CAN PARLE BE RESTRAINED FROM ADVERTISING THE TAGLINE “FOR THE BOLD”?

CAN PARLE BE RESTRAINED FROM ADVERTISING THE TAGLINE “FOR THE BOLD”?

by | Sep 28, 2023 | Civil Law, Corporate Law

Delhi High Court refuses to restrain Parle from using the ‘For The Bold’ campaign as a label on its ‘B Fizz’ bottle.

  • WHAT WERE THE FACTS OF THE CASE?

CS (COMM) 268 of 2021 was instituted by PepsiCo Inc. (hereinafter referred to as “PepsiCo”), against Parle Agro Private Limited Company (hereinafter referred to as “Parle”), seeking a permanent injunction against Parle using the tagline “For The Bold” in relation to its products and IA 7170/2021 under Order XXXIX Rules 1 and 2 of the CPC was filed seeking an interlocutory injunction. During the pendency of the suit, IA 9591/2021 under Section 124 (1)(a)(ii) was filed by Parle Agro Private Limited under Section 124(1)(a)(ii) of the Trade Marks Act for the grant of leave to file a rectification petition challenging the registration of the PepsiCo’s “For The Bold” trade mark.

  • WHAT WERE THE LEGAL ISSUES RAISED BY PEPSICO?

  1. The DORITO range of tortilla chips, a product of PepsiCo was adopted as the brand name in 1961 when its use commenced in the USA and India, the mark DORITOS stands registered in in Classes 29 and 30 with effect from 08.05.1986. The tagline “For The Bold” was used about the DORITOS range of Tortilla Chips during the global marketing campaign by PepsiCo to draw consumers. The tagline has been used by PepsiCo since 2013 internationally and in India since 2015 when PepsiCo’s DORITOS range of tortilla chips was introduced in this country.
  2. The tagline “For The Bold” stands registered in favor of PepsiCo in Class 30 w.e.f. 21.03.2013 which is still subsisting.
  3. Local manufacturing of the DORITO tortilla chips bearing the tagline “For The Bold” commenced in India in 2017. The return from sale figures brought forth by PepsiCo showed that in the year 2020, till October 2020 alone, sales of DORITOS chips had returned earnings of ₹ 61.1 crores. Also, the expenses incurred by the company for the promotion and publicity of its product between March and October 2020, were to the tune of ₹ 13.1 crores.
  4. In November 2020, PepsiCo discovered that Parle had launched a malt-flavored fruit juice-based drink in India by the name B FIZZ, on 15.10.2020 bearing the tagline “For The Bold” on the label. In furtherance, the tagline was being extensively used by Parle in its advertising campaign and on its social media pages. Use of the “For The Bold” tagline by Parle even for advertising constitutes “use” of PepsiCo’s registered trademark, within the meaning of the Trade Marks Act in terms of 2(2)(b) and Section 29(6) of the Trade Marks Act
  5. On 19.09.2020 Parle applied for registration of the tagline “Be The Fizz! For The Bold” as a trademark on a “proposed to be used basis” which was opposed by PepsiCo, and the said application was pending during the proceeding of the current matter
  6. PepsiCo alleged that Parle by using the tagline “For The Bold” has infringed the registered trademark of PepsiCo within the meaning of Section 29 of the Trade Marks Act and that by using the tagline Parle is seeking to create an artificial inference of association with PepsiCo. The tagline being a registered trademark of PepsiCo it is entitled, as of right, to the presumption of validity under Section 31 of the Trade Marks Act and the presumption of validity, conferred by Section 31(1) would also apply to the rectification proceedings which Parle seeks to initiate.

  • WHAT WERE THE SUBMISSIONS ON BEHALF OF PARLE?

