Lawyers have played a pivotal role in the remarkable growth of India's technology industry, which is now valued at an impressive $245 billion and employs some 5.4 million people. Leaders at some key law firms talk about how their expertise in IP rights, contract law, and regulatory compliance provided the legal framework for innovation, investment, and business expansion, fostering an environment conducive to the sector's success.
ALB: How is the significant growth of India's technology industry driving the need for legal support provided by firms like yours?
Pravin Anand, managing partner, and Vaishali Mittal, partner, Anand & Anand: Law and technology are inseparable, and today, are considered one of the most important disciplines. Today, India Inc. is as much the story of legacy businesses, as it is the story of grassroots inventors, content creators on social media, start-ups turning unicorns, and the entire nation going cashless, relying solely on digital payments. With India's narrative being largely digital, an overwhelming majority of the issues that will arise, both for monetisation as well as protecting one's creations, will relate to intellectual property. IP firms like ours will play a pivotal role in giving shape to the way technology catalyses social and economic change. IP will not be restricted to government offices or courts, but will be the dominant factor in valuation meetings, pitches to incubation centres, license negotiations etc.
Hemant Singh, managing partner, and Mamta Jha, senior partner, Inttl Advocare: India has consistently been recognised as the world's tech hub. However, recent entrepreneurial efforts and an extremely conducive environment have propelled India to the global stage as a formidable tech powerhouse. Given the dynamism of the tech industry, legal support in this sector needs to be equally dynamic and solution-oriented. This has been the guiding philosophy for Inttl Advocare when assisting clients from and around the tech sector!
Since its inception in 1991, the firm has seen the tech sector grow by leaps and bounds. From being a tertiary avenue for various industries, the digital ecosystem is now a primary and essential market. Surviving online is the key to thriving offline! It would not be remiss to state that the Technology Industry has permeated every other industrial sector. This cross-sectoral growth has also raised complex legal challenges pertaining to intellectual property, data privacy, cybersecurity, cross-jurisdictional challenges, and regulatory compliance aspects requiring specialised expertise, which firms like ours are well-equipped to provide.
At Inttl Advocare, our legal strategies and advice always consider the practical realities of the digital world. We strive to provide innovative solutions to evolving challenges in the tech space, which are rooted in the conventional law, whilst being flexible to withstand the rapid technological changes. From metaverse, NFTs to Web 3.0, our firm combines expertise and experience to provide forward-facing solutions. Understanding the technology and keeping abreast with the policy deliberations are also important factors that allow us to carve out niche solutions for our tech clients.
Arjun Sinha, founding partner, AP & Partners: The growth of India's technology industry and its fast-paced regulatory environment have significantly increased the demand for legal support. As opposed to a traditional engagement model, teams need to keep themselves updated on frequent changes and proactively inform their clients of the potential impact on their business. Moreover, as Indian businesses expand globally, we need to be up to date with global legal developments and work with partners in multiple jurisdictions.
Vidushpat Singhania, managing partner, Krida Legal: The growth of India's technology industry is driving a compelling need for legal support. With the rapid advancement of technology and digital innovation, various sectors of the Indian economy, including e-gaming/sports, e-commerce, fintech, artificial intelligence, and blockchain, have experienced remarkable transformations. This growth has given rise to complex legal challenges that necessitate specialised expertise.
The rise in technology has necessitated changes being reflected in existing laws and rules in the country. The Department of Consumer Affairs and ASCI both have, in 2022 issued various guidelines to be followed by celebrities and social media influencers to prevent misleading advertisements and surrogate advertising. Any contravention of such guidelines would imply the risk of being slapped with stringent action by the authorities. Hence, it is necessary to ensure that any and all online advertisement campaigns run by our clients are in compliance with these guidelines.
