UNIT 2:CONTRACTS IN THE INFOTECH WORLD

Explain the concept of Intellectual Property Rights.

 Intellectual property (IPR) refers to creations of the
mind, such as inventions; literary and artistic works;
designs; and symbols, names and images used in
commerce.
Intellectual property rights are like any other property
right. They allow creators, or owners, of patents,
trademarks or copyrighted works to benefit from their own
work or investment in a creation.
Tools of Intellectual Property rights are:
Patent: A patent is an exclusive right granted for an
invention – a product or process that provides a new way
of doing something, or that offers a new technical solution
to a problem. A patent provides patent owners with
protection for their inventions.
Trademark: A trademark is a distinctive sign that
identifies certain goods or services produced or
provided by an individual or a company.
Trademarks may be one or combination of words,
letters and numerals. They may consist of
drawings, symbols or three dimensional signs such
as shape and packaging of goods. In some
countries, non-traditional marks may be registered
for distinguishing features such as holograms,
motion, color and non –visible signs (sound, smell
or taste)
Copyright: Copyright laws grant authors, artists and other creators
protection for their literary and artistic creations, generally referred
to as “works”. Copyright covers literary works (such as novels,
poems and plays), films, music, artistic works (e.g., drawings,
paintings, photographs and sculptures) and architectural design.
 Geographical Indication: A geographical indication is a sign used
on goods that have a specific geographical origin and possess
qualities or a reputation due to that place of origin. Most
commonly, a geographical indication consists of the name of the
place of origin of the goods.
 Industrial Design: An industrial design refers to the ornamental
or aesthetic aspects of an article. A design may consist of three-
dimensional features, such as the shape or surface of an article, or
two-dimensional features, such as patterns, lines or color.
Explain Computer Software as an Intellectual Property
and its protection.
“Computer software” also referred to as computer
programs are the instructions executed by a computer. In
other words, the explanations, instructions, commands
and systems which have been developed in order to run
the machine are called computer software. Software
comprises of the following one or more components: the
source code itself which contains the programmer’s
invaluable comments any literature that may be supplied
with the package which could be in the form of manuals
or explanatory material regarding the running of the
programme. All these components require protection
because the making of it involves the expenditure of skill,
time and labour and therefore the resultant work should
be protected from misappropriation.
Software has a market value. Computer software is subject
to ferocious competition with a shorter life circle and is
liable to be copied soon, as it is “read all on the face”
technology.
Because of its nature the owner of computer program will
have two problems (i) economic problem and (ii)
competition. Economic problem means, others can access it
without payment to the creator. Competition means the
competitors will make competing products based on the
creation either by reserve engineering or blatant copying.
Apart from protecting the economic interest of the
owner the protection of software through appropriate
IPR mechanism is considered necessary to encourage
creativity, innovation and investment. Software may be
reproduced at no cost, some means of restricting the
free copying and redistribution of software work is
necessary to preserve an investment in a software
product
There is a divergence in views among various
jurisdictions of the world as to what category of
intellectual property may that is to be granted to
protect computer software. Presently there are
two principal modes of protection of software,
copyright and patents. Copyright is most commonly
used to protect computer program, because
writing of a code is similar to any type of
literary work. The copyright protection is extended
to expression of ideas.
To establish intellectual property protection to
computer software domestically and
internationally the signatories of TRIPS Agreement,
Berne convention, and WIPO Copyright Treaty
(WCT) have agreed to protect copyright in a
computer program until, at a minimum 50 years
after the author (software writer) of the program
dies.
Trade Related Aspects of Intellectual Property
Rights (TRIPS)
WIPO Copyright Treaty (WCT)
What is click wrap contract?
A clickwrap agreement is a type of contract that
is widely used with software licenses and online
transactions in which a user must agree to terms
and conditions prior to using the product or
service.
Is a checkbox legally binding?
What you see more commonly is a checkbox that
must be checked to signify that you accept the
terms, the agreement, etc. ... The agreement is
wrapped up in the deliberate action of clicking to
signify acceptance of the terms or contract.
Courts generally uphold clickwrap agreements
as legally binding.
What is shrink wrap contract
A shrink wrap contract is an end user license
agreement (EULA) that is enclosed with
software in plastic-wrapped packaging. Once the
end user opens the packaging, the EULA is
considered to be in effect. There are some
concerns about the legality of an agreement that
the user cannot examine prior to purchase.
 Are these agreements valid and binding contracts in the
eyes of law?
Can they be enforced and if so why!
The very basic bedrock of any contract is the intention to
enter into a legal relationship and that there should be
‘meeting of minds’. But as it must be already clear by now
that in most of these contracts the party assenting to the
terms does it without knowing or having intention to
enter into any contract and even if has knowledge of the
terms has no meaningful choice but to adhere to certain
standard clauses put by the other party, thereby
frustrating the very concept of meeting of minds.
