Q. When can the central government cause investigation into the scheduled industries under the IDRA Act? What directions may the government issue after completion of the investigation?

A. Power to cause investigation to be made into scheduled industries or industrial undertakingsWhere the Central Government is of the opinion that-(a) in respect of any scheduled industry or industrial undertaking or un-dertakings-(i) there has been, or is likely to be, a substantial fall in the volume of

production in respect of any article or class of articles relatable to that industry or manufactured or produced in the industrial undertaking or undertakings, as the case may be, for which, hav-ing regard to the economic conditions prevailing, there is no jus-tification; or

(ii) there has been, or is likely to be, marked deterioration in the quality of any article or class of articles relatable to that industry or manufactured or produced in the industrial undertaking or un-dertakings, as the case may be, which could have been or can be avoided; or

(iii) there has been or is likely to be a rise in the price of any article or class of articles relatable to that industry or manufactured or produced in the industrial undertaking or undertakings, as the case may be, for which there is no justification; or

(iv) it is necessary to take any such action as is provided in this Chapter for the purpose of conserving any resources of national impor-tance which are utilized in the industry or the industrial under-taking or undertakings, as the case may be; or

(b) any industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest;the Central Government may make or cause to be made a full and com-plete investigation into the circumstances of the case by such person or body of persons as it may appoint for the purpose.

Powers of Central Government on completion of investigation un-der section 15(1) If after making or causing to be made any such investigation as is re-ferred to in section 15 the Central Government is satisfied that action under this section is desirable, it may issue such directions to the indus-trial undertaking or undertakings concerned as may be appropriate in the circumstances for all or any of the following purposes, namely-(a) regulating the production of any article or class of articles by the in-

dustrial undertaking or undertakings and fixing the standards of production;

(b) requiring the industrial undertaking or undertakings to take such steps as the Central Government may consider necessary to stim-ulate the development of the industry of which the undertaking or undertakings relates or relate;

(c) prohibiting the industrial undertaking or undertakings from resort-ing to any act or practice which might reduce its or their produc-tion, capacity or economic value;

(d) controlling the prices, or regulating the distribution, of any article or class of articles which have been the subject-matter of investiga-tion.

(2) Where a case relating to any industry or industrial undertaking or undertakings is under investigation, the Central Government may issue at any time any direction of the nature referred to in sub-section (1) to the industrial undertaking or undertakings concerned, and such direc-tion shall have effect until it is varied or revoked by the Central Govern-ment.

Q. Define consumer. What are the objectives of Consumer Protec-tion Act 1986?

A. An individual who buys products or services for personal use and not for manufacture or resale. A consumer is someone who can make the decision whether or not to purchase an item at the store, and someone who can be influenced by marketing and advertisements. Any time someone goes to a store and pur-chases a toy, shirt, beverage, or anything else, they are making that decision as a consumer.

The objectives of Consumer Protection Act 1986, are as follows:

1. the right to be protected against marketing of goods and ser-vices which are hazardous to life and property

2. the right to be informed about the quality, quantity, potency, pu-rity, standard and price of goods, or services so as to protect the consumer against unfair trade practices

3. the right to be assured, wherever possible, access to variety of goods and services at competitive prices

4. the right to be heard and be assured that consumers' interests will receive due consideration at appropriate forums

5. the right to seek redressal against unfair trade practices or re-strictive trade practices or unscrupulous exploitation of consumers

6. the right to consumer education

Q. Define copy right. Explain the rights conferred by the copy right.

A. A bundle of intangible rights granted by statute to the author or originator of certain literary or artistic produc-tions, whereby, for a limited period, the exclusive privilege is given to that person (or to any party to whom he or she transfers ownership) to make copies of the same for publi-cation and sale.A copyright is a legal device that gives the creator of a lit-erary, artistic, musical, or other creative work the sole right to publish and sell that work. Copyright owners have the right to control the reproduction of their work, includ-ing the right to receive payment for that reproduction. An author may grant or sell those rights to others, including publishers or recording companies. Violation of a copy-right is called infringement.

Rights conferred by copy right are as follows:• the right to reproduce the copyrighted work• the right to prepare derivative works based upon the work• the right to distribute copies of the work to the public• the right to perform the copyrighted work publicly• the right to display the copyrighted work publicly

REPRODUCTION:The reproduction right is perhaps the most important right granted by the Copyright Act. Under this right, no one other than the copyright owner may make any reproductions or copies of the work. Examples of unauthorised acts which are prohibited under this right include photocopying a book, copy-

ing a computer software program, using a cartoon character on a t-shirt, and incorporating a portion of another's song into a new song.

DERIVATIVE WORKSThe right to make a derivative work overlaps somewhat with the reproduction right. According to the Copyright Act, a de-rivative work isa work based upon one or more preexisting works, such as a translation, musical arrangement, dramatisation, fictionalisa-tion, motion picture version, sound recording, art reproduc-tion, abridgement, condensation, or any other form in which a work may be recast, transformed, or adapted.A derivative work usually involves a type of transformation, such as the transformation of a novel into a motion picture. In the computer industry, a second version of a software program is generally considered a derivative work based upon the ear-lier version.

