Indian Patent Office- Revised Guidelines for Examination of CRIs Issued

The Office of the Controller General of Patents, Designs and Trade Marks (CGPDTM) has re-issued a set of guidelines applicable to Examination of Computer Related Inventions (CRIs) on February 19, 2016. The aim of these guidelines are to “further foster uniformity and consistency in the examination of CRIs” and “bring out clarity in terms of exclusions expected under Section 3(k) so that eligible applications of patents relating to CRIs can be examined speedily”. The guidelines are being hailed as a welcome development by various IT think tanks who had opposed the August, 2015 guidelines issued by the Indian Patent Office (IPO) related to CRIs.

IPO in August, 2015 issued guidelines pertaining to Examination of CRIs which allowed patenting of software, a hitherto contentious issue for the software industry at large. The guidelines were met with heavy opposition from a lobby of various IT stakeholders who were concerned about the detrimental effect on IP innovators writing code against infringing action by multinational companies. The guidelines were also criticized for bypassing the explicit provisions of Section 3(k) of the Indian Patents Act which excludes: “a mathematical or business method or a computer program per se or algorithms” from patentability. However, in December, 2015, after significant pressure exerted by several IT groups, including appeals made to the Prime Minister’s Office, the Indian Patent Office stayed the guidelines, paving way for the current substantially amended revised guidelines.

The main provisions of the revised guidelines are highlighted below:

• Computer programs per se are excluded from patentability
• Three step test for determining patentability of CRI has been laid down which include:
1. Properly construe the claim and identify the actual contribution;
2. If the contribution lies only in mathematical method, business method or algorithm, deny the claims;
3. If the contribution lies in the field of computer programme, check whether it is claimed in conjunction with a novel hardware and proceed to other steps to determine patentability with respect to the invention. The computer programme in itself is never patentable. If the contribution lies solely in the computer programme, deny the claims. If the contribution lies in both the computer programme as well as hardware, proceed to other steps of patentability. 

• If the patent application relates to apparatus/system/device i.e. hardware based inventions, each and every feature of the invention shall be described with suitable illustrative drawings. If these system/device/apparatus claims are worded in such a way that they merely and only comprise of a memory which stores instructions to execute the previously claimed method and a processor to execute these instructions, then this set of claims claiming a system/device /apparatus may be deemed as conventional and may not fulfil the eligibility criteria of patentability.
• If, however, the invention relates to ‘method’, the necessary sequence of steps should clearly be described so as to distinguish the invention from the prior art with the help of the flowcharts and other information required to perform the invention together with their modes/ means of implementation.
• The working relationship of different components together with connectivity shall be described.  
• The desired result/output or the outcome of the invention as envisaged in the specification and of any intermediate applicable components/steps shall be clearly described.
• Claims which are directed towards computer programs per se are excluded from patentability such as, (i) Claims directed at computer programmes/ set of instructions/ Routines and/or Sub-routines. (ii) Claims directed at “computer programme products” / “Storage Medium having instructions” / “Database” / “Computer Memory with instruction” i.e. computer programmes per se stored in a computer readable medium.

The said guidelines as published on the website www.ipindia.nic.in can be accessed here.

India: Delhi High Court Clarifies Transfer Status of IPR Suits Vis-à-Vis Commercial Courts Act, 2015

The Delhi High Court, vide its judgment dated February 15, 2016, brought clarity to a few key issues regarding the status of transfer of pending and filed Intellectual Property Rights (IPR) cases vis-à-vis the Commercial Division and Commercial Appellate Division of High Courts and Commercial Courts Act, 2015 (hereinafter referred to as the “Commercial Courts Act”). Hon’ble Mr. Justice Valmiki J. Mehta came to the conclusion by clubbing numerous suits, transfer petitions and amendment applications before the Delhi High Court seeking enhancement of pecuniary jurisdiction, interpreting the Act with respect to the expression ‘filed or pending’ in the first proviso of Section 7. This expression came into controversy while deciding whether it means that the High Court would entertain all pending matters even if it does not have pecuniary jurisdiction to entertain the matters or not.

The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Ordinance was intended to ensure that the commercial cases are disposed of expeditiously, fairly and at reasonable cost to the litigant. Along with improving the international image of the Indian justice delivery system but the same was in the middle of a controversy regarding the interpretation of certain provisions.

The Ordinance came into effect on October 23, 2015, and stated that the State Governments, in consultation with the respective High Courts, will constitute Commercial Courts at the District level, that is, where the District Courts have original civil jurisdiction. No Commercial Court will be constituted where the respective High Court has the original civil jurisdiction. The Chief Justices of the High Courts will constitute Commercial Divisions where the High Courts have original civil jurisdiction. The Chief Justices of the concerned High Courts will constitute Commercial Appellate Divisions where the High Courts have appellate jurisdiction. Thus, the High Courts at Delhi, Calcutta, Bombay, Madras and Himachal Pradesh will have Commercial Divisions and Commercial Appellate Divisions as they have original and appellate jurisdictions. In all other states, the District Courts will have Commercial Courts as they have original jurisdiction and the High Courts will have Commercial Appellate Divisions as they have appellate jurisdiction.   

It also laid down that all commercial disputes, that is, disputes related to mercantile issues, partnership agreements, intellectual property rights, insurance, etc. with a specified value of INR 2 crores and above lie with the Commercial Division of the respective High Court as the High Court has the original civil jurisdiction. All commercial disputes with a specified value of INR 1-2 crores lie with the Commercial Court of the respective District Court and all commercial disputes with a specified value of INR 1 crore and below lie with the District Court with original civil jurisdiction.

