Unit - 3
Intellectual Property Rights (IPR) & Human Resource Management (HRM)
Q1) What is meant by Intellectual Property? Why does intellectual property need to be promoted and protected?
A1) Intellectual property (IP) refers to the creations of the human mind like inventions, literary and artistic works, and symbols, names, images and designs used in commerce. Intellectual property is divided into two categories: Industrial property, which includes inventions (patents), trademarks, industrial designs, and geographic indications and Copyright, which includes literary and artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs. Rights related to copyright include those of performing artists in their performances, producers of phonograms in their recordings, and those of broadcasters in their radio and television programs. Intellectual property rights protect the interests of creators by giving them property rights over their creations.
The most noticeable difference between intellectual property and other forms of property, however, is that intellectual property is intangible, that is, it cannot be defined or identified by its own physical parameters. It must be expressed in some discernible way to be protectable. Generally, it encompasses four separate and distinct types of intangible property namely — patents, trademarks, copyrights, and trade secrets, which collectively are referred to as “intellectual property.” However, the scope and definition of intellectual property is constantly evolving with the inclusion of newer forms under the gambit of intellectual property. In recent times, geographical indications, protection of plant varieties, protection for semi-conductors and integrated circuits, and undisclosed information have been brought under the umbrella of intellectual property.
With the establishment of the World Trade Organization (WTO), the importance and role of the intellectual property protection has been crystallized in the Trade-Related Intellectual Property Systems (TRIPS) Agreement. It was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) treaty in 1994.
The TRIPS Agreement encompasses, in principle, all forms of intellectual property and aims at harmonizing and strengthening standards of protection and providing for effective enforcement at both national and international levels. The TRIPS Agreement, which came into effect on 1 January 1995, is to date the most comprehensive multilateral agreement on intellectual property. The areas of intellectual property that it covers are:
(i) Copyright and related rights (i.e. the rights of performers, producers of sound recordings and broadcasting organisations);
(ii) Trade marks including service marks;
(iii) Geographical indications including appellations of origin;
(iv) Industrial designs;
(v) Patents including protection of new varieties of plants;
(vi) The lay-out designs (topographies) of integrated circuits;
(vii) The undisclosed information including trade secrets and test data.
Over a period of time and particularly in contemporary corporate paradigm, ideas and knowledge have become increasingly important parts of trade. Most of the value of high technology products and new medicines lies in the amount of invention, innovation, research, design and testing involved. Films, music recordings, books, computer software and on-line services are bought and sold because of the information and creativity they contain, not usually because of the plastic, metal or paper used to make them. Many products that used to be traded as low-technology goods or commodities now contain a higher proportion of invention and design in their value, for example, brand-named clothing or new varieties of plants. Therefore, creators are given the right to prevent others from using their inventions, designs or other creations. The premise underlying Intellectual Property throughout its history has been that the recognition and rewards associated with ownership of inventions and creative works stimulate further inventive and creative activity that, in turn, stimulates economic growth.
Q2) An invention may satisfy the condition of novelty, inventiveness and usefulness but it may not qualify for a patent. Discuss. Who checks the novelty features of the invention?
A2) It is correct that an invention may satisfy the condition of novelty, inventiveness and usefulness but it may not qualify for a patent. The Patents Act, 1970 expressly excludes certain categories of inventions from patentability. These inventions have been stipulated under Section 3 of the Patents Act which are as follows:
a) an invention which is frivolous or which claims anything obviously contrary to well established natural laws;
b) an invention the primary or intended use or commercial exploitation of which could be contrary to public order or morality or which causes serious prejudice to human, animal or plant life or health or to the environment;
c) the mere discovery of a scientific principle or the formulation of an abstract theory or discovery of any living thing or non-living substances occurring in nature;
d) the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any property or mere new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant; Explanation to clause (d) clarifies that salts, esters, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy;
e) a substance obtained by a mere admixture resulting only in the aggregation of the properties of the components thereof or a process for producing such substance;
f) the mere arrangement or re-arrangement or duplication of known devices each functioning independently of one another in a known way;
g) omitted by Patents (Amendment) Act, 2002;
h) a method of agriculture or horticulture;
i) any process for the medicinal, surgical, curative, prophylactic diagnostic, therapeutic or other treatment of human beings or any process for a similar treatment of animals to render them free of disease or to increase their economic value or that of their products;
j) plants and animals in whole or any part thereof other than micro-organisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals;
k) a computer programme per se other than its technical application to industry or a combination with hardware;
l) a literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever including cinematographic works and television productions;
m) a mere scheme or rule or method of performing mental act or method of playing game;
n) a presentation of information;
o) topography of integrated circuits;
p) an invention which in effect, is traditional knowledge or which is an aggregation or duplication of known properties of traditionally known component or components.
Section 4 prohibits the grant of patent in respect of an invention relating to atomic energy falling within Sub-section (1) of Section 20 of the Atomic Energy Act, 1962.
Section 20 of the Atomic Energy Act, 1962 contains special provision relating to inventions. Under Section 20 (1) of the Atomic Energy Act, 1962 “no patents shall be granted for inventions which in the opinion of the Central Government are useful for or relate to the production, control, use or disposal of atomic energy or the prospecting, mining, extraction, production, physical and chemical treatment, fabrication, enrichment, canning or use of any prescribed substance or radioactive substance or the ensuring of safety in atomic energy operations”. Patent office checks the novelty features of the invention.
Q3) What is patent information? Briefly explain the significance of using the patent information. How does a patent document help in R&D?
A3) Patent information includes not only the content of published patent documents but also bibliographic and other information concerning patents for inventions, inventors’ certificates, utility certificates and utility models. It is the largest, well-classified and most up-to-date collection of technical documents on new and innovative technologies.
Patent applications are filed in accordance with the requirements of national or regional patent laws. An applicant may be a public and private company, government agency, researcher in a university or in a research and development institution, or even individual inventors.
Significance of using the patent information: A patent document contains in a standardized form, a wealth of information about the state-of-the-art, adjudged in the international context, in technological developments in that area of technology.
Patent information is more than just technological or legal information. When developing a new product, comparative technological information may determine the success or failure of the product and, in turn, the success or failure of the company itself. Some of the practical applications of patent information include:
Patents & Management of Research and Development (R&D)
In order to enter into a new business or to develop a new product, a company should be able to seize the overall image of the relevant technology field and accurately forecast the market needs. Patent analysis makes it possible to find out the flow of technology from elementary technologies along with the expansion of those technologies, the trend of technological change, the life cycle of a technology (consisting of growth, development, maturity and decline), problems and solutions in the development of a particular technology, competitors’ technologies and solutions to cope with possible problems. Knowing the life cycle of a technology makes it possible to judge the timing of development policy and focus on certain development themes. It can also prevent an infringement from occurring, which would save a huge amount in litigation expenses and compensation for damages.
Patents are often linked to research and development and can be considered as indicators of R & D output. If one company has more patents than another does, then this suggests that the company has a stronger commitment to R&D. Not all patents, however, are equally valuable. A few patents are for radical inventions that change the world; most patents are granted for incremental but non-obvious inventions. A patent, which is more frequently cited than other patents of the same age, is regarded as a patent of greater impact or of higher quality. From links between patents revealed by patent citation analysis, it is possible to target the acquisition of strong patents, which results in the enhancement of R&D output and, consequently, much improved or new products.
Q4) What are the essential requirements for the registration of design under the Designs Act, 2000?
A4) Design means only the features of shape, configuration, pattern or ornament or composition of lines or colour or combination thereof applied to any article whether two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye, but does not include any mode or principle or construction or anything which is in substance a mere mechanical device, and does not include any trade mark, as define in clause (v) of sub-section of Section 2 of the Trade and Merchandise Marks Act, 1958, property mark or artistic works as defined under Section 2(c) of the Copyright Act, 1957.
Essential requirements for the registration of design
An application for registration of a Design shall be addressed to the Controller of Designs, the Patent Office at Kolkata, or at any of its branch offices at New Delhi, Mumbai and Chennai. A proprietor may be from India or from a Convention Country.
Type of Applications
(a) Ordinary application.
An ordinary application does not claim priority.
(b) Reciprocity application.
A reciprocity application claims priority of an application filed previously in a convention country. Such an application shall be filed in India within six month from the date of filing in Convention Country. This period of six months is not extendable.
