"Consumer is the sole end and purpose of all production; and the
interest of the producer ought to be attended to only so far as it may
be necessary for promoting that of the consumer."
- Adam Smith
Introduction:
Every human being who consumes anything for survival is a consumer;
every individual is a consumer, regardless of occupation, age, gender,
community or religious affiliation. Consumer rights and welfare are now
an integral part of the life of an individual and we all have made use
of them at some or the other point in our daily routine. Consumers have
traditionally called for government intervention, when the marketers
fail to produce a socially desirable outcome. Governance is that broad
field of economics, which concern the design of regulatory system
through which exchange is smoothly conducted.
The economic theory of regulation, most often examines how collective
action by individuals, through the auspices of government, affects the
incentives of participants in markets. The role of government in
regulating the marketing activities must be to contribute to the
development of an efficient system, for creation of products or
services; communication and delivery to the consumers. It should
establish an efficient structure for governance of marketing activities,
which involves the standardization and refinement of marketing tools
and techniques for consumer benefits [1].
The Consumer Protection Act, 1986
is an important social legislation to protect the consumers from
exploitation from the business and trading community with bad
intentions. Under this act the government has made provision for the
establishment of consumer councils and other authorities for the
settlement of consumers' disputes and for the matters connected
therewith to secure speedy and in- expensive redressal of their
grievances. With the enactment of this law, consumers now feel that they
are in a position to deal with the business community and corporations
against their exploitation. The broad salient features of Consumer
Protection Act are:
- The Act is exclusively passed for the interest of the consumers
- It seeks to promote the rights of the consumers
- It covers private, public and co-operative sector
- The provisions of Act are compensatory in nature
In short, it protects the consumers from influences of the seller's
(marketer/manufacturer) coercive power by way of unfair trade practices
to restrict competition. The Consumer Protection Act, 1986 prohibits
marketers form adopting the following unfair trade practice {Section 36A
and Section 2(1) mn}:
- False representation of the quality, composition, style or model of goods and services
- Falsely alleging affiliation and misleading statements about the usefulness of goods and Services.
- Warranties or guarantees given without adequate tests, or
expressed in misleading terms, giving false or misleading facts
disparaging the goods, services or trade of others.
- Announcing bargain prices for goods, which are either put on sale
or are offered in quantities which are not reasonable with respect to
the nature of the trade, offering gifts, prizes or other items with the
intention of not providing them as offered.
- Sale of substandard and hazardous goods under defined conditions.
Enactment of the Consumer Protection Act, 1986 marked one of the most
important milestones in the consumer movement in the country. It is one
of the benevolent social legislation intended to protect the large body
of consumers from exploitation. The Act has come as a panacea for
consumers all over the country and has assumed the shape of practically
the most important legislation in the country during the last few years.
It has become the vehicle for enabling people to secure speedy and
in-expensive redressal of their grievances. With the enactment of this
law, consumers now feel that they are in a position to declare sellers
beware whereas previously the consumers were at the receiving end and
generally told buyers beware.
Consumer means any person who -
(i) buys any goods for a consideration which has been paid or promised
or partly paid and partly promised, or under any system of deferred
payment, and includes any user of such goods other than the person who
buys such goods for consideration paid or promised or partly paid or
partly promised, or under any system of deferred payment when such use
is made with the approval of such person, but does not include a person
who obtains such goods for resale or for any commercial purpose; or
(ii) hires or avails of any services for a consideration which has been
paid or promised or partly paid and partly promised, or under any
system of deferred payment, and includes any beneficiary of such
services other than the person who hires or avails of the services for
consideration paid or promised, or partly paid and partly promised, or
under any system of deferred payment, when such services are availed of
with the approval of the first mentioned person [2].
The provisions of this Act cover 'Products' as well as 'Services'.
The products are those which are manufactured or produced and sold to
consumers through wholesalers and retailers. The services are of the
nature of transport, telephones, electricity, constructions, banking,
insurance, medical treatment, etc. The services by and large include
those provided by professionals such as Doctors, Engineers, Architects,
Lawyers, etc. The objects of the Act are:
- Protection of Interests of Consumers
- Protection of Rights of Consumers
- Establishment of Consumer Protection Councils
- Establishment of Consumer Dispute Redressal Agencies [3]
Trademark and Consumers:
The Trade and Merchandise Mark Act [4] had been enacted with a view to
protect trade interests to prevent the deception of the consumers by the
misuse or abuse of the trademark.
