this problem. Many government departments are now blacklisting firms which are engaging in such practices. They are even providing rewards for tips on bid-rigging. Hopefully, such practices will go a long way in tackling this menace.

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________________ [i] Arrowsmith, S. and R. Anderson (2011), ‘The WTO Regime on Government Procurement: Challenges and Reforms’, Cambridge Press, New York, USA [ii] Sandeep Verma, ‘Domestic Preferences in Public Procurement’, the Business Standard, December 26, 2011 available at www.businessstandard.com/india/print page accessed on August 01, 2012 [iii] http://www.loc.gov/law/help/govt-procurement-law/india.php#_ftn12 [iv]http://www.mondaq.com/india/x/341248/Cartels+Monopolies/STOP+CARTELIZATION+IN+PUBLIC+PRO UREMENT

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THE ABC OF INDUSTRIAL DESIGNS RIGHTS

By Anmol Jassal, 3rd Year, Rajiv Gandhi National University of Law, Punjab

The A, B and C of Industrial Design Rights An industrial design right is an intellectual property right that protects the visual design of objects that are not purely utilitarian. An industrial design consists of the creation of a shape, configuration or composition of pattern or color, or combination of pattern and color in three-dimensional form containing aesthetic value. An industrial design can be a two- or three-dimensional pattern used to produce a product, industrial commodity or handicraft. An industrial design constitutes the ornamental or aesthetic aspect of an article. A design may consist of three-dimensional features, such as the shape or surface of an article, or of two-dimensional features, such as patterns, lines or color. • What kind of products can be protected as Industrial Designs? Industrial designs are applied to a wide variety of products of industry and handicraft: from technical and medical instruments to watches, jewelry, and other luxury items; from housewares and electrical appliances to vehicles and architectural structures; and from textile to leisure goods. • Why protect Industrial Designs? Industrial designs are what make a product attractive and appealing; hence, they add to the commercial value of a product and increase its marketability. When an industrial design is protected, this helps to ensure a fair return on investment. An effective system of protection also benefits consumers and the public at large, by promoting fair competition and honest trade practices. Protecting industrial designs also helps economic development, by encouraging creativity in the industrial and manufacturing sectors and contributes to the expansion of commercial activities and the export of national products. How can Industrial Rights be protected? In most countries, an industrial design must be registered in order to be protected under industrial design law. Depending on the particular national law and the kind of design, an industrial design may also be protected as an unregistered design or as a work of art under copyright law. In some countries, industrial design and copyright protection can exist concurrently. In other countries, they are mutually exclusive: meaning that once the owner chooses one kind of protection, he can no longer invoke the other. Under certain circumstances an industrial design may also be eligible for protection under unfair competition law, although the conditions of protection and the rights and remedies ensured can be significantly different. What industrial design rights cannot protect?

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Designs that are generally barred from registration in many territories include: i) designs that do not meet the requirements of novelty, originality and/or individual character; ii) designs that are considered to be dictated exclusively by the technical function of a product; such technical or functional design features may be protected, depending on the facts of each case, by other IP rights (e.g. patents, utility models or trade secrets); iii) designs incorporating protected official symbols or emblems (such as the national flag); iv) designs which are considered to be contrary to public order or morality. v) Some countries exclude handicrafts from design protection, as industrial design law in these countries requires that the product to which an industrial design is applied is “an article of manufacture” or that it can be replicated by “industrial means”. • What rights are conferred by industrial design protection? When an industrial design is registered, the holder receives the right to prevent unauthorized copying or imitation by third parties. This includes the right to prevent all unauthorized parties from making, selling or importing any product in which the design is incorporated or to which it is applied. Because industrial design rights are territorial in nature, this right is limited to the territory for which the design is registered. • How extensive is industrial design protection? Generally, industrial design protection is limited to the country in which protection is granted. Under the Hague Agreement Concerning the International Registration of Industrial Designs, a WIPO-administered treaty, a procedure for an international registration is offered. An applicant can file a single international application with WIPO. The applicant can designate as many Contracting Parties as he wishes. How can you enforce your rights when your industrial design is being infringed? In case of infringement, the holder of industrial design rights could, firstly, decide to send a “cease or desist letter” to the alleged infringer, informing him of a possible conflict between his industrial design rights and the alleged infringing product and asking him to cease said infringement. If the infringement persists, the holder of the industrial design rights could decide to take all appropriate legal measures against the infringer, as provided for by the applicable law. The enforcement of industrial design rights may be a complex issue for which it is usually advisable to seek professional assistance from a lawyer who would in principle be the competent person to provide you with advice on how to settle any dispute. • What is the international framework for Industrial Design Rights? Under the Hague Agreement Concerning the International Deposit of Industrial Designs, a WIPO-administered treaty, a procedure for an international registration exists. An applicant can file for a single international deposit with WIPO or with the national office in a country party to the treaty. The design will then be protected in as many member countries of the treaty as desired. Are Industrial Design Rights protected in India also ?

