(BTCOE504) UNIT-II - WordPress.com · UNIT-II • Law Relating To Electronic Records And Intellectual Property Rights In India • Legal Aspects of Electronic Records/Digital Signatures

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UNIT-II

• Law Relating To Electronic Records And Intellectual Property RightsIn India

• Legal Aspects of Electronic Records/Digital Signatures• The Roles and Regulations of Certifying Authorities in India• Protection of Intellectual Property Rights in Cyberspace in India.

By Prof. Pankaj R. Patil

Law Relating To Electronic Records And Intellectual Property Rights In India

Legal Aspects of Electronic Records/Digital Signatures Recognition of Electronic Records- Under the Indian law, where it provides that information or any other matter

shall be in writing or in the writing or in the typewritten or printed form, then,notwithstanding anything contained in such law, such requirement shall bedeemed to have been satisfied if such information or matter is-

• rendered or made available in an electronic form; and• accessible so as to be usable for a subsequent reference.- The above provision of a law provides that if any information or matter isrendered or made available in an electronic form, and accessible so as to beusable for a subsequent reference, shall be deemed to have satisfied therequirement of the law which provides that information or any matter shall be inwriting or in the typewritten form.


-Section 4 provides legal recognition to electronic record and that where anylaw requires that any information or matter should be in the typewritten orprinted form, then such requirement shall be deemed to be satisfied if it is anelectronic form.-This provision is based on Article-5 of UNCITRAL Model Law which statesthat any information shall not be denied legal effect, validity or enforceabilitysolely on the grounds that it is in the form of a data message.-Moreover, UNCITRAL Guide to Enactment states that Article 5 embodies thefundamental principle that there should be no disparity of treatment betweendata messages and paper documents which is called the doctrine of “functionalequivalence.-The form in which certain information is presented or retained Can not be usedas the only reason for which that information is denied legal effectiveness,validity or enforceability. But Article 5 does not establish that effectiveness,validity of enforceability of data.


• Even in US the ‘Uniform Electronic Transaction Act (25 November 1997draft) Section 201 provides the following: _

(a) A record may not be denied legal effect, validity or enforceability solelybecause it is in the form of an electronic record(b) If a rule of law requires a record to be in writing, or providesconsequences if it is not, an electronic record satisfies that rule.(c) A person may establish reasonable requirements regarding the type ofrecords, which will be acceptable to it.


UNCITRAL Model Law- UNCITRAL Guide to Enactment states that Article 6, of the UNCITRAL Model

Law is intended to define the basic standards to be met by a data message inorder to satisfy a requirement that information be retained or presented ‘inwriting’ or that it be contained in a ‘document’ or other paper-based instrument.

- In many jurisdictions, the concept of ‘writing’, ‘original’ and ‘signature’overlap, but the Model Law approaches them as three separate and distinctconcepts. However, the three articles share a common structure and should beread together’.

- Even the convention on the Recognition and Enforcement of Foreign ArbitralAwards (the New York Convention), deals not only with the form of arbitrationagreement to be recognized, but also the arbitral award.

- In respect of arbitration agreements, it requires recognition of an agreement inwriting and also specifies that an agreement includes a clause in a contract orarbitration agreement ‘signed’ by parties or contained in an exchange of lettersor telegrams.


The Legal Recognition of Electronic/Digital Signatures- In India where any law provides that information or any other matter shall beauthenticated by affixing signature or any document shall be signed or bear the signature ofany person, then, anything contained in such laws, such requirement shall be deemed to havebeen satisfied if such information or matter is authenticated by mean of electronic signaturesaffixed in such a manner as may be prescribe by central government UNCITRAL Model LawArticle 7 of UNCITRAL Model Law relating to digital signature provides:(1) Where the law requires a signature of a person, that requirement is met in relation to a data message if—(a) A method is, used to identify that person and to indicate that person’s approval of the information contained in the data message; and(b) that method is a reliable as was appropriate for the purpose for which the data message was generated or communicated, in the light of all the circumstances, including any relevant agreement.


(2) Paragraph (1) applies whether the requirement therein is in the form of : an obligation or whether the law simply provides consequences in the form of an obligation or whether law simply provides consequence in absence of a signature.-Article 7 of UNCITRAL Model Law is based on the recognition of the functions of a signature in a paper-based environment some of which are for the following purposes: • Identify a person;• Provide certainty as to the personal involvement of that person in the act of signing;• Associate that person with the content of a document;• Attest to the intent of a person to endorse authorship of a text;• Attest to the intent of a person to associate itself with the content of a document written by

someone else;• Attest to the fact that, and the time when a person had been at a given place.

-Paragraph 1(a) of UNCITRAL Guide to Enactment establishes the principle that in anelectronic environment, the basic legal functions of a signature are performed by way of amethod that identifies the originator of a data message and confirms that the originatorapproved of the content of that message.


-Paragraph 1(b) of the above enactment establishes a flexible approach to the level of security tobe achieved by the method of identification used under paragraph 1(a). In determining whetherthe method mention in para (1) js appropriate legal, technical and commercial factors should betaken into account Some of these include, the following:• The sophistication of the equipment used by each parties;• The nature of their trade activity;• The frequency at which commercial transactions take place between the parties; |• The function of signature requirements in a given statutory and regulatory environment;• Compliance with authentication procedures set forth by intermediaries:• Compliance with trade customs and practice;• Existence of insurance coverage mechanisms against unauthorized messages;• The availability of alternative methods of authentication and the cost of implementations;• The degree of acceptance or non-acceptance of the methods of identification in the relevant

industry or field at the time method was agreed upon and the time the data message wascommunicated and so on.


The Position in the US

-In the US the legal recognition of electronic signature—(a) A may not be denied legal affect, validity or enforceability solely because it is in the formof electronic signature.(b) If a rule of law requires a signature or provides consequences in the absence of signature,the Rule of law is satisfied with respect to an electronic record if the electronic recordincludes an electronic Signature.(c) A party may establish reasonable requirements regarding the method and type ofsignatures, which will be acceptable to it.- According to the US law, ‘Electronic Signature’ means any signature in electronic form,attached to logically associated with an electronic record, executed or adopted by a person orhis electronic agent with an intent to sign the electronic record’.


- Further, in US, law, ‘signature’ means any symbol, sound, process or encryption or a recordin whole or in part executed or adopted by a person or the person’s electronic agent with anintent to—• identify the party;• adopt or accept a term or record;• establish the information integrity of a record or term that contains• the signature or to which a record containing the signature refers.• The critical issue in the context of both a signature or electronic signature is what the signer

intended when the symbol was executed, attached or incorporated into the record.The effect and proof of electronic signatures are as follows:

(a) Unless the circumstances otherwise indicate that a party intends less than all the effect andelectronic signature is intended to establish—


(1) the signing party’s identity;(2) its adoption and acceptance of a record or a term; and(3) the informational integrity of the record or term to which the electronic signature isattached or with which it is logically associated.(b) If the signing party executed or adopted the electronic signature in accordance with asecurity procedure, the electronic record to which the electronic signature is attached or withwhich it is logically associated is presumed to be signed by the signing party. Otherwise, anelectronic signature may be proven in any manner, including by showing that—(1) A procedure existed by which a party must of necessity have signed, or manifested assentto a record of term. In order to proceed further in the processing of the transaction or(2) that the party is bound by virtue of the operation of its electronic agent.(c) The authenticity of and authority to make an electronic signature is admitted unlessspecifically denied in the pleadings. If the validity of an electronic signature is denied in thepleadings, the burden of establishing validity is on the person claiming validity


The Position in Australia- In Australia many law require a signature that a document is signed by particular person and that be

signed in writing . In all these requirement ,the signature be seen to be performing a different kind of afunction.

- These might include identifying a person, providing certainty personal involvement of that person inthe act of signing, associating that person with the content of a document, attesting to the intent of aperson to endorse authorship of a text, attesting to the intent of a person to associate himself with thecontent of a document written by someone else, and attesting to the fact that and the time when aperson had been at a given place.

- In Australia, the courts have interpreted ‘signed’ and ‘signature’ very widely, depending upon thenature of the requirement for a signature or a document be signed.

- The courts in Australia have held that signature signals endorsement or acknowledgment of thedocument as well as identifying the party to sign the document.

- The courts view in Australia that the signature does not necessarily have to be handwritten and insome cases it does not have to be party’s actual signature, and initials have been held to be sufficientunder the law.

