India Regulatory Brief: Passage of Bankruptcy Law, New National IPR Policy, and Draft Geospatial Bill Announced
Passage of Bankruptcy Law
The Insolvency and Bankruptcy Code, 2016 was passed by the Indian parliament on May 11. If the bill gets enacted (after the President’s assent) by May 31, it would improve India’s ranking in the World Bank’s Ease of Doing Business report. India currently ranks 130 out of 189 countries overall and 136th on the parameter of resolving insolvency.
As per the new law, resolving insolvency must now be achieved within a 180 day period, extendable only once, by 90 days. This is much shorter than the current average of 4.3 years. The bankruptcy bill promises faster recovery of debt by creditors and turnaround of businesses as well as a database of serial defaulters to secure the system. It also creates a new category of ‘insolvency professionals’ specialized in dealing with distressed companies, who will be regulated by the law’s proposed Insolvency and Bankruptcy Board of India. The control of sick companies will henceforth go to insolvency professionals instead of the promoters or controlling shareholders.
The bill’s smooth passage has been possible because the Insolvency and Bankruptcy Code amended itself to incorporate all the changes proposed by the joint parliamentary committee (consisting of members from across political parties). Some of these amendments include filing bankruptcy applications within three months, protecting worker and employee interests as first priority (in case of liquidation of assets of a company), and the disqualification of bankrupt individuals from occupying public office.
New National IPR Policy and Patents (Amendment) Rules in Force
The government announced a new National Intellectual Property Rights (IPR) Policy on May 12, subsequently publishing the Patents (Amendment) Rules on May 16. All national laws on patents, trademarks, and IPRs will be shaped by the Policy, which intends to safeguard the interests of rights of owners and combat copyright infringement. It is fully compliant with the World Trade Organisation’s (WTO’s) agreement on Trade Related Aspects of IPRs (TRIPS). From now on, the Department of Industrial Promotion and Policy (DIPP) will be the nodal agency regulating intellectual property rights in India. Further, the National IPR Policy will be reviewed every five years.
Under the new policy, trademark offices will be modernized, enabling online registration. The process for trademark and patent examination and registration will be expedited – first to 8 months from 13 months, and finally, to just one month by 2017. Importantly, the policy broadens the scope of copyright laws to cover films, music, and industrial drawings. However, the National IPR Policy still stands by the Compulsory Licensing (CL) provision of the Indian Patents Act, 1970 that allows sovereign countries to ensure the availability of essential and life-saving drugs at affordable prices. Moreover, the definition of what is considered an invention will continue to be interpreted as per Section 3(d) of the Indian Patents Act, 1970.
This Policy is a vital addition to the business-friendly reforms embarked upon by the ruling NDA government because it primarily acknowledges IPRs to be marketable financial assets. Such an outlook incentivizes entrepreneurship and respects innovation by providing legal measures in case of violation and infringement.
Government Releases Draft on Geospatial Bill
On May 4, the Ministry of Home Affairs released a draft of the Geospatial Information Regulation Bill. Geospatial information refers to any location/topographical imagery acquired through space or aerial mediums such as satellite, aircrafts, airships, balloons, unmanned aerial vehicle etc. If implemented, the bill would outlaw any individual or corporation that acquires, disseminates, publishes, or distributes any geospatial information of India without securing a license with a Security Vetting Authority. Payment for the appropriate privilege to do so will be made mandatory. An enormous fine of up to U.S. 14.84 billion (Rs 100 crore) and/or jail time of up to seven years will be imposed on those who violate these norms.
The bill, if passed, will be a definitive hindrance to all the new reforms advocated by the current administration. Skill development, Digital India, the Smart Cities initiative, and enhancement of the transport sector are all heavily dependent on geospatial data. The bill would also act as a major entry barrier for e-commerce firms, logistics companies, service-oriented start-ups, and transport aggregators who rely on private sector providers for geospatial information. In effect, anyone with GPS systems in their smartphones, laptops, or other devices would get affected.
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