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India's Design Act, 2000 was enacted to consolidate and amend the law relating to protection of design and to comply with the articles 25 and 26 of TRIPS agreement. According to Articles 25 and 26 of TRIPS: “Members shall provide for the protection of independently created industrial designs that are new or original. Members may provide that designs are not new or original if they do not significantly differ from known designs or combinations of known design features. Members may provide that such protection shall not extend to designs dictated essentially by technical or functional considerations. Each Member shall ensure that requirements for securing protection for textile designs, in particular in regard to any cost, examination or publication, do not unreasonably impair the opportunity to seek and obtain such protection. Members shall be free to meet this obligation through industrial design law or through copyright law.” The new act, (earlier Patent and Design Act, 1911 was repealed by this act) now defines "design" to mean only the features of shape, configuration, pattern, ornament, or composition of lines or colours applied to any article, whether in two- or three-dimensional, or in both forms, by any industrial process or means, whether manual or mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye; but does not include any mode or principle of construction. ________________ 1. http://www.wipo.int/designs/en/#accordion__collapse__03. 2. Brian W. Gray & Effie Bouzalas, editors, Industrial Design Rights: An International Perspective (Kluwer Law International: The Hague, 2001) ISBN 90-411-9684-6. 3. http://www.wto.org/english/docs_e/legal_e/27-trips.pdf.

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TRADEMARK DILUTION IN INDIA

By Palak Jain, 4th Year, B.A LL.B (Hons.) FYIC, National Law Institute University, Bhopal

Trademark dilution is that facet of trademark infringement, wherein the owner of a well-known trademark has the power to prevent others from using the mark on the ground that such use is likely to lessen the reputation or uniqueness of the trademark. In other words, unlike ordinary trademark infringements, dilution protection extends to trademark uses that do not confuse consumers regarding who has made a product. Instead, dilution protection law aims to protect sufficiently strong and well known trademarks from losing their singular association in the public mind with a particular product. Thus, Dilution theory regards trademark not only as a commercial signature but also as a ‘silent salesman’ who directly comes in contact with the consumers.1 Doctrine of dilution in India The old law in India, i.e the Trade and Merchandise Marks Act, 1958, did not provide for trademark dilution, as is in the case of Section 29(4)2 of the Trademarks Act, 1999 by which the anti-dilution provision has been first incorporated in a statute. But, the principle of dilution was evolved by our courts prior to the Act, having regard to internationally recognized standards. Nature and scope of Section 29(4) of the Act First and foremost, for the application of Section 29(4), the trademark should be registered and should have a reputation in India. Thus, a different terminology “a reputed trademark” is used here instead of “well-known trademark” which is defined in the Act. The intent of the legislature is not clear as to why there has been a substitution. However, courts have tried to bring a distinction between the two in a few cases that have come before them, though not successfully As per the ingredients of Section 29(4), trademark infringement in the form of dilution is said to have occurred if the person in the course of trade or business uses the mark which is: 1. identical with or similar to the registered trademark having reputation in India; and 2. such use is on different goods or services than those covered by the registration. Such use of the mark would constitute infringement in the form of dilution if it is found that the use of offending mark produces the following results: 1. without due cause takes unfair advantage of the distinctive character or reputation of registered trademark 2. without due cause is detrimental to the distinctive character or repute of the registered trademark Judgments on trademark dilution In Daimler Benz Aktiegessellschaft & Anr. v. Hybo Hindustan3, which is the most celebrated case on trademark dilution prior to the 1999 Act, the issue was regarding the mark BENZ along with