- In a case in Australia, the court held that the object of all statutes which require a document to besigned by a particular person is to authenticate the genuineness of the document. And where the statutedoes not require that the document be signed with the name of the party signing a cross or initials orpart only of a full name will suffice


Electronic Records and Electronic Signatures/Digital Signatures and Their Use by the Government and its Agencies in India

In India-(1) where any law provides for—(a) the filing of any form, application or any other document with any office, authority, body or agencyowned or controlled by the appropriate government in a particular manner;(b) the issue or grant of any license, permit, sanction or approval by whatever name called in aparticular manner; and(c) the receipt or payment of money in a particular manner, then, notwithstanding anything containedin any other law for the time being in force, such requirement shall be deemed to have been satisfied ifsuch filing, issue, grant, receipt, or payment, as the case may be, is effected by means of suchelectronic form as may be prescribed by the appropriate government.(2) The appropriate Government may, for the purposes of sub-section of(1), by rules, prescribe—(a) the manner and format in which such electronic records shall be filed created or issued; and(b) the manner or method of payment of any fee or charges for filing, creation or issue any electronicrecord under clause (a).


-The appropriate government may, for the purposes of IT Act 2000 and for efficient deliveryof service to the public through electronic means authorize any service provider to setup,maintain and upgrade the computerized facilities, and perform such other services as may bespecified by notifications in the Official Gazette.-Such service providers may be also authorized to collect, retain and appropriate such servicecharges as may be prescribed by the appropriate government.- Even if there is no express provision under the Act, rule, or regulation or notification, theappropriate government may also specify different scale of service charges for different typesof services


Retention of Electronic Records in India- In India-(1) where any law provides that documents, records or information shall be retained for any

specific period, then that requirement shall be deemed to have been satisfied if suchdocuments, records or information are retained in the electronic form if the—

(a) information contained there in remains accessible so as to be usable for a subsequentreference;(b) electronic record is retained in the format in which it was originally generated, sent orreceived or in a format which can be demonstrated to represent accurately the informationoriginally generated, sent or received; and(c) details which will facilitate the identification of the origin, destination, date and time ofdispatch or receipt of such electronic record are available in the electronic record;-Provided that this clause does not apply to any information which is automatically generatedsolely for the purpose of enabling an electronic record to be dispatched or received.(2) Nothing in this Section shall apply to any law that expressly provide for the retention ofdocuments, records or information in the form of electronic record . If the law requires forprovision for audit of documents, records or information that provision of law shall also beapplicable for documents, records or information processed and maintained in the electronicform.


UNCITRAL Model Law Relating to Retention of Data Messages- Article 10 of UNCITRAL Model Law provides—(1) Where the law requires that certain documents records or information be retained that requirement is met by retaining data messages, provided that the following conditions are satisfied:(a) The information contained therein is accessible so as to be usable for subsequent reference;(b) The data message is retained in the format in which it was generated, sent or received, or in a format which can be demonstrated to represent accurately the information generated, sent or received; and(c) Such information, if any, is retained as enables the identification of the origin and destination of a data message and the date and time when it was sent or received.(2) An obligation to retain documents, records or information in accordance with paragraph (1) does not extend to any information, the sole purpose of which is to enable the message to be sent or received.(3) A person may satisfy the requirement referred to in paragraph (1) by using the services of any other person, provided that the conditions set forth in sub-paragraphs (a), (b) and (c) of paragraph (1) are met.


-In practice, storage of information and especially storage of transmittalinformation may often be carried out by someone other than the originator or theaddressee, such as an intermediary.- Nevertheless, it is intended that the person obligated to retain certain

transmittal information cannot escape meeting that obligation simply because,for example, the communication system operated by that other person does notretain the required information.

- This is intended to discourage bad practice or willful misconduct.- Paragraph (3) provides meeting its obligation under paragraph (1), an

addressee or originator may use the services of any third party, not just anintermediary


Position in the US-Under the Uniform Electronic Transactions Act (25 November 1997 draft) Section 205 dealswith provisions for retention of electronic record .under the law, if certain documents, recordsor information be retained, as electronic records it will satisfy the requirement of the retentionunder the law if—(1) the information contained in the electronic record remains accessible so as to be usable forsubsequent reference;(2) the electronic record is retained in the format in which it was generated, stored, sent orreceived, or in format that can be demonstrated to reflect accurately the information asoriginally generated, stored, sent or received; and(3) the information, if any, is retained as enables the identification of the source of origin anddestination of an electronic record and the date and time when it was sent or received.


Position in India• In India, wherever any law provides that any rule, regulations or order, bye- law, notification

or any other matter shall be published in the Official Gazette, then such requirements shallbe deemed to have been satisfied if such rules of regulations are published either in theOfficial Gazette or in the electronic gazette, and if they are published, shall be deemed to bethe date of that Official Gazette which was first published in either form.

• However, it has been specifically provided under the law in India that nothing in theprovisions about the use of electronic record and electronic/digital signature in governmentand its agencies, about the retention of the requirement of the publication of rules,regulations, and the requirement of the publication of electronic gazette shall confer a rightupon any person to insist that any Ministry or Department of the Central Government or theState Government or any authority or body established by or under any law or controlled orfunded by the Central or State Government should accept, issue, create, retain and preserveany document in the form of electronic records or effect any monetary transaction in theelectronic form.


The Central Government’s Power to Make Rules in India- In India the Central Government has been given the power to frame rules with respectto proper, effective and legally valid rules in connection with the electronic/digitalsignatures. These rules, the Central Government may frame, with respect to theelectronic/digital signatures for the following purposes:• The type of electronic/digital signature• The manner and format in which the electronic/digital signature shall be affixed• The manner or procedure which facilitates identification of the person affixing the

electronic/digital signature• Control processes and procedures to ensure adequate integrity, security and

confidentiality of electronic records or payments• Any other matter which is necessary to give legal effect to electronic/ digital

signatures.- Where in a contract formation, the communication, the acceptance, the revocation of

proposals and acceptances are expressed in electronic form or by means of anelectronic record, such contract shall not be deemed to be unenforceable solely on theground that such electronic form or means was used for that purpose.By Prof. Pankaj R. Patil

- In this connection, the Central Government has framed rules with respect to electronicrecords and digital signature in the year 2004. Rule 3 of these rules provide for filing ofform, application or any other document may be filed with any office, authority, body oragency owned or controlled by the appropriate government using software specified by it.And, such office, authority, body or agency, while generating such software, shall take intoaccount the following electronic records: :

• Life time• Preservability• Accessibility• Readability• Comprehensibility in respect of linked information• Evidentiary value in terms of authenticity and integrity• Controlled destructibility• Augmentability.-And any license, permit, sanction or approval whatever name called referred to in clause (b)of Sub-section (1) of Section 6 of the Act may be issued or granted by using the softwarespecified under the Rule 3.


Electronic Records: Attribution Acknowledgement and Dispatch in India- Based on Article 13 of the UNCITRAL Model Law, the Indian law relating to attribution ofelectronic record shall be attributed to the originator—• if it was sent by the originator himself;• by a person who had the authority to act on behalf of the originator in respect of that

electronic record; or• by an information system programmed by or on behalf of the originator to operate

automatically’.- The above provision states that if any electronic record was sent by the originator himself orby a person who had the authority to act on behalf of the originator or by an informationsystem programmed by or on behalf of the organizer to operate automatically, then theelectronic record shall be attributed to the originator.


UNCITRAL Model Law on Attribution of Data MessagesArticle 13 of the UNCITRAL Model Law provides—(1) A data message is that of the originator if it was sent by the originator itself.(2) As between the originator and the addresses, a data message is deemed to be that of theoriginator if it was sent by• person who had the authority to act on behalf of the originator in respect of that data

message: or .• an information System programmed by or on behalf of the Originator to operate

automatically(3)As between the originator and the addresses, an addressee is entitled to regard a datamessage as being that of the originator and to act on that assumption if(a) in order to ascertain whether the data message was that of the originator, the addresseeproperly applied a procedure previously agreed to by the originator for that purpose; or(b) the data message as received by the addressee resulted from the actions of a person whoserelationship with the originator or with any agent of the originator enabled that person to gainaccess to a method used by the originator to identify data message as its own.


The Position in the US- Similarly, the US law is based on Article 13 of the UNCITRAL Model Law. The US lawabout attribution of data message provides—(a) As between the parties, an electronic record is attributable to a party if—(1) it was in fact the action of that party, its agent, or electronic agent;(2) the other party, in good faith and in compliance with a security procedure concluded that itwas the action of the other party, its agent, or electronic agent; or(3) the electronic record—

(i) resulted from acts of a person that obtained access to a security procedure, accessnumbers, codes, computer programs or like from a source under the control party creating theappearance that the electronic record came from that party;(ii) the access occurred under circumstances constituting a failure to exercise reasonable care by the party; and(iii) the other party reasonably relied to its detriment on the apparent source of the electronic record.


