Liability for damage to goods

Cross Border Liability

Multimodal Transport Ocean Shipping

1. Common Carrier 2. Charter Parties

1. Voyage Charter 2. Time Charter

3. Bareboat Charter

Liability for damage to goods

Concept of General Average

Cross Border Liability

Ocean Bill of Lading

1. Negotiable/Non-negotiable Bill of Lading 2. Clean/Claused On-board Bill of Lading Airway Bill of Lading

Deviation

Insurance

Documentary Letter of Credit

Departure (Group E) EXW

Main Carriage Unpaid (Group F) FCA, FAS, FOB

Main Carriage Paid (Group C) CPT, CIP, CFR, CIF

Arrival (Group D)

DAP, DPU, DDP

Incoterms

^®

2020 Rules

Ex Works

Category 1 : Rules for any Mode or Modes of Transport (Multi-modal)

EXW

FCA Free Carrier

CPT Carriage Paid To

CIP Carriage Insurance Paid To

DPU Delivered at Place Unloaded

Delivered at Place DAP

Delivered Duty Paid DDP

The Seller's only responsibility is to make the goods available at the Seller's premises. The Buyer bears full costs and risks of moving the goods from there to destination.

Free Carrier means that the seller delivers the goods cleared for export, to the carrier or another person nominated by the buyer at the seller’s premises or another named place. The Seller loads the goods if the carrier pickup is at the Seller's premises. From that point, the Buyer bears the costs and risks of moving the goods to destination.

“Carriage Paid To” means that the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such place is agreed between parties) and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination. From the time the goods are transferred to the first carrier, the Buyer bears the risks of loss or damage.

“Carriage and Insurance Paid to ” means that the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such place is agreed between parties) and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination. From the time the goods are transferred to the first carrier, the Buyer bears the risks of loss or damage. The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage. The buyer should note that under CIP the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements.

The Seller delivers when the goods are placed at the Buyer's disposal on the arriving means of transport ready for unloading at the named place of destination. The Seller bears all risks involved in bringing the goods to the named place.

“Delivered at Place Unloaded ” means that Seller delivers the goods and transfer risk to Buyer, when the goods once unloaded from the arriving means of transport are placed at the disposal of the Buyer & at the named place or destination or at an agreed point within that place, if any point has been agreed.

The contract of carriage must be arranged by the Seller up to the agreed point of delivery of destination. The Seller is liable to unload the good from the means of transportation. DPU requires the Seller to clear the goods for export however the Seller is under no obligation to clear the good for import or transit through third countries

“Delivered Duty Paid” means that the seller delivers the goods when the goods are placed at the disposal of the buyer, cleared for import on the arriving means of transport ready for unloading at the named place of destination.

The seller bears all the costs and risks involved in bringing the goods to the place of destination and has an obligation to clear the goods not only for export but also for

import, to pay any duty for both export and import and to carry out all customs formalities.

“Free Alongside Ship ” means that the seller delivers when the goods are placed alongside the vessel (e.g., on a quay or a barge) nominated by the buyer at the named port of shipment. The risk of loss of or damage to the goods passes when the goods are alongside the ship, and the buyer bears all costs from that moment onwards.

The Seller delivers the goods on board the ship and clears the goods for export.

From that point, the Buyer bears all costs and risks of loss or damage

“Cost and Freight” means that the seller delivers the goods on board the vessel or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the vessel. the seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.

“Cost, Insurance and Freight ” means that the seller delivers the goods on board the vessel or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the vessel.

The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination. The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage. The buyer should note that under CIF the seller is required to obtain insurance only on minimum cover.

Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements.

Advantages of Arbitration

• Final, binding decisions

• International recognition of arbitral awards

•

UN Convention on the Recognition & Enforcement of Foreign Arbitral Awards, 1958

• Neutrality

•

Place of arbitration,

•

Language used,

•

Procedures or rules of law applied,

•

Nationality, and

•

Legal representation.

• Specialized competence of arbitrators

• Speed and economy

• Confidentiality

• Ad hoc or institutional arbitration

Major Centers for International Arbitration

• Permanent Court of Arbitration

• The ICC International Court of Arbitration

• International Centre for the Settlement of Investment Disputes

• World Intellectual Property Organization – Arbitration & Mediation Centre

• World Trade Organization – Dispute Settlement Body

International Accounting & Taxation Practices

Factors that influence development of a country’s Accounting Systems

National Accounting

System

Political & Economic ties with other Nations

National Culture Level of Inflation

Relationship b/w Business & Providers

of Capital

Level of Economic Development

International Financial Reporting Standards

• These are standards and interpretations adopted by International Accounting Standards Board (IASB).

• Many of the standards forming part of IFRS are known by the older name of International Accounting Standards issued

between 1973 and 2001 by the board of International Accounting Standards Committee (IASC).