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a “three pointed human being in a ring” which the defendant used for his undergarment line. Ignoring the defense of honest concurrent use by the defendant, the High Court of Delhi granted injunction to the plaintiff and observed that imitation of mark such as of MERCEDES BENZ by anyone including the defendant would result in perversion of the trademark law in India. The Court held: “Such a mark is not up for grabs—not available to any person to apply upon anything or goods. That name . . . is well known in India and worldwide, with respect to cars, as is its symbol a three pointed star. This was the first case law in India which restrained the defendant from using the plaintiff’s well-known mark on the sole ground of free-riding, without bringing analysis of likelihood of confusion or deception into picture. ITC Ltd. v. Philip Morris Products SA & Ors4 Till date, in particular, since the enactment of the TM Act, this decision can certainly be termed as the most significant one which examined the doctrine of trademark dilution. Court in this case held for the first time, that the test evolved for infringement actions were inapplicable or inapposite to cases falling under Section 29(4), and therefore dissociated comprehensively the likelihood of confusion test from all actions falling under this Section. The Court observed that the absence of a presumption of infringement under Section 29(4), unlike the preceding clauses of Section 29, was indicative of the legislative intent requiring a higher standard of proof in cases falling under Section 29(4). The court emphasized that the following four essential elements need to be established in order for a dilution case to succeed: 1. The diluting mark is identical or similar to the injured mark; 2. The injured mark has a reputation in India; 3. The use of the impugned mark is without due cause; 4. The use of the impugned mark amounts to taking unfair advantage of, or is detrimental to, the distinctive character or reputation of the registered trade mark. Determination of issues in trademark law of India There has been little consistency with which Indian courts have decided dilution cases. Standard of dilution In India, “likelihood of dilution” approach has been taken more often than not. I am of the opinion that the approach should rather be actual dilution in such a case. This is because Trademark Act majorly is consumer oriented but for this provision. Thus, the threshold of dilution should not be lowered without a strong reason, when there is an alternative and anticipatory remedy already existing in the Act under section 11(2).

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Also, the positive wording of Section 29(4) is a replication of the English legislation, and even in that jurisdiction, the positive wording of the statute has led to courts requiring dilution to actually be established. Standard of reputation Since there is an evident confusion regarding reputation of a trademark, legislature should come into the picture and make necessary amendments. It should be made clear whether reputation is a narrower term than well-known trademark, as has been pronounced by the Indian courts, or means the same as can be gathered from the Act and foreign judgments. Conclusion Doctrine of dilution, even though recognized by courts in reference to Section 29(4) as a remedy independent of infringement action, owes its development to and flourishes in the protective blanket of passing off. Thus, to make it a successful independent cause of action, what is required is clarity in the provision by resolving the issues mentioned above. By legislative amendment, a provision enabling protection to unregistered trademarks should also be inserted which would not only reduce the dependence on the passing off principle in strengthening the claim of unregistered well-known marks against dilution, it would also expand the horizons of protection by stitching the worn out portions of the statutory blanket providing such protection. ________________ [1] T.G. Agitha, “Trademark dilution: Indian Approach” 50(3) JILI 341 (2008) [2] 29(4) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which- (a) is identical with or similar to the registered trade mark, and (b) is used in relation to goods or services which are not similar to those for which the trade mark is registered, and (c) the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark. [3] AIR 1994 Del. 239 [4] 2010 (42) PTC 572 (Del.)

