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What Are The Consumer Protection Concerns With Crypto-Assets?
http://editors.cis-india.org/internet-governance/blog/what-are-the-consumer-protection-concerns-with-crypto-assets
<b>Existing consumer protection regulations are not sufficient to cover the extent of protection that a crypto-investor would require.</b>
<p>The article was <a class="external-link" href="https://www.medianama.com/2022/07/223-addressing-the-consumer-protection-concerns-associated-with-crypto-assets/">published in Medianama</a> on July 8, 2022</p>
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<p style="text-align: justify; ">Crypto-asset regulation is at the forefront of India’s financial regulator’s minds. On the 6th of June, the Securities and Exchange Board of India (SEBI) <a href="https://www.businessinsider.in/investment/news/sebi-raises-concern-on-crypto-says-that-its-decentralised-nature-makes-them-harder-to-regulate/articleshow/92079830.cms">in a response </a>to the Parliamentary Standing Committee on Finance expressed clear consumer protection concerns associated with crypto-assets.</p>
<p style="text-align: justify; ">This statement follows <a href="https://www.rbi.org.in/commonman/English/Scripts/PressReleases.aspx?Id=2474">multiple notices</a> issued by the Reserve Bank of India (RBI) warning consumers of the risks related to crypto-assets, and even a <a href="https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12103">failed attempt</a> to prevent banks from transacting with any individual trading crypto-assets. Yet, in spite of these multiple warnings, and a significant drop in trading volume due to the introduction of a new taxation structure, crypto-assets still have managed to establish themselves as a legitimate financial instrument in the minds of many.</p>
<p style="text-align: justify; ">Recent global developments, however, seem to validate the concerns held by both the RBI and SEBI.</p>
<p style="text-align: justify; ">The bear market that crypto finds itself in has sent shockwaves throughout the ecosystem, crippling some of the most established tokens in the space. Take, for example, the <a href="https://indianexpress.com/article/technology/crypto/luna-terra-crash-a-brief-history-of-failed-algorithmic-stablecoins-7934293/">death spiral</a> of the algorithmic stablecoin Terra USD and its sister token Luna—with Terra USD going from a top-10-traded crypto-token to being practically worthless. The volatility of token prices has had a significant knock-on effect on crypto-related services. Following Terra’s crash, the Centralised Finance Platform (CeFi) Celsius—which provided quasi-banking facilities for crypto holders—also halted all withdrawals. More recently, the crypto-asset hedge fund Three Arrows also filed for bankruptcy following its inability to meet its debt obligations and protect its assets from creditors looking to get their money back.</p>
<p style="text-align: justify; ">Underpinning these stories of failing corporations are the very real experiences of investors and consumers—many of whom have lost a <a href="https://www.bloomberg.com/news/articles/2022-05-14/terra-s-45-billion-face-plant-creates-a-crowd-of-crypto-losers">significant amount of wealth</a>. This has been a direct result of the messaging around crypto-assets. Crypto-assets have been promoted through popular culture as a means of achieving financial freedom and accruing wealth quickly. It is this narrative that lured numerous regular citizens to invest substantial portions of their income into crypto-asset trading. At the same time, the crypto-asset space is littered with a number of scams and schemes designed to trick unaware consumers. These schemes, primarily taking the form of ‘<a href="https://www.investor.gov/introduction-investing/investing-basics/glossary/pump-and-dump-schemes">pump and dump</a>’ schemes, represent a significant issue for investors in the space.</p>
<p style="text-align: justify; ">It seems, therefore, that any attempt to ensure consumer protection in the crypto-space must adopt two key strategies:</p>
<ul>
<li><span>First, it must re-orient the narrative from crypto as a simple means of getting wealthy—and ensure that those consumers who invest in crypto do so with full knowledge of the risks associated with crypto-assets</span></li>
<li><span>Second, it must provide consumers with sufficient recourse in cases where they have been subject to fraud.</span></li>
</ul>
<p style="text-align: justify; ">In this article, we examine the existing regulatory framework around grievance redressal for consumers in India—and whether these safeguards are sufficient to protect consumers trading crypto-assets. We further suggest practical measures that the government can adopt going forward.</p>
<h3 style="text-align: justify; ">What is the Current Consumer Protection Framework Around Crypto-assets?</h3>
<p>Safeguards Under the Consumer Protection Act and E-commerce Rules</p>
<p> </p>
<p style="text-align: justify; "><span>The increased adoption of e-commerce by consumers in India forced legislators to address the lack of regulation for the protection of consumer interests. This legislative expansion may extend to protecting the interests of investors and consumers trading in crypto-assets. </span></p>
<p style="text-align: justify; ">The groundwork for consumer welfare was laid in the new Consumer Protection Act, 2019 which defined e-commerce as the “buying or selling of goods or services including digital products over digital or electronic network.” It also empowered the Union Government to take measures and issue rules for the protection of consumer rights and interests, and the prevention of unfair trade practices in e-commerce.</p>
<p style="text-align: justify; ">Within a year, the Union Government exercised its power to issue operative rules known as the Consumer Protection (E-Commerce) Rules, 2020 (the “Rules”), which amongst other things, sought to prohibit unfair trade practices across all models of e-commerce. The Rules define an e-commerce entity as one which owns, operates or manages a digital or electronic facility or platform (which includes a website as well as mobile applications) for electronic commerce.</p>
<p style="text-align: justify; ">The definition of e-commerce is not limited only to physical goods but also includes services as well as digital products. So, one can plausibly assume that it would be applicable to a number of crypto-exchanges, as well as certain entities offering decentralized finance (DeFi) services. This is because crypto tokens—be it cryptocurrencies like Bitcoin, Ethereum, or Dogecoin—are not considered currency or securities within Indian law, but can be said to be digital products since they are digital goods.</p>
<p style="text-align: justify; ">The fact that the digital products being traded on the e-commerce entity originated outside Indian territory would make no difference as far as the applicability of the Rules is concerned. The Rules apply even to e-commerce entities not established in India, but which systematically offer goods or services to consumers in India. The concept of systematically offering goods or services across territorial boundaries appears to have been taken from the E-evidence Directive of the European Union and seeks to target only those entities which intend to do substantial business within India while excluding those who do not focus on the Indian market and have only a minuscule presence here.</p>
<p style="text-align: justify; ">Additionally, the Rules impose certain duties and obligations on e-commerce entities, such as:</p>
<ul>
<li><span>The appointment of a nodal officer or a senior designated functionary who is resident in India, to ensure compliance with the provisions of the Consumer Protection Act;</span></li>
<li>The prohibition on the adoption of any unfair trading practices, thereby making the most important requirements of consumer protection applicable to e-commerce;</li>
<li>The establishment of a grievance redressal mechanism and specifying an outer limit of one month for redressal of complaints;</li>
<li>The prohibition on imposing cancellation charges on the consumer, unless a similar charge is also borne by the e-commerce entity if it cancels the purchase order unilaterally for any reason;</li>
<li>The prohibition on price manipulation to gain unreasonable profit by imposing an unjustified price on the consumers; </li>
<li>The prohibition on discrimination between consumers of the same class or an arbitrary classification of consumers that affects their rights; etc.</li>
</ul>
<p style="text-align: justify; ">The Rules also impose certain liabilities on e-commerce entities relating to the tracking of shipments, the accuracy of the information on the goods or services being offered, information and ranking of sellers, tracking complaints, and information regarding payment mechanisms. Most importantly, the Rules explicitly make the grievance redressal mechanism under the Consumer Protection Act, 2019 applicable to e-commerce entities in case they violate any of the requirements under the Rules.</p>
<p style="text-align: justify; ">What this means is that at present crypto-exchanges and crypto-service providers clearly fall within the ambit of consumer protection legislation in India. In real terms, this means that consumers can rest assured that in any crypto transaction their rights must be accounted for by the corporation.</p>
<p style="text-align: justify; ">With crypto related scams <a href="https://www.ftc.gov/news-events/data-visualizations/data-spotlight/2022/06/reports-show-scammers-cashing-crypto-craze">exploding globally following 2021</a>, it is likely that Indian investors will come into contact, or be subject to various scams and schemes in the crypto marketplace. Therefore, it is imperative that consumers and investors the steps they can take in case they fall victim to a scam. Currently, any consumer who is the victim of a fraud or scam in the crypto space would as per the current legal regime, have two primary redressal remedies:</p>
<ul>
<li><span>Lodging a criminal complaint with the police, usually the cyber cell, regarding the fraud. It then becomes the police’s responsibility to investigate the case, trace the perpetrators, and ensure that they are held accountable under relevant legal provisions. </span></li>
<li>Lodging a civil complaint before the consumer forum or even the civil courts claiming compensation and damages for the loss caused. In this process, the onus is on the consumer to follow up and prove that they have been defrauded.</li>
</ul>
<p style="text-align: justify; ">Filing a consumer complaint may impose an extra burden on the consumer to prove the fraud—especially if the consumer is unable to get complete and accurate information regarding the transaction. Additionally, in most cases, a consumer complaint is filed when the perpetrator is still accessible and can be located by the consumer. However, in case the perpetrator has absconded, the consumer would have no choice but to lodge a criminal complaint. That said, if the perpetrators have already absconded, it may be difficult even for the police to be of much help considering the anonymity that is built into technology.</p>
<p style="text-align: justify; ">Therefore, perhaps the best protection that can be afforded to the consumer is where the regulatory regime is geared towards the prevention of frauds and scams by establishing a licensing and supervisory regime for crypto businesses.</p>
<h3 style="text-align: justify; ">A Practical Guide to Consumer Protection and Crypto-assets</h3>
<p style="text-align: justify; ">What is apparent is that existing regulations are not sufficient to cover the extent of protection that a crypto-investor would require. Ideally, this gap would be covered by dedicated legislation that looks to cover the range of issues within the crypto-ecosystem. However, in the absence of the (still pending) government crypto bill, we are forced to consider how consumers can currently be protected and made aware of the risks associated with crypto-assets.</p>
<p style="text-align: justify; ">On the question of informing customers of the risks associated, we must address one of the primary means through which consumers become aware of crypto-assets: advertising. Currently, crypto-asset advertising follows a <a href="https://ascionline.in/images/pdf/vda-guidelines-23.02.22.pdf">code</a> set down by the <a href="https://www.google.com/search?client=safari&rls=en&q=Advertising+Council+of+India&ie=UTF-8&oe=UTF-8">Advertising Standards Council of India</a>, a self-regulating, non-government body. As such, there is currently no government body that enforces binding advertising standards on crypto and crypto-service providers.</p>
<p style="text-align: justify; ">While self-regulation has generally been an acceptable practice in the case of advertising, the advertising of financial products has differed slightly. For example, Schedule VI of the <a href="https://www.sebi.gov.in/acts/mfreg96.html#sch6#sch6">Securities and Exchange Board of India (Mutual Funds) Regulations, 1996</a>, lays down detailed guidelines associated with the advertising of mutual funds. Crypto-assets can, depending on their form, perform similar functions to currencies, securities, and assets. Moreover, they carry a clear financial risk—as such their advertising should come under the purview of a recognised financial regulator. In the absence of a dedicated crypto bill, an existing regulator—such as SEBI or the RBI—should use their ad-hoc power to bring crypto-assets and their advertising under their purview.</p>
<p style="text-align: justify; ">This would allow for the government to not only ensure that advertising guidelines are followed, but to dictate the exact nature of these guidelines. This allows it to issue standards pertaining to disclaimers and prevent crypto service providers from advertising crypto as being easy to understand, having a guaranteed return on investment, or other misleading messages.</p>
<p style="text-align: justify; ">Moreover, financial institutions such as the RBI and SEBI may consider increasing efforts to inform consumers of the financial and economic risks associated with crypto-assets by undertaking dedicated public awareness campaigns. Strongly enforced advertising guidelines, coupled with widespread and comprehensive awareness efforts, would allow the average consumer to understand the risks associated with crypto-assets, thereby re-orienting the prevailing narrative around them.</p>
<p style="text-align: justify; ">On the question of providing consumers with clear recourse, current financial regulators might consider setting up a joint working group to examine the extent of financial fraud associated with crypto-assets. Such a body can be tasked with providing consumers with clear information related to crypto-asset scams and schemes, how to spot them, and the next steps they must take in case they fall victim to one.</p>
<hr />
<p style="text-align: justify; "><em>Aman Nair is a policy officer at the Centre for Internet & Society (CIS), India, focusing on fintech, data governance, and digital cooperative research. Vipul Kharbanda is a non-resident fellow at CIS, focusing on the fintech research agenda of the organisation.</em></p>
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For more details visit <a href='http://editors.cis-india.org/internet-governance/blog/what-are-the-consumer-protection-concerns-with-crypto-assets'>http://editors.cis-india.org/internet-governance/blog/what-are-the-consumer-protection-concerns-with-crypto-assets</a>
</p>
No publisherAman Nair and Vipul KharbandaConsumer RightsInternet GovernanceCryptography2022-07-18T15:22:02ZBlog EntryComments on proposed amendments to the Consumer Protection (E-Commerce) Rules, 2020
http://editors.cis-india.org/internet-governance/blog/comments-on-proposed-amendments-to-the-consumer-protection-e-commerce-rules-2020
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<p style="text-align: justify;" dir="ltr"> </p>
<p style="text-align: justify;" dir="ltr">The Consumer Protection (E-commerce) Rules, 2020 were first introduced in an attempt to ensure that consumers were granted adequate protections and to prevent the adoption of unfair trade practices by E-commerce entities. The amendments have proposed several rules which will protect the consumer with a restriction on misleading advertisements and appointment of grievance officers based in India. However, while on this path, the proposed rules have created hurdles in the operations of e-commerce, reducing the ease of business and increasing the costs of operations especially for smaller players; which could eventually pass on to the consumers.</p>
<p style="text-align: justify;" dir="ltr">In our submission to the Ministry of Consumer Affairs, we focussed our analysis on eight points: Definitions and Registration, Compliance, Data Protection and Surveillance, Flash Sales, Unfair Trade Practices, Jurisdictional Issues with Competition Law, Compliance with International Trade Law and Liabilities of Marketplace E-commerce Entities. </p>
<p style="text-align: justify;" dir="ltr">A snapshot of our recommendations and analysis is listed out below. To read our full submission, please click <a href="https://cis-india.org/internet-governance/centre-for-internet-society-ecommerce-amendments">here</a>.</p>
<h3 style="text-align: justify;">Definitions and Registrations</h3>
<p style="text-align: justify;" dir="ltr">The registration of entities with the DPIIT must be made as smooth as possible especially considering the wide definition of E-commerce entities in the rules, which may include smaller businesses as well. In particular, we suggested doing away with physical office visits. </p>
<h3 style="text-align: justify;">Compliance</h3>
<p style="text-align: justify;" dir="ltr">As a general observation, compliance obligations should be differentiated based on the size of the entity and the volume of transactions rather than adopting a ‘one size fits all’ approach which may harm smaller businesses, especially those that are just starting up. Before these rules come into force, further consultations with small and medium-sized business enterprises would be vital in ensuring that the regulation is in line with their needs and does not hamper their growth. Excessive compliance requirements may end up playing into the hands of the largest players as they would have larger financial coffers and institutional mechanisms to comply with these obligations.</p>
<p style="text-align: justify;" dir="ltr">There is some confusion in the law as to whether the Chief Compliance officer mentioned in the amended rules is the same as the “nodal person of contact or an alternate senior designated functionary who is resident of India” under Rule 5(1).</p>
<p style="text-align: justify;" dir="ltr">The safe harbour should therefore refer to due diligence by the CCO and not the e-commerce entity itself. The requirement for the compliance officer to be an Indian citizen who is a resident and a senior officer or managerial employee may place an undue burden on small E-commerce players not located in India. </p>
<h3><span style="text-align: justify;">Data Protection and Surveillance</span></h3>
<p style="text-align: justify;" dir="ltr">In the absence of a Personal Data protection bill these rules do not adequately protect consumers’ personal data and reduce the powers given to the Central Government to access data or conduct surveillance</p>
<h3 style="text-align: justify;">Flash Sales </h3>
<p style="text-align: justify;" dir="ltr">Conventional flash sales should be defined. Clear distinction must be made between conventional flash sales and fraudulent flash sales. The definition should not be limited to interception of business “using technological means”, which limits the scope of the fraudulent flash sales. Further parameters must be provided for when a flash sale will be considered a fraudulent flash sale. </p>
<h3 style="text-align: justify;">Unfair Trade Practices </h3>
<p style="text-align: justify;" dir="ltr">The rules place restrictions on marketplace E-commerce entities from selling their own goods or services or from listing related enterprises as sellers on their platforms. No such restriction applies to brick and mortar stores, and this blanket ban must be rethought. </p>
<h3 style="text-align: justify;"> Jurisdictional Issues with Competition Law </h3>