Substitution of Applicant or Joint Claiming
Name of an applicant can be substituted or a joint claim can be made for an applied design, if the following requirements are met:
(a) The claim for substitution is made before the design has been registered; and
(b) Right of claimant shall be created only by:
(i) an assignment;
(ii) agreement in writing made by the applicant or one of the applicants; or
(iii) operation of law; and
(c) The design under consideration shall be identified in the assignment or agreement specifically by reference to the number of application for registration; or
(d) The rights of the claimant in respect of the design have been finally established by a Court.
A Design Application may be filed personally by an applicant or through a patent agent/legal practitioner. If the application is filed through a patent agent/legal practitioner, a power of authority shall be submitted, along with the application. General Power of Attorney is also acceptable.
Priority Document
A reciprocity application shall be accompanied by a copy of the design application filed in the Convention Country. Such copy shall be duly certified by the Official Chief or Head of the Organisation in which it was filed. If the priority document was not filed with the application, the same may be filed within an extended period of three months. Extension may be sought by filing Form-18 along with the prescribed fee.
Representation Sheet
(a) The representation sheet of an article needs to be prepared diligently and shall be filed along with the application, in duplicate. The Designs Rules require that four copies of the representation shall be filed along with the application. However, as the records are digitised and processed electronically, two copies of the representation shall suffice.
(b) Representation means the exact representation of the article for which registration is sought. A representation may contain more than one page.
Representation shall be exactly similar drawings, photographs, tracings including computer graphics or specimens of the design. The Controller may require a specimen of the article to be submitted at the time of examination, in rare cases.
Classification of Designs
(a) For the purpose of registration of designs, articles are classified into thirty-one classes and a miscellaneous class 99, as described in the Third Schedule of The Design Rules, 2001.
(b) The appropriate class shall be clearly identified with reference to the Third Schedule and shall be mentioned in Form 1. In case of any ambiguity, the Controller may decide the same, if necessary, in consultation with the applicant.
(c) When a Design Application is for an article with multiple utilities, the application may be made with depiction of an article in any one or more of the utilities. For instance, in case of a design of pen cum torch, the applicant is at liberty to apply in the class relating to pen, torch, pen-torch, or file two applications in different classes for better protection.
(d) The classification of articles under the Third Schedule is based on the International Classification of Industrial Designs according to the Locarno Agreement. However, India is not a signatory to the agreement.
(e) Ordinarily, the name of article should be common/familiar in the Trade or Industry and shall be analogous to the representation of the article. If the name of article is not common, the applicant may state the purpose for which the article is intended to be used, in Form-1 and representation sheet, so as to enable the Office to correctly decide the classification and facilitate search.
Address for Service
(a) An address for service in India shall be given by every person in any proceeding under the Act or Rules.
(b) Change in address for service before a design has been registered shall be affected by filing a petition under Rule 46 with the prescribed fee, along with the fresh Form-1.
(c) Any change in address for service for a registered design shall be affected by filing Form-22 with the prescribed fee.
(d) Unless an address for service is given, the Controller shall not proceed with the application.
(e) An address for service shall include e-mail of the agent/applicant.
Processing & Examination of the Application
On receipt of an application, the Office accords a date and serial number to the application. This serial number, upon registration, becomes the registration number of the design. The application for registration of a design is refereed by the Controller of Designs to an Examiner of Designs for conducting examination as to:
(f) whether the application and the documents satisfy the formal requirements, and
(g) whether such design as applied to an article is registrable, under the provisions of the Designs Act, 2000 and Designs Rules, 2001.
Formality Check
The Examiner determines whether:
(h) the application is in prescribed format?
(i) the prescribed fee has been paid?
(j) the name, address, and nationality of the applicant is mentioned?
(k) address for service is given in the application form?
(l) declaration of proprietorship is given in the application form?
(m) representation sheet is in a manner as prescribed in Rule 14?
(n) power of authority, if applicable, is filed?
(o) in case of reciprocity application:
(I) the application was filed within the prescribed time?
(II) the priority document was filed at the time of filing? If not, whether the priority document was filed within the extendable period of three months along with the prescribed form and fees?
(III) the application was filed by the same applicant? If not, whether the assignment document has been filed?
When the application is deficient in respect of (g), the Examiner reports the deficiency to the Controller, who communicates the statement of objections to the applicant. Such an application shall proceed for substantive examination only after compliance of the objections. The applicant may comply with the deficiencies within three months from the date of communication of the statement of objections or respond to the objections, failing which the application shall be treated as withdrawn.
Substantive Examination
Substantive examination is carried out to determine whether the design under consideration is:
(p) ‘a design’ under the Act?
(q) new or original?
(r) prejudicial to public order or morality?
(s) prejudicial to the security of India?
The Controller shall consider the report of Examiner on registrability of a design as applied to an article and if it is registrable, the same shall be registered forthwith. The registration certificate shall be issued and sent to the applicant at the earliest.
If upon consideration of the report, the Controller is of the opinion that there are objection(s) adverse to the applicant or the application requires some amendment(s), a statement of objections shall be communicated to the applicant or to his agent at the address for service by the Controller.
The defects shall be corrected and the application resubmitted for acceptance within six months or within the extended period from the official date of the application.
Registration & Publication
Once an application is registered, it is published in the Patent Office Journal ordinarily within one month. The registration number is same as the application number. The date of registration of an ordinary application is the date of filing of the application. In case of reciprocity application, the date of registration is the date of filing of application in the Convention Country.
Certificate of Registration
Upon registration, the Controller issues a certificate of registration to the proprietor of the design. The certificate is sent by registered post to the address for service. No hand delivery of certificate of registration is allowed.
Register of Designs
All the registered designs are entered in the Register of Designs maintained at Patent Office, Kolkata. The register is available to public.
The important purpose of design Registration is to see that the artisan, creator, originator of a design having aesthetic look is not deprived of his bonafide reward by others applying it to their goods.
Q5) TRIPS Agreement obliges member states to patent micro-organisms. Comment. How the requirement of sufficiency of disclosure met in the case of micro-organisms?
A5) The exciting developments in the domain of biotechnology have resulted in intensive R&D activities all over the world including India. After information technology, biotechnology is increasingly recognized as the next wave in the knowledge-based economy. Biotechnology has been at the core of a number of important developments in the pharmaceutical, agrochemical, energy and environmental sectors. In particular, progress in the field of molecular biology, biotechnology and molecular medicine has highlighted the potential of biotechnology for the pharmaceutical industry.
Conventionally a micro-organism is considered as an organism that is microscopic, i.e., too small to be seen by the naked human eye and can be viewed only under a microscope, usually, an ordinary light microscope. Micro-organisms include bacteria, fungi, virus, protists and other prokaryotes as well as some microscopic plants (phytoplankton) and animals (zooplankton).
Prior to 1980 microorganisms were clearly “products of nature” and as such were not considered patentable. In 1980 the US Supreme Court in Anand Chakrabarty’s case allowed patenting of crude oil spilling bacterium) and this subject has been drawing a great deal of attention all over the world. As microorganisms are important constituents of biodiversity, issues like the origin of a microorganism and its patentability and ownership have gained importance.
The US Supreme Court ruled that genetically altered microorganisms were indeed patentable based on the following criteria:
- They were man-made
- They were products of human manipulation and therefore considered similar to any other invention
- They had a specified industrial application (one criterion for patenting is that the invention has utility).
Further, Supreme Court cited the fact that there was precedence for patenting living matter. Since 1930 certain asexually reproduced plants have been protected by patenting. Furthermore, in 1970 the Plant Variety Protection Act allowed for protection of some sexually reproduced plants.
As a result of the Supreme Court’s decision, the US biotechnology industry flourished and many US patents have been granted on human-made higher life forms such as transgenic mice, fish etc. Thus, microorganisms, plants and animals have now all received
U.S. Patenting status. Europe views patenting of “man-made” life in much the same manner as the U.S. Patent office.
TRIPS Agreement obliges member states to patent micro-organisms. Article 27.3 permits WTO member countries to exclude two specific classes of subject matter from patentability: (1) diagnostic, therapeutic, and surgical methods for the treatment of humans or animals; and (2) plants and animals other than microorganisms, and essentially biological processes for the production of plants or animals other than non biological and microbiological processes. Though the TRIPS agreement mandates patent protection for micro-organisms, it does not define micro-organisms; thus there is no standard definition for member nations to follow.