(b) ...(c) Attribution of an electronic record to a party under Sub-section (a) (2) creates a

presumption that the electronic record was that of the party to which it is attributed. Under theUS Law, the term “electronic agent’ means a computer program or other electronic orAutomated means used, selected, or programmed by a party to initiate or respond to electronicrecords or performances in whole or in part without review by an individual


• Acknowledgement of Receipt of Electronic Record in India-The Indian law relating to acknowledgement of receipt is primarily based op the UNCITRALrecommendations for acknowledgment of receipt of electronic records under Article 14. In India—(1) where the originator has stipulated that the acknowledgement of receipt of electronic record begiven in a particular form or by a particular method, an acknowledgement may be given by—(a) any communication by the addressee, automated or otherwise; or(b) any conduct of the addressee, sufficient to indicate to the originator that the electronic record hasbeen received.(2) Where the originator has stipulated that the electronic record shall be binding only on receipt of anacknowledgement of such electronic record by him, then, unless acknowledgement has been soreceived, the electronic record shall be deemed to have been never sent by the originator.(3) Where the originator has not stipulated that the electronic record shall be binding only on receipt ofsuch acknowledgement, and the acknowledgement has not been received by the originator within areasonable time, the originator may give notice to the addressee stating that no acknowledgement hasbeen received by him and specifying a reasonable time by which the acknowledgement must bereceived by him and if no acknowledgement is received within the aforesaid time limit he may, aftergiving notice to the addressee, treat the electronic record as though it has never been sent”. ,- The above Section stipulates for the acknowledgement of receipt of an electronic record by variousmodes.


UNCITRAL Model Law Relating to Acknowledgement of Data Message• Article 14 of the UNCITRAL Model Law provides—(1) Paragraph (2) to (4) of this Article apply where, on or before sending a data message theoriginator has requested or has agreed with the addressee, that receipt of the data message beacknowledged.(2) Where the originator has not agreed with the addressee that acknowledgement given in a

particular form or by particular method an acknowledgement may be given by—(a) any communication by the addressee, automated or otherwise(b) Any conduct of the addressee sufficient to indicate to the originator that the data messagehas been received.(3) Where the originator has stated that the data message is conditional on receipt of theacknowledgement the data message is treated as though it has never been sent, until theacknowledgement is received.(4) Where the originator has not stated that the data message is conditional on receipt of theacknowledgement and the acknowledgement has not been received by the originator withinthe time specified or agreed or, if no time has been specified or agreed, within a reasonabletime to the originator.


-The provisions of Article 14 are based on the assumption that acknowledgement proceduresare to be used at the discretion of the originator. It is not intended to deal with the legalconsequences that may flow from sending an acknowledgement of receipt, apart fromestablishing receipt of the data message.- The utility of functional acknowledgement is a business decision to be made by users ofelectronic commerce whether or not sending that acknowledgement would amount to anacceptance of the offer is left to general contract law.


• The Position in the US-The US law, an electronic acknowledgement of receipt provides—(1) If the sender of a record requests or agrees with the recipient of the record that receipt ofthe record does not bind the sender until acknowledgement is received and expires ifacknowledgement is not received in a reasonable time after the record was sent.(2) If the sender requests electronic acknowledgement but does not state that the record is

conditional on electronic acknowledgement and does not specify a time for receipt andelectronic acknowledgement is not received within a reasonable time after the record is sent,the sender, on notice to the other party, may either treat the record as having expired or specifya further reasonable time within which electronic acknowledgment must be received or themessage will be treated as having expired. If electronic acknowledgement is not receivedwithin that additional time, the sender may treat the record as not having binding effect.(3) If the sender requests electronic acknowledgement and specifies a time for receipt, ifreceipt does not occur within that time, the sender may for treat the record as having expired


• The Time and Place of Dispatch and Receipt of Electronic records in India

-One of the main issue is when a message is considered sent or received when it is transmitted through differentelectronic mechanism. In order to remove many of the difficulties and ambiguities the cyberspace laws aboutacknowledgement of receipt of data message and the time and place of dispatch and receipt of electronic recordshave been provided under the law. In India, the law about time and place of dispatch and receipt of electronicrecords provides:(1) Save as otherwise agreed to between the Originator and the addressee, the dispatch of an electronic recordoccurs when it enters a computers resource outside the control of the originator.(2) Save as otherwise agreed to between the Originator and the addressee, the time of receipt of an electronicrecord shall be determined as follows:(a) If the addressee has designed a computer resource for the purpose of receiving electronic records,(i) receipt occurs at the time when the electronic records enters the designed computer resource; or(ii) if the electronic record is sent to a computer resource of the addressee that is not the designed computerresource receipt Occurs at the time when the electronic record is retrieved by the addressee; |(b) If the addressee has not designated a computer resource along with the specified timings, if any, receipt whenthe electronic record enters the computer resource of the addressee.


(3) Save as otherwise agreed to between the originator and the addressee, anelectronic record is deemed to be dispatched at the place where the originator hashis place of business and is deemed to be received at the place where theaddressee has his place of business.(4) The provision of Sub-section (2) shall apply notwithstanding that the placewhere the computer resource is located may be different from the place wherethe electronic record is deemed to have been received under Sub-section (3).(5) For the purposes of this Section—(a) If the originator or the addressee has more than one place of business, theprincipal place of business, shall be the place of business;(b) If the originator or the addressee does not have a place of business, his usualplace of residence shall be deemed to be the place of business;(c) ‘Usual place of residence’ in relation to a body corporate, means the placewhere it is registered


UNCITRAL Model Law on Time and Place and Receipt of Data Messages-As the Indian law by and large follows UNCITRAL Model Law, we shall discuss the UNCITRALModel Law on time and place of dispatch and receipt as follows:Under Article 15 of the UNCITRAL Model Law—(1) Unless otherwise agreed between the originator and the addressee, the dispatch of a data messageoccurs when it enters an information system outside the control of the originator or of the person whosent the data message on behalf of the originator.(2) Unless otherwise agreed between the originator and the addressee, the time of receipt of a datamessage is determined as follows:(a) If the addressee has designed an information system for the purpose of receiving data messagereceipt occurs—(i) at the time when the data message enters the designed information system; or(ii) If the data message is sent to an information system of the addressee that is not the designedinformation systems, at the time when the data message is retrieved by the addressee.(b) Paragraph (2) applies not with standing that the place where the information system is located maybe different from the place where the data message is deemed to be received under paragraph (4)


-For the application of the existing principles of law, it is important to ascertainthe time and place of receipt of information of the data messages.-We find the use of electronic communication technique makes those rulesdifficult to ascertain the uses of electronic commerce to communicate from oneState to another without knowing the location of any information is very commonthrough which the communication is effected.-The Model law is intended to reflect the fact that the location of informationsystems Is irrelevant therefore, lays down more objective criteria that 1s, the placeof business of parties.


Position in the US-Under the US law, the time and place of sending and receipt of data messages is as follows: 7(a) Unless otherwise agreed between the sender and the recipient, an electronic record is sentwhen it enters an information system outside the control of the sender or of a person who sentthe electronic record on behalf of the sender. 7(b) Unless otherwise agreed between the sender and the recipient, an electronic record isreceived when recipient 1s able to retrieve electronic records, in a form capable of beingprocessed by that system, and the recipient uses or has designed that system for the purpose ofreceiving such records or information. In addition, an electronic record is received when itcomes to the attention of the recipient.(c) Sub-section (b) applies even if the place where the information system is located isdifferent from the place where the electronic record 1s considered to be received under Sub-section (d).


(d) Unless otherwise agreed between the sender and the recipient, an electronicrecord is deemed to be sent from where the sender has its place of business andis deemed to be received where the recipient has its place of business. For thepurposes of this sub-section—(1) If the sender or recipient has more than one place of business, the place ofbusiness is that which has the closest relationship to the underlying transactionsor, if there is no underlying transaction, the principal place of business; and(2) If the sender or the recipient does not have a place of business, the place ofbusiness 1s the recipient’s habitual residence.(e) Subject to Section 403, an electronic record is effective when received, evenif no individual is aware of its receipt


• As in the regime of the Internet where e-commerce transactions are not specific to the timeand place of the parties entering into agreements with the help of e-commerce andelectronic/digital signatures, therefore, there are ambiguities in the electronic world to findout the exact time and place of the formation of contracts.

• It is precisely for this reasons that the cyber laws have to give importance to the place ofbusiness of the parties for a showing the formation of the contract.

• Thus, the trend of the cyber laws which are primarily based on the UNCITRAL Model Lawabout the time and place of data message though the Internet regime gives significantimportance to the place of business of the parties for conclusion or formation of the contractwhether in India or in the US.


Securing Electronic Record and Electronic/Digital Signatures in India- In the age of e-commerce where the electronic records and digital signatures one are of

crucial significance for proper functioning of e-commerce and businesses in the globalizedfree market economy it is imperative that the transactions of a e-commerce in the form ofelectronic record and electronic/digital signatures should be secure, authentic and must besuitably confidential from the general public and the third parties.