Section 7 and its proviso of the Ordinance was what created the confusion. It stated that all suits relating to commercial disputes with a specified value filed in the High Court having original jurisdiction shall be heard and disposed of by the Commercial Division of the High Court provided that such suits are filed on the original side of the High Court.

The words ‘and filed’ can be interpreted to mean that if a suit was originally filed in the High Court, High Court through its Commercial Division will hear the suit, even if specified value of the pending suit does not lie in the pecuniary jurisdiction of the Court. Another interpretation of the word can be that if a suit is filed in the High Court, High Court will hear the suit only if it continues to have pecuniary jurisdiction of the suit. Justice Mehta contemplated that something was left unsaid by the legislature in the expression.

To remove the possibility of having different interpretations to the words ‘and filed’, the Government of India and the Press Information Bureau issued a Press Note on December 16, 2015, saying an amendment was required to the proviso to clear out that the proviso will also apply to ‘pending cases’ so that ‘and filed’ could be construed to include pending cases. Subsequently, an amendment was made in the Act to change the said expression to ‘filed and pending’. The 78^th Report by the Department Related Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice contained the reason for changing the expression in the Act. It stated recommendations of the Standing Committee saying that the transfer of all pending commercial disputes to Commercial Courts and Divisions will overburden the Courts and defeat the purpose of establishing them, that is, swift disposal of cases. The committee suggested that instead of transferring pending cases to Commercial Courts, a sunset clause should be inserted so that only fresh cases in the pecuniary jurisdiction may be transferred.

Justice Mehta reiterated that the Report said that there was to be a sunset clause whereby only fresh cases with the pecuniary jurisdiction are to be filed in the Commercial Divisions of the High Courts and the pending cases would not be transferred and will be taken up by the Commercial Courts. Thus, the legislature has widened the expression ‘and filed’ to mean ‘filed and pending’, meaning thereby that any pending case will be continued to be tried by the Commercial Divisions of the High Courts even if it is below the specified value of INR 1 crore. This is the only interpretation possible.

Justice Mehta felt that the language of the proviso would have been better if the expression ‘irrespective of pecuniary jurisdiction’ was added even though the meaning of the legislature can be understood by the existing words. He also reiterated that Section 7 deals generally with IPR matters where such suits cannot be entertained by courts below the level of a District Court, meaning thereby that such suits can only be instituted in District Courts and High Courts. When it comes to IPR related suits, whether trademarks, copyrights, designs, patents or geographical indications, pending in the High Courts as on the date of introducing the Act, such suits will be entertained by the Commercial Divisions of the High Courts even if the specific value of the suits is above INR 20 lacs but below INR1crore, that is, not falling in the pecuniary jurisdiction. Justice Mehta has, thus, answered the issue regarding the first proviso to Section 7 of the Act of 2015 and cleared all doubts regarding the same.               

India: National Science Day celebrated countrywide on February 28th, 2016

National Science Day or Rashtrya Vigyan Diwas is celebrated in India on 28^th February, with events continuing till 29^th February, each year to celebrate the discovery of the Raman Effect by the famous Indian physicist, Sir Chandrasekhara Venkata Raman, on 28^th of February 1928, for which he was awarded the Nobel Prize in Physics in 1930.

It is a day that is celebrated every year with immense excitement at the Giant Metrewave Radio Telescope at Khodad, which is a the world’s most famous telescope operating at low radio frequencies, by the  National Centre for Radio Astrophysics under the Tata Institute of Fundamental Research. Department of Science and Technology presents awards every year at this event to recognize the efforts of individuals, government bodies and non-government bodies in popularizing science in the country.

Many scientific activities and programs are conducted that encourage the participation of scientists as well as students from schools and colleges. This celebration has provided a platform for new and young scientists to focus on and boost their career in the science profession. This is an initiative aiming to inculcate a scientific temper in the young minds and to make aware the general public so that take pride in the scientific achievements of the nation.

While the theme of the launch year, 1999, was ‘Our Changing Earth’, the theme of last year was ‘Science for Nation Building’. The Department of Science and Technology recently released the theme for this year as ‘Make in India: S&T Driven Innovations’.

The National Science Day is now celebrated with great enthusiasm as a science festival in India where students of schools and colleges, scientists and general public come together to take part in various events. The highlights of this event are:

• Students exhibit and demonstrate their science projects, at the end of which prizes are given for the best entries in different age groups.
• Programmes are organized to enable students to interact with well-known scientists and engineers.
• Radio-TV talk shows are held.
• Virtual tours and open houses are organized.
• Informative science movies are exhibited.
• A grand science exhibition is organized during the day to showcase science models by designed by the students.
• Students are engaged in enthralling events like watching the night sky and witnessing live projects.
• Quiz competitions, lectures, public debates, poster making and many more fun activities are also organized.

The Minister of Science and Technology also gives a message through his speech on this day every year to the students, scientists and general public of the nation to congratulate their efforts and encourage further innovation. The previous year, he laid emphasis on Science, Technology, Engineering and Mathematics (STEM) encouraging the youth to tap the vast potential available in these fields.

Hordes of people attend the National Science Day celebrations to participate in the events and witness the new projects and latest researches of various institutes that are displayed for the public. The National science Day is not only a fun and exciting event for the students but also a learning experience for them, along with an active participation from their parents and the general public.  

