December 2021

Saree in Law

Saree is well-known Indian attire worn by women not only in India but around the world. It has captivated audiences since time immemorial due to its sensuality and versatility. A saree can be draped in numerous ways that highlight its versatility, culture, tradition, community, occasion, and beauty. Saree is an imperative part of the Indian tradition and culture. Whether it’s Madisari, a saree-draping style that was traditionally worn by women after their marriage in the Iyengar and Iyer culture of Tamil Nadu, or the Atpoure Shari, the saree draping style of West Bengal or Kappulu a saree draping style of the older women in Andhra Pradesh or the Nauvari worn like a dhoti in Maharashtra, the draping or tying style of an unstitched garment or 3.5 to 9-yard saree, varies by region, community, functionality, and, on occasion. In a world full of ever-changing fashion trends and fast fashion, Indian sarees and the traditional draping style remain constant. India has a treasure trove of saree styles and different ways of draping them that have even inspired the international fashion world.

Despite this India lacks a law regime to protect the saree draping styles. The Indian Trademark Act 1999 can protect the brands selling sarees while the prints and designs can be protected under the Copyright Act 1957 under original artistic work or the Designs Act 2000 for the designs aesthetically appealing. However, one may think to protect saree draping under ‘any other work of artistic craftsmanship’ under the Copyright Act 1957[1], but issues related to calculating the time, originality, and who to attribute the authorship arise. While the most obvious branch of IP the mind associates to saree is Geographical Indications, however, registered GIs under the Geographical Indication Act 199 like Bhagalpuri silks, Kanchipuram silks, Mysore, and Muga silks, which are world-famous as fabrics associated primarily with sarees. Further, saree draping is fundamentally considered a process or an activity, which may lead one to the domain of patent protection but due to the activity being in the public domain since time immemorial protection under the Indian Patent Act 1970 is not possible for saree draping.

It can thus be concluded the present IP regime in India including trademarks, copyrights, patents, designs, and even GIs mainly protect the brand name and logo, the weave and fabric, the manufacturing process, the unique designs, or a combination of all of these, and the community for protecting/maintaining the standards and nurturing the culture and tradition as GIs. But neither of the above talk or provide protection to saree draping.

How can India protect Saree Draping?

It is certain that the current IP regime in India cannot provide the much-needed protection to the myriad of saree draping styles prevalent in a culturally rich country like India. In such a scenario, India can develop the lesser-known branch of Intellectual Property Rights known as Traditional Knowledge which further incorporates Traditional Cultural Expressions. Saree draping styles perfectly fit under the WIPO definition for Traditional Cultural Expressions[2], as tangible forms of expression – folk costumes. Saree draping styles can be envisaged as folk / traditional costumes worn by when and women of communities. Thus, a well-codified law to protect such traditional knowledge or traditional cultural expressions which are passed from generation to generation could help to protect saree draping styles in India. However, locating the owner of the traditional cultural expressions and the fact that sarees are commonly worn in Nepal and Bangladesh, proprietor and territory issues may be common.

However, India can adopt the economic right ‘Domaine Public Payant’ to protect traditional cultural expressions such as saree draping styles. According to this right, when the work enters the public domain after the normal period of protection expires, it cannot be used freely as in the case of normal free public domain. On contrary, it requires a royalty to be paid for the commercial use of the work.[3] Thus, any non-Indian who commercially exploits Indian saree draping styles would be required to pay a royalty or prescribed fee to the collecting society or equivalent. Till date, only 5-6 countries have adopted and incorporated this right and could be a feasible option for India to adopt to protect saree draping styles as Traditional Knowledge and Traditional Cultural Expression. Saree is a prominent part of the Indian culture and a source of inspiration to fashion trends across the world. Protecting the different traditional ways of draping a saree is in fact an essential way to protect the diverse culture and traditions in India.

