Unit- 4 LEGAL ASPECTS OF BUSINESS
What you will know <ul><li>Legal aspects of business relating to </li></ul><ul><ul><li>Labour </li></ul></ul><ul><ul><li>G...
Legal aspects of business relating to labour <ul><li>Labour welfare refers to all such services, amenities and facilities ...
Welfare within the establishment <ul><li>It includes  </li></ul><ul><ul><li>medical aid </li></ul></ul><ul><ul><li>Crèche ...
Welfare outside the establishment <ul><li>It includes social insurance measures like </li></ul><ul><li>Gratuity,  </li></u...
Govt. Issues <ul><li>Key Regulations </li></ul><ul><li>An entrepreneur has to take into account the  basic regulatory requ...
<ul><li>In India, the Ministry of environment and forest (MoEF) is the apex administrative body for :-  </li></ul><ul><li>...
<ul><li>The main provisions of the Act are:- </li></ul><ul><li>The Central Government shall have the power to take all suc...
<ul><li>The Central Government or any officer empowered by it in this behalf, shall have power to take, for the purpose of...
IPR Issues <ul><li>Industrial Property consists of patents or inventions, trademarks, industrial designs and geographical ...
Why IPR ? <ul><li>The cost of introducing a new drug into the market may cost a company anywhere between  </li></ul><ul><l...
<ul><li>IPR can be assigned, gifted, sold and licensed like any other property. Unlike other moveable and immoveable prope...
<ul><li>A patent is an exclusive right granted by a country to the owner of an invention to make, use, manufacture and mar...
<ul><li>Further, existing patents in similar area may also come in the way. A patent in the law is a property right and he...
Royalty payments <ul><li>Royalty:  payment to the holder of a patent or copyright or resource for the right to use their p...
Contd… <ul><li>The owner of lands containing mineral resources, such as petroleum or coal, who permits another to extract ...
<ul><li>INFRINGEMENT </li></ul><ul><li>Infringement of registered trademarks  </li></ul><ul><li>When a person other than t...
<ul><ul><li>OFFENCES AND PENALTIES [SECTIONS 103] </li></ul></ul><ul><li>Penalty for applying/selling false trademarks, tr...
<ul><li>The mere discovery of any new property or its use or of the mere use of a known process, machine or apparatus.  ( ...
copyright <ul><ul><ul><ul><li>TERM OF COPYRIGHT </li></ul></ul></ul></ul><ul><li>Published literary, dramatic, musical and...
<ul><li>STATUTORY EXCEPTIONS TO INFRINGEMENT   (SECTION 52) </li></ul><ul><li>Some of the exceptions provided under the Ac...
<ul><li>(vii)  the reproduction of a literary, dramatic musical or artistic work by a teacher or a pupil in the course of ...
<ul><li>(xi)  the making of not more than three copies of a book; </li></ul><ul><li>(xv)  the reproduction, for the purpos...
Employee welfare measures- PF, ESI , Medical compensation ,Risk coverage <ul><li>Welfare includes anything that is done fo...
<ul><li>Labor welfare has the following objectives:  </li></ul><ul><li>To provide better life and health to the workers </...
<ul><li>The basic features of labor welfare measures are as follows: </li></ul><ul><li>Labor welfare includes various faci...
<ul><li>The very logic behind providing welfare schemes is to create efficient, healthy, loyal and satisfied labor force f...
<ul><li>Employers get stable labor force by providing welfare facilities. Workers take active interest in their jobs and w...
<ul><li>Welfare of Labour includes conditions of work, provident funds, employers’ liability, workmen’s compensation, inva...
<ul><li>The Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 (EPF & MP Act)  which applies to specific sche...
<ul><li>The Workmen’s Compensation Act, 1923 (WC Act) , which requires payment of compensation to the workman or his famil...