• In April 2001 the IASB adopted all IAS and continued there development calling the new standards IFRS

• The aim of settings standards was to bring about uniformity in financial reporting and to ensure consistency and

comparability in the data published by enterprises

International Accounting & Taxation Practices

International Accounting & Taxation Practices

Concepts of Taxation

1. Tax Neutrality

a) Domestic Neutrality b) Foreign Neutrality

2. Tax Equity

Criteria taken into by Multinational Enterprises when making Transfer Pricing Decisions

• Tax Regimes

• Local Market Conditions (Market share of affiliate, growth rate of market, nature of local competition, etc.)

• Market Imperfections (Price freezes, and profit repatriation restrictions)

• Joint Venture Partner

• Morale of Local Country Managers

Setting Transfer Prices

Country A Subsidiary

Country B Headquarters

Country C Subsidiary

High Taxes Low Tax, High Tariff Restrictions on Repatriation of Profits

Low Price

High Price

High Price

Transfer Pricing Strategies

• Market based Transfer Pricing (Arm’s Length Prices)

• Non-market based Transfer Pricing

• Cost-based Pricing

• Negotiated Pricing

• Basic Arm’s Length Standard (BALS)

Technology Transfer

Technology transfer is the process by which basic science research and fundamental discoveries are developed into practical and commercially relevant applications and products.

A Typical Transfer Procedure is as under:

▪ Discovery of technology

▪ Technology valuation and demand selection

▪ Packaging

▪ Technology transfer marketing activities

▪ Technology transfer negotiations and contract

▪ Post management

Knowledge Centers

• Institutes of Council of Scientific and Industrial Research

• Institutes/Laboratories of Defense Research Development Organization

• Centers/Units of Indian Space Research Organization

• Institute of Indian Council of Medical Research

• Institutes of Indian Council of Agricultural Research

• Department of Atomic Energy

• Department of Electronics

• Ministry of Small Scale Industries and Agro & Rural Industries

• Department of Industrial Development

• Ministry of Science & Technology

• Department of Science & Technology

• Department of Scientific & Industrial Research

• Department of Biotechnology

• State Level R&Ds

• R&Ds of Industrial Associations

• Private R&Ds

• Higher Education Sector

Impact of Technology Transfer

Positive Impacts

•

Policy formulation for enhancement of investment in sophisticated technology.

•

Manufacturing of new and improved products.

•

Restructuring by making additional investment in machinery, equipment, testing laboratories, etc.

•

Employment opportunities due to industrial investment & growth.

•

Development of skills through advance process oriented training.

•

Improved manufacturing processes.

•

In-house R&D facilities for maintaining better quality.

•

Creation of Brand image.

•

Achievement of cost efficiency for better competitiveness.

•

Increase in market share.

Impact of Technology Transfer

Negative Impacts

•

Rise in disputes between providers and users of technology.

•

Mistrust and transparency problems in implementation of MOU and technology transfer agreement.

•

High costs in technology transfer.

•

Delays and other problems related to royalty payment.

•

Disincentive to small entrepreneurs.

•

Job displacements due to adoption of new technologies.

•

Frictions between trade unions and management.

•

Risks associated with introduction of new technologies.

Methods of Technology Transfer

A.

Market Oriented

▪

Technology sale and transfer

▪

Technology license (Exclusive License, Non-exclusive license, Sublicense and Cross Licensing)

▪

Technology transfer along with capital, management, and know-how etc.

▪

Purchase, M&A of corporations possessing technological capabilities

▪

Purchase of Equipment and Products having embedded technology

▪

Technology transfer involving the sale of technology data such as plans, microfilms, etc.

▪

Technology transfer using technical personnel as a medium

B.

Non-market Oriented

▪

Books, Academic Journals, Business Magazines

▪

Sales Literature

▪

Industrial Fairs & Exhibitions

▪

Informal Personal Contacts

▪

Participation in Conferences, Seminars and Workshops

Technology Transfer Licensing Contract

1. Definitions:

Licensor, Licensee, Licensed Product, Effective Date, Technical Knowhow, Territory, Law, Effective Term.

2. License:

• Licensor grants license for the effective term of the contract . The exclusive rights and license to use the technical documents and knowhow for manufacture and sale of the licensed product in the territory.

• Licensee shall be entitled to use, practice, manufacture the licensed product and sell it in the territory without any further payment after the expiry of the effective term of the contract.

3. Provision of Licensed Technology:

• Licenser shall deliver to the licensee the technical documentation and the knowhow in the territory and such delivery shall be in two numbers of blue prints that are in English language and in metric system.

• Licensor shall provide standard specification sheets of the licensed product.

• Licensor shall deliver the technical documentation and knowhow within a specified period from the effective date, and the licensee shall issue a receipt thereof.

Technology Transfer Licensing Contract

4. Technical Assistance and Service:

• Licensor shall provide advice to the licensee by sending two technicians to the licensee’s plants in the territory.

