ADVERTISEMENT: A RISKY AFFAIR

BY

PRAVEEN DALAL*

             The aim of this article is to discuss the ramifications of advertisement done by using the means of information technology (IT). The traditional modes of advertisements were meant for limited coverage and their access was also limited. The use of IT has eliminated the boundaries of countries and the advertisement has become a global phenomenon. This has resulted in a tremendous rise of new legal challenges before the companies advertising with the aid of IT.

 I. Introduction

             The engagement of human beings in trade, commerce and intercourse has its existence from ancient times and so is the advertisement. The traditional “business community” also indulged in advertisement for enhancing the chances of sale of their products. The means of such advertisements were, however, not only limited but also equally few in number. The targeted group was fixed in advance and a deviation from it was not much seeked due to lack of adequate transportation facilities. The time has changed now due to the advent of IT, which has reduced the territorial distances and has shrunk the world.  The IT is teasingly encroaching upon the sovereign territorial limits of other countries with virtually no control over it. The “reciprocal arrangements” and the “comity of nations” are the only control that can be exercised to curb the menace of unreasonable and unwanted advertisements by sovereign nations. This situation is further aggravated by the ignorance of law by these advertising segments. These advertisements segments, either due to ignorance or deliberately, violates various laws of different countries with impunity. The most common violations involve privacy violations, I.P.Rs violations, Cyberlaw violations, etc. The end result is their confrontation with various legal systems. Thus, by adopting an advertisement policy that is legally sound this confrontation can be prevented.

 II.  Importance of information technology

             The importance of information technology cannot be ignored by corporate sector, except at the cost of elimination from the competition. This is so because the use of information technology produces certain advantages, which are not available when the traditional and conventional methods of doing business are used. The use of information technology generates the following advantages to the corporate sector[1]:

(1) easy handling of day to day affairs of an organisation,

(2) speedy disposal of routine and daily works,

(3) assurance of authenticity, integrity and confidentiality in the functioning of the organisation,

(4) cost economy,

(5) integration and interaction with the global institutions and organisations,

(6) better communication and presentation facilities,

(7) assurance of safety and sound security of the sensitive and valuable information, like trade secrets,

(8) instant transfer of data and information where the situation demands so,

(9) it provides access to public documents which are digitalized by various department s of the Government,

(10) for making online payments of various bills and dues,

(11) to file statutory documents online[2], etc.

            These benefits can be availed only if the IT is used for legitimate and lawful activities. If the IT is used for unlawful or illegitimate purposes then it will bring counterproductive results. This holds equally true about advertisement through the mode of IT.

 III. The risk factor

             The law expects every person to act fairly, reasonably and diligently. That is why deviations from these standards are made punishable by the law. One cannot in the zeal of earning profit or in the sense of indifference take the law casually. There are certain well-recognised cardinal principles of criminal laws, which need to be discussed before proceeding further. These are:

 (1) The ignorance of law is no excuse,

(2) The “presumption of innocence” continues until the guilt of the accused is proved,

(3) The guilt of the accused must be proved “beyond reasonable doubt”,

(4) No person is guilty of an offence unless it is accompanied by both an act/ omission and the guilty intention for the same,

(5) The law may presume the guilty intention if the commission of the act is proved. This is known as “strict liability offences”, and

(6) The law may fix the liability of certain individuals on a “notional basis”. This usually happens where a company is involved in the commission of an offence or wrong. The imputation of criminal liability to certain “natural persons” is logical because a company, being an artificial person, cannot operate automatically. Thus, to conduct the affairs of the company certain natural persons are required, who alone can be saddled with the liability of the wrongs committed by the company. As a corollary, only that person can be held liable for the wrong that was responsible for the conduct of the business at the time when the wrong was committed. This practice has the support of logic and common sense because the supreme authority, on whose orders and directions the company is bound to act, can safely be presumed to have the “express” as well as the “constructive knowledge” of the wrong committed by the company. He cannot escape his liability by merely “pleading’ either ignorance of the law or ignorance of the “factum of the wrong”. If the supreme authority was in charge of the day-to-day affairs of the company at the relevant time and the commission of the wrongful act was within his powers, competence, authority and reach, then the law can safely presume that its commission had a backing of that authority. This is, however, a rebuttable presumption that can be rebutted at the trial stage. Till then the law will consider the authority as the responsible person. This approach also seems to be just and fair because if the supreme authority cannot prevent the commission of the wrong then none can prevent such wrong. It would be wrong to presume that a subordinate staff can take decisions in the active presence and participation of the supreme authority. In fact, when the matter pertains to involvement of government departments/institutions, then the “head of the department/institution” is held liable for the wrong. Thus, there cannot be any “preferential treatment” in favour of private person as the same may violate the provisions of Article 14, 19 and 21 of the Constitution of India. Similarly, when the wrongful act was committed with the consent or connivance of, or is attributable to any neglect on the part of, the supreme authority, who was responsible for the day to day functioning of the company, such authority shall also be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly[3].

 IV. Legal risks

         The legal risks associated with advertisement can be grouped under the following categories:

(A) Risks associated with IPRs violations,

(B) Risks associated with cyber law violations,

(C) Risks associated with violation of privacy rights, and

(D) Risks associated with other laws.