But all these contracts are held valid and enforceable in a
catena of judgments and statutory recognition of its
validity is also forthcoming
click-wrap agreements are formed very differently from
contracts that are created offline.
For example, there is no opportunity for consumers to
negotiate the terms and conditions of the contract.
They are take-it-or-leave-it agreements.
Furthermore, all this can be done without paper
contracts or physical signatures and contract formation
can take place without ever needing any physical contact
with the consumer.
Once the purchaser selects the I Accept icon and
thereby assents to be bound, the contract is said to be
formed on the posted terms and the transaction is
completed.
In this way, in the click-wrap agreement
context, the act of clicking the I Accept icon is
analogous to breaking the shrink wrapping in the
shrink-wrap agreement context.
 No paper record is generally created nor is the
electronic or paper signature of the Internet user
typically required.
As in the shrink wrap agreement, the click-wrap
agreement purports to be a contract whereby the
user agrees not to engage in certain activities that
might otherwise be allowed under law
Shrink-wrap agreements were introduced specifically
for the mass-market sale of packaged software.
 With the mass-market acceptance of the PC,
companies such as Apple and IBM found that it was
virtually impossible, inefficient and very costly to enter
into licensing arrangements with individual users.
It is for these reasons that the ‘shrink-wrap’ license
concept originated; a mass-market software license
agreement (a standard form agreement) shipped with
the product and not requiring both parties to sign.
software vendors use shrink-wrap agreements
as a means of reinforcing their proprietary rights
and to provide protection beyond that afforded
by whatever intellectual property rights exist in
the works.
For example,in limiting implied warranties,
prohibiting reverse engineering, specifying
governing law and forum for resolving dispute
The courts have upheld the principle of online
contracting and that a legally valid and binding
contract can be created by mouse-clicking the ‘I
Accept’ icon. Courts have held this conduct as
effectively ‘signing’ a click-wrap agreement,
binding the consumer to the terms and conditions
of the agreement even if the consumer claims to
not have seen, read or consciously agreed to the
terms.
Internet consumers need to be aware of what a
simple mouse-click could mean; they could be
agreeing to a whole host of terms that may not be
in their best interest. Accordingly, given that
courts will likely find click-wrap agreements
enforceable, consumers must be more conscious
of what they are agreeing to and it behooves a
site visitor to slow down and pay attention to the
details of the terms and conditions of click-wrap
agreements when subscribing to an online service
or starting a download
Validity of E-contracts in India
The Indian contract act 1872 has recognized the
traditional agreements which consist of the oral
contracts made by the loose consent of the contracting
events who are able to contract for the lawful
consideration with a lawful object and are not expressly
declared to be void. subsequently, there may be no
provision on this Act which prohibits the enforceability
of electronic agreements provided that the crucial
elements of the valid settlement have to be found in
such agreements. The free consent is considered as the
main characteristics of the legitimate contract.
commonly, there may be no scope for negotiation on
Econtracts
Legality of E-Contracts under Indian Technology Act 2000:
Section 10 A of the act gives the legal representation to legality
and enforcement of E-contracts under IT act 2000. It gives that
“were in contract formation, communication of proposal, the
revocation of the proposal and acceptance as the case are
expressed in electronic form or by electronic record . Section 10 A
was inserted in IT Act 2000 by the Information Technology
(amendment) Act 2008. Section 4 says Law recognition of
electronic records.- where any law presents that statistics or
another count number will be in writing or within the typewritten
or published shape, then, however anything contained in such
regulation, such requirement shall be deemed to were glad if such
records or remember is (a) rendered or made available in an digital
form; and (b) reachable on the way to be usable for a next
reference
Section 11 says Attribution of digital statistics.-
An electronic report shall be attributed to the
originator, (a) if it changed into sent by means of
the originator himself; (b) via a person who had
the authority to act on behalf of the originator in
respect of that digital record; or (c) through an
information machine programmed via or on
behalf of the originator to function robotically.
Section 12 Acknowledgement of receipt.
wherein the originator has no longer that the
acknowledgement of receipt of electronic
document receive in a specific form or by a
particular technique, an acknowledgement can
be given via (a) any communique via the
addressee, automatic or otherwise; or (b) any
behavior of the addressee, enough to suggest to
the originator that the digital file has been
received.
Essential Elements of a Contract as defined in
Section 10 of the Indian Contract Act 1872
1. Agreement - Offer and Acceptance
2. Legal purpose
3. Lawful Consideration
4. Capacity to contract
5. Consent to contract
6. Lawful object
7. Certainity
8. Possibility of Performance
9. Not expressly declared void
10. Legal formalities like Writing, Registration
etc.