• Licensor shall provide training to two technicians of the licensee for

manufacture of the licensed product, instruction, operation at the licensor’s plant. The trainees shall be permitted to take notes/make sketches, and the licensee shall not disclose such information to a third party.

• Licensor shall explain to the licensee’s trainees the technical

documentation, drawings, writings and specification relating to technical documentation and knowhow, including operation and maintenance manuals, as also the expertise associated with the production.

• The licensor shall continue to provide technical assistance so that the licensee is able to maintain to maintain the standards of the licensor.

• From time to time to time the licensor shall make available service of its technical advisors, the licensor shall also permit any duly authorised

employees of the licensee to visit the licensor’s lab and factory, and/or the licensor in response to the licensee’s request seeking solutions, guidance and instructions, may advise corrective measures to the licensee to improve the quality of the licensed product.

• Licensor shall provide to the licensee the names of the original

vendors/sub-component manufacturers and their prices, and help in procuring the components from the said vendors.

Technology Transfer Licensing Contract

4. Technical Assistance and Service (Contd.):

• The licensor shall extend full technical support and help, if required by the licensee to develop such imported components of the required quality within the territory.

• The licensor and licensee shall work together in reducing the cost of the licensed product without impairing the quality.

5. Improvements:

• Licensor shall furnish to the licensee, free of charge, any or all

improvements, innovations, development and/or modifications to the technical documentation, knowhow including the technical

manufacturing related to the licensed product during the effective term of the contract.

• The licensor shall give first preference to the licensee for the

manufacturing and selling rights in the territory for any other new model of the machine, which might be developed by the licensor at a later

date.

Technology Transfer Licensing Contract

6. Technical Fee:

• The licensee shall pay to the licensor a net sum agreed upon. Taxes, duties fees encountered on the initial fee have to be borne by the licensee.

• 1/3^rdof the fee is paid within a specified number of days from the effective date of the contract.

• 1/3^rdof the fee is paid within a specified number of days after the date of the technical documentation and knowhow transfer.

• 1/3^rdof the fee is paid within a specified number of days of the commencement of the commercial production.

• All payments shall be made at the prevailing rate of exchange on the date of each payment to the bank account designated by the licensor.

7. Disclaimer and Limitation of Warranty:

• The sole warranty of the licensor under the contract is that the licensed product will meet the specifications, the licensor being the owner of entire rights to license the licensed product.

• Licensor does not give any warranty, expressed or implied, nor assume any

liability whatsoever in respect of the licensed product, manufactured or sold by the licensee.

Technology Transfer Licensing Contract

7. Disclaimer and Limitation of Warranty (Contd.):

• The licensor shall have no responsibility for the ability of the licensee to use the technical documentation and knowhow supplied for the manufacture of the licensed product and for any damages suffered by licensee in connection with the manufacture, sale or use of the licensed product.

8. Infringement:

• In the event of any action, suit or proceeding by any person in the territory against the licensee on the ground of any infringement of such person’s patent and other rights by licensee’s use of the technical documentation and

knowhow, and manufacture of the licensed products, the licensee shall

promptly give a written notice to the licensor. The licensor shall defend the said action on behalf of the licensee at his own cost.

• Licensee shall fully cooperate/render all responsible assistance to the licensor in defence of any such infringement.

• Licensor and licensee shall consult each other on methods of preventing third parties from making copies of the licensed products.

Technology Transfer Licensing Contract

9. Brand and Marketing:

• On the condition that the licensed products manufactured by the licensee attain and maintain the quality of the licensed products approved by the

licensor, the licensee shall have the right to mark the licensed products and/or their package wit the words, “Manufactured under the Technical License from M/S ………….”

• As soon as the quality of the licensed product, manufactured by licensee is approved by the licensor, the licensee would become the exclusive

manufacturer of the licensed product, the licensor would buy from the licensee.

10. Termination:

• On the expiry of the effective term of the contract.

• A party may terminate the contract if the other party commits a substantial

breach of contract, or becomes insolvent/taken into liquidation, or by any event of force majeure.

Technology Transfer Licensing Contract

11. Force Majeure:

• Any failure/omission by either party to perform its obligation shall not be a breach of contract, if the same is caused by reasons/circumstances constituting force majeure.

• The party claiming force majeure shall as soon as practicable notify the other party of the conditions constituting force majeure.

• The performance of obligations of the party invoking force majeure shall, to the extent affect by it, remain suspended during the subsistence of such force

majeure and the period for the performance thereof shall be extended by the period of subsistence of such force majeure.

12. Arbitration: All disputes, controversies or differences, which cannot be

resolved by mutual endeavors shall be finally settled by arbitration, which shall be held in accordance with the Rules of the Conciliation and Arbitration of the International Chamber of Commerce.

