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Intermediary Guidelines and Digital Media Ethics Code: Shifting Paradigm of Social & Digital Media Platforms

It has been just over six months since the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (the “Rules“) have been notified. However, these six months have been nothing short of a roller coaster ride for the (Internet) Intermediaries and Digital Media platforms, especially Social Media platforms who have tried to muddle through the slew of compliance obligations now imposed through these eccentric Rules. Notwithstanding, some of them had to face the wrath of the Government and even Courts for the delay in adherence.

On this topic, we are trying to stitch together a series of articles covering the entire gamut of the Rules, including their objective, applicability, impact, and the key issues around some of the rules being declared unconstitutional, etc.

In our first article, we analyse the timeline, objectives, and applicability of these Rules through some of the definitions provided under the Rules and the IT Act.

Tracing the Roots of the Digital Media Ethics Code 

The initiation of this endeavour can be tracked down to July 26, 2018, when a Calling Attention Motion was introduced in the Rajya Sabha on the misuse of social media and spread of fake news, whereby the Minister of Electronics and Information Technology conveyed the Government’s intent to strengthen the existing legal framework and make social media platforms accountable under the law. Thereafter, the first draft of the proposed amendments to the Intermediary Guidelines, The Information Technology (Intermediary Guidelines (Amendment) Rules) 2018, was published for public comments on December 24, 2018.

In the same year, the Supreme Court in Prajwala v. Union of India[1] directed the Union Government to form necessary guidelines or Statement of Procedures (SOPs) to curb child pornography online. An ad-hoc committee of the Rajya Sabha studied the issue of pornography on social media and its effects on children and the society and laid its report recommending the facilitation of identification of the first originator of such contents in February 2020.

In another matter, the Supreme Court of India on October 15 2020, issued a notice to the Union Government seeking its response on a PIL to regulate OTT Platforms. The Union Government subsequently on November 9 2020, made a notification bringing digital and online media under the ambit of the Ministry of Information and Broadcasting, thereby giving the Ministry the power to regulate OTT Platforms.

On February 25, 2021, the Union Government notified the much-anticipated Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, bringing various digital entities under its purview and imposing new compliances to regulate them.

 

Objectives of the Digital Media Ethics Code

The rising internet and social media penetration in India raises concerns of transparency, disinformation and misuse of such technologies. The Rules address these concerns and bring accountability to social and digital media platforms by mandating the setting up of a grievance redressal mechanism that adheres to statutory timeframes. The Rules also address the legal lacuna surrounding the regulation of OTT platforms and the content available on them and introduces a three-tier content regulation mechanism.

Key definitions and the applicability of the Digital Media Ethics Code

The Rules add on extensively to the 2011 Intermediary Guidelines and also introduce new terms and definitions. To understand the Rules and the compliances thereunder in a holistic manner, it becomes imperative to learn the key terms and definitions. This also addresses concerns of applicability of the Rules to different entities, as they prescribe different sets of compliances to different categories of entities.

Key definitions:

Digital Media as per Rule 2(1)(i) are digitised content that can be transmitted over the internet or computer networks, including content received, stored, transmitted, edited or processed by

  • an intermediary; or
  • a publisher of news and current affairs content or a publisher of online curated content.

This broadly includes every content available online and every content that can be transmitted over the internet.

Grievance as per Rule 2(1)(j) includes any complaint, whether regarding any content, any duties of an intermediary or publisher under the Act, or other matters pertaining to the computer resource of an intermediary or publisher as the case may be.

Intermediary has not been defined in the Rules, but as per S. 2(1)(w) of the IT Act, intermediary, with respect to any particular electronic record, is any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record and includes telecom service providers, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-market places and cyber cafes.

The first part of the definition lays down that an Intermediary with respect to an electronic record, is any person that receives, stores or transmits that electronic record on behalf of another person.

An entity becomes an intermediary for a particular electronic record if that record is received by, stored in or transmitted through the entity on behalf of a third party. However, as the clause does not use the term “collect” with respect to an electronic record, any data that entities may collect, including IP Addresses, device information, etc., do not fall within the definition’s purview. Hence the entities would not be considered as intermediaries for such data.

Moreover, the second part of the definition lays down that those entities that provide any service with respect to an electronic record would be intermediaries. However, what constitutes “service” has been a key point of discussion in prior cases. In Christian Louboutin Sas v. Nakul Bajaj[2], the Court not only held that the nature of the service offered by an entity would determine whether it falls under the ambit of the definition, but also went on to hold that when the involvement of an entity is more than that of merely an intermediary, i.e., it actively takes part in the use of such record, it might lose safe harbour protection under S. 79 of the Act.

The definition also includes telecom service providers, network service providers, internet service providers, web-hosting service providers, search engines, online payment sites, online-auction sites, online-market places, and cyber cafes as intermediaries. In Satish N v. State of Karnataka[3], it was held that taxi aggregators like Uber are also intermediaries with respect to the data they store. Therefore, Telecom Service Providers like Airtel, Vi, Jio, etc., Network Service Providers like Reliance Jio, BSNL, MTNL, etc., Internet Service Providers like ACT Fibernet, Hathaway, etc., Search Engines like Google, Bing, etc., Online Payment gateways like Razorpay, Billdesk etc., Online Auction Sites like eBay, eAuction India, etc., Online Market Places like Flipkart, Amazon etc. are all considered intermediaries.

Social Media Intermediaries as per Rule 2(1)(w) is an intermediary which primarily or solely enables online interaction between two or more users and allows them to create, upload, share, disseminate, modify or access information using its services. This includes platforms like Tumblr, Flickr, Diaspora, Ello, etc.

Significant Social Media Intermediaries as per Rule 2(1)(v) is a social media intermediary having number of registered users in India above such threshold as notified by the Central Government. Currently, the threshold is 5 million users. Platforms that fall under this category would be Facebook, Twitter, Instagram, YouTube, Snapchat, LinkedIn, WhatsApp, Telegram etc.

News & current affairs content as per Rule 2(1)(m) includes newly received or noteworthy content, including analysis, especially about recent events primarily of socio-political, economic or cultural nature, made available over the internet or computer networks, and any digital media shall be news and current affairs content where the context, substance, purpose, import and meaning of such information is in the nature of news and current affairs content. Therefore, news pieces reported by newspapers or news agencies, shared online, on social media, or on digital media platforms are news & current affairs content. This includes contents of such nature created by any person and shared through social media platforms like WhatsApp, Facebook, Twitter etc. Digital content discussing news and the latest happenings will also come under the purview of this definition.

Newspaper as per Rule 2(1)(n) as a periodical of loosely folded sheets usually printed on newsprint and brought out daily or at least once in a week, containing information on current events, public news or comments on public news. Newspapers like The Hindu, Times of India etc. will fall under this category.

News aggregator as per Rule 2(1)(o) is an entity performing a significant role in determining the news and current affairs content being made available, makes available to users a computer resource that enable such users to access such news and current affairs content which is aggregated, curated and presented by such entity. This includes platforms like Inshorts, Dailyhunt etc.

Online curated content as per Rule 2(1)(1) is any curated catalogue of audio-visual content, other than news and current affairs content, which is owned by, licensed to or contracted to be transmitted by a publisher of online curated content, and made available on demand, including but not limited through subscription, over the internet or computer networks, and includes films, audio visual programmes, documentaries, television programmes, serials, podcasts and other such content. This includes movies and shows available on OTT platforms like Netflix, Prime Video, Disney+Hotstar etc.

Publisher of News and Current Affairs Content as per Rule 2(1)(t) includes online paper, news portal, news aggregator, news agency and such other entities, which publishes news and current affairs. This would include websites/apps such as The Wire, The News Minute, Scroll.in, Dkoding.in, The Print, The Citizen, LiveLaw, Inshorts etc.