[1] Section 2 (c)(iii)

[2] https://www.wipo.int/tk/en/folklore/

[3] https://unesdoc.unesco.org/ark:/48223/pf0000143960

Due Diligence in Merger and Acquisition

Introduction
Due diligence is that the process by which legal, monetary, confidential, and other important information is studied, traded, and evaluated by the parties, and it’s done before finalizing the deal. It is also an investigation and risk calculation of a future business transaction. It’s a careful assessment of a business or persons or the performance of an act with certain care to make sure that the information is precise and proper and to get the information that will affect the results of the deal. This process is employed to analyze the pros and cons of the proposed merger and acquisition. Sometimes this process helps to get the hidden facts associated with the proposed mergers or in other words we will also say that it sometimes also helps discover the facts which are being hidden by either of the parties intentionally. Due diligence is additionally important to permit the investigating party to understand everything that it needs to know. In today’s world, it’s quite common that people tend to misrepresent the facts about their business and try to fraud another person for his or her own benefit therefore the process of due diligence helps to make sure the investigating party gets all the relevant facts about the targeted party.

Various aspects of Due Diligence
The various aspects for Due Diligence are as follow:
1. Financial Aspect – Under this aspect, the most focus remains on the accounts book of the companies, their financial history, or any pending debt of the parties of the proposed merger.

2. Legal Aspect – Under this aspect, the most focus remains on the contracts of the corporate, the agreements of which the corporate is a component of or any pending litigation against any of the parties of the proposed merger.

3. Commercial – Under this aspect, the most focus remains on the market strategy followed by the parties, market dynamics, Goodwill of the corporate which eventually helps the parties to the merger to make a decision the exposure of the proposed merger in the future.

4. Human resource – Under this aspect, the most focus remains on the utilization policy, which also checks the work environment, the dedication of the workers towards their employers. They also make sure is there any lawsuits filed by the workers against their employer and also the working environment is additionally vital because it directly affects the performance of the workers.

5. Tax – Under this aspect the most focus remains on the very fact that the parties have paid all their taxes on time, which eventually helps to make sure that there’s not any corruption happening within the company by evading the taxes.

Case Laws
1. Google and Nest
Google acquired nest labs in 2014 to enter into the market of smart homes. While google worked efficiently on the software but couldn’t cope up with the hardware and merchandise innovation. This led to internal fighting and politics within the Nest which affected the merchandise innovation of the corporate and ultimately both the founders had to later quit the corporate.

2. HP and Autonomy
In 2011, HP acquired Autonomy, a European data analytics company. But, later it had been acknowledged that Autonomy had cooked their books which resulted in the increase of their prices during acquisition. HP couldn’t gain anything from the acquisition and ultimately had to write down down the acquisition as a $9 Billion Loss.

Conclusion

Due Diligence is a very important part of the merger and acquisitions process. An M&A transaction typically requires a buyer and its counsel, advisors, and accountants to undertake a big amount of due diligence.

Vaidik Sharma

C-41

B.A.LLB 5th Year

Bharati Vidyapeeth, New Law College, Pune

Director and their Duties

Introduction

A company is an artificial person which means it does have a legal entity, but it does not have any physical existence. That is why a natural person is needed to manage its day to day affairs. Only a natural person can be a director i.e., an individual. The first directors are appointed by the subscribers of the memorandum. If no first directors are appointed then the people who are subscribers become the first directors. The first directors hold the office until the first Annual General Meeting (AGM) is not conducted. Directors owe commitments to the company, directors are appointed by the company’s board to run the achieve company’s endeavors for the upsides of the investors.

Number of Directors in different types of companies

Every company must have directors. The least number of directors that every company should have is mentioned in Section 149 of The Companies Act, 2013.

Public Company: 3 or more
Private Company: 2 or more
One Person Company: At least 1

Though a company cannot have more than 15 directors. This number can be increased if they pass a special resolution for the same.

Different Duties of Director

The position of the director in any company might be difficult to explain. Directors sometimes play the role of trustees, sometimes as agents and sometimes also as managing partners of the company.

Directors as Agents

The directors are the agents of a company according to law. The company being an artificial person can act just through the directors. Concerning, the connection between the directors and the company is just similar to the common connection of principle and agent. The connection between the directors and the company falls under the ambit of the general principle of agency. At the point when a director signs in the interest of the company, it is the company that is held liable and not the director. Additionally, they are also required to disclose if they have any personal interest in the said transaction.