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THE UNSETTLED CASE OF ANTON PILLARS DOCTRINE: A CONFLICT WITH RIGHT AGAINST SELF INCRIMINATION

By Pranav Bansal, 4th Year, West Bengal National University of Juridical Sciences, Kolkata

Copyright law protects the inherent right of creator or author, over his intellectual property, which emanates from the ingenuity of his mind and assumes tangible shape called his work-literary, artistic etc.[i]They vest negative rights in the owner, which allow the right-holder to utilize or dispose of his rights, and initiate legal proceeding against those who infringe them.[ii] The remedies available under copyright law can be divided under three main categories viz., administrative remedies, criminal remedies and civil remedies.[iii] Anton Pillar order [iv][hereinafter ‘order’] is a preventive civil remedy in the form of injunction, granted by the court, and aims to restrain infringement of copyright by allowing plaintiff to enter the premises of defendant on an ex-parte application, in order to inspect and remove original documents, copies of original or infringing goods without notifying defendant of the application.[v] The order in its extreme form may contain direction for defendant to disclose particular information and produce certain documents.[vi] It is not a search warrant, and requires permission of the defendant before the search or seizure of documents can be performed at his premises.[vii] It is to be noted that defendant can deny compliance with the order, but only at peril of facing proceeding for contempt of court.[viii] In India, Ordinance 39 of Civil Procedure Code empowers the court to issue Anton Pillar order. The order gives plaintiff an access to the privileged information, and hence violates right against self-incrimination contained in Article 20 (3) of Constitution of India [hereinafter ‘Constitution’]. The Constitution allows the privilege against self-incrimination[ix], or in other words a person cannot be compelled to become a witness against himself.[x] The privilege against self-incrimination is contained in the form of fundamental right, and a provision in violation of it has to be struck down.[xi] The relation between privilege against self-incrimination and order was examined for the first time by House of Lords in 1981.[xii] Antonio Pillar order is an extra ordinary remedy, which allows plaintiff to carry search in the premises of the defendant, and more than often it allows complainant an access to the privileged documents, which might contain incriminating material.[xiii] The order, hence gives unequal advantage to plaintiff, who many a times comes in possession of privileged information. The bigger issue arises when order directs the disclosure of information and document which might not be obtained by search alone. The refusal to cooperate with order opens the window for prosecution for the contempt of court.[xiv] The significant element of order is surprise due to which defendant are placed in vulnerable position, with no statutory protection for non-compliance Therefore, order coerces the defendant to disclose privileged information and documents, which oft may be of incriminating nature, allowing a gateway to start criminal proceedings of serious nature against him. The plaintiff may disclose such information to the prosecution agencies, which then can institute criminal proceeding based upon the evidence obtained while executing the order.[xv] The order presents defendant a choice between self-incrimination and contempt of court charges, hence it is stated that order creates coercion over defendant to disclose privileged information. As already stated Constitution[xvi] provides protection against self-incrimination, therefore Antonio Pillar order carry potential to violate fundamental right guaranteed under the Constitution.

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In India, the order is still at nascent stage and lot of questions remain unanswered. The courts primarily search prima facie case, good faith, irreparable loss and frank disclosure before granting the order in favour of plaintiff.[xvii]The consideration of its constitutional validity has not been addressed by the Indian courts. Unlike, UK where order is protected under §72 of UK Supreme Courts Act 1981, the question of whether the same protection can be culled out in Indian scenario, given that privilege against self-incrimination forms fundamental right is still to be determined. Until then, it is suggested that court should take cautious approach before granting order to avoid implicit violation of basic constitutional right. The courts should allow search and seizure by neutral third party upon the undertaking that privileged information obtained during execution of order shall not be leaked.[xviii] The evidence obtained in line of order should be used only in suit for which the order was issued. The order should be executed at normal office hours, and court should refrain from ordering forcible entry in the premises of the defendant.[xix] The neutral solicitor should further prepare the list of documents removed, and report them to the court.[xx] The order should be granted upon disclosure of honest material information, including the loopholes in his case by the plaintiff.[xxi] Anton Pillar order is a potent weapon in the hand of plaintiff and due to its enormous power; it can be misused to violate privilege against self-incrimination of defendant, and same has been recognized in UK.[xxii] The parliament of UK responded by legislating § 72[xxiii], however such provision is inexistent in India. Further, right against self-incrimination forms fundamental right guaranteed under Constitution. Therefore, it is important to address this issue and settle the legal position on the validity of Anton Pillar order. Until then court should take judicious approach and issue order in extra-ordinary circumstances based upon the guidelines listed above. ________________ [i] Justice A.S. Srivastava, Lal Commentary on Law of Copyright (Ed. Third 2002) Delhi Law House. [ii]Souvik Bhadraand Arka Majumdar, Anton Piller Order in UK and its Possible Implications in India, Journal of Intellectual Property Rights Vol. 12 (2007). [iii] Akhil Prasad and Aditi Agarwal, Copyright Law Desk book (Ed. First2009) Universal Law Publication. [iv] Anton Piller KG v. Manufacturing Processes Ltd. [1976] 1 All E.R. 799 [v] Perkins and Mills, Patent infringement and forum shopping in the European Union, Fordham International Law Journal, 20 (1996). [vi] Mitchell P. McInnes, The Right to Silence in the Presence of Anton Pillar: A Question of Self Incrimination, Alberta Law Review Vol. 26 (1988). [vii] Akhil Prasad and Aditi Agarwal, Supra note 3 [viii] Columbia Picture Industriesv Robinson, (1986) 3 All ER 338. [ix] Selvi and ors. v. State of Karnataka, AIR2010SC1974.