While the Rules do not include the regular newspapers or replica e-papers of these newspapers, as they come under the Press Council Act, news websites such as Hindustantimes.com, IndianExpress.com, thehindu.com are covered under the Rules, and the Union Government clarified the same on June 10, 2021. The clarification stated that websites of organisations having traditional newspapers and digital news portals/websites of traditional TV Organisations come under the ambit of the Rules.

This does not include news and current affairs reported or posted by laymen or ordinary citizens online, as the scope is limited only to news publishing agencies.

Publisher of Online Curated Content as per Rule 2(1)(u) is a publisher who performs a significant role in determining the online curated content being made available and enables users’ access to such content via internet or computer networks. Such transmission of online currented content shall be in the course of systematic business or commercial activity. This includes all OTT platforms, including Netflix, Prime Video, Voot, Lionsgate, Disney+Hotstar, etc.

The Digital Media Ethics Code Challenged in Court

Part III of the IT Rules has been challenged by many persons in various High Courts. News platforms including The Wire, The Quint, and AltNews moved to the Delhi High Court, alleging that online news platforms do not fall under the purview of Section 87 of the IT Act, under which these Rules are made as the section is only applicable to intermediaries. Section 69A is also limited to intermediaries and government agencies. It is alleged that since such publishers are not intermediaries, they do not fall under the purview of the IT Rules.

A similar petition was moved by LiveLaw, a legal news reporting website before the Kerala High Court, alleging that the Rules violated Articles 13, 14, 19(1)(a), 19(1)(g), and 21 of the Constitution and the IT Act.[4] The petitioners contended that the Rules had brought Digital News Media under the purview of the Press Council of India Act and the Cable Television Networks (Regulation) Act, 1995, without amending either of the two legislations. They also alleged that the rules were undoing the procedural safeguards formed by the Supreme Court in the Shreya Singhal[5] case. In this regard, the Kerala High Court has ordered that no coercive action is to be taken against the petitioner as interim relief.

Recently, the Bombay High Court in Agij Promotion of Nineteenonea v. Union of India[6] delivered an interim order staying Rules 9(1) and 9(3), which provides for publishers’ compliance with the Code of Ethics, and the three tier self-regulation system respectively. The Court found Rule 9(1) prima facie an intrusion of Art. 19(1)(a).

Legality & Enforceability of the Digital Media Ethics Code

Even though six months have passed since the Rules came into force, the legality and enforceability of the Rules are still in question. While most intermediaries, including social media and significant social media intermediaries, have at least partly complied with the Rules, the same cannot be said for publishers of news and current affairs content and online curated content. This will have to wait until the challenges to its legality and constitutionality are settled by Courts.

References:

[1] 2018 SCC OnLine SC 3419.

[2] 2018 (76) PTC 508 (Del).

[3] ILR 2017 KARNATAKA 735.

[4] https://www.livelaw.in/top-stories/kerala-high-court-new-it-rules-orders-no-coercive-action-issues-notice-on-livelaws-plea-170983

[5] (2013) 12 SCC 73.

[6] Agij Promotion of Nineteenonea v. Union of India, WRIT PETITION (L.) NO.14172 of 2021.

Image Credits: 

Photo by Jeremy Bezanger on Unsplash

 

Even though six months have passed since the Rules came into force, the legality and enforceability of the Rules are still in question. While most intermediaries, including social media and significant social media intermediaries, have at least partly complied with the Rules, the same cannot be said for publishers of news and current affairs content and online curated content. This will have to wait until the challenges to its legality and constitutionality are settled by Courts.

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Influencer Advertising in Digital Media Comes Under the Purview of ASCI’s Self- Regulation

The Advertising Standard Council of India (ASCI) has released Guidelines for Influencer Advertising in
Digital Media (“ Guidelines ”) which are applicable to posts published from June 14, 2021, onwards. A
draft version of these guidelines was initially circulated on 22 February 2021, for consideration and
comments from relevant stakeholders (advertisers, agencies, influencers, consumers). Post revision,
the final guidelines were released on June 1, 2021.

With the growing influence of digital media, ASCI believed that it was crucial for consumers to have the requisite information when something was being promoted with an intention to influence their opinion or behaviour for an immediate or eventual commercial gain.

Key Highlights of the Guidelines:

Who is an Influencer?

The guidelines define “Influencers” as “…someone who has access to an audience and the power to affect their audiences’ purchasing decisions or opinions about a product, service, brand or experience, because of the influencer’s authority, knowledge, position, or relationship with their audience”.

The Guidelines also recognize the growing trend of virtual influencing, thereby including fictional computer-generated people or avatars as virtual influencers within its scope.

What disclosures have to be made?

The guidelines mandate that all advertised/sponsored posts published by or on behalf of social media influencers through their accounts must carry a disclosure label that clearly identifies them as advertisements.

The content, format and placement of the disclosure:
Influencers or their representatives must clearly label their advertisement posts (from a list of approved labels, namely; Advertisement, Ad, Sponsored, Collaboration, Partnership, Employee or Free gift) in English or in the language of the advertisement.

Additionally, virtual influencers must disclose that they are not interacting with real human beings. The responsibility of disclosure of material connection also lies upon the advertiser.

The disclosures must be upfront, that is, a user should not have to click ‘see more’ while reading the post caption. Further, blanket disclosures, for instance availing the ‘link in bio’ option, shall be considered inadequate.

Placement in case the Ad is merely a picture or a video post:

In cases where the advertisement is not accompanied by text, for instance – an Instagram story, then the disclosure label must be superimposed over the picture or the video. In addition: 

  • If a video is 15 seconds or lesser, the disclosure label must stay for a minimum of 3 seconds;
  • If the duration is 15 seconds to 2 minutes, the label should stay for 1/3 rd of the length of video; and
  • For videos longer than 2 minutes, the label must stay for the entire section of the video that mentions the promoted brand or its benefits/features etc.

When is the disclosure required?

As per the Guidelines, disclosure is required if there is a material connection between the advertiser and the influencer. The material connection may be monetary or in any other form such as discounted products, perks etc.

As long as there is a material connection between advertisers and influencers, disclosure would be necessary even if the influencers are unbiased or the evaluations are formulated by the influencers.

Whose responsibility is it to ensure the disclosure?

Both Influencers as well as advertiser whose product or service is promoted through the advertisement bear the responsibility of proper disclosure of material connection and the content of the advertisement.

For clarity, where Advertiser has a material connection with the Influencer, Advertiser’s responsibility will be to ensure that the posted Influencer advertisement is in line with the ASCI code and its Guidelines.

While the Influencer shall be responsible for making disclosures required under the Guidelines. Further, the newly formulated guidelines, put the onus on influencers to carry out Due Diligence to review and satisfy themselves of the claims in the advertisement. In other words, influencers must present their opinions on the sponsored content subject, based on their genuine experiences of usage.

What would be the consequence of non-compliance?

Owing to the self-regulatory nature of ASCI, the enforcement mechanism of the Guidelines for Influencer Advertising in Digital Media is marred with obscurity. The only available remedy against the violations of the directions formulated under the new guidelines is by filing a complaint under the Code of Self-Regulation of ASCI (ASCI Code), by the relevant consumer cohort, or on a Suo motto action by ASCI.

Once a complaint is registered, it is forwarded for review to the Consumer Complaints Council (CCC) which functions as its examining body. The CCC would consider the complaints raised as well as the response of the advertiser, even if the advertiser is not a member of ASCI, before giving its recommendations on whether the advertisement in question violates the provisions of the Code. If the complaint is upheld, then the advertisers would be directed to modify the advertisement or pull it out.

The ASCI being a self-regulatory body has no powers to penalize advertisers and may only have them modify or remove their advertisements should they not comply with their Code.

Image Credits: Photo by Oleg Magni from Pexels

The guidelines mandate that all advertised/sponsored posts published by or on behalf of social media influencers through their accounts must carry a disclosure label that clearly identifies them as advertisements.