Similarly, MEITY recently introduced amendments to the IT (Intermediary Guidelines and Media Ethics Code) Rules 2021 to among other things provide for the creation of Self-Regulatory Bodies (SRBs). These SRBs will be tasked with creating various frameworks for verifying and approving permissible online games, which can be offered to users for real money as entertainment. The amended IT Rules 2021 also provide for establishing mandatory posts by online intermediaries, including gaming companies, to ensure swift action by such entities in the event of any cyber-security incidents. The changes in these laws have been brought to counter technological advancements effectively. In such cases, it is always our effort to ensure that compliance requirements of our clients are met and that the client is not in breach. Lastly, the landscape pertaining to data security and the rules and regulations in relation thereof will undergo a massive change as and when Parliament passes the Digital India Bill and the Digital Personal Data Protection Bill. It is expected that both legislations will effectively answers questions surrounding data security in India. The compliance of technologies with the data-security standards to be established under these legislations will be key moving forward.
ALB: Could you provide some examples of these companies' specific legal challenges?
Anand and Mittal: Some of the specific legal challenges that technology industry is facing in India in the present day include, first, online piracy and the sale of counterfeit goods, especially on e-commerce websites, which claim safe-harbour, disclaim liability and require that with each instance of infringing content being uploaded on the platform, rights owners resort to the "notice-and-take-down" scheme. Recent legislative and policy initiatives such as Intermediary Guidelines, 2021 (as amended in 2022) have helped make stricter norms around these.
Second, misleading content posted on social media by influencers hired by established brands. With the power of influencers on the rise, the responsibility with which they endorse products or services, must increase. Recent guidelines floated by the Advertisement Standards Council of India (ASCI) and amendments to the Consumer Protection Act and underlying rules require all such advertisements to be taken down, unless clear disclaimers are given to the public that these are merely endorsements at the best of other brands.
Third, online gaming. The casual gaming industry in India has seen a major boost with takers across the length and breadth of the country. Protecting the unique interface of their games, ensuring that key strategic inputs are protected adequately as trade secrets and that new games are developed in a clean manner without getting tangled in disputes surrounding IP owned by other companies are some of the major elements in the gaming space today.
Singh and Jha: Rapid expansion and evolution of the sector has presented technology companies with complex legal challenges that require specialised support. At Inttl Advocare, we have had the privilege of assisting numerous technology companies in navigating these challenges effectively. Speaking from our experience, one of the significant legal challenges that companies face, is protection and enforcement of their intellectual property rights. As technology companies invest substantial resources in research and development, safeguarding their innovations becomes crucial. We have been advising companies to tackle issues related to patent infringement, including standard essential patents, compulsory licensing, trademark and domain name disputes, copyright violations, misappropriation of confidential information, and more.
Online content regulation is an emerging legal challenge, specifically for companies acting as online intermediary platforms. The increasing internet traffic in India has resultantly increased issues related to free speech, misinformation, child safety, impersonation, violation of IP rights, etc., thereby increasing the burden of compliance on such technology companies. We have regularly advised and assisted such platforms with respect to safe harbour provisions, adherence to rules on content regulation, and monitoring, detection, reporting and removal of third-party content.
Another area where our expertise is often sought is data privacy and security. With the increasing reliance on data-driven technologies, companies must comply with stringent data protection laws and ensure the security of personal and sensitive information. We have assisted clients in addressing challenges related to data breaches, information security management systems, user consent, data localisation requirements, cross-border data transfers, and compliance with Indian as well as global data protection standards such as the GDPR, HIPAA, FISMA, etc.
Regulatory compliance is another key concern for technology companies. The sector operates within a complex legal landscape, and ensuring compliance with sector-specific regulations, licensing requirements, consumer protection laws, e-commerce regulations, and antitrust regulations can be challenging.
Further, antitrust issues have become one of the biggest hurdles for technology companies. We have advised companies on potential antitrust issues, abuse of dominant market position, merger control, and regulatory approvals for acquisitions, helping them navigate the complexities of competition law.
Additionally, the growing threats of cyberattacks and data theft have heightened concerns over cybersecurity and data theft. As emerging technologies such as artificial intelligence, blockchain, web3, NFTs, virtual reality, etc,. gain traction; we have assisted clients in understanding and complying with the regulatory frameworks governing these technologies.