- The relevant parties to the electronic records and electronic/digital signatures must beconfident while conducting e-commerce or business that their transactions are secure andcannot be tampered with by any or unrelated persons to the transactions of e-commercebetween the relevant parties.

- Therefore, in order to have proper security procedures to secure electronic records andelectronic/digital signatures, proper cyber laws are very essential. And many countries in theworld have tried to frame such laws suiting to their unique business environment, thepolitical system and the necessity of properly conducting e-commerce or business in themodern world of cyberspace and the Internet.


-Section 14 of the IT Act, 2000 provides that an electronic record would be deemed to be secureif any security procedure has been applied to an electronic record. And it shall be deemedsecure from the time the security procedure was applied, up to the point of time of ‘verification.- What could be the security procedure has not been clarified and what security procedurewould be valid under the law has not been explained. It appears that the scope of the securityprocedure is very wide.- Whereas encryption provides a mechanism for providing security of content, some other

techniques also need to be used to satisfy authentication.- In a written transaction, the signature on the document or contract serves the purpose of

authenticating the document, and to identify and bind the person who signed. Moreover, if thename were inserted into a document of acknowledgement in such a way as to signify that theacknowledgement was intended to be his own, such a name, whether written or printed,would constitute his signature.


-In Indian Law the main provision which provides for the legal recognition ofelectronic signature as a substitute for hand-written signature is provided underSection 5 of the IT Act.-This section also provides that this recognition would be available if theelectronic signature is fixed in such a manner as is prescribed by the CentralGovernment.-The Central Government has been given the power to make rules for electronicsignatures under Section 10 of the said Act. Moreover, it is provided for theauthentication and to secure electronic signatures.-In case of digital signature, the ‘signature creation data” mean the private key ofthe subscriber


Verification of Electronic Signatures in India-The verification of an electronic/digital signature shall be accomplished by computing a newhash result of the original electronic record by means of the hash function used to create aelectronic/digital signature and by using the public key and the new hash result, the verifiershall check—(i) if the digital signature was created using the corresponding private key and(ii) if the newly computed hash result matches the original result which was transformed intodigital signature during the signing process. The verification software will confirm the DigitalSignature as verified if—(a) the signer’s private key was used to digitally sign the electronic record, which is known tobe the case if the signer’s public key was used to verity the signature because the signer’spublic key will verify only a digital signature created with the signer’s private key.(b) the electronic record was unaltered which is known to be the case id the hash resultcomputed by the verifier is known to be the case identical to the hash result extracted from thedigital signatures during the verification process.


Central Government’s Power to Prescribe Security Procedure -It is for the Central Government to prescribe the Security procedure with respect to secureelectronic records and electronic signatures.-While exercising its power for prescribing security procedure the, Indian law states thatcentral Government prescribe such security procedure having regard to commercialcircumstances at the time when the procedure was used including following:- Nature of the transactionLevel of sophistication of the parties with reference to their technological capacityVolume of similar transactions engaged in by other parties .Availability of alternatives offered to but rejected by any party. Cost of alternative proceduresProcedures in general use for similar types of transaction or communications- The Central Government may, for the purposes of Sections 14 and 15, prescribe the securityprocedures and practices.


Conclusions-We see that means of communication, business and commerce are continuing tochange across the international boundaries. The modern electronic technology such asElectronic Data Interchange (EDI), the Internet and e-mails allow speedier andcheaper transactions between franchisors, franchisees and customers.- The electronic communications can be used for advertising, marketing and

promotion of business, training materials, manual revisions, supplier’s information,transmittal of software upgrades and many other functions.

- But the new innovations and opportunities bring their own new challenges. Thechanges in electronic technology bring new legal issues to the fore and the domesticand international laws are slow to respond to the requirements of the newtechnology.

- Thus, it is advisable for the Indian business community, to be well acquainted withthe latest technology and advise the government to make suitable changes in the law,keeping in view the demands of the latest electronic technology.


The Roles and Regulations of Certifying Authorities in India

The Scenario• Software is playing an important role in using the enhanced capabilities of processing, storage and

communication technologies which will create new environment that will increase interactivity among variouscomputing device and application. Software development has made possible massively distributed computingknown as community computing.

• In India, therefore, electronic/digital signatures means authentication of any electronic record by a subscriberby means of an electronic method or procedure in accordance with the provision of Section 3 of the IT Act.

The Role of Certifying Authority (CA)• The Certifying ‘Authority (CA) acts as a trusted third party in the public key infrastructure. And the CAs

important role is to certify that a public key is associated with a given or particular individual. Such anassociation is important in the verification for the purpose of authentication which gives reliability to digitalsignature.

• We find that these are various methods and ways of describing what an electronic/digital signature is. We maymention that the non legal basis of the definition of digital signature or digital data which grant both the partiesparticipating in a message the certainty and the integrity they need for the formation of online contracts or longdistance transactions


• the authenticity of the subject participating in the commercial communication;• the integrity of the message communicated or the communication. The authenticity, integrity

and confidentiality can be ensured by the independent third party, that is the proper CAsunder the law. The Certifying Authority could either be a public authority or a privateauthority.

- It is the important role of the CAs that they should make such easily accessible CertificationPractices Statement which clearly states the kind of practices that CAs employ in issuingcertificates.

- A CA must also make its own Certificate regarding its public key available to the partieswho want to verify the certificates of consumers or users and if a CA fails to perform itsduties which result in significant losses on a large number of innocent parties, then suchparties, could be compensated for their losses.


Appointment of Controller and His Functions- The Indian Law requires that the Central Government may appoint a Controller of CertifyingAuthorities for the implementation purpose of this Act.- The Central Government may also appoint a number of Deputy Controllers and Assistant

Controller, other officers and employees as the government deems fit. The Controller issupposed to discharge his functions as required under the Act. And his functions are subjectto the general control and directions of the central government.

- The Deputy Controller and Assistant Controller and other officer and employees shallperform their functions as assigned to them by the Controller under his generalsuperintendence and control. The qualifications for the appointment of Controller, DeputyController and Assistant Controller are to be prescribed by the Central Government.

- The Head Office and Branch office of the Controller are to be specified by the CentralGovernment and are to be established at such places as the Central Government may thinkfit.

- Under the IT Act, 2000, the Controller has very important functions to perform for theimplementation of the objects of the Act and as well as regulating, supervising and layingdown standards for the activities of the CAs which perform important functions for thefunctioning of the control over the cyberspace and the internet.


- For the purpose of effectively & usefully regulating the authentic and properly identifiabletransactions, there is a need for not only national CAs but also due regard to the foreign CAsto be recognized under the law. Central govt. approval and by notification in the officialgazette recognize any foreign CA for the purpose of act .- IT’ architecture for CAs may support open standards and accepted de facto standards; the

most important standards that may be considered for the different activities associated withthe CA’s functions. Obtaining License to Issue Electronic/Digital Signature Certificates in

India-Subject to the provision of sub-section (2) Section 21 of the IT Act, any person may makeapplication to the Controller for a license to issue the Electronic/ Digital Signature Certificate.And no license shall be issued unless that applicant fulfils such requirements with respect toqualification, expertise, manpower, financial sources and other infrastructure facilities, whichare necessary to issue Electronic/Digital Signature Certificate as may be prescribed by theCentral Government.


- A license granted by the Controller shall—• Be valid for such period as may be Specified by the Central government; an• not be transferable or heritable;• Be subject to such terms and conditions as may be specified by the regulations- Under the Indian law, the following Persons may apply for grant of license to issue Digital SignatureCertificate ,(a) an individual, being a citizen of India & having capital five crore of rupees or more in his businessor Profession:(b) a company having—(i) Paid up capital of not less than five crores of rupees; and(ii) Net worth of not less than fifty crores of rupees:- Provided that no company in which the equity share capital held in aggregate by the Non Resident

Indian, Foreign Institutional Investors, or foreign companies, exceeds forty-nine per cent of itscapital, shall be eligible for grant of license.

- The above rule makes it clear that no NRI, foreign national or foreign company should have majorityof shares in the company in India if they want to get a license for issue of Electronic/DigitalSignature Certificate as a proper and valid CA.


• In India, every application for issue of a license shall be in such form as may be prescribedby the Central Government. Every application for issue of a license shall be accompaniedby—

(a) certification practice statement:(b) a statement including the procedures with respect to identification of the applicant;(c) payment of such fees, not exceeding twenty-five thousand rupees as may be prescribed bythe Central Government;(d) such other documents, as may be prescribed by the Central Government’.- For the purposes of getting a license for a CA, it is provided under the rules that every

application shall be made to the Controller—(i) in the form given in schedule-I; and(ii) in such manner as the controller may, from time to time, determine, supported by suchdocuments and information as the controller may require and it shall inter alia include:(a) a Certificate Practice Statement(CPS);(b) A statement including the procedures with respect to identification of the applicant;(c) a statement for the purpose and scope of anticipated Digital Signature Certificatetechnology, management, or operations to be outsourced etc.