India's Basmati Rice Gets the GI Tag

On February 16, 2016, the Basmati rice, a special long grain aromatic rice, became the latest product to obtain the Geographical Indication (GI) Certification. About 250 products have been added to this list so far.

Earlier in 2008, the Union Commerce Ministry’s wing, Agricultural and Processed Food Products Export Development Authority (APEDA) had applied to the Geographical Indications Registry of India, to acquire an exclusive commercial use of the name ‘BASMATI’ for the rice grain varieties grown within the boundaries of the Indo-Gangetic plains, encompassing most of northern and eastern India. Subsequently, India and Pakistan had initiated steps to register Basmati under GI as a joint heritage for protecting its premium market abroad, where Pakistan had reportedly agreed not to contest India’s move to include Basmati in its GI Registry, with the condition that when Pakistan institutes a similar IPR platform, it would also get the rice grown in its Punjab province registered under its GI system. This aspect was covered extensively in our earlier newsletter issue no. 50 dated December 14, 2015, available here. However, this did not fructify due to an opposition within Pakistan.

After seven years of filing the said application for grant of GI protection to Basmati rice, the GI Registry in Chennai, India granted the coveted tag to APEDA on February 16, 2015. APEDA has been granted the GI tag as the sole custodian of Basmati rice. This development took place following the Intellectual Property Appellate Board (IPAB) in Chennai asking the GI registry to grant the GI Certification to APEDA last month in January.

This GI protection in India would lead to similar recognition of Basmati in other countries, including the European Union (EU) and the United States (US), which implies that India’s competitors would be barred from using the ‘Basmati’ tag. In the absence of such a GI, many private companies had been trying to register their products under this title, which commands a premium in the global market. Basmati rice from the Indo-Gangetic plain, which also includes the Punjab province of Pakistan, has a special aroma attributable and unique to it. India dominates with an 85% share in the global trade of Basmati rice at present.

Following the GI Certification, exporters and farmers of the 77 districts of 7 states in India, namely, Punjab, Haryana, Uttar Pradesh, Uttarakhand, Delhi, Himachal Pradesh and Jammu and Kashmir, would now get the benefits bestowed by a GI Certification, that is, the registered proprietor and authorized users having the legal right to the exclusive use of the GI and preventing all unauthorized persons from using the same. Products sold with the GI tag get the benefit of premium pricing as well and the legal protection that is conferred would boost exports, thus, promoting the economic prosperity of the producers of goods produced in that geographical territory.

India exports millions of tonnes of Basmati to the rest of the world including the Gulf, Saudi Arabia, Europe and the United States every year. More substantively, Indian farmers export $250 million in Basmati every year and U.S. is a strong target market.

With the addition of the Basmati Rice to the GI protected list, much more profits are expected to accrue to the concerned communities growing Basmati Rice in India.

Mediation and Conciliation process initiated for contested matters in TMR, Delhi

The Office of the Controller General of Patents, Designs and Trade Marks (CGPDTM), India has released a public notice on February 19, 2016 stating that it has, in collaboration with the Delhi State Legal Service Authority (DSLSA), undertaken to initiate a process of Mediation and Conciliation in contested matters of the Trade Marks Registry, Delhi.

This welcome step comes in view of the pendency of Opposition and Rectification matters at the Trade Marks Registry, Delhi, with the objective to liquidate such pendency through Mediation and Conciliation based on Mediation/ Conciliation Rules framed under the Legal Services Authorities Act, 1987. These rules are available at the website of the DSLSA here.

As per the said Public Notice, it has been decided initially to undertake the project on pilot basis by taking up 500 pending Opposition and Rectification matters.

The said Public Notice as issued by the office of the CGPDTM is available here.

A Consent Form has also been provided for, which is to be submitted before the designated officer of DSLSA at the time of the Mediation proceeding. Copy of the draft consent form as made available is produced below:

The said draft Consent Form can be accessed here.

India: Vikrant Rana speaks at the School of Planning and Architecture, New Delhi

New Delhi                                                                                                February 17, 2016

Mr. Vikrant Rana, Managing Partner at S.S. Rana & Co., recently spoke at the School of Planning and Architecture, New Delhi on the topic “Introduction to Intellectual Property and Design Laws”.

The School of Planning and Architecture, is a specialized University, only one of its kind, which exclusively provides training at various levels, in different aspects of human habitat and environment. The school has taken lead in introducing academic programmes in specialized fields both at Bachelors’ and Masters’ levels. The School, in striving for excellence, has always been in the lead in extending education and research to new frontiers of knowledge.

The talk initially started with the basics of each IP in India, and then a detailed description on Design laws with special attention paid to the Procedural requirements in respect to design registration.

100% FDI in E-Commerce- Reality or Myth

In our earlier newsletter article titled ‘DIPP Replies To Delhi High Court on E-Commerce Model vis-à-vis India’s FDI’s Policy’ in Issue No.2 (vol. VIII) dated January 11, 2106 we had covered how the Department of Industrial Policy and Promotion (hereinafter referred to as the ‘DIPP’) had replied to the Delhi High Court that e-commerce websites are not recognized in India’s foreign investment direct policy (FDI). They also reportedly said that FDI is a capital account transaction and if there is any violation of FDI regulations they are covered under the penal provisions of the Foreign Exchange Management Act, 1999 and also that no FDI is allowed for a company which is engaged in multi-branding retail trading by way of e-commerce.

An E-commerce company basically provides an online marketplace where buyers can directly deal with sellers without the need for any physical infrastructure. The biggest advantage of FDI in e-commerce is that it enhances the country’s national income which spurs job creation and purchasing power of the people thereby raising the economic standard of the country. However, it has its own limitations as it carries huge amount of risk along with it.