To comply with the World Trade Organization (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, India amended the Patents Act, 1970 with effect from January 2005. The Indian Patent Act has now a specific provision in regard to patenting of microorganisms and microbiological processes. It is now possible to get a patent for a microbiological process and also products emanating from such processes.
The most vital distinction between the legal practices of the India and developed countries is that India does not allow patenting of microorganisms that already exist in nature as the same is considered to be a discovery as per the provisions of the section 3(d) of the Patents Act, 1970 and therefore not patentable. But genetically modified versions of the same microorganisms that result in enhancement of its known efficacies are patentable.
Another requirement is sufficiency of disclosure which is very important. The Patents Act, 1970 stipulates that the description of the invention should be given sufficiently and clearly. The Act or the Rule however do not stipulate any condition or procedure to meet the requirement of sufficiency of disclosure in the case of inventions involving use of biological material which are, very difficult to describe in words.
It has been the practice of the Patent Office from time immemorial to follow the practice adopted by the foreign patent offices by allowing the accession no., accorded by a depository institution either foreign or Indian in the patent specification to satisfy the requirement of sufficiency of disclosure of the invention desired to be patented.
It may be mentioned hare that a system of depositing strain of microorganisms in some recognized depositories was evolved way back in 1949 in USA. An international treaty called “Budapest Treaty” was signed in Budapest in 1973 and later on amended in 1980. India became a member of this Treaty, with effect from December 17, 2001.
This is an international convention governing the recognition of deposits in officially approved culture collections for the purpose of patent applications in any country that is a party to this treaty. Because of the difficulties and virtual impossibility of reproducing a microorganism from a description of it in a patent specification, it is essential to deposit a strain in a culture collection centre for testing and examination by others.
Under the Patents Act, 1970 if the invention uses a biological material which is new, it is essential to deposit the same in the International Depository Authority (IDA) prior to the filing of the application in India in order to supplement the description. The description in the specification should contain the name and address of the International Depository Authority and, date and number of depositions of biological material. [Section 10(4) (d) (ii)] of Patent Act, 1970. If such biological material is already known, in such case it is not essential to deposit the same. There are many international depositories in different countries such as MTCC, DSM etc. which are recognized under the Budapest Treaty.
The Institute of Microbial Technology (IMTEC), Chandigarh is the first Indian depository set up under the Budapest Treaty.
Very recently Microbial Culture Collection Centre (MCC), Pune (which is located in the NCCS, Pune) has been recognized International Depository Authority (IDA) under the Budapest Treaty on the International Recognition of the Deposit of Micro-organisms for the Purpose of Patent Procedure.
Q6) Who can apply for the registration of a geographical indication? What is the benefit of registration of geographical indications? Who is a registered proprietor of a geographical indication?
A6) Factors and/or human know-how can play in the end quality of a product. Like trademarks or commercial names GIs are also IPRs, which are used to identify products and to develop their reputation and goodwill in the market.
As per Section 11 any association of persons or producers or any organisation or authority established by or under any law representing the interest of the producers of the concerned goods can apply for the registration of a geographical indication.
The Applicant has to be a legal entity and should be representing the interest of producers of the goods applied for. Any such organisation or association being not that of the producers may have to prove that they represent the interest of producers. Any Applicant Authority also has to prove that they represent the interest of producers.
An application for registration of a geographical indication is to be made in writing, along with the prescribed fees (as specified under First Schedule), and should be addressed to the Registrar of Geographical Indications.
The Geographical Indication Registry is situated at Geographical Indications Registry, Intellectual Property Office Building, G.S.T. Road, Guindy, Chennai– 600 032 having all-India Jurisdiction. Application or any other document may be filed directly in the GI Registry, Chennai, or may be sent by post or registered post or speed post or courier services.
Geographical Indications registration gives to the registered proprietor and its authorised users, the legal right to the exclusive use of the GI and also the right to obtain relief in case of its infringement. Exclusion of unauthorized persons from misusing GI would ensure that genuine products of the rightful producers are marketed.
Any association of persons or of producers or any organization or authority established by or under the law can be a registered proprietor. Their name should be entered in the Register of Geographical Indication as registered proprietor for the Geographical Indication applied for.
Q7) What is the significance of intellectual property management? (2000)
A7) In an increasingly knowledge-driven economy, Intellectual Property (IP) is an important key consideration in day-to-day business decisions. New products, brands and creative designs appear almost daily on the market and are the result of continuous human innovation and creativity. Generally, the small and medium companies in India either do not understand the value of their intellectual property assets or are not aware of the intellectual property system or the protection it can provide for their inventions, brands, and designs. As the Intellectual Property forms an important part of companies’ assets, its adequate protection is crucial in deterring potential infringement and in turning ideas into business assets with a real market value. In fact, the Intellectual Property system enables companies to profit from their innovative capacity and creativity and enhance their competitiveness.
Companies that dedicate time and resources for protecting their intellectual property can increase their competitiveness in a number of areas, as it prevents competitors from copying or closely imitating a company’s products or services; avoids wasteful investment in research and development (R&D) and marketing; creating a corporate identity through a trademark and branding strategy; negotiating licensing, franchising or other Intellectual Property based contractual agreements; increasing the market value of the company; acquiring venture capital and enhancing access to finance; obtaining access to new markets and most important a careful search for conflicting existing Intellectual Property rights, and the examination of application by offices can help an enterprise to avoid conflicts and unnecessary litigation.
Strategies for Effective IPR Management: The effective management of intellectual property assets requires implementation of a comprehensive asset management plan. In this process, one of the most important steps is to review the existing intellectual property assets, so as to identify and locate the company’s key intellectual property assets such as patents, patentable subject matter, copyrights, trademarks, designs, trade secrets, domain names, mask works, inventions, works of authorship, hardware and devices, depending upon the nature of business. Once the intellectual property assets are identified, it becomes important to determine nature and scope of the company’s rights in intellectual property assets, which may range from outright ownership to a license - including contingent rights in intellectual property to be developed in future. Capitalizing on intellectual property assets so identified require a most constructive approach keeping in view, among others, type of intellectual property assets, the type of business claiming ownership of intellectual property assets, long term and short-term goals of the business organization including intended/possible use of intellectual property assets.
In nutshell, effective management of Intellectual Property enables companies to use their intellectual property to improve their competitiveness and strategic advantage. Acquiring Intellectual Property protection, no doubt is crucial but its effective management provides much more than just protection to an enterprise’s inventions, trademarks, designs, copyright or other allied rights.
Effective intellectual property management requires a company to commercialize its inventions and effectively monitor and enforce its intellectual property rights. Indeed, a company’s portfolio of Intellectual Property must be viewed as a collection of key assets that add significant value to the enterprise. Thus, effective management of intellectual property may be seen as critical business strategy to maintain sustainable corporate growth and maximisation of shareholder value resulting into the economic growth.
Q8) What are the grounds for refusal of registration of a trade mark? (2000)
A8) Registration of a trade mark can be refused on the following grounds:
Absolute Grounds
Section 9(1) to (3) of the Trade Marks Act lists the absolute grounds for refusal of registration.
Section 9(1) prohibits the registration of those trademarks-
(a) which are devoid of any distinctive character, that is to say, not capable of distinguishing the goods or services of one person from those of another person;
(b) which consist exclusively of marks or indications which may serve in trade to designate the kind, quality, quantity, intended purpose, values, geographical origin or the time of production of the goods or rendering of the service or other characteristics of the goods or services; or
(c) which consist exclusively of marks or indications which have become customary in the current language or in the bona fide and established practice of the trade.
However, a trade mark shall not be refused registration, if the mark has in fact acquired a distinctive character as a result of the use made of it or is a well known trade mark before the date of application for registration.
The basis of Section 9(1) is that a trader should not obtain a statutory monopoly through registration in a word which another trader might legitimately wish to use. A competitor should of course be entitled to make bonafide use of the word, to describe his goods or the place of manufacture. If a word, however, through use has become clearly associated in public mind with the goods/service of a particular trader, then it could not be legitimately used as a trade mark by a competitor. For this purpose, the onus is on the applicant to show by cogent evidence that the trade mark, by reason of use has acquired distinctiveness in relation to his goods or services.