Sinha: Technology companies doing business in India have to grapple with a rapidly changing regulatory environment. We have seen new rules for gaming and streaming companies; a developing regulatory framework for e-commerce and online advertisements; and stricter regulation of virtual assets.
As a result, businesses need to consistently evaluate the impact of new and proposed changes on their business and take proactive measures to ensure business continuity.
The digitisation of nearly all forms of businesses has increased the complexity of the operating environment for businesses. Clients, along with their trusted advisors, need to work in teams to analyse their business decisions from a diverse set of perspectives. The other area that we see focus on is an increasing element of preparing against enforcement actions or contentious situations.
Singhania: With the advancement of technology and rise in internet connectivity, we have increasingly witnessed examples of civil and criminal complaints being filed by individuals in far-flung areas against celebrities and influencers for participating in various marketing campaigns whilst alleging violation of existing laws and regulations, including ASCI's due diligence guidelines for celebrities and social media influencers. Consequently, the interests of such celebrities and influencers have to be defended in the respective jurisdictions where the complaints get filed, including requesting an online hearing, a facet of technology whose reach and acceptability has been robust.
To reflect on the rise in technology, the Department of Consumer Affairs recently issued guidelines to be followed by celebrities and various social media influencers to prevent misleading advertisements. These guidelines, interestingly, also provided for regulation of advertisements featuring virtual influencers, i.e., fictional characters or avatars possessing realistic characteristics, features and personalities of humans. Such guidelines must be followed by tech companies looking to advertise themselves while utilising AI-driven characters/ avatars.
Another issue faced by gaming entities is the threat of third-party scams, with proceeds being used on their respective platforms. In such cases, the criminal complaint filed results in the bank account of the gaming entities being frozen, which can potentially cripple operations. Consequently, we often assist in making representations to the respective law enforcement agencies and coordinate with all concerned parties to ensure that the bank accounts become operational at the earliest. Another challenge that is now being faced by gaming entities, particularly those catching the eye of the law enforcement agencies, is the suspension of their respective internet domains. In such cases, the dispute resolution mechanism of NIXI is explored to arrive at possible resolution and resumption of operations of the suspended domains.
With the rapid growth of the online gaming industry worldwide and particularly in India, the government has also sought to provide an impetus to the sector of e-sports. The government also came out with an AVGC policy in order to create a boost for the animation industry. However, there is still a lack of clarity in terms of how e-sports as a sector is sought to be promoted by the government.
With the rise in number of OTT platforms, we have witnessed challenges being faced during contract negotiations on behalf of free streaming platforms/ channels to ensure that goals of revenue generation and profitability are met.
ALB: Considering the projected growth and potential regulatory changes in the technology industry, what are your predictions for the legal landscape and the specific legal challenges that technology companies may face in the near future?
Anand and Mittal: Industry 4.0 is throwing up never-before-envisioned aspects and challenges. As this new branch of technology interfaces with pretty much every aspect of life, the challenges in future are going to be tricky to resolve.
Some of the challenges that technology companies will face include, first, technology licensing. The future of SEP licensing will see cross-transfer of technology by both parties, and more objective methods of deciding royalty payments. Thus, the impetus on all organisations should be to develop their own IP to command a stronger negotiating position.
Second, expanding the definition of intermediaries and tightening safe harbour. Different jurisdictions are currently coming up with their own answers to the varying degrees of finding balance between protecting the intermediary and aggregator business models (which are here to stay) and protecting free speech and related rights of individuals.
Third, AI-related challenges. The list here is endless. From protecting one's trade secrets from generative AI, to designing policies on the use of responsible AI and how to interact with generative AI; from addressing questions of authorship and inventorship of AI - this field is expected to throw up the greatest amount of challenges.