The Trade Marks Act, 1999
is the governing law for Trade Marks in India. It has been enacted to
provide for registration and better protection of trade marks for goods
and services and for the prevention of the use of fraudulent marks.
According to the Trade Marks Act, the 'trade mark' means a mark capable
of being represented graphically and which is capable of distinguishing
the goods or services of one person from those of others and may include
shape of goods, their packaging and combination of colors [5].
The Controller-General of Patents, Designs and Trade Marks, under the
Department of Industrial Policy and Promotion (DIPP), Ministry of
Commerce and Industry, is the 'Registrar of Trade Marks'. It directs and
supervises the functioning of the Trade Marks Registry (TMR), which in
turn administers the Trade Marks Act, 1999 and the Rules thereunder.
Trademarks are distinctive signs used to differentiate between identical
or similar goods and services offered by different producers or
services providers. It may be a distinctive word, phrase, logo, Internet
domain name, graphic symbol, slogan or other device that is used to
identify the source of a product and to distinguish a manufacturer's
product from others. Here, the term 'distinctive' means unique enough to
help consumers recognize a particular product in the market place.
A service mark is same as a trademark, which promote services and
events, not only products. For example, when a business uses its name to
market its goods or services in advertising copy or on signs, the name
qualifies as a service mark.
Consumers often make their purchasing choices on the basis of
recognizable trademarks/ service marks. So, the main thrust of trade
mark Act is to ensure that trademarks don't overlap in a manner that
causes users/ consumers to become confused about the source of a
product. As per the Act, the trade mark shall not be registered if it is
of nature so as to deceive public, cause confusion, has identity with
or similar to an earlier trade mark, or comprises or contains scandalous
or obscene matter, etc.
A trademark essentially serves as a link between the consumer and the
manufacturer. It enables the consumer to get closer with the
manufacturer. Consumers, today, demand safety and a continuous assurance
of quality.
In a way, trademark is a specified set of promises from the manufacturer
to the consumer. So, a consumer can claim damages if his reasonable
expectations are not fulfilled. Further, since the use of trade mark
enables the manufacturer to distinguish his product from that of the
others, the consumer becomes fully aware of the advantages of using that
particular product.
The registration of a trade mark confers upon the owner the exclusive
right to use that mark [6]. Thus, it is his responsibility to educate
the consumers on the unique features of his product as against products
of other manufacturers. The main reason being that there is high level
of consumer awareness of the goods and its manufacturer. Now, lots of
alternatives are available for almost every product. So, the
manufacturer or the owner of trade mark has to come up to the
expectations of the consumers to make his Trade Mark acceptable to them
[7].
Patents Protection:
Patents means an official document giving the holder of the patent the
sole right to make, use or sell an invention and preventing others from
imitating it [8]. From the manufacturer's prospective patents create a
market barrier to other competitors and they can also charge royalties
on the license of patents to third parties. Though patents give
effective protection to invented new technology; it is an expense. It
allows the owner to commercially exploit the consumers.
The patent system has protected inventors by giving them an opportunity
to profit from their labours, and it has benefited society by
systematically recording new inventions and releasing them to the Public
after the inventors' limited rights have expired. India made its patent
laws compatible with the Trade-Related Aspects of Intellectual Property
Rights (TRIPS) Agreement under WTO by 2005 and has incorporated all
changes in the Patent Act, 1970 through various amendments. These
changes caused paradigm shift in the thinking of the intellectual
property managers and inventors.
Design Protection:
As per Design Act 2000, design refers to the features of shape,
configuration, pattern or Ornamentation, which can be judged by the eye
in finished products. Design registration is used to protect the visual
appearance of manufactured products. A registered design gives you a
legally enforceable right to use your product's design to gain marketing
edge. It also prevents others from using the design without your
agreement. The design registration in India is intended to:
- Protect only for the appearance of the article and not how it works.
- Protect features of shape, configuration, pattern or ornamentation.
- Protect designs, which have an industrial or commercial use.
- Exclude the designs, which are essentially 'Artistic Works' which
are covered by copyright legislation and are not eligible for design
registration.
- Protect the features which appeals to and is judged by the eye. The features are applied by Industrial process [9].