If a trade mark is devoid of distinctive character, the same cannot be registered. In Ambalal Sarbhai Enterprises Limited v. Tata Oil Mills Company Limited 1988 OTC 73 Bom, it was held that the word PROMIX was distinctive. The Court held that even though there are many trade marks in the register with the prefix PRO which is common to the trade, the applicants have particularly coined the word PROMIX and the same was not known earlier. Applicants are the proprietors of a series of trade marks having prefixed PRO as a leading distinguishing feature. Their trade mark is distinctive and so can be registered under the Act.
Length of user is a material factor to acquire distinctiveness in a trade mark (Durga Dutt Sarma v. Navaratna Pharmaceutical Laboratories, AIR 1962 Ker 156). This view was affirmed in Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceuticals Laboratories, AIR 1965 SC 980. The Apex Court held that the length of user would, of course, be a material factor for the mark to become distinctive.
In Mahendra & Mahendra Paper Mills Ltd. v. Mahindra & Mahendra Ltd., AIR 2002 SC 117, the Supreme Court observed.
"The name has acquired a distinctiveness and a secondary meaning in the business or trade circles. People have come associate the name "Mahindra" with a certain standard of goods and services. Any attempt by another person to use the name in business and trade circles is likely to and in probability will create an impression of a connection with the plaintiffs' group of companies. Such user may also affect the plaintiff prejudicially in its business and trading activities."
Section 9(2) states that a mark shall not be registered as a trade mark if —
(a) It is of such nature as to deceive the public or cause confusion;
(b) It contains or comprises of any matter likely to hurt the religious susceptibilities of any class or section of the citizens of India;
(c) It comprises or contains scandalous or obscene matter;
(d) Its use is prohibited under the Emblems and Names (Prevention of Improper Use) Act, 1950.
Under Section 9(2), if the confusion arises from any factor whatsoever, even without involvement of any other mark or there being no similarity with any other mark, the registration may still be refused if the impugned mark is of such nature that it will cause confusion. For a successful opposition the opponent has to establish by proper evidence that its mark had acquired reputation by use and the mark of the applicant if registered is likely to cause confusion (Anglo-French Drug Co. v. Brihans Laboratories, 1995 IPLR 7).
The medical preparations sold at the prescription by doctors and supplied by qualified pharmacists have been considered a special case for determining deceptive similarity. The test was not of the ordinary customers but whether the pharmacists or doctors would be confused. Therefore, in the field of drugs and chemicals, the names with small variations are allowed. In Burrogh Wellcome v. Uni Sole Pvt. Ltd., 1999 PTC 188, the Bombay High Court has applied the test of person of ordinary intelligence as against doctors and pharmacists. The Court took the judicial notice of the fact that various medicines which are required by law to be sold per prescription, in actual practice they are sold without such prescription inspite of the mandate of the law.
Section 9(3) prohibits registration of a mark, if it consists exclusively of shape of goods which results from the nature of the goods themselves or which is necessary to obtain a technical result or which gives substantial value to the goods. It is, however, explained that the nature of goods or services in relation to which the trade mark is used or proposed to be used shall not be a ground for refusal of registration.
Section 9(3) is intended to prevent permanent monopolies being created under the Trade Marks Act, by reason of trade marks constituted by the shape of goods giving the proprietor a permanent and substantial advantage over his potential competitors. It is considered that will create unacceptable distortions in the market.
In order to avoid an objection, a mark constituted by a shape must be sufficiently different from a shape which is -
(a) Characteristic of the product;
(b) The norm or customary in the sector concerned.
In other words, the shape should not be descriptive and must stand out from the crowd, and in the case of new product development must not be a shape likely to be taken for the product concerned.
The fact that functional claim has been previously made in a patent application will be prima facie evidence that those aspects of the shape covered by the patent claim are necessary to achieve a technical result. This will attract objection under section 9(3)(b). The test is whether there are any significant aspects of the shape or its arrangement which are not only attributable to the achievement of a technical result.
The shape of an ornamental lamp, for example would appear to add substantial value to the goods by making it attractive. This would attract objection under section 9(3)(c) and also 9(3)(a).
Relative Grounds
Section 11 of the Trade Marks Act stipulates that where there exists a likelihood of confusion on the part of the public because of the identity with an earlier trade mark or similarity of goods or services, the trade mark shall not be registered. The registration of a mark which is merely reproduction or imitation of a well-known mark is also prohibited. Sub-section (3) prohibits the registration of a trade mark if or to the extent that, its use in India will be prevented by law of passing off or under the law of copyright unless the proprietor of the earlier trade mark consents to such registration.
The term “earlier trade mark” as per the Explanation appended to this Section means a registered trade mark or an international registration or a convention application which has a date of application earlier than the trade mark in question, or a trade mark, which on the date of application for registration or on the date of priority claimed was entitled to protection as a well-known trade mark.
The proprietor of earlier trade mark is entitled to oppose the registration of a trade mark and prove it. In the opposition proceeding the Registrar shall protect a well-known trade mark against identical or similar trademarks and take into consideration the bad faith of either the applicant or the opponent affecting the rights relating to the trade mark. Further, the section also lays down the factors which the Registrar is required to take into account while determining the status of a well-known trade mark. The Section also lays down the facts to be considered by the Registrar in determining whether a trade mark is known or recognised in a relevant section of the public.
What is a well-known trade mark, the Delhi High Court held in Tata Sons Ltd. v. Mr. Md. Jawed & Anron (March, 2011) held that a well-known trade mark is a mark which is widely known to the relevant section of the general public and enjoys a comparatively high reputation amongst them? Further, the Court observed that the owner of a well-known trade mark may (i) seek cancellation or (ii) prevent registration of a trade mark which is same or similar to the well-known mark irrespective of whether the impugned mark is in relation to identical or similar goods or services or in relation to other categories of goods or services. He may also prevent others from incorporating the well-known trade mark as a part of their corporate name/business name. Even if a well-known trade mark is not registered in India, its owner may avail these rights in respect of the trade mark registered/used or sought to be registered/used in India, provided that the well-known mark is otherwise known to or recognized by the relevant section of public in India. The Trade Marks Act, 1999 accords a statutory protection to well known marks, irrespective of whether they are Indian marks or foreign marks. The existence of actual confusion or a risk of confusion is, however, necessary for the protection of a well-known trade mark, as a result of infringement.
Q9) Enumerate steps a company should take to protect the trade secrets/confidential business information.
A9) A trade secret is any kind of information that is secret or not generally known in the relevant industry giving the owner an advantage over competitors. Generally, it has been stated that any information that can be used in the operation of a business or other enterprise and that is sufficiently valuable to afford an actual or potential economic advantage over others is a trade secret. Examples of trade secrets include formulas, patterns, methods, programs, techniques, processes or compilations of information that provide one’s business with a competitive advantage.
The precise language by which a trade secret is defined varies by jurisdiction (as do the precise types of information that are subject to trade secret protection). However, there are three factors that (though subject to differing interpretations) are common to all such definitions: a trade secret is some sort of information that (a) is not generally known to the relevant portion of the public, (b) confers some sort of economic benefit on its holder (which means this benefit must derive specifically from the fact that it is not generally known, not just from the value of the information itself), and (c) is the subject of reasonable efforts to maintain its secrecy.
Trade secrets are not protected by law in the same manner as trademarks or patents. Probably one of the most significant differences is that a trade secret is protected without disclosure of the secret. A trade secret might be a patentable idea but not always. Unlike patent, a trade secret does not have to pass the test of novelty; nevertheless, the idea should be somewhat new, unfamiliar to many people including many in the same trade.
Trade secrets are not registered like other forms of intellectual property and are not creatures of statutes. Instead, the judicial system of each country determines the requirements for obtaining trade secrets protection. In India, trade secrets are not covered under any law.
Trade secrets are by definition not disclosed to the world at large. So long as trade secret remains a secret, it is valuable for the company. Once the information enters the public domain, it is lost forever. Therefore, companies should take every precaution to keep the information secret. Instead, owners of trade secrets seek to keep their special knowledge out of the hands of competitors through a variety of civil and commercial means, not the least of which is the employment or confidentiality agreements and/or non-disclosure agreements. In exchange for the opportunity to be employed by the holder of secrets, a worker will sign an agreement not to reveal his prospective employer’s proprietary information. Often, he will also sign over rights to the ownership of his own intellectual production during the course (or as a condition) of his employment. Violation of the agreement generally carries stiff financial penalties, agreed to in writing by the worker and designed to operate as a disincentive to going back on his word. Similar agreements are often signed by representatives of other companies with whom the trade secret holder is engaged in licensing talks or other business negotiations.