Fourth, data sharing, monetisation, and piracy. Data is the new gold rush. However, can one truly monetise it without cross-border reciprocal safeguards being in place? What security standards must one conform to ensure consistency of standards which will allow anonymised data to be used for further research, without comprising privacy and sensitive information of individuals, businesses and governments?
Singh and Jha: At Inttl Advocare, we are attuned to the technology industry's rapid growth and potential regulatory changes. We believe that with India's growing realisation for safeguarding its citizen's personal data and introducing the Digital Personal Data Protection Bill 2022, technology companies will face stricter data privacy regulations. Technology companies will need to adhere to more stringent laws regarding the collection, storage, and use of personal data. Compliance will require robust data protection measures, explicit user consent mechanisms, and adherence to privacy-by-design principles. Similarly, cybersecurity regulations are likely to become more stringent in response to evolving cyber threats. Technology companies will face heightened scrutiny and regulatory requirements to safeguard sensitive information and protection against data breaches. Implementing comprehensive cybersecurity measures and establishing effective incident response plans will become critical.
Further, as artificial intelligence (AI) continues to advance, we foresee the emergence of specific regulations addressing AI technologies' ethical and legal implications. Companies utilising AI will need to navigate issues related to bias, transparency, accountability, and potential liability arising from AI-driven decision-making. Compliance with these regulations will be crucial to maintain public trust and ensure responsible AI development and deployment.
The increasing dominance of technology giants may invite intensified antitrust scrutiny and sanctions. Technology companies could face investigations into potential anti-competitive practices, leading to measures aimed at ensuring fair competition, such as divestitures and stricter regulations. Additionally, cross-border data transfers will continue to pose challenges. Technology companies operating across jurisdictions will need to navigate complex data protection regulations, including data localisation requirements, adequacy determinations, and the negotiation of data transfer agreements.
Sinha: The integration of AI technology across diverse industries presents an array of legal areas for analysis. We have seen some businesses develop internal rules to assess and adopt AI solutions. These rules vary from ethical concerns to legal risks arising out of such AI adoption - such as potential risk of intellectual property infringement, and liability implications arising from the utilisation of automated tools in decision-making processes. It has been very interesting working with people on evaluating some of these.
The other element is the changing nature of the legal environment, and preparing for these changes is the other significant risk for technology companies. We are witnessing greater discussion on anti-competitive effects of data-based companies from various corners (including the Indian industry), need for regulation of consumer applications, calls for localisation of data.
Preparing their businesses against these challenges is the other key risk that technology businesses need to prepare against in the near future.
Singhania: The technology industry, particularly the online gaming industry, is anticipating future compliances arising out of the various frameworks created by the SRBs under the provisions of the recently amended IT Rules 2021. The framework(s) are expected to follow stringent guidelines for the verification and approval of permissible online games that gaming entities may offer to users for real money as a form of entertainment. The legal challenge there will be to ensure that the games provided by the gaming entities comply with all the legal requirements under the framework of the SRBs.
As mentioned earlier, another anticipated change in the legal landscape will be the changes in existing data protection measures. New legislation, such as the Digital India Bill and the Digital Personal Data Protection Bill are expected to be passed by Parliament soon, which will create another seismic shift in the legal field, particularly regarding the tech industry. One of the key factors/ areas of concern for all is going to be data security, and the challenges that tech companies will face will range from the appointment of essential, trained personnel to various mandatory posts to mitigate effects and ensure swift redressal in cyber-security incidents to ensuring storage of data in a secure manner that will not infringe on the privacy of individuals. The team at Krida Legal is working to continuously keep ourselves updated to ensure that we as a are in a position to provide sound advice to our clients in the face of such diverse challenges.
ALB: How has your firm adapted its strategies and services to set itself apart from competitors when it comes to servicing domestic and international clients?
Anand and Mittal: Anand and Anand has set up a new practice area, the Digital Group, which is dedicated to assisting our clients with issues thrown up by new and emerging technology. The focus of our Digital Group will be assisting in all aspects of law, i.e., litigation, compliance, and policy.