Copyrights Protection:
The Copyright Act, 1957 in Section 14, describes copyright as the
exclusive right subject to the provisions of this Act. It authorizes the
copyright owner for the reproduction or copying in respect of a work or
any substantial part thereof, namely:
Copyright vests in original work involving skill, labour and judgment in
respect of literary (such as books, publication including computer
software); dramatic and musical works, artistic Works; Engineering
drawings; Sound recording; Musical work; Cinematography film, etc.
Computer programs are entitled to protection under the present laws.
Computer software comprises program manuals, punched cards, magnetic
tapes, disks, and papers etc. which are needed for the operation of
computers. Manuals, papers and computer printouts can be classified as
literary but the concept of algorithms, normally used in programming are
not covered under copyright protection. Software containing certain
special information in a particular notation, mainly punched cards is
considered as a literary work. The magnetic tapes and disks, on which
electronic impulses are recorded, are considered as literary work. As
per Section 51 of the Copyright in a work shall be deemed to be
infringed:
- When any person without a license granted by the owner of the
copyright of the Registrar of Copyrights under this act or in
contravention of the conditions of a license so granted or of any
condition imposed by a competent authority under this Act -
- Does anything, the exclusive right to do which is by this Act conferred upon the owner of the copyright, or
- Permits for profit, any place to be used for the communication of
the work to the public where such communication constitutes an
infringement of the copyright in the work, unless he was not aware and
had no reasonable ground for believing that such communication to the
public would be an infringement of copyright; or
- When any person makes for sale or hire, or sells or lets for hire, or by way of trade displays or offers for sale or hire, or
- Distributes either for the purpose of trade or to such an extent as to affect prejudicially the owner of the copyright, or
- By way of trade-exhibits in public, or
- Imports into India.
In India, the unauthorized hire and sale of copies of video films,
cassette recordings for public Performance and books is regarded as a
violation of Copyrights Laws. Against such violations, civil suits
provide remedy for claiming compensation for loss of profits. If copies
of the work done outside India, are produced in India it would infringe
the copyright of the owner, and its import will be banned. Mere import
of such material would result in the infringement of the copyright law
in India. The Intellectual property is one of the corner stones of
modern economic policy at the national level. It is increasingly
becoming an important tool for sustainable development in the
knowledge-based society of this millennium.
Therefore, understanding and appreciating the economic foundations of
the IP systems is a prerequisite for comprehending its increasing
importance and role in national strategies for enhancing competitiveness
and accelerating socioeconomic development. As the IPR legislation
gives protection to the marketers or owners of the IPRs, it may lead to
the monopolistic situation and exploitation of the consumers. However,
through the enactment of the following laws the consumer's interest is
protected.
Geographical Indications and Consumers:
A Geographical Indication (GI) is a sign used on goods that have a
specific geographical origin and possess qualities, reputation or
characteristics that are essentially attributable to that origin. The
Geographical Indication of Goods (Registration and Protection) Act, 1999
is the main Act which has been enacted to provide for the registration
and better protection of geographical indications (GIs) relating to
goods.
According to the Act, the term 'geographical indication' (in relation to
goods) means "an indication which identifies such goods as agricultural
goods, natural goods or manufactured goods as originating, or
manufactured in the territory of a country, or a region or locality in
that territory, where a given quality, reputation or other
characteristic of such goods is essentially attributable to its
geographical origin and in case where such goods are manufactured goods,
one of the activities of either the production or of processing or
preparation of the goods concerned takes place in such territory, region
or locality, as the case may be".
The Controller-General of Patents, Designs and Trade Marks, under the
Department of Industrial Policy and Promotion (DIPP), Ministry of
Commerce and Industry, is the 'Registrar of Geographical Indications'.
It directs and supervises the functioning of the Geographical
Indications Registry (GIR), which in turn administers the Geographical
Indication of Goods (Registration and Protection) Act, 1999 and the
Rules thereunder.
GIs are source identifiers as they help the consumers to identify the
place of origin of the goods as well as act as the indicator to the
quality, reputation and other distinctive characteristics of goods that
are essentially due to that place of origin.
Any duplication and false use of GIs by unauthorized parties is
detrimental for both the consumers as well as legitimate producers.