The TRIPs Agreement

The Agreement covers five broad issues:

▪

How basic principles of the trading system and other international property agreements should be

applied.

▪

How to give adequate protection to IPRs.

▪

How nations should enforce those rights adequately in their own territories.

▪

How to settle disputes on intellectual property between members of the WTO.

▪

Special transitional arrangements during the period

when the new system is being introduced.

Basic Principles of TRIPS

National Treatment and MFN: National treatment (non-discrimination against foreigners) and MFN treatment (no discrimination between foreign nationals) in intellectual property protection are allowed subject to the exceptions under the Berne Convention, the Paris Convention and the Rome Convention.

Concept of Exhaustion in IPRs: An issue in intellectual

property protection is the question of exhaustion of

rights. The holder of IPRs in a product forfeits rights

over further distribution once sales have taken place,

and has no control over whether the buyer re-sells the

product in the market.

Copyrights and Related Rights

Copyright is about the right to copy. It is based on the notion that

people who create/produce creative work have the right to decide how the fruits of their talent, skill and labour should be reproduced. It thus, provides the economic foundation for sustaining and fostering

creativity. Without this protection, nobody would be encouraged to be creative.

In the case of India, the law on copyright protection is contained in the Indian Copyright Act, 1957. Copyright is available for a wide range of expressions, which include literary, dramatic, musical and artistic works.

India’s copyright law fully reflects the Berne Convention on Copyrights, to which India is a party. Additionally, India is party to the Geneva

Convention for the Protection of Rights of Producers of Phonograms and to the Universal Copyright Convention. India is also an active member of the WIPO and UNESCO.

The copyright Act in India has always been well organized ever since its inception, and has been amended a few times to make it stronger.

An amendment in 1984 equipped the law to deal with piracy in videotapes and music.

Copyrights and Related Rights

Another amendment of the Act in 1995, further updated the law and

fulfilled the country’s commitment under the GATT, which required specific mention of a computer programme as a literary work and making other special provisions on infringement of copyrights in computer programmes.

Another addition was in the area of the rights of broadcasters, which was aimed at protecting their programme from misappropriation.

India’s copyright law has been amended and in some ways exceeds the requirements of the TRIPS Agreement, for example, on the period for

copyright protection (which is 60 years in India). The law was amended in December 1999 to grant 25-year term of protection for neighbouring rights.

The term of protection for copyrights and right of performers and producers of phonograms is to be no less than 50 years.

In case of broadcasting organizations, however, the term of protection is to be at least 20 years.

Copyright protection in published works is for the life of the author and continues for 60 years from the beginning of the calendar year next following the year in which the author dies.

Copyrights and Related Rights

▪

In the area of copyright and related rights (i.e. rights of performers,

producers of phonograms and broadcasting organizations), the agreement requires compliance with the substantive provisions of the Berne

Convention.

▪

The TRIPS agreement ensures that computer programmes will be

protected as literary works under the Berne Convention and outlines how databases should be protected.

▪

It also expands international copyright rules to cover rental rights. Authors of computer programmes and producers of sound recordings must have the right to prohibit the commercial rental of their works to the public. A similar exclusive right applies to films where commercial rental has led to widespread copying, affecting copyright-owners’ potential earnings from their films.

▪

Producers of sound recordings must have the right to prevent the

unauthorized reproduction of recordings for a period of 50 years. Several measures have been adopted to strengthen and streamline the

enforcement of copyrights. These include the setting up of a Copyright Enforcement Advisory Council, training programmes for enforcement officers and setting up special policy cells to deal with cases relating to infringement of copyrights.

Trademarks

▪

A trademark is a distinctive mark, motto, device, or implement that a manufacturer

stamps, prints, or otherwise affixes to the goods it produces so that they may be identified on the market and their origins made known. Once a trademark is established (under the common law or through registration), the owner is entitled to its exclusive use.

▪

The Trade and Merchandize Marks Act, 1958 provided details for registration/refusal to register a trademark. The key requirement was that the trademark should be distinctive and could be registered only in relation to specific goods, falling in a specific class of goods.

Registration of the trademark was valid for a period of 7 years subject to renewal for a further period.

▪

The Trademarks Act 1999 was put into effect from September 2003, and has made Indian laws fully compliant with the TRIPS obligations. The TRIPS Agreement defines what types of signs must be eligible for protection as trademarks, and what the minimum rights

conferred on their owners must be. It says that service marks must be protected in the same way as trademarks used for goods. Marks that have become well known in a particular country enjoy additional protection.

▪

WTO members are obliged to publish each trademark either before it is registered or promptly thereafter so as to allow an opportunity for any other possible claimant to

contest the applicant’s claim and get the registration cancelled. Alternatively, the members can allow an opportunity for lodging of objections before granting registration for the

trademark. The owner of a registered trademark reserves the exclusive right to prevent all third parties, not having the owner’s consent, from using identical or similar signs for

goods or services, which are identical or similar to those in respect of which the trademark is registered if there is a possibility of confusion.