As stated in the “Consolidated FDI Policy” released by the DIPP 100% overseas capital is allowed only in Business to Business (B2B) E-commerce platform,  not in retail trading, inter-alia implying that existing restrictions on FDI in domestic trading would be applicable to ecommerce as well. Recently, as reported by the Economic Times, an Indian daily, the Government of India is contemplating to allow 100% FDI in e-commerce platforms which would ultimately be beneficial for the country’s economy in terms of resources as well as productivity. This matter has been debated time and again and finally in a joint meeting of a group of officials from DIPP, Ministry of Corporate Affairs and Economic Affairs, this matter was rigorously argued upon and finally, DIPP suggested to approve the 100% FDI in “market place model e-commerce” activities.

The National Association of Software and Services Companies (NASSCOM) was also a part of the government’s all stakeholder meeting chaired by commerce and industry minister Nirmala Sitharaman to discuss a review of Foreign Direct Investment (FDI) in ecommerce retailing. Clarifying its position on the issue, NASSCOM stated that the policy should address diverse needs of entrepreneurs and investors supporting both scaling up of operations and entrepreneurship ideas and therefore the need for 100% foreign investments in B2C e-commerce. It is imperative that entrepreneurs, who have already made significant investments and are looking ahead to a robust growth and market share, should be allowed to seek investments to support business operations.

Concluding Remarks

In today’s Globalized marketplace, a symbiotic relationship between countries is the most beneficial way to improve trade and commerce. Economic isolation, as evinced from the, historical example of Cuba, and the contemporary situation of Iran is proof that a country cannot compromise on the benefits of multi-lateral trade. Due to trade and economics, relations among foreign countries have improved considerably and geography is no longer a barrier. In such a scenario, investment in foreign countries, or expanding the realm of business beyond one’s domestic border is a boon for any country in terms of growth, productivity and development. Thus 100% FDI in e-commerce is indeed a step taken towards the development of the country, and what shall be the eventual fruits of this endeavor is yet to be seen.

Source

• http://economictimes.indiatimes.com/topic/FDI-in-retail-e-commerce
• http://www.nasscom.in/nasscom-reiterates-demand-100-fdi-b2c-ecommerce-showcases-recommendations-investment-policy-governme
• http://www.ibtimes.co.in/govt-may-allow-100-fdi-marketplace-model-e-commerce-report-666446
• http://dipp.nic.in/English/Policies/FDI_Circular_2015.pdf

Competition Commission of India dismisses Mega Cabs’ Allegation against OLA for Abuse of Dominant Position

In a recent order dated February 09, 2016, the Competition Commission of India (CCI) has rendered its decision in a case between M/s Mega Cabs Pvt. Ltd. and M/s ANI Technologies Pvt. Ltd. relating to alleged abuse of its dominant position and entering into anti-competitive agreements with its taxi drivers by OLA in the Delhi-NCR region, India. Rejecting the allegations forwarded by Mega Cabs, the CCI ruled in OLA’s favour holding that it did not abuse its dominant position or enter into anti-competitive agreements with the drivers in its network.

Brief Facts of the Case               

     

Mega Cabs Pvt. Ltd. (hereinafter referred to as “Mega Cabs”), the Informant in the Complaint under discussion, filed a complaint against ANI Technologies Pvt. Ltd. (hereinafter referred to as “OLA”) accusing it of entering into anti-competitive agreements and of abusing its dominant position in the Delhi-NCR market. Both Mega Cabs and OLA are engaged in the business of radio taxi services, in the Delhi-NCR region, India.

Contentions by the Informant, Mega Cabs

• That OLA is dominant in the Delhi-NCR market and is abusing its dominant position in terms of Section 4 of the Competition Act, 2002.
• That OLA has also indulged in anti-competitive agreements with the taxi drivers registered on its network which has adversely affected the competition in the market within the meaning of Section 3 of the said Act.
• That OLA has managed to raise huge investments by way of multiple rounds of venture funding to acquire a position of dominance in Delhi-NCR region, and has engaged itself in abusive tactics like predatory pricing, offering periodical discounts to consumers and incentivising driver with the sole intention to eliminate competition from the market.
• Further, OLA’s recent acquisition of its competitor ‘Taxi for Sure’, has strengthened its market position tremendously enabling it further to indulge in abusive tactics.
• As per a market report for radio taxis in the Delhi-NCR region titled “Delhi/NCR Radio Taxi Market Analysis (2015)’ prepared by market research and consulting firm named ‘6Wresearch’ (hereinafter, “6Wresearch report”), OLA along with its recently acquired Taxi For Sure holds a dominant position in the radio taxi services market in Delhi-NCR on the basis of fleet size (52.9%), monthly revenue (52.3%) and number of trips per day (57.5%).
• That for every cab trip, OLA receives 15% of the actual billing and remaining 85% is remitted to service providers as revenue. Further, over and above the 85% share, OLA provides rebates and incentives to its drivers.
• That OLA also suffers a loss of INR 15.80 per trip but engages in below-cost pricing to oust other players from the market.
• That OLA provides many rebates and discounts to customers like free rides, cash back schemes, recharge schemes, reduction in minimum fares, special bonuses, special prizes etc. leads to discrimination of pricing.
• That due to actions of OLA, the radio taxi services market is becoming distorted and the Informant is losing its revenues and radio taxis on its network as its bookings have reduced by 29% since April 2013, bookings have gone down by 31% during 2013-2015 and the average number of trips per day has also gone down by 31% during the said period.
• That the pricing strategy of OLA is predatory which is impossible to be matched by other competitors in market.