<p style="text-align: justify;" dir="ltr">This rule brings the issue of ‘abuse of dominant power’ under the fora of the Consumer Protection Authority or the Consumer Disputes Redressal Commissions. Overlapping jurisdiction of this nature could introduce regulatory delays into the dispute resolution process and can be a source of tension for the parties and regulatory authorities. The intention behind importing a competition law concept such as “abuse of dominant position” in the consumer protection regulations may be understandable, such a step might be effective in jurisdictions which have a common regulatory authority for both competition law as well as consumer protection issues, such as Australia, Finland, Ireland, Netherlands. However, in a country such as India which has completely separate regulatory mechanisms for competition and consumer law issues, such a provision may lead to logistical difficulties.</p>
<h3 style="text-align: justify;">Compliance with International Trade Law </h3>
<p style="text-align: justify;" dir="ltr">A robust framework on ranking with transparent disclosure of parameters for the same would also go a long way towards addressing concerns with discrimination and national treatment under WTO law. Further, the obligation to provide domestic alternatives should be clarified and amended to ensure that it does not cause uncertainty and open India up to a national treatment challenge at the WTO.</p>
<h3 style="text-align: justify;">Liabilities of Marketplace E-commerce Entities</h3>
<p style="text-align: justify;" dir="ltr">Fallback liability is an essential component of consumers’ protection in the E-commerce space. However, as currently envisioned there is a lack of clarity surrounding the extent to which fallback liability is applicable on E-commerce entities as well as exemptions to this liability. We have recommended alternate approaches adopted in other jurisdictions, which include</p>
<ol><li style="list-style-type: lower-alpha;" dir="ltr">
<p style="text-align: justify;" dir="ltr">Liability through negligence</p>
</li><li style="list-style-type: lower-alpha;" dir="ltr">
<p style="text-align: justify;" dir="ltr">Liability as an exemption to safe harbour</p>
</li></ol>
<div style="text-align: justify;"> </div>
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For more details visit <a href='http://editors.cis-india.org/internet-governance/blog/comments-on-proposed-amendments-to-the-consumer-protection-e-commerce-rules-2020'>http://editors.cis-india.org/internet-governance/blog/comments-on-proposed-amendments-to-the-consumer-protection-e-commerce-rules-2020</a>
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No publisherVipul Kharbanda, Rajat Misra, Arindrajit Basu and Aman NairE-CommerceConsumer Rights2021-07-27T14:45:07ZBlog EntryThe Competition Law Case Against Whatsapp’s 2021 Privacy Policy Alteration
http://editors.cis-india.org/internet-governance/blog/the-competition-law-case-against-whatsapp2019s-2021-privacy-policy-alteration
<b>Having examined the privacy implications of Whatsapp's changes to its privacy policy in 2021, this issue brief is the second output in our series examining the effects of those changes. This brief examines the changes in the context of data sharing between Whatsapp and Facebook as being an anticompetitive action in violation of the Indian Competition Act, 2002. </b>
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<p style="text-align: justify;" dir="ltr"> </p>
<h3 style="text-align: justify;">Executive Summary</h3>
<p style="text-align: justify;" dir="ltr">On January 4, 2021, Whatsapp announced a revised privacy policy through an in-app notification. It highlighted that the new policy would impact user interactions with business accounts, including those which may be using Facebook's hosting services. The updated policy presented users with the option of either accepting greater data sharing between Whatsapp and Facebook or being unable to use the platform post 15th May, 2021. The updated policy resulted in temporarily slowed growth for Whatsapp and increased growth for other messaging apps like Signal and Telegram. While Whatsapp has chosen to delay the implementation of this policy due to consumer outrage, it is important for us to unpack and understand what this (and similar policies) mean for the digital economy, and its associated competition law concerns. Competition law is one of the sharpest tools available to policy-makers to fairly regulate and constrain the unbridled power of large technology companies.</p>
<p style="text-align: justify;" dir="ltr">While it is evident the Indian competition landscape will benefit from revisiting the existing law and policy framework to reign in Big technology companies, we argue that the change in Whatsapp’s privacy policy in 2021 can be held anti-competitive using legal provisions as they presently stand. Therefore, in this issue brief, we largely limit ourselves to evaluating the legality of Whatsapp’s privacy policy within the confines of the present legal system. </p>
<p style="text-align: justify;" dir="ltr">First, we dive into an articulation of the present abuse of dominance framework in Indian Competition Law. Second, we analyze whether there was abuse of dominance-bearing in mind an economic analysis of Whatsapp’s role in the relevant market by using tests laid out in previous rulings of the CCI</p>
<br />
<p style="text-align: justify;" dir="ltr">The framework for determining abuse of dominance as per The Competition Act is based on three factors:</p>
<p style="text-align: justify;" dir="ltr">1. Determination of relevant market</p>
<p style="text-align: justify;" dir="ltr">2. Determination of dominant position</p>
<p style="text-align: justify;" dir="ltr">3. Abuse of the dominant position</p>
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<p style="text-align: justify;" dir="ltr">In two previous orders in 2016 and 2020, CCI has held that Whatsapp is dominant in its relevant market based on several factors which we explore. These include:</p>
<ol><li style="list-style-type: decimal;" dir="ltr">
<p style="text-align: justify;" dir="ltr">Advantage in user base, usage and reach,</p>
</li><li style="list-style-type: decimal;" dir="ltr">
<p style="text-align: justify;" dir="ltr">Barriers to entry for other competitors</p>
</li><li style="list-style-type: decimal;" dir="ltr">
<p style="text-align: justify;" dir="ltr">Power of acquisition over competitors.</p>
</li></ol>
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<p style="text-align: justify;" dir="ltr">However, in both orders, CCI held that Whatsapp did not abuse its dominance by arguing that the practices in question allowed for user choice. We critique these judgments for not reflecting the market structures and exploitative practices of large technology companies. We also argue that even if we use the test of user choice laid down by the CCI in its previous orders concerning Whatsapp and Facebook, the changes made to the privacy policy in 2021 did abuse dominance,and should be held guilty of violating competition law standards.</p>
<p style="text-align: justify;" dir="ltr">Our analysis revolves around examining the explicit and implicit standards of user choice laid out by the CCI in its 2016 and 2020 judgements as the standard for evaluating fairness in an Abuse of Dominance claim.We demonstrate how the 2021 changes failed to meet these standards. </p>
<p style="text-align: justify;" dir="ltr">Finally, we conclude by noting that the present case offers a crucial opportunity for India to take a giant step forward in its regulation of big tech companies and harmonise its rulings with regulatory developments around the world.</p>
<p style="text-align: justify;" dir="ltr">The full issue brief can be found <a href="https://cis-india.org/internet-governance/whatsapp-privacy-policy-2021-issue-brief-competition-law">here</a></p>
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<p style="text-align: justify;" dir="ltr"> </p>
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For more details visit <a href='http://editors.cis-india.org/internet-governance/blog/the-competition-law-case-against-whatsapp2019s-2021-privacy-policy-alteration'>http://editors.cis-india.org/internet-governance/blog/the-competition-law-case-against-whatsapp2019s-2021-privacy-policy-alteration</a>
</p>
No publisherAman Nair and Arindrajit BasuConsumer RightsDigital EconomyData ProtectionFacebookCompetitionWhatsAppCompetition Law2021-03-24T16:12:09ZBlog EntryReading the Fine Script: Service Providers, Terms and Conditions and Consumer Rights
http://editors.cis-india.org/internet-governance/blog/reading-between-the-lines-service-providers-terms-and-conditions-and-consumer-rights
<b>This year, an increasing number of incidents, related to consumer rights and service providers, have come to light. This blog illustrates the facts of the cases, and discusses the main issues at stake, namely, the role and responsibilities of providers of platforms for user-created content with regard to consumer rights.</b>
<p style="text-align: justify; "><span>On 1st July, 2014 the Federal Trade Commission (FTC) filed a complaint against T-Mobile USA,</span><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftn1">[1]</a><span> accusing the service provider of 'cramming' customers bills, with millions of dollars of unauthorized charges. Recently, another service provider, received flak from regulators and users worldwide, after it published a paper, 'Experimental evidence of massive-scale emotional contagion through social networks'.</span><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftn2">[2]</a><span> The paper described Facebook's experiment on more than 600,000 users, to determine whether manipulating user-generated content, would affect the emotions of its users.</span></p>
<p style="text-align: justify; ">In both incidents the terms that should ensure the protection of their user's legal rights, were used to gain consent for actions on behalf of the service providers, that were not anticipated at the time of agreeing to the terms and conditions (T&Cs) by the consumer. More precisely, both cases point to the underlying issue of how users are bound by T&Cs, and in a mediated online landscape—highlight, the need to pay attention to the regulations that govern the online engagement of users.</p>
<p style="text-align: justify; "><b>I have read and agree to the terms</b></p>
<p style="text-align: justify; ">In his statement, Chief Executive Officer, John Legere might have referred to T-Mobile as "the most pro-consumer company in the industry",<a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftn3">[3]</a> however the FTC investigation revelations, that many customers never authorized the charges, suggest otherwise. The FTC investigation also found that, T-Mobile received 35-40 per cent of the amount charged for subscriptions, that were made largely through innocuous services, that customers had been signed up to, without their knowledge or consent. Last month news broke, that just under 700,000 users 'unknowingly' participated in the Facebook study, and while the legality and ethics of the experiment are being debated, what is clear is that Facebook violated consumer rights by not providing the choice to opt in or out, or even the knowledge of such social or psychological experiments to its users.</p>
<p style="text-align: justify; ">Both incidents boil down to the sensitive question of consent. While binding agreements around the world work on the condition of consent, how do we define it and what are the implications of agreeing to the terms?</p>
<p style="text-align: justify; "><b>Terms of Service: Conditions are subject to change </b></p>
<p style="text-align: justify; ">A legal necessity, the existing terms of service (TOS)—as they are also known—as an acceptance mechanism are deeply broken. The policies of online service providers are often, too long, and with no shorter or multilingual versions, require substantial effort on part of the user to go through in detail. A 2008 Carnegie Mellon study estimated it would take an average user 244 hours every year to go through the policies they agree to online.<a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftn4">[4]</a> Based on the study, Atlantic's Alexis C. Madrigal derived that reading all of the privacy policies an average Internet user encounters in a year, would take 76 working days.<a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftn5">[5]</a></p>
<p style="text-align: justify; ">The costs of time are multiplied by the fact that terms of services change with technology, making it very hard for a user to keep track of all of the changes over time. Moreover, many services providers do not even commit to the obligation of notifying the users of any changes in the TOS. Microsoft, Skype, Amazon, YouTube are examples of some of the service providers that have not committed to any obligations of notification of changes and often, there are no mechanisms in place to ensure that service providers are keeping users updated.</p>
<p style="text-align: justify; ">Facebook has said that the recent social experiment is perfectly legal under its TOS,<a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftn6">[6]</a> the question of fairness of the conditions of users consent remain debatable. Facebook has a broad copyright license that goes beyond its operating requirements, such as the right to 'sublicense'. The copyright also does not end when users stop using the service, unless the content has been deleted by everyone else.</p>
<p style="text-align: justify; ">More importantly, since 2007, Facebook has brought major changes to their lengthy TOS about every year.<a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftn7">[7]</a> And while many point that Facebook is transparent, as it solicits feedback preceding changes to their terms, the accountability remains questionable, as the results are not binding unless 30% of the actual users vote. Facebook can and does, track users and shares their data across websites, and has no obligation or mechanism to inform users of the takedown requests.</p>
<p style="text-align: justify; ">Courts in different jurisdictions under different laws may come to different conclusions regarding these practices, especially about whether changing terms without notifying users is acceptable or not. Living in a society more protective of consumer rights is however, no safeguard, as TOS often include a clause of choice of law which allow companies to select jurisdictions whose laws govern the terms.</p>
<p style="text-align: justify; ">The recent experiment bypassed the need for informed user consent due to Facebook's Data Use Policy<a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftn8">[8]</a>, which states that once an account has been created, user data can be used for 'internal operations, including troubleshooting, data analysis, testing, research and service improvement.' While the users worldwide may be outraged, legally, Facebook acted within its rights as the decision fell within the scope of T&Cs that users consented to. The incident's most positive impact might be in taking the questions of Facebook responsibilities towards protecting users, including informing them of the usage of their data and changes in data privacy terms, to a worldwide audience.</p>
<p style="text-align: justify; "><b>My right is bigger than yours</b></p>
<p style="text-align: justify; ">Most TOS agreements, written by lawyers to protect the interests of the companies add to the complexities of privacy, in an increasingly user-generated digital world. Often, intentionally complicated agreements, conflict with existing data and user rights across jurisdictions and chip away at rights like ownership, privacy and even the ability to sue. With conditions that that allow for change in terms at anytime, existing users do not have ownership or control over their data.</p>
<p style="text-align: justify; ">In April New York Times, reported of updates to the legal policy of General Mills (GM), the multibillion-dollar food company.<a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftn9">[9]</a> The update broadly asserted that consumers interacting with the company in a variety of ways and venues no longer can sue GM, but must instead, submit any complaint to “informal negotiation” or arbitration. Since then, GM has backtracked and clarified that “online communities” mentioned in the policy referred only to those online communities hosted by the company on its own websites.<a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftn10">[10]</a> Clarification aside, as Julia Duncan, Director of Federal programs at American Association for Justice points out, the update in the terms were so broad, that they were open to wide interpretation and anything that consumers purchase from the company could have been held to this clause. <a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftn11">[11]</a></p>
<p style="text-align: justify; "><b>Data and whose rights?</b></p>
<p style="text-align: justify; ">Following Snowden revelations, data privacy has become a contentious issue in the EU, and TOS, that allow the service providers to unilaterally alter terms of the contract, will face many challenges in the future. In March Edward Snowden sent his testimony to the European Parliament calling for greater accountability and highlighted that in "a global, interconnected world where, when national laws fail like this, our international laws provide for another level of accountability."<a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftn12">[12]</a> Following the testimony came the European Parliament's vote in favor of new safeguards on the personal data of EU citizens, when it’s transferred to non-EU.<a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftn13">[13]</a> The new regulations seek to give users more control over their personal data including the right to ask for data from companies that control it and seek to place the burden of proof on the service providers.</p>
<p style="text-align: justify; ">The regulation places responsibility on companies, including third-parties involved in data collection, transfer and storing and greater transparency on concerned requests for information. The amendment reinforces data subject right to seek erasure of data and obliges concerned parties to communicate data rectification. Also, earlier this year, the European Court of Justice (ECJ) ruled in favor of the 'right to be forgotten'<a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftn14">[14]</a>. The ECJ ruling recognised data subject's rights override the interest of internet users, however, with exceptions pertaining to nature of information, its sensitivity for the data subject's private life and the role of the data subject in public life.</p>
<p style="text-align: justify; ">In May, the Norwegian Consumer Council filed a complaint with the Norwegian Consumer Ombudsman, “… based on the discrepancies between Norwegian Law and the standard terms and conditions applicable to the Apple iCloud service...”, and, “...in breach of the law regarding control of marketing and standard agreements.”<a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftn15">[15]</a> The council based its complaint on the results of a study, published earlier this year, that found terms were hazy and varied across services including iCloud, Drop Box, Google Drive, Jotta Cloud, and Microsoft OneDrive. The Norwegian Council study found that Google TOS, allow for users content to be used for other purposes than storage, including by partners and that it has rights of usage even after the service is cancelled. None of the providers provide a guarantee that data is safe from loss, while many, have the ability to terminate an account without notice. All of the service providers can change the terms of service but only Google and Microsoft give an advance notice.</p>
<p style="text-align: justify; ">The study also found service providers lacking with respect to European privacy standards, with many allowing for browsing of user content. Tellingly, Google had received a fine in January by the French Data Protection Authority, that stated regarding Google's TOS, "permits itself to combine all the data it collects about its users across all of its services without any legal basis."</p>
<p style="text-align: justify; "><b>To blame or not to blame</b></p>
<p style="text-align: justify; ">Facebook is facing a probe by the UK Information Commissioner's Office, to assess if the experiment conducted in 2012 was a violation of data privacy laws.<a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftn16">[16]</a> The FTC asked the court to order T-Mobile USA, to stop mobile cramming, provide refunds and give up any revenues from the practice. The existing mechanisms of online consent, do not simplify the task of agreeing to multiple documents and services at once, a complexity which manifolds, with the involvement of third parties.</p>