Trademarks

▪

The term Trade Dress refers to the image and overall appearance of a product, for example, the distinctive décor, menu, layout, and the style of service of a particular restaurant. Basically, trade dress is subject to the same protection as trademarks.

In cases involving trade dress infringement cases, a major consideration is whether consumers are likely to be confused by the allegedly infringing use.

▪

A Service Markis similar to a trademark but is used to distinguish the services of one person or company from those of another. For example, each airline has a particular mark or symbol associated with its name. Titles and character names used in radio and television are frequently registered as service marks.

▪

A Certification Markis used by one or more persons other than the owner to certify the region, materials, mode of manufacture, quality, or accuracy of the owner’s goods or services. When used by members of a cooperative, association, or other organizations, it is referred to as Collective Mark.

▪

The term Trade Name is used to indicate part or a business’s entire name, whether the business is a sole proprietorship, a partnership, or a corporation. Generally a trade name is directly related to a business and its goodwill. A trade name may be protected as a trademark if the trade name is the same as the name of the

company’s trademarked product, for example, Coca Cola.

▪

In cyberspace, trademarks are sometimes referred to as Cyber Marks.

Patents

A patent is an exclusive right granted for an invention, which is a product or a process that provides a new way of doing something, or offers a new technical solution to a problem. A patent provides protection for the invention to the owner of the patent.

Indian Patents (Amendment) Act, 1999

Patents (Second Amendment) Act, 2002

Indian Patents Act, 1970

Patents (Third Amendment) Ordinance, 2004

Indian Patents Act, 2005

Patents

Before the introduction of the Patents (Third Amendment) Ordinance, 2004, Section 25 of the Patents Act provided for the initiation of

proceedings for opposing the grant of a patent, which could be

launched within four months from the date of advertisement of the acceptance of complete specification. In other words, India followed a system of pre-grant opposition. The grant of patents could be opposed on grounds that included;

▪

The inventions for which the patent has been claimed was publicly known or publicly used,

▪

The invention is obvious and does not involve an inventive step,

▪

The invention is not patentable under the Patents Act, 1970,

▪

The complete specification wrongly mentions the source or geographical origin of biological material used in the invention, and

▪

The invention on which the patent is claimed forms part of the traditional knowledge whether in India or elsewhere.

Industrial Designs

▪

The Designs Act of 1911 governed industrial designs. The registration of a design conferred on the registered proprietor the right to take action

against third parties who apply the registered design without license or consent.

▪

Section 4 of the TRIPs Agreement covers Industrial designs.

▪

Under the TRIPS agreement, industrial designs must be protected for at least 10 years. Textile designs have a short life cycle. They have been given special attention, and low cost registration is provided for

protection.

▪

Owners of protected designs must be able to prevent the manufacture, sale or importation of articles bearing or embodying a design, which is a copy of the protected design.

▪

Obligations envisaged in respect of industrial designs are that independently created designs that are new or original shall be protected.

▪

There in an option to exclude from protection, designs that are dictated by technical or functional consideration, as against aesthetic

consideration, which constitutes the coverage of industrial designs.

Geographical Indications

▪

Geographical indications are defined in Article 22 of the TRIPs

Agreement, as “indications, which identify a good as originating in the territory of a member or a region, or locality in the territory, where a given quality, reputation or other characteristics of the good is

essentially attributable to its geographical origin”.

▪

The Geographical Indication of Goods (Registration & Protection) Act, 1999 has since been enacted. Place names are sometimes used to identify a product. Well-known examples include “Champagne”,

“Scotch”, “Tequila”, and “Roquefort” cheese.

▪

Wine and spirits makers are particularly concerned about the use of place-names to identify products, and the TRIPS Agreement contains special provisions for these products. But the issue is also important for other types of goods.

▪

The use of a place name to describe a product in this way — a

“geographical indication” — usually identifies both its geographical origin and its characteristics. Therefore, using the place name when the product was made elsewhere or when it does not have the usual characteristics can mislead consumers, and it can lead to unfair

competition.

Layout Designs of Integrated Circuits

▪ The basis for protecting integrated circuit designs

(“topographies”) in the TRIPS Agreement is the Washington

Treaty on Intellectual Property in Respect of Integrated

Circuits, which comes under the WIPO.

▪ The main obligations of the Washington Treaty are also incorporated in the TRIPS Agreement with some

enhancement and cover the protection of the intellectual property in respect of lay-out designs that are original in the sense of being the result of their creator's own intellectual efforts.

▪ The obligations include national treatment to foreign right

holders and a term of protection for 10 years.

Protection of Undisclosed Information/Trade Secrets

▪ Trade secrets consist of customer lists, plans, research and development, pricing information, marketing techniques,

production techniques, and generally anything that makes an individual company unique and that would have value to a competitor.