  1. The Trademark for the tagline “For The Bold” has been applied by PepsiCo under Class 30 whereas, on the contrary, Parle had applied for a trademark for the tagline “Be The Fizz! For The Bold” under Class 32. The trade dresses of PepsiCo’s DORITOS tortilla chips and Parle’s B Fizz malted beverage are completely distinct, different, and distinguishable. Besides, the name of the manufacturing company is prominently displayed on both labels. Section 29(1) of the Trade Marks Act does not apply as the impugned mark of Parle is not used in respect of the goods in respect of which PepsiCo’s mark is registered.
  2. The allegedly impugned product B Fizz of Parle had earned through sales revenue of ₹ 184 crores during the period September 2020 to March 2021 and ₹ 48.12 crores during April and May 2021 and the expenses incurred by Parle in the promotion and advertising of the product during the year 2021-2022, up to May 2021, amounted to be ₹ 35,55,82,129/–.
  3. Registration of the tagline “For The Bold” by PepsiCo is violative both of clauses (a) and (b) of Section 9(1) of The Trade Marks Act as the tagline is inherently incapable of distinguishing the goods of PepsiCo and the mark “For The Bold” on the reverse of the DORITOS pack is merely a slogan denoting the quality of the product and the intended purpose of the contents of the pack.
  4. The tagline has no distinctive character as the “For The Bold” tagline has become customary in the current language and in the bona fide and established practices of trade as it is also being used by various third parties. The tagline trademarked by PepsiCo does not function as a means to identify the product with PepsiCo also the tagline as the trademark is not used either by PepsiCo or by Parle.
  5. Section 179 of the Trade Marks Act, does not permit dissection of the mark into its parts, unless the individual parts are themselves registered trademarks and therefore PepsiCo’s “For The Bold” registered trademark cannot be compared with Parle’s “Be The Fizz! For The Bold!” by extracting, for such comparison, the latter “For The Bold” part of Parle’s mark.
  6. Parle was not taking any unfair advantage of PepsiCo by using the impugned tagline or seeking to ride on PepsiCo’s reputation as there is no evidence of dilution of PepsiCo’s “For The Bold” mark as the consequence of use, by Parle, of the impugned “Be The Fizz! For The Bold!” tagline. In furtherance, the mark has been used by Parle since September 2020 and the sales of its “B Fizz” beverage of Parle have multiplied manifold, far over the sales of the DORITOS chips of PepsiCo.
  7. A mere registration of “For The Bold” as a trademark in favor of PepsiCo does not, in his submission, ipso facto imply that PepsiCo is using “For The Bold” as a trademark as the same is not being used by PepsiCo as a trademark

  • WHAT WAS THE ANALYSIS DRAWN BY THE HON’BLE COURT?

The Hon’ble Court relying on a catena of judgements made the following analysis:

  1. Section 124 and I.A. 9591 of 2021

IA 9591 of 20021 was filed by Parle under Section 124(1)(ii) praying for framing of an issue regarding the validity of the “For The Bold” trademark of PepsiCo and for Parle to be granted leave to move for rectification of the mark

The Hon’ble Court observed that while exercising its subjective satisfaction in terms of Section 124(1)(a)(ii) the court, was only required to satisfy itself regarding the “prima facie tenability” of the challenge, by the defendant, to the plaintiff’s trade mark – or vice-versa. The task of the suit Court, whether under Section 111(1)(ii) of the Trade Marks Act 1958 or the corresponding Section 124(1)(a)(ii) of the present Trade Marks Act, is only to pronounce on the prima facie tenability of the challenge, by the defendant, to the validity of the plaintiff’s trade mark and once the suit Court finds the challenge to be tenable and frames in issue in that regard, the challenger-defendant would have to move the IPAB for rectification, and it was the IPAB alone which could decide on the aspect of rectification and, therefore, on the validity of the plaintiff’s trade mark, one way or the other.

The court allowing IA 9591 of 2021 enabled Parle to file an appropriate rectification petition to frame an issue regarding validity of the PepsiCo’s “For The Bold” Trademark and framed the following issue:

“Whether the registration of the tagline “For The Bold” as a trademark in favor of PepsiCo is valid?”

As C.O. (COMM. IPD-TM) 5 of 2021 was already filed by Parle before the Court could decide on the prima facie tenability of the challenge the same was allowed to be treated as a rectification petition filed under Section 124(1)(ii) but the same was not permitted to be treated as a precedent.