<p style="text-align: justify; ">Unsurprisingly, T-Mobile's Legere termed the FTC lawsuit misdirected and blamed the companies providing the text services for the cramming.<a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftn17">[17]</a> He felt those providers should be held accountable, despite allegations that T-Mobile's billing practices made it difficult for consumers to detect that they were being charged for unauthorized services and having shared revenues with third-party providers. Interestingly, this is the first action against a wireless carrier for cramming and the FTC has a precedent of going after smaller companies that provide the services.</p>
<p style="text-align: justify; ">The FTC charged T-Mobile USA with deceptive billing practices in putting the crammed charges under a total for 'use charges' and 'premium services' and failure to highlight that portion of the charge was towards third-party charges. Further, the company urged customers to take complaints to vendors and was not forthcoming with refunds. For now, T-Mobile may be able to share the blame, the incident brings to question its accountability, especially as going forward it has entered a pact along with other carriers in USA including Verizon and AT&T, agreeing to stop billing customers for third-party services. Even when practices such as cramming are deemed illegal, it does not necessarily mean that harm has been prevented. Often users bear the burden of claiming refunds and litigation comes at a cost while even after being fined companies could have succeeded in profiting from their actions.</p>
<p style="text-align: justify; "><b>Conclusion </b></p>
<p style="text-align: justify; ">Unfair terms and conditions may arise when service providers include terms that are difficult to understand or vague in their scope. TOS that prevent users from taking legal action, negate liability for service providers actions despite the companies actions that may have a direct bearing on users, are also considered unfair. More importantly, any term that is hidden till after signing the contract, or a term giving the provider the right to change the contract to their benefit including wider rights for service provider wide in comparison to users such as a term that that makes it very difficult for users to end a contract create an imbalance. These issues get further complicated when the companies control and profiting from data are doing so with user generated data provided free to the platform.</p>
<p style="text-align: justify; ">In the knowledge economy, web companies play a decisive role as even though they work for profit, the profit is derived out of the knowledge held by individuals and groups. In their function of aggregating human knowledge, they collect and provide opportunities for feedback of the outcomes of individual choices. The significance of consent becomes a critical part of the equation when harnessing individual information. In France, consent is part of the four conditions necessary to be forming a valid contract (article 1108 of the Code Civil).</p>
<p style="text-align: justify; ">The cases highlight the complexities that are inherent in the existing mechanisms of online consent. The question of consent has many underlying layers such as reasonable notice and contractual obligations related to consent such as those explored in the case in Canada, which looked at whether clauses of TOS were communicated reasonably to the user, a topic for another blog. For now, we must remember that by creating and organising social knowledge that further human activity, service providers, serve a powerful function. And as the saying goes, with great power comes great responsibility.</p>
<hr size="1" style="text-align: justify; " width="33%" />
<p style="text-align: justify; "><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftnref1">[1]</a> 'FTC Alleges T-Mobile Crammed Bogus Charges onto Customers’ Phone Bills', published 1 July, 2014. See: http://www.ftc.gov/news-events/press-releases/2014/07/ftc-alleges-t-mobile-crammed-bogus-charges-customers-phone-bills</p>
<p style="text-align: justify; "><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftnref2">[2]</a> 'Experimental evidence of massive-scale emotional contagion through social networks', Adam D. I. Kramera,1, Jamie E. Guilloryb, and Jeffrey T. Hancock, published March 25, 2014. See:http://www.pnas.org/content/111/24/8788.full.pdf+html?sid=2610b655-db67-453d-bcb6-da4efeebf534</p>
<p style="text-align: justify; "><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftnref3">[3]</a> 'U.S. sues T-Mobile USA, alleges bogus charges on phone bills, Reuters published 1st July, 2014 See: http://www.reuters.com/article/2014/07/01/us-tmobile-ftc-idUSKBN0F656E20140701</p>
<p style="text-align: justify; "><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftnref4">[4]</a> 'The Cost of Reading Privacy Policies', Aleecia M. McDonald and Lorrie Faith Cranor, published I/S: A Journal of Law and Policy for the Information Society 2008 Privacy Year in Review issue. See: http://lorrie.cranor.org/pubs/readingPolicyCost-authorDraft.pdf</p>
<p style="text-align: justify; "><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftnref5">[5]</a> 'Reading the Privacy Policies You Encounter in a Year Would Take 76 Work Days', Alexis C. Madrigal, published The Atlantic, March 2012 See: http://www.theatlantic.com/technology/archive/2012/03/reading-the-privacy-policies-you-encounter-in-a-year-would-take-76-work-days/253851/</p>
<p style="text-align: justify; "><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftnref6">[6]</a> Facebook Legal Terms. See: https://www.facebook.com/legal/terms</p>
<p style="text-align: justify; "><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftnref7">[7]</a> 'Facebook's Eroding Privacy Policy: A Timeline', Kurt Opsahl, Published Electronic Frontier Foundation , April 28, 2010 See:https://www.eff.org/deeplinks/2010/04/facebook-timeline</p>
<p style="text-align: justify; "><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftnref8">[8]</a> Facebook Data Use Policy. See: https://www.facebook.com/about/privacy/</p>
<p style="text-align: justify; "><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftnref9">[9]</a> 'When ‘Liking’ a Brand Online Voids the Right to Sue', Stephanie Strom, published in New York Times on April 16, 2014 See: http://www.nytimes.com/2014/04/17/business/when-liking-a-brand-online-voids-the-right-to-sue.html?ref=business</p>
<p style="text-align: justify; "><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftnref10">[10]</a> Explaining our website privacy policy and legal terms, published April 17, 2014 See:http://www.blog.generalmills.com/2014/04/explaining-our-website-privacy-policy-and-legal-terms/#sthash.B5URM3et.dpufhttp://www.blog.generalmills.com/2014/04/explaining-our-website-privacy-policy-and-legal-terms/</p>
<p style="text-align: justify; "><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftnref11">[11]</a> General Mills Amends New Legal Policies, Stephanie Strom, published in New York Times on 1http://www.nytimes.com/2014/04/18/business/general-mills-amends-new-legal-policies.html?_r=0</p>
<p style="text-align: justify; "><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftnref12">[12]</a> Edward Snowden Statement to European Parliament published March 7, 2014. See: http://www.europarl.europa.eu/document/activities/cont/201403/20140307ATT80674/20140307ATT80674EN.pdf</p>
<p style="text-align: justify; "><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftnref13">[13]</a> Progress on EU data protection reform now irreversible following European Parliament vote, published 12 March 201 See: http://europa.eu/rapid/press-release_MEMO-14-186_en.htm</p>
<p style="text-align: justify; "><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftnref14">[14]</a> European Court of Justice rules Internet Search Engine Operator responsible for Processing Personal Data Published by Third Parties, Jyoti Panday, published on CIS blog on May 14, 2014. See: http://cis-india.org/internet-governance/blog/ecj-rules-internet-search-engine-operator-responsible-for-processing-personal-data-published-by-third-parties</p>
<p style="text-align: justify; "><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftnref15">[15]</a> Complaint regarding Apple iCloud’s terms and conditions , published on 13 May 2014 See:http://www.forbrukerradet.no/_attachment/1175090/binary/29927</p>
<p style="text-align: justify; "><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftnref16">[16]</a> 'Facebook faces UK probe over emotion study' See: http://www.bbc.co.uk/news/technology-28102550</p>
<p style="text-align: justify; "><a href="file:///C:/Users/jyoti/Desktop/Reading%20the%20fine%20script%20When%20terms%20and%20conditions%20apply.docx#_ftnref17">[17]</a> Our Reaction to the FTC Lawsuit See: http://newsroom.t-mobile.com/news/our-reaction-to-the-ftc-lawsuit.htm</p>
<p>
For more details visit <a href='http://editors.cis-india.org/internet-governance/blog/reading-between-the-lines-service-providers-terms-and-conditions-and-consumer-rights'>http://editors.cis-india.org/internet-governance/blog/reading-between-the-lines-service-providers-terms-and-conditions-and-consumer-rights</a>
</p>
No publisherjyotiSocial MediaConsumer RightsGoogleinternet and societyPrivacyTransparency and AccountabilityIntermediary LiabilityAccountabilityFacebookData ProtectionPoliciesSafety2014-07-04T06:31:37ZBlog EntryAre Indian Consumer Laws Ready for the Digital Age?
http://editors.cis-india.org/a2k/blogs/are-indian-consumers-laws-ready-for-digital-age
<b>The Economic and Social Council of the United Nations, recognizing the need for protection of the rights of consumers, drafted a set of model guidelines on consumer protection which were adopted by the General Assembly in 1985. The United Nations Guidelines for Consumer Protection (UNGCP) act as an international reference point of the consumer movement, however since it has been over a quarter of a century since they were first drafted, there is a strong argument for revising them to bring them in line with new developments in technology and business practices.</b>
<p style="text-align: justify; ">It is for this reason that that <a class="external-link" href="http://unctad.org/en/Pages/Home.aspx">United Nations Conference on Trade and Development</a> has undertaken a revision of the UNGCP. <a class="external-link" href="http://www.consumersinternational.org/">Consumers International</a>, an international consumer rights organization has along with CIS and other groups been trying to represent the voice of consumers at the negotiations for this revision. As part of this effort, Consumers International has produced a book titled "<a class="external-link" href="http://www.consumersinternational.org/news-and-media/resource-zone/jeremy_digital_ungcp#.UgM5UaxWygg">Updating the UN Guidelines for Consumer Protection for Consumers in the Digital Age</a>". This blog has been produced through a filteration of the essence of some of the arguments and issues addressed in that book.</p>
<p style="text-align: justify; ">In December 2012 there was a news report that pegged the market for online commerce in India at roughly USD 14 billion,<a href="#fn1" name="fr1">[1]</a> which is why some of the poster children of online retail in India are getting stratospheric valuations even though they are yet to show any major profits, case in point, <a class="external-link" href="http://www.flipkart.com/">Flipkart</a> had a valuation of around USD 800 million<a href="#fn2" name="fr2">[2]</a> in 2012 and is looking for an IPO in around three to four years. Such huge numbers give a sneak peek into the size and scope of the Indian e-commerce marketplace which begs the question, if there are so many transactions occurring in the online marketplace and since a large number of those transactions are between retailers and domestic consumers, then are there any specific laws out there protecting the interests of consumers in the online world.</p>
<p style="text-align: justify; ">Apart from the <a class="external-link" href="http://eprocure.gov.in/cppp/sites/default/files/eproc/itact2000.pdf">Information Technology Act, 2000</a> and various<a class="external-link" href="http://www.rbi.org.in/scripts/bs_circularindexdisplay.aspx"> circulars by the Reserve Bank of India</a> regarding online banking and money transfer activities which are more generic in nature trying to secure the online space as a whole, there are no specific laws that seek to protect consumers in the online space. However, that does not necessarily mean that the consumers are left without any recourse and in this post we shall examine whether it is possible to use the <a class="external-link" href="http://www.ncdrc.nic.in/1_1.html">Consumer Protection Act, 1986</a> to protect consumer rights in the online environment as well.</p>
<p style="text-align: justify; ">The Consumer Protection Act, 1986 (“<b>COPRA</b>”) was enacted with the purpose of empowering consumers to take on the might of large corporations and preventing unscrupulous businessmen from taking undue advantage of the weak position which consumers are inherently placed in under the archaic Indian judicial system. It set up special tribunals, simpler procedures and enacted special provisions to help consumers get a better bargaining position vis-à-vis manufacturers and retailers, etc. However, since this law was enacted more than a quarter of a century ago and it is not entirely geared towards protecting consumer rights in the digital era. However, that does not mean it is entirely toothless in the online environment although it certainly needs some major provisions to come to grasp with the special circumstances and practices of the online marketplace, as the rest of the discussion will demonstrate.</p>
<p>For any transaction to come under the purview of COPRA, it should have the following three essential requirements:</p>
<ol>
<li>There should be a ‘good’ or ‘service’ sold or provided to a consumer;</li>
<li>Such good or service must be ‘sold’ i.e. there must be a ‘sale’;</li>
<li>There should be a ‘defect’ in the good or ‘deficiency’ in the service;</li>
</ol>
<p style="text-align: justify; ">We will now examine different types of e-commerce transactions and discuss whether they fulfill the requirements given above and therefore are amenable to the jurisdiction of COPRA.</p>
<p style="text-align: justify; "><b>There should be a ‘good’ or ‘service’</b><br />This is issue is not very complicated so far as digital purchases of physical items are concerned. Since a book or a mobile phone is considered as a ‘good’ then it will always be considered as a ‘good’ irrespective of whether it has been bought from a physical shop or an online retailer. However, the question does take on an air of some complexity when dealing with digital items such as mp3 files and software programmes. The <a class="external-link" href="http://trivandrum.gov.in/~trivandrum/images/pdfs/generalclausesact.pdf">General Clauses Act, 1897</a> states that all property which is not immovable property is considered as movable property. Since immovable property is defined as land and things attached to the land, therefore it is pretty clear that ‘computer software’ would in all likelihood be considered as movable property. Whether such movable property can be considered as a ‘good’ or not is a question which is yet to be tested in the courts of law in India, however it must be mentioned that in the context of the Sales Tax Act, the Supreme Court of India has held canned software to be a ‘good’. Laying down a test for determining whether a property is a ‘good’ or not, the Supreme Court in that case laid down the following test:</p>
<p class="callout" style="text-align: justify; ">“A 'goods' may be a tangible property or an intangible one. It would become goods provided it has the attributes thereof having regard to (a) its utility; (b) capable of being bought and sold; and (c) capable of transmitted, transferred, delivered, stored and possessed. <span>If a software whether customized or non-customized satisfies these attributes, the same would be goods.</span>”<a href="#fn3" name="fr3">[3]</a></p>
<p style="text-align: justify; ">It must be emphasized again that the Supreme Court’s ruling was given in the context of the Sales Tax Act and it may not be accepted by a court deciding a case on COPRA. This is one issue which could and should be addressed under Indian laws to ensure that the large numbers of Indian consumers who buy items in the online marketplace are not left in a lurch and without the protection of the COPRA.</p>
<p style="text-align: justify; "><b>There must be a “Sale” of the good or service<br /></b>Just as the previous issue, this question again can be simple when asked in relation to sale of physical goods using the internet but may not be so when talking about digital goods. When a physical item is purchased using the internet, a sale may be said to have occurred when the ownership of the good passes from the seller (online retailer) to the buyer (consumer) and the payment and delivery are complete. However, the question whether sale of software (here we are using this generic term for all sorts of computer programmes and data because the reasoning and legal analysis can be applied to both types of data) in an online environment would actually constitute a ‘sale’ requires a little more analysis. A huge problem in labeling online software purchases as a ‘sale’ is that most of these ‘sales’ are made in the form of a license. The manufacturers or retailers would argue that such an online purchase is not really a sale since the consumer usually only gets a license to use the product under strict conditions and does not buy the product as an owner, further this is really the industry standard when it comes to software purchases. The argument on the other side is that most websites advertise these products as an outside sale, for example, if you go to the <a class="external-link" href="http://www.quickheal.com/">Quick Heal</a> antivirus website today and go to the page for “Home Users”<a href="#fn4" name="fr4">[4]</a> the page clearly shows a “Buy Now” tab and indicates the price at Rs. 1549/-. In fact in a number of cases you can actually buy the file containing the software without ever being shown the contractual terms of the agreement. These terms usually specify that you are only getting a license to use the product and may not have the right to resell or lend the product to others, rights which a traditional buyer of a product enjoys under law.</p>
<p style="text-align: justify; ">This issue was also discussed by a Full Bench of the Supreme Court of India in the case of <i>Tata Consultancy Services</i> v. <i>State of Andhra Pradesh</i>,<a href="#fn5" name="fr5">[5]</a> which ultimately held that the ‘sale’ of canned software (the term the court used for non customized software which is sold off the shelf) would be a sale of goods and therefore liable to be taxed under the Sales Tax Act. As is evident this decision was given in the context of the Sales Tax Act, but it could be argued that since tax statues are anyways supposed to be interpreted strictly and beneficial statutes such as the COPRA are required to be interpreted broadly, as per the accepted rules of legal interpretation, therefore it is possible that such a ‘license’ for computer software bought by an ordinary consumer could be considered as a ‘sale’ so as to bring the item within the ambit of the COPRA.</p>
<p>Here again we see that although there might be arguments which could be made to justify such licences for computer software as a ‘sale’, however it is still an untested issue and the COPRA certainly needs to take these issues into account if we want to protect the rights of the ever growing number of online consumers.</p>
<p style="text-align: justify; "><b>There should be a “defect” in the goods</b><br />If I order a pair of shoes from <a class="external-link" href="http://flpikart.com/">flpikart.com</a> and the shoes arrive with one of the soles torn off, it’s a pretty straightforward case of there being a defect. In such a scenario unless the retailer has a specified return policy (which incidentally flipkart has) the consumer would have a right to approach the consumer forum to lodge a compliant. Similarly, if I buy a software from a manufacturer for my personal use and the file has a bug in it, it can fairly easily be considered as a defect since any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard or the good can be considered as a defect.</p>
<p style="text-align: justify; ">This is where things get a little interesting. What if we argue that stringent Digital Rights Management techniques by some online retailers are actually a defect in the goods since they do give the consumer all the rights that a buyer of goods would traditionally have. For example, if I buy an e-book with DRMs which restrict lending and on-selling, then two of my rights as a traditional book buyer are straightaway rescinded. Let us now examine the issue in the traditional context of the term ‘defect’.</p>