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PhonePe Vs. BharatPe Case: No Exclusivity Over a Part of a Mark, Not Even by Misspelling It

Registration of the (whole) mark does not confer an exclusive right over a part of a registered mark. Similarly, no exclusivity can be claimed over a descriptive mark or a descriptive part of the mark, not even by misspelling it. This was the ruling of the Delhi High Court in a recent Trademark Infringement & Passing Off matter between PhonePe Pvt. Ltd. (Plaintiff) & Ezy Services & Anr. (Defendants). Hon’ble Justice C. Hari Shankar affirmed some of the fundamental principles of the Trademark Law, which have been asserted by various Courts from time to time.
PhonePe’s Perception:

PhonePe in its plea before the Delhi High Court stated that: a consumer of average intelligence and imperfect recollection, on seeing the defendants’ mark BharatPe would immediately associate it with PhonePe.

Well, how often is our intelligence questioned and challenged, even without our knowledge? Considering the deep inroads that technology has made into our lives now, I reckon all of us are reasonably aware of the prominent digital wallets in the market. Knowing that, it is contestable how many of us would have wondered about any association between these two marks purely based on the similarity in their suffix “Pe”.

Background:

The plaintiff had filed a suit before the Delhi High Court seeking a permanent injunction and other remedies against the defendants’ use of ‘Pe’ or any deceptive mark identical and/or similar to the plaintiff’s trademark ‘PhonePe’. The plaintiff alleged that the use of the word “BharatPe” itself, infringed the plaintiff’s registered trademark and amounted to passing off.

The plaintiff in its suit claimed that “Pe” is an essential, dominant, and distinguishing feature of the plaintiff’s registered trademarks. Plaintiff further claimed that “Pe” is an invented word, not to be found in the English dictionary and when combined with “Phone”, which is an ordinary dictionary word with a well-known meaning, “Pe” becomes the dominant and essential feature of the plaintiff’s trademark “PhonePe”.

Court’s Findings and Rulings:

The Hon’ble Delhi High Court’s decision in this matter seems to be premised based on following three principles, which have already been established earlier in multiple Judgments by various Courts:

a) The Anti-Dissection Rule:
The Hon’ble High Court observed that the registered mark ought not to be dissected for the purpose of comparison with the conflicting mark. However, the Court acknowledged the exception of “dominant mark” test, under which, if any part of the plaintiff’s mark was found to be dominant, the Court was required to examine whether such dominant part of the plaintiff’s mark was infringed by the defendant’s mark.

The plaintiff contended that “PhonePe” was a combination of the words “Phone” and “Pe”, where “Phone” was a common dictionary word and the suffix “Pe” was not a dictionary word, which made it the dominant feature of the plaintiff’s trademark. Similarly, in the defendant’s trademark, the word “Bharat” was publici juris and “Pe” formed the dominant element of the mark “BharatPe”. However, the Court was not convinced on the argument and did not find “Pe” to be the dominant part, therefore, the marks were not allowed to be dissected for the comparison.

The Court ruled that while applying the above principles to the facts in hand, the following positions emerged i.e. (i) “PhonePe” and “BharatPe” were both composite marks. (ii) the marks could not be dissected into “Phone” and “Pe” in the case of the plaintiff and “Bharat” and “Pe” in the case of the defendants; and (iii) the plaintiff could not claim exclusivity over the word “Pe”, as it was merely a misspelling of the word “Pay”, hence no infringement could be claimed on the basis of part of a registered trademark.

b) Separate Registration of a Part of a Composite Mark:
The Hon’ble Court further observed that since the plaintiff did not have any registration over the suffix “Pe”, therefore, it could not claim any exclusivity on the same. As a result, the question of infringement did not arise because of the alleged similarity between the non-essential, unregistered part of the composite mark.

In the cases of South India Beverages1 and P.K. Overseas Pvt. Ltd.2, the Delhi High Court explained the relation between the anti-dissection principle and the “dominant/essential feature” principle. The division bench relied on a passage from McCarthy on Trademarks and Unfair Competition, earlier cited in the case of Stiefel Laboratories3, which stated that “The rationale for the rule is that the commercial impression of a composite trademark on an ordinary prospective buyer is created by the mark as a whole, not by its component parts. However, it is not a violation of the anti-dissection rule to view the component parts of conflicting composite marks as a preliminary step on the way to an ultimate determination of probable customer reaction to the conflicting composites as a whole”.

c) Non-exclusivity of Descriptive or Generic Marks or Parts of Marks:
The Hon’ble Court observed that a party cannot claim exclusivity over a descriptive or generic mark or a part of the mark that is considered descriptive. The Court went on to observe that the plaintiff could not claim that the mark was non-descriptive merely by misspelling the descriptive word. However, the Court admitted an exception to this principle in situations where the descriptive or generic mark had acquired distinctiveness or secondary meaning.

The Court further observed that had the plaintiff been able to establish that the word “Pe” had acquired distinctiveness and secondary meaning, it might have been able to make out a case of infringement. However, in this case, the plaintiff’s use of the mark “PhonePe” was only since 2016 and even the defendants claimed to have extensive use of their mark “BharatPe”. Therefore, the plaintiff had not been able to make out a prima facie case.

In the case of Marico Limited4, the Court dived deep into the concept of acquired secondary meaning of a descriptive mark and held that while deciding whether a descriptive mark is registrable or not the “Courts should ordinarily lean against holding distinctiveness of a descriptive trademark unless the user of such trademark is over such a long period of time of many-many years that even a descriptive word mark is unmistakably and only relatable to one source i.e. the same has acquired a secondary meaning”.
1 South India Beverages v. General Mills Marketing, AIR 1965 SC 980
2 P.K. Overseas Pvt. Ltd. v. Bhagwati Lecto Vegetarians Exports Pvt. Ltd., 2016 SCC OnLine Del 5420
3 Stiefel Laborataries v. Ajanta Pharma Ltd, 211 (2014) DLT 296
4 Marico Limited v. Agro Tech Foods Limited, 2010 (44) PTC 736 (Del.) (DB)
The Marico case also discussed the nature and character of a misspelt word when used as a trademark and held that “if partly tweaked descriptive words and expressions of English language are claimed to be coined words, the same would result in a grave and absurd situation because a non-tweaked word being a completely descriptive word will in fact be deceptively similar to the tweaked descriptive English language word or expression of which registration is obtained”.

Conclusion:

The Hon’ble Court ruled that there was no case for grant of interim injunction against the defendants. The Court observed that except the common word “Pe” (suffix) it cannot be established that the marks “PhonePe” and “BharatPe” are confusingly or deceptively similar. Barring the suffix “Pe” these are two different words altogether with no commonality whatsoever.

The important legal positions that emerge from this decision are:
(i) In accordance with the “anti-dissection” rule, it was held that the composite marks were to be considered in their entirety rather than truncating or dissecting them into individual components/elements.
(ii) The registration of a composite mark cannot confer any exclusive rights over any part of such registered mark unless otherwise, such part is the dominant part of the registered mark.
(iii) No exclusivity can be claimed, over a descriptive mark, or a descriptive part of a mark, not even by misspelling it, unless otherwise the descriptive mark or descriptive part has attained distinctiveness, or it has acquired a secondary meaning.

This case has surely reaffirmed some of the basic principles of trademark laws that prohibit adaptation and exclusive claim over descriptive and generic marks or part of the mark.
Read about the important legal positions that emerge from the PhonePe V. BharatPe decision in this article.

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BigBasket Vs. Daily Basket Saga

Perils of using generic/descriptive terms as a “Trademark”

On February 21, 2021, when Ramesh Vel, the founder of a Coimbatore based startup “Daily Basket” tweeted about BigBasket’s alleged bullying through a cease & desist notice, no one ever thought that it would become such a big issue. Even before the news could spread, Daily Basket was prompt enough to create a page https://bbisabully.com/ to put forth their perspective and even posted a copy of the notice. They did not stop at this but went on to launch an online campaign #BoycottBigBasket.