Because of this, former are likely to be deceived as they get a
worthless imitation of product, which they buy by considering as genuine
product with specific qualities and characteristics. While, the
producers suffer losses and damages as their valuable business is taken
away from them and their established reputation for the products is
damaged.
The benefits of registration of geographical indications are:- (i)
provides legal protection to Geographical Indications in India, which in
turn gives boost to the exports; (ii) prevents unauthorized use of a
Registered Geographical Indication by others; (iii) promotes economic
prosperity of producers of goods produced in a geographical territory;
(iv) promotes consumers' welfare by providing goods of reputation and
quality; etc.
However, there are some of the GIs which are not registrable under the
Act, about which consumers must be fully aware. These are:-
- When GI has become a generic name, that is, names of those goods
which have lost their original meaning and are used as common names;
- If use of GI is likely to deceive public, cause confusions, or is contrary to any law in force;
- GIs which comprises scandalous or obscene matter or hurt any section of the society, etc.
If a geographical term is used as the designation of a kind of product,
rather than an indication of the place of origin of that product, this
term does no longer function as a GI. It has been recognized that
consumers need to be made aware of this fact as well [10].
Protection against Unfair Competition:
Promoting Competition (CA)
Ordinarily an unfair trade practice means a trade practice [11] which is
detrimental to the interests of consumer whether the interests are
economic or in respect of health, safety or other matters which can be
regarded as unfair to the consumer. The Competition Act, 2002 endeavor's
to shift the focus from restricting monopolies to promoting fair
competition, so that the Indian market is equipped to compete with
market word-wide. The object of Competition Act is to promote fair
competition in the market, to protect consumers, firms from each other's
and the interest of the society. The highlights of the CA are as
follows:
- The anti-competitive practices such as price-fixing, output restrictions, bid rigging and market restriction are prohibited.
- Regulates the mergers and acquisitions above threshold limits.
- CA emphasizes in competition advocacy.
The overall direction of this Competition Act is to protect the interest
of the consumers, freedom of trade and promote healthy competition.
Protection against unfair competition has been recognized as one of the
main objectives of intellectual property system. It does not grant
exclusive rights to the owners with respect to the subject concerned,
like in the case of patents, trademarks, etc. In fact, it prohibits any
act of competition that is contrary to honest practices in industrial or
commercial matters, referred to as "unfair competition".
The acts of unfair competition not only adversely affect the
competitors, which tend to lose their customers and market share; but
also affect consumers as they are likely to be misinformed and mislead
and tend to suffer economic and personal prejudice.
The following acts of unfair competition are closely related to IP and are directly relevant to consumer protection:-
- all acts of such a nature as to create confusion by any means
whatever with the establishment, the goods, or the industrial or
commercial activities, of a competitor
- false allegations in the course of trade of such a nature as to
discredit the establishment, the goods, or the industrial or commercial
activities, of a competitor
- indications or allegations the use of which in trade is liable to
mislead the public as to the nature, manufacturing process,
characteristics, suitability for their purpose or quantity, of the
goods.
Whatever form unfair competition may take, it is in the interest of the
honest and legitimate entrepreneur, the consumer and the public at large
that they should be prevented from it as early and as effectively as
possible. Free and fair competition between enterprises is considered to
be the best means of satisfying supply and demand in the economy as
well as of serving the interests of consumers and economy as a whole.
This stimulates innovation and productivity and leads to the optimum
allocation of resources in the economy; reduces costs and improves
quality; as well as accelerates economic growth and development. Hence,
In India, the Government has formulated a Competition Policy which
protects the interests of consumers and producers by promoting and
sustaining a fair competition.
Further, fair play in the market place cannot be ensured only by the
protection of industrial property rights. A wide range of unfair acts,
such as misleading advertising, violation of trade secrets, etc., are
usually not dealt with by specific laws on intellectual property. Thus,
it is necessary to enforce Unfair Competition law to supplement the
intellectual property laws and to grant fair protection to consumers
[12].
Issues and Problems:
Globalization has made the world smaller by integrating the global
markets. This has exposed the consumers to the wide range of products
and services available in the market. It has, on one hand; given them a
greater choice of products and brands with lower costs. While, on the
other hand, it has made consumers more and more quality consciousness
and aware of their rights. As a result, they are able to voice their
concerns about various problems and issues faced by them.