<p style="text-align: justify; ">If an article bought has any fault, imperfection or shortcoming in the quality, etc., then it would be considered as a defective good. For example, if a person buys a generator which is creating excessive noise, then it can be said that there is a shortcoming in the quality or the standard which is required to be maintained. A generator may supply electricity perfectly well and there may not be any fault at the time of running the machine but while operating the machine if it is creating more noise than the prescribed level, it can be said that there is a defect in the manufacture. An e-book with DRMs may also let a consumer read its contents but that may not be the only criteria to determine whether an item is defective or not. Using the traditional definition of a ‘buyer’, we can argue that a traditional buyer commonly has rights such as the right to resale, the right to make copies for personal use, the right to lend, the right to gift, etc., which may not exist in a an e-book with DRMs. Thus, an argument could be made that such measures constitute a ‘defect’ in the goods under the COPRA.</p>
<p style="text-align: justify; ">Again, this is only an argument and it is entirely possible that a court of law may reject such an argument, especially in light of the fact that the consumer has entered into a license agreement while completing the transaction which specifically grants the consumer only specific and limited rights in regard to the item being purchased. A possible counter to this argument could be that the agreement is generally long and verbose and is only presented to the consumer towards the end of the transaction when the consumer generally does not have the time to read it. Further, there is hardly ever a situation where the consumer can negotiate the terms of the contract, it is usually a standard form of contract which is heavily tilted in favour of the seller and the consumer is given no real choice in this regard. This is why in common law jurisdictions the courts have laid down certain principles or extra conditions which a standard form of contract has to abide by for it to be enforceable viz.,:</p>
<ol>
<li style="text-align: justify; "><span>Sufficient notice</span>: This principle requires that the major and specially the unusual terms in a contract should be displayed in a sufficiently highlighted manner so that a reasonable consumer is not likely to miss these unusual terms.<a href="#fn6" name="fr6">[6]</a></li>
<li style="text-align: justify; "><span>Fundamental breach of contract</span>: If the contract is so drafted that it would impose additional obligations on the consumer or restrict the liability and obligations of the seller in such a way that it would result in breaching any of the fundamental or main terms or obligations that one expects in such a contract, then such a contract may not be enforceable.<a href="#fn7" name="fr7">[7]</a></li>
<li style="text-align: justify; "><span>Exclusion of unreasonable terms</span>: Another type of protection that is available to consumers is the principle which seeks to exclude unreasonable terms from a contract i.e. a term which would defeat the very purpose of the contract or if it is repugnant to the public policy.<a href="#fn8" name="fr8">[8]</a></li>
</ol>
<p style="text-align: justify; ">Relying on the above principles of standard form contracts, it is possible to at least argue that highly strict and limiting terms which are put into a long verbose standard form contract which backs the Technology Protection Measures on a protected software may not be entirely enforceable, in which case the alleged consent of the consumer for such DRMs gets negated and the software with all its DRM limitations could be considered as ‘defective’.</p>
<p style="text-align: justify; "><b>Conclusion</b><br />From the discussion above it is clear that the nature of online transactions and digital goods presents certain unique problems for the legal regime which seeks to protect consumer rights. The law needs to be amended to take into account the unique circumstances of this fledging marketplace that exists online and ensure that the legal regime is fully capable of facing the challenges thrown up by e-commerce. One of the initiatives in this regard is the effort by Consumers International to include amendments in the Model <a class="external-link" href="http://www.consumersinternational.org/who-we-are/un-guidelines-on-consumer-protection#.UgNj_6xWygg">United Nations Guidelines for Consumer Protection</a> to include various provisions which deal with the online marketplace and its unique challenges as well as issues relating to access to knowledge (A2K). Perhaps it is time for the establishment in India to also take this into account and bring our quarter of a century old consumer protection legislation in line with the digital age.</p>
<ol> </ol>
<hr />
<p>[<a href="#fr1" name="fn1">1</a>]. <a class="external-link" href="http://goo.gl/Mh74vB">http://goo.gl/Mh74vB</a></p>
<p>[<a href="#fr2" name="fn2">2</a>]. <a class="external-link" href="http://goo.gl/By5x3i">http://goo.gl/By5x3i</a></p>
<p>[<a href="#fr3" name="fn3">3</a>]. <i>Tata Consultancy Services</i> v. <i>State of Andhra Pradesh</i>, 5 November, 2004, available at <a class="external-link" href="http://goo.gl/Bn7KRp">http://goo.gl/Bn7KRp</a></p>
<p>[<a href="#fr4" name="fn4">4</a>]. <a class="external-link" href="http://goo.gl/lMdoI">http://goo.gl/lMdoI</a></p>
<p>[<a href="#fr5" name="fn5">5</a>].<a class="external-link" href="http://goo.gl/Bn7KRp">http://goo.gl/Bn7KRp</a></p>
<p>[<a href="#fr6" name="fn6">6</a>]. <i>Henderson</i> & others v.<i> Stevenson</i>, 1875 2 R (HL) 71, <i>Interfoto Picture Library</i> Ltd v<i>. Stiletto Visual</i> Programmes Ltd. [1988] 1 All ER 348.</p>
<p>[<a href="#fr7" name="fn7">7</a>]. <i>Harbutt's</i> "<i>Plasticine</i>" <i>Ltd. </i>v<i>. Wayne Tank and Pump Co Ltd</i> [1970] 1 QB 447.</p>
<p>[<a href="#fr8" name="fn8">8</a>]. <i>Lily White</i> v. <i>R. Mannuswami</i>, AIR 1966 Mad.13.</p>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/are-indian-consumers-laws-ready-for-digital-age'>http://editors.cis-india.org/a2k/blogs/are-indian-consumers-laws-ready-for-digital-age</a>
</p>
No publishervipulConsumer RightsFeaturedAccess to Knowledge2013-08-08T11:52:40ZBlog EntryConsumer Privacy
http://editors.cis-india.org/internet-governance/consumer-privacy.pdf
<b>This chapter will examine the present legal state of consumer privacy in India and seek to understand the gap between policy and implementation of policy. In doing so, it will look at what are the existing avenues for protection of consumer privacy in India, how is the definition of consumer privacy evolving through case law and public opinion, and what are the current challenges to consumer privacy in India. Traditionally speaking, and according to the Consumer Protection Act, 1986, in India, a consumer is a broad label for any person who buys goods or services with the intent of using them for non-commercial purposes. In the typical sense, when people think of themselves as being consumers, they think about transactions with a vendor through a physical exchange of money in a store or through an online exchange for a product or service. Certain services that consumers use put an extraordinary amount of sensitive personal information into the hands of vendors.</b>
<p>
For more details visit <a href='http://editors.cis-india.org/internet-governance/consumer-privacy.pdf'>http://editors.cis-india.org/internet-governance/consumer-privacy.pdf</a>
</p>
No publisherpraskrishnaConsumer RightsInternet GovernancePrivacy2012-09-13T09:21:26ZFileConsumers International Global Meeting 2012
http://editors.cis-india.org/news/consumers-international-meeting-2012
<b>Pranesh Prakash participated in the Consumers International Global Meeting held in Kuala Lumpur on March 8 and 9, 2012. He spoke on UN Consumer Guidelines. Robin Brown, Tobias Schönwetter and Guilherme Varella were the other speakers in the session.</b>
<h3>Wednesday 7 March</h3>
<table class="plain">
<tbody>
<tr>
<td> 6:45pm</td>
<td>Anwar Fazal speech on 50th anniversary of JFK Consumer Rights</td>
</tr>
<tr>
<td> <br />
7:00pm</td>
<td>Dinner hosted by FOMCA</td>
</tr>
</tbody>
</table>
<h3>Thursday 8 March</h3>
<table class="plain">
<tbody>
<tr>
<td>8:30am</td>
<td>Registration<br />
<br /></td>
</tr>
<tr>
<td>9:00am</td>
<td>Welcome (Helen McCallum)</td>
</tr>
<tr>
<td>9:30am <br /></td>
<td>Introduction and overview (Jeremy Malcolm)</td>
</tr>
<tr>
<td> 10:00am</td>
<td>Introduction to Digital Personal Property (Paul Sweazey)</td>
</tr>
<tr>
<td> 11:00am</td>
<td>Break</td>
</tr>
<tr>
<td> 11:30am</td>
<td>UN Consumer Guidelines (Robin Brown, Tobias Schönwetter, Pranesh Prakash, Guilherme Varella)</td>
</tr>
<tr>
<td>1:00pm</td>
<td>Lunch</td>
</tr>
<tr>
<td> 2:00pm</td>
<td>Consumer Protection and IP Abuse Prevention under the WTO Framework (George Tian)</td>
</tr>
<tr>
<td> <br />
3:00pm</td>
<td>Internet governance and consumers (Peng Hwa Ang)</td>
</tr>
<tr>
<td>4:00pm</td>
<td>Break</td>
</tr>
<tr>
<td>4:30pm <br /></td>
<td>Public Interest Representation in the Information Society (Norbert Bollow)</td>
</tr>
<tr>
<td>5:30pm</td>
<td>Consumers in the information society (Jeremy Malcolm)</td>
</tr>
<tr>
<td>6:30pm</td>
<td>Break</td>
</tr>
<tr>
<td> 7:30pm </td>
<td>Cultural and culinary outing to pasar malam</td>
</tr>
</tbody>
</table>
<h3>Friday 9 March</h3>
<table class="plain">
<tbody>
<tr>
<td>8:30am</td>
<td>Registration</td>
</tr>
<tr>
<td> 9:00am</td>
<td>M-Lab (Lih Shiun Goh from Google Singapore)</td>
</tr>
<tr>
<td>10:00am</td>
<td> Internet and human rights (Alan Finlay from Association for Progressive Communications)</td>
</tr>
<tr>
<td>11:00am <br /></td>
<td>Break</td>
</tr>
<tr>
<td> 11:30am </td>
<td>Global consumer survey on broadband (Jeremy Malcolm, Veridiana Alimonti, Elise Davidson, Marzena Kisielowska-Lipman)</td>
</tr>
<tr>
<td>1:00pm </td>
<td> Lunch</td>
</tr>
<tr>
<td> 2:00pm</td>
<td> Cyber-security concerns for consumers and businesses (Raj Kumar, IMPACT)</td>
</tr>
<tr>
<td>3:00pm</td>
<td>Broadband nutrition label (Benjamin Lennett, New America Foundation)</td>
</tr>
<tr>
<td>4:00pm </td>
<td> Break</td>
</tr>
<tr>
<td>4:30pm</td>
<td>Reporting back – open time for member presentations</td>
</tr>
<tr>
<td>6.00 pm<br /></td>
<td>Close</td>
</tr>
</tbody>
</table>
<h2>Abstracts and biographies</h2>
<h3>United Nations Guidelines for Consumer Protection</h3>
<p>This paper provides background to the proposed amendments to update the United Nations Guidelines for Consumer Protection for the digital age. A soft-law instrument, the Guidelines provide an influential standard for the dissemination of good practices in consumer protection, as a mechanism to foster and promote social and economic development. They outline eight areas for developing policies for consumer protection, which are reflected by the eight consumer rights declared by the global consumer movement: rights to satisfaction of basic needs, safety, choice, information, consumer education, redress, representation and a health environment.<br /><br />The paper outlines the current global regime of public policy developmment and regualtion relating to access to knowledge. Indicating that many of the issues of concern in terms of access to knowledge are essentially consumer issues it argues that amendments to the Guidelines would form the basis for progress. The paper then details the proposed amendments explaining the basis for each one.<br /><br />Joining Robin Brown on the panel will be representatives from our research partners in India, Brazil and South Africa who will be contributing to our research on the Guidelines.<br /><br />Robin Brown has 25 years of experience in consumer and business regulatory affairs. He spent 10 years as the chair and chief executive of Australia’s national consumer body, the Australian Federation of Consumer Organisations. Robin has been involved in projects to advance consumer protection and competition policy and regulation in a number of developing countries. In recent years Robin has served as a Councilor of the Australian Consumers’ Association. He holds a BA and a Master of Public Policy from the Australian National University.<br /><br />Pranesh Prakash is Programme Manager at the Centre for Internet and Society, Bangalore. He is a graduate with a degree in Arts and Law from National Law School, Bangalore, with a keen interest in the law, economics, and culture of intellectual property rights. He helped found the Indian Journal of Law and Technology, and was part of its editorial board for two years. He is most interested in interdisciplinary research on IP and property law, freedom of speech, and privacy. He has worked with practising lawyers, civil society organizations, and law firms.<br /><br />Tobias Schönwetter is a Senior Manager within PricewaterhouseCoopers' South African practice performing legal advisory services specifically relating to innovation, technology and intellectual property (copyright and trademarks). Tobias has studied and practised law in Germany, the US and South Africa and he has led the copyright division at UCT's Intellectual Property Law and Policy Research Unit for several years. His international experience, together with his leadership roles in a number of intellectual property-related projects and research collaborations such as the African Copyright and Access to Knowledge (ACA2K) project and the Open AIR (African Innovation Research and Training) project, has secured his place as an industry expert within the intellectual property and technology sector.<br /><br />Guilherme Varella is a lawyer at Idec (Brazilian Institute for Consumer Defense) in telecomunications, Internet and access to knowledge and Master's student in public policies of culture in the Law School of Universidade de São Paulo (University of São Paulo - USP).</p>
<p>The event was sponsored by the Ford Foundation, the Open Society Institute and IDRC/CRDI. For more information, <a class="external-link" href="http://a2knetwork.org/infosoc2012#un-consumer-guidelines">see here</a> on the Access to Knowledge website.</p>
<p>
For more details visit <a href='http://editors.cis-india.org/news/consumers-international-meeting-2012'>http://editors.cis-india.org/news/consumers-international-meeting-2012</a>
</p>
No publisherpraskrishnaConsumer RightsAccess to Knowledge2012-04-03T07:54:56ZNews ItemThomas Abraham's Rebuttal on Parallel Importation
http://editors.cis-india.org/a2k/blogs/parallel-importation-rebuttal
<b>We engaged in an e-mail conversation with Thomas Abraham, the managing director of Hachette India, on the issue of parallel importation of books into India. We thought it would be in the public interest to publish a substantive part of that conversation. In this post he points at great length how our arguments are faulty. While we still believe that he doesn't succeed, we hope this will clarify matters a bit.</b>
<h2>Nature of disagreement</h2>
<p>There is essentially fundamental disagreement on principle and definition-and I guess there will always be if you knock actual knowledge and see things as abstract philosophical (and legal) points. Why I think detailed knowledge is necessary is precisely illustrated at the logic (or lack thereof actually) employed by the Ministry. And then there is to me the fundamental problem of disregarding the author's wishes (for no greater good).</p>
<h2>Second hand books and libraries</h2>
<p>The comparison is not the same. Both (second-hand and libraries) have had a first sale where the copyright holder has got his/her basic right-the designated royalty. (I have explained earlier how export royalties and remainder royalties are much lower and results in losses to the author.) So here we come back to the basic philosophy-who has greater right on deciding on creative works? The creator or the government? A just answer would be the creator provided commercial dissemination fulfilled society's needs-which in India's case would be availability and right pricing keeping in mind socio-economic needs. Both are happening through local publishing and pricing of imports. But parallel imports would take away that right an author has of deriving a rightful income as per existing norms in all mature markets (including India so far). We are heading towards being a mature market and this has come about only because we are in the self-perpetuating framework of publishing, writing, and cultural development.</p>
<p>So the argument is that second hand books and libraries foster reading without depriving the author of rightful royalty or ruining the market.</p>
<p>Parallel importation does both. There is every reason to know that this will happen-that's exactly the substantiation we are offering. And the advocates of parallel importation have none to offer-pricing (where is it high, and by how much should it come down?), what is not freely available and at special prices? So for what reason do we want the existing law-also made by lawmakers-to change the stated remit of exhaustion from national to international.</p>
<p>No book publisher objects to libraries or even second hand books. But they are objecting to parallel importation. So leave it to them to decide. It is a tad patronizing to tell us what will help us, without having a shred of actual knowledge.</p>
<h2>Helping libraries and disabled</h2>
<p>This is completely false. No library needs to import from Amazon. And if it is a public library then they are wasting taxpayer money. Almost any book in the world they will still get at a special price through Indian publishers or distributors. There are societies for the disabled to whom publishers give rights at almost no cost. The UK has a law that a copy must be made available at near cost for disabled. By all means have such a law here. Why try and use parallel importation as an excuse for this?</p>
<h2>Flexibility in the law</h2>
<p>To your point: "Even if prices don't fall, it is good to have the flexibility for libraries to import four copies of a book that students need and isn't being made available in India. That flexibility is crucial, for availability, and just on principle, and not just for the sake of prices". By all means pass the law that gives the libraries the right to import 5 copies of any book they want. Publishers won't gripe at that. Libraries would still get it cheaper here than Amazon but that's the libraries' call.</p>
<h2>Law should promote fairness and equity, not perpetuate a particular business model</h2>
<p>No disagreement here. But the contention is that it will result in exactly the opposite. Sure, so let the lawmakers demonstrate they have done due diligence and outline evidence for their assumptions and how it will promote fairness and equity. What is unfair right now and what is not equitable? And how this law will address that. Why do other markets have it, and why should we not? On no count is there any detailing-just three false assumptions-availability, pricing and current editions.</p>
<p>Equally one can't have the law being made the proverbial ass because the lawmakers won't do their homework.</p>
<h2>Export and remainder royalties are lower</h2>
<p>I explained export vs domestic royalties in my first rebuttal. Not just remainders. Remainders are near zero royalties. Export surplus even pre-remainders are low royalty-against the author's wishes. And parallel importation will result in further loss of royalties from loss of sales of the hitherto legitimate edition.</p>
<h2>Why anti-dumping laws will not be practical</h2>
<p>Firstly there will be 40,000-plus titles to track, and the damage would have been done by the time you invoke the law. And assuming we want to invoke anti-dumping law, what parameters will be fixed? what discount are you going to fix? What quantity? I'll explain why this will never work. There are no real averages to draw lines and say this much and no more for either discount or price or quantity. To understand why we need to understand cost to price structures. Indian publishing (both publishing and imports) is low margin. Our books are priced to market; that means from cost our mark up is 2.5 times for imports and about 3-4 on average for local publishing-to enable the prices you see. Abroad it is 8-10 times from cost. To enable low pricing in India, we already have overseas terms that exceed 70% discounts, going into 'net pricing' for the ones that we pick to push big. Once the market is opened up, you will have two things-(a) targeted remainders as against the minor trickle now and (b) surplus clearance or even targeted sale to undercut the existing lawful edition. And I repeat the point that these remainders and 'targeted exports' can still end up undercutting the local edition. Not significantly enough to cause a change in pricing pattern (no benefit to consumer), but enough to undermine existing industry structures.</p>