This prompt and aggressive move surely garnered sympathies as well as support for Daily Basket and BigBasket was at the receiving end as it was perceived as a bully in the entire episode. Though it may not have caused any impact on BigBasket’s revenue, the Company cannot deny that the episode did put a dent in its brand reputation.

The Notice:

The cease & desist notice dated Feb 17, 2021, was sent to the startup Letsdaily India Private Limited, asking them to refrain from using the mark “Daily Basket” and any other name or a mark containing the term “Basket” and also sought Rupees Two Lakhs towards the cost of the legal notice.

Who owns/claims what?

Before analyzing the matter, let us understand the claims and ownerships over the subject marks.

Looking at the trademark database, BigBasket seems to have registered several variants of its brand “BigBasket” in various classes i.e. 29, 30, 31 & 35 (food & related goods and online marketplace). However, the record does not show or mention any use or registration of the term “Basket” by BigBasket independently.

Daily Basket claims to have started its business around August 2020 but there is no record of any trademark application/registration by them.

The term “Basket”:

Currently, there are two “Basket” marks that seem to have been registered in India; one being in Class 35 where the application is dated 2014 (appl. no. 2779571) and the other one in Class 31 where the application is dated 2017 (Appl. no. 3470365).

The mark “Daily Basket”:

With regard to the mark “Daily Basket”, currently there are 3 marks in the records of Trademark Registry in Class 35. The first “Daily Basket” mark (appl no. 1807585), which was filed way back in 2009, could not proceed to registration and the same stands abandoned.

The other “Daily Basket” mark (appl. no. 3042971), which stands “registered”, was filed in the year 2015. The third “Daily Basket” mark, which was filed in the year 2017, (app. no. 3491637) was refused registration due to various reasons including the presence of conflicting marks in the same class.

Interestingly, during the prosecution of the last two marks, the examiner did not cite “BigBasket” as a conflicting mark even though BigBasket’s trademarks were on record or registered during that period and in the same class – related to the same or similar services.

Other similar marks with prefix/suffix “Basket”:

There are over a dozen trademarks with suffix/prefix “basket” including, Oven Basket, Nature’s Basket, Ocean Basket, Fresh Basket, Health Basket etc. which appear to be in existence (registered or filed or used) on the Trademark Registry’s record as early as 1999 which is way prior to BigBasket’s coming into existence i.e., 2012.

Similarly, there are another over a dozen marks with prefix/suffix “basket” including Fbasket, EBasket, 4Basket, NutBasket, Medbasket, TekBasket, MilkBasket, Badi Basket, Aqua Basket, Pure Basket, Spin Basket, Eco Basket etc. which were registered post BigBasket’s trademark registration and most of them are in use and in relation to the goods/ services in Class 29, 30, 31 and 35.

BigBasket’s Claim – fair or unfair?

As per the cease & desist notice, BigBasket’s primary objection was over Daily Basket’s use of the term “Basket”. A simple comparison between the two marks (as shown in https://bbisabully.com/)makes it clear that there exists no similarity between the two logos. Therefore, the main issue in the subject matter was over the term “Basket”.

Without dwelling deep into the Trademark Law, which has already been done in many of the previously authored articles, it is abundantly clear that a term like “Basket” (in class 35) would be considered a descriptive mark hence non-registrable (we need not get into the nitty-gritty of how the other two “Basket” marks were registered).

Further, even though BigBasket has been threatening and opposing registration of various other marks with Prefix/Suffix “Basket”, the fact that it did not even attempt to register the mark “Basket” itself makes the strength of the contention fairly obvious.

What goes against BigBasket?

A plain reading of the cease & desist notice explains the seriousness of the matter. It is beyond anyone’s understanding how and on what ground one would claim exclusive ownership over the term “Basket” especially when a) you don’t have any registration over it; b) there are several already registered marks (similar) some of them being prior to even their commencement of business, and c) the mark being a descriptive one.

Perhaps, no one can deny the fact that BigBasket’s claims were far-fetched and demands overly ambitious. It is quite possible that they would not have been apprised with the basic principles of trademark law or rather the whole approach was very casual in nature.

It happens in many cases where the trademarks applications are opposed and users are threatened with legal notices even when there is no strong case. This is because, in India, it is not a common practice to fight back or take legal action for groundless threats.

What are the lessons learnt?

Getting involved in personal capacity must be avoided when a matter can be and should be handled by experts who know the ins and outs of the legal implications. In the instant case, the founder of Daily Basket got involved personally and used digital and social media to level allegations. The fact that BigBasket chose to respond in a clarification mode also did not go down well and the whole matter got murkier.

Had this been handled by their lawyers instead (considering the substance in the notice), it would have simply been concluded without any clamour and commotion. Involvement of founders or CEOs is advisable and welcome only in closed-door negotiations or dispute resolutions but definitely not in public forums.

Is it wise to adopt a generic mark?

Adoption and registration of generic and descriptive marks always have consequences, both in the short term as well as the long term. In the short term, it is an uphill task to get these marks registered, whereas in the long term one must keep contesting the use/registration of similar marks by third parties.

There is always a fraction of people who would advise you to adopt a generic/descriptive mark which makes the marketing team’s job much easier, but everyone does not get lucky and neither does everyone has deep pockets. The “Bookings.com” case is a good example where the matter went till US Supreme Court before the mark was registered and even then, they did not get the right to refrain others from using similar marks.

Similarly, in the recent Judgment of PhonePe Vs. BharatPe, the Hon’ble Delhi High Court asserted that no exclusivity can be claimed over a descriptive mark, or a descriptive part of the mark unless the descriptive mark or descriptive part has attained distinctiveness, i.e. it has acquired a secondary meaning.

The content of this Article does not necessarily reflect the views / position of Fox Mandal but remain solely those of the authors.

 

 

Know all about the validity of the claims made by both BigBasket and Dailybasket from a trademark registration perspective.

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‘Technological Doping’: A Threat To Equity In Sports

Athletes thrive on success and are often willing to go the extra mile to achieve on-field success. The influx of technological advancements in our daily lives has naturally found its way onto the sports field; this has resulted in a race to look for the best sports equipment/gears and technology hence shifting the focus from physiological ability. This article focuses on issues related to the usage of performance enhancement technology in sports and the negative effect that it has had on the integrity of sports.

Background:

A sport remains competitive and fair as long as there exists a level playing field in all aspects of the sport. Track & Field has by far maintained equity among athletes. Further, in association with the World Anti-Doping Agency (WADA), the World Athletics has kept a strict vigilance on the conventional doping and performance enhancement techniques to a great extent.

Most of the sports, which have preset measurements for the equipment and athletic gears used in the games, leave comparatively less or no room for any kind of experiment, however, certain sports which have no preset rules for the equipment/gears are prone to such kind of manipulation thereby gaining an advantage over others.

A major controversy broke out in late 2019 when a Kenyan Athlete, Eliud Kipchoge, completed a marathon in less than two hours. The records by Eliud Kipchoge in Vienna and Brigid Kosgei in Chicago highlighted how the (shoe) technology had enhanced the performance of athletes. The common factor between these two record-breaking athletes, other than being from the same country and training together, was that both athletes were wearing a prototype of the new Nike Vaporfly 4%. These shoes had been proven by Nike to enhance the efficiency of the runners by adding more to what the runners expended, thus, giving runners an edge over others.

The Playbook:

The World Athletics, in its guidelines on shoes (before amendment in January 2020), provided that shoes used by athletes must not be those that create an “unfair advantage” and must be “reasonably available” to all. The rules were silent as to what would amount to an “unfair advantage”. On the application of these rules, the Nike Vaporfly 4% could be considered unfair as it had been proven to increase the efficiency of a runner, thereby creating an unfair advantage. There would be no issue of unfairness if these shoes were available to all runners. However, the high cost and non-availability of the shoes in the open market prevented the access of such shoes to all athletes. This thus, results in an unfair and non-level playing field and is regarded as an unconventional method of doping in running dubbed as “technological doping”.