  1. A. 7170 of 2021
  • Scope of Section 124(5) – Validity of the plaintiff’s trademark being an inalienable pre-requisite for relief against infringement, under Section 124(5), read with Order XIX of the CPC, the court while doing so can only examine the allegation, if any, of passing off, which is not conditional on the trade mark being validly registered or, registered at all. The Court, under Section 124(1)(ii) of the Act merely opines on the prima facie tenability of the challenge to validity. Once a trademark is considered to be registered in terms of Section 31(1) of the Trade Marks Act the initial onus on the plaintiff to establish that the mark which it seeks to assert is prima facie valid stands discharged
  • The Aspect of Infringement – An infringement can only be said to exist where the ingredients for infringement, as set out in Section 29 of the Trade Marks Act, are found to be satisfied. Infringement is a tort manifested by a physical act, which the innocent trademark is incapable of performing. The mere similarity between the marks and identity or similarity between the goods or services in respect of which the marks are used would not, therefore, even if they are found cumulatively to exist, justify a finding of infringement. The likelihood of the trademark has to be assessed by comparing the marks as wholes. Parle uses PepsiCo’s registered “For The Bold” tagline in two ways – as part of its label and in its advertising campaign – one of which is infringing, and the other non-infringing in nature, and since it is only the infringing use of the mark which can be injuncted Parle was disallowed to use “For The Bold” tagline in its advertising campaign on Social Media
  • Passing Off – Passing off is a common law tort, which is committed only where the defendant, by use of the impugned mark, is seeking to pass off its product as the product of the plaintiff. A finding of passing off can be returned only if the plaintiff, in the first instance, proves the existence of sufficient goodwill and reputation of the mark that it seeks to assert. The reputation which is required to be established, to sustain a plea of passing off, is the reputation of the mark and not the reputation of the product bearing the mark. The plea of PepsiCo that Parle is trying to pass off its product as a product of PepsiCo was found to be unsustainable considering the reputation of the Company Parle and also the sales figure of the B-Fizz product of Parle which was far more compared to PepsiCo

Balance of convenience and irreparable loss – The interlocutory injunction sought by PepsiCo was not found to be in the interest of justice, but rather the court directed Parle to place on record the entire returns earned by the sales of its “B Fizz” beverage, using the label which contains “For The Bold” from the time the use of the said label commenced, duly certified by a Chartered Accountant and continue to file, every two months, duly certified figures of returns of sales from its “B Fizz” beverages, during the pendency of the suit considering the same to be adequate in terms of interests of justice.

  • WHAT WAS THE FINAL JUDGMENT?

  1. IA 9591/2021 was allowed by the Hon’ble Court based on the following terms:
  • The challenge, by Parle, to the registration of the “For The Bold” trademark of PepsiCo was found to be tenable, but the Court by stating so only intended to convey that the challenge is arguable and requires consideration and the merits of the challenge will be examined while adjudicating C.O. (COMM. IPD-TM) 5/2021, uninfluenced by any observation contained in the judgment laid down in ____

. For the said purpose, and without intending it to operate as a precedent, C.O.(COMM.IPD-TM) 5/2021 is treated as an application under Section 124(1)(a)(ii) of the Trade Marks Act. Notice is deemed to have been issued thereon and accepted by Mr Manish Jha, learned counsel for PepsiCo.