Reply by the Opposite Party, OLA

• That Mega Cabs has wrongly relied on financial statements of OLA for the year 2012-13 and 2013-14 when OLA was not even present in the Delhi-NCR market, as it had entered the said market only in 2014. Thus, the reduction in Mega Cabs’ booking by 29% since April 2013 cannot be contributed to OLA.
• That the 6Wresearch report, which has been relied upon by Mega Cabs in the complaint to prove OLA’s dominance in the market, is unreliable, reflects the poor performance of Mega Cabs and cannot be used as a basis to prove OLA’s dominance.
• That Mega Cabs operates on own-assets model wherein all taxis in its fleet size are owned by it as opposed to OLA which operates on aggregators’ model wherein it does not own taxis, rather taxis are attached to its network by taxi owners. Hence, the connotation of ‘active fleet size’ cannot be applied to Mega Cabs which has full control over its taxi fleet.
• That Mega Cabs has 650 taxis in its fleet out of which 400 are active and 250 are inactive. Further, daily trips of each radio taxi of OLA are 6 whereas for Mega Cabs it is only 4, thereby showing its inefficiency.
• That while Mega Cabs is complaining of OLA’s losses and linking it to predatory pricing, Mega Cabs is also suffering losses for 6-7 years after entering the market.
• That giving discounts and rebates is very natural in every market and essential in the competition process, especially for new players trying to gain a presence in the market. 
• That being an aggregator, OLA needs to ensure that the taxi drivers attached to its network stay motivated, and therefore it needs to provide incentives to drivers.
• That OLA is an efficient and innovative player in radio taxi services market and its strategies aim at meeting the competition and establishing a presence.

The Competition Commission of India’s Observations and Holding

• Relevant Product Market

The features of radio taxis like convenience of time saving point-to-point pick and drop, pre-booking facilities, round the clock availability, predictability in expected waiting/journey time etc. makes them different from other modes of transport like auto-rickshaws, buses, private taxis etc. A dedicated category of commuters would only use radio taxes irrespective of costs. Thus, similar relevant product market definition would be appropriate due to dependence of commuters on radio taxis.

• Relevant Geographic Market

That having regard to transport being a state subject, radio taxi services being regulated by State Transport Authorities and demarcation of Delhi and NCR in apps (applications), the relevant geographic market in the present case would be ‘Delhi’.

In view of the above, the relevant market would be market for ‘services offered by radio taxis in Delhi’.

• OLA’s Dominant Position in the Relevant Market

The CCI observed that the veracity of the 6Wresearch report relied upon by Mega Cabs in the case was highly doubtful as the same was commissioned on instructions of a particular anonymous client and most of the data used in the report is silent as to specific source from where the data is taken. Thus, it remains questionable as to whether radio taxi operators were interviewed or not and if the data was reliable. Thus, conclusions based on incomplete information were not found to be reliable. Hence, OLA’s dominance in the relevant market based on the 6Wresearch report could not be proved.

Held

In view of the aforesaid observations and data, the CCI held that OLA does not hold a dominant position in the relevant market and there are other players with significant presence in the market. Hence there was no need to go into the examination of OLA’s conduct in such relevant market.

Also, allegations raised by Mega Cabs are opposed to basic tenets of competition law, and inability of existing players to match innovative technology by any player or the model created for operating in a particular industry cannot be said to be creating entry barriers in itself.

Further, option of venture funding, used by OLA to bear costs of giving incentives to drivers and discounts to customers are not exclusively available to OLA alone and can be accessed by any existing player in the market. Thus, Mega Cabs’ contentions appear to be misplaced and liable to rejection.

Conclusion

On account of heavy discounts and attractive offers, radio taxi services offered by start-ups and companies like OLA, Uber, Taxi For Sure etc. have gained immense prominence and consumers are heavily relying on this mode of transportation. Thus, there is exists fierce competition and frequent adoption of predation in this segment of business. Therefore, it is not surprising that there is a sudden rise in disputes of such nature before the CCI. We had earlier covered a similar dispute between Meru Cabs and Uber in context of the relevant market ‘services offered by radio taxis and yellow taxis in Kolkata’ in our Issue No. 1 dated January 04, 2016, available here. Interestingly, Meru had recently made a similar complaint against Uber with regard to the relevant market of ‘services offered by radio taxis in Delhi-NCR’, based on a report prepared by TechSci, where the CCI again observed that the NCR region was distinct from Delhi, hence the relevant market was ‘services offered by radio taxis in Delhi’ and held that Uber does not have a dominant position.

Thus, it can be observed that largely due to procedural lapses like alleged incomplete or conflicting reports of market research and consulting firms like TechSci and 6Wresearch, complaints by older players in the said market against new and seemingly more dynamic entrants regarding predatory pricing and abuse of dominance are not able to hold ground. However, this realm of disputes is relatively new in the industry, and how the scenario shapes out in the future is yet to be seen. 

India: Highlights of the ‘Make In India’ Week

Schemes like Start-up India are umbrella initiatives aimed to steer a series of other programs already undertaken like Make in India, Digital India, and Skilling India to tackle one of the major challenges for this country, that is, to provide employment to a growing number of educated and aspiring youths. Infrastructural support to the manufacturing industry has truly reached its nadir as described by Rajesh Agarwal, the founder of Micromax that a consignment from China reaches the Mumbai port in approximately 12 days, but it takes nearly a month for it to reach its factory in Uttaranchal.