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[x] See The Constitution of India, Article 20 (3) [xi] Id. [xii] Rank Film Distributors Ltd. and Others v. Video Information Centre and Others, 1 [1981] 2 All E.R. 76. [xiii] IBM United Kingdom Ltd v. Prima Data International Ltd (1994) 4 All ER 748; Celanese Canada Inc. v. Murray Demolition Corp, ((2006) SCC 36). [xiv] Busby v. Thorn EMI Video Programmes Ltd., (1984) 1 NZLR 461. [xv] New Zealand Law Commission, Should Privilege in Civil Proceeding be Removed by Legislation? , September 27, 2013, available at https://www.google.co.in/search?q=newzealand+law+commision+anton+pillar&rlz= 1C1CHMO _enIN546IN546&oq =newzealand +law+commision+anton +pillar&aqs=chrome..69i57.9080j0&sourceid=chrome&espvd =210&es_sm=122&ie=UTF-8 (Last visited on September 30, 2013). [xvi] Supra note 16, 17. [xvii] Bucyrus Europe Ltd v. Vulcan Industries Engineering Co Pvt Ltd, 2005 (30) PTC 279; National Garments v. National Apparels, (1990) PTC 98; Bengal Club Ltd v. Susanta Kr Chowdhury, 2002 (3) CHN 322. [xviii] Mitchell P. McInnes, Supra note 12. [xix] Universal Thermosensors Ltd v. Hibben, (1992) 3 All ER 257 [xx] Souvik Bhadraand Arka Majumdar, Supra note 2. [xxi] Jeffrey Rogers Knitwear Productions Ltd v Vinola Knitwear Manufacturing Co (1985) FSR 184, 189. [xxii] Rank Film Distributors Ltd. and Others v. Video Information Centre and Others, Supra note 18. [xxiii]See UK Supreme Courts Act 1981, § 72; provides for the withdrawal of the privilege against self-incrimination in civil proceedings pertaining to infringement of intellectual property rights or passing off.