  • The Court, framed the following issue: “Whether the registration of the tagline “For The Bold”, as a trademark in favor of PepsiCo is valid?”
  • The trial of the suit given Section 124(2) of The Trade Marks Act was stayed until disposal of C.O.(COMM.IPD-TM) 5/2021 and the same was ordered to be taken up for hearing and disposal at 2:30 PM on 25 September 2023 and no request for adjournment was sought to be entertained.
  • The ground of challenge by Parle, to the “For The Bold” trademark of PepsiCo was found to be purely legal and no additional evidence was permitted to be led by the parties except for those already on record.
  1. IA 7170/2021 was disposed of by the Hon’ble Court on the following terms:
  • The prayer for interlocutory injunction by PepsiCo against the use, by Parle, of “For The Bold” as part of the label on its “B Fizz” bottle/can was rejected but Parle was restrained, pending disposal of the suit from altering the label on its “B Fizz” beverage bottle/can without prior approval of the Hon’ble Court.
  • Parle was restrained, pending disposal of the suit, from using the tagline “For The Bold” as the predominant part of any advertising campaign for its “B Fizz” beverage and also restrained from airing or continuing the Facebook advertisements and taking and discontinuing any continuing advertisement. In the event of any fresh advertising campaign, or advertisement, by Parle, which uses “For The Bold” as its dominant/predominant part, PepsiCo was entitled to move to the Court using an interlocutory application in the present suit, seeking injunctive relief
  • Parle was directed to place on record the entire returns earned by the sales of its “B Fizz” beverage, using the label which contains “For The Bold” from the time the use of the said label commenced, duly certified by a Chartered Accountant and was ordered to continue to file, every two months, duly certified figures of returns of sales from its “B Fizz” beverage, during the pendency of the suit.

Judgment reviewed by: Kavya Kapoor, Legal Intern at Aggarwals & Associates, Mohali

Pharmaceutical Company’s Non-Liability for Adverse Vaccination Reactions

Pharmaceutical Company’s Non-Liability for Adverse Vaccination Reactions

by | Sep 21, 2023 | Civil Law, Corporate Law, General

Can Pharmaceutical Companies Be Held Liable For Not Mentioning Adverse Reactions Of Vaccination?

SUPREME COURT UPHOLDS THE NCDRC ORDER DENYING COMPENSATION TO THE COMPLAINANT WHO HAS FAILED TO ESTABLISH EXERGIX-B VACCINE BY THE PHARMACEUTICAL COMPANY AS THE CAUSE OF HIS “MYOSIS”.

CASE: Prakash Bang v. Glaxo Smithkline Pharmaceuticals Ltd Anr. (CIVIL APPEAL NO. 6791 OF 2013)

WHAT ARE THE FACTS OF THE CASE?

  • In order to achieve immunity against contracting Hepatitis B, on 10.08.1998, the appellant approached his family physician Dr. Satyajit Pathak for administering the repeat dose of the vaccine Engerix-B, but after four days of being vaccinated, he felt severe pain in his left shoulder at the site of the injection and while moving his shoulder. The skin at the place where he was injected was found shiny with a bit of erythema.
  • He took analgesics under medical advice and visited an orthopedic surgeon, underwent certain radiological tests but no orthopedic abnormality was detected. He was examined by Neuro-physician and the nerve conduction test was carried out. During the process, he found out that the pain was due to ‘myositis’ which is a condition occurring as an adverse reaction due to the administration of Engerix-B, manufactured by the pharmaceutical company.
  • The appellant filed a complaint before the NCDRC claiming compensation of Rs,90,20,557 from the pharmaceutical company. It was observed by NCDRC that if the drug of that particular batch had any such defect or deficiency, the reaction should have been common for other members also as they also took the same. Also, the reported frequency has a minimal incidence i.e. 0.02 per million doses. The muscle biopsy was never sent to the pharmaceutical company. Various examinations/ tests conducted by the pharmaceutical company found that all the values had passed the requisite standard and the drug of that lot suffered from no defect of any kind.

WHAT ARE THE LEGAL ISSUES RAISED?

  • Firstly, whether the conclusion as recorded by the NCDRC is erroneous or perverse so as to call for interference, and whether there is sufficient evidence to establish that the appellant in fact had suffered ‘myositis’ and if so whether the cause for same was the vaccination Engerix-B being administered?
  • Secondly, whether the non-mentioning of ‘myositis’ being suffered as an adverse reaction in the literature accompanying the injection or on the ‘vial’ amounts to ‘deficiency of service’, more particularly when the adverse reaction is minimal only to the extent of 0.02 in one million?

The burden was on the appellant, particularly in a circumstance when all the family members had been administered the same vaccination from the same source and the appellant himself did not have any difficulty when the first two doses were administered.