Directors as Trustees

Directors are also trustees of all the assets of the company. A trustee can make contracts in regard to the trust property in his name however the directors do not have the authority to do so. They can make such agreements under the common seal of the company. They are only quasi trustees because they are not trustees for the debt of the company or its creditors or shareholders. The directors while working as a trustee should also act in good faith.

Directors as Managing Partner

In a company, the administration is in the possession of plural directors. Along these lines, the directors are partners (the term partner used in the sense of the Partnership Act. Though a director cannot act without prior approval of the Board of Directors. That is why unlike a partnership firm a single partner cannot act as a managing partner in a company.

Conclusion

The Directors should always stay vigilant to avoid threats against them or the company. They should try to attend each board meeting and should be fully aware of the company’s business. Only participation in the meeting is not anymore enough, it also must be ensured all questions or expressed dissents are properly recorded within the minutes of the meeting, this is often extremely important and maybe pertinent evidence to avoid the legal hassles at a later date. Proper training for directors on Corporate Governance is important and can equip them to figure within the best interest of the organization.

Vaidik Sharma
B.A.LLB 5th Year
Bharati Vidyapeeth, New Law College, Pune

Blockchain is more than Crypto: Potential Contemporary Uses

Blockchain, a term which many of us use synonymously with Cryptocurrency (crypto). It is in fact a popular term for DLT (Distributed Ledger Technology) that allows a transaction between two persons without any interference of an intermediary for authorization like banks i.e., the system is decentralized. The use of keys and cryptographic signatures, as well as peer-to-peer authentication, makes this system trustworthy among its users.

Prima facie, blockchain, and cryptocurrency are two different aspects. Blockchain is basically a principle (technology) and crypto is just one of its many applications. Every now and then we heard the news that the governments around the world are announcing a ban on crypto but does that mean they are announcing a ban on the blockchain? Absolutely not. In fact, Blockchain has now been seen as an innovative technology to bring drastic reforms in the e-governance models and digitized economies around the world, including India. Out of the many benefits, five of them are listed below-

Transfer of land records and property:

Everyone knows that property transfers necessitate a lot of paperwork to verify the credentials of the parties and the transaction involved. In such cases, Blockchain can provide a quick, safe and secure transfer of records. Thus, apart from making the process hassle-free, it will reduce litigation on title disputes on the property which we commonly see around us, as the ledger will record an indelible public entry that will be visible to all and cannot be tampered by anyone.

Pension and Insurance:

The use of blockchain in these areas can definitely save a massive amount of time and money. One can have “event-based smart contracts”, for eg: if an insured car is lost and the owner uploads the corresponding FIR for the same on a blockchain-enabled portal, then he may get the assured sum, without having interference of any agent. These smart contracts with “automated paying capacity” will reduce the involvement of a never-ending list of middlemen or agents, thereby saving a lot of money for the insurance companies and precious time of the beneficiaries. Additionally, recording the claims on such a portal will prohibit duplicity of claims.

E-voting:

It is perhaps the only avenue that entices the legislators and parliamentarians to discuss this tech on the floor of the Parliament. If the voters are registered on a blockchain-enabled voting portal, then duplicity of votes can be avoided, as the ledger will record only one vote per voter. Furthermore, people will not have to stand in long queues for hours anymore and the hefty cost of maintaining election arrangements will get reduced.

Reaping the benefits IP:

As one of the primary purposes of blockchain is to detect duplicity, it can help in identifying possible IP infringements that occur on a daily basis by providing a quick and cost-effective solution. It can help reduce piracy of artistic work (like keeping track of music, film, designs, etc.) thereby ensuring the creator’s adequate remuneration of their intellectual creation.

Maintaining Health-records:

After the arrival of the EHR (Electronic Health Record) system, people are reluctant to share the records of their personal health, which is obvious, as centrally stored data is more prone to cyberattacks. Thus, EHR needs to be combined with the privacy model of blockchain, which can only be accessed only by the patient and the doctor via a cryptographic key. This will also maintain a uniform record of the patient and every healthcare practitioner will have the same & updated access to his/her health details. Further, details of medical insurance can also be clubbed in that system, so that the patient doesn’t have to move pillar-to-post to settle down his claims.

