Digital Media & Digital Commerce Ashish Chandra

Dec 15, 2011

Opening Statement
This presentation is intended to discuss e-commerce, media and internet law and technology with an entrepreneurial approach through emphasizing the interaction between tech, business and law
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Why is everyone so excited about digital? (The India Story)

800m + mobile users shifting trend to more data consumption on mobile 120m + internet users India third largest with a mere 10% adoption rate National Broadband Plan estimate broadband users @ 160m+ by 2016 CAGR of 39% in Digital Advertising during 2007-10 making it the fastest growing advertising market in India (as
per FICCI KPMG Indian Media and Entertainment Industry Report 2011)
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Why is everyone so excited about digital? (The India Story continues)

Adoption of 3G & 4G technologies for data transfer. Successful 3G and BWA auctions fetches Indian Govt. more than Rs. 1 lakh crore (approx US$ 22.2 billion) its a serious business PPLs revenue from mobile and digital rights itself grew from a mere Rs. 7 crore in 2004-05 to Rs. 138 crore in 2009-10 a phenomenal 2000% growth in just 6 years eCommerce valuation gone above the roof Expected shift in the manner of media consumption and goods buying by urban and on 2011, Ashish Chandra the move consumer

What IPRs are involved in this discussion??

Trademark Copyrights Trade Secrets Patents Contracts Data Privacy Common law rights As a true IP lawyer, we should analyze and learn how a company develops business model, deploys technology and then uses IP laws and contract laws, to successfully execute its business plans. Ashish Chandra 2011,

Creating & protecting IP in Global Village

Target Indians / people abroad
Owning brand-names, copyrights and protecting misuse of content Territorial restrictions and breaching pricing model and movement of goods

Targeting India
One of the largest consumption market Key market for English language content
Impact of each form of IP includes study of domestic as well as international IP laws
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What we will discuss?

Digital media & IPRs Digital commerce & IPRs Digital Contracts Competition law issues New laws to watch out for

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Digital Media & IPRs

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Digital distribution of Media

Cleaner:
Self Content Aggregators Third party service providers / OEMs

Ifs and Buts:

P2P Networks Social Media Networks

Illegal:
Breaking DRMs and unauthorized retransmissions Copy paste - uploadAshish Chandra 2011, 9

MVAS eco-system

(1) Content provider Telco End User (On deck & off deck model & SMS / IVR based)

(2) Content provider content aggregator Telco End User (On deck & off deck model & SMS / IVR based)

(3) Content provider Content aggregator OEMs Telco / End User (typically through Mobile Apps)
(5) Content provider OEMs End User (for eg: Star Plus app on iPhone / iPad)

(4) Content provider End User (typically through WAP Sites)

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Monetization of Media
Text & graphics Advertisements
Self procured Network Advts Targeted Advts

In-Video Advts
Pre/mid/post scroll

Subscription based Through Telcos Enterprise valuation

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 Copyright owners enjoy multiple distinct rights, including:

Reproduction Distribution Public performance Derivative works Conversion of 2D to 3D and vice versa Personality rights Publicity rights
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What right does content owner enjoys??

Digital Media IPR issues

Extent of extension of rights
Means of diffusion Modes of display

DRM v fair use Technological standards open v closed Broadcast Reproduction Rights (signal or beyond) Performers rights Other third party rights in overall packaged media Compulsory licensing Piracy
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Why IP issues in media are complicated? Eg of Music royalty

chart courtesy of Music Reports Inc, Woodland Hills, CA, www.musicreports.com

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Protecting Media o/s India

WIPO treaties DMCA and its equivalents in other countries Extra territorial jurisdiction of IT Act Technology tools Website blocking under IT Act Proposed WIPO Broadcasting / Webcasting treaty Music royalties to international societies Cloud computing
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Intermediary Liability - Media

Comparison:
YouTube v Viacom (US judgment) Super Cassette Industries (T-Series) v MySpace (Delhi High Court)

IT Act (sec 79 r/w sec 81) Copyrights (Amendment) Bill, 2011 DMCA
Is it for safeguarding innocent or safe-harbour for infringers??

Making ISPs accountable:

Current ISP guidelines Graduated response 2011, Ashish Chandra principle) (three strike
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Digital Commerce & IPRs

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Types of Digital Commerce

B2C B2B C2C Social buying Group buying Social Media buying Search engine buying Television home shopping IVR based shopping
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Digital Commerce IPR issues

Parallel import Parallel export Breach of authorized distribution channels Data privacy and data protection Use of third party trademarks Providing a venue for violation of law

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Intermediary Liability - Commerce

Section 79 of IT Act
Course of conduct immunity available only if
Mere access to a communication system Does not initiate the transmission Does not select the receiver of the transmission Does not select or modify the information contained in the transmission Observes Due Diligence Observes guidelines prescribed by Central govt.