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CREATIVE COMMONS: EXPANDING THE PUBLIC DOMAIN SINCE 2001

By Tania Singla, 3rd Year, National Law University, Delhi

When one claims the right to freedom of expression, it also logically follows that he wants other people around him to be able to access the information that he creates. This, however, places him in a moral dilemma: he wants to share his ‘creative wealth’ in the public domain but simultaneously, he wants to prevent ‘free-riders’ from capitalizing on his work. Copyright law, in a bid to create barriers to unauthorized commercial exploitation of creative works, also erected barriers to access and sharing of such works in the public domain – a natural repercussion of the default ‘All rights reserved’. The pinch of these barriers is felt more strongly in this era dominated by the Internet, where even a person armed with a smartphone can remix and rebuild content with unprecedented ease. Grounded in the belief that creativity stems only from economic incentives, copyright law did not account for those authors who want their work to be freely shared, downloaded and remixed and (do not need the monopoly over expression that the law provides) for. To highlight the restrictive nature of this monopoly, “copyleft” and open access movements arose and gained momentum in several parts of the world.;one such movement was Creative Commons. Some Rights Reserved Creative Commons (CC) is a non-profit organization that seeks to circumvent the cumbersome permissions and royalties process under Copyright by offering “Some Rights Reserved” licenses designed primarily for authors and artists. Founded in 2001, the CC framework is designed in a manner such that it can co-exist with copyright. The CC website states, “Creative Commons licenses are not an alternative to copyright. They work alongside copyright and enable you to modify your copyright terms to best suit your needs.” The CC licenses are standardized licenses of varied terms, where the authors may choose which rights they want to retain and which rights they want to ‘sell’ to the public. The main licensing terms comprise mainly of Attribution (CC BY), which requires that author must be acknowledged as the creator of the work every time his work is used; Non-commercial (NC), which authorizes only non-commercial use; Share Alike (SA), which requires that the release of a derivative work must be on the same terms as the license of the original work and No Derivatives (ND), which does not allow the use of the work in any other work. These elements are then mixed and matched into six main licenses: 1) Attribution (CC BY) 2) Attribution Share Alike (CC BY-SA) 3) Attribution No Derivatives (CC BY-ND) 4) Attribution Non-Commercial (CC BY-NC) 5) Attribution Non-Commercial Share Alike (CC BY-NC-SA) 6) Attribution Non-Commercial No Derivatives (CC BY-NC-ND)

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These licenses “[do] not claim freedom for the user to copy and counterfeit the work, only the ability of the author to grant this freedom to subsequent users”. These licenses have generated much enthusiasm among supporters of the open source culture. Creative Commons, now active in 34 countries, re-launched its India chapter as recently as November 2013. Relevance in the Indian Context In India, millions of people and institutions lack the ability to afford proprietary software. But with an expanding academic and student base, there is a tremendous demand for inexpensive works that can be freely shared and built upon to suit the requirements of the setting these works are being used in. Under the Indian Copyright Act, Section 52 permits fair use of copyrighted materials whereby material may be copied for educational purposes but it is limited to research, teaching discourse, examination and performances in institutions. There is no legal protection for course materials that are copied and distributed. The lopsided balance of copyright became evident in a case that is currently subjudice. The licensed photocopier of the Delhi University (DU) has been sued by Oxford and Cambridge University Press (“Publishers”) for supplying course-packs to students, which essentially comprised of extracts compiled from different copyrighted works that students ordinarily cannot afford. But the Publishers want their royalties first, even though the average content copied was only 8.81%. It is in this background of ‘private profit monopoly thicket’ that the potential of CC licenses becomes most relevant. Pratham Books, a non-profit publishing house for children’s books has started using CC licenses to create more content for children and to reach out to a wider audience. The open source model has also been adopted by the National Repository of Open Educational Resources (NROER) where all works are licensed under the CC BY-SA license. Legal Recognition for CC Licenses To the citizens of a developing country looking for inexpensive creative resources, these licenses are quite attractive. But the success of an open source model is fostered to a large extent by the ability of the licensor to successfully sue for copyright infringement in the event that the terms of these licenses are violated. In India, the concept in new and litigation has not been spawned in this area yet. But the re-launch has been significant because these licenses have now been designed in a manner such that they are compatible with and enforceable under the Indian Copyright Act. In other jurisdictions, meanwhile, CC licenses are gradually paving their way for legal recognition. In Curry v. Audax, Adam Curry, a famous podcaster, sued a Dutch tabloid for publishing photos from his Flickr account, which were licensed under the CC BY-NC-SA 2.0 unported licence. He argued that this was commercial use and in violation of the terms of the license. The Dutch Court did not grant any damages but upheld the claim. This decision is significant because it confirms that the conditions of a CC license are directly and immediately applicable to the content licensed under it, and bind users of such content even without expressly agreeing to, or having knowledge of, the conditions of the license. The US Federal Court, in the Jacobsen v. Katzer decision of 2008, dealt with the question of whether the terms of the Artistic License (for open-source software) were in the nature of