This article has merely unearthed some of the hundreds of uses of blockchain technology that have been discovered till now and future generations can use this technology for various new purposes. As blockchain is merely a tool, in the right hands it can act as a lifeline but in the wrong hands can be a terminator for our future generations and thus needs to be regulated with certain rules and guidelines defining its broad framework. All these upcoming legal developments and novel uses will be updated timely in the later series of articles.

Atul Bhatt
LLB, 3rd year
Campus Law Centre
University of Delhi

When “Potter” needs a lawyer to save “Hogwarts”: An IP Perspective PART I

This article provides a basic overview of the Intellectual property (IP) involved in theme-based cafes/restaurants and the incidental IP infringements that may occur, knowingly or unknowingly, in light of the recent order passed by the Hon’ble High Court of Delhi in the case of Warner Bros Entertainment Inc. v. Mr. Ishant Kashiwal trading as the Hogwarts Kafe & Ors. (CS(COMM) 457/2021).

These days one can see a lot of cafes running around the cities, designed or inspired by popular movies or web series like F.R.I.E.N.D.S, Game of Thrones, Avengers, etc. “The Hogwarts Kafe” in Delhi was one among such, designed to give Potter fans a superlative experience, that was indeed enjoyed by many. However, they forgot to take necessary licensing from real parents of Potter (J.K. Rowling and Warner Bros), which resulted in a clear-cut lawsuit by the plaintiffs.

Copyright involved-

At the outset, copyright protects the “expression of an idea” and not the “idea” itself, which as a part of this discussion means that one can very well run a cafe based on a general theme like “friendship” or “magic”. However, when this general theme becomes specific so as people could easily relate it to a copyrighted work (a fictional character, movie, TV show, etc.,), such as “Harry potter’s magic” then it creates problems, as it infringes upon the intellectual creation of a creator, like J.K. Rowling in this case.

As per section 14 of the Indian Copyright Act, the author of a work, inter-alia, has the exclusive right “to reproduce the work in any material form” or “to adapt” it in any form, which is seemingly violated in the instant case as the entire layout of the cafe including the majestic seating, wall-paintings, banners, etc., were duplicated from the potter series. The entire menu was designed with the names associated with well-known characters like ‘Severes Soups’, ‘Gryffindor Burgers’, ‘Draco Desserts’ etc., with ‘deathly hallows’ triangular logo on it. Thus, providing all the necessary evidence needed for their takedown.

Trademark involved-

Trademark infringement is a matter of concern for theme-based cafes and they need to do the necessary background check before investing huge chunks of money. In the instant case, it is undeniable that Mrs. Rowling holds the copyright but Warner Bros are the registered proprietor of the well-known Trademarks ‘HOGWARTS’ and ‘HARRY POTTER’ and has been using the same globally for more than two decades. They had specifically registered the above-mentioned trademarks with the Indian TM registry and are very well eligible for statutory protection. Additionally, the plaintiff is the proprietor of the ‘THE WIZARDING WORLD’ properties including various trademarked names which were misappropriated by the defendants on their menu as ‘Ravenclaw Nachos’, ‘Slytherin Salads’, ‘Dumbledore Dimsums’ etc.,”.

It must be noted that even if such TMs were not registered by the plaintiff in India or in any other jurisdiction for that matter, they would have still been entitled to the protection owing to their tremendous transborder reputation or as a well-known trademark.

The fate of this case-

Finding prima-facie case in favor of the plaintiff, the court has granted an interim injunction under Order XXXIX Rule 3 CPC, against the defendants and has directed them to remove their advertisements from all the food delivery and social media platforms. This case is a prime example of what can happen if one tries to take a piggyback ride on someone else’s goodwill or established reputation without giving them the due credit. For now, the matter has gone under mediation and most probably will be settled outside the court.