Amended Technical Rules:

The revised Technical Rules of the World athletics (post-amendment) have impliedly given a green signal to performance enhancement shoes. World Athletics has disallowed any prototype shoe to be used in any competition but has permitted athletes to use shoes that are in sale in the market for a period of 4 months or more. Furthermore, the amendment has prohibited athletes from using shoes that have a sole thickness greater than 40mm.

This has surely indirectly legalized the Nike Vaporfly 4%, which has a sole thickness of 39.5mm and has resulted in an arms race of sorts amongst athletes to procure the most advanced and specialized shoes. Had the Tokyo Olympics held in 2020, the disparity in sporting performances might have been evident with the number of past records being broken with relative ease.

Technological Advancement Vs. Technological doping:

There is a thin line between technological advancements and technological doping in sports. ‘Advancement’ is a natural phenomenon, but its utilization to gain an unfair advantage is what converts it into ‘doping’. In the absence of any defined Rules, there exists an opportunity for some to find ways to gain that advantage over others by technological means. Further, the price and availability of such hi-tech equipment and gears would for sure deprive many able but financially weak athletes. Another point to ponder is– whether such technology dilutes human effort and has a decisive effect on the performance or whether it would create some sort of unrealistic targets and records.

Hence, fairness in sports can only be achieved if such technology is banned, or if allowed, made available to all at a reasonable price. Technological advancements in sports are inevitable and necessary, but to avoid such technology from being used to gain an unfair advantage in the sport, equity is to be maintained by ensuring equal and reasonable access for all athletes.

TECHNOLOGICAL DOPING ISSUES IN OTHER SPORTS:

Swimming in Beijing Olympics:

During the 2008 Beijing Olympics, most of the swimmers used the Speedo LZR swimsuit, which was specifically designed to improve the speed of the swimmer. The suit covered the whole body from shoulder to calf and was designed to optimize body compression and hydrodynamics. The suit allowed better oxygen flow to muscles, however, it also trapped air to add buoyancy.

According to Speedo, the suit reduced drag or water resistance by 38% compared to an ordinary LYCRA suit. This reduction in drag translated into approximately a 4% increase in speed for swimmers.

The advantage of using such a suit was so extreme that one did not even stand a chance if they competed without such a suit. Japanese swimmers even broke away from their sponsorship deals to use the Speedo swimsuits in the Olympics! The swimsuit aided in about 23 out of the 25 world records that were broken in the Beijing Olympics.

A moralistic issue arose as to how would one compare the athletes of the present to yesteryear, considering that they were not equipped with such suits? An athletes’ greatness is often measured by their performances in the Olympics; however, can one call such athletes great in light of the current technologies in sports? On the regulatory side of things, a defense was provided by Speedo that suggested the suit only improved the management of existing forces rather than generating new ones. FINA, however, banned such suits after the Beijing Olympics and disallowed swimmers from using suits that extended above the waist and below the knees. Only textile suits with relatively minimal coverage were allowed – which meant that the full-coverage low-drag (even buoyant) polyurethane swimsuits were out.

The move by FINA was crucial and widely celebrated because a simple sport such as swimming had become an expensive and inaccessible sport where all the benefits were going to the well-funded athletes. However, the world records were still upheld, and since the technology has been banned for future athletes, it is going to be a tough task for them to beat the stats.

Case of Oscar Pistorius:

Oscar Pistorius’s dramatic life story has moved the world. An 11 month old South African boy whose both feet were amputated due to a congenital defect, goes on to compete in both, Olympic Games and Paralympic Games before being charged with murder. He had wished to compete against able-bodied athletes using two prosthetic legs in both the Beijing Olympic and Paralympic events. His prosthesis used an ESR (Energy storage and return) mechanism which comprised of carbon fiber blades that compressed and extended under load, therefore, worked like a spring.

The IAAF had commissioned a report in 2007 on the ESR mechanism and claimed that it was an unfair technology as it provided Pistorius an unfair mechanical advantage over able-bodied athletes of more than 30%, had a 25% reduced energy output for maintaining the same speed and possessed inertial benefits due to the reduced mass of the prosthesis. On the basis of this report, the IAAF banned Pistorius from taking part in able-bodied Olympic events. However, in a separate report commissioned by Oscar Pistorius, he proved before the CAS that while he was mechanically different, he remained physiologically similar to other athletes.

The CAS had to determine whether the use of such prosthesis was in contravention to rule 144.2 (e) of the IAAF technical rules which is read as– “Use of any technical device that incorporates springs, wheels, or any other element that provides the user with an advantage over another athlete not using such a device.” Interestingly, the CAS analysed what constituted a spring and held that even the human leg was a spring. The CAS was not convinced that the ESR prosthesis provided Pistorius with an overall net advantage over the other athletes and hence over-turned the decision of the IAAF and subsequently allowed Pistorius to compete in able-bodied events.

Case of Markus Rehm:

It was a similar case to that of Pistorius. Markus is an amputee who wished to compete in the able-bodied sport in the long jump event in the 2016 Rio Olympics. The main issue, in this case, was that he was using his prosthetic leg to jump rather than his biological leg. The German Athletics Association considered his prosthetic limb an unfair advantage and did not allow him to participate. He did not appeal to the CAS and currently is a record holder in the Paralympic long jump event.

Case of Casey Martin:

Martin was a Pro-golfer but suffered from a circulatory disorder in his lower right leg, known as Klippel-Trenaunay-Webber syndrome. This made walking very hard for him and he was always at the risk of having his leg amputated if he happened to fall. Whilst attempting to qualify for the Professional Golf Association (PGA) tour, Martin played golf using a powered golf cart. He attempted to use this technology to support his transit between strokes but the PGA attempted to prevent this.

Golf carts were banned in professional golf at the time as it was felt that such technology would change the nature of the game by reducing the impact of the walk between each hole and provide players using them with an advantage over other golfers. Martin attempted to challenge the PGA decision using the American legal system by proposing that such technology was part of his professional occupation.

The Supreme Court ruled that the use of the cart would not be a fundamental alteration of the game and therefore would not disadvantage other players and organisers.

Regulations to Tackle Doping in Sports:

The WADA Anti-Doping code serves as the core regulatory framework to tackle conventional doping in sports. It harmonizes anti-doping policies, rules and regulations within sport organizations and among public authorities around the world. Almost every international sporting governing body is a signatory to the WADA anti-doping code, thus ensuring its universal application to tackling doping in sports.

The anti-doping code has defined what constitutes doping and maintains a list of prohibited substances and activities that would enable the WADA to take action against an athlete for doping.

Technological Doping & WADA:

WADA has recognised the threat posed by technological doping but has left it to the discretion of the independent sporting bodies to allow or ban a new technology in a sport. The general stance of the WADA on technological doping is that technology should be banned if they are “performance enhancing” or “against the spirit of the sport”.

Conclusion:

Technology has started playing a vital role in sports by not only improving it but also enhancing the sports viewing experience and altering the dynamics of sports gear, thereby paving the way for performance improvement. Ideally, technology has been traditionally utilized for the betterment of the game, safety and efficiency of the athletes, however, when it becomes the decisive factor in achieving on-field success, it raises concerns. The main issue with technological doping is that it dilutes human athleticism and the element of fairness in a game.

Technology has started playing a vital role in sports by not only improving it but also enhancing the sports viewing experience and altering the dynamics of sports gear thereby paving the way for performance improvement. Ideally, technology has been traditionally utilized for the betterment of the game, safety and efficiency of the athletes, however, when it becomes the decisive factor in achieving on-field success, it raises concerns. The main issue with technological doping is that it dilutes the role of human athleticism and also the element of fairness in a game.