Despite its incredible growth rate, India has always fallen behind China in terms of manufacturing potential due to the volatility of the Indian market and the ineffectiveness of past governments. To help rectify this issue, Prime Minister Narendra Modi introduced 'Make in India' to help improve India's status as a global manufacturing hub. The ‘Make in India’ Week is being held in Mumbai, is being organized by the Department Of Industrial Policy and Promotion to showcase India as a preferred manufacturing destination. Prime Minister Modi also held bilateral talks with the Prime Ministers of Sweden and Finland and Deputy Prime Minister of Poland. In his talks with his Swedish counterpart, Mr. Stefan Lofven, Narendra Modi lauded Sweden as a significant participant under the Make in India initiative. He invited Swedish companies to forge partnerships in the fields of defence, electronic goods, medical equipment etc. Putting technology to good use, PM also discussed areas of cooperation in food processing, clean energy and transportation sectors.

The PM said that the main purpose of this event was to showcase the potential of design, innovation and sustainability of India's manufacturing sectors in the coming decades. The week-long event offered foreign investors and businesses unprecedented access, insights and opportunities to showcase, connect and collaborate with young Indian entrepreneurs, industry leaders, academicians and government officials at the central and state levels. The private sector also needs to participate in the government's vision to strengthen the road sector. Key opportunities in sectors like auto and auto components, defence and aerospace, food processing, infrastructure etc., were showcased through seminars and discussions among the major stakeholders.

Design has missed its rightful place in the policy of industrial development due to the popular perception of design being just an aesthetic endeavor. However, industrial design, on the contrary, was rather a process which could augment manufacturing through product innovation, improving functionality and visual appeal. Our policymakers have recognized the importance of design and the role it plays in making India’s manufacturing sector globally competitive. The Make in India program meant to turn India into a global manufacturing hub also acknowledges the role of design. The government has plans to showcase the potential of design and innovation in some of India’s key sectors. It’s estimated that the manufacturing sector can touch US$ 1 trillion mark by 2025 and contribute to 25-30% to India’s GDP. It can help in the creation of 90 million jobs. Meagre awareness of design and over dependence on low-cost substitute for innovation have also been responsible for making India’s manufacturing sector uncompetitive. The general lack of finesse, safety, convenience, visual appeal etc. makes Indian products uncompetitive in the world market. To encourage new innovators and as a build-up to Make in India week, Qualcomm has introduced Qualcomm Design in India Challenge in collaboration with NASSCOM. This initiative is a corollary to PM Narendra Modi’s Make in India vision to shift from a services-driven model to a manufacturing model for indigenous products in the domains of smartphones and tablets for Healthcare, Education, Banking, Automotive, etc.

Technology, design, innovation, skill, infrastructure; the success of Make in India will depend on many such enabling factors. Policies dealing with these sectors should converge. For example, the National Design Policy and Skill India need to come together to create a workforce skilled in design and design-led innovation. Similarly, technology and design also need to augment each other.

India: First Vaccine for Zika Virus developed by Bharat Biotech

Bharat Biotech, a Hyderabad based company, amidst an Ebola like déjà vu moment for the world, has recently announced that they have developed two vaccines (ZIKAVAC) to fight against Zika Virus – one is a recombinant vaccine and another an inactivated vaccine that has reached the stage of pre-clinical testing in animals. The company has filed patent applications for both. The company, until now was only famous for having mastered the making of the world's cheapest hepatitis-B vaccine. This news comes as a surprise for many because as recently as the beginning of 2016, American Scientists predicted that it might take up as much as a decade to finally release the drug in the market. 

Even though the virus is yet to spread in parts of India, it is imperative for the hoi polio to be aware of its spread, chiefly for two reasons. The first and the more universal reason is because the virus has reached pandemic levels in various parts of Central and South Americas. As recently as last month the U.S. Center for Disease Control and Prevention has issued guidelines concerning pregnant women for future travels in the affected countries. The second reason, being much closer to home, is that the virus belonging to the family Flaviviridae, is related to other pathogenic vector borne flaviviruses like dengue, a disease that is all too common among the lower-middle class and related income groups in India.

On the last week of January, the World Health Organization, said that the virus was likely to spread throughout the majority of the Americas by the end of the year. Though there is not enough evidence to predict an Ebola like outbreak, it has not escaped such speculation by the popular media. It even found its way in the recent G.O.P. debate. Chris Christie, the Governor of New Jersey, and one of the republican frontrunners, when asked if he would quarantine individuals returning from Brazil and other Latin American countries with symptoms of Zika virus, replied in the assertive.

One of the men behind the success story, Dr. Krishna Ella, now the chairman-cum-managing director of Bharat Biotech Ltd, says on July 2015, his team had a Eureka moment on Zika and were able to make two vaccine candidates. Hurriedly patents were filed. It eluded media attention during that time, primarily because no one anticipated a future global crisis caused by the Zika virus. Ella says the actual struggles begin now, as the Indian technocracy and the drugs regulatory system takes its own sweet time for approvals. Ella's first hurdle now is to convince an expert committee set up by the Indian Council of Medical Research (ICMR) that the product and patent he has applied for is scientifically worth pursuing since vaccine trials are very expensive.          