DISTRIBUTIONThe distribution right grants to the copyright holder the exclu-sive right to make a work available to the public by sale, rental, lease, or lending. This right allows the copyright holder to prevent the distribution of unauthorised copies of a work. In addition, the right allows the copyright holder to control the first distribution of a particular authorised copy.

PUBLIC PERFORMANCEThe public performance right allows the copyright holder to control the public performance of certain copyrighted works. The scope of the performance right is limited to the following types of works:

• literary works,• musical works,• dramatic works,• choreographic works,• pantomimes,• motion pictures, and• audio visual works.

Under the public performance right, a copyright holder is al-lowed to control when the work is performed "publicly." A per-

formance is considered "public" when the work is performed in a "place open to the public or at a place where a substantial number of persons outside of a normal circle of a family and its social acquaintances are gathered." A performance is also considered to be public if it is transmitted to multiple loca-tions, such as through television and radio. Thus, it would be a violation of the public performance right in a motion picture to rent a video and to show it in a public park or theatre without obtaining a license from the copyright holder. In contrast, the performance of the video on a home TV where friends and family are gathered would not be considered a "public" perfor-mance and would not be prohibited under the Copyright Act.The public performance right is generally held to cover com-puter software, since software is considered a literary work under the Copyright Act. In addition, many software programs fall under the definition of an audio visual work. The applica-tion of the public performance right to software has not be fully developed, except that it is clear that a publicly available video game is controlled by this right.

PUBLIC DISPLAYThe public display right is similar to the public performance right, except that this right controls the public "display" of a work. This right is limited to the following types of works:

• literary works;• musical works;• dramatic works;• choreographic works;• pantomimes;• pictorial works;• graphical works;• sculptural works; and• stills (individual images) from motion pictures and other

audio visual works.

Q. Explain Articles of Association with contents.

A. ‘Articles’ means the articles of association of a company as originally framed or as altered from time to time in pursuance of any previous companies law of this act. The articles of association are the rules and regula-

tions of a company framed for the purpose of internal management of its affairs. It deals with the rights of the member of the company inter-se. The articles are framed for carrying out the aims and object of the Memorandum of association. The articles of associa-tion of a company are sub -ordinate to and are con-trolled by the memorandum of association.

It is not obligatory to register articles in the case of a public company limited by shares. In such a case model articles con-tained in ‘Table A’ of schedule I will apply. However, a private company, a company limited by guaranteed and an unlimited company must register their articles along with the memoran-dum. (section26)In the case of an unlimited company, the articles shall state the number of the members, with which the company is to be registered, and if it has a share capital, the amount of share capital with which it is to be registered. [section 27(1)]In the case of a company limited by guarantee, the articles shall state the number of members with which the company is to be registered.In the case of a private company, articles must contain provi-sions which(a) Restrict the right to transfer its shares;(b) Limit the number of its member to fifty excluding past and the present employees of the company;(c) Prohibit any invitation to the public to subscribe for any share in or debenture of the company.The articles must be printed and divided into paragraph, num-bered consecutively. The articles must be signed by each sub-scriber of the memorandum in the presence of at least one wit-ness who will attest the signature and likewise add his ad-dress, description and occupation, if any.Contents of articles:The articles usually contain the following matter:1. Exclusion wholly or in part of Table A.2. Adoption of preliminary contracts.3. Number and value of shares.4. Allotment of shares.5. Calls on shares.6. Lien on shares.

7. Transfer and Transmission of shares.8. Forfeiture of share.9. Alteration of capital.10. Share certificates.11. Conversion of share into stock.12. Voting rights and proxies.13. Meeting.14. Directors their appointment etc.15. Borrowing powers.16. Dividends and reserves.17. Accounts and audit.18. Winding up.

Q. Explain the principles of registration of Trade Marks. What are the ground for refusal of registration ?

A. B. Grounds for Refusal of Registration of a Trademark –

the Indian LawDR.K.S.Ravichandran Partner, KSR&Co.,Company Secretaries,India

A trademark may be either inherently distinctive or capa-ble of distinguishing its goods by acquiring distinctiveness if used for some period of time. The Trademarks Act, 1999 (the Act) is the law in India containing absolute and rela-tive grounds for refusal of registration of a trademark.

Absolute Grounds – (Section 9 of the Act)

The First Rule – [sub-section (1)]

A. The mark lacks distinctiveness;

B. The mark is descriptive of the characteristics of the goods or services;

C. The mark consists exclusively of marks or indications which have become customary or in the bonafide and es-tablished practices of the trade.

Exception to the above Rule – the Proviso to sub–sec-tion (1)

Before the date of application for registration, if the mark has acquired a distinctive character as a result of the use made of it or if the mark is a well–known mark, the mark shall not be refused registration.

In ELGI Ultra Industries Limited v The Assistant Registrar of Trade Marks, the Intellectual Property Appellate Board [IPAB], MANU/IC/0062/2008, the IPAB held that the words “ultra” and “perfect” are highly descriptive and laudatory.