ATUL BHATT
LLB, 3rd year
Campus Law Centre
University of Delhi

India’s anti-dumping measure: Tariff on Chinese optical fiber

India has found large-scale dumping of optical fiber from China, days after Beijing extended a protective tariff on the import of Indian-made fibre for five years, which could trigger an identical tariff measure by New Delhi against the Chinese product within the local market, two official’s conscious of development said.[1]

The government is considering imposing remedial duty on the import of “single mode optical fibre” after an investigation by the Directorate General of Trade Remedies (DGTR) confirmed its dumping mainly from China, the officials said, requesting anonymity. The DGTR may be a single-window agency tasked with providing a level-playing field to domestic industry against unfair trade practices by countries like China.

After an in-depth investigation, DGTR on Friday concluded that import of single mode optical fiber at below cost is threatening to cause “serious injury” to Indian manufacturers and recommended imposition of a tenth safeguard duty on its import from all countries except developing nations, barring China, the officials said. the govt had already raised basic customs (BCD) thereon by 5% in July 2019.

The finance ministry is predicted to require a final judgment on the matter soon, they said. Single mode optical fiber is employed in manufacturing optical fiber cables utilized in telecommunication operations like community access televisions (CATV).

“Effectively, the measure is against Chinese firms as combined import from all other developing countries is a smaller amount than 9%. China alone features a share of over 84% in its import,” one among the officials said.[2]

The DGTR’s recommendation came close on the heels of Chinese commerce ministry’s punitive tariff on an equivalent product imported from India for five years, effective from August 14.

According to officials, China is resorting to tariff barriers because its companies are affected by overcapacity, and also diverting its exports to the Indian market within the face of a worldwide boycott of the Chinese products. “Based on complaints by the domestic optic fibre industry, DGT

R had initiated the investigation on Chinese dumping on September 23 last year. It had issued a primary finding on November 6 last year, but its recommendations couldn’t be implemented at that point,” the primary official said.

The second official said India was very cautious about Chinese unfair trade practices, especially after June 15. Sino-Indian tensions have shot up after a violent brawl between Chinese and Indian soldiers on June 15 along the road of Actual Control within the Galwan Valley in eastern Ladakh during which 20 Indian army personnel and an unspecified number of Chinese were killed.

“Given the domestic economic scenario, the finance ministry is predicted to simply accept this,” Divakar Vijayasarathy, founder and managing partner at consulting company DVS Advisors LLP, said. The move can’t be linked to China alone because the government has been indicating its intentions of protecting domestic industry.

“In the budget, customs were increased for quite 10 products. Since China may be a major supplier for India with an enormous trade surplus, any action on imports across the board would impact China. Atmanirbhar Bharat {Self-Reliant India} itself is to limit the influence of China on Indian markets and with relationships soaring, indirect economic sanctions will help both in hurting China and giving a lift to the fortunes of the domestic industry,” he said.

Dumping is an unfair trade practice that entails the export of a product at a price less than its value and is countered by punitive actions, which are a suitable measure under multilateral trade agreements, the officials said. Remedial actions include imposition of protective tariff (against underpriced imports), safeguard measures (imposition of a requirement, a quota, or both against an unexpected import surge) and duty (against export subsidies) to guard domestic units.

India has taken a troublesome position against unfair Chinese trade practices because it is committed to protecting domestic industry under the government’s Make in India campaign, the officials said.

India-China bilateral trade is heavily tilted in favour of China. consistent with trade figures released by the overall Administration of Customs of China (GACC) in mid-January 2020, India’s deficit with China was $56.77 billion in 2019; bilateral trade amounted to about $92.68 billion last year, a 1.6% annual increase.

RASHI OSWAL

B.A. L.L.B 4th Year

DES NAVALMAL FIRODIA LAW COLLEGE, Pune

[1] https://www.hindustantimes.com/india-news/anti-dumping-measure-tariff-on-chinese-optical-fibre-likely/story-LHhTYR5IyP7txmCVAEKKwM.html

[2] https://www.eqmagpro.com/25-chinese-items-may-face-extension-of-dumping-duty/