<p>And yes, parallel importation (the current trickle) does see enforcement the logical way (by which I mean that the intensity of the problem merits the level of redressal). So far (believe me, each of us keeps tabs) we have 'unaware imports' and 'deliberate imports'. It is an irritant but is gradually reducing as the market matures. And the unaware ones are easily remedied by a simple letter asking for infringing stock to be withdrawn. In fact 8 out of 10 cases this simple letter works. For the deliberate ones, as I said earlier, it's just one or two where the impact is not worth the cost. Our margins do not allow us to hire expensive lawyers. But the moment it touches key brands or high revenue, legal action is taken.</p>
<h2>Market expansion</h2>
<p>Again the inherent assumption that this is some 'fat cat' lobbying protest. For once the lawmakers need to apply themselves-why is everybody from Penguin & Hachette (biggest) to Zubaan and Yatra (amongst smallest) all opposing it? Similarly from Crossword (large chain) to 'The Bookshop' in Jor Bagh (small independent), nobody wants this. Why? Surely that must speak for something? The only ones it will benefit are the remainder stalls you see (of which there must be about 25-30 all over the country). But over time every bookshop will be forced to keep this kind of stocking eroding current shelf space (they will have no choice). This is not market expansion.</p>
<h2>Pricing drop</h2>
<p>The other thing being ignored is that it's not just short term spoiler pricing. When one thinks in purely theoretical terms and says "open up, prices will drop", one is also not factoring in that the composition of what is stocked will changed. It's no longer <em>status quo</em> at reduced prices. That's the key to a mature market, that what the market needs is available-from bestsellers to literary works to philosophical works-balancing commercial and cultural needs and at prices the market can afford. So sure we can sit back and say we don't care if the history and philosophy shelves are eroded, if local publishing shrinks, let market forces prevail and let there be just foreign mass market novels and old editions (which will flow in by the thousand). But I'd like to hear the government say that.</p>
<h2>Not just about copyrighted books but about all copyrighted materials</h2>
<p>Yes, and we're not commenting about the others (other materials, i.e.) because we do not know enough. But we cannot have one size fits all if there are legitimate grounds to think about otherwise. Why is there a redressal of authors' needs in the music and film industry and a total disregard of books? Why were there panels created to discuss and thresh the whole thing through for films, and no detailed consultation at all for the books industry?</p>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/parallel-importation-rebuttal'>http://editors.cis-india.org/a2k/blogs/parallel-importation-rebuttal</a>
</p>
No publisherpraneshConsumer RightsCopyrightAccess to Knowledge2011-08-04T04:47:12ZBlog EntryIndian Law and "Parallel Exports"
http://editors.cis-india.org/a2k/blogs/indian-law-and-parallel-exports
<b>Recently, a lawyer for the publishing industry made the claim that allowing for parallel importation would legally allow for the exports of low-priced edition. Here we present a legal rebuttal of that claim.</b>
<p>Recently, on publisher/editor/writer Divya Dubey's blog, Saikrishna Rajagopal, a highly respected copyright lawyer and founding partner of Saikrishna & Associates, <a class="external-link" href="http://dearddsez.blogspot.com/2011/01/thomas-abrahams-rebuttal-to-why.html">claimed that</a> we had misconstrued the law with regard to export of books from India, and that allowing for parallel importation would harm that.</p>
<p>Mr Rajagopal writes:</p>
<blockquote>
<p>The fundamental legal infirmity that I find in Mr. Prakash’s argument are twofold:<br />1. That current Indian Law allows export of low priced editions;<br />2. That the proposed proviso would not include within its scope 'exports'.</p>
<p>1. As regards the argument that current Indian Law allows export of low priced editions, the two John Wiley cases of the Delhi High Court of May 2010, make it abundantly clear that current Indian Copyright Law precludes export of low priced editions. Pertinently, an appeal was preferred in one of the Wiley cases and was dismissed. These judgments are therefore final now and therefore authoritatively, interpret Indian Copyright Law as it stands today.</p>
</blockquote>
<p>I was wrong regarding the question of export of low-priced editions. There are are two Delhi High Court judgments which came out in May 2010 on export of books, holding that export of Low-Priced Editions meant for India to countries outside is unlawful (<em>John Wiley & Sons Inc. & Ors v. Prabhat Chander Kumar Jain & Ors</em> and <em>John Wiley & Sons Inc. & Ors v. International Book Store & Anr</em>). However, in the first judgment Justice Manmohan Singh clearly held that it would be unlawful to export without permission of the rights owner regardless of whether we followed the doctrine of national exhaustion (disallowed parallel importation) or the doctrine of international exhaustion (allowed parallel importation), and the "the question of exhaustion of rights of owner in copyright does not arise at all".[1] Thus Mr. Rajagopals's fears are, thankfully, unfounded.</p>
<p>Mr. Rajagopal continues:</p>
<blockquote>2. As regards Pranesh’s argument that the proposed amendment does not cover ‘exports’, this argument is completely specious. In order to determine at what stage a copyright owner loses its right to control further sale and distribution of a copyrighted product, the statute itself needs to be looked into to determine what standard of exhaustion of rights has been contemplated. If the proposed proviso becomes law, it would be a clear indicator to a Court that Indian Copyright Law follows international exhaustion, namely, that once a product is legitimately sold anywhere in the world market, the copyright owner loses/exhausts the right to control further distribution and sale, including export and import. It is because the copyright owner exhausts rights globally that the proposed amendment is allowing for genuine copies of books sold in the international market, to be legally imported into India. This being the case, there is almost unanimity amongst IP Lawyers that export of low priced editions would also be considered legal, in view of the proposed amendment. This is not just our Indian view, but also the view of other international IP experts who have had an opportunity to look at the implications of this proviso.<br /></blockquote>
<p>The copyright owner, under a proper appreciation of the Indian law,
never has the right to control "further sale and distribution" (as per s.14(a)(ii) of the Copyright Act), contrary to Mr. Rajagopal's assertion. Once a
copy is in circulation (e.g., is sold), the copyright owner no longer has the exclusive
right to put that copy into circulation, nor to control its further sale /
distribution in any manner. This is the limitation on the owner's right that allows libraries exist. This is how second-hand book shops exist. If this limitation of the copyright owner's right did not exist, libraries and second-hand book shops would need to take permissions from the owner for each copy of each book that they lend or sell.</p>
<p>Imports and exports are two distinct things. India's following of the principle of "international exhaustion" means that the right to first sale is exhausted <em>in India</em>, when the work is legally published anywhere <em>internationally</em> (i.e., regardless of where that copyrighted work is legally published). The principle of international exhaustion doesn't not exhaust the right of first sale <em>internationally</em>—the word "international" is used to indicate where the <em>publication</em> has to take place for exhaustion to occur, and not where the <em>exhaustion</em> takes place. After all, Indian law on a matter cannot determine whether a book can or cannot be sold anywhere else in the world (which is precisely what it would do if it is to hold that rights are exhausted internationally by virtue of a book being printed in India).</p>
<p>Having done research on this point for the past week, I have not been able to come up with any legal articles or cases to directly oppose Mr. Rajagopal's claim that the legality of book exports from a country can depend on whether it follows national or international exhaustion. It is such a novel claim that no one has made it so far, and so no one has thought to oppose it. I know of no other IP lawyers in India or internationally who agree with
Mr. Rajagopal's claim that allowing for parallel importation in India will have
an impact on the exports of low-priced editions from India.</p>
<blockquote>
<p>Most pertinently, when the Wiley judgments which related to export of low priced editions, were being pronounced in Court, the Hon’ble Judge casually remarked that the law laid down in cases may soon become redundant if the proposed legislation comes into force.</p>
</blockquote>
<p>As noted above, the judge specifically stated in the written judgment itself that as per the court's reasoning, the question of whether the export of low-priced editions is legal is not related to the question of exhaustion of rights of the owner: "<em>. . . as the express provision for international
exhaustion is absent in our Indian law, it would be appropriate to
confine the applicability of the same to regional exhaustion. Be that as
it may, in the present case,</em> <em>the circumstances do not even otherwise
warrant this discussion </em>. . . <em>the question of exhaustion of
rights of owner in the copyright does not arise at all</em>". </p>
<p>To get a little bit more technical, Justice Singh rules that there is a difference between first sale (exhaustion) vis-a-vis the owner and first sale vis-a-vis the licensee. He states that only rights of the licensee have been exhausted, and that the rights of the owner being exhausted do not even arise. But he is quite clear that this difference would apply regardless of whether we follow international exhaustion or national exhaustion.</p>
<strong>Update (2011-02-15): </strong>For the tabularly inclined, here's a summary of what it means for a country to follow "national exhaustion" or "international exhaustion":
<div align="center"> </div>
<table class="plain">
<tbody>
<tr>
<td align="center"><br /></td>
<td align="center">What "Exhaustion" Means<br /></td>
<td align="center"><br /></td>
</tr>
<tr>
<th align="center">Where copyrighted work is first circulated<br /></th>
<th align="center">Where right of circulation is exhausted <br /></th>
<th align="center">What this is termed<br /></th>
</tr>
</tbody>
<tbody>
<tr>
<td align="center">In any country<br /></td>
<td align="center">In all countries<br /></td>
<td align="center">[- Not possible.<br /><br />- Law in one country<br />can't dictate law in another.<br /><br />- Exhaustion of right of circulation<br />
"in all countries" can only be <br />
declared so through an <br />
international treaty<br />
(e.g., the way TRIPS makes a book<br />copyrighted in all countries if <br />it is copyrighted in any country)<br /><br />- Art. 6 of TRIPS doesn't allow for this interpretation.]<br /></td>
</tr>
<tr>
<td align="center"><strong> In any country<br /></strong></td>
<td align="center"><strong>Domestic territory<br />
</strong></td>
<td align="center"><strong>International exhaustion<br />
</strong></td>
</tr>
<tr>
<td align="center"> Domestic territory<br /></td>
<td align="center">In all countries<br /></td>
<td align="center">[- Not possible.<br />
<br />- Law in one country <br />can't affect law in another.<br /><br />- Exhaustion of right of circulation<br />
"in all countries" can only be <br />declared so through an <br />international treaty<br />(e.g., the way TRIPS makes a book<br />
copyrighted in all countries if <br />it is copyrighted in any country)<br /><br />- Art. 6 of TRIPS doesn't allow for this interpretation.]<br /></td>
</tr>
<tr>
<td align="center"><strong> Domestic territory<br />
</strong></td>
<td align="center"><strong>Domestic territory<br />
</strong></td>
<td align="center"><strong>National exhaustion<br />
</strong></td>
</tr>
</tbody>
</table>
<p> </p>
<p>Thus it is seen that the "national" or "international" exhaustion only determines the question of where the book has to be first circulated for exhaustion to happen. It can never change <em>where</em> the right of first circulation is exhausted (which in either case can only happen at a territorial level). </p>
<p>The implication of the right of circulation being exhausted world-wide is that no country can by law prevent parallel importation. The TRIPS Agreement, via Article 6, decided to give each country the right to choose to allow or disallow parallel importation. This was despite a great effort by developing countries to get international exhaustion codified as the worldwide norm.</p>
<p>To make this even more clear, I propose the following thought experiment.<br /><br /><strong>X</strong> - national of <strong>New Zealand</strong>, which follows international exhaustion.<br /><strong>Country 1</strong> - a country that follows national exhaustion / doesn't allow parallel imports<br /><strong>Country 2</strong> - a country that follows national exhaustion / doesn't allow parallel imports<br /><strong>Country 3</strong> - a country that follows international exhaustion / allows for parallel imports<br /><br /></p>
<ul><li>Example 1: If <strong>X</strong> buys a book from <strong>Country 1</strong> and sells that book in <strong>Country 2</strong>, he is in violation of <strong>Country 2</strong>'s laws, regardless of the laws in <strong>New Zealand</strong> and <strong>Country 1</strong>.</li><li>Example 2: If <strong>X</strong> buys a book from <strong>Country 1</strong> and sells that book in <strong>Country 3</strong>, he is <em>not</em> in violation of the law (either in <strong>New Zealand</strong> or in <strong>Country 3</strong>).</li><li>Example 3: If <strong>X</strong> buys a book in <strong>New Zealand</strong> and sells that book in <strong>Country 2</strong>, he is in violation of <strong>Country 2</strong>'s laws, regardless of the laws in <strong>New Zealand</strong>.</li><li>Example 4: If <strong>X</strong> buys a book in <strong>New Zealand</strong> and sells that book in <strong>Country 3</strong>, he is <em>not</em> in violation of the law (either in <strong>New Zealand</strong> or in <strong>Country 3</strong>).</li></ul>
<p><br />If one takes "international exhaustion" to mean that the right is exhausted in <em>every country</em>, then <strong>Example 3</strong>
would be wrong. But that would be absurd, since we know from experience
that it is correct: Buying a book in New Zealand and selling it in the
United Kingdom (which follows national/regional exhaustion) is unlawful. So obviously "international exhaustion" doesn't mean that.</p>
<p>Similarly, if one takes "national exhaustion" to mean that after sale a book cannot be exported, that
would imply that <strong>Example 2</strong> is faulty. But we know from
experience that this is not so: Buying a book in the United Kingdom and selling it in New Zealand is lawful. So obviously "national exhaustion" doesn't mean that.</p>
<p>Thus, it is only the act of import that is ever affected by the question of national vs. international exhaustion, and never exports.</p>
<h3>Notes</h3>
<p> [1]: Justice Manmohan Singh writes: "As per my opinion, as the express provision for international
exhaustion is absent in our Indian law, it would be appropriate to
confine the applicability of the same to regional exhaustion. Be that as
it may, in the present case, the circumstances do not even otherwise
warrant this discussion as the rights if at all are exhausted are to the
extent to which they are available with the licensees as the books are
purchased from the exclusive licensees who have limited rights and not
from the owner. In these circumstances, the question of exhaustion of
rights of owner in the copyright does not arise at all." (Para 104).</p>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/indian-law-and-parallel-exports'>http://editors.cis-india.org/a2k/blogs/indian-law-and-parallel-exports</a>
</p>
No publisherpraneshConsumer RightsCopyrightAccess to Knowledge2011-08-04T04:47:07ZBlog EntryAnalysis of the Copyright (Amendment) Bill, 2010
http://editors.cis-india.org/a2k/blogs/copyright-bill-analysis
<b>CIS analyses the Copyright (Amendment) Bill, 2010, from a public interest perspective to sift the good from the bad, and importantly to point out what crucial amendments should be considered but have not been so far.</b>
<p>
The full submission that CIS and 21 other civil society organizations made to the Rajya Sabha Standing Committee on HRD (which is studying the Bill) is <a title="Copyright Bill Analysis" class="internal-link" href="http://www.cis-india.org/advocacy/ipr/upload/copyright-bill-submission">available here</a>. Given below is the summary of our submissions:</p>
<h2 class="western">Existing Copyright Act</h2>
<p align="JUSTIFY">The Indian Copyright
Act, 1957 has been designed from the perspective of a developing
country. It has always attempted a balance between various kinds of
interests. It has always sought to ensure that rights of authors of
creative works is carefully promoted alongside the public interest
served by wide availability and usability of that material. For
instance, our Copyright Act has provisions for: </p>
<ul><li>
<p align="JUSTIFY">compulsory and
statutory licensing: recognizing its importance in making works
available, especially making them available at an affordable rate.</p>
</li><li>
<p align="JUSTIFY">cover versions:
recognizing that more players lead to a more vibrant music industry.</p>
</li><li>
<p align="JUSTIFY">widely-worded
right of fair dealing for private use: recognizing that individual
use and large-scale commercial misuse are different.</p>
</li></ul>
<p align="JUSTIFY">These provisions of
our Act <a class="external-link" href="http://a2knetwork.org/watchlist/report/india">have been lauded</a>,<sup><a class="sdfootnoteanc" name="sdfootnote1anc" href="#sdfootnote1sym"></a></sup>
and India has been rated as <a class="external-link" href="http://a2knetwork.org/summary-report-2010">the most balanced copyright system in a
global survey</a><sup><a class="sdfootnoteanc" name="sdfootnote2anc" href="#sdfootnote2sym"></a></sup>
conducted of over 34 countries by <a class="external-link" href="http://www.consumersinternational.org/">Consumers International</a><sup><a class="sdfootnoteanc" name="sdfootnote3anc" href="#sdfootnote3sym"></a></sup>.</p>
<p align="JUSTIFY">The Indian Parliament
has always sought to be responsive to changing technologies by paying
heed to both the democratisation of access as well as the securing of
the interests of copyright holders. This approach needs to be lauded,
and importantly, needs to be maintained.</p>
<p align="JUSTIFY"><br /></p>
<h2 class="western">Proposed Amendments</h2>
<h3 class="western">Some positive amendments</h3>
<ul><li>
<p align="JUSTIFY"><strong>Fair
Dealings, Parallel Importation, Non-commercial Rental</strong>: All works
(including sound recordings and cinematograph films) are now covered
the fair dealings clause (except computer programmes), and a few
other exceptions; parallel importation is now clearly allowed; and
non-commercial rental has become a limitation in some cases.</p>
</li><li>
<p align="JUSTIFY"><strong>Persons with
disabilities</strong>: There is finally an attempt at addressing the
concerns of persons with disabilities. But the provisions are
completely useless the way they are currently worded.</p>
</li><li>
<p align="JUSTIFY"><strong>Public
Libraries</strong>: They can now make electronic copies of works they
own, and some other beneficial changes relating to public libraries.</p>
</li><li>
<p align="JUSTIFY"><strong>Education</strong>:
Some exceptions related to education have been broadened (scope of
works, & scope of use).</p>
</li><li>
<p align="JUSTIFY"><strong>Statutory and
compulsory licensing</strong>: Some new statutory licensing provisions
(including for radio broadcasting) and some streamlining of existing
compulsory licensing provisions.</p>
</li><li>
<p align="JUSTIFY"><strong>Copyright
societies</strong>: These are now responsible to authors and not owners
of works.</p>
</li><li>
<p align="JUSTIFY"><strong>Open
licences</strong>: Free and Open Source Software and Open Content
licensing is now simpler.</p>
</li><li>
<p align="JUSTIFY"><strong>Partial
exemption of online intermediaries</strong>:
Transient and incidental storage of copyrighted works has
been excepted, mostly for the benefit of online intermediaries.</p>
</li><li>
<p align="JUSTIFY"><strong>Performer’s