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NVPM-4

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NVPM-4

  1. 1. Unit- 4 LEGAL ASPECTS OF BUSINESS
  2. 2. What you will know <ul><li>Legal aspects of business relating to </li></ul><ul><ul><li>Labour </li></ul></ul><ul><ul><li>Govt. Issues </li></ul></ul><ul><ul><li>IPR issues </li></ul></ul><ul><ul><ul><li>Royalty payments </li></ul></ul></ul><ul><ul><ul><li>Brand name </li></ul></ul></ul><ul><ul><ul><li>logos </li></ul></ul></ul><ul><li>Employee welfare measures </li></ul><ul><ul><li>PF, ESI </li></ul></ul><ul><ul><li>Medical compensation </li></ul></ul><ul><ul><li>Risk coverage </li></ul></ul><ul><li>Accounting practices </li></ul><ul><ul><li>Income tax </li></ul></ul><ul><ul><li>VAT, TDS </li></ul></ul><ul><li>Logistics planning- Transport warehousing </li></ul>
  3. 3. Legal aspects of business relating to labour <ul><li>Labour welfare refers to all such services, amenities and facilities to the employees that improves their working conditions as well as standard of living. </li></ul><ul><li>The term labour welfare bears a different interpretation from country to country and from time to time, and even in the same country, according to its value system, social institution, degree of industrialisation and general level of social and economic development. </li></ul><ul><li>Generally, the labour welfare services are divided into two groups:- </li></ul><ul><ul><li>Welfare within the establishment </li></ul></ul><ul><ul><li>Welfare outside the establishment </li></ul></ul>
  4. 4. Welfare within the establishment <ul><li>It includes </li></ul><ul><ul><li>medical aid </li></ul></ul><ul><ul><li>Crèche </li></ul></ul><ul><ul><li>canteens </li></ul></ul><ul><ul><li>supply of clean drinking water </li></ul></ul><ul><ul><li>health services </li></ul></ul><ul><ul><li>uniforms and protective clothing </li></ul></ul><ul><ul><li>rest shelters, etc. </li></ul></ul><ul><li>It is the employer's responsibility to provide these facilities to his/ her employees and several legislations have been enacted to set certain minimum standards for provision of these facilities. </li></ul>
  5. 5. Welfare outside the establishment <ul><li>It includes social insurance measures like </li></ul><ul><li>Gratuity, </li></ul><ul><li>Pension fund, </li></ul><ul><li>Provident fund, etc; </li></ul><ul><li>Educational facilities; </li></ul><ul><li>Housing facilities; </li></ul><ul><li>Recreational facilities; </li></ul><ul><li>Workers' cooperatives; </li></ul><ul><li>Vocational training, etc. </li></ul>
  6. 6. Govt. Issues <ul><li>Key Regulations </li></ul><ul><li>An entrepreneur has to take into account the basic regulatory requirements of the country in order to ensure sustainability of the profits and productivity of his/her business. </li></ul><ul><li>The most important regulation relates to the environment. </li></ul><ul><li>Broadly, it includes the emission standards for air, noise, water , etc. </li></ul><ul><li>Separate set of laws for emission of hazardous wastes have also been enacted. Every industry has to abide by these guidelines and parameters for environmental protection. </li></ul><ul><li>An organization for its smooth and effective functioning, must ensure health and safety of its employees . </li></ul>
  7. 7. <ul><li>In India, the Ministry of environment and forest (MoEF) is the apex administrative body for :- </li></ul><ul><li>(i) regulating and ensuring environmental protection; </li></ul><ul><li>(ii) formulating the environmental policy framework in the country; </li></ul><ul><li>(iii) undertaking conservation & survey of flora, fauna, forests and wildlife; and </li></ul><ul><li>(iv) planning, promotion, co-ordination and overseeing the implementation of environmental and forestry programmes. </li></ul><ul><li>Besides, the responsibility for prevention and control of industrial pollution is primarily executed by the Central Pollution Control Board (CPCB) at the Central Level, which is a statutory authority, attached to the MoEF. The State Departments of Environment and State Pollution Control Boards are the designated agencies to perform this function at the State Level. </li></ul><ul><li>The term &quot;environment&quot; includes water, air and land and the inter- relationship which exists among and between water, air and land, and human beings, other living creatures, plants, micro-organism and property. </li></ul>