• Renewal and Suspension of License of the certifying Authority- Once a license has been granted for a specified period it can be renewed if the CA Makes an application for

renewal of a license in the prescribed form and a fee of not exceeding five thousand rupees .- The Controller has the power to suspend a license of the CA:- (1) if he is satisfied after making such inquiry as he may think fit on the grounds that a certifying authority

has—(a) made a statement in, or in relation to, the application for the issue or renewal of the license, which is incorrector false in material particulars;(b) failed to comply with the terms and conditions subject to which the license was granted;(c) failed to maintain the standards specified under the clause(b) of sub-section(2) of Section 20;(d) contravened any provisions of this Act, rule, regulation or order made thereunder; revoke the license:- Provided that no license shall be revoked unless the Certifying Authority has been given a reasonableOpportunity of showing cause against the proposed revocation.(2) The controller may, if he has reasonable cause to believe that there is any ground for revoking a license undersub-section (1), by order, suspend such license pending the completion of any enquiry ordered by him:-Provided that no license Shall be suspended for a period exceeding ten days unless the CA has been given areasonable opportunity of showing Cause against the proposed Suspension.(3) No Certifying Authority Whose license has been suspended shall issue any Electronic/Digital Signature

Certificate during such suspensionBy Prof. Pankaj R. Patil

• Procedure for the Grant or Rejection of License to the Certifying Authority (CA)- the Controller has the power after considering the application for a license to refuse to grant or renew a licenseon the following grounds:(i) the applicant has not provided the controller with such information relating to its business, and to anycircumstances likely to affect its method of conducting business, as the controller may require, or(ii) the applicant is in the course of being wound-up or liquidated; or(iii) a receiver has, or a receiver and manager have, been appointed by the court in respect of the applicant; or(iv) the applicant or any trusted person has been convicted, whether in India or out of India, of an offence theconviction for which involved a finding that it or such trusted person acted fraudulently or dishonestly, or hasbeen convicted of an offense under the Act or these rules: or(v) the controller has invoked performance bond or banker’s guarantee; or(vi) a Certifying Authority commits breach of, or fails to observe and comply with, the procedures and practicesas per the Certification Practice Statements; or(vil) a Certifying Authority fails to conduct, or does not submit, the returns of the audit in accordance with rule31; or(Viii) ‘the audit report recommends that the Certifying Authority is not worthy of continuing CertifyingAuthority’s operation; or(ix) A CA fails to comply with the directions of the Controller


Some Procedures and Security Guidelines for Certifying Authorities(CAs)

Every CA is expected to—• make use of hardware, software and procedures that are secure from intrusion and misuse;• provide a reasonable level of reliability in its services which are reasonably suited to the

performance of intended functions,• adhere to security procedures to ensure that the secrecy and privacy of the electronic

signatures are assured; and• observe such other standards as may be specified by regulations.The following are the Security Guidelines for the CAs:(1) The Certifying Authorities shall have the sole responsibility of integrity: confidentialityand protection of information and information assets employed in its operation, consideringclassification, declassification, labelling, storage, access and destruction of information assetsaccording to their value, sensitivity and importance of operation.


(2) Information Technology Security Guidelines and Security Guidelines for CertifyingAuthorities aimed at protecting the integrity, confidentiality and availability of service ofCertifying Authority are given in Schedule-II and Schedule-IIJ respectively.(i) The Certifying Authority shall formulate its Information Technology and Security policyfor operation complying with these guidelines and submit it to the Controller beforecommencement of operation;(ii) Provided that any change made by the Certifying Authority in the information technologyand security policy shall be submitted by it within two weeks to the Controller!Moreover, under the law every CA is expected to ensure that every person employed orotherwise engaged by it complies, in the course of his employment or engagement with theprovisions of this Act, rules, regulations or orders made there under. The licensed CA shallcommence its commercial operation ofgeneration and issue of electronic/digital signature only after—(a) It has confirmed to the controller the adoption of Certification Practice Statement;(b) It has generated its key pair, namely, private and corresponding public key, and submittedthe public key to the controller


• Procedure and Prior Requirements for Surrender of License, and Cessation as Certifying Authority (CA)

-The CA whose license is suspended or revoked shall immediately after suspension orrevocation surrender the license to the Controller. And where any CA fails to surrender alicense, the person in whose favour a license, has been issued shall be guilty of an offence andshall be punished with imprisonment which may extend up to six months or a fine which mayextend up to ten thousands rupees or with both.Before ‘a CA ceases to act, it shall—(a) give notice to the Controller of its intention to cease acting as a Certifying Authority:Provided that the notice shall be made ninety days before the ceasing to act as a CertifyingAuthority or ninety days before the date of expiry of license;(b) advertise sixty days before the expiry of license or ceasing to act as Certifying Authorities and in such manner as controller may determine;


c) notify its intention to cease acting as a Certifying Authority to the subscriber and crossCertifying Authority of each unrevoked or unexpired Digital Signature Certificate issued by it:Provided that the notice shall be given sixty days before ceasing to act as a Certifying Authorityor sixty days before the date of expiry of unrevoked or unexpired Electronic/Digital SignatureCertificate as the case may be;(d) the notice shall be sent to the Controller, affected subscribers and cross CertifyingAuthorities by digitally signed e-mail and registered post;(e) revoke all Digital Signature Certificates that remain unrevoked or unexpired at the end ofthe ninety days notice period, whether or not the subscribers have requested revocation;(f) make a reasonable effort to ensure that discontinuing its certification service cause minimaldisruptions its subscribers & to persons duly needing to verify digital signature by reference tothe public key contained in outstanding digital signature certificate .(g) make reasonable arrangements for preserving records for a period of seven years:(h) pay reasonable restitution to subscribers for revoking the electronic /digital signaturecertificate before the date of expiry.(i)After the expiry mentioned in the license ,CA shall destroy the certificate signing privatekey and conform the date & time of destruction of the private key to the controller


Duties of certifying authorities for the disclosure of information - Its electronic signature certificate- Any certification practice statement relevant thereto- notice of revocation or suspension of its CA certificate- any other fact that materially & adversely affect either the reliability of electronic signature

certificate .the Certifying Authority shall—(a) use reasonable efforts to notify any persons who are likely to be affected by thatoccurrence; or(b) act in accordance with the procedure specified in its certificate practice statement to dealwith such event or situation Electronic Signature Certificate to be Issued by Certifying Authorities (CAs)


-The CA, on receipt of an application and after consideration of the Certification PracticeStatement or any other statement and after making such enquiries as it may deem fit, grant theElectronic Signature Certificate or reject the application with reasons to be recorded in writing asfollows—(a) The applicant holds the private key corresponding to the public key to be listed in the ElectronicSignature Certificate;(b) The applicant holds a private key, which is capable of creating a electronic signature;(c) The public key to be listed in the certificate can be used to verify an electronic signature affixedby the private key held by the applicant—Provided that no application shall be rejected unless theapplicant has been given a reasonable opportunity of showing cause against the proposed rejection Suspension of Electronic/Digital Signature Certificate-The CA which has issued a Electronic/Digital Signature Certificate may suspend such Certificate under the following situations—(a) On receipt of a request to that effect from— :(i) the subscriber listed in the Electronic/Digital Signature Certificate; or(ii) any person duly authorized to act on behalf of that subscriber;(b) If it is of opinion that the Electronic/Digital Signature Certificate should be suspended in public interest.


Archiving Electronic/Digital Signature Certificates-A Certifying Authority shall archive the following documents:(a) application for issue of Electronic/Digital Signature Certificates;(b) registration and verification documents of generated Electronic/ Digital SignatureCertificates;(c) Electronic/Digital Signature Certificates;(d) notices of Suspension;(e) information of suspended Electronic/Digital Signature Certificates;(f) information of revoked Electronic/Digital Signature Certificates;(g) expired Electronic/Digital Signature Certificates, for a minimum period of seven years orfor a period in accordance with legal requirement Revocation of Electronic/Digital Signature Certificates-A CA can revoke an Electronic/Digital Signature Certificate under the following Circumstances


• Where the subscriber or any other person authorized by him Makes a request to that effect• Upon the death of the subscriber• Upon the dissolution of the firm or winding up of company where the subscriber is a firm or

a company.Rules of Compromise and Revocation of Electronic/Digital Signature

CertificatesThe Electronic/Digital Signature Certificate shall be revoked and become invalid forany trusted use, where—(a) there is a compromise of the Electronic/Digital Signature Certificate owner’s privatekey;(b) there is a misuse of the Electronic/Digital Signature Certificate;(c) there 1s a misrepresentation or errors in the Electronic/Digital Signature Certificate;(d) the Electronic/Digital Signature Certificate is no longer required. And theElectronic/Digital Signature Certificate shall be added to the Certificate RevocationList (CRL).