 (A) IPRs violations:

             The very concept of advertisement revolves around the requirement of attracting the attention of the consumers. This requires an attractive advertisement of the product or services of the concerned manufacturer or service provider. Once the advertisement becomes famous for its creativity, eye-caching features, etc the others try to encash its reputation or style. At this point of time it results in violation of IPRs of the concerned manufacturer or service provider. These include the following:

(1) Original creative works: Original creative works like written material, photographs, art, graphics, music and videos, etc are protected by the copyright law;

(2) Advertisement jingles: Advertisement jingles are protected by copyright and/or by trademark law, depending whether they are in written or verbal form,

(3) Domain name: Business names, logos, product names, domain names and other signs used in advertising are protected by trademark and copyright law;

(4) Industrial designs: The industrial design law may protect Computer-generated graphic symbols, screen displays; graphic user interfaces (GUIs) and even web pages;

(5) Website design: A website design may be protected by copyright law;

(6) Software: Softwares to create digital advertisements, such as computer generated imagery (CGI), may be protected by copyright and/or patents, depending on the national laws;

(7) Business methods: The business methods patents in some countries of the world may protect the advertising techniques or means of doing business. This protection is, however, not available in India, 

(8) Databases: The data of various profiles is protected by copyright or by sui generis database laws, etc.

            These are some of the instance where the advertisement issued by a manufacturer or service provider may violate the IPRs of others. This is particularly so after India has ratified the TRIPS Agreement and is following its requirement of strong IPRs protection in India. The advertisers must be cautious of these IPRs infringements in their own interest.

 (B) Cyber laws violations:

             The advertisements may also violate various provisions of the Information Technology Act, 2000(IT Act). For instance, if the advertisement contains any information in electronic form, which is obscene in nature, then section 67 of the IT Act will be attracted. Similarly, a network service provider will also be liable u/s 79 of IT Act if he fails to exercise due diligence in removing the offensive advertised material from the server/site. A company advertising may also be held liable for any offence under the IT Act by virtue of section 85 of the IT Act. For instance, Section 85(1) of the Information Technology Act (ITA), 2000 provides that where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder is a Company, every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of business of the company as well as the company, shall be guilty of the contravention and shall be liable to be proceeded against and punished accordingly. The proviso to section 85 (1) provides that such person will not be liable for punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. Section 85(2) provides that where a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly. The explanation to section 85 provides that the expressions “company” means any body corporate and includes a firm or other association of individuals and the expression "director", in relation to a firm, means a partner in the firm. Thus, the sweep of IT Act is very wide and its provisions must not be taken lightly while advertising on the net or by using other electronic mediums.

 (C) Privacy violations:

             The development of IT in modern times has a special relevance to the evolution of the law of privacy. The IT has made it possible to bring the private life of an individual into the public domain, thus exposing him to the risk of an invasion of his space and his privacy. In terms of electronic information, a person should be able to keep personal affairs to himself. Advances in computer technology are making it easy to do what was impossible not long ago. Information in many databases can be cross-matched to create profiles of individuals and to even predict their behaviour. This behaviour is determined by individual’s transactions with various educational, financial, governmental, professional and judicial institutions. Major uses of this information include direct marketing and credit check services for potential borrowers or renters. To the individual, the result of all this information sharing is most commonly seen as increased ‘junk mail’[4]. A citizen has a right to safeguard the privacy of his own, his family, marriage, procreation, motherhood, childbearing and education among other matters. None can publish anything concerning the above matters without his consent, whether truthful or otherwise and whether laudatory or critical. If he does so, he would be violating the right to privacy of the person concerned and would be liable in an action for damages[5]. Thus, while advertising the business segments must keep in mind that they are not violating the privacy of others by “pop-up advertisements”, “junk mails”, and “unsolicited e-mails”.

 (D) Other violations:

An advertisement may also attract the wrath of various laws of a nation. For instance, if an advertisement is shown on Internet without the consent of the person who is the owner of the product advertised, then the person advertising can be booked under the law of the land. A classical example of the same is the recent filing of a criminal case by Volkswagen AG over a spoof advertisement for its Polo small car that has been circulating on the Internet. The advertisement was not authorised by Volkswagen or its advertising agencies and it shows a suicide bomber detonating his explosives in Polo parked outside a busy cafe, only to have the car absorb the blast. The ultimate aim of the advertisement was to show how tough and strong the car is. The person who advertised has, however, claimed that it was meant for personal viewing and not for public viewing[6]. The ultimate decision will only determine the fate of the person who has advertised the same. Similarly, the Delhi Police has booked a holding company of one of India's largest business empires, Reliance Infocomm for alleged violation of a law on pre-natal sex determination. The Reliance Infocomm is accused of violating provisions of the law by depicting information about sex determination of foetus on its website.  The advertisement, in R-menu on Reliance mobile phones, allegedly provided information of Chinese way of detecting the sex of foetus[7]. These instances are unfortunate and could be avoided by taking normal precautions. Thus, while advertising the provisions of various laws must be kept in mind.

V. Conclusion

 The advertisements that are ignoring the mandates of various laws seem to be a faulty management strategy on the part of the company advertising. The general philosophy of business doing is that more the risk more will be the gain. It seems the management of certain companies has taken this theory in its wrong perspective. This theory nowhere advocates that for earning profit it is essential to take legal risks. The casual approach on the part of management may take the company to a situation where the theory that can be applicable will be more the risk more will be the punishment. This situation endorses the aphorism that  “knowledge is power” and “prevention is better than cure”. The management must be aware of the laws punishing offensive advertisement and should take all precautionary steps to avoid any criminal liability. The management must either take clue from these maxims or it may face the “music of criminal law”.