Thursday, November 18, 2010

Copyright vs. Copyrighted Article: Guest Post

( This article is contributed by Megha Mishra. Megha is a final year Charted Accountant Student and is also working as an analyst at PriceWaterHouseCoopers. Needless to state that the views expressed here are personal)

 Payment made for the use of software has been, for sometime now an area of ambiguity and has attracted a lot of controversy. There are various judicial precedents which have held time and again, that the payment made for purchase of “off- the- shelf” software is not a payment for ‘royalty’. However, in a recent ruling in M/s Gracemac Corporation v. ADIT, the Delhi ITAT has held that consideration for the sale/ purchase of “off-the-shelf” software is treated as Royalty.

This ruling in Gracemac is a significant departure from the position laid down by the Indian courts in several cases like Tata Consultancy Services , Motorola Inc, Sonata Information Technology v ACIT, and others, wherein a distinction was drawn between ‘copyright’ and ‘ copyrighted article’. However, in Gracemac, the ITAT held that the term ‘copyrighted article’ has not been defined either in the Income Tax Act, 1961 or under the copyright Act, 1957; the term ‘copyrighted article’ had originated in the US Regulations and then found its way into the OECD commentary. Further, the ITAT observed that the term ‘copyrighted article’ was independently defined only for the sake of drawing out a meaning for the same; hence there was/is no need in importing the expression’ copyrighted article’ for the interpretation of the term ‘royalty’. Alternatively, the Tribunal also stated that as per the definition of the term ‘royalty’ in section 9(1)(vi) of the Income Tax Act,1961, a copyright subsists in a computer programme and therefore any sale of software amounts to ‘royalty’.

However, in my opinion, when a license to use the generalized software is issued by the owner to the end user, the payment made for the same should not be treated as a ‘royalty’, since the end user does not get the right to commercially exploit the said software. Thus, as also held in various judicial precedents, the sale of ‘off-the-shelf’ software should be treated as sale of an article and not as royalty.

Wednesday, November 17, 2010

Industry Jargon Explained

In this blog, we would be giving links to articles in business newspapers / websites which explain industry terminology. Often, as law students and law industry practitioners, we are not aware of several terms that are used in the day-to-day life of business. Hence, we would be giving links to articles in the newspapers on commonly used terms in the industry but of which law students are generally not aware. on Net Asset Value in Mutual Funds

Business Line on contractual terms in Health Insurance Policies
In the above article, terms such as the "sum assured", "benefits", conditions such as exclusion of alternative therapies from the cover of insurance, exclusion of cover for organ transplants are explained.

Business Line on How to Arrive at the Enterprise Value
Enterprise Value is the index used to compare two firms (in the economic sense) in the same sector. The article explains how to calculate enterprise value, combination of enterprise value and other comparison systems, and the limitations of using enterprise value in the comparison of firms.

Business Line on Non-Compete Fee
The issue of Non-Compete Fee became famous because of the proposed acquisition of Cairn India by Vedanta. This article explains what a Non-Compete Fee is and briefly maps the legal position pertaining to it. [the latest news on the Cairn-Vedanta deal can be accessed from here.]

Wednesday, November 10, 2010

Extend Transfer Pricing Laws to Domestic Transactions: Suggests the SC

In CIT v. Glaxo Smithkline, the Supreme Court has suggested/recommended the Ministry of Finance and the CBDT to look into the prospect of extending the transfer pricing laws to "domestic transactions" involving "related parties". The Judgement and a summary is available here.

I shall explore this possibility in a later post.

Sunday, November 7, 2010

Rights of a Patient

Dr. Shaila Shenoy in this article in the Hindu writes on the rights of the patient. She lists, among other things, the following as the rights of a patient:
  • Right to know the identity of the doctor treating the patient
  • Right to know the probable diagnosis
  • Right to know the probable treatment
  • Right to be informed of the possible financial implications of the proposed treatment
  • Right to demand transfer to another facility
  • Right to accept or refuse treatment after being informed of the risks
  • Right to be informed before research protocol is initiated and to refuse to be a part of it
  • Right to demand photocopy of the patient's entire medical records.
Following are some of the randomly googled articles that might be of interest on this topic.

Informed Consent and the Anesthesiologist
Doctrine of Informed Consent and the Patient: Different Aspects
Informed Consent Process
Informed Consent and Clinical Trials
Seeking patients' consent: The ethical considerations
Patients' Rights

Saturday, November 6, 2010

The Nobel Peace Price and Politics

According to the Nobel prize website, the '[t]he Nobel Peace Prize 2010 was awarded to Liu Xiaobo "for his long and non-violent struggle for fundamental human rights in China".' The Frontline (Volume 27, Number 22, Oct 23-Nov 5, 2010) carries an article by John Cherian on the selection of the Chinese dissident Liu Xiaobo for the 2010 Nobel Peace Prize. Cherian gives a few examples of controversial nobel peace prizes including those to Henry Kissinger, Barack Obama (2009), Menachem Begin (1978). Cherian points out that during the cold war, the "dissidents in Eastern Europe" were given the Nobel Prize. He also states that even the Nobel Prize for Literature has not been without controversy on a similar issue. Do check out the Frontline article from here. An interesting novel, The Prize, by Irving Wallace, is based on the Nobel Prize.