The Rules of Confidential Information and Access to Confidential Information

The following information shall be confidential —(a) Electronic/Digital Signature Certificates application whether approved or rejected;(b) Electronic/Digital Signature Certificate information collected from the subscriber orelsewhere as part of the registration and verification record but not included in theElectronic/Digital Signature Certificate information;(c) Subscriber agreement.-Any access to confidential information by the CAs operational staff shall be on a ‘need-to-know’ and ‘need-to-use’ basis and the paper based records, documentation and back-up datacontaining all confidential information as prescribed in Rule 33 shall be kept in secure andlocked container or filing system, separately from all other records


Duties of Subscribers under the Law• Generating Key Pair-A subscriber shall generate the key pair by applying the security procedure where anyElectronic/Digital Signature Certificate of which the public key corresponds signaturecertificate & has been accepted by the subscriber.-IT Act, 2000 provides the duties of the subscribers which are contained from Sections 40 to42 of the said Act.-A ‘Subscriber’ means a person in whose name the Electronic/Digital Signature Certificate isissued. The law requires that the subscriber Shall have a pair of keys that is one private keyand the other public key. It 1s a duty of the subscriber to have control over the private keycorresponding to the public key which is listed in his Electronic/Digital Signature Certificate.- It is expected of the subscriber to keep the identity of his Electronic/Digital Signature secret.It is also expected that the subscriber should use Electronic/Digital Signature himself andshould not reveal the Electronic/Digital Signature to others. It is duty of the subscriber toinform the CA without any delay in case his private key has been compromised in anymanner.


The Concept of Acceptance of Electronic/Digital Certificate by the SubscriberUnder the law a subscriber shall be deemed to have accepted an Electronic/ DigitalSignature Certificate if he publishes or authorizes the publication of aElectronic/Digital Signature Certificate either to one or more Persons or in arepository or otherwise demonstrates his approval of the Electronic/Digital SignatureCertificate in any manner.- And by accepting an Electronic/Digital Signature certificate certifies to all whoreasonably rely on the information contained SubscriberDigital Signature Certificate that -(a) the subscriber holds the private key corresponding to the public key listed in theElectronic/Digital Signature certificate and is Entitled to hold the same.(b) all representations made by the subscriber to the Certificate and all materialrelevant to the information contained in Electronic/Digital Signature are true;(c) all information in the Electronic/Digital Signature Certificate that is within theknowledge of the subscriber is true.


The Importance of the Control of Private Key by the Subscriber-For the removal of doubts, it is here by declared that the subscriber shall be liable till he hasinformed the CA that the private key has been compromised Conclusion-Privacy and data security have been important concerns and issues particularly since thecomputer age began. In fact privacy and security did not originate with the computer; ratherpaper records and files can also be subject to threat of personal privacy and it can be verymuch possible to reveal confidential and sensitive information from the paper records.Therefore, most of the commercial organizations and individuals kept their critical filesunder lock and key giving a limited access to only few trusted people.- It is through this process of encryption that the subscriber can exercise reasonable control inorder to retain control of the private key which has a corresponding public key in hiselectronic/digital signature certificate which assures protection, secrecy and preventsdisclosure to unauthorized person. Thus, the process enables the subscriber to control hisprivate key.


Protection of Intellectual Property Rights in Cyberspace in India• The Cyberspace- Web-based technology through the Internet has increased our capacity to access it easilywith rapid speed which is very useful for e-commerce and having quick electronic businesstransactions. Information stored in electronic form is cheaper, easy to store, retrieve, andspeedier to communicate. The advantages of the Internet have naturally attracted manybusiness people to conduct the business through e-commerce.- The efficiency and speed brought by this technology has made it as matchless alternative in electronic commerce- Intellectual property means knowledge or information in any form which has acommercial value and Intellectual property rights can be defined as a mix of ideas,inventions & creations on which society provides the status of property.And the protection of the intellectual property right systems include a range of laws,institutions and arrangements.


- However, recently international regimes for the protections of intellectual property have beenbrought under the umbrella of World Intellectual Property Organization (WIPO) on the onehand and the World Trade Organization (WTO) on the other hand.- These international regimes, for the protection of intellectual property, attempt to strike a

balance between the interest of the intellectual property owner and its interests of theintellectual property users by ensuring the owners of intellectual property adequate return ontheir investment in knowledge and increasing social benefits from unrestricted access toknowledge to the intellectual property users.

- This aspect can be clearly pointed out by the agreement on TRIPs in the WTO. The TRIPsagreement imposes minimum standards on patents, copyright, trademarks and the tradesecrets. And these standards which are applicable to all WTO members are based almost,entirely on intellectual property legislation in the industrialized countries particularly the US.


The Relevance of Domain Names in Intellectual Property Rights-In the new e-commerce economy it is important that before doing any sort of businessactivity a company must be easily traceable on the Internet. This means that the companymust have an address in the cyberspace. This requires the company must have registrationunder a particular domain name and a website of its own.-The Domain Name System (DNS) has made it possible for the registration of a companywhich enables a company to conduct online transactions and make it easily traceable by thecustomers, suppliers and other users. As it is difficult to remember all-numeric addresseswhich each computer, public server has its own unique all-numeric IP addresses and thereforedomain name has a major role to play in the development of the DNS and the emergence ofdomain names as important corporate assets.-The growth of e-business organizations or companies have to cater to new markets for whichthe Internet is to play an important role. As a consequence, it is important for a company tosecure an appropriate domain name. For this, the domain name and the protection of thecompany’s right to use it are the aspects which every organization or company has to face.


- The domain names serve a number of useful purposes and will rapidly grow toform the fulcrum of a company’s visibility and marketing operations. Oncethere is domain name of the company it will soon be remembered only throughits web address rather than its geographical or telephonic addresses andnumbers.

- The representation of the company’s both name and address on the Internet canserve as a typical trademark function of showing a company’s recognition andgoodwill in the market place. Therefore, domain name is relevant as theconsumers often see them as performing in e-commerce, the same role as trademarks and trade names have played in the traditional modes of business.

- Various types of domain name disputes have come for consideration before theserious kinds of disputes has been the courts all over the world.


Deception by Squatting in Cyberspace- The consumers when looking to find the name of the brand on the Internet, the

easiest way for them is to type a domain name of the brand or the company.Generally, in India, a domain name has at least two key parts. The second leveldomain describes like .Com or .Gov and third level domain contains familiarname that describes product, service or topic that the website addresses. Thepopularity of Internet in advertising, recruiting and for market place forproducts and services by the companies on the Internet have the interest anddesire to have domain names which are easy to remember and they relate to theproduct trade names or trademarks such as www.rediff.com.

-


• Trademarks and domain names being similar, have been exploited by some peoplewho register trademarks of others as domain names and sell those domain namesback to the trademark owners or third parties at a high profit. This is known as‘cybersquatting’ which means some person sitting on the property of another person.Such a trend of cybersquatting has led the courts to consider the relationship betweentrademarks and domain names in Intermatic Inc. v. Toeppen, wherein a US courtfound that the offer to sell a domain name in the US was ‘use in commerce’ andtherefore it amounts to a trademark’s use. And the court held that such an offer to sella domain name to the owner of an identical or similar trademark was a trademarkinfringement. The practice of cyber Squatting is abusive whereby one entity registera domain name that includes name or trademark of others.

• In this connection the most significant case decided by the Delhi High Court isYahoo! Inc. v. Akash Arora & Anr’. In this case the Internet search engine Yahoo!Inc. sued an Internet pirate who had not only copied the domain nameYahooindia.com but had also used Yahooindia as, a trademark on its website and wasoffering directory services with information specific to India.


• In this connection it may be pointed out that the Internet Corporation ofAssigned Names and Numbers (ICANN) has adopted a policy called UniformDomain Name Dispute Resolution Policy (UDRP) which offers an expeditedadministrative proceedings for trademark holders to contest abusiveregistrations of domain names’ which provides cancellation, suspension ortransfer of a domain name by the registrar. The advantages of the ICA are itsquick resolutions of disputes and relatively low costs.Bad Faith in Relation to Domain Name Infringement-In order to establish 'bad faith' in the proceedings for infringement of a domain namea complainant has to establish the following points in order to obtain relief:• Respondent's domain name is identical or confusingly similar to a trademark or

service mark in which the complainant has rights.• Respondents has no right or legitimate interest in respect of the domain name.• Respondent's domain name has been registered and is being used in bad faith.