▪ Section 7 of TRIPs Agreement provides in this area that natural and legal persons shall have the possibility of preventing

information lawfully within their control from being disclosed to, acquired by or used by others without their consent in a manner contrary to honest commercial practices.

▪ Further, parties are required to protect against unfair commercial uses, undisclosed or other data obtained as a condition of

approving the marketing of pharmaceutical or of agricultural

chemical products.

Enforcement of

Intellectual Property Rights

▪ General obligations and procedures

▪ Civil and administrative procedures and remedies

▪ Provisional measures

▪ Border measures

▪ Criminal procedures and penalties

World Intellectual Property Organization

WIPO is an international organization dedicated to promoting the use and protection of works of the human spirit. With headquarters in

Geneva, Switzerland, WIPO is one of the 16 specialized agencies of the United Nations system of organizations.

Major

International Agreements

▪

Paris Convention for the Protection of Industrial Property

▪

Berne Convention for the Protection of Literary and Artistic Works

▪

Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations

▪

Geneva Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms

▪

Nairobi Treaty on the Protection of the Olympic Symbol

▪

Madrid Agreement for the Repression of False or Deceptive Indications of Source on Goods

Trademark Law Treaty (TLT)

▪

Brussels Convention Relating to the Distribution of Programme-Carrying Signals Transmitted by Satellite

▪

WIPO Copyright Treaty (WCT)

▪

WIPO Performances and Phonograms Treaty (WPPT)

▪

Patent Law Treaty (PLT)

Paris Convention for the Protection of Industrial Property

The Paris Convention entered into force in 1884 with 14 member States, which set up an International Bureau to carry out administrative tasks, such as organizing meetings of the member States.

The treaty was designed to help the people of one country obtain protection in other countries for their intellectual creations in the form of industrial property rights, known as; inventions (patents) , trademarks , industrial designs .

Berne Convention

In 1886, copyright entered the international arena with the Berne Convention for the Protection of Literary and Artistic Works. The aim of this Convention was to help nationals of its member States obtain international protection of their right to control, and receive payment for, the use of their creative works such as; novels, short stories, poems, plays;

songs, operas, musicals, sonatas; and drawings, paintings, sculptures, architectural works.

The Berne Convention set up an International Bureau to carry out administrative tasks.

▪

In 1893, these two small bureaux united to form an international organization called the United International Bureaux for the Protection of Intellectual Property (best known by its French acronym BIRPI).

▪

Based in Berne, Switzerland, with a staff of seven, this small organization was the predecessor of the World Intellectual Property Organization of today - a dynamic entity with a mission and a mandate that are constantly growing.

▪

In 1960, BIRPI moved from Berne to Geneva to be closer to the United Nations and other international organizations in that city.

▪

A decade later, following the entry into force of the Convention Establishing the World Intellectual Property Organization, BIRPI became WIPO, undergoing structural and administrative reforms and acquiring a secretariat answerable to the member States.

▪

In 1974, WIPO became a specialized agency of the United Nations system of organizations, with a mandate to administer intellectual property matters recognized by the member States of the UN.

▪

In 1978, the WIPO Secretariat moved into the headquarters building that has now become a Geneva landmark, with spectacular views of the surrounding Swiss and French countryside.

▪

WIPO expanded its role and further demonstrated the importance of intellectual property rights in the management of globalized trade in 1996 by entering into a cooperation agreement with the World Trade Organization (WTO).

Patent Cooperation Treaty

▪

Patent Cooperation Treaty (PCT) is the most successful and widely used treaties under the WIPO, which implements the concept of a single

international patent application that has legal effect in the countries which are bound by the treaty and which are designated by the applicant. Once such an application is filed, an applicant receives valuable information about the potential patentability of his invention (through the

international search report and the optional international preliminary examination report) and has more time than under the traditional patent system to decide in which of the designated countries to continue with the application.

▪

The PCT system thus, consolidates and streamlines patenting procedures and reduces costs, providing applicants with a solid basis for important decision-making.

▪

Extensive fact-finding and wide-ranging consultations by WIPO since 1998 culminated in the establishment by the member States, in late 2000 of the Intergovernmental Committee on Intellectual Property and Genetic

Resources, Traditional Knowledge and Folklore. This new forum will discuss three primary themes, namely, intellectual property issues that arise in the context of

•

access to genetic resources and benefit-sharing;

•

protection of traditional knowledge, whether or not associated with those resources; and

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the protection of expressions of folklore.

Enforcement and Assistance to Countries

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WIPO has promoted an intellectual property infrastructure that allows participation in the exchange of commercially valuable information at the international level, including the quick and easy access to information on new technology, such as the international patent applications and abstracts available under the PCT.

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Beyond national boundaries, a well-functioning intellectual property system contributes to greater stability and security for protected rights in an increasingly competitive global marketplace, allowing efficient enforcement of those rights. The system can aid in combating illegal activities such as counterfeiting and piracy.