  8. 8. <ul><li>The main provisions of the Act are:- </li></ul><ul><li>The Central Government shall have the power to take all such measures as it deems necessary or expedient for the purpose of protecting and improving the quality of the environment and preventing, controlling and abating environmental pollution. </li></ul><ul><li>No person carrying on any industry, operation or process shall discharge or emit any environmental pollutants or permit to do so in excess of such standards as may be prescribed. </li></ul><ul><li>Where the discharge of any environmental pollutant in excess of the prescribed standards occurs or is apprehended to occur due to any accident or other unforeseen act or event, the person responsible for such discharge and the person in charge of the place at which such discharge occurs or is apprehended to occur, shall be bound to prevent or mitigate the environmental pollution caused as a result of such discharge and shall also forthwith intimate the fact of such occurrence or apprehension of such occurrence; and be bound, if called upon, to render all assistance to such authorities or agencies as may be prescribed. </li></ul>
  9. 9. <ul><li>The Central Government or any officer empowered by it in this behalf, shall have power to take, for the purpose of analysis, samples of air, water, soil or other substance from any factory, premises or other place in such manner as may be prescribed. </li></ul><ul><li>The Central Government may, by notification in the Official Gazette, establish one or more environmental laboratories; and recognize one or more laboratories or institutes as environmental laboratories to carry out the functions entrusted to an environmental laboratory under this Act. </li></ul><ul><li>Whoever fails to comply with or contravenes any of the provisions of this Act, or the rules made or orders or directions issued thereunder, shall, in respect of each such failure or contravention, be punishable with imprisonment or with fine or with both. </li></ul>
  10. 10. IPR Issues <ul><li>Industrial Property consists of patents or inventions, trademarks, industrial designs and geographical indications of source. </li></ul><ul><li>Patents are rights that are granted exclusively for inventions – inventions being a product or a process . </li></ul><ul><li>A trademark on the other hand is a symbol or a word or a name that is put on goods in the marketplace that indicates its source. </li></ul><ul><li>Trademark rights ensure that the symbol, word or name that identifies the source of the product is not duplicated – though the product can be marketed under a different mark. </li></ul><ul><li>Service marks are given to services as opposed to products – the services being provided by the same source. </li></ul><ul><li>Copyright has been devised to protect the authors of original works of art, music, film as well as literary outputs. </li></ul>
  11. 11. Why IPR ? <ul><li>The cost of introducing a new drug into the market may cost a company anywhere between </li></ul><ul><li>$ 300 million to $600 million along with all the associated risks at the developmental stage, no company will like to risk its intellectual property becoming a public property with out adequate returns. </li></ul><ul><li>These rights are awarded by the State and are monopoly rights implying that no one can use these rights without the consent of the right holder. </li></ul>
  12. 12. <ul><li>IPR can be assigned, gifted, sold and licensed like any other property. Unlike other moveable and immoveable properties, these rights can be simultaneously held in many countries at the same time. </li></ul><ul><li>IPR can be held only by legal entities i.e., who have the right to sell and purchase property. In other words an institution, which is not autonomous may not in a position to own an intellectual property. </li></ul><ul><li>These rights especially, patents, copyrights, industrial designs, IC layout design and trade secrets are associated with something new or original and therefore, what is known in public domain cannot be protected through the rights mentioned above. </li></ul><ul><li>Improvements and modifications made over known things can be protected. It would however, be possible to utilize geographical indications for protecting some agriculture and traditional products. </li></ul>
  13. 13. <ul><li>A patent is an exclusive right granted by a country to the owner of an invention to make, use, manufacture and market the invention, provided the invention satisfies certain conditions stipulated in the law. </li></ul><ul><li>Exclusive right implies that no one else can make, use, manufacture or market the invention without the consent of the patent holder. </li></ul><ul><li>This right is available for a limited period of time. In spite of the ownership of the rights, the use or exploitation of the rights by the owner of the patent may not be possible due to other laws of the country which has awarded the patent. </li></ul><ul><li>These laws may relate to health, safety, food, security etc. </li></ul>