- other factors to determine bad faith:• Registering the domain name with the primary aim of subsequently selling it

at a profit• Registering the domain name primarily for disrupting the business Of the

competitor• Registering the domain name in order to prevent the owner of the trade mark

from reflecting the mark in a corresponding domain name• Using the domain name to attract Internet users to one's website by creating a

likelihood of confusion with the complainant's trademark


Some Leading Cases Involving Complaints from India before WIPO-A number of cases have been filed before the World Intellectual Property Organisation(WIPO) where the complainants have been well known Indian corporate houses or mediacompanies.-In Tata Sons Ltd. v. The Advanced Information Technology Association, it was decided bythe WIPO Administrative Panel, Instructing Network Solutions Inc. to transfer the impugneddomain name tata.org to the complainant Tata Sons Ltd. The administrative panelist relied onthe decisions that had been earlier given in favour of Tata Sons Ltd. by the Indian courtsproviding protection to the Tata trademark from abusive registrations. In this case the panelheld that the respondent had not even activated its website was itself indicative of bad faith.- Similarly in tridenthotels.com case the complainant was Oberoi Hotels which owned thetrademarks ‘Trident’ and ‘Trident Hotels’ in India. In this case the panel held that the-use ofthe word ‘Trident’ in combination with the word hotels has a certain distinctive character as itindicates a chain hotels such as the complainants group. The domain name tridenthotels.comsignifies that the domain name was intended to be used for a chain of hotels. It was held bythe administrative panel that this was indicative of the bad faith on the part of the respondent.


Protection of Copyright on Cyberspace-The new technology which is multi-functional IT or the Internet poses number of challengesfor laws to protect copyrights. Copyright being an intellectual property gives rights to theauthors in literary, artistic, dramatic and musical works.- As in other intellectual property rights available under the copyright are essentially negative

in nature, similarly these are basically the rights to stop others from doing certain things asfor example, right to stop piracy, counterfeit, copying or imitations.

- The copyright even enables the holder to stop even the third parties who mightindependently reach the same idea from exploiting them without the permission of thecopyright owner. It means that the copyright holder has a right to control the activities ofothers.

- Therefore, copyright is rightly called as ‘bundle of rights’ such as right to reproduce workin copies, right to make an adaptation of the copyrighted work, right to perform or displaythe work in public etc. However, it may be pointed out that copyright does not exist in anidea but is available only when it is in some form or expression

- In India ‘copyright’ means the exclusive right subject to the provisions of the law to do or authorize the doing of act in respect of work or any substantial part of work.


(a) In the case of literary, dramatic or musical work not being a computer programme toreproduce the work in any material form including the storing of it in any medium byelectronic means, to 1ssue Copies, to perform the work in the public, to make anycinematograph film, or sound recording, to make any translation or to make any adaptation,(b) In the case of computer programme to—(i) do any of the acts specified in clause(a); and(ii) sell or give on commercial rental or offer for sale or for commercial rental any copy of thecomputer programme. Provided that such commercial rental does not apply 1n respect ofcomputer programmes where the programme itself is not the essential object of the rental. Inrelation to computer programmes ‘literary work’ includes computer programmes, tables andcompilations including computer databases and an ‘author’ means in relation to a literarywork or dramatic work the author of the work, in relation to a musical work, the composer,and in relation to any literary, dramatic, musical or artistic work which is computer generated,the person who cause, the work to be created


-The Indian law about copyright is based on Article 10 of the TRIPs Agreement which deals with computerprogrammes and stipulates that computer programmes shall be treated as literary works under BerneConvention. There are various kinds of software based on their availability on the Internet and can be classifiedas follows:• Commercial software• Freeware• Shareware• Copy lifting software- Though there are different kinds of software as mentioned above, the law relating to protection of copyright

doesn’t make any distinction among any of these software’s.- Under the law in India all kinds of software have been given similar protection for the purposes of copyright.

Computer software that is sold for a price is called commercial software. It may be pointed out that it is onlywith respect to commercial software a large scale computer piracy is done.

- This aspect of piracy of commercial software is the basic concern of the copyright law. In the case ofcomputer freeware, the software is fully available on the Internet free of cost. And therefore, the user of suchsoftware has not to pay any thing to the author and if the user wishes he may appreciate the work of theauthor and acknowledge the benefit he derived from the use of the author’s work

- . A shareware is a software that is distributed openly and widely for users to try before they buy thatprogramme By Prof. Pankaj R. Patil

Rights of Software Copyright Owners-under Section 14 of the Copyright Act, 1957. the copyrights particularly of the softwarecopyright owners.• First the author of the software has the right to reproduce and make any number of copies of

his work as he likes.• Secondly the software copyright owner may display his software on the Internet which

would amount to display to the public which right is provided under section 14(d) of theCopyright Act and if a defendant by making available copyrighted product online will beliable, for violation of the right of public display and distribution of the copyrighted work inviolation of author’s copyright

• Owner of the copyright software enjoys exclusive rights to distribute copies of the work tothe Public by Sale or by transfer od ownership or by rental.this right to distribute in indiaflaws from Section 14 of the Copyright act 1957.

• Right to adaptation of his work by updating ,changing and modifying his softwarecopyright


- In India, some of the acts which do not constitute the infringement of copyright are as follows:(a) a fair dealing with a literary, dramatic, musical or artistic work (not being a computer programme)for the purpose of(i) private use, including in research,(ii) criticism or review.(aa) The making of the copies or adaptation of a computer programme by the lawful possessor of acopy of such computer programme from such copy—(i) in order to utilize the computer programme for the purpose for which it was supplied; or(ii) to make back-up copies purely as a temporary protection against loss, destruction or damage inorder only to utilize the computer program for the purpose for which it was supplied. ...(ac) The observation, study or test of functioning of the computer programme in order to determinethe ideas and principles which underline any elements of the programme while performing such actsnecessary for the functions for which the computer programme was supplied.(ad) The making of copies or adaptation of the computer programme from a personally legallyobtained copy for non-commercial personal use.


Infringement Of Copyright On Cyberspace- Under the law, copyright in a work shall be deemed to be infringed—(a) When any person, without a license granted by the owner of the copyright or the Registrar ofCopyrights under this Act, or in contravention of the conditions of a license so granted or of anycondition imposed by a competent authority under this Act— |(i) does anything, the exclusive right to do which is by this Act conferred upon the owner of thecopyright;(ii) permits for profit any place to be used for the communication of the work to the public wheresuch communication constitutes an infringement of copyright in the work, unless he was not awareand had no reasonable ground for believing that such communication to the public would be aninfringement of copyright; or(b) when any person—(i) makes for sale or hire, or sells or lets for hire, or by way of trade displays or offers for sale or hire;or(ii) distributes either for the purpose of trade or to such an extent as to affect prejudicially the ownerof the copyright; or(iii) by way of trade exhibits in public; or(iv) Imports into India


- There is no definition of infringement provided under the Copyright Act 1957. However,Section 2(m) gives the meaning to the words ‘infringing copy’ is in relation to—• literary, dramatic, musical or artistic work, a reproduction thereof otherwise than in the

form of a cinematographic film;• a cinematographic film, a copy of the film made on any medium by any means;• a sound recording, any other recording embodying the same sound recording, made by any

means;• a programme of performance in which such a broadcast, reproduction right or a

performer’s right subsists under the provisions of this Act, the sound recording or acinematographic film of such programme or performance


-following test to determine infringement of a copyrighted work:There can be no copyright in an idea, subject-matter, themes, plots or historical or legendaryfacts and violation of the copyright if access is confined to the form, manner and arrangement,and expression of the idea by the author of the copyrighted work.(2in order to have action against the infringed copy, the copying must be a substantial andmaterial one which at once leads to the conclusion that the defendant is guilty of an act ofpiracy.(3) surest and safest test to determine whether or not there has been a violation of copyright isto see if the reader ,spectator or viewer after having read or seen both the work is clearly of theopinion & get unmistakable impression that subsequent work appears to be copy of theoriginal


Cyberspace, the Internet, Websites and the Nature of the Copyright-The copyright on the website the underlying source code or computer programme isprotectable as literary work-A website creator must ensure that he owns the copyrights in all the aspects involved in thecreation of website for its functioning. In law it is presumed that anything created by anemployee during the course of employment belongs to the employer.- For the users who want to download a file or software programme it is important to read

instructions and the copyright notices attached with the files. The author may permit theuser to download but may not permit distribution for posting on the internet through someother website.

- For the owner of a website to have effective control over his material on the website, it isimportant that he expressly prohibits any downloading of such materials, because indownloading the materials from the website there is always a threat of it being used forvarious commercial purposes like transmitting and Sale of such material to other users.