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conditions or covenants. This distinction is important because in the former, remedies are available for copyright infringement but in the latter, limited remedies are available and only under contract law. The Court overturned the ruling of the District Court and held that the terms were in the nature of conditions for which a suit may be brought for availing remedies for copyright infringement. These judgments demonstrate evolving legal acceptance for CC licenses and though copyright jurisprudence in India has not delved into these questions yet, we can only be hopeful that the Indian Courts will be receptive to the transformative potential of this idea of ‘using private rights to create public goods’. __________________ 1. Niva Elkin-Koren, What Contracts Cannot Do: The Limits of Private Ordering in Facilitating a Creative Commons, 74 Fordham L. Rev. 375 2005-2006. 2. Adrienne K. Goss, Codifying A Commons: Copyright, Copyleft, and the Creative Commons Project, 82 Chi.-Kent L. Rev. 963 2007. 3. Mira T. Sundara Rajan, Creative Commons: America’s Moral Rights, 21 Fordham Intell. Prop. Media & Ent. L.J. 905. 4. http://spicyip.com/docs/Resources/good-news-vol2-issue18.JPG 5. http://wiki.creativecommons.org/OER_Case_Studies 6. http://spicyip.com/2012/09/analysing-delhi-university-v-publishers.html 7. http://spicyip.com/2011/09/creative-commons-licensing-success.html 8. http://www.groklaw.net/article.php?story=20060316052623594 9. http://blog.internetcases.com/2009/02/20/open-source-software-and-the-covenant-condition-dichotomy/ 10. http://articles.economictimes.indiatimes.com/2007-02-06/news/28451618_1_free-access-copyright-licence 11. https://creativecommons.org/tag/in 12. http://www.thehindu.com/opinion/blogs/blog-datadelve/article5380106.ece.

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INTELLECTUAL PROPERTY RIGHTS

By Vrinda Pareek, 1st Year, BA LLB. (Hons.), Rajiv Gandhi National University of Law, Punjab

Intellectual property law is a legal concept that deals with the creations of the mind for which exclusive rights are recognised and granted; it refers to the property of original thought manifested in a tangible form, which is protected by law[i] and regulates the creation, use and exploitation of mental or creative labour. While there are numerous significant distinctions between the various forms of intellectual property rights, one factor that they share in common is that they establish property protection over intangible things such as ideas, inventions, signs and information. Although intellectual property may be intangible or abstract, once in existence intellectual property rights have much in common with the rights associated with real property- for the most part, intellectual property rights can be assigned or bequeathed. While there is a close relationship between intangible property and the tangible objects in which they are embodied, intellectual property rights are distinct and separate from property rights in tangible goods. As rights over intangibles, intellectual property rights limit what the owners of personal property are able to do with the things which they own.[ii] Any property has to be protected to save it from an unauthorized use. Likewise, Intellectual Property Rights also need to be protected from infringement. Major forms of intellectual property law that protect original thought or physical manifestations of such creative thought include: copyright, trademark, patent, geographical indication and industrial design. Copyright is a form of intellectual property which gives the creator of "original literary dramatic, musical and artistic works, cinematograph films and sound recordings...exclusive rights subject to the provisions of this Act..."[iii] - such exclusivity pervades to the right to copy, to be credited for the work, to determine the eligibility of an individual to adapt or to reproduce it and similar related rights. A patent refers to a right granted to an inventor for a limited period of time in lieu of the public disclosure of the invention which may be a product or a process; one which satisfies the conditions of innovativeness, usefulness and novelty. “Trade mark means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours."[iv] They are used to claim exclusive properties of products. A geographical indication is a sign used on goods that have a specific geographical origin and possess qualities, reputation or characteristics that are essentially attributable to that place of origin. Most commonly, a geographical indication includes the name of the place of origin of the goods. Geographical indications may be used for a variety of products whether natural, agricultural or manufactured. An appellation of origin is a special kind of geographical indication. It generally consists of a geographical name or a traditional designation used on products which have a specific quality or characteristics that are essentially due to the geographical environment in which they are produced. The concept of a geographical indication encompasses appellations of origin.[v] Finally and quite significantly, the intellectual property of industrial design can be understood as the design of any aspect of the shape or configuration, whether internal or external, of the whole or part of an article. These may be functional elements of design or configuration and may also be elements that are aesthetically pleasing. The article that employs the said design, meanwhile, need not be one which is intended for, or is even capable of being, reproduced by an industrial process, as with the old registered design. Design right, it must be noted, subsists if the design is original.[vi] The primary issue that arose in granting the status of property to such intangibles pertained to the determination of a set definition of intangible property itself- as to the demarcation of objects which were deemed to be fit so as to be included in the purview of such protection. This dilemma