References

Image Credits: Photo by Hunter Johnson on Unsplash

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The Concussion Conundrum

The first T20 International Cricket match between Australia Vs. India played on December 4, 2020, at Manuka Oval, Canberra witnessed an unusual controversy. During the inning break, on-field cameras captured the animated discussion between the match referee David Boon and the Australian head coach Justin Langer. The issue was centered on the decision of the match referee about concussion replacement player Yuzvendra Chahal for concussed player Ravindra Jadeja.

During the last over of India’s inning, a beaming delivery of Mitchell Starc hit Ravindra Jadeja on his helmet. Though Jadeja went on to complete that over without any complaint or call for help, later reported dizziness in the dressing room. As per the news reports, the team medics after examining the player suspected of concussion hence sought concussion replacement.

The team medics seem to have duly followed the ICC Rules on their part by completing the required formalities. Match Referee, David Boon who approved India’s concussion substitute had an animated conversation with Justin Langer followed by outbursts from certain Australian players and the decision being questioned by Cricket experts and scrutinized by the media.

ICC Rules & Guidelines on Concussion Replacement:

Well, to lay rest to these speculations and determine if the Indian team subverted the rules, it is important to look at the International Cricket Council (ICC) Rules and Guidelines concerning concussion replacement. The concussion rules were implemented to restrict a player from being unduly exposed to health risks and also to save a team from being disadvantaged if their player is concussed.

The concussion replacement issue is dealt with under Rule 1.2.7 of the ICC Men’s Twenty20 International Playing Conditions which was introduced in July 2019. The Rules allow a ‘like-for-like’ replacement in case a player is concussed, i.e., an injury is caused to the head or neck during the course of the match and the incident had occurred within the playing area.

The team medical representative is responsible for diagnosing the player and submitting the request for concussion replacement to the Match Referee. Rules 1.2.7.1.3.4 mandate that the concussion replacement request shall be a like-for-like for the player who has sustained the concussion or suspected concussion.

As per Rule 1.2.7.3, the ICC Match Referee should ordinarily approve a Concussion Replacement Request if the replacement is a like-for-like player whose inclusion will not excessively advantage his team for the remainder of the match. Further, the ICC Match Referee should consider the likely role the concussed player would have played during the remainder of the match, and the normal role that would be performed by the nominated Concussion Replacement. The decision of the match referee in this regard is final and cannot be appealed.

Did India and the Match Referee follow the Rules?

Let us analyze the core issues which became the point of discussion and disagreement and caused the stir.

a) Player Assessment

The major issue was that the player was not assessed after he was hit and hence there was a breach of protocol by team India. Let us look at the ICC’s concussion management guidelines and refer to section “Clear and immediate diagnosis of concussion” which reads as:

When should a team doctor/physio run out for an on-field assessment?

  1. If called on by the umpire;
  2. If a player is down and players are calling for assistance;
  3. Immediately, if there is a head knock and the player is unable to resume after 3 to 4 seconds;
  4. If a player calls for a new helmet following a head injury; and
  5. At the end of the over, if the player resumes play after having sustained a blow to the head.

Analyzing, the above guidelines team India does not seem to have breached any protocol as the player was attended and assessed in the dressing room by the team medics immediately after the (final) over in which he was hit, therefore falling under the fifth scenario. Hence, the objection of an unfair advantage being taken solely on this ground cannot be sustained. Moreover, given the medical expertise and sensitive nature of the injury, the opinion of the medics can also not be called into question or be disregarded.

b)  Like-for-like replacement:

The second issue, which caused much furor was whether the replacement player (Yuzvendra Chahal in this case) could be considered a ‘like-for-like’ replacement (Ravindra Jadeja) where Jadeja is considered a bowling all-rounder while Chahal is purely a leg-spinner.

Rules 1.2.7.3 – 1.2.7.5 sets out the guidelines for Match Referee to address the issue of concussion replacement. As per the Rules, the Match Referee should assess the likely role the concussed player would have played during the remainder of the match and the normal role, which would be performed by the nominated replacement. It is not necessary that a player should be a ‘like-for-like’ replacement in terms of ability and standing. Such an interpretation would render the concussion rules infructuous as no two players are alike and no team can be expected to carry a squad containing an exact substitute for each of its players. The assessment is to be done on the basis of the ‘likely role’ to be played.

Moreover, if the Match Referee believes that the inclusion of the replacement would excessively advantage the team, the Match Referee is well within his rights to impose conditions upon the identity and involvement of the Concussion replacement, to neutralize any advantage being accrued. In the instant match, being an all-rounder, Jadeja was likely to complete his bowling quota. Since the replacement happened at the end of the batting innings, Chahal could be considered a ‘like-for-like’ replacement, as he would have played the role of Jadeja, which is to bowl his quota of four overs.

Conclusion:

An in-depth analysis of the ICC Rules & Guidelines and the subject issue of concussion replacement do not hint at any unfair or mala-fide intention neither on the part of the Indian cricket team nor the match referee. Another perspective; had Chahal not bowled the Indian team to victory and bagged the man of the match award, this issue would not have seen the light of the day. The whole matter seems to be no more than a tempest in a teacup.

Image Credits: Photo by Aksh yadav on Unsplash

Had Chahal not bowled the Indian team to victory and bagged the man of the match award, this issue would not have seen the light of the day. The whole matter seems to be no more than a tempest in a teacup.

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The Rise of Fantasy Sports in India

“Dream XI mein team bana lo”! Every Indian cricket fan must have heard this line several times during the recently concluded IPL 2020. From a struggling startup that faced uncertainty about the legality of its business model to the title sponsor of IPL 2020, Dream11, an Indian Fantasy Sports platform has made it big. With the rise of the likes of Dream11 and Mobile Premier League (MPL) the market for fantasy sports has surely been set in India.

What are Fantasy Sports? 

Fantasy Sports1 are online prediction games where the fantasy gamers (persons playing the game) put together a virtual team of real sports players such as players from the Indian Premier League (IPL), English Premier League (EPL) the National Basketball Association (NBA), etc. These gamers are called “Managers” and they form a team of players in a specific league, who earn points based on real-life statistics that are converted into fantasy points. Managers earn fantasy points based on the players’ performances in real-life sports. Each Manager plays against other Managers and their teams. These managers manage a roster by adding, trading, and selling players to form their team.

There are two types of fantasy sports that are prevalent. The first is the season-long draft system and the second one is the daily fantasy leagues played by the players worldwide.

In Indian fantasy sports platforms like Dream11, My Circle 11 we generally see the daily fantasy version being used. Managers pay an entry fee to enter a contest, the prize money for which is predetermined by the platform. Taking the example of cricket; points are earned on a variety of statistics like the runs scored by a batsman, wickets taken by a bowler and catches/run-outs inflicted by a fielder. The managers have to select a captain and vice-captain among the 11 players and their performance normally fetches some extra points. At the end of the match, the Manager with the highest points wins the game.

Prominent Fantasy platforms in India

There have been many fantasy sports platforms in the offing in India, but it was Dream11 that made it big and popularised fantasy sports in India. Some of the other apps such as MPL, My11 Circle, My team 11, Fancode, Fancy11, Faboom, Fanfight, Guru 11, MPL, Balle Baazi are fighting out in the market which already is in surge with the number of new players joining in. Dream 11 has been the first Fantasy Sports platform that has entered the league of unicorns in India. They have also been at the forefront when it comes to legal suits as many cases have been filed against it and some are still pending.