  • On the first aspect, the court held that the affidavit of the family doctor ‘Dr. Satyajit Pathak’, stated only about administering the vaccine and the fact of the shoulder pain, and also there was no affidavit containing the medical research of the doctors who had subsequently treated the appellant. In the absence of such medical evidence, it becomes difficult for the court to arrive at a conclusion.
  • It was also held that the initial burden to be discharged by the appellant has not been discharged to substantiate the allegation which was made in the complaint. Also, the muscle biopsy not being furnished despite being asked to do so by the respondent pharmaceutical company should be held adversely against the appellant.
  • On the second aspect, The Supreme Court while relying on, Jacob Punnen and Another vs. United India Insurance Company Limited, observed that the said family doctor also owed a duty to his patient and if he had prescribed the said drug it was incumbent on him to know more details about the vaccination before prescribing or administering the same, and ideally, he ought to have been a party-respondent to the proceedings rather than filing his affidavit.
  • Also, The assumption of the appellant that he has suffered ‘myositis’ and the cause for the same was the Engerix-B vaccine has not been established with the minimal required evidence to conclude in favor of the complainant.

Even muscle biopsy which was required by the pharmaceutical company was not furnished so as to enable the pharmaceutical company to make an ultimate decision in the matter. Therefore, considering all the aspects, the court held that NCDRC has not committed any error so as to call for interference with the impugned order

WHAT ARE THE VIEWS OF THE SUPREME COURT?

  • The Honourable Supreme Court to arrive at a conclusion considered the relevant observation in the order of the NCRDC which explained that it is difficult to establish a relationship between such adverse reaction and the vaccine as it could be calculated to a minimal incidence i.e., 0.02% only. It also said that had the vaccine had any defect or deficiency, the reaction must also be caused to other family members.
  • Also, the drug has passed all the examination and requisite standards required to be used as a vaccine and was made available in the market after certification therefore, it can’t have any such adverse reactions that the complainant had allegedly suffered.
  • The appellant also failed to produce any documentary evidence other than the affidavit filed by the doctor that can indicate the very basic issue of the purchase of the vaccine and the same being administered by the pharmaceutical company.
  • The Apex court said that the non-mentioning of ‘myositis’ being suffered as an adverse reaction in the literature on the ‘vial’ did not amount to “a deficiency of service” on the part of a pharmaceutical company- Glaxo SmithKline Pharmaceuticals Ltd. as the affidavit of the manufacturer indicated that the detailed procedure was followed in the certification of the drug.
  • Further, it was found by the court that the muscle biopsy was not furnished by the complainant despite being asked to do so by the pharmaceutical company, and thus the same was held adversely against the former.
  • Thus, the Supreme Court upheld the order of the NCRDC and dismissed the plea.

The complainant has miserably failed to establish his case in regard to either any defect in the drug in question or any negligence amounting to deficiency in service on the part of the pharmaceutical company which is the manufacturer of the drug. In that view, the complaint filed by the appellant was dismissed by the NCDRC. 

Judgment reviewed by: Advitiya Malhotra and Siddhi Porwal, Legal Intern at Aggarwals & Associates, Mohali

Maternity Benefits Can Extend Even Beyond Contractual Term: Supreme Court of India

Maternity Benefits Can Extend Even Beyond Contractual Term: Supreme Court of India

by | Sep 11, 2023 | Civil Law, Contract Law, General

“Fulfil the entitlement criteria specified in section 5(2) of the Maternity Benefits Act and get eligible for full Maternity benefits even beyond the contractual term”.

The Hon’ble Supreme Court of India upheld the above statement in a three-judge bench. Case: Dr. Kavita Yadav v The Secretary, Ministry of Health and Family Welfare Department & Ors (Civil appeal No. 5010/2023) on 17th August 2023.

WHAT ARE THE FACTS?

  • The appellant is a pathology doctor and was appointed as the senior resident (pathology) on a contractual basis in Janakpuri Super Specialty Hospital, under the government of NCT Delhi. The appellant’s contract was dated to end on 12th June 2017 as per the conditions of the contract.
  • However, she applied for maternity benefits from 1 June 2017 under the Maternity Benefit Act 1961. Eventually, the employer stated that she would only get 11 days of maternity leave, since her employment period is going to expire on 12th June 2017 and it cannot extend beyond the employment period.
  • The appellant challenged the action of the employer and filed a complaint in the central administrative tribunal and eventually in the high court; however, her claim for the same was rejected by both the court, on the same grounds as stated by the employer.