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WIPO has set up an Advisory Committee on Enforcement of Industrial Property Rights, which has initiated a new approach to enforcement. That approach is for the member States to focus collectively on the real challenges that all States face in implementing practical procedures for enforcing rights, and to investigate best practices and procedures that could be used to effectively enforce industrial property rights while keeping the time and cost burden on administrative infrastructures to a minimum.

In this plan, communication will be enhanced among member States and enforcement agencies to increase cooperation for effective enforcement.

Challenges faced by the WIPO

(A) Globalization

It is evident that global commerce is greatly hampered by a patchwork of inconsistent regulations across the different national territories in which it is conducted. Increased harmonization of the various legal disciplines that come into play on the global marketplace is therefore an indispensable ingredient of any policy agenda geared towards globalization.

Intellectual property rights and the mechanisms to enforce them are fundamentally territorial in nature. The challenge for WIPO will be to adjust the existing intellectual property system in order to make it function harmoniously in a global world.

(B) New Technologies

The transformation that rapid technological change has produced in almost every aspect of the international arena, has had an unprecedented impact on the intellectual property protection system, and has opened new possibilities of protection other than purely legal ones. Many creations protected by copyright, which traditionally have been exchanged physically, will increasingly be delivered in digital form by means of global networks. New possibilities emerged in the field of biotechnology, in particular genetic engineering, which have raised not only ethical questions but also increasing concerns regarding the need to protect traditional knowledge, as well as the genetic resources that can now be reproduced, manipulated and exploited out of their natural environment. WIPO is at the center of the debate concerning the interplay between intellectual property and the new technologies.

Types of Cyber Laws

• Digital Contracts Laws

• Digital Property Laws

• Digital Rights Laws

• Cyber Crimes Laws

Ways in which Computers can be used in Crimes

1. Computers as Targets

a) Theft of Information

b) Denial-of-Service Attacks

2. Computers as Storage Devices

a) Drug dealers store information regarding sales and customers.

b) Hackers store stolen password lists, credit card/calling card numbers, proprietary corporate information, pornographic image files, or pirated commercial software.

3. Computers as Communication Tools

a) Illegal sale of prescription drugs, controlled substances, alcohol, and gems.

b) Gambling and child pornography.

c) Falsely advertise goods on the Internet/website.

d) Threats or extortion demands.

e) Unauthorized reproduction and distribution of copyrighted software.

Characteristics Earlier Today

Profile of cyber criminals

Computer addicts in the age group of 14-34 years.

Real world professionals – Mafia that works in a planned and systematic manner.

Objective of cyber crime

To gain attention, destroy, satisfy ego.

Commercial gain

Nature of threat Single threats: Online threats that is either a virus, or a worm or a Trojan that had one predefined

programme to

execute.

Blended threats: These are a combination of online and offline crimes. Also in combination of virus, worms, and Trojans performing multiple tasks.

Focus of attacks ^Computers. Transactions like banking and e-commerce.

Nature of security Machine, servers. Covers the entire infrastructure, interaction and information.

Information Technology Act 2000

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IT Act 2000 empowers the government departments to accept filing, creating and retention of official documents in the digital format. The Act also puts forward the proposal for setting up the legal framework essential for the authentication and origin of electronic records /

communications through digital signature.

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The Act legalizes the e-mail and gives it the status of being valid form of carrying out communication in India. This implies that e-mails can be duly produced and approved in a court of law, thus can be a

regarded as substantial document to carry out legal proceedings.

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The act also talks about digital signatures and digital records. These have been also awarded the status of being legal and valid means that can form strong basis for launching litigation in a court of law. It invites the corporate companies in the business of being Certifying Authorities for issuing secure Digital Signatures Certificates.

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The Act now allows Government to issue notification on the web thus heralding e-governance.

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It eases the task of companies of the filing any form, application or

document by laying down the guidelines to be submitted at any appropriate office, authority, body or agency owned or controlled by the government.

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The act also provides statutory remedy to the corporates in case the crime against the accused for breaking into their computer systems or network and damaging and copying the data is proven. The remedy provided by the Act is in the form of monetary damages, not exceeding Rs. 1 crore ($200,000).

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The law sets up the Territorial Jurisdiction of the Adjudicating Officers for cyber crimes and the Cyber Regulations Appellate Tribunal. The Act talks of appointment of any officers not below the rank of a Director to the

Government of India or an equivalent officer of state government as an Adjudicating Officer who shall adjudicate whether any person has made a contravention of any of the provisions of the said Act or rules framed there under.

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The said Adjudicating Officer has been given the powers of a Civil Court. The Act talks of the establishment of the Cyber Regulations Appellate Tribunal, which shall be an appellate body where appeals against the orders passed by the Adjudicating Officers, shall be preferred.