If a trade secret is well protected, there is no term of protection. Trade secret protection can, in principle, extend indefinitely and in this respect offers an advantage over patent protection, which lasts only for a specified period. It is equally possible that a company may decide not to patent as for instance formula for Coca-Cola which is considered to be one of the best well protected trade secrets.
Companies often try to discover one another’s trade secrets through lawful methods of reverse engineering on one hand and less lawful methods of industrial espionage on the other. Acts of industrial espionage are generally illegal in their own right under the relevant governing laws, of course. The importance of that illegality to trade secret law is as follows: if a trade secret is acquired by improper means (a somewhat wider concept than “illegal means” but inclusive of such means), the secret is generally deemed to have been misappropriated. Thus if a trade secret has been acquired via industrial espionage, its acquirer will probably be subject to legal liability for acquiring it improperly. (The holder of the trade secret is nevertheless obliged to protect against such espionage to some degree in order to safeguard the secret. As noted above, under most trade secret regimes, a trade secret is not deemed to exist unless its purported holder takes reasonable steps to maintain its secrecy.)
The test for a cause of action for breach of confidence in the common law world is set out in the case of Coco v. A.N. Clark (Engineers) Ltd., (1969) R.P.C. 41:
- The information itself must have the necessary quality of confidence about it;
- That information must have been imparted in circumstances imparting an obligation of confidence;
- There must be an unauthorized use of that information to the detriment of the party communicating it.
The “quality of confidence” highlights the fact that trade secrets are a legal concept. With sufficient effort or through illegal acts (such as break and enter), competitors can usually obtain trade secrets. However, so long as the owner of the trade secret demonstrates that reasonable efforts have been made to keep the information confidential, the information remains a trade secret and is legally protected as such. Conversely, trade secret owners who do not demonstrate reasonable effort at protecting confidential information, risk losing the trade secret even if the information is obtained by competitors illegally. It is for this reason that trade secret owners shred documents and do not simply recycle them. Presumably an industrious competitor could piece together the shredded documents again. Legally the trade secret remains a trade secret because shredding the document is considered to have kept the quality of confidence of the information.
Technology Transfer and Trade Secrets
In technology transfer a trade secret may be far more valuable than a patent. Sometimes a trade secret is not really a secret and may not be of much value either. In a technology package some part is usually unprotected information, even so the best way of obtaining this unprotected information is to buy from the suppliers. Companies must be assured trade secret protection, which they are enjoying in their respective countries under the international licencing agreements. As mentioned earlier, the value of a trade secret lies in its secrecy. If a company cannot ensure protection of its trade secrets in a foreign country, it will not do business in that country. Every company should therefore, take some important measures to protect its trade secrets.
A checklist for the identification of potential trade secrets owned by a manufacturing company has been devised which inter alia includes:
(i) Technical information/research and development;
(ii) Proprietary technology information;
(iii) Proprietary information concerning research and development;
(iv) Formulas;
(v) Compounds;
(vi) Prototypes;
(vii) Processes;
(viii) Laboratory notebooks;
(ix) Experiments and experimental data;
(x) Analytical data;
(xi) Calculations;
(xii) Drawings- all types;
(xiii) Diagrams- all types;
(xiv) Design data and design manuals;
(xv) R&D reports-all types;
(xvi) R&D know-how and negative know-how (i.e. what does not work);
(xvii) Production/ process information;
(xviii) Proprietary information concerning production/process etc.
Some experts suggest that it may be prudent for the companies to conduct an intellectual property audit to identify the protectable business information. This will help the companies to assess the value of the information useful for their business. The intellectual property audit is the starting point for the development of a trade secrets protection programme as company’s portfolio of trade secrets is constantly changing. Some information becomes obsolete, new information is created which is extremely valuable and may be protected.
Once the audit is complete, the next step is to determine appropriate level of security necessary to protect different types of trade secret. There are six factors which need to be taken into consideration while determining whether information owned or used by a company is a trade secret in terms of the necessary level of security to ensure adequate protection of those trade secrets. These are:
- The extent to which the information is known outside the company.
- The extent to which the information is known by employees and others involved in the company.
- The extent of measures taken by the company to guard the secrecy of the information.
- The value of the information to the company and the competitors.
- The expenditures by the company (time, money, effort) in developing the information.
- The ease or difficulty with which the information could be properly acquired or duplicated by others.
Q10) What is valuation? Why is valuation of intellectual property important?
A10) Intellectual capital is recognized as the most important asset of many of the world’s largest and most powerful companies; it is the foundation for the market dominance and continuing profitability of leading corporations. It is often the key objective in mergers and acquisitions and knowledgeable companies are increasingly using licensing routes to transfer these assets to low tax jurisdictions.
Nevertheless, the role of intellectual property rights (IPRs) and intangible assets in business is insufficiently understood. Accounting standards are generally not helpful in representing the worth of IPRs in company accounts and IPRs are often under-valued, under-managed or under-exploited. Despite the importance and complexity of IPRs, there is generally little co-ordination between the different professionals dealing with an organization’s IPR. For a better understanding of the IPRs of a company, some of the questions to be answered should often be:
- What are the IPRs used in the business?
- What is their value (and hence level of risk)?
- Who owns it (could I sue or could someone sue me)?
- How may it be better exploited (e.g., licensing in or out of technology)?
- At what level do I need to insure the IPR risk?
One of the key factors affecting a company’s success or failure is the degree to which it effectively exploits intellectual capital and values risk. Management obviously needs to know the value of the IPR and those risks for the same reason that they need to know the underlying value of their tangible assets; because business managers should know the value of all assets and liabilities under their stewardship and control, to make sure that values are maintained. Exploitation of IPRs can take many forms, ranging from outright sale of an asset, a joint venture or a licensing agreement. Inevitably, exploitation increases the risk assessment.
Valuation is, essentially, a bringing together of the economic concept of value and the legal concept of property. The presence of an asset is a function of its ability to generate a return and the discount rate applied to that return. The cardinal rule of commercial valuation is: the value of something cannot be stated in the abstract; all that can be stated is the value of a thing in a particular place, at a particular time, in particular circumstances. I adhere to this and the questions ‘to whom?’ and ‘for what purpose?’ must always be asked before a valuation can be carried out.
This rule is particularly significant as far as the valuation of intellectual property rights is concerned. More often than not, there will only be one or two interested parties, and the value to each of them will depend upon their circumstances. Failure to take these circumstances, and those of the owner, into account will result in a meaningless valuation.
For the value of intangible assets, calculating the value of intangible assets is not usually a major problem when they have been formally protected through trademarks, patents or copyright. This is not the case with intangibles such as know-how, (which can include the talents, skill and knowledge of the workforce), training systems and methods, technical processes, customer lists, distribution networks, etc. These assets may be equally valuable but more difficult to identify in terms of the earnings and profits they generate. With many intangibles, a very careful initial due diligence analysis needs to be undertaken together with IP lawyers and in-house accountants.
There are four main value concepts, namely, owner value, market value, fair value and tax value. Owner value often determines the price in negotiated deals and is often led by a proprietor’s view of value if he were deprived of the property. The basis of market value is the assumption that if comparable property has fetched a certain price, then the subject property will realize a price something near to it. The fair value concept, in its essence, is the desire to be equitable to both parties. It recognizes that the transaction is not in the open market and that vendor and purchaser have been brought together in a legally binding manner. Tax value has been the subject of case law worldwide since the turn of the century and is an esoteric practice. There are quasi-concepts of value which impinge upon each of these main areas, namely, investment value, liquidation value, and going concern value.
Q11) Can copyright be assigned? If so, what is the mode of assignment of the copyright?