How does ‘Fantasy Sports” work in India

The Federation of Indian Fantasy Sports (FIFS)2 is the self-regulatory industry body of Fantasy sports in India. FIFS has been set up to protect consumer interest and formulate best practices for Fantasy Sports

For an online fantasy sports platform (OFSP) to be considered for confirmation by the Governing Council, the Operator is required to obtain and submit an evaluation and opinion from the Innovation Committee of the FIFS on the proposed contest as a ‘game of skill’. In the recent Rajasthan High Court ruling4, the Court observed that FIFS presently has over 35 of the largest fantasy sports companies as members, which cater to 99% of the fantasy sports users in India.in India. FIFS also publishes a Charter for Online Fantasy Sports Platforms which lays down the ground rules for the members.3

According to the charter, the members have to obtain a valid license and authorization for the usage of third-party intellectual property rights which include player images, photographs, trademarks, etc. on its platform. Members have to obtain a license and authorization to claim any official association with any sport’s governing body, player, team or tournament. FIFS has also adopted the Internet & Mobile Association of India (IAMAI) guidelines for self-regulation of the advertisements.5

Legal issues around online gaming in India

Regulating Fantasy Sports: Central vs State Legislations

The Public  Gaming  Act,  18676  is  a  central law that  prohibits  running  or  being  in  charge  of  a  public gambling house in India. However, under the Constitution of India, State legislatures have been entrusted with the power to frame state-specific laws on betting and gambling. As per the Seventh Schedule to the Constitution of India7 (Entries 34 and 62 of List II), the State Governments have been authorized to make laws on betting and gambling.

Fantasy Sports, which have been categorized as Game of skill, fall in a separate category and the State Gambling legislation of various states (with the exception of Assam, Odisha and Telangana) exclude game of skill from the ambit of gambling.

“Skill” V. “Chance”

The main legal hurdle faced by online gaming companies in India is whether it is a game of skill or a game of chance. Countries have adopted different approaches to defining chance and skill. India has followed the US model by applying the “dominant factor” test. The Satyanarayana case8 and the Lakshmanan case9 were the first cases where the “skill versus chance” question was addressed. The Courts were of the opinion that no game exists which can have ‘skill’ as the individual factor to determine the result. In State of Bombay v. R.M.D.C.,10 the court propounded that if a game contains both elements, i.e. skill and chance, it would be considered a game of skill.

Skill vs. Chance as seen through Fantasy Sports

Bringing context into fantasy sports, the main question was whether choosing a team of 11 players out of 22 was something a player did on skill or whether it was the player taking chance by selecting the set of players. The Court for the first time had settled this question in the case of Varun Gumber v. UT of Chandigarh & Ors.11 clarified that: “Playing of fantasy game by any participant user involved forming of a virtual team by him which certainly required considerable skill, judgment and discretion. The participant had to assess the relative worth of each athlete/sportsperson as against all athlete/sportspersons available for selection. He was further required to study the rules and regulations of the strength of athlete or player and weakness also.”

 

The High Court made its stance clear that Dream 11 is completely a game of skill and held that fantasy sports did not amount to gambling. The Court also added that Dream 11 was conducting a business activity protected under Article 19(1)(g) of the Constitution.

IP Rights: Use of Players’ Names, Team Logos, etc.

Another issue that surrounds fantasy sports platforms is the usage of the players’ names and the team logos in their platforms. Fantasy sports platforms use players’ names, team logos etc. to enable the participants to choose specific players from specific teams. We are aware of the fact that IP laws enable players to have certain IP rights including image rights.

Fantasy sports are built around the leagues/ tournaments and the participants (players) therein and not around specific players and there are always commercial arrangements between the platforms and the leagues/teams which enables the platforms to use their IP. Moreover, the use of these players’ names and images by fantasy sports platforms is largely for the purpose of identifying those players and the use of their names, images do not in any manner suggest endorsement of the fantasy sports game.12

Since Indian courts haven’t particularly dealt with cases of publicity rights with regard to fantasy sports, there is less legal jurisprudence available on this issue.

Judicial Developments related to “Fantasy Sports” in India

Two years after the Varun Gumber case, the legality of Dream 11 was questioned again in the Bombay High Court in the case of Gurdeep Singh Sachar v. Union of India case13. The Court again sided with the previous judgment and observed- “The participants do not bet on the outcome of the match and merely play a role akin to that of selectors in selecting the team. The points are scored by the participants for the entire duration of the whole match and not any part of the match.” This was an interesting analysis done by the Bombay High Court which further strengthened Dream 11’s case. Dream 11 again got the benefit of the doubt in 2020 where the Rajasthan High Court dismissed the PIL14 which argued that the said app was involved in betting on cricket games.

Future of Fantasy Sports in India! What lies ahead?

Recently in D Siluvai Venance v. State,15 the Madras High Court has called for stricter regulations for online games. The Court showed concern by pointing out how youngsters are being attracted to play such online games where some prize money is involved. The Madras High Court also sent a notice to MPL ambassador Virat Kohli and My11Circle ambassador Sourav Ganguly for promoting online gaming apps. It is worth noting that the apps mentioned above not only include fantasy sports but they also have online rummy- which was the major point of contention in the Siluvai case.

Andhra Pradesh was the latest state to ban fantasy sports in its entirety when the savings and exceptions for ‘game of skill’ from the provisions of the Andhra Pradesh Gaming Act were done away with.

The decision of the Bombay High Court has been challenged before the Supreme Court already. The Supreme Court has issued notices to all the parties for hearing the fresh contentions. So, it can be said that the future of online fantasy sports hangs in the balance until the Supreme Court decides on the pending matter.

References

1 https://fanarena.com/fantasy-sports/

2 https://fifs.in/

3 https://fifs.in/wp-content/uploads/2020/09/1598963962796_FIFS.Charter.wef-01Sep2020.pdf

4https://www.medianama.com/wp-content/uploads/Rajasthan-High-Court-Dream-11-2020-Ravindra-Singh-3 https://fifs.in/wp-content/uploads/2020/09/1598963962796_FIFS.Charter.wef-01Sep2020.pdf

Chaudhary-v.-Union-of-India.pdf

5 https://fifs.in/fifs-advertising-guidelines/

6 https://www.indiacode.nic.in/bitstream/123456789/2269/1/A1867-03.pdf

7 http://legislative.gov.in/sites/default/files/COI-updated.pdf

8 State of Andhra Pradesh v. K. Satyanarayana, AIR 1968 SC 825

9 Dr. K.R. Lakshmanan v. State of Tamil Nadu, AIR 1996 SC 1153

10 State of Bombay v. R.M.D. Chamarbaugwala, AIR 1957 SC 699

11 Varun Gumber vs. Union Territory of Chandigarh and Ors. (18.04.2017 – PHHC): C.W.P. No. 7559 of 2017

12 http://www.sportslaw.in/reports/FantasySportsPublication-Web.pdf

13 2017 SCC OnLine Del 12272

 

Image Credits: Photo by Peter Lagson on Unsplash 

It can be said that the future of online fantasy sports hangs in the balance until the Supreme Court decides on the pending matter.

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The football transfer: How the Barcelona – Messi matter turned murky

“In Barcelona, on 14 December 2000 and the presence of Messrs Minguella and Horacio (Gaggioli), Carles Rexach, Director of Football of F.C.B., hereby agrees under his responsibility and regardless of any dissenting opinions, to sign the player Lionel Messi, provided that we keep to the amounts agreed upon.”

 

Carles Rexach, the then Director of Football of F. C. Barcelona, scribbled this on a napkin to sign up a young Argentinian wonder kid, Lionel Messi, as he had never seen such a talent before and did not want to lose out on him. Thus, began the fairytale journey of Messi’s tryst with Barcelona and as history suggests this gamble that played out 20 years ago, turned out to be the most profitable for the club and rewarding for Messi.

Messi has been the Messiah for the club on several occasions, wriggling the club out of tough situations with his magic touch. With Messi on their side, Barcelona established itself as a formidable force that won everything that world football could offer. As all good things inevitably come to an end, this fairytale match appeared to have come to an end when Messi formally notified the club of his intention to unilaterally terminate his contract.

The events that transpired after the news broke out of Messi’s intention to leave highlight some troubling issues that are currently plaguing the football transfer market; in particular, the breakdown of relationships between a club and a player at the instance of their squabbling over better wages and contracts. Messi’s dispute with Barcelona revolves around the unique nature of a football contract and the role relationships play in such contracts.

 

In order to understand the dispute better, one must first have a formal understanding of the football transfer market.