Malafide commissions immunity not available

Conspired, Abetted, Aided or Induced

Omissions immunity not available if

Fails expeditiously to remove or disable access to the infringing / violating transmission on: Receiving actual knowledge of the unlawful act Being notified of such unlawful act by Central Government or its agency

Section 104 of Trademarks Act Section 51 Copyrights Act 2011, Ashish Chandra

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Intermediary Liability - Commerce

Baazee.com / eBay case
Criminal liability of intermediary and officers under IPC and IT Act

Ramkumar Patent case

Contributory liability of intermediary

Sanjay Kr. Kedia v Narcotics Control Bureau

Abuse of safe harbour

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Digital Contracts

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Types of Internet contracts

Click wrap
Standard contracts & non-negotiable I Accept / Continue

Browse wrap
Standard terms and conditions & non-negotiable Acceptance by way of course of conduct

Email contracts
Offer through emails Acceptance of offer through emails

SMS based contracts

Send message to a keyword (i.e. STAR) or numeric short code (i.e. 57827)

Tele-shopping / TV shopping
Reference to terms and conditions in a specified hyperlink Generic description of goods on the media Acceptance through placement of order
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Digital Contracts
Essential elements of contract:
Offer & receipt of offer Acceptance & receipt of acceptance Record of instrument creating the contract (preferably for evidence purpose)

Provisions in IT Act
Section 11 Attribution of electronic record (who has made the offer & who has communicated the acceptance?) Section 12 Acknowledgement of receipt (whether the offer & acceptance was received and acknowledged?) Section 13 Time and place of dispatch (enters computer resource outside the control of originator) and receipt (at designated computer resource, if specified, or general computer resource, if not specified)

How IT Act could meet the requirements of contract:

Offer & receipt of offer Section 11 read with Section 13 Acceptance & receipt of acceptance Section 12 read with Section 13 2011, Ashish Chandra Electronic Record as evidence Indian Evidence Act

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Issues to be considered enforcement of e-Contracts

Fair terms: You cant have your cake and eat it too!! Reasonable notice: Avoid hide and seek!! Upfront intent to be bound: Caveat Emptor!! Changes: With prior notice and with consent (opt out)!! Keep copies: Facility to print and keep the copy!! Date, time & place: Website should record the date & time and IP Address of the person accepting the e-contracts
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Jurisdiction for enforcement

International: Key Principles Choice of jurisdiction in contract Territory principle (place of business) Nationality principle (head office) Effect principle Minimum contact principle Domestic: Key Principles
Civil Procedure Code read with Section 13 IT Act Supreme Court in Bhagwandas Goverdhandas Kedia v. M/s Girdharlal Parshottamdas and Co.: 1966 SCC 543 & and A.B.C. Laminart Pvt. Ltd and Another: 1989 SC 1239 the normal rule applicable to postal communications would not be applicable to communications which are instantaneous as in the case of a telephone conversation or a telex message. when a contract comes into being in cases where the communications are exchanged by post and communications are exchanged over the telephone or telex the contract is only complete when the acceptance is received by the offerer and the contract is Ashish Chandra place where the acceptance is 2011, made at the received

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Competition Law issues

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Competition law issues - conflict or compliment

IPR laws self sustained code for anticompetition?
Statutory License Compulsory License Fair Use Tariff determination

Sector specific regulations eg:

Telecom & Broadcasting: TRAI Medicines: Drug controller of India
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Competition law issues - conflictIPR owners or compliment Usual restrictions by

Refusal to deal Patent pooling & cross licensing (similar to copyright societies) Differential terms of sale of same product Different prices for different territories Closed technological standards Cartelization v. collective bargaining Excessive rights management Tie-in sales Non Compete arrangements
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 Section 3 Anti-competitive agreements

Exception to IPR owners for:
Retraining any infringement Impose reasonable conditions

Competition law issues - conflict or compliment

Section 4 Abuse of dominant position

IPR creates monopoly Puts IPR owner into a dominant position Trigger point is abuse of dominant position Very important to define and understand relevant market in IP intensive industry Chandra 2011, Ashish

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New laws to watch out for

Copyright (Amendment) Bill, 2011 Proposed - Utility Patents Bill, 2011 FDI in retail (including retail eCommerce) Comprehensive MVAS guidelines by TRAI Proposed Mobile TV guidelines WIPO Broadcasting Treaty RBI notifications under PSSA on internet and mobile payments Proposed amendments to PRB Act Internet content regulation 31 Network neutrality 2011, Ashish Chandra

Ashish Chandra: Email: ashish1109@gmail.com

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