Information Technology Act 2000 (Contd.)

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The Act talks about various offences and the said offences shall be investigated only by a Police Officer not below the rank of the Deputy Superintendent of Police. These offences include tampering with

computer source documents, publishing of information, which is obscene in electronic form, and hacking.

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The Act also provides for the constitution of the Cyber Regulations Advisory Committee, which shall advice the government as regards any rules, or for any other purpose connected with the said act. The said Act also proposes to amend the Indian Penal Code, 1860, the

Indian Evidence Act, 1872, The Bankers' Books Evidence Act, 1891, The Reserve Bank of India Act, 1934 to make them in tune with the

provisions of the IT Act.

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The law has also laid guidelines for providing Internet Services on a license on a non-exclusive basis. The Government has issued

guidelines for providing Internet Services on a license on a non-

exclusive basis. A company registered in India under the Companies Act, 1956 will be eligible. Foreign equity, if any, shall be as per the Government Policy and guidelines from time to time

Information Technology Act 2000 (Contd.)

Information Technology Act 2000 (Contd.)

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The ISP will be required to set up his nodes i.e. Routers / Servers within the geographical limits of the service area. An applicant may be granted any number of licenses. The leased line subscribers shall be from within the service area. However, the ISP can offer dial-up services from any part of the country.

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Whoever publishes or transmits or causes to be published in the electronic form, any material which is lascivious or appeals to the prurient interest or if its effect is such as to tend to deprave or corrupt persons who are likely, having regard to all relevant circumstances, to read, see, or hear the matter contained or

embodied in it, shall be punished. A first time offender can be jailed for up to five years and fined Rs1 lakh while a subsequent conviction could result in up to 10 years in prison with double the fine.

▪ Online – Offline Consistency

▪ Appropriate Investigatory Tools

▪ Technology Neutrality

▪ Consideration of other Social Interests

Framework for Evaluating Unlawful

Conduct on the Internet

IT Act Amendment 2008

• Liability of body corporate towards Sensitive Personal Data: New amendment was brought in changes in section 43 of IT Act 2000 in which for the fist time any body corporate which deals with sensitive personal information does not have adequate controls resulting in wrongful loss or wrongful gain to any person is liable to pay damages to that person to the tune of five crores.

• Introduction of virus, manipulating accounts, denial of services etc made punishable: punishment may lead to imprisonment which may extend to three years or with fine which may extend to five lakh rupees or with both. This is a change from earlier position where introduction of virus, manipulating some ones account has been made punishable with imprisonment for the first time.

• Phishing and Spam: Through this section sending of menacing,

annoying messages and also misleading information about the origin of the message has become punishable with imprisonment up to three years and fine

IT Act Amendment 2008 (Contd.)

• Stolen Computer resource or communication device: This has also been made punishable with three years or fine of one lakh rupees or both.

• Misuse of Digital Signature: Dishonest use of somebody else’s digital signature has been made punishable with imprisonment which may extend to three years and shall also be liable to fine with may extend to rupees one lakh.

• Cheating: Cheating using computer resource has been made punished with imprisonment of either description for a term which may extend to three years and shall also be liable to fine which may extend to one lakh rupees.

• Cyber terrorism: The newly introduced section 66F talks about acts of cyber terror which threatens the unity, integrity or sovereignty of India or strike terror in the people or any section of the people.

• Child Pornography: Punishable with imprisonment of five years and fine which may extend up to ten lakhs in first offence and seven years and fine of ten lakhs on subsequent offence

IT Act Amendment 2008 (Contd.)

• Intermediary’s liability: Intermediaries have been made liable to retain any information in the format that Central government prescribes. and are punishable for violation with a punishment of imprisonment of 3 years and fine In case of any act which affects national sovereignty intermediaries are liable to seven years.

• Surveillance, Interception and Monitoring: This empowers

government not only to monitor any traffic but also block any site through any intermediary. Any failure on part of the intermediary is punishable by seven years and also. Earlier the provision did not mention any fine.

• Cognizance of cases: All cases which entail punishment of three years or more have been made cognizable.

• Investigation of Offences: One major change has been inclusion of Inspectors as investigating officers for offences.

IT Act Amendment 2008 (Contd.)

Major Dilutions

• Sexually explicit content: Newly introduced section 66 E talks about acts of intentionally or knowingly captures, publishes or transmits the image of a private area of any person without his or her consent, under circumstances violating the privacy of that person, shall be punished with imprisonment which may extend to three years or with fine not exceeding two lakh rupees, or with both. In fact the earlier such a person was punishable for first offence with five years of

imprisonment and fine of one lakh rupees. This change has made the provision lenient and open to misinterpretation.

• Compliance with orders of Controller: Section 68(2) which earlier

made failure to comply with the direction of controller punishable with three years of imprisonment or fine of two lacks or both now has been reduced to two years punishment or fine of one lakh of rupees or both.