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Relevance of copyrights and trademarks in business transactions

November 15, 2021
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Image source: https://blog.ipleaders.in/need-know-process-trademark-registration/

This article is written by Aditya Anand, from Symbiosis Law School, Noida. This article has brief knowledge and details of the trademarks, copyrights and how it plays an important role in business.

Introduction

Copyright and intellectual property are valuable assets in business. For example,  Salim, Rohan, and Raghu are good friends and hard-working persons who have a certain source of income. Salim is a music composer, Rohan is a book writer and Raghu is a director of a company that deals in the marketing of goods. What if the music that was created by Salim is used by any other person for their income if Rohan’s book gets duplicated which is his source of income and the other person earns the profit and if Raghu sells the goods with a certain mark which has a certain image in the market and a person uses a similar symbol to earn reputation and money. They can surely sue the person who commits these offenses if the law of the land recognizes the violation of copyright and trademark rules as illegal and eventually action can be taken against the infringing persons. To deal with such issues there are copyright and trademark laws that give the owners a sense of security by providing legal rights for their creation, authentication, and distinction of the product. The copyright and trademarks are the primary intellectual properties. 

Copyright and trademark and their role in business transactions

The copyright and trademark are intangible business assets that can be converted into monetary terms and can be reflected in the financial accounts of a business. After the post-independence era and early nineties, there was massive liberalization and globalization of the Indian economy.  The acknowledgement of copyrights and trademarks has secured the company image and values as well as given distinct identities to them as it leads to the growth of multinational companies. 

Copyright 

It is the unique authority given to a particular person for the use, duplicate, or sale who is the owner and holds the exclusive right over the production, publication, or sale of that original work or creation. It indicates the creativity and originality of that product. There can be no unauthorized use as it gives legal authority to the owner. Copyright can be in the form of literary, artistic, dramatic, musical, or any other creation. 

 In India, the copyright laws have been dealt with in Copyright Rules,(2013) and the Copyrights Act (1957).  The author can be any person and the meaning of the author has been stated under Section 2(d) of the Copyright Act,(1957). Generally, the period of copyrights is for 60 years but there are special provisions for the original musical, artistic, literary, and other works that are counted 60 years starting from the day of the death of the author.  Section 17 of the Copyrights Act (1957) states that the author is the first owner of that creation. Copyright infringement has been mentioned under Section 51 of the Copyrights Act(1957). Various circumstances have been discussed. 

In Hindustan Pencils Limited vs J.N. Ghosh And Bros. Pvt. Ltd. on 30 October, 2006 the court held that there was a violation of copyright laws by the Copyright Board of Goa as it was held that when there are similarities between artistic works when fundamental and substantial then it leads to copyright infringement. For the ownership issues Godrej Soaps (P) Ltd. vs Dora Cosmetics Co. on 23 April 2001, this was the case of Delhi High court where it was held that when a carton was designed for valuable consideration on behalf of the plaintiff during the course of employment for which the defendant had no reasonable justification that the court would accept thus it was concluded that the plaintiff is the legitimate owner of the copyright that was printed in the carton as well as the logo.

Trademark 

The trademark can be acknowledged as anything that can be a symbol, phrase, name, or that can be used to identify and distinguish the particular product which is recognizable. It is a form of identification and distinction of the goods and services that differentiate from one company to another. The trademarks are very essential in the franchise business. The trademarks can be represented on the goods or products and if it is in the case of services then it is represented on the website.  The company is the sole owner and provides the convenience for the customer to distinguish the product of a company. 

In India, the rules related to the trademark are governed under the Trademarks Act, (1999). The trademark is issued by the trademark registry that has its branch office in Ahmedabad, Kolkata, Delhi, Chennai, and head office in Mumbai that issue trademarks as per the provisions of the Trademarks Act, (1999). The definition of trademark has also been provided under Section 2(1)(zg) of the Trademarks Act,(1999). It also helps the customer to identify the difference between fake goods and original goods. 

 There are various types of trademarks as one of them is the product trademark that is used for the product and the second is the service trademarks that are used to identify the services. They are generally used for advertising purposes. The duration of the trademark issued is generally ten years after which it has to be renewed. The infringement proceedings for the certification trademarks have been discussed under Section 75 of the Trademarks Act,(1999).