WHAT WAS THE LEGAL ISSUED RAISED?

  • Whether the maternity benefits as contemplated in Section 5(2) of the Maternity Benefits Act, 1961 apply to a woman appointed on contract if the period for which she claims such benefits overshoots the contractual period?
  • If the period of employment is as per the conditions of the contract, can there be a notional extension of the period of employment?

WHAT WAS THE JUDGEMENT?

  • The Hon’ble Supreme Court relied on several judgments. It opined that continuation of maternity benefits in the statute itself, where the benefits would survive beyond the cessation of the period of employment.
  • In the case of the municipal corporation of Delhi v. female workers (muster role) & Anr.’ the point of argument was highlighted. It revealed the fact that regular women employees were extended the benefits of the act, but, not to those women workers who were employed on a contractual basis.
  • The judgment emphasized Article 39 and more specifically 42 which fall in the ambit of directive principles of state policy and state that, a woman employee at the time of employment shall not be compelled to do hard labor. Also, the judges declared that we did not find anything credible in the act which states that only regular women employees are eligible for maternity benefits.
  • The Hon’ble Supreme Court opined that the high court erred in holding that the appellant was not eligible for maternity benefits after 11 June 2023.
  • The factual analysis of the provision led to the conclusion that after fulfillment of section 5(2) of the act, a woman employee is eligible for full maternity benefits even after these benefits exceed her period of employment.
  • The main crux of the entire judgment was, that if the employee fulfills the eligible criteria for availing maternity benefits, i.e. she completes 80 days of employment, she will be eligible to avail of the maternity benefits even if such benefits exceed the duration of her contract.
  • The Supreme Court set aside the judgment of the high court and the decision of the tribunal invalidated thereof.

WHAT IS THE SIGNIFICANCE OF THIS JUDGEMENT?

  • We know that maternity benefits are a fundamental and integral part of the identity and dignity of a woman who chooses to bear a child. Thus the apex court gave a fabulous judgement about the rights of the contractual women employees.
  • The benefits should be given on a timely basis and the discrimination based on permanent and contractual employment shall be curbed as much as possible, considering the development of female strata of the society and the economy at large.

 

Judgment reviewed by: Ajit Ranadive, Legal Intern at Aggarwals & Associates, Mohali

 

 

 

The Thrill of Online Gaming: A Comprehensive Guide

The Thrill of Online Gaming: A Comprehensive Guide

by | Sep 5, 2023 | Civil Law, Corporate Law, General

In this article, we will be catering the critical legal aspects related to online gaming in India. We will be talking the recent legal developments that are shaping the landscape aswell.

WHAT IS ONLINE GAMING?

  • Online gaming is the playing of games via online mode with friends, family, or any known member.
  • The players have to pay a monthly or annual subscription fee to play the online games on the internet platform. The gaming experience involves users playing in groups offering a multi-user experience.
  • The multi-users can chat or talk to each other and play to win gaming battles.
  • Currently, there are various Online portals available to provide a smart user interface for such players. They are providing them with a hassle-free gaming experience.

WHAT IS ONLINE GAMING IN INDIA?

  • As per the Indian Government, Online games mean “game that is offered on the Internet and is accessible by a user through a computer resource or an intermediary”.
  • The gaming experience dealing with wagering and betting falls out of the ambit of online gaming.
  • As per the Minister of State for Electronics in India, online gaming is permissible games involving real money. Also, they do not harm the users and make them addicted to the online gaming experience.
  • They do not involve wagering or are not involved in betting.

WHAT ARE THE CLASSIFICATIONS OF ONLINE GAMES?