  14. 14. <ul><li>Further, existing patents in similar area may also come in the way. A patent in the law is a property right and hence, can be gifted, inherited, assigned, sold or licensed. </li></ul><ul><li>As the right is conferred by the State, it can be revoked by the State under very special circumstances even if the patent has been sold or licensed or manufactured or marketed in the meantime. </li></ul><ul><li>The patent right is territorial in nature and inventors/their assignees will have to file separate patent applications in countries of their interest, along with necessary fees, for obtaining patents in those countries. </li></ul><ul><li>Term of the patent will be 20 years from the date of filing for all types of inventions </li></ul>
  15. 15. Royalty payments <ul><li>Royalty: payment to the holder of a patent or copyright or resource for the right to use their property </li></ul><ul><li>The owner of lands containing mineral resources, such as petroleum or coal, who permits another to extract these products generally receives a royalty, or payment, consisting of a percentage of the production for petroleum or a fixed dollar amount per ton for coal. </li></ul><ul><li>The owner of a patent or copyright may license others to use the patented item or to reproduce, change, distribute, perform, or display the copyrighted creative work. For example, royalties may be paid to a writer, composer, or inventor as a share of the proceeds resulting from the sale, performance, or other use of his or her work or invention. </li></ul>
  16. 16. Contd… <ul><li>The owner of lands containing mineral resources, such as petroleum or coal, who permits another to extract these products generally receives a royalty, or payment, consisting of a percentage of the production for petroleum or a fixed dollar amount per ton for coal. </li></ul><ul><li>The owner of a patent or copyright may license others to use the patented item or to reproduce, change, distribute, perform, or display the copyrighted creative work. </li></ul><ul><li>For example, royalties may be paid to a writer, composer, or inventor as a share of the proceeds resulting from the sale, performance, or other use of his or her work or invention. </li></ul>
  17. 17. <ul><li>INFRINGEMENT </li></ul><ul><li>Infringement of registered trademarks </li></ul><ul><li>When a person other than the registered proprietor of permitted user uses a mark in the course of trade for which original owner is registered, and such a mark is identical with, or deceptively similar to the registered trademark relation to goods or services in respect of which the trademark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trademark. </li></ul><ul><li>Passing Off </li></ul><ul><li>It means when any person not authorised to use any registered trade uses the same in order to cause confusion or deception in the mind of the user or injure reputation of the registered owner. There shall be actual damage by such unauthorised use. It constitutes an infringement, when proved. </li></ul>
  18. 18. <ul><ul><li>OFFENCES AND PENALTIES [SECTIONS 103] </li></ul></ul><ul><li>Penalty for applying/selling false trademarks, trade descriptions, etc. </li></ul><ul><ul><li>An imprisonment upto three years and fine upto Rs. 2 Lakhs may be imposed on violation of the Act. </li></ul></ul><ul><ul><li>INVENTIONS NOT PATENTABLE (SECTION 3 AND 4) </li></ul></ul><ul><li>Frivolous or claims made are obvious or contrary to well established natural laws. </li></ul><ul><li>Contrary to law or morality or injurious to public heath. ( Ex.- Method for gambling) </li></ul><ul><li>Mere discovery of a scientific principle or the formulation of an abstract theory. ( Ex -Scientific theory is a statement about the natural world.) </li></ul>