Meanwhile, our Research team also put together a list of trademark application filed by various entities including Bharat Biotech for the trademark ZIKA and similar trademarks in class 5:

At a time when the entire world is searching for an answer to the conundrum, the World Health Organization has acknowledged Bharat Biotech’s efforts and said in a recent press statement, "we have just been informed about the Zika vaccine candidate that Bharat Biotech has. We will examine it from the scientific point of view and see the feasibility of taking it forward."

Sources

1. Oduyebo T, Petersen EE, Rasmussen SA, et al. Update: Interim Guidelines for Health Care Providers Caring for Pregnant Women and Women of Reproductive Age with Possible Zika Virus Exposure — United States, 2016. MMWR Morb Mortal Wkly Rep 2016;65(Early Release):1–6.
2. European center for disease prevention and control , 'Zika virus infection' (European Center For Disease Prevention and Control , 3 February 2016) http://ecdc.europa.eu/en/he althtopics/zika_virus_infection/Pages/index.aspx  accessed 8 February 2016
3. Tom Miles, 'Zika virus set to spread across Americas, spurring vaccine hunt' (Reuters, 25 January 2016) http://www.reuters.com/article/us-health-zika-idUSKCN0V30U6  accessed 8 February 2016
4. Dina Maron, 'Why We Shouldn't Quarantine Travelers Because of Zika' (Scientific American , 7 February 2016) http://www.scientificamerican.com/article/why-we-shouldn-t-quarantine-travelers-because-of-zika/  accessed 8 February
5. James Cook, 'Zika virus: US scientists say vaccine '10 years away'' (BBC, 27 January 2016) http://www.bbc.com/news/world-us-canada-35423288  accessed 8 February 2016
6. Pallava Bagla, 'How Bharat Biotech Made Its Breakthrough In Developing A Vaccine For Zika Virus' (Huffington Post, 7 February 2016) http://www.huffingtonpost.in/2016/02/07/ zika-virus_0_n_9179776.html  accessed 8 February 2016 

Wind Blowning in Favour of Net Neutrality

In our earlier newsletter article titled “Debate on Net Neutrality in India” published in Vol. VII Issue no. 16 dated April 20, 2015, we had covered the controversy surrounding the net neutrality issue which had suddenly invoked widespread debates in India.

The irony of the entire controversy surrounding Network-Neutrality is the fact that so far there was no incumbent policy or regulatory framework in India which says that net neutrality should be maintained. Non-compliance on the part of a service provider with the ‘principle’ of Net-Neutrality is something that till now was not patently illegal. The issue received a lot of media attention in December 2014, when telecom giant Airtel revised its service terms for 2G and 3G data packs so that VoIP (Voice over Internet Protocol) data was excluded from the set amount of free data. This particular move by Airtel was heavily criticized on the Social Media and when asked by the press, the then chairman of Telecom Regulatory Authority of India (hereinafter, referred to as TRAI), Rahul Khullar, reiterated the same stating that what the company plans to do is certainly not in conformity with net neutrality. He further stated that one, however, cannot say that the move is illegal today as there is no policy either by the government that net neutrality is our principle or a regulatory framework put in place by the regulator. The only legal justification at that point of time for not opting for Net-Neutrality was that the TRAI guidelines for the United Access Service license, which promotes Net-Neutrality, but does not do enough to enforce it.

Over the course of the next twelve months, the issue of Net-Neutrality had polarized the Telecommunications world. On one side of the debate are the bigwig Internet Service providers like Reliance Communication, Airtel and on the other-side, a heterogeneous mix of vigilant consumers voiced by organizations like the Free Software Movement of India, Free software Foundation of Tamil Nadu, etc. Both the groups have been at loggerheads with each other, with frequent vocal skirmishes and media mud-slinging being all too common. As this debate gained currency, on December 9, 2015, TRAI released a consultation paper on over-the-top services (OTT) and net neutrality named ‘Consultation Paper on Differential Pricing for Data Services’ where comments and counter comments of concerned stakeholders were invited till January 7, 2016 and January 14, 2016 respectively. The prime objective of the consultation paper was to seek the views of the stakeholders on whether the service providers should be allowed to change differential tariffs based on the website/platform being accessed on the internet. An Open House Discussion was also held on January 21, 2016.

An overwhelming number of the detailed and well-reasoned responses, representing a diverse set of views were received in the consultation process, both in support and against ex ante steps for regulating differential tariff for the data service based on content. After careful examination of all the comments and feedback, TRAI issued the ‘Prohibition of the Discriminatory Tariffs for Data Services Regulations, 2016’ on February 8, 2016, thus ending the silence of the law on the issue of Net Neutrality. This was done in exercise of TRAI’s powers conferred upon it under Section 36(1) read with Sections 11(1)(b)(i) and 11(2) of the Telecom Regulatory Authority of India Act.

The said Regulations bar service providers from offering or charging discriminatory tariffs for data services on the basis of the content, effectively prohibiting Reliance Communication and Facebook’s Free Basics and Airtel Zero platform in their current form. Further, no service provider can enter into any agreement or contract with any person whether natural or legal, that can result into discriminatory tariffs for data services which is offered or charged by the service provider for the purpose of evading the prohibition in this regulations. Reduced tariffs for accessing or providing emergency services, or at times of public emergency have been permitted. Financial disincentives for contravention of the regulation have also been specified. However, it also provides for an exception and it does not apply to tariffs over closed electronic communication networks. Whether a service provider is in contravention of these regulations or not, the ultimate decision rests with the TRAI. Section 5 of the Act provides for punitive sanctions on the part of the violators. If a service provider acts in contravention of these Regulations, TRAI can order the withdrawal of such tariffs and direct them to pay an amount of INR 50,000 a day, but not exceeding the INR 50 Lakh (5 Million).