Linking, Hyper-Linking and Framing-on the commercial Internet the sight owners have contended that before employing alink, the website must seek permission from the website to which it wants to link.Some of the website owners have challenged the practice of linking without firstseeking permission.- Ticketmaster sued Microsoft for linking an Sight without permission. Ticketmaster

objected to Microsoft’s practice of linking deep within its site rather than to the home page and claimed inter alia that Microsoft unfairly diverted advertising dollars that otherwise would nave gone to Ticketmaster.

- A framing site, by virtue of certain commands in its HTML code, links to anothersite, displaying that site within a window or frame. The frame itself is comprised ofcontent from the framing site. In comparison to generic hyper linking, in the case offraming, the user remains at the framing site and views content form both sites.

- The address that the user’s browser displays may continue to be that of the framingsite. The user may be unaware that the content in the frame comes from another site.The difference between linking and framing may make trademark liability morelikely for sites that frame rather than merely hyperlink.


Remedies for Infringement of Copyright on Cyberspace-Under the Copyright Act, 1957, for the infringement of the copyrighted works without a licensegranted by the owner of the copyright or the Registrar we find that there are three types of remediesavailable to the owner of the Copyrighted work viz.,(i) Civil remedies(ii) Administrative remedies

(iii) Criminal remedies under the law.The civil remedies under the law may be classified further in two categories(a) preventive civil remedies, and(b) (b) compensatory remedies:- Under the Copyright Act, 1957 preventive civil remedies may include interlocutory injunction andthe final injunction in the suite for infringement of copyright. Injunction is the most important remedyagainst the infringement of copyright under the law. Injunction means a judicial process by which onewho is threatening to invade or has invaded the legal or equitable rights of another is restrained fromcommencing or continuing such act, or is commanded to restore matters to the position in which theystood previous to the action. Injunction may be interlocutory granted before trial of a suite orpermanently granted after the trial.


• The Liabilities of an Internet Services Provider (ISP) in Cyberspace -The liabilities of ISPs may arise in a variety of legal areas, such as criminal law' Torts law,Trade secret law, Copyright law, Trademark law, Unfair competition law and the like. Manycountries have tried to define the liability of ISPs in disseminating third party content, Thefunction of service providers is to host content, such as web pages of subscriber, over whichthe service provider exercises no control.-And it is impossible practically to monitor or screen the activities of users of networkservices. Therefore, service providers need legal protection similar to that as given under thelaw to common carriers, such as telephone companies, for infringements ‘committed by theirconsumers.


-Such a view is consistent with the Agreed Statements Concerning the WIPO CopyrightTreaty which states that the mere provision of physical facilities for enabling or making acommunication does not by itself amount to a communication.- As it is impossible to monitor the activities of users of network services, for example,educational institutions, libraries and museums and service providers, they should have nolegal obligations to monitor what is transmitted, or seek facts or circumstances indicatingillegal activity.- The Copyright Forum’s recommendation in this regard is based on Article 15(1) of the

European Union’s Directive on Electronic Commerce. The European Union’s approach ispreferred over that of the US which is viewed as being too complex.


• Cyberspace and the Protection of Patents in India-The owner of a patent is granted certain exclusive rights to a particular invention. The rightsof patent owner include the right to make, the . right to use, and the right to sell the inventionand also the obvious extensions connected with the rights of inventions.- One of the objects of the patent granted to the owner is to enable the inventor to make better

profits from his efforts. The patent serves to protect the inventor from the unhealthycompetition from the copycats.

- - In the computer technology which is fast-paced, being the first to develop and to patent aninvention which satisfies the demand in a market can Provide significant leverage overcompetitors.

- The patent owners can also have an agreement to let others make use of the patentedinvention. This is generally done by means of a license agreement which specifies what thelicensee may do me the invention in exchange for a royalty paid to the licensor patent holder.


-The term 'patent' refers to a grant of some privilege, property or authority made by thegovernment or the sovereign of the country to one or more individuals. The instrument bywhich such a grant is made by the government is known as patent. A patent is a form ofintellectual property rights in, among other things, a new and useful device, design or process.In India, under the law- a patent is a—• right granted by the government;• to exclude others;• from engaging in activities such as making, using, importing, offering to sell or selling an

invention.


- In India, the law relating to patents came on the Statute Book as The Patents Act, 1970.Patent, under the Act, is granted by the Controller to the inventor for a period of twentyyears. It is exclusive right to make use, exercise and vend his invention. The Patents(Amendment Act) 2005, defines: 'patent means a patent for any invention granted under thisAct' 42.

- The Patent's Act grants to the inventor substantive rights and secures to him the valuablemonetary right which he can enforce for his own advantage either by using it himself orconveying the privileges to others. He receives something tangible, something which haspresent existing value, which protects him from some competition, and is the source of gainand profit.

- After the expiry of the period for which exclusive right is granted to the inventor, inventioncan be put to use by any person other than one to whom a patent had been granted. Theperson to whom a patent is granted is called patentee.


Patent as a Form of Intellectual Property - An invention is the creation of intellect applied to capital and labour, to produce something

new and useful. Such creation becomes the exclusive property Of the inventor on the grantof patent. The patentee's exclusive proprietary right over the invention is an intellectualproperty right. The owner's of the 'patent', that is the, patentee is entitled to deal with hissuch property in the same manner as owner of any movable property deals with hisproperty.

- This means that the patentee can sell the whole or part of his property (patent). He can alsogrant license to other(s). Such sale and license of assignment of patented property naturallyhas to be for valuable consideration, mutually.

- In Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries43, the Supreme courthas held that "the object of patent law is to encourage scientific research, new technologyand industrial progress. Grant of exclusive privilege 117 to own, use or sell the method orthe product patented for a limited period, stimulates new inventions of commercial utility.


- The price of the grant of the monopoly is the disclosure of the invention at the Patent Office,which after expiry of the fixed period of the monopoly passes into the public domain".

- In order to be patentable, an invention must be a new product or process, useful andcapable of industrial application. Secondly, for an invention to be granted patent it shouldinvolve technical advance as compared to the existing knowledge or have economicsignificance or both. Thirdly, the invention must be non-obvious to a person possessed ofaverage skill in the art. What is obvious to a person skilled in the art cannot be patented.

- Novelty or newness in an invention is dependent upon the state of point of art, that is, theexisting knowledge and similar inventions already known in the particular field.


- The invention, besides being new and non-obvious, must also be useful. An inventionwhich is new and also non-obvious but which cannot be put to any beneficial use of themankind cannot be patented.

- However, not so useful intentions are protected in some countries as 'utility models'. Butthat concept is not statutorily recognized in India. Further, an invention in order to bepatented, must also be 'non-obvious'.

- This means that to be patentable an invention must be more than a trivial modification ofpreviously existing inventions. This is usually expressed by saying that an intention isobvious if it differs from that prior one in such a way that, the invention as a whole wouldhave been obvious to a person skilled in the relevant art at the time the invention wascreated.

- The copyright protection generally does not protect the owner of the Copyright fromindependent creation or reverse engineering. In other words, in order to prove a copyrightviolation, the copyright owner must prove that the alleged infringer had access to andcopied the copyrighted material


-A piece of software patented cannot be reverse-engineered and sold by another company,because patent rights prevent anyone other than the patent holder from exercising the patentholder's exclusive rights without authorization- In determining the infringement of a patent the principle of 'full coverage is infringement'and the 'doctrines of equivalents' are applied.- If the accused infringing the product and the patent is only a replacement of an equivalentthen it is considered that there is an infringement of the patent. The conditions for applyingthe 'doctrine of equivalents' are as follows:• The technology of the accused product and that of plaintiff's claims are substantially

similar in the purpose, function and effect.• The replacement would be easily thought of by ordinary technicians in the same field of

technology without creative intellectual work


-some kinds of works which need proper protection under the law:• A multimedia work which is a collection of various other forms of work such as audio, video, text

and so on, is not protected as a class of its own under the copyright. In future such kind of works willbe the kind of norm rather than the exception. Such works may be protected by giving expendedmeaning to the term compilation under the Copyright Act.

• With the digitization of works available on such open networks as Internet has raised many legalissues. In viewing of such works on the Internet multiple temporary copies are made and it isarguable whether there is infringement of such works on the Internet. Therefore, some new rightslike digital transmission right may be needed to deal with new methods of digital communication.

• Whereas the rights of the authors on the Internet are important to be protected from the infringementof their copyrighted works the users should be allowed to have a fair use of such works.

• Electronic network is becoming an international market place and the use of the domain names bythe companies has become very important and significant. As so far there is no international regimein this area, the traditional trademarks law in our country may be amended so that due protection begiven to the trademark owner for use of domain names.

• misuse of cyberspace on the Internet called Spamming. What spamming means is an e-mail that isboth unsolicited and commercial in nature.The process of spamming involves sending bulk e-mailswhere the cost is minimal. Spammers generally use 'stealthing' and 'spoofing' to disguise the originof their messages.



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