A11) The owner of the copyright in an existing work or the prospective owner of the
Copyright in a future work may assign to any person the copyright. Section 18 of the Copyright Act provides for the assignment of copyright in an existing work as well as future work. In both the cases an assignment may be made of the copyright either wholly or partially and generally or subject to limitations and that too for the whole period of copyright or part thereof. However, in case of assignment of copyright in any future work, the assignment has the real effect only when the work comes into existence. Section 18(3) explains that a assignee in respect of assignment of the copyright in future work include the legal representative of the assignee, if the assignee dies before the work comes into existence.
Sections 17 and 18 of the Copyright Act, 1957 show where the copyright vests. If a work is done by an author for a consideration for a publisher, the copyright in it would normally vest in the publisher subject to any contract to the contrary, as is provided by Section 17 of the said Act. It can be legitimately said that this Section has been inserted in the Act of 1957, but the rule of law has been same even prior to this statutory provision. Secondly as provided by Section 18, the copyright could be assigned, and if it is so done it would be vested in the purchaser. (Khemraj Shrikrishnadass v. M/s Garg & Co. And Another AIR 1975 Del 130.)
Mode of Assignment
Section 19 of the Act provides that an assignment of copyright should be in writing signed by the owner of the copyright. Mere acceptance of remuneration or delivery of manuscript does not constitute an assignment of copyright. Oral assignment is invalid and it is impermissible in law. (Setty v. Dr. Suryakantha U. Kamath K.A. Venugopala Setty v. Dr. Suryakantha U. Kamath AIR 1992 Kar 1).
Section 19 requires that the assignment should be in writing signed by the assignor or by his duly authorized agent — if the assignment appears from any document and it is signed by the assignor or by his authorized agent the statutory requirement is fulfilled. [Srimagal and Co. v. Books (India) Pvt. Ltd. & Others AIR 1973 Mad 49 : (1972) 2 Mad LJ 610.]
Copyright is different from the material object which is the subject of the copyright. So it should be clear that the transfer of the material object does not necessarily involve a transfer of the copyright. The assignment of copyright should specify the assigned work, rights including duration, territorial extent of assignment and the amount of royalty. However, in the absence of duration and territorial extent, the assignment remains valid for a period of five years and within the territory of India.
In case assignee does not exercise his rights within a period of one year from the date of assignment, the assignment in respect of such rights shall be deemed to have lapsed after the expiry of said period, unless otherwise specified in the assignment.
The assignment of copyright in any work contrary to the terms and conditions of the rights already assigned to a copyright society in which the author of the work is a member is void.
The assignment of copyright in any work to make a cinematograph film does not affect the right of the author of the work to claim an equal share of royalties and consideration payable in case of utilization of the work in any form other than for the communication to the public of the work, along with the cinematograph film in a cinema hall.
The assignment of the copyright in any work to make a sound recording which does not form part of any cinematograph film does not affect the right of the author of the work to claim an equal share of royalties and consideration payable for any utilization of such work in any form.
Q12) Why study human resource management?
A12) You may ask a question, why study human resource management? You will recognize that staffing the organization, designing jobs and team, developing skilful employees, identifying approaches for improving their performance, and rewarding employee successes—all typically are known as HRM issues-are as relevant to line managers as they are to managers in the HR department.
To work with people effectively, we have to understand human behavior, and we have to be knowledgeable about the various systems and practices available to assist us build a skilled and motivated people. At the same time, we have to be aware of economic, technological, social, and legal issues that either facilitate or constrain our efforts to achieve organizational goals.
While people have always been central to organizations, today they have assumed even more vital role in building a firm’s competitive advantage. Particularly in knowledge-based industries such as software and information services, success increasingly depends on “people-embodied know- how”. This includes the knowledge, skills, and abilities people of an organization possess.
Management experts now realize that the key to a firm’s success is based on establishing a set of core competencies. Core competencies are an integrated knowledge set within organizations that distinguish it from its competitors and delivers value to customers. For example, McDonalds has developed core competencies in management efficiency and training.
Canon Corporation has core competencies in precision mechanics, fine optics, and microelectronics. Core competencies tend to be limited in number, but they provide a long-term basis for technology innovation, product development, and service delivery.
Q13) Define Human Resource Management.
A13) According to Flippo, “Human resource management is the planning, organising, directing and controlling of the procurement, development, compensation, integration, maintenance and reproduction of human resource to the end that individual, organisational and society’ objectives are accomplished.”
According to Dessler, “Human resource management is the process of acquiring, training, appraising and compensating employees and attending to their labour relations, health, and safety and fairness concerns.”
Milkovich and Boudreau have defined HRM as follows, “Human resource management is a species of integrated decisions that form the employment relationships; their quality contributes to the ability of the organisations and the employees to achieve their objectives.”
Q14) Discuss the importance of Human Resource Planning.
A14) Human Resource Management has a place of great importance. According to Peter F. Drucker, ―The proper or improper use of the different factors of production depend on the wishes of the human resources. Hence, besides other resources human resources need more development. Human resources can increase cooperation but it needs proper and efficient management to guide it‖.
Importance of personnel management is in reality the importance of labour functions of personnel department which are indispensable to the management activity itself. Because of the following reasons human resource management holds a place of importance.
Thus, the role of human resource management is very important in an organization and it should not be undermined especially in large scale enterprises. It is the key to the whole organization and related to all other activities of the management i.e., marketing, production, finance etc.
Human Resource Management is concerned with the managing people as an organizational resource rather than as factors of production. It involves a system to be followed in business firm to recruit, select, hire, train and develop human assets. It is concerned with the people dimension of an organization. The attainment of organizational objectives depends, to a great extent, on the way in which people are recruited, developed and utilized by the management. Therefore, proper co-ordination of human efforts and effective utilization of human and others material resources is necessary.
Need and Importance of Human Resource Planning:
(i) To carry on its work and to achieve its objectives, every organisation requires employees with adequate knowledge, experience and aptitudes. Human Resource Planning is helpful in selection and training activities.
(ii) Human Resource Planning identifies gaps in existing manpower in terms of their quantity and talent
(iii) There is need to replace employees who retire, die, resign and become incapacitated due to injury. Provision for replacement of personnel can be made through Human Resource Planning.
(iv) Human Resource Planning facilitates the expansion and diversification of an organisation.
(v) Human Resource Planning creates awareness about the effective utilisation of human resources throughout the organisation. It helps to reduce wastage of manpower. It also helps in judging the effectiveness of human resource policies and programmes of management.
(vi) Human Resource Planning is helpful in effective utilisation of technological progress.
(vii) With the help of Human Resource Planning, areas of surplus manpower can be anticipated and timely action can be taken (e.g. Redeployment).
(viii) Human Resource Planning is useful in anticipating the cost of human resources, which facilitates the budgeting process. It also helps in controlling human resource costs through effective utilisation.
(ix) Human Resource Planning facilitates career succession planning in the organisation.
(x) Human Resource Planning helps in planning for physical facilities like canteen, staff quarters, dispensary and school for the staff and their children.
(xi) At the national level, Human Resource Planning facilitates educational reforms, geographical mobility of talent and employment generation.
(xii) It helps management in the preparation adoption and continuing evolution of personnel programmes and policies.
(xiii) It supplies skilled workers through scientific selection process.
(xiv) It ensures maximum benefit out of the expenditure on training and development and appreciates the human assets.
(xv) It prepares workers according to the changing needs of industry and environment.
(xvi) It motivates workers and upgrades them so as to enable them to accomplish the organization goals.
(xvii) Through innovation and experimentation in the fields of personnel, it helps in reducing casts and helps in increasing productivity.
(xviii) It contributes a lot in restoring the industrial harmony and healthy employer- employee relations.
(xix) It establishes mechanism for the administration of personnel services that are delegated to the personnel department.
Q15) What is the nature of Human Resource Management? (2013)
A15) The emergence of human resource management can be attributed to the writings of the human relation thinkers who attached great significance to the human factor. Lawrence Appley remarked, the personnel department in discharging this responsibility.
The nature of the human resource management has been highlighted in its following features:
1. Inherent Part of Management: Human resource management is inherent in the process of management. This function is performed by all the managers throughout the organization rather that by the personnel department only. If a manager is to get the best of his people, he must undertake the basic responsibility of selecting people who will work under him.
2. Pervasive Function: Human Resource Management is a pervasive function of management. It is performed by all managers at various levels in the organization. It is not a responsibility that a manager can leave completely to someone else. However, he may secure advice and help in managing people from experts who have special competence in personnel management and industrial relations.