rights</strong>: The general, and confusing, exclusive right that
performers had to communicate their performance to the public has
been removed, and instead only the exclusive right to communicate
sound/video recordings remains.</p>
</li><li>
<p align="JUSTIFY"><strong>Enforcement</strong>:
Provisions on border measures have been made better, and less prone
to abuse and prevention of legitimate trade.</p>
</li></ul>
<h3 class="western"><br /></h3>
<h3 class="western">Some negative amendments</h3>
<ul><li>
<p align="JUSTIFY"><strong>WCT and WPPT
compliance</strong>: India has not signed either of these two treaties,
which impose TRIPS-plus copyright protection, but without any
corresponding increase in fair dealing / fair use rights.</p>
</li><li>
<p align="JUSTIFY"><strong>Increase in
duration of copyright</strong>: This will significantly reduce the public
domain, which India has been arguing for internationally.</p>
</li><li>
<p align="JUSTIFY"><strong>Technological
Protection Measures</strong>: TPMs, which have been shown to be
anti-consumer in all countries in which they have been introduced,
are sought to be brought into Indian law.</p>
</li><li>
<p align="JUSTIFY"><strong>Version
recordings</strong>: The amendments make cover version much more
difficult to produce.</p>
</li><li>
<p align="JUSTIFY"><strong>Moral rights</strong>:
Changes have been made to author’s moral rights (and performer’s
moral rights have been introduced) but these have been made without
requisite safeguards.</p>
</li></ul>
<h3 class="western"><br /></h3>
<h3 class="western">Missed opportunities</h3>
<ul><li>
<p align="JUSTIFY"><strong>Government-funded
works</strong>: Taxpayers are still not free to use works that were paid
for by them. This goes against the direction that India has elected
to march towards with the Right to Information Act.</p>
</li><li>
<p align="JUSTIFY"><strong>Copyright
terms</strong>: The duration of all copyrights are above the minimum
required by our international obligations, thus decreasing the
public domain which is crucial for all scientific and cultural
progress.</p>
</li><li>
<p align="JUSTIFY"><strong>Criminal
provisions</strong>: Our law still criminalises individual,
non-commercial copyright infringement.</p>
</li><li>
<p align="JUSTIFY"><strong>Libraries and
archives</strong>: The exceptions for ‘public libraries’ are still
too narrow in what they perceive as ‘public libraries’.</p>
</li><li>
<p align="JUSTIFY"><strong>Educational
exceptions</strong>: The exceptions for education still do not fully
embrace distance and digital education.</p>
</li><li>
<p align="JUSTIFY"><strong>Communication
to the public</strong>: No clear definition is given of what constitute a
‘public’, and no distinction is drawn between commercial and
non-commercial ‘public’ communication.</p>
</li><li>
<p align="JUSTIFY"><strong>Internet
intermediaries</strong>: More protections are required to be granted to
Internet intermediaries to ensure that non-market based
peer-production projects such as Wikipedia, and other forms of
social media and grassroots innovation are not stifled.</p>
</li><li>
<p align="JUSTIFY"><strong>Fair dealing
and fair use</strong>: We would benefit greatly if, apart from the
specific exceptions provided for in the Act, more general guidelines
were also provided as to what do not constitute infringement. This
would not take away from the existing exceptions.</p>
</li></ul>
<p align="JUSTIFY"> </p>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/copyright-bill-analysis'>http://editors.cis-india.org/a2k/blogs/copyright-bill-analysis</a>
</p>
No publisherpraneshAccess to KnowledgeConsumer RightsCopyrightFair DealingsPublic AccountabilityIntellectual Property RightsRTIFeaturedBroadcastingPublicationsSubmissionsTechnological Protection Measures2011-09-21T06:01:54ZBlog EntryA Guide to Key IPR Provisions of the Proposed India-European Union Free Trade Agreement
http://editors.cis-india.org/a2k/blogs/a-guide-to-the-proposed-india-european-union-free-trade-agreement
<b>The Centre for Internet and Society presents a guide for policymakers and other stakeholders to the latest draft of the India-European Union Free Trade Agreement, which likely will be concluded by the end of the year and may hold serious ramifications for Indian businesses and consumers. </b>
<div class="visualClear">In its ongoing negotiation for a FTA with the EU, a process that began in 2007 and is expected to end sometime this year, India has won several signicant IP-related concessions. But there remain several IP issues critical to the maintenance of its developing economy, including its robust entrepreneurial environment, that India should contest further before ratifying the treaty. This guide covers the FTA's IP provisions that are within the scope of CIS' policy agenda and on which India has negotiated favorable language, as well as those provisions that it should re-negotiate or oppose.</div>
<div class="visualClear"> </div>
<div class="visualClear">Download the guide <a title="A Guide to the Proposed India-European Union FTA" class="internal-link" href="http://www.cis-india.org/a2k/publications/CIS%20Open%20Data%20Case%20Studies%20Proposal.pdf">here</a>, and please feel free to comment below.</div>
<div class="visualClear"> </div>
<div class="visualClear">You may also download a <a title="India-EU FTA TRIPS Comparison Chart" class="internal-link" href="http://www.cis-india.org/advocacy/ipr/upload/India-EU_FTA_Chart.odt">chart</a> comparing the language proposed by India and the EU respectively with that included in the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).</div>
<div class="visualClear"> </div>
<div class="visualClear">Following is a summary of CIS' findings:</div>
<div class="visualClear"> </div>
<div class="visualClear">
<div class="visualClear">
<ul><li>India has become a de facto leader of developing countries at the WTO, and an India-EU FTA seems likely to provide a model for FTAs between developed and developing states well into the future.</li><li>The EU has proposed articles on reproduction, communication, and broadcasting rights which could seriously undermine India's authority to regulate the use of works under copyright as currently provided for in the Berne Convention, as well as narrowing exceptions and limitations to rights under copyright.</li><li>The EU asserts that copyright includes "copyright in computer programs and in databases," without indicating whether such copyright exceeds that provided for in the Berne Convention. Moreover, by asserting that copyright "includes copyright in computer programs and in databases," the EU has left open the door for the extension of copyright to non-original databases.</li><li>India should explicitly obligate the EU to promote and encourage technology transfer -- an obligation compatible with and derived from TRIPS -- as well as propose a clear definition of technology transfer.</li><li>The EU has demanded India's accession to the WIPO Internet Treaties, the merits of which are currently under debate as India moves towards amending its Copyright Act, as well as several other international treaties that India either does not explicitly enforce or to which it is not a contracting party.</li><li>In general, the EU's provisions would extend terms of protection for material under copyright, within certain constraints, further endangering India's consumer-friendly copyright regime.</li><li>An agreement to establish arrangements between national organizations charged with collecting and distributing royalty payments may obligate such organizations in India collect royalty payments for EU rights holders on the same basis as they do for Indian rights holders, and vice versa in the EU, but more heavily burden India.</li><li>The EU has proposed a series of radical provisions on the enforcement of IPRs that are tailored almost exclusively to serve the interests of rights holders, at the expense of providing safety mechanisms for those accused of infringing or enabling infringers. </li><li>The EU has proposed, under cover of protecting intermediate service providers from liability for infringement by their users, to increase and/or place the burden on such providers of policing user activity.</li></ul>
</div>
</div>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/a-guide-to-the-proposed-india-european-union-free-trade-agreement'>http://editors.cis-india.org/a2k/blogs/a-guide-to-the-proposed-india-european-union-free-trade-agreement</a>
</p>
No publishergloverDevelopmentConsumer RightsCopyrightAccess to KnowledgeDiscussionEconomicsAnalysisTechnological Protection MeasuresIntermediary LiabilityinnovationIntellectual Property RightsPatentsPublications2011-08-30T13:06:03ZBlog EntryThe 2010 Special 301 Report Is More of the Same, Slightly Less Shrill
http://editors.cis-india.org/a2k/blogs/2010-special-301
<b>Pranesh Prakash examines the numerous flaws in the Special 301 from the Indian perspective, to come to the conclusion that the Indian government should openly refuse to acknowledge such a flawed report. He notes that the Consumers International survey, to which CIS contributed the India report, serves as an effective counter to the Special 301 report.</b>
<h1>Special 301 Report: Unbalanced Hypocrisy</h1>
<p>The United States Trade Representative has put yet another edition of the Special 301 report which details the copyright law and policy wrongdoings of the US's trading partners. Jeremy Malcolm of Consumers International notes that the report this year claims to be "well-balanced assessment of intellectual property protection and enforcement ... taking into account diverse factors", but:</p>
<blockquote>
<p>[I]n fact, the report largely continues to be very one-sided. As in previous editions, it lambasts developing countries for failing to meet unrealistically stringent standards of IP protection that exceed their obligations under international law.</p>
</blockquote>
<p>More the report changes, <a href="http://cis-india.org/advocacy/ipr/blog/consumers-international-ip-watch-list-2009">the more it stays the same</a>. <a href="http://www.michaelgeist.ca/content/view/4684/195/">Despite having wider consultations</a> than just the International Intellectual Property Alliance (IIPA, consisting of US-based IP-maximalist lobbyists like the Motion Picture Association of America, Recording Industry Association of America, National Music Publishers Association, Association of American Publishers, and Business Software Alliance) and the Pharmaceutical Research and Manufacturers of America (PhRMA, consisting of US-based pharma multinationals), things haven't really changed much in terms of the shoddiness of the Special 301 report.</p>
<h1>India and the 2010 Special 301 Report</h1>
<p>The Special 301 report for 2010 contains the following assessment of India:</p>
<blockquote>
<p>India will remain on the Priority Watch List in 2010. India continues to make gradual progress on efforts to improve its legislative, administrative, and enforcement infrastructure for IPR. India has made incremental improvements on enforcement, and its IP offices continued to pursue promising modernization efforts. Among other steps, the United States is encouraged by the Indian government’s consideration of possible trademark law amendments that would facilitate India’s accession to the Madrid Protocol. The United States encourages the continuation of efforts to reduce patent application backlogs and streamline patent opposition proceedings. Some industries report improved engagement and commitment from enforcement officials on key enforcement challenges such as optical disc and book piracy. However, concerns remain over India’s inadequate legal framework and ineffective enforcement. Piracy and counterfeiting, including the counterfeiting of medicines, remains widespread and India’s enforcement regime remains ineffective at addressing this problem. Amendments are needed to bring India’s copyright law in line with international standards, including by implementing the provisions of the WIPO Internet Treaties. Additionally, a law designed to address the unauthorized manufacture and distribution of optical discs remains in draft form and should be enacted in the near term. The United States continues to urge India to improve its IPR regime by providing stronger protection for patents. One concern in this regard is a provision in India’s Patent Law that prohibits patents on certain chemical forms absent a showing of increased efficacy. While the full import of this provision remains unclear, it appears to limit the patentability of potentially beneficial innovations, such as temperature-stable forms of a drug or new means of drug delivery. The United States also encourages India to provide protection against unfair commercial use, as well as unauthorized disclosure, of undisclosed test or other data generated to obtain marketing approval for pharmaceutical and agricultural chemical products. The United States encourages India to improve its criminal enforcement regime by providing for expeditious judicial disposition of IPR infringement cases as well as deterrent sentences, and to change the perception that IPR offenses are low priority crimes. The United States urges India to strengthen its IPR regime and will continue to work with India on these issues in the coming year. </p>
</blockquote>
<p>This short dismissal of the Indian IPR regime, and subsequent classification of India as a "Priority Watch List" country reveals the great many problems with the Special 301.</p>
<h2>On Copyrights</h2>
<ol>
<li>
<p>The report notes that there are "concerns over India's inadequate legal framework and ineffective enforcement". However, nowhere does it bother to point out precisely <em>how</em> India's legal framework is inadequate, and how this is negatively affecting authors and creators, consumers, or even the industry groups (MPAA, RIAA, BSA, etc.) that give input to the USTR via the IPAA. Nor does it acknowledge the well-publicised fact that the statistics put out by these bodies have time and again <a href="http://www.cis-india.org/a2k/blog/fallacies-lies-and-video-pirates">proven to be wrong</a>:</p>
</li>
<li>
<p>Apart from this bald allegation which has not backing, there is a bald statement about India needing to bring its copyright law "in line with international standards" including "the WIPO Internet Treaties". The WIPO Internet Treaties given that more than half the countries of the world are not signatories to either of the WIPO Internet Treaties (namely the WIPO Copyright Treaty and the WIPO Performance and Phonograms Treaty), calling them 'international standards' is suspect. That apart, both those treaties are TRIPS-plus treaties (requiring protections greater than the already-high standards of the TRIPS Agreement). India has not signed either of them. It should not be obligated to do so. Indeed, Ruth Okediji, a noted copyright scholar, <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1433848">states</a>:</p>
</li>
</ol>
<blockquote>
<p>Consistent with their predecessors, the WIPO Internet Treaties marginalize collaborative forms of creative engagement with which citizens in the global South have long identified and continue in the tradition of assuming that copyright’s most enduring cannons are culturally neutral. [...] The Treaties do not provide a meaningful basis for a harmonized approach to encourage new creative forms in much the same way the Berne Convention fell short of embracing diversity in patterns and modes of authorial expression.</p>
</blockquote>
<ol>
<li>
<p>Some of the of the 'problems' noted in the report are actually seen as being beneficial by many researchers and scholars such as Lawrence Liang, Achal Prabhala, Perihan Abou Zeid <a href="https://sites.google.com/site/iipenforcement/bibliography">and others</a>, who argue that <a href="http://www.altlawforum.org/intellectual-property/publications/articles-on-the-social-life-of-media-piracy/reconsidering-the-pirate-nation">lax enforcement has enabled access to knowledge and promotion of innovation</a>. In a panel on 'Access to Knowledge' at the Internet Governance Forum, <a href="http://a2knetwork.org/access-knowledge-internet-governance-forum">Lea Shaver, Jeremy Malcolm and others</a> who have been involved in that Access to Knowledge movement noted that lack of strict enforcement played a positive role in many developing countries. However, they also noted, with a fair bit of trepidation, that this was sought to be changed at the international level through treaties such as the Anti-Counterfeiting Treaty Agreement (ACTA).</p>
</li>
<li>
<p>The scope of an optical disc law are quite different from copyright law. The report condemns "unauthorized manufacture and distribution of optical discs", however it does not make it clear that what it is talking about is not just unlicensed copying of films (which is already prohibited under the Copyright Act) but the manufacture and distribution of blank CDs and DVDs as well. The need for such a law is assumed, but never demonstrated. It is onerous for CD and DVD manufacturers (such as the Indian company Moserbaer), and is an overbearing means of attacking piracy.</p>
</li>
<li>
<p>The report calls for "improve[ment] [of India's] criminal enforcement regime" and for "deterrent" sentences and expeditious judicial disposition of IPR infringement cases. While we agree with the last suggestion, the first two are most unacceptable. Increased criminal enforcement of a what is essentially a private monopoly right is undesirable. Copyright infringment on non-commercial scales should not be criminal offences at all. What would deter people from infringing copyright laws are not "deterrent sentences" but more convenient and affordable access to the copyright work being infringed.</p>
</li>
</ol>
<h2>On Patents</h2>
<p>Thankfully, this year the Special 301 report does not criticise the Indian Patent Act for providing for post-grant opposition to patent filings, as it has in previous years. However, it still criticises section 3(d) of the Patent Act which ensures that 'evergreening' of drug patents is not allowed by requiring for new forms of known substances to be patented only if "the enhancement of the known efficacy of [the known] substance" is shown. Thus, the US wishes India to change its domestic law to enable large pharma companies to patent new forms of known substances that aren't even better ("enhancement of the known efficacy"). For instance, "new means of drug delivery" will not, contrary to the assertions of the Special 301 report and the worries of PhRMA, be deemed unpatentable.</p>
<p>The United States has been going through much turmoil over its patent system. Reform of the patent system is currently underway in the US through administrative means, judicial means, as well as legislative means. One of the main reasons for this crumbling of the patent system has been the low bar for patentability (most notably the 'obviousness' test) in the United States and the subsequent over-patenting. An <a href="http://supreme.justia.com/us/447/303/case.html">American judgment</a> even noted that "anything under the sun that is made by man" is patentable subject matter. It is well-nigh impossible to take American concerns regarding our high patent standards seriously, given this context.</p>
<h2>Miscellanea</h2>
<p>The harms of counterfeit medicine, as <a href="http://www.cis-india.org/a2k/blog/fallacies-lies-and-video-pirates">we have noted earlier</a>, are separate issues that are best dealt under health safety regulations and consumer laws, rather than trademark law.</p>
<p>Data exclusivity has been noted to be harmful to the progress of generics, and seeks to extend proprietary rights over government-mandated test data. It is [clear from the TRIPS Agreement][de-trips] that data exclusivity is not mandatory. There are clear rationale against it, and the Indian pharmaceutical industry [is dead-set against it][de-india]. Still, the United States Trade Representative persists in acting as a corporate shill, calling on countries such as India to implement such detrimental laws.</p>
<h2>Conclusion</h2>
<p>Michael Geist, professor at University of Ottowa <a href="http://www.michaelgeist.ca/content/view/4997/125">astutely notes</a>:</p>
<blockquote>
<p>Looking beyond just Canada, the list [of countries condemned by the Special 301 report] is so large, that it is rendered meaningless. According to the report, approximately 4.3 billion people live in countries without effective intellectual property protection. Since the report does not include any African countries outside of North Africa, the U.S. is effectively saying that only a small percentage of the world meet its standard for IP protection. Canada is not outlier, it's in good company with the fastest growing economies in the world (the BRIC countries are there) and European countries like Norway, Italy, and Spain.