This move by TRAI has been met with widespread applause from internet users with some going as far as terming the order a victory for consumers in India. However, Mark Zuckerberg, the Founder of Facebook was not particularly happy with the order, primarily because it means an end to Facebooks’ aggressively marketed Internet.org initiative, which was rechristened to Free Basics in September of last year.

To summarize:

1.  The Regulations mandate that no service provider can offer or allow discriminatory pricing for data services based on content.
2.  It has also ruled against any arrangement or agreement between any service provider and any person, whether natural or legal, that adheres to differential pricing for data services.
3. Any transgressor if found violating the regulation, will pay a penalty of INR 50,000 for each day of contravention, subject to a maximum penalty of INR 50 Lakhs (5 Million).

Sources

• http://indianexpress.com/article/business/companies/airtel-move-to-charge-voip-calls-not-illegal-khullar/
• http://www.theguardian.com/technology/2015/may/25/india-net-neutrality-people-power
• http://www.business-standard.com/article/companies/10-things-to-know-about-facebook-s-free-basics-net-neutrality-115122300326_1.html
• http://economictimes.indiatimes.com/tech/internet/mark-zuckerberg-disappointed-with-trais-ban-on-free-basics/articleshow/50910725.cms
• http://www.trai.gov.in/WriteReadData/WhatsNew/Documents/Regulation_Data_Service.pdf

German Auto Major Volkswagen Accused Of Flouting 
Emission Norms

In an ongoing petition initiated by a Delhi based teacher to evaluate whether German auto major, Volkswagen was using the ‘Defeat Device’ in India, the National Green Tribunal in Saloni Ailawadi vs. Union of India & Ors. (Ministry of Heavy Industry, Ministry of Environment and Forest, Central Pollution Control Board) (Original Application No. 509/2015) vide its order dated January 6, 2016 directed the Automotive Research Association of India (ARAI) to investigate the matter and prepare a report on the same.

Brief Facts

• After Volkswagen admitted to flouting the emission tests in the US by using a device known as the Defeat Device, a software which manipulates the emission tests by changing the performance of the vehicle to improve results in the lab, the Government of India on September 24, 2015 had written to the apex vehicle testing agency – Automotive Research Association of India (ARAI) in Pune to evaluate Volkswagen cars and check if the car maker uses the Defeat Device in India to fudge test reports. 
• The Automotive Research Association of India (ARAI), on November 4, 2015, found the pollution levels to be more than 9 times the permissible levels in on-road vehicles of 3 Volkswagen models compared to laboratory measurements. 
• As per the ARAI test results, Volkswagen’s Jetta and Vento, Skoda’s Octavia and Audi models A4 and A6 were found to be emitting more nitrogen oxide than permitted. The tests were conducted on vehicles made by Volkswagen in India many of which are merely assembled whereas, their main manufacturing is done in Germany. 
• On November 20, 2015, a Delhi based teacher, Ms. Saloni Ailwadi, moved the National Green Tribunal against Volkswagen. The Petition called for a stop to manufacturing, assembly and sale of vehicles manufactured by Volkswagen and its group of companies until they clear the prescribed pollution norms in India.

Submissions by the Petitioner, Ms. Saloni Ailwadi

The Petitioner stated that the mischief of installing a device or a software designed to evade emission norms was being practiced by Volkswagen in the US and Germany and in that regard the Governments of USA and Germany have taken a strict view and penalized the manufacturing companies. It was further stated that this mischief has not only harmed the people in USA and European Countries but this harm is also involuntarily shared by Indians as a result of sharing of the common environment world over.

Notice Issued by the National Green Tribunal

On the first hearing which was scheduled on November 30, 2015, the National Green Tribunal issued a notice to Volkswagen, the Ministry of Heavy Industry as well as the Ministry of Environment on alleged violations by Volkswagen India.

Submissions by the Respondent

• That the manufacturing companies do not wish to transgress law and are willing to give an undertaking that they will manufacture and sell only such vehicles in India which are strictly in compliance with the prescribed norms in force in India.
• That the investigation report by ARAI was placed before the Tribunal in the hearing scheduled on February 4, 2016. However on the said date, the Respondents have sought more time to file their respective replies and the National Green Tribunal has granted them two weeks to file their replies. 

Volkswagen’s Reaction

• As per media reports, Volkswagen has apologized publicly for the emission scandal in India and reiterated that its cars follow the country’s norms and the recall of three lakh vehicles is a voluntary step taken by it.
• In India, Volkswagen has announced to recall vehicles across its three brands i.e. Audi, Skoda and Volkswagen.
•  Volkswagen plans to update the engines of approximately 300,000 (3 Lakh) vehicles that it recalled in India after a government-ordered probe found it using diesel engines equipped with a defeat device which help cheat emission tests.

Meanwhile, it is interesting to mention here that in a bid to reduce the extreme pollution levels in Delhi, the Delhi Government had recently introduced the odd-even rule on a 15 day trial basis, under which cars having odd-numbered plates were allowed to ply on odd dates and cars having even-numbered plates were allowed to ply on even dates, with a hefty penalty being imposed on defaulters. Thus, the rising pollution is indeed an important concern which is being taken by the Government.

The abovementioned case is listed for further hearing on February 26, 2016 and the matter will be watched keenly by one and all.

The latest order dated February 4, 2016 of the National Green Tribunal in this case can be accessed here.