Some of the commonly raised problems are:
- Adulteration of food substances by traders through addition of
substances which are injurious to health or removal of substances which
are nutritious or by lowering their quality standards
- Misleading advertisements of goods and services in television,
newspapers and magazines to influence the consumers demand for the same
- Variations in the contents filled in the package of goods
- Improper delivery of after sales services
- Supply of defective goods
- Hidden price component
- Use of deceptive or incorrect rates on products
- Use of false or non-standard weights and measures in supply of goods
- Production of low quality goods in bulk quantities
- Illegal fixation of Maximum Retail Price (MRP)
- Selling above the MRP
- Unauthorized sale of essential products like medicines, etc. beyond their expiry date to ignorant consumers
- Poor customer services
- Non-compliance with the terms and conditions of sales and services
- Supply of false or incomplete information regarding the product
- Non-fulfillment of guarantee or warrantee etc.
All such issues and problems must be handled more efficiently both at
the Centre and the State level, with a view to protect the interests of
the consumers and promote their welfare [13].
Suggestions and Conclusion:
In today's changing market scenario, there is an increasing necessity of
empowering the consumers through education and motivation regarding
their rights and responsibilities. He/she should be equipped to be fully
vigilant so as to be able to protect himself/herself from any wrongful
act on the part of the seller/trader. Several steps have been taken by
the Government, both at the Central and State level towards generating
awareness among the consumers. Given all such initiatives, it is the
responsibility of the consumer as well to keep in mind the following
Suggestions:
- Purchase products only after their complete scrutiny and not at the cost of attractive advertisements.
- Keep check on the weighing and measuring instruments used by traders.
- Avoid buying fruits and vegetables from unhygienic place.
- Check print of MRP on the packet.
- Check the quantity as per the figure printed on the packet.
- Check the expiry date of the product, particularly that of eatables and medicines.
- Always collect bill at the time of purchase.
Conclusion:
Moreover, the packaging and appearance of the product should not be the
guiding factor for consumer purchases. Along with cost consideration,
consumer must be cautious of the quality of the product. Most
importantly, it is the prime responsibility of a consumer to bring to
the notice of the concerned authorities, any violation in their rights
[14].
The Intellectual property is one of the corner stones of modern economic
policy at the national level. It is increasingly becoming an important
tool for sustainable development in the knowledge-based society of this
millennium. Therefore, understanding and appreciating the economic
foundations of the IP systems is a prerequisite for comprehending its
increasing importance and role in national strategies for enhancing
competitiveness and accelerating socioeconomic development. IPRs cannot
be misused to escape provisions of the competition law by using
unreasonable conditions. And this would be the second instrument that
will keep a check on the prices of patented drugs here; the first being a
price negotiation as a pre-condition for giving marketing approval to
any patented drug in India.
References:
[1] V.V. Sople and Jyoti Gattani, New IPR (Intellectual Property Rights)
Legislation and Regulations for Marketing Activity, International
Marketing Conference on Marketing & Society, 8-10 April, 2007, IIMK
720.
[2] Section 2 (d) of Consumer Protection Act, 1986.
[3] http://business.gov.in/consumer_rights/legal_framework.php
[4] This Act has consolidated The Trade Marks Act, 1940 and Indian
Merchandise Marks Act, 1889 and provided law relating to registration
and better protection of trademarks in the country.
[5] Section 2 (zb) of Trade Mark Act, 1999.
[6] Section 28 (2) of Trade Mark Act, 1999.
[7] http://business.gov.in/consumer_rights/trademark.php
[8] Vino V. Sople, Managing Intellectual Property: the strategic
imperative, Prentice Hall of India Pvt. Ltd., New Delhi, 2006, p.74.
[9] Vino V. Sople, Managing Intellectual Property: the strategic
imperative, Prentice Hall of India Pvt. Ltd., New Delhi, 2006, p.152.
[10] http://business.gov.in/consumer_rights/geographical_indi.php
[11] Section 2(1) (r) of Consumer Protection Act, 1987.
[12] http://business.gov.in/consumer_rights/protection_unfaircom.php
[13] http://business.gov.in/consumer_rights/issues_problems.php
[14] http://business.gov.in/consumer_rights/suggestion.php
Published by
Mr. Sandip Bhosale
LL.M Student at Rajiv Gandhi National University of Law, Patiala
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