In other words, the embarrassment is not Canadian law. Rather, the embarrassment falls on the U.S. for promoting this bullying exercise and on the Canadian copyright lobby groups who seemingly welcome the chance to criticize their own country. </p>
</blockquote>
<p>His comments apply equally well for India as well.</p>
<h1>IIPA's Recommendation for the Special 301 Report</h1>
<p>Thankfully, this year <a href="http://www.iipa.com/rbc/2010/2010SPEC301INDIA.pdf">IIPA's recommendations</a> have not been directly copied into the Special 301 report. (They couldn't be incorporated, as seen below.) For instance, the IIPA report notes:</p>
<blockquote>
<p>The industry is also concerned about moves by the government to consider mandating the use of open source software and software of only domestic origin. Though such policies have not yet been implemented, IIPA and BSA urge that this area be carefully monitored.</p>
</blockquote>
<p>Breaking that into two bit:</p>
<h2>Open Source</h2>
<p>Firstly, it is curious to see industry object to legal non-pirated software. Secondly, many of BSA's members (if not most) use open source software, and a great many of them also produce open source software. <a href="http://hp.sourceforge.net/">HP</a> and <a href="http://www-03.ibm.com/linux/ossstds/">IBM</a> have been huge supporters of open source software. Even <a href="http://www.microsoft.com/opensource/">Microsoft has an open source software division</a>. [Intel][intel], <a href="http://www.sap.com/usa/about/newsroom/press.epx?pressid=11410">SAP</a>, <a href="http://www.cisco.com/web/about/doing_business/open_source/index.html">Cisco</a>, <a href="http://linux.dell.com/projects.shtml">Dell</a>, <a href="http://www.sybase.com/developer/opensource">Sybase</a>, <a href="http://www.entrust.com/news/index.php?s=43&item=702">Entrust</a>, <a href="http://about.intuit.com/about_intuit/press_room/press_release/articles/2009/IntuitPartnerPlatformAddsOpenSourceCommunity.html">Intuit</a>, <a href="http://www.synopsys.com/community/interoperability/pages/libertylibmodel.aspx">Synopsys</a>, <a href="http://www.apple.com/opensource/">Apple</a>, <a href="http://www.theregister.co.uk/2005/04/22/jbuilder_eclipse/">Borland</a>, <a href="http://w2.cadence.com/webforms/squeak/">Cadence</a>, <a href="http://usa.autodesk.com/adsk/servlet/item?siteID=123112&id=6153839">Autodesk</a>, and <a href="http://news.cnet.com/8301-13505_3-9967593-16.html">Siemens</a> are all members of BSA which support open source software / produce at least some open source software. And <em>all</em> BSA members rely on open source software (as part of their core products, their web-server, their content management system, etc.) to a lesser or greater extent. BSA's left hand doesn't seem to know what its right hand -- its members -- are doing. Indeed, the IIPA does not seem to realise that the United States' government itself uses [open source software], and has been urged to <a href="http://news.bbc.co.uk/2/hi/7841486.stm">look at FOSS very seriously</a> and is doing so, especially under CIO Vivek Kundra. And that may well be the reason why the USTR could not include this cautionary message in the Special 301 report.</p>
<h2>Domestic Software</h2>
<p>As <a href="http://arstechnica.com/tech-policy/news/2010/04/indias-copyright-proposals-are-un-american-and-thats-bad.ars">this insightful article by Nate Anderson in Ars Technica</a> notes:</p>
<blockquote>
<p>Open source is bad enough, but a "buy Indian" law? That would be <a href="http://www.canadainternational.gc.ca/sell2usgov-vendreaugouvusa/procurement-marches/buyamerica.aspx?lang=eng">an outrage</a> and surely something the US government would not itself engage in <a href="http://www.canadainternational.gc.ca/sell2usgov-vendreaugouvusa/procurement-marches/ARRA.aspx?lang=eng">as recently as last year</a>. Err, right?</p>
</blockquote>
<p>Furthermore, the IIPA submission do not provide any reference for their claim that "domestic origin" software is being thought of being made a mandatory requirement in governmental software procurement.<br />
</p>
<h2>WCT, WPPT, Camcording, and Statutory Damages</h2>
<p>The IIPA submission also wish that India would:</p>
<ol>
<li>Adopt a system of statutory damages in civil cases; allow compensation to be awarded in criminal cases;</li>
<li>Adopt an optical disc law;</li>
<li>Enact Copyright Law amendments consistent with the WCT and WPPT;</li>
<li>Adopt an anti-camcording criminal provision.</li>
</ol>
<p>Quick counters:</p>
<ol>
<li>Statutory damages (that is, an amount based on statute rather than actual loss) would result in ridiculousness such as the $1.92 million damages that the jury (based on the statutory damages) slapped on Jammie Thomas. The judge in that case <a href="http://arstechnica.com/tech-policy/news/2010/01/judge-slashes-monstrous-jammie-thomas-p2p-award-by-35x.ars">called the damage award</a> "monstrous and shocking" and said that veered into "the realm of gross injustice."</li>
<li>The reasons against an optical disc law are given above. Quick recap: it is a) unnecessary and b) harmful.</li>
<li>India has not signed the WCT and the WPPT. Indian law satisfies all our international obligations. Thus enacting amendments consistent with the WCT and the WPPT is not required.</li>
<li>Camcording of a film is in any case a violation of the Copyright Act, 1957, and one would be hard-pressed to find a single theatre that allows for / does not prohibit camcorders. Given this, the reason for an additional law is, quite frankly, puzzling. At any rate, IIPA in its submission does not go into such nuances.</li>
</ol>
<h2>Further conclusions</h2>
<p><a href="http://spicyipindia.blogspot.com/2010/05/us-special-301-report-and-not-so.html">Shamnad Basheer</a>, an IP professor at NUJS, offer the following as a response:</p>
<blockquote>
<p>"Dear USA,</p>
<p>India encourages you to mind your own business. We respect your sovereignty to frame IP laws according to your national priorities and suggest that you show us the same courtesy. If your grouse is that we haven't complied with TRIPS, please feel free to take us to the WTO dispute panel. Our guess is that panel members familiar with the English language will ultimately inform you that section 3(d) is perfectly compatible with TRIPS. And that Article 39.3 does not mandate pharmaceutical data exclusivity, as you suggest!
More importantly, at that point, we might even think of hauling you up before the very same body for rampant violations, including your refusal to grant TRIPS mandated copyright protection to our record companies, despite a WTO ruling (Irish music case) against you.</p>
<p>Yours sincerely,</p>
<p>India."</p>
</blockquote>
<p>Basheer's suggestion seems to be in line with that Michael Geist who believes that other countries should join Canada and Israel in openly refusing to acknowledge the validity of the Special 301 Reports because they lack ['reliable and objective analysis'][geist-reliable]. And that thought serves as a good coda.</p>
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/2010-special-301'>http://editors.cis-india.org/a2k/blogs/2010-special-301</a>
</p>
No publisherpraneshDevelopmentConsumer RightsAccess to KnowledgeCopyrightPiracyAccess to MedicineIntellectual Property RightsData ProtectionFLOSSTechnological Protection MeasuresPublications2011-10-03T05:37:27ZBlog EntryOpen Standards Workshop at IGF '09
http://editors.cis-india.org/openness/blog-old/dcos-workshop-09
<b>The Centre for Internet and Society co-organized a workshop on 'Open Standards: A Rights-Based Framework' at the fourth Internet Governance Forum, at Sharm el-Sheikh. The panel was chaired by Aslam Raffee of Sun Microsystems and the panellists were Sir Tim Berners-Lee of W3C, Renu Budhiraja of India's DIT, Sunil Abraham of CIS, Steve Mutkoski of Microsoft, and Rishab Ghosh of UNU-MERIT.</b>
<p>Sir Tim Berners-Lee started the session with an address on various rights. Rights, he noted can range from being things like the rights to air and water to the right not to have the data carrier you use determine which movie you watch. Then, there are tensions between rights: the right to anonymity can clash with the right to know who posted information on making a bomb. Berners-Lee stated that for 2009, he has chosen to pursue one particular right: the right to government-held data. This data can include everything from where schools are to emergency services such as locations of hospitals. Today, we are talking about standards. </p>
<p>The World Wide Web Consortium (W3C) is a fifteen-year old body in which all kinds of people come together for purposes of setting standards around the World Wide Web. Thus, everything from HTML, which is used to write Web pages to WCAG, which are guidelines to enable people with disabilities access websites through assistive technologies. W3C conducts its discussions openly: anybody who has a good idea has a right to participate in its discussions -- it does not matter who one works for, who one represents -- what does matter are the ideas one brings to the table. The kinds of standards that W3C deals with are of interest to an immensely wide-ranging group of people. Even ten-year olds have actually expressed their opinions about standards like HTML. All this openness of participation must be guaranteed while ensuring that the processes move forward.</p>
<p>Next spoke Renu Budhiraja of the Department of Information and Technology, which is a part of the Indian government. She started off by hoping that this workshop would be not only a platform to share knowledge, but also to reach consensus on a few matters. Next, she laid out why open standards are extremely important for the Indian government. What citizens want in their interactions with the government are ease of interaction and efficiency. For them it is immaterial whether a certain service is provided by Department A or Department B. Thus we need to move towards a single-window government service for citizens, enabling them to interact easily with the government's various departments. While such an initiative must be centralized for it to be effective, it is crucial that its implementation be decentralized and suited to each district or localities' needs.</p>
<p>There is, understandably, a huge institutional mechanism behind ensuring that these systems are based on open standards. We have expert committees, consisting of academics and knowledgeable bureaucrats, and working groups, which include industry groups. Through these, we have evolved a National Policy on Open Standards, which is currently in a draft stage, but shall be notified soon. This policy outlines the principles based on which particular standards required for governmental functioning are to be chosen or evolved. This document will ensure long-term accessibility to public documents and information, and seamless interoperability of various governmental services and departments. It will also reduce the risk of vendor lock-in and reduce costs, and thus ensure long-term, sustainable, scalable and cost-effective solutions.</p>
<p>Ms. Budhiraja noted that there are a few aspects of the policy that bear discussion in a forum such as the IGF. First is the issue of whether royalty-free is the only choice for innovation. All other things equal, between royalty-free and reasonable and non-discriminatory (RAND) standards, of course royalty-free is to be preferred. But what if a superior technology (JPEG200 vs. JPEG) is RAND? What should the government's position be in such a case? Further, what should the government's position be when in a particular domain a RAND standard is the only option? </p>
<p>Next is the issue of single vs. multiple open standards. When interoperability is what we are aiming at, can multiple standards be recommended as some in the industry are asking us to do? And then is the issue of market maturity. The government sometimes finds itself in a situation where a standard is available, but well-developed products around that standard aren't and there aren't sufficient vendors using that standard. All these issues are of great practical importance when a government works on a policy document on standards.</p>
<p>Next up was Sunil Abraham, Executive Director of the Centre for Internet and Society. His presentation was on open standards as citizens' and consumers' rights. He started off by citing the example of the Smart Card Operating System for Transport Application (SCOSTA) standard, and the implications that the SCOSTA story has on large-scale projects such as the National Unique ID project currently under way in India. SCOSTA, an open standard, was being written off as unimplementable by all the MNC smart card vendors who wished to push RAND standards. IIT Kanpur helped the government develop a working implementation. Within twenty days, the card manufacturers submitted modified cards for compliance testing by NIC. Because of SCOSTA being an open standard, local companies also joined the tender. The cost went down from Rs. 600 per card to Rs. 30 per card. This shows the benefits of open standards as a means of curbing oligopolistic pricing, and working for the benefit of consumers.</p>
<p>From a rights-based perspective, access to the state machinery is a primary right. Citizens should not be required to pirate or purchase software to interact with the state. If e-governance solutions are based on proprietary standards, not all citizens would be equal. The South African example or requiring a particular browser to access the election commission's website shows that in a rather drastic fashion. When intellectual property interferes with governmental needs, governments have not been shy of issuing compulsory licences. This was seen when during the Great War the United States government pooled various flight-related patents and compulsorily licensed them, as well as what we are currently seeing with many Aids-related drugs being compulsorily licensed in developing countries. Thus, there are precedents for such licensing, and governments should explore them in the realm of e-governance. Many countries now have statutes that guarantee the right to government-held information. Government Interoperability Frameworks should take these into account, and mandate all government-to-citizen (G2C) information be transacted via open standards. This must be backed up by a strong accessibility policy to ensure that the governments don't discriminate between their citizens.</p>
<p>Proprietary standards act like pseudo-intellectual property rights, just as DRMs do. They add a layer on top of rights such as copyright, and can prevent the exercise of fair use and fair dealing rights because of an inability to legally negotiate the standards in which the content is encoded in a cost-free manner. In guaranteeing this balance between copyrights and fair dealing rights, free software and alternative IP models play a crucial role. Because of software patents being recognized in a few countries, development of free software which allows citizens to exercise their fair use rights is harmed in all countries.</p>
<p>Steve Mutkoski of Microsoft spoke next and placed the standards debate in a large context. He noted that standards are a technicality that are only a small part of the large issue which is interoperability in e-governance and delivery to citizens. The real challenges are organizational and semantic interoperability. Frequently interoperability is not harmed by technical issues, but by legal and organizational issues. Governments used to work on paper; during the shift to electronic data, they didn't engage in any organizational changes. Thus they continue to function with electronic data the same way that they did with paper-based data. Governments often lack strong privacy policies regarding the data that each of their departments holds. This harms governmental functioning. Additionally, legacy hardware and software have to be catered to by the standards we are talking about: sometimes an open standard just will not work. </p>
<p>Standards don't guarantee interoperability, and there is significant work done on this by noted academics ("Why Standards Are Not Enough To Guarantee End-to-End Interoperability" Lewis et al.; "Difficulties Implementing Standards" Egyedi & Dahanayake; "Standards Compliant, But Incompatible?" Egyedi et al.). Mandated standards lists will not help address interoperability issues between different implementations of the same standard. What would help? Transparency of implementations; collaboration with community; active participation in maintenance of standards, etc., would help. There is a need for continued public sector reform, with a focus on citizen-centric e-governance, and a need to engage with the question of whether government-mandated standards lists lead the market or follow the market.</p>
<p>Rishab Aiyer Ghosh, a senior researcher at UN University, Maastricht, spoke next. He started by noting that technical standards are left to technical experts. That needs to change, which is why discussing open standards at the IGF is important. He next set off a hypothetical: imagine you go to the city council office in Sharm el Sheik, and at the parking lot there it says that your car has to be a Ford if you are to park there; or if the Dutch government insists that you have a Philips TV if you are to receive the national broadcaster's signal. While these might seem absurd, situations like this arise all the time when it comes to the realm of software. Thus, the social effects of open standards are of utmost importance, and not just their technical qualities. Analysing the social effects of open standards takes us back to the economics of technology and technological standards. Technological standards exhibit network externalities: their inherent value is less than the value of others using them. Being the only person in the world with a telephone won't be very useful. Technological standards also exhibit path dependence: once you go with one technological format, it is difficult to change over to another even if that other format is superior to the first. Thus, clearly, standards benefit when there is a 'natural monopoly'. The challenge really arises when faced with the question of how to ensure a monopoly in a technology without the supplier of that technology exhibiting monopolistic tendencies. This can only be done when the technology is open and developed openly, of which the web standards and the W3C are excellent examples. If the technology or the process are semi-open, then because of the few intellectual property rights attached to the technology, some would be better off than others. Just as governments cannot insist on driving a particular make of cars as a prerequisite for access to them, they cannot insist on using a particular proprietary standard as a means of accessing them.</p>
<p>Many interesting questions arose when the floor was thrown open to the audience. "Should governments only mandate a particular standard when it is certain that market maturity exists?" Not really, since governmental decisions also give signals to the market and help direct attention to those standards. It would be best if roadmaps were provided, with particular under-mature standards being designated as "preferred standards", thus helping push industry in a particular direction. Examples where this strategy has borne fruit abound. This is also the strategy found in the Australian GIF. On the issue of multiplicity of standards, Sir Tim was very clear that they have to be avoided at all costs. He gave the example of XSLT and CSS, which are both stylesheet formats. He noted that their domain of operation was very different (with one being for servers and the other for clients), so having two standards with similar functions but different domains of operation does not make them multiple standards. Multiple standards defeat the purpose of the standardization process.</p>
<p>It was noted that governmental choices are of practical importance to citizens. During the Hurricane Katrina emergency, the federal emergency website only worked properly if Internet Explorer was used. How do we move forward? We must move forward by having policies that strike a balance between allowing for the natural evolution of standards and stability. The Government Interoperability Frameworks must be dynamic documents, allowing for categorization between standards and having clear roadmaps to enable industry to provide solutions to the government in a timely fashion. Governments must be strong in order to push industry towards openness, for the sake of its citizens, and not let industry dictate proprietary standards as the solution. Some opined that since there are dozens of domains that governments function in, maintaining lists of standards is a time-consuming process that is not justified, but others rebutted that by noting that for enterprise architectures to work, governments have to maintain such lists internally. Opening up that list to citizens and service providers would not entail greater overheads.</p>
<p><strong>Sunil Abraham talking Open Standards at IGF09</strong></p>
<p>(Video added on December 30, 2009)<br /><br /><br /><a title="<OBJECT>, shockwave-flash@http://www.youtube.com/v/woC_6GddD6A&color1=0xb1b1b1&color2=0xcfcfcf&hl=en_US&feature=player_embedded&fs=1" class="__noscriptPlaceholder__" href="http://www.youtube.com/v/woC_6GddD6A&color1=0xb1b1b1&color2=0xcfcfcf&hl=en_US&feature=player_embedded&fs=1">
</a></p>
<div style="float: none; text-align: start;" class="__noscriptPlaceholder__1"><a title="<OBJECT>, shockwave-flash@http://www.youtube.com/v/woC_6GddD6A&color1=0xb1b1b1&color2=0xcfcfcf&hl=en_US&feature=player_embedded&fs=1" class="__noscriptPlaceholder__" href="http://www.youtube.com/v/woC_6GddD6A&color1=0xb1b1b1&color2=0xcfcfcf&hl=en_US&feature=player_embedded&fs=1">
<div class="__noscriptPlaceholder__2"> </div>
</a></div>
<a title="<OBJECT>, shockwave-flash@http://www.youtube.com/v/woC_6GddD6A&color1=0xb1b1b1&color2=0xcfcfcf&hl=en_US&feature=player_embedded&fs=1" class="__noscriptPlaceholder__" href="http://www.youtube.com/v/woC_6GddD6A&color1=0xb1b1b1&color2=0xcfcfcf&hl=en_US&feature=player_embedded&fs=1">
</a>
<p> </p>
<p> </p>
<p>
For more details visit <a href='http://editors.cis-india.org/openness/blog-old/dcos-workshop-09'>http://editors.cis-india.org/openness/blog-old/dcos-workshop-09</a>
</p>
No publisherpraneshOpen StandardsConsumer RightsDigital GovernanceFair DealingsFLOSSWorkshopOpenness2011-08-23T02:54:03ZBlog EntryAt the end of the niche optical pirate
http://editors.cis-india.org/a2k/blogs/at-the-end-of-the-niche-optical-pirate
<b>In this blog post, Siddharth Chaddha goes enquiring into the modus operandi of a video pirate / film lover / businessman in Bangalore's famed National Market.</b>
<h3><strong>Getting to the National Market</strong></h3>
<p>Wading through Majestic Bus Stand,
Flea Markets, Private Bus Stops and vehicles going around in circles,
you could almost miss this board outside one of the shopping plazas.
