clinical trial deaths in 7 yrs: Centre to SC

Clinical Trial deaths in 7 yrs: Centre to SC

Even as the Drugs and Cosmetics Act awaits penal provisions, the Centre has informed the Supreme Court that at least 80 people have died due to illegal clinical trials in the last seven years.

In an affidavit submitted to the court as per its directive, the health ministry has said there were 2,644 "serious adverse events" of deaths during clinical trials during 2005-2012. Of these, 80 have been attributed to clinical trials, while the other deaths could be due to terminal illnesses or other life-threatening diseases. Compensation was paid to families of 44 victims till 2011.

According to the ministry, there were around 12,000 incidents of "other adverse effects" in this period, of which 506 directly pertained to clinical trials.

The existing Act does not have a single penal provision prescribing a jail term for illegal clinical trials. The Centre has said it is trying to correct the "deficiency" by replacing the old law with a 2013 amendment Bill.

The health ministry has said the Bill seeks to expand the responsibility of the sponsor (firm which conducts the trials), investigator and ethics committee.

The Bill also mandates complete adherence to the protocols and good clinical practice guidelines for conducting trials. In case of non-compliance, it seeks to authorise the Drugs Controller General of India (DCGI) to recommend rejection of the study as well as suspension and debarment of the sponsor.

CLB issues strict norms for notarisation of affidavits

Company Law Board while passing an order in the matter of Shri Rupak Gupta & Others Vs. M/s. Banaras House Pvt. Limited has taken a very serious note of the serious breach of duty by Notaries in the capital while attesting affidavits (like affidavits having blank spaces, non disclosure of the identity of the person signing the affidavits, notarization in the absence of the deponents and cases of false impersonation and false identification of deponent. .

In a press release issued by CLB it has been stated that Justice D.R. Deshmukh Chairman of CLB while deciding the aforesaid petition has directed the Chief Secretary, National capital Territory of Delhi to initiate immediate disciplinary action for cancellation of license of Mr. Ashok Kumar, Notary Public, Chamber No. B-112, BGS Block, Tis Hazari Courts, New Delhi–110 064 and Mr. Dipankar Das, Notary Public, Registration No. 916, 14, Lawyers Chamber, Supreme Court of India, New Delhi and to send a report to the Company Law Board of having done so. In one of the cases the notary had even attested the affidavit of a lady being deposed and signed by a man and indentified as such.

The Chief Secretary, NCT of Delhi has also further been directed to issue directions to all Notaries functioning in the NCT of Delhi to ensure that they shall obtain the signature and full details of not only the deponents but also the person indentifying such deponent in the Notary Register and the Notary shall affix his seal and signature on each page of the document/ petition being deposed to in the affidavits.

SC forces RTI info commissions to be headed by judges, CIC freezes

SC forces RTI info commissions to be headed by judges, CIC freezes

The Supreme Court on Friday disposed of a writ petition filed two months ago, opening the floodgates to many more post-retirement positions for high court and Supreme Court judges and bringing the functioning of the CIC to an abrupt emergency halt.

The court ruled that information commissions under the Right to Information Act 2005 (RTI Act) must function with two-member benches, one of the two members being a high court judge in the case of an information commissioner’s post, and a high court chief justice or a Supreme Court judge for the post of chief information commissioner.

It further said that appointments to these posts must be made only after consulting with high court chief justices and the chief justice of India.

The ruling will take effect prospectively, clarified the bench, but left several questions of implementation open to doubt.

“Can only hope that the RTI community quickly grasps the horrifying implications of this judgement soon and moves court quickly,” tweeted Legally India blogger Courtwitness adding, “still trying to understand how this case was argued and decided in two months with the government having barely had a say defending its stand.”

The first disastrous effect of the order is that all RTI hearings will have to stop till the judicial members are appointed, explained one of the drafters of the Act Shekhar Singh to Hindustan Times. The report stated that more than 17,000 pending cases, translating into a three month waiting period for an RTI appeal-hearing were already in the docket until August.

Further, appointment of judicial members is not a simple affair, explained Friday’s report in The Hindu. To function in two-member benches the Central Information Commission must have twelve commissioners six of whom must be judicial members, whereas as of now it has only eight members none of whom are judicial members. So, two present members will have to be replaced by judicial members.

But there are two riders. First, all members don’t retire at the same time, and second, under the RTI Act it is “impossible” to remove an incumbent commissioner.

To add to the complexity, the retirement age for both Supreme Court judges and chief information commissioners is 65 making it procedurally impossible to appoint a retired SC judge a chief information commissioner.

The bench of justices AK Patnaik and Swatanter Kumar passed directions on the public interest litigation of petitioner Namit Sharma who had challenged the constitutionality of the sections of the RTI Act that lay down the eligibility criteria for appointment to the posts of chief information commissioners and information commissioners at the central and state levels.

According to Sharma, the sections were vague and did not provide specific eligibility qualifications for such appointments, and that it was not warranted for a person of non-judicial background to perform judicial or quasi-judicial functions under the Act because it goes against citizens’ constitutional right to equality before law.

Sharma was also aggrieved with the fact that the Act does not prescribe any mechanism for proper scrutiny and consultation with the judiciary to ensure that the information commissioners do their job effectively.