 

What is a football transfer? Generally, a transfer in football is like any other business transaction that takes place between two football clubs and involves the transfer of a player who is under a contract with one club to another club in consideration of a fee known as a transfer fee.

 

A transfer is considered complete when the buying and selling clubs agree on the terms of sale and when the buying club enters into a contract with the player.

 

 

How does football transfer work?

If a transfer has to take place, the buying club must first approach the selling club and inform in writing before entering into negotiation with the player. This is legally mandated under Article 18(3) of the FIFA Regulations on the Status and Transfer of Players (the ‘Transfer Regulations’).

 

It is important to note however that the ultimate bargaining power in a transfer still lies with the selling club.

 

 

What is a transfer request?

A player, who is dissatisfied with his current club and finds himself in a position wherein the club has rejected all transfer bids from other clubs, may put in an official transfer request to the club. The only drawback is that such a request has no legal bearing and the club may choose to reject the plea.

 

 

When can a football transfer happen?

A transfer can take place during the “registration periods” which are provided by the governing bodies of the respective national associations.

In Europe, there are officially two periods during which transfers can take place – summer (July 1st – August 31st) and winter (January 1st – 31st) transfer window.

 

What is the duration of contracts between the players and the clubs?

The duration of a contract entered into by a player with the club may vary from short term to long-term depending on a variety of factors such as the age of the player, their skill, commercial value, potential growth and injury risk of the player. The term of a contract is determined mostly by these factors.

According to Article 18 (2) of the Transfer Regulations, the minimum term of a contract shall be from its effective date until the end of the season, while the maximum term of a contract shall be five years. Players under the age of 18 may not sign a professional contract for a term longer than three years.

 

Having garnered a basis of what and how a football transfer works, it is necessary to understand the terms of the contract between Messi and FC Barcelona that enables him to leave Barcelona on a free transfer and the reason behind the current situation between two.

 

What enabled Messi to leave Barcelona for free? Messi extended his contract with Barcelona in 2017 for a duration of 4 years, which was a deal that would enable him to retire at the club. However, on the insistence of Messi, an additional clause was added in the contract, which granted Messi the right to unilaterally terminate the contract at the end of each season and leave for free, provided that he notified the club prior to June 10th.

 

 

What was the legal issue involved in their dispute?

The legal issue involved the interpretation of the terms of the unilateral termination clause in light of the unprecedented COVID–19 pandemic that led to the interruption and the subsequent extension of the season.

 

Messi claimed that since the pandemic had suspended the season temporarily and it restarted only after June 10th (La Liga re-started on June 11th, 2020), it was impossible for him to exercise such a right before June 10th. Messi thus wished for the terms of the contract to be viewed liberally in light of the unprecedented events.

 

The Barcelona Board however contested that the terms of the contract strictly mentioned June 10th, hence Messi could not unilaterally terminate the contract post that date. The issue therefore would depend on whether the terms of the contract specifically mention a “specific date” or whether it is termed as the “end of the season”. In any case, according to Article 16 of the Transfer Regulation, a contract cannot be unilaterally terminated during the course of a season.

 

 

Relationship v Contract: what matters more?

The reason behind this issue turning unpleasant is largely due to the long-standing relationship that Messi had with Barcelona ever since he was a young boy. On a deeper analysis, the issue throws light on an important question – what is the nature of a football contract; is it purely a business transaction or does it involve the building of a relationship of trust, faith and respect?

 

Generally, the nature of any football contract is such that a player is associated with a club for a period of 3-4 years. It is unlike a business transaction of sale wherein it involves a single transaction. Instead, football contracts bind a player to the club for a considerable period of time and hence building a definitive relationship with the club is essential for the success of the contract. While the contract may describe the legal relationship, the true essence of the deal is the personal relationship.

 

Therefore, if a football contract failed to build a human connection between the player and the club, it would only increase the chances of the player leaving mid-contract and create a hostile environment for both parties.

 

 

Conclusion

In this case, Barcelona should have gauged the reasoning behind Messi’s intention to include a clause to unilaterally terminate his contract at the end of each season. Adding to the misery, the club management seems to have created a situation, which ultimately drove him to the point of making a decision to leave.

 

Barcelona’s actions, post Messi’s notification to leave, has been criticized as a tactical move to ensure that Messi had no other option but to stay at the club or could only leave provided the Club received his hefty release amount of € 700 million.

 

While Messi decided not to take the matter to Court, Barcelona seems to have made a big commotion out of it by forcing him to change his decision and stay with the club, perhaps until next June, thereby destroying the long-standing relation between the two.

 

Image Credits: Photo by Connor Coyne on Unsplash

If a football contract failed to build a human connection between the player and the club, it would only increase the chances of the player leaving mid-contract and create a hostile environment for both parties.

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Arraying of the unknown party as the main Defendant disallowed

The Delhi High Court has come down heavily on the tactics of concealment of real defendants in Intellectual Property (IP) Infringement cases utilized by plaintiffs with the aim of obtaining ex-parte injunction.  In a recent trademark infringement and passing off dispute between Bata India Limited vs Chawla Boot House & Anr, the Delhi High Court ruled that Plaintiff’s approach of impleading an unknown party as Defendant No. 1 was impermissible in law and directed stringent actions from the High Court Registry to control such misuse in all IP disputes 

The Court expressed its dismay over the non-compliance of the settled legal position and observed that this tactic has been adapted multiple times in IP infringement cases to obtain ex-parte injunctions in the initial hearing by making it very difficult for the main defendants to spot themselves in the cause list and appear in litigation concerning them 

Regarding the merits of the case, the court observed that Red Chief’s mark ‘POWER FLEX’ was infringing upon Bata’s trademark ‘POWER.’ 

BACKGROUND 

Bata instituted a trademark infringement suit against Red Chief, a footwear brand owned by Leayan Global, for using ‘POWER FLEX’ and the tagline ‘THE POWER OF REAL LEATHER’. According to Bata, it had exclusive right over the mark “POWER” by virtue of long and continuous use as well as multiple trademark registrationsBefore addressing the substantial part of the dispute i.e. trademark infringement, passing off, and unfair competition, the Court decided to address the way the Defendants were arrayed by the Plaintiff Company.  

ARRAYING OF UNKNOWN PARTY AS THE MAIN DEFENDANT 

Bata named Delhi-based retail outlet – Chawla Boot House, as the main defendant, whereas, the allegations were directed against the manufacturer company, Leayan GlobalThis hints at malafide intentions of the plaintiff to obtain ex-parte order against the main defendants by preventing them from detecting their names in the cause list by listing it as ‘Chawla Boot House & others’.  

This practice was declared impermissible in law in the case of Micolube India Ltd. v. Maggon Auto Centre & Anr in which the plaintiff had arrayed Maggon Auto Centre as the main defendant whereas the principal party i.e. Motor Industries was arrayed at Defendant no. 2. It was further noted that such practices disentitle a plaintiff of any equitable relief since the plaintiff did not approach the court with clean hands. It was held in that: 

The very fact that the plaintiff has also indulged in this practice is an indicator that it did not want the counsel for the defendant No. 2 to appear on the first date on which the matter was taken up for consideration of the grant or non-grant of ad interim injunction.” 

 

CONCLUSION  

Despite the established legal position, plaintiffs continue to array parties unrelated to the dispute as to the main defendant. The Registry was therefore ordered by the High Court to ensure strict compliance with the ratio laid down in the Micolube India judgment. In addition, a circular has been issued directing plaintiffs in all IP cases where there are multiple defendants to furnish an affidavit to the Registry confirming the arraignment of the main contesting party in the suit as Defendant No. 1.

Image Credits: Photo by Tingey Injury Law Firm on Unsplash

Despite the established legal position, plaintiffs  continue to array parties unrelated to the dispute as to the main defendant. 

The Registry was therefore ordered by the High Court to ensure strict compliance with the ratio laid down in the Micolube India judgment.

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