NATIONAL MARKET, the famed "pirate market" at the heart of
the city. Most of the business here is illegal and the local police
raid the thirty odd shops selling goods, which within the purview of
any multilateral agreement under WIPO or TRIPS regime would be an
infringement of copyright, at least once a
month. The shops run shutter to shutter, each one five by four feet.
Crowded with sellers and customers, all pirate markets typically
smell the same. Pirated DVDs, DVD players, Chinese mobile phones and
PDAs, even VHS players of the yore, smuggled MP3 music systems, fake
Ray-Bans and Police sunglasses, gaming consoles. You name it, and
National Market has it.</p>
<h3>Meet the Pirate</h3>
<p>Tall and sporting a stubble, Sooraj
(name changed) is a Malayali who has been in the trade for over 8
years. "Earlier, I used to have the best English Movie
collection ever. But now, its all going away. Most people have
shifted from DVD's to Digital Storage and Bit Torrents", says
Sooraj. A family comes across the counter. A middle aged man
accompanied by two women in a burqua, one of them carrying a young
baby boy in their hand. "Tom and Jerry!", says the man and
Sooraj's helper brings out a carton full of animated Hollywood films.
Finding Nemo, The Lion King, Madagascar, its all there. "No Tom
and Jerry. This doesn't have Tom and Jerry", growls the stout
customer. Sooraj jumps into the action, hunts out a DVD from a stack
and puts it on the table. "Tom and Jerry Tales - 13 episodes",
reads the the outside with a classic Tom chasing Jerry picture on the
cover. Satisfied, the family puts it aside and goes on to explore
other popular cartoon series. In the end, the man calls for
Maharathi, a recent Bollywood flick. He looks at the cover
intriguingly and I decide to butt in, "Amazing movie. Just saw
it last week. Great plot." The deal is seized and after a bout
of bargaining over the price. As the family dissolves into the market,
Sooraj turns back and says to me, "A lot of customers bargain. I
get a headache. And my shop is the first one in the market, inside
people operate on margins of 5-10 rupees. That just ruins everything
for us. They don't think of the amount of the risk involved."</p>
<h3>The Business of Piracy<strong><br /></strong></h3>
<p>Sooraj explains to me how Chennai is the biggest market of
the South. "Chennai is a sea. You will get everything there.
Once you take a dive in that ocean, it's all there." When I ask
him of the chain of distribution, he says, "No one will say that
I print the covers of fake DVDs or I copy prints. For me, I just
call my distributor and everything comes from Chennai. I don't ask
beyond that. The stock comes in the price range of 25-35-40 Rupees.
Now, there is only one quality of stock. The market is dying. No one
has good stock. Earlier, we used to sell DVDs for Rs.70-80. Now,
there is no demand. Even the wholesale business is at a low.'' I ask
him, "So what are you going to do, now that soon DVDs will be
gone?" Sooraj is not flustered. "We will shut this and start
a new business," he says. I quietly step back, as another
customer comes asking for audio CDs. He doesn't deal in those.</p>
<h3>Enforcement Threat<strong><br /></strong></h3>
<p>When the customer is gone, I ask him,
"How often does the police raid this market?" He smiles and
replies, "Not often anymore. The business is almost dead. But
yes, they come sometimes. Then you are taken away and a case ensues."
I decide to ask him candidly, "How many times have you been
booked?" He smiles again. "5-7 times. I have a few cases
pending, dates that I have to go and visit the court. They arrest you
for a day but that's all they can do. After all this is not a big
crime." He continues dealing with customers who have various
demands for music and films. Some he sells to, he guides others to
the inside shops. "I sell about a 1000 DVDs everyday. Earlier,
the figure used to be much higher. Mostly English. Hindi, Tamil and
Telugu too. No Kannada," he volunteers. I probe further, "Why
no Kannada?" He says that that he supports protection for their
own industry. "And the market price for Kannada films is
appropriate. Some are Rupees 60, 90, 110. That's reasonable. We do not
need to pirate it."</p>
I ask him for Tamil titles. He asked if
I wanted <em>Ghajani</em>. “I saw it when it released. Give me something
that's worth watching.” He picks out two. <em>Saroja</em> and <em>Subramaniya
Puram</em>. He doesn't make a profit in this deal but something tells me
that he is happy to spread the love of good films. "Can I click
a picture?" He refuses, saying it would not be a good idea. I
shake his hand. Until next time.
<p>
For more details visit <a href='http://editors.cis-india.org/a2k/blogs/at-the-end-of-the-niche-optical-pirate'>http://editors.cis-india.org/a2k/blogs/at-the-end-of-the-niche-optical-pirate</a>
</p>
No publishersiddharthIT ActConsumer RightsPiracyIntellectual Property Rightsinternet and society2011-08-04T04:44:58ZBlog EntryCivil Society Letter Against TRIPS-Plus IP Enforcement
http://editors.cis-india.org/a2k/blogs/civil-society-letter-against-trips-plus-ip-enforcement
<b>This open letter was sent to the president of Confederation of Indian Industry (CII) and high-level government officials on the eve of the Third International Conference on Counterfeiting & Piracy organized by CII. This conference aims to strengthen the enforcement of intellectual property rights and thus creating an imbalance in the protection that intellectual property offers to both those who own it as well as those who don't.
</b>
<h2>An Open Letter to the President of Confederation of Indian Industry (CII) on the Third International Conference on Counterfeiting & Piracy</h2>
<p><br />To<br />Mr. Venu Srinivasan <br />The President <br />Confederation of Indian Industry (CII) <br />The Mantosh Sondhi Centre, 23, <br />Institutional Area, Lodi Road <br />New Delhi - 110 003 <br /><br />Dear Mr. Srinivasan,<br /><br />We understand that Confederation of Indian Industry (CII) is hosting the Third International Conference on Counterfeiting and Piracy from 19-20th August 2009 in partnership with the Embassy of the United States and the Quality Brand Protection Committee (QBPC), China. As stated in the invitation letter the primary objectives of the conference are: 1) to initiate coordinated action for cross border enforcement; 2) to highlight the importance of protection of intellectual property rights (IPRs); 3) to combat the growing threat of piracy and counterfeiting; 4) to facilitate a global meeting of customs officials across the globe; 5) to recommend the creation and setting up of a governmental “National Brand Protection” group; 6) to serve as a forum to discuss legal guidelines related to the prosecution of IPR infringement and to eliminate ‘loopholes’ within the existing laws; and 7) to strengthen cooperation between enforcement agencies and chalk out strategies for enforcement agencies a industry action both at national & international level. We also understand that this international conference is part of CII Intellectual Property Division’s special initiative on enforcement of IPRs. As part of this special initiative CII aims at “engaging government to create conducive legislative measures, policy levels reform and impressing [upon them] to adopt stringent enforcement initiatives and exemplary punitive and monetary measures to further safeguard and secure the interest of industry”. CII also wants to “create a global partnership to synergise efforts of international community and to support and participate in India's efforts in combating counterfeiting both at domestic and international levels”. We, the undersigned, representing various civil society organizations in India, write this letter to express our strong reservation on the conference as well as on CII’s special initiative on IP enforcement. Without raising any question on CII’s right to organize events we would like to convey the following concerns with regard to the conference and CII’s initiative on IP enforcement.</p>
<p>Many of the above mentioned objectives of the conference and the special initiative are directed towards the enhancement of intellectual property (IP) standards like coordinated action on border measures, common guidelines for prosecution of IP infringement, exemplary punitive and monetary measures, etc. In other words, enhancement of IP standards means using more public money to protect private rights; very often protecting the monopoly over intangible property rights of multi-national corporations (MNCs).</p>
<p>As you may be aware, MNCs and their developed country hosts are currently engaged in the implementation of <a class="external-link" href="http://www.iqsensato.org/wp-content/uploads/Sell_IP_Enforcement_State_of_Play-OPs_1_June_2008.pdf">a multi-pronged strategy to enhance IP enforcement standards</a>.[1] This is similar to the MNC’s initiatives in the mid 80s to enhance international IP protection, which resulted in the Agreement on Trade-Related aspects of Intellectual Property Rights (TRIPS). Unlike the 80s, now MNCs and developed countries use multiple forums to pursue the objective of enhancement of IP enforcement standards. Some developed countries have unilaterally enhanced their IP enforcement strategy to force other countries, especially developing countries, to accept the same through various multilateral organizations, namely the World Customs Organization (WCO), World Health Organization (WHO), Universal Postal Union (UPU), Interpol, WIPO and WTO. Developed countries are also using Free Trade Agreements (FTAs), Bilateral Agreements on IP Enforcements as well as financing lobbyist studies, conferences and policy recommendations to impose higher IP enforcement standards. These efforts for the enhancement of IP enforcement standards are a matter of grave concern for the people of developing countries and their governments. By partnering with the US Embassy and <a class="external-link" href="http://www.qbpc.org.cn/About_QBPC/Introduction/2008-08/01_116.html.">Quality Brand Protection Committee of China</a> (QBPC)[2] in the organization of this conference, CII is allowing itself to play in the hands of MNCs and some developed countries, whose interests do not match with that of India industries and that of the Indian people.</p>
<p>As you are aware, the Government of India is taking a very strong position in resisting enhancement of IP enforcement standards in all the multilateral forums. India along with like-minded developing countries successfully pushed back TRIPS-plus[3] IP enforcement agenda at WCO and WHO. India is also trying its level best to convince other developing countries the need to stick to TRIPS-compliant standards rather than adopting TRIPS-plus enforcement standards. In the wake of the controversial generic drug seizures by EU customs authorities, <a class="external-link" href="http://www.livemint.com/2009/02/04232721/India-Brazil-raise-EU-drug-se.html">India has also raised the issue of TRIPS-plus IP enforcement standards</a> contained in the EU IP Enforcement Directive at least two times at the TRIPS Council.[4] The <a class="external-link" href="http://www.keionline.org/blogs/2009/07/08/india-ecosoc-seizures/#more-2404">Indian political leadership has unequivocally raised its concern</a> over the enhancement of IP enforcement standards at other forums also.[5] In adopting this stance, the Government of India has cited <a class="external-link" href="http://www.centad.org/focus_77.asp">public interest as well as the operating freedom of Indian industry</a> as its justifications.[6] By partnering at this vital stage with an MNC lobby group and a heeding to developed country governments, CII is not acting in furtherance of the legitimate public interests of Indian domestic industry and the Indian people.</p>
<p>It is a well-evidenced fact that TRIPS-plus enforcement standards adversely impact not only legitimate trade between nations (as shown by the EU seizures) but also the <a class="external-link" href="http://www2.ohchr.org/english/bodies/hrcouncil/docs/11session/A.HRC.11.12_en.pdf">day-to-day life of millions of people</a> especially in India and other developing countries.[7] Unfounded IP enforcement measures would adversely impact access to life saving medicines and educational materials. Thus the IP enforcement measures also have the potential to deny right to development to people in the global South. Hence an organization like CII should not view IP as only a business tool but should look at the larger scheme of things especially in the social and economic realities of India. In fact, by promoting enhancement of IP enforcement standards CII is advocating a policy, which would violate the right to health, the right to knowledge, as also the right to development.</p>
<p>We would also like to point out that Indian pharmaceutical industry is one of the victims of TRIPS-plus IP enforcement standards. In 2008 alone, <a class="external-link" href="http://www.thehindubusinessline.com/2009/06/08/stories/2009060851700300.htm">17 consignments</a>[8] were seized in transit at Europe using the <a class="external-link" href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:196:0007:0014:EN:PDF">EU Directive on IP Enforcement</a>, which allows seizure of goods in transit.[9] These consignments were being exported from developing countries (such as India and Brazil) to other developing countries, and the contents of the consignments are perfectly legal in both the exporting as well as the importing nations. These highly questionable seizures resulted in the crisis of health programmes as it resulted in delays in and prohibitive costs of access to life-saving medicines in developing countries of Africa and Latin America. CII can barely claim to be representative of the interests of Indian industry if it ignores such episodes and partners with self-promoting MNCs and developed countries’ governments to advocate for the enhancement of IP enforcement standards.</p>
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<p>In the light of above-mentioned issues, we request you to consider the following:</p>
<ul><li>Rejecting the TRIPS-plus enforcement agenda in toto. We demand CII, Federation of Indian Chambers of Commerce and Industry (FICCI), Associated Chambers of Commerce and Industry(ASSOCHAM) and other Indian business associations to reject any and all attempts of bringing in a TRIPS-plus enforcement agenda in India, in the interests of Indian industry and the Indian people.</li><li>Completely disengaging from any collaborative efforts with foreign institutions to further TRIPS-plus standards of IP protection in India and also abstaining from any engagements on the anti-counterfeiting efforts with foreign agencies. CII should attempt to engage with domestic institutions and build national consensus before engaging with foreign institutions with the claim of representatives of Indian industry.</li><li>Taking necessary proactive steps to safeguard the interests of access to medicine and access to knowledge along with interest of the Indian domestic industry.</li><li>Participating in a more creative discussion on IP and development rather than simply accepting the simplistic and largely discredited view that stronger IP regime leads to more innovation and is a necessary condition for socio-economic development. </li></ul>
<p><br />CC:<br />Shri Anjan Das <br />Senior Director & Head <br />Technology, Innovation, IPR & Life Sciences <br />Confederation of Indian Industry (CII) <br />Plot No. 249-F, Sector-18; Udyog Vihar, Phase-IV, <br />Gurgaon-122015, Haryana <br /><br />Shri. P. Chidambaram<br />Minister<br />Ministry of Home Affairs<br />Government of India<br />North Block, Central Secretariat<br />New Delhi 110001 <br /><br />Shri G. K. Pillai<br />Secretary Justice<br />Department of Justice<br />Ministry of Home Affairs<br />Government of India<br />North Block, Central Secretariat<br />New Delhi 110001 <br /><br />Shri Naresh Dayal,<br />Secretary, Dept. of Health and Family Welfare<br />Ministry of Health and Family Welfare<br />Government of India<br />149-A, Nirman Bhawan, New Delhi – 110 011 <br /><br />Shri Ajay Shankar<br />Secretary<br />Department Of Industrial Policy & Promotion<br />Ministry of Commerce and Industry<br />Room 153, Udyog Bhavan,<br />New Delhi – 110 011 <br /><br /></p>
<h3>Signatories to this letter</h3>
<ul><li>Centre for Trade and Development (Centad), New Delhi</li><li>Centre for Internet and Society, Bangalore</li><li>National Working Group on Patent Laws, New Delhi</li><li>Lawyers Collective (HIV/AIDS Unit)</li><li>All India Drug Action Network (AIDAN)</li><li>International Treatment Preparedness Coalition (ITPC), India</li><li>Consumers Association of India, Chennai</li><li>IndoJuris Law Offices, Chennai</li><li>All Indian People’s Science Network, New Delhi</li><li>Delhi Science Forum</li><li>Alternative Law Forum, Bangalore</li><li>Knowledge Commons</li><li>Moving Republic</li><li>IT for Change</li><li>Centre for Health and Social Justice(CHSJ), New Delhi</li><li>Navdanya, New Delhi</li><li>Support for Advocacy and Training to Health Initiatives (SATHI)</li><li>Centre for Enquiry Into Health and Allied Themes (CEHAT)</li><li>Initiative for Health Equity & Society</li><li>International Peoples Health Council (South Asia)</li><li>Drug Action Forum – Dharwad, Karnataka</li><li>Dr. Mira Shiva, New Delhi</li><li>Tina Kuriakose, PhD Scholar, Jawaharlal Nehru University, New Delhi</li><li>Dr Gopal Dabade, Dharwad</li><li>Dinesh Abrol, Scientist NISTADS, CSIR, New Delhi</li><li>Madhavi Rahirkar, Lawyer/Consultant, Pune</li><li>Gautam John, Bangalore</li><li>Achal Prabhala, Bangalore</li></ul>
<p><br />Endnotes</p>
<p>[1] See Susan K Sell, The Global IP Upward Ratchet, Anti-counterfeiting and Piracy Enforcement Efforts: The State of Play.<br />[2] QBPC barely qualifies as a representative of Chinese interest, as it comprises more than 180 multinational member companies.<br />[3] ‘TRIPS-plus’ refers to any protection of IPRs that surpasses the standards and requirements spelt out in WTO-TRIPS provisions.<br />[4] See Jonathan Lyn, India Brazil raise EU drug Seizures issue at WTO, available at http://www.livemint.com/2009/02/04232721/India-Brazil-raise-EU-drug-se.html<br />[5] Indian Minister of State for External Affairs Broaches Seizures of Generics at ECOSOC, available at http://www.keionline.org/blogs/2009/07/08/india-ecosoc-seizures/#more-2404<br />[6] Indian Commerce Secretary’s Speech to the African Community Ambassadors. available at http://www.centad.org/focus_77.asp.<br />[7] For two very recent examples, see Intellectual Property Enforcement: International Perspectives, Xuan Li & Carlos Correa (eds.) (2009); Anand Grover, Report of the Special Rapporteur on the Right of Everyone to the Enjoyment of the Highest Attainable Standard of Physical and Mental Health, A/HRC/11/12 (2009).<br />[8] Jyoti Datta, 16 out of 17 drug consignment seizures in the Dutch were from India available at http://www.thehindubusinessline.com/2009/06/08/stories/2009060851700300.htm<br />[9] The EC Regulation No 1383/2003 allows for seizure of goods in transit.</p>
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For more details visit <a href='http://editors.cis-india.org/a2k/blogs/civil-society-letter-against-trips-plus-ip-enforcement'>http://editors.cis-india.org/a2k/blogs/civil-society-letter-against-trips-plus-ip-enforcement</a>
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No publisherpraneshAccess to MedicineConsumer RightsIntellectual Property RightsAccess to Knowledge2011-09-22T12:48:51ZBlog Entry