  19. 19. <ul><li>The mere discovery of any new property or its use or of the mere use of a known process, machine or apparatus. ( Ex - Use of Aspirin for cardio-vascular disease) </li></ul><ul><li>A substance obtained by a mere admixture resulting only in the aggregation of the properties of the components thereof ( Ex – Alloy) </li></ul><ul><li>The mere arrangement or re-arrangement or duplication of known devices ( Ex - Umbrella with fan </li></ul><ul><li>A method or a process for enhancing machine efficiency. ( Ex - Process for testing of chlorine level in the water) </li></ul><ul><li>A method of agriculture or horticulture ( Ex - A method for cultivation of an algae) </li></ul><ul><li>Any process for the medicinal, surgical, curative, prophylactic or other treatment of living animals to make them disease free. ( Ex - treatment of malignant tumour cells </li></ul><ul><li>Inventions relating to Atomic energy </li></ul>
  20. 20. copyright <ul><ul><ul><ul><li>TERM OF COPYRIGHT </li></ul></ul></ul></ul><ul><li>Published literary, dramatic, musical and artistic works etc . - Lifetime of the author upto 60 years from the beginning of the calendar year next following the year in which the author dies. </li></ul><ul><li>The broadcast reproduction right - 25 years from the beginning of the calendar year next following the year in which the broadcast is made. </li></ul><ul><li>Performer's right - 50 years from the beginning of the calendar year next following the year in which the performance is made. </li></ul><ul><ul><ul><li>REDRESSAL MECHANISM [SECTION 116] </li></ul></ul></ul><ul><li>Appellate Board </li></ul><ul><li>The Appellate Board established under the Trade Marks Act, 1999 shall be the Appellate Board for the Patent Act also. </li></ul>
  21. 21. <ul><li>STATUTORY EXCEPTIONS TO INFRINGEMENT (SECTION 52) </li></ul><ul><li>Some of the exceptions provided under the Act are as follows: - </li></ul><ul><li>(i) a fair dealing with a literary, dramatic musical or artistic work; </li></ul><ul><li>(ii) the making of copies or adaptation of a computer programme by the lawful possessor; </li></ul><ul><li>(iii) the doing of any act necessary to obtain information essential for operating inter-operability of an independently created computer programme. </li></ul><ul><li>(iv) the reproduction of a literary dramatic, musical or artistic work for the purpose of a judicial proceeding; </li></ul><ul><li>(v) the reading or recitation in public of any reasonable extract from a published literary or dramatic work;. </li></ul><ul><li>(vi) the publication in a collection, mainly composed of non-copyright matter, bona fide intended for the use of educational institutions; </li></ul>
  22. 22. <ul><li>(vii) the reproduction of a literary, dramatic musical or artistic work by a teacher or a pupil in the course of instruction; or as part of the question to be answered in an examination; or in answers to such questions; </li></ul><ul><li>(viii) the making of sound recordings in respect of any literary, dramatic or musical work, if sound recordings of that work have been made by or with the licence or consent of the owner of the right in the work; the person making the sound recordings has given a notice of his intention to make the sound recordings, has provided copies of all covers or labels with which the sound recordings are to be sold, and has paid in the prescribed manner to the owner of rights in the work royalties in respect of all such sound recordings to be made by him, at the rate fixed by the Copyright Board in this behalf. </li></ul><ul><li>(x) the causing of a recording to be heard in public by utilising it in an enclosed room or hall. </li></ul>
  23. 23. <ul><li>(xi) the making of not more than three copies of a book; </li></ul><ul><li>(xv) the reproduction, for the purpose of research or private study; </li></ul><ul><li>REMEDIES AGAINST INFRINGEMENT OF COPYRIGHT (SECTIONS 54 –62) </li></ul><ul><li>The Act prescribes penalty by way of imprisonment for a minimum period of 3 years and with fine upto Rs. 2 lakhs. For any second and subsequent convictions imprisonment up to three years and the fine upto Rs.2 lakhs. </li></ul><ul><li>Any police officer, not below the rank of a sub-inspector, may, has also been empowered to seize without warrant, all copies of the work, plates and be produced before a Magistrate. </li></ul>
  24. 24. Employee welfare measures- PF, ESI , Medical compensation ,Risk coverage <ul><li>Welfare includes anything that is done for the comfort and improvement of employees and is provided over and above the wages. Welfare helps in keeping the morale and motivation of the employees high so as to retain the employees for longer duration. The welfare measures need not be in monetary terms only but in any kind/forms. </li></ul><ul><li>Employee welfare includes monitoring of working conditions, creation of industrial harmony through infrastructure for health, industrial relations and insurance against disease, accident and unemployment for the workers and their families. </li></ul><ul><li>Labor welfare entails all those activities of employer which are directed towards providing the employees with certain facilities and services in addition to wages or salaries. </li></ul>