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gave rise to an equally dynamic and indefinite solution: the effective development of techniques to determine the parameters of intangible property, specific to each distinct area of intellectual property. Such criteria manifested itself in several forms; for instance, requirements of sufficiency of disclosure under patent law and the originality prerequisite that forms the core of copyright law. A general point in this regard suggests that boundaries or definitions of intellectual property may not be identified unless and until they are legally challenged.[vii] The rationale behind the need for protection of intellectual property is that IPRs relate to new ideas, new technology, new products and evolution of knowledge. They impart success to the business enterprise by creating and preserving exclusive markets and thus reducing the element of risk and uncertainty. This provides an incentive to investors for further investment in R & D, which leads to creation of new and better products and in turn, brings about economic growth and social benefits.[viii] The status and legitimacy of the grant of intellectual property rights is justified on three primary grounds- instrumental, economic and socio-ethical or moral. The first stresses on the fact that the concept of intellectual property promotes desirable behaviour- for instance, the patent system provides inventors with an incentive to disclose valuable technical information which would have otherwise remained secret. The economic justification contends that owing to its intangible nature, intellectual property poses a 'public goods' problem. Intellectual property can be costly and time-consuming to produce and may require a considerable degree of inventiveness and originality. Yet, once this mental investment has been embodied in a material form, it may be relatively cheap and easy to reproduce. Furthermore, there may be no limit to the extent to which it can be copied with each copy having as much value as the original. Without intellectual property rights, there is nothing to prevent others from taking advantage of the intellectual capital without incurring its original cost. Resultantly, intellectual property rights offer an important incentive for the creation of new intellectual capital.[ix] The social function, meanwhile, is inherent to any legal rule. It allows for the rights of individuals to be weighed against competing rights.[x] For instance, the fact that copyright law recognises an author's natural or human rights over the products of their labour provides an elucidation of the moral ground of justification under consideration. Similarly, trade-mark protection allows for the prevention of third parties from becoming unjustly enriched by 'reaping what they have not sown'.[xi] ____________ [i] Prof. Ramesh Chandra, Issues of Intellectual Property Rights, Isha Books, New Delhi, India, 2004, p. vii [ii] Lionel Bently and Brad Sherman, Intellectual Property Law, Oxford University Press, New York, United States of America, 2001, p.1 [iii] Indian Copyright Act, 1957; Chapter III, Section 14 [iv] Trademarks Act, 1999 [v] World Intellectual Property Organisation (http://www.wipo.int/geo_indications/en/about.html) [vi] Jennifer Davis, Intellectual Property Law, Oxford University Press, Great Britain, 2012, p.343

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[vii] Jennifer Davis, Intellectual Property Law, Oxford University press, Great Britain, 2012, p.2 [viii] Dr. R. Radhakrishnan & Dr. S. Balasubramaniam, Intellectual Property Rights, Excel Books, New Delhi, 2009, p.3 [ix] Jennifer Davis, intellectual Property Law, Oxford University Press, Great Britain, 2012, p.4 [x] Christophe Geiger, "The Social Function of Intellectual property Rights", (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2228067) [xi] J. Hughes, "The Philosophy of Intellectual Property", Georgetown Law Review 77, 1988, p. 287


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