3. Basic to all Functional Areas: Human Resource Management permeates all the functional area of management such as production management, financial management, and marketing management. That is every manager from top to bottom, working in any department has to perform the personnel functions.
4. People Centered: Human Resource Management is people centered and is relevant in all types of organizations. It is concerned with all categories of personnel from top to the bottom of the organization. The broad classification of personnel in an industrial enterprise may be as follows: (i) Blue-collar workers (i.e. those working on machines and engaged in loading, unloading etc.) and white-collar workers (i.e. clerical employees), (ii) Managerial and non-managerial personnel, (iii) Professionals (such as Chartered Accountant, Company Secretary, Lawyer, etc.) and non- professional personnel.
5. Personnel Activities or Functions: Human Resource Management involves several functions concerned with the management of people at work. It includes manpower planning, employment, placement, training, appraisal and compensation of employees. For the performance of these activities efficiently, a separate department known as Personnel Department is created in most of the organizations.
6. Continuous Process: Human Resource Management is not a one shot‘ function. It must be performed continuously if the organizational objectives are to be achieved smoothly.
7. Based on Human Relations: Human Resource Management is concerned with the motivation of human resources in the organization. The human beings can‘t be dealt with like physical factors of production. Every person has different needs, perceptions and expectations. The managers should give due attention to these factors. They require human relations skills to deal with the people at work. Human relations skills are also required in training performance appraisal, transfer and promotion of subordinates.
Personnel Management VS Human Resource Management:
Contemporary Human Resource Management, as a part and parcel of management function, underscores strategic approach to management in areas of acquisition, motivation, and management of people at work.
Q16) What are the objectives of HRM?
A16) According to Scott, Clothier and Spriegal ―The objectives of
Human Resource Management, in an organization, is to obtain maximum individual development, desirable working relationships between employers and employees and employers and employees, and to affect the moulding of human resources as contrasted with physical resources‖. The basic objective of human resource management is to contribute to the realisation of the organizational goals. However, the specific objectives of human resource management are as follows:
(i) To ensure effective utilisation of human resources, all other organizational resources will be efficiently utilised by the human resources.
(ii) To establish and maintain an adequate organizational structure of relationship among all the members of an organization by dividing of organization tasks into functions, positions and jobs, and by defining clearly the responsibility, accountability, authority for each job and its relation with other jobs in the organization.
(iii) To generate maximum development of human resources within the organization by offering opportunities for advancement to employees through training and education.
(iv) To ensure respect for human beings by providing various services and welfare facilities to the personnel.
(v) To ensure reconciliation of individual/group goals with those of the organization in such a manner that the personnel feel a sense of commitment and loyalty towards it.
(vi) To identify and satisfy the needs of individuals by offering various monetary and non-monetary rewards.
In order to achieve the above objectives, human resource management undertakes the following activities:
(i) Human Resource Planning, i.e., determining the number and kinds of personnel required to fill various positions in the organization.
(ii) Recruitment, selection and placement of personnel, i.e., employment function.
(iii) Training and development of employees for their efficient performance and growth.
(iv) Appraisal of performance of employees and taking corrective steps such as transfer from one job to another.
(v) Motivation of workforce by providing financial incentives and avenues of promotion.
(vi) Remuneration of employees. The employees must be given sufficient wages and fringe benefits to achieve higher standard of living and to motivate them to show higher productivity.
(vii) Social security and welfare of employees.
Q17) Discuss the functions of human Resource Management with relevant examples?
A17) The main functions of human resource management are classified into two categories:
(a) Managerial Functions and (b) Operative Functions
(a) Managerial Functions
Following are the managerial functions of Human Resources Management.
- Planning: The planning function of human resource department pertains to the steps taken in determining in advance personnel requirements, personnel programmes, policies etc. After determining how many and what type of people are required, a personnel manager has to devise ways and means to motivate them.
b. Organization: Under organization, the human resource manager has to organise the operative functions by designing structure of relationship among jobs, personnel and physical factors in such a way so as to have maximum contribution towards organizational objectives. In this way a personnel manager performs following functions:
(a) preparation of task force;
(b) allocation of work to individuals;
(c) integration of the efforts of the task force;
(d) coordination of work of individual with that of the department.
3. Directing: Directing is concerned with initiation of organised action and stimulating the people to work. The personnel manager directs the activities of people of the organization to get its function performed properly. A personnel manager guides and motivates the staff of the organization to follow the path laid down in advance.
4.Controlling: It provides basic data for establishing standards, makes job analysis and performance appraisal, etc. All these techniques assist in effective control of the qualities, time and efforts of workers.
(b) Operative Functions: The following are the Operative Functions of Human Resource Management
1.Procurement of Personnel: It is concerned with the obtaining of the proper kind and number of personnel necessary to accomplish organization goals. It deals specifically with such subjects as the determination of manpower requirements, their recruitment, selecting, placement and orientation, etc.
2.Development of Personnel: Development has to do with the increase through training, skill that is necessary for proper job performance. In this process various techniques of training are used to develop the employees. Framing a sound promotion policy, determination of the basis of promotion and making performance appraisal are the elements of personnel development function.
3.Compensation to Personnel: Compensation means determination of adequate and equitable remuneration of personnel for their contribution to organization objectives. To determine the monetary compensation for various jobs is one of the most difficult and important function of the personnel management. A number of decisions are taken into the function, viz., job-evaluation, remuneration, policy, inventive and premium plans, bonus policy and co-partnership, etc. It also assists the organization for adopting the suitable wages and salaries, policy and payment of wages and salaries in right time.
4.Maintaining Good Industrial Relation: Human Resource Management covers a wide field. It is intended to reduce storifies, promote industrial peace, provide fair deal to workers and establish industrial democracy. It the personnel manager is unable to make harmonious relations between management and labour industrial unrest will take place and millions of man-days will be lost. If labour management relations are not good the moral and physical condition of the employee will suffer, and it will be a loss to an organization vis-a-visa nation. Hence, the personnel manager must create harmonious relations with the help of sufficient communication system and co-partnership.
5.Record Keeping : In record-keeping the personnel manager collects and maintains information concerned with the staff of the organization. It is essential for every organization because it assists the management in decision making such as in promotions.
6.Personnel Planning and Evaluation: Under this system different type of activities are evaluated such as evaluation of performance, personnel policy of an organization and its practices, personnel audit, morale, survey and performance appraisal, etc.
Q18) What do you mean by HRP?
A18) It is the HRP process which helps the management of the organization in meeting the future demand of human resource in the organization with the supply of the appropriate people in appropriate numbers at the appropriate time and place. Further, it is only after proper analysis of the HR requirements can the process of recruitment and selection be initiated by the management. Also, HRP is essential in successfully achieving the strategies and objectives of organization. In fact, with the element of strategies and long term objectives of the organization being widely associated with human resource planning these days, HR Planning has now became Strategic HR Planning.
Though, HR Planning may sound quite simple a process of managing the numbers in terms of human resource requirement of the organization, yet, the actual activity may involve the HR manager to face many roadblocks owing to the effect of the current workforce in the organization, pressure to meet the business objectives and prevailing workforce market condition. HR Planning, thus, help the organization in many ways as follows:
- HR managers are in a stage of anticipating the workforce requirements rather than getting surprised by the change of events
- Prevent the business from falling into the trap of shifting workforce market, a common concern among all industries and sectors
- Work proactively as the expansion in the workforce market is not always in conjunction with the workforce requirement of the organization in terms of professional experience, talent needs, skills, etc.
- Organizations in growth phase may face the challenge of meeting the need for critical set of skills, competencies and talent to meet their strategic objectives so they can stand well- prepared to meet the HR needs
- Considering the organizational goals, HR Planning allows the identification, selection and development of required talent or competency within the organization.
It is, therefore, suitable on the part of the organization to opt for HR Planning to prevent any unnecessary hurdles in its workforce needs. An HR Consulting Firm can provide the organization with a comprehensive HR assessment and planning to meet its future requirements in the most cost-effective and timely manner.
An HR Planning process simply involves the following four broad steps:
- Current HR Supply: Assessment of the current human resource availability in the organization is the foremost step in HR Planning. It includes a comprehensive study of the human resource strength of the organization in terms of numbers, skills, talents, competencies, qualifications, experience, age, tenures, performance ratings, designations, grades, compensations, benefits, etc. At this stage, the consultants may conduct extensive interviews with the managers to understand the critical HR issues they face and workforce capabilities they consider basic or crucial for various business processes.