Some of the landmark judgments related to infringement or passing off of trademarks are one of them is  Tata Sons Limited vs Mr. Manu Kishori & Ors. on 9 March 2001  in which Delhi High Court gave the judgment in favor of the plaintiff who was Tata Sons and issued permanent injunction over the defendants subsequently restraining them from using the trademark name TATA to the competent authorities operating the business in any form as it is misleading. Another case of the apex court is  N.R. Dongre And Ors vs Whirlpool Corporation And Anr on 30 August 1996 the fact of the case was such that the defendant applied for registering a trademark in the year 1986 while the plaintiff was the known owner of the trademark which expired in the year 1977, when the objection was raised by the plaintiff and after hearing the plea the court issued temporary injunction over the defendants which was accepted by the Supreme Court undoubtedly when it was appealed by the defendant against the orders of the lower court and Division bench. There are civil as well as criminal remedies available for passing off or infringement. 

Making intellectual property work for business

Copyright has certain advantages that are highly beneficial for the business. The basic advantage of copyright is that there is no investment required to obtain or maintain copyright. India has also signed various international conventions like the Berne Convention which is ratified by 179 countries. India is also a member of the World  Intellectual Property Organisation. The importance of the copyright laws has been taken into consideration at a very large scale and it is acknowledged by most of the UN-recognized countries. It is suggested that heads of the business should ensure that the company employment terms and conditions must have an IP clause so that the work done or assigned by an employer under the course of employment should remain with the business. 

The trademark provides various benefits and eventually provides multifarious usage in the business. The exclusive rights over the product or certain types of services create trust and brand value in the market and earn a reputation for their uniqueness among the customers. The main benefit is that it differentiates the goods and services from one company to another.  It can also be sold, transferred, or purchased from one company to another. It is a valuable business asset. It is a form of intangible asset that has value in terms of money. It acts as a safeguard and creates value in the stiff competition. 

India has also ratified the agreement of the World Trade Organisation(WTO) which has also mentioned the Trade-Related Aspects Of Intellectual Property (TRIPS). In 2013, India also signed the Madrid Protocol which gives international recognition and acceptance of trademarks by all the member countries. The usage of trademarks prevents unlawful, illegal, or counterfeit products or services.

Difference between Copyright and trademark

                          Copyright                             Trademarks 
It protects dramatic, artistic, and musical work, or there can be some other original creation.It acts as a protection of a trade name, value, or the company logo or symbol.
It defends the rights of the people who originate or create. It is valid for up to 60 years for the individual owners.It defends the unauthorized use of company brand value, name, and logo. It is valid for up to 10 years. 
There is no obligation to use the “C” symbol for copyright after registration. It is governed under the Copyrights Act,1957 coupled with Copyright Rules,2013.It is mandatory to use the “R” symbol after the registration and during usage. It is governed under the Trademarks Act,1999.

Conclusion 

The immense increase in the business and startup sectors of the country has contributed immensely to the trademark and copyright laws of the land. The trademark not only creates a brand value by maintaining the reputation but also distinct its products and services. The copyright laws also encourage people to increase their creativity up to the maximum level as it will be safeguarded by the laws and statutes. If there would be no laws then nobody would try to become creative and there would be a sense of insecurity. The law holds and protects the interest of the people who do business and earn income by their creation or a brand value. Such laws diminish the fears, reduce the conflict, and promote as well as protect originality and authenticity.

References 

1.https://www.legisscriptor.com/post/analyzing-the-role-of-copyrights-and-trademarks-in-business-transactions.

2.https://www.mondaq.com/india/trademark/517806/process-trademark-registration-in-india

3.https://www.lexology.com/library/detail.aspx?g=e963324a-4b62-49ab-bd90-aeddb1aee2b0

4.https://www.lawyersclubindia.com/articles/copyrights-and-trademarks-in-business-transactions-13862.asp

5.https://www.mondaq.com/india/trademark/515986/madrid-protocol-in-india-pros-and-cons


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