Recently, we provided our inputs and feedback in guiding the preparatory phase of Responsible AI Guidelines for Generative AI, published by NASS-COM. Not just that, we have made some path-breaking tech overtures within the firm, that too without the involvement of any third party. We have created Pat-ent Automation Module, which auto-fills Patent Form I in under five minutes as against 45 minutes when filled manually. It even breaks captcha without human intervention. Another app sifts through bulky trademark journals in a matter of a few minutes. Such Apps end up generating more hours for lawyers at the firm to engage constructively with clients and continue to innovate.
Singh and Jha: Our firm has adapted its strategies and services in several ways to deliver exceptional value and meet the unique needs of our clients. We strive to differentiate ourselves by providing specialisation and expertise in intellectual property and technology law, media, and telecommunications. With over three decades of experience, our dedicated team of lawyers has developed a deep understanding of these areas, allowing us to provide comprehensive and specialised legal solutions tailored to meet our clients' specific requirements.
We strongly emphasise a client-centric approach, taking the time to understand our clients' objectives and challenges. This enables us to develop customised legal strategies aligned with their business goals, ensuring personalised attention and effective solutions.
As a firm representing clients from across the globe, we have gained valuable insights and a global perspective to serve our international clients as well as domestic clients effectively. We understand the complexities of cross-border transactions and international legal frameworks to the domestic legal framework, allowing us to provide seamless support to clients with global operations as well as domestic operations and address their unique legal needs.
Furthermore, we embrace the use of advanced legal technology tools and platforms to enhance our services. By leveraging technology, we streamline processes, improve efficiency, and deliver cost-effective solutions to our clients. Our focus on staying up-to-date with legal technology allows us to provide innovative and forward-thinking legal services.
We also believe in the importance of thought leadership and knowledge sharing. Our lawyers actively contribute to industry discussions, publish articles, and participate in conferences and seminars. By sharing our insights and expertise, we aim to position ourselves as trusted advisors and contribute to the collective knowledge of the legal community.
Additionally, we have established collaborations with law firms and professionals globally, enabling us to provide comprehensive support to our clients with international operations or legal needs. These partnerships allow us to extend our reach and deliver seamless legal services worldwide.
Ultimately, our commitment to excellence drives everything we do. We consistently strive to provide exceptional quality, conducting thorough research, paying attention to the minutest details, and ensuring seamless communication. By upholding the highest standards of professionalism and ethics, we aim to build enduring relationships with our clients.
Sinha: In today's regulatory landscape, lawyers need to work collaboratively across teams to find innovative solutions in a wide range of sectors. The challenges faced by our clients – whether in deals or advisory matters can result from a wide range of areas, such as data protection, situation.
Additionally, we think the law firm remuneration model may undergo a change in the coming years. While standard pricing models such as hourly billing rates will continue, increasingly clients may be willing to take a value billing approach – where they pay for services based on the complexity of the problem and its criticality to the business.
Singhania: As a firm, we have consciously chosen to focus solely on the sports, gaming, med-tech, and entertainment sectors as our key areas of operation. Having been part of the industry for the past decade, Krida Legal is routinely involved not only with various industry bodies but has also been involved closely in providing advisories to various state and central governments grappling with policy decisions, be it on the sports or the gaming side of things.
On account of our unique mode of operation and the multitude of assignments handled and delivered to the satisfaction of our clients, Krida Legal has developed a unique insight in relation to the dynamics of the sports, gaming and entertainment sectors. Our regular interaction with major stakeholders in these sectors provides us with an edge over others in the sense that we always seek to understand the industry and the commercial requirements of our clientele before we provide legal solutions to them. We possess an innate understanding of the best international practices in each sector of our operations which has been instrumental in the execution of our strategies effectively to service our clientele's requirements.
Lastly, proactive risk management is a key element of our service offering. We understand that clients require legal solutions and seek proactive strategies to mitigate potential risks. We offer proactive risk assessment and mitigation services beyond reactive legal advice.