2. Future HR Demand: Analysis of the future workforce requirements of the business is the second step in HR Planning. All the known HR variables like attrition, lay-offs, foreseeable vacancies, retirements, promotions, pre-set transfers, etc. are taken into consideration while determining future HR demand. Further, certain unknown workforce variables like competitive factors, resignations, abrupt transfers or dismissals are also included in the scope of analysis.
3. Demand Forecast: Next step is to match the current supply with the future demand of HR, and create a demand forecast. Here, it is also essential to understand the business strategy and objectives in the long run so that the workforce demand forecast is such that it is aligned to the organizational goals.
4. HR Sourcing Strategy and Implementation: After reviewing the gaps in the HR supply and demand, the HR Consulting Firm develops plans to meet these gaps as per the demand forecast created by them. This may include conducting communication programs with employees, relocation, talent acquisition, recruitment and outsourcing, talent management, training and coaching, and revision of policies. The plans are, then, implemented taking into confidence the mangers so as to make the process of execution smooth and efficient. Here, it is important to note that all the regulatory and legal compliances are being followed by the consultants to prevent any untoward situation coming from the employees.
Hence, a properly conducted process of HR Planning by an HR Consulting Firm helps the organization in meeting its goals and objectives in timely manner with the right HR strength in action.
Q19) What is the concept of Recruitment?
A 19) Effect recruitment is the next big process after human resource planning is to develop applicant polling called recruiting. The more application you have, the more selective you can be in your hiring. If only two candidates apply for two openings, you can use techniques like interviews and tests to screen out all but the best. Some employees use a recruiting yield pyramid to calculate the number of applicants they must generate to hire the required number of new employees. In the company knows it needs 50 new entry-level accountants next year then they use this recruitment yield pyramid. It is a historical arithmetic relationship between recruitment leads and invitees, invitees and interviews, interviews and offers made, and offers made and offers accepted. Therefore, for getting the 50 recruits the firm must generate 1,200 leads to be able to invite 200 viable candidates to its offices for interviews. The firm will then get to interview about 150 of those invited and from these it will make 100 offers. Of those 100 offers, about 50 will accept. An effective recruitment is carried out by something called recruitment policy which is derived from personnel policy of the same organization. Recruitment practices vary from organization to organization, some follow centralized way such as commercial banks and others such as railways follow decentralized process for various grade of jobs.
Q20) Discuss the different types of selection tests.
A20) Selection can be defined as process of choosing the right person for the right job.
Types of selection test
Different selection test are adopted by different organization depending upon their requirements. These tests are specialized test which have been scientifically tested and hence they are also known as scientific test.
I. Aptitude test: -
Aptitude tests are test which assess the potential and ability of a candidate. It enables to find out whether the candidate is suitable for the job. The job may be managerial technical or clerical.
The different types of aptitude test areas are:
a. Mental ability/mental intelligence test: -
This test is used to measure the overall intelligence and intellectual ability of the candidate to deal with problems. It judges the decision-making abilities.
b. Mechanical aptitude test: -
This test deals with the ability of the candidate to do mechanical work. It is used to judge and measure the specialized knowledge and problem-solving ability. It is used for technical and maintenance staff.
c. Psycho motor test: -
This test judges the motor skills the hand and eye co- ordination and evaluates the ability to do jobs lie packing, quality testing, quality inspection etc.
II. Intelligence test: -
This test measures the numerical skills and reasoning abilities of the candidates. Such abilities become important in decision making. The test consists of logical reasoning ability, data interpretation, comprehension skills and basic language skills.
III. Personality test: -
In this test the emotional ability or the emotional quotient is tested. This test judges the ability to work in a group, inter personal skills, ability to understand and handle conflicts and judge motivation levels. This test is becoming very popular now days.
IV. Performance test: -
This test judges and evaluates the acquired knowledge and experience of the knowledge and experience of the individual and his speed and accuracy in performing a job. It is used to test performance of typist, data entry operators etc.
Q21) Write short note on Training and Development.
A21) Training is considered a short-term learning process for employees to acquire the technical knowledge and skills they need to effectively perform their tasks and responsibilities. "Training consists of planned programs implemented to improve employee knowledge, skills, attitudes and social behavior in order to significantly improve the performance of the organization," said Wayne Casio.
Development is seen as a long-term learning process for managers to acquire conceptual and theoretical knowledge and skills to strengthen general management skills.
Training and development are one of the most important functions of human resource management in any organization. The purpose of this training is to strengthen employee skill behavior and expertise by learning new techniques for employees to do their jobs.
Employee training and development helps update employees' skills and knowledge to get the job done. This ultimately improves work efficiency and increases organizational productivity. This alleviates employee weirdness and eccentricity, allowing learning and behavioural changes to take place in a highly structured format. Training development or learning and development is a formal, ongoing educational activity aimed at achieving goals and improving employee performance.
Activities related to employee training and development are created to tell employees to perform better in their assigned work, allowing them to qualify for promotion and salary increases during performance assessment.
Motivate employees to do their best. It refers to the hustle and bustle of skill and knowledge, which is the source of additional information and instructions needed to improve the quality of performance.
Human resource development and development are two different activities that are closely related to the overall improvement of employees. The short-term and responsive process is training used for operational purposes, while the long-term development process is used for executive purposes.
The purpose of HRM training is to improve the skills required of employees, while the purpose of development is to improve the overall personality of employees. Management is in control of training to fill the skill gaps in the organization. Development initiatives are usually aimed at developing future successors.
Meaning and Definition
Training may be a short-term follow-up process for operatives and processes, and development is meant as endless proactive process for executives.
In training, management takes the lead in meeting the current needs of fan employees. In development, individuals take the lead in meeting the future needs of their fan employees.
Definition of Training and Development by prominent authors
The following are the definitions given by experts and prominent authors.
Armstrong
“Training could also be a proper and systematic modification of learning behavior as a result of teaching, teaching, development and planned experience. Development improves individual performance in their current role and is a future. Be prepared for greater responsibility. "
Katz & Khan
"Training and development is described as a maintenance subsystem aimed toward improving organizational efficiency by increasing the routineness and predictability of behavior."
Kllatt, Murdick & Schuster
“Training could also be a scientific way for workers to vary their behavior to arrange for work or improve their performance in their current job. Development is a structured, complex concept, decision-making. , And preparing employees to improve their interpersonal skills. Situations "
Lucier
"Training is that the process of acquiring the talents needed to urge the work done, and development is that the ability to urge the work done both now and within the future." skill,
Kirk Patrick
The term development refers to an individual's growth and preparation for a higher level of work.”
Clayman
Training and development is a planned learning experience that teaches workers how to effectively perform their current or future work.
Training and development have always been recognized as one of the key talent functions. Training and development are an integral part of HRD (Human Resources) activities in most organizations. Training and development serve as a tool for organizational success in the fierce competition of the corporate world, where skilled talent is an important aspect of gaining a competitive advantage. Due to the rapid decline of employees due to rapid changes in technology, many organizations set a fixed amount of training time per year for their employees.
The HRD department is focused on improving the talent of the organization. Training and development activities are often used to motivate employees and increase organizational commitment.
The Human Resources Development Department has found that employees are truly grateful for giving them the opportunity to build new skills and improve their ability to perform their jobs. Employees feel that the organization is fully committed to developing human resources and want to participate in training and development activities. Training development activities also are wont to attract new talent to the organization by publicizing HRD's efforts.
From an HR perspective, training and development activities are the best way to create a talent pool within your organization. Instead of hiring skilled and trained staff for a particular job, the training and development activities performed within the organization are a much cheaper source of information for skilled employees within the company. This reduces the cost of hiring or hiring an organization, and by hiring in-house in a particular position, employees joining new posts are already aware of the organization's work culture.
The HRD department also promotes HR training and development activities as homemade executives are found to perform better than skilled people hired from outside.
The HRD department is typically responsible for planning and executing training and development activities within the organization. This activity involves first searching for skill gaps within your organization and then finding the right source for employees to learn new skills and improve performance. Through training and capacity building activities, it is often said that the HRM department actually contributes to the productivity of the organization.