  25. 25. <ul><li>Labor welfare has the following objectives: </li></ul><ul><li>To provide better life and health to the workers </li></ul><ul><li>To make the workers happy and satisfied </li></ul><ul><li>To relieve workers from industrial fatigue and to improve intellectual, cultural and material conditions of living of the workers. </li></ul>
  26. 26. <ul><li>The basic features of labor welfare measures are as follows: </li></ul><ul><li>Labor welfare includes various facilities, services and amenities provided to workers for improving their health, efficiency, economic betterment and social status. </li></ul><ul><li>Welfare measures are in addition to regular wages and other economic benefits available to workers due to legal provisions and collective bargaining </li></ul><ul><li>Labor welfare schemes are flexible and ever-changing. New welfare measures are added to the existing ones from time to time. </li></ul><ul><li>Welfare measures may be introduced by the employers, government, employees or by any social or charitable agency. </li></ul><ul><li>The purpose of labor welfare is to bring about the development of the whole personality of the workers to make a better workforce. </li></ul>
  27. 27. <ul><li>The very logic behind providing welfare schemes is to create efficient, healthy, loyal and satisfied labor force for the organization. The purpose of providing such facilities is to make their work life better and also to raise their standard of living. The important benefits of welfare measures can be summarized as follows: </li></ul><ul><li>They provide better physical and mental health to workers and thus promote a healthy work environment </li></ul><ul><li>Facilities like housing schemes, medical benefits, and education and recreation facilities for workers’ families help in raising their standards of living. This makes workers to pay more attention towards work and thus increases their productivity. </li></ul>
  28. 28. <ul><li>Employers get stable labor force by providing welfare facilities. Workers take active interest in their jobs and work with a feeling of involvement and participation. </li></ul><ul><li>Employee welfare measures increase the productivity of organization and promote healthy industrial relations thereby maintaining industrial peace. </li></ul><ul><li>The social evils prevalent among the labors such as substance abuse, etc are reduced to a greater extent by the welfare policies. </li></ul>
  29. 29. <ul><li>Welfare of Labour includes conditions of work, provident funds, employers’ liability, workmen’s compensation, invalidity and old age pension and maternity benefits. </li></ul><ul><li>The principal social security laws enacted in India are the following: </li></ul><ul><ul><li>(i) The Employees’ State Insurance Act, 1948 (ESI Act) which covers factories and establishments with 10 or more employees and provides for comprehensive medical care to the employees and their families as well as cash benefits during sickness and maternity, and monthly payments in case of death or disablement. </li></ul></ul>
  30. 30. <ul><li>The Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 (EPF & MP Act) which applies to specific scheduled factories and establishments employing 20 or more employees and ensures terminal benefits to provident fund, superannuation pension, and family pension in case of death during service. Separate laws exist for similar benefits for the workers in the coal mines and tea plantations. </li></ul>
  31. 31. <ul><li>The Workmen’s Compensation Act, 1923 (WC Act) , which requires payment of compensation to the workman or his family in cases of employment related injuries resulting in death or disability. </li></ul><ul><li>The Maternity Benefit Act, 1961 (M.B. Act), which provides for 12 weeks wages during maternity as well as paid leave in certain other related contingencies. </li></ul><ul><li>The Payment of Gratuity Act, 1972 (P.G. Act ), which provides 15 days wages for each year of service to employees who have worked for five years or more in establishments having a minimum of 10 workers. </li></ul><ul><li>Separate Provident fund legislation exists for workers employed in Coal Mines and Tea Plantations in the State of Assam and for seamen. </li></ul>

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