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Govt moots AI developers paying creators for copyrighted training data. In a significant step towards establishing a legal framework for balancing copyright with the evolution of the generative Al ecosystem in India, the Centre on Tuesday proposed a mandatory licensing regime for AI developers that incorporates a statutory remuneration right for content creators. “India’s approach will open up the lawful use of copyrighted content for AI training with fair royalties being paid to the creators,” Sajai Singh, partner, JSA Advocates and Solicitors, said. “Considering the US, EU and UK models, India’s Inter-Ministerial working groups are expected to develop clear guidelines. It would be important for India to also study the Japan example, as well as seek international cooperation in standard-setting from organizations like the World Intellectual Property Organization (WIPO),” he adds. As per Singh, ongoing litigations, such as those around ANI Media v. OpenAI Inc. has got India thinking resulting in the DPIIT Committee report. “It’s good to see that India’s approach to copyright and generative AI is evolving towards a hybrid model,” he adds. Read more

Stock market regulator Securities & Exchange Board of India (SEBI) can ask a social media platform to take down any misleading or false securities-related information posted by a finfluencer or any other entity. The Finance Ministry has notified SEBI as a designated authority under the Information Technology rules. Raj Ramachandran, Partner-JSA Advocates & Solicitors, said now SEBI can issue directions to intermediaries to remove or disable access in relation to content that violates laws governing the securities market including where the content relates to misleading financial advice, unregulated investment information, fraudulent trading schemes, or misinformation capable of affecting the securities market. Read more

As India nears implementation of the Digital Personal Data Protection (DPDP) Act, the government’s plan to designate certain entities as significant data fiduciaries has raised questions over the lack of clarity on criteria, process and timelines. Legal experts, however, urged patience. Sajai Singh, partner at JSA Advocates & Solicitors, said that there is “no need to panic” and that once the government defines the criteria, compliance expectations will become clearer. “Obviously, if the volume and sensitivity of data being processed is high and there’s a risk to privacy or national integrity, entities should already start auditing their processes,” he said. Read more

Here is where jurisprudence is evolving most rapidly. “We are in a legally ambiguous territory. Indian jurisprudence recognises personality rights through Article 21 jurisprudence. The precedents assume that there is a real-world appropriation of a real identity. AI complicates this because a generated face or voice may not be the celebrity’s exact face but may evoke them strongly,” says Probir Roy Chowdhury, Partner, JSA Advocates and Solicitors. That ambiguity lets creators argue that the work is “inspired” or “approximate,” not theft. “Identity misappropriation does not have to be literal replication. If an AI generated face, voice, style or persona is substantially evocative of a celebrity such that an average viewer would believe there is endorsement, association or involvement, courts can recognise this as actionable misuse,” Roy Chowdhury adds. Read more

Global funds are adopting an extra cautious approach towards combination applications filed before the Competition Commission of India (CCI) as two global funds – Goldman Sachs and Carlyle – have received a rap from the anti-trust regulator. At the core of the matter are the merger and acquisition (M&A) transactions involving purchase of smaller stakes in companies by Alternative Investment Funds (AIFs). “Recent CCI enforcement highlights strict scrutiny of minority investments and investor protection rights, particularly where such rights may confer material influence. Investors must closely assess whether information, access or governance rights, such as access to board minutes or commercially sensitive information as these could trigger a mandatory filing notwithstanding a low shareholding,” said Vaibhav Choukse, partner, JSA Advocates and Solicitors. Read more

The Department of Telecommunications’ directive that every smartphone come pre-installed with the app follows a familiar pattern of ‘optional’ tools that turn mandatory in practice. On Monday, the government disclosed a directive issued by the Department of Telecommunications on 28 November, instructing smartphone manufacturers and importers to preload its Sanchar Saathi app on every new device. It’s a decision that has drawn criticism from various quarters and set off a number of concerns. “The [recently-enforced Digital Personal Data Protection (DPDP) Act] indicates consent must be free and not forced,” says Tony Verghese, partner at JSA. “So, if users have no real choice, it amounts to indirect compulsion.” Read more