In Imperial Tobacco Company of India Ltd v. Registrar of Trademarks, AIR 1968 Cal 582, the Calcutta High Court held that the trade mark “Simla” with the label is compos-ite in character. It is a well known hill– station of India. Its geographical signification is, therefore, plain and unequiv-ocal.

Second Rule – [sub– section (2)]

A. The mark is of such nature as to deceive the public or cause confusion;

B. The mark is likely to hurt religious sentiments;

C. The mark comprises scandalous or obscene matter;

D. The use of the mark is prohibited under the Emblems and Names (Prevention of Improper Use) Act, 1950;

The Third Rule – [sub-section (3)]

If the mark consists exclusively the shape of the goods (i) resulting from nature of the goods; or (ii) which is neces-sary to obtain a technical result; or (iii) which gives sub-stantial value to the goods.

Relative Grounds (Section 11 of the Act)

The First Rule – [sub– section (1)]

The mark is identical or similar to an earlier trademark and the goods are identical or similar to the goods of the earlier trademark.

The Second Rule – [sub– section (2)]

The mark is identical or similar to an earlier trademark and use of such a mark would allow the applicant to gain unfair advantage of or damage the reputation of the ear-lier trademark though goods may not be similar.

Note: For the First and Second Rule, “Earlier Trademark” means a “registered mark” or a “well known mark”.

The Third Rule – [sub– section (3)]

The use of the mark in India should be prevented by virtue of any law in particular the law of passing off protecting an unregistered trademark or by virtue of the law of copy-right.

The Supreme Court in Parle Products (P) Ltd. v. J.P. & Co. Mysore AIR1972SC1359 held that “in order to ascertain whether one mark is deceptively similar to another, the broad and essential features of the two marks have to be considered. It would be enough if the impugned mark bears an overall similarity to the registered mark as would be likely to mislead a person usually dealing with one, to accept the other if offered to him.”

Honesty is an Exception – [sub-section (4) of Section 11 read with Section 12!

Section 12 of the Trademarks Act, 1999 permits registra-tion of “honest concurrent users”. For availing this benefit, the applicant must be bonafide prior or concurrent user.

Q. Give a brief account of Cartelization case of cement companies in India dealt with by Competition Commission.

A.Cartels are agreements between enterprises to attempt to control the production, distribution, sale and price of goods and services. This could involve, say, allocating mar-ket share or sales quotas, or engaging in collusive bidding or bid-rigging in one or more markets.For consumers, cartelisation results in higher prices, poor quality and less or no choice of goods and services.

The trigger It all started when the Builders Association of India (BAI) lodged a complaint with CCI in July 2010, alleging restrictive trade practices and collusive price fixing in the cement industry. The BAI’s charges were mainly against Cement Manufacturers’ Association and 10 ma-jor cement manufacturers.BAI in its complaint alleged that despite having large capacities, these companies formed a cartel and used the platform of CMA to synchronise the reduction of utilisation levels, thereby limiting sup-plies to the market, and hiking the prices in tandem. While all the cement companies have their manufacturing units located in vari-ous parts of the country with different input and transportation costs, the cement companies decided to hike prices of the commod-ity uniformly and simultaneously, BAI alleged.

Under the scannerFollowing complaints from BAI, the CCI directed its director general (DG) of investigation in September 2010 to probe the matter and submit a report.According to a CCI official, the investigations were carried out based on various inquiries, analyses of communications between the ce-

ment companies and dealers, and data from various sources. In the absence of no direct evidence, the DG also analysed circumstantial evidence, including behavioural indicators to find out whether there was any agreement and concerted action by manufacturers to raise prices in tandem.The DG, in its report submitted on 31 May 2011, concluded that, yes, cement companies in fact entered into anti-competitive agree-ments in order to control the supply of cement. It also said the com-panies used the platform of CMA and indulged in collusive price-fix-ing.

How the cartel workedAccording to BAI’s submissions to the CCI, major cement producers along with CMA divided the whole market into five zones, which en-abled them to control the supply and fix prices by forming a cartel.According to DG’s investigation report, CMA formed a high power committee and the prices of cement were discussed in its meetings. Even companies like ACC and Ambuja Cements, which had resigned from CMA, continued to participate in such meetings. The CMA ap-parently nominated different companies in 34 different centres to collect and disseminate the retail as well as the wholesale price. This information is either collected on phone or through e-mails.

The final wordBased on the finding of the DG’s probe and after listening to compa-nies, the competition watchdog imposed a heavy penalty of Rs 6,307.32 crore on the 10-top cement companies, including ACC, Ambuja Cements, Ultratech and Jaypee Cements as well as CMA, ac-cusing them of creating a cartel.The CCI has found these cement manufacturers in violation of the provisions of the Competition Act, 2002 which deals with anti-com-petitive agreements, including cartels.Grasim Cements (now merged with Ultratech Cements), Lafarge In-dia, JK Cement, India Cements, Madras Cements, Century Cements and Binani Cements are among others found guilty and penalised.

CONSUMER PROTRECTION ACTFEMAIDRACOMPANY LAWCOMPETITION ACTPATENTS AND TRADEMARKS ACTS

COPYRIGHT ACTSIT ACTSARFESI ACT