Online games in India typically fall under two primary legal categories:

  1. Games of skill- Games of skill is involving a substantial element of skill and strategy, are exempted from anti-gambling laws.
  2. Games of chance- Games of opportunity is primarily relying on luck, are often subjected to gambling regulations.
  • The distinction between these categories plays a pivotal role in determining the applicability of gambling laws.
  • In recent years, online poker and fantasy sports platforms have gained significant attention and faced legal challenges.
  • The legal status of these platforms hinges on the determination of whether they constitute games of skill or games of chance. The courts have generally leaned towards classifying poker as a game of skill due to its strategic nature, while fantasy sports platforms argue that participant knowledge and decision-making make their offerings games of skill as well.
  • The legal battle surrounding these classifications reached a milestone in the XYZ v. ABC case, wherein the High Court upheld the type of poker as a game of skill. This ruling established a precedent for other courts to follow, providing a level of legitimacy to the online poker industry.

WHAT IS THE LEGAL ASPECT RELATED TO ONLINE GAMING IN INDIA?

  • Online gaming is rapidly growing in India and has led to an efflux in legal considerations surrounding this dynamic industry.
  • As players immerse themselves in virtual worlds, legal frameworks are being scrutinized to ensure a balance between entertainment, consumer protection, and regulatory compliance.
  • The Indian Ministry of Electronics and IT (MeitY) is trying to regularise this part of the virtual world from the players being tricked or harmed by the addiction or from being scammed.
  • The MeitY has introduced certain rules and regulations to scrutinize the virtual online gaming world.
  • Such scrutiny will be with the help of the Self Regulatory Organisations (SRO’s).
  • The SRO’s will be approving the games to operate in India in accordance with the rules introduced by the Indian Ministry of Electronics and IT (MeitY).
  • The Self Regulatory Organisations  will be providing betting-free, harm-free games, and wager-free online games for online gaming users. Such rules have been brought into the picture by amending the IT rules of 2021.

CAN INCOME RECEIVED FROM ONLINE GAMING BE TAXED?

  • The taxation of online gaming in India is a complex matter.
  • Income generated by players through gaming activities may be subject to income tax, while gaming platforms are also subject to various tax implications.
  • Furthermore, foreign investment in the Indian gaming industry is subject to the Foreign Direct Investment (FDI) policy of the country. Recent amendments to the FDI policy have allowed for increased foreign investment in the sector, fueling its growth.

CAN ONLINE GAMING BE ADVERTISED?

  • The advertising and endorsement of online gaming platforms have also garnered legal attention.
  • The Advertising Standards Council of India (ASCI) has issued guidelines that require gaming advertisements to be transparent and not mislead consumers.
  • Celebrity endorsements of gaming platforms is facing scrutiny, leading to a closer examination of whether such endorsements violate any ethical or legal standards.

WHAT IS ONLINE GAMING ONLINE GAMBLING OR A SKILL GAME?

  • The distinction between online gambling and skill games is a subject of contention in recent years.
  • While games of skill has gained acceptance as legal activities, the line between skill and chance can sometimes be blurred. This has led to debates over whether certain card games or betting activities should be treated as skill-based games or gambling.
  • The XYZ Bill is currently under consideration in Parliament. It is seeking to establish a regulatory framework to address these ambiguities and provide clarity on the legal status of various online gaming activities.

CONCLUSION:

  • The legal landscape of online gaming in India is rapidly driven by technological advancements, changing consumer behaviors, and legal challenges.
  • As the industry is struggling with questions of skill versus chance, consumer protection, taxation, and advertising.
  • It is imperative for both players and stakeholders to stay informed about the latest legal developments.
  • Recent rulings, such as the XYZ v. ABC case, has provided an essential guidance, but the journey toward a comprehensive regulatory framework is ongoing.
  • In this dynamic environment, players, gaming platforms, and regulators must collaborate to strike a balance.
  • It should be fostering  innovation, ensuring consumer safety, and upholding legal standards.
  • As online gaming is becoming an increasingly integral part of Indian leisure and entertainment, a clear and comprehensive legal framework will play a pivotal role in shaping the future of this vibrant industry.

By: Advocate Riti Gupta, Associate Lawyer at Aggarwals & Associates, Mohali