Top consulting firm Deloitte found itself in an awkward situation this week, after it was found that a major workforce report it prepared for the Canadian government allegedly contained AI errors. “We have helped several clients draft AI-usage clauses, and in many cases, the conversation starts even before the drafting stage. Depending on the nature of the company, the industry, and the kind of work employees perform, we often recommend that such clauses be included in employment agreements,” said Yajas Setlur, Partner at JSA Advocates & Solicitors. For example, companies that develop or deploy customised or bespoke software or build tools for other businesses must ensure that employees are not using restricted AI tools, which can create significant liability not only for the employer but also downstream for the client using the final product. These are exactly the kinds of risks companies are trying to address, Setlur added. Read more

The new labour codes notified by the government last week have created interest around the gratuity rules, with the reforms designed to help the contract workers and fixed-term employees. “The one-year gratuity eligibility rule is a new entitlement specifically created for fixed-term employees and does not apply to permanent employees. The standard eligibility period for permanent employees remains five years of continuous service. The only exception for the five-year rule for permanent employees would be in cases of employee death or disablement,” Preetha Soman, partner, JSA Advocates and Solicitors. Read more

The rollout of 4 new labour codes has renewed curiosity among employees about gratuity rules, with many of them likely to benefit hugely from the labour reforms. The revised framework does offer a big advantage for fixed-term and contract workers by allowing them to qualify for gratuity after completing just one year of service compared to 5 years earlier. “The one-year gratuity eligibility rule is a new entitlement specifically created for fixed-term employees and does not apply to permanent employees. The standard eligibility period for permanent employees remains five years of continuous service. The only exception for the five-year rule for permanent employees would be in cases of employee death or disablement,” said Preetha Soman, partner, JSA Advocates and Solicitors. Read more

Last Friday, when the Indian government announced labour reforms, consolidating 29 separate labour laws into four comprehensive codes, it attempted to address these incongruities — balancing business interests with employee welfare. “The e-commerce industries are going to get impacted heavily with much higher running costs given formal recognition of gig workers and platform workers,” said Gerald Manoharan, partner at legal firm JSA. Social benefits and contribution to welfare funds by aggregators are bound to affect the operating margin of such companies, before the costs are passed on to the customers, he added. Read more

Many mergers and acquisition (M&A) deals in sectors involving large blue-collar or contract-based workers have been delayed due to the implementation of new labour laws, sources tell Moneycontrol. Sonakshi Das, Partner at JSA Advocates & Solicitors said that to ensure timely closure of M&A transactions, parties can explore the option to include “mutually agreed resolution” clauses in transaction documents, agreeing to resolve future issues and cost implications arising out of compliance infractions under the Labour Codes, in due course, on a good-faith basis. “This of course, could be subject to deal-specific guardrails and additional considerations linked to specific indemnity, cap on liabilities and the like,” she added. Read more

According to the new labour code, companies are required to pay your full and final settlement money within two working days. In the past, some companies would issue the FnF on the last working day while some paid within the statutory timeframe of about 30 days. Sonakshi Das, Partner – JSA, said to ET Wealth Online that under the Code on Wages, 2019 (Wage Code), ‘Wages’ here is to be construed as having the meaning as defined under the Wage Code—and any part of an employee’s full and final settlement that qualifies as ‘wages’ under the Wage Code, is likely to be required to be paid out within the prescribed time. According to Das from JSA, in other words, based on a strict interpretation, components of an employee’s full and final settlement that do not qualify as ‘wages’ under the Wage Code, or fall within the exclusions to the ‘wages’ definition—for instance, gratuity on termination, for which, different payout timelines are prescribed—is likely to not be viewed as mandatory for release within the two-working days timeline. Das said: “For these components, applicable timelines and thresholds if and as prescribed under the Wage Code and corresponding rules, will need to be assessed. With time and further developments, clarity on this interpretation can be expected. Read more