However, the 107-page judgement makes no mention of the arguments of any government counsel opposing Sharma. The petition was filed on 11 July, and decided on Friday two months later in a “record-time” hearing for a writ petition, pointed out Courtwitness.

“Strangely there's no mention of vakalat on the part of the government. Was any counter affidavit filed disputing writ petition,” asked cbcnn_Pillid in a tweet.

Chief information commissioner Satyananda Mishra, himself a bureaucrat having a non-judicial background, convened an “emergency meeting” of the Central Information Commission (CIC) soon after the order to understand the import of the ruling and take legal opinion on its implementation from the law ministry, reported Mint.

“The court says the ruling is to come into effect prospectively but we do not know if this means we have to wait until the existing commissioners retire or the changes will come into effect immediately,” Mishra told The Hindu.

A Gift can't be taken back

The Supreme Court bench of Justices S B Sinha and H S Bedi, ruled that gifts from parents to children could not be rescinded later had said two months ago that parents could disentitle their son from inheritance if he neglected them. Ashokan from Kerala was gifted land by his mother through a registered gift deed out of “love and affection” on January 4, 1984. His father followed suit saying it would help him lead a good family life. But after one-and-a-half years, the parents cancelled the deeds saying Ashokan had failed to render financial assistance to the family though he worked in Oman. They were also upset he did not fulfil his promise to contribute Rs 1 lakh for his sister’s marriage.

 Ashokan approached the trial court seeking quashing of the two documents executed by his parents through which the gift was cancelled. Despite the breach of promise cited by the parents, the court ruled that once the gift deed had been executed, it could not be revoked “by the mere fact that the donor’s feeling towards the recipient underwent a change”.

The parents had protested that if the deeds were kept alive, it would be fair to fear that the son would evict them from their own land. The district court ruled in favour of the parents saying the son had not taken possession of the land, nor paid tax, nor mutated it in his name. The Kerala HC upheld this decision.

Ashokan approached the SC challenging the HC’s decision. The SC said the gift deeds were executed out of love and on the ground that the recipient was the son of the donor and to enable him to live a good life.

 “Could the parents now turn around and say he was to fulfil a promise? The answer must be in the negative. It’s one thing to say the execution of the deed is based on an aspiration or belief, but another to say the same constituted an onerous gift,” said the bench. The SC revived the gift deeds originally made by the parents and said, “Once a gift is complete, it cannot be rescinded.”

Cabinet approves reforms in marriage, divorce and adoption laws

The Central government took some major decisions with regard to the Hindu Marriage Act, including making divorce easier, in a key Cabinet meeting. 

According to the decision of the Cabinet, the mandatory six-month clause for filing of divorce will now be waived off on grounds of irretrievable breakdown. 

The new clause also allows one-time settlement instead of monthly maintenance in case of divorce. 

The redrafted Marriage Laws (Amendment) Bill, 2010 based on key recommendations of a Parliamentary Standing Committee also allows a woman a share in her husband's property. The quantum of share will be decided by the court on case-by-case basis. 

The Marriage Laws (Amendment) Bill, 2010, which was cleared by the Cabinet, also seeks to give a woman a share in her husband's property. 

The government has accepted the recommendation of the parliamentary committee that women should have a share in the property of her husband in case of a divorce but the quantum of share will be decided by the courts on case-by-case basis. 

According to the Cabinet Note, while a wife can oppose a husband's plea for a divorce under the new "irretrievable breakdown of marriage" clause, the husband will have no such rights to oppose if the wife moves the court on the same grounds. 

Apart from this, bringing a big change in the adoption laws, the Union Cabinet has cleared equal rights for adopted children in custody cases.

According to the redrafted Bill passed by the Cabinet, adopted children will have rights on par with biological off springs of a couple in case the parents go for a divorce.

Trade Mark

1.      What is a trade mark?

A trade mark (popularly known as brand name) in laymans language is a visual symbol which may be a  word signature, name, device, label, numerals or  combination of colours used by one undertaking on goods or services or other articles of commerce to distinguish it from other similar goods or services originating from a different undertaking.

The legal requirements to register a trade mark under the Act are:   

     The selected mark should be capable of being represented graphically (that is in the paper form).

     It should be capable of distinguishing the goods or services of one undertaking from those of others.

     It should be used or proposed to be used mark in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services and some person have the right to use the mark with or without identity of that person.

2.How to select a trade mark?                                                 

        If it is a word it should be easy to speak, spell and remember.

        The best trade marks are invented words or coined words.

        Please avoid selection of a geographical name. No one can have monopoly right on it.

        Avoid adopting laudatory word or words that describe the quality of goods (such as best, perfect, super etc)

        It is advisable to conduct a market survey to ascertain if same/similar mark is used in market.

3. What is the function of a trade mark?

Under modern business condition a trade mark performs four functions

      It identifies the goods / or services and its origin.

      It guarantees its unchanged quality

      It advertises the goods/services

      It creates an image for the goods/ services.

4.Who can apply for a trade mark and how ?

Any person claiming to be the proprietor of a trade mark used or proposed to be used by him may apply in writing in prescribed manner for registration.  The application should contain the trade mark, the goods/services, name and address of applicant and agent (if any) with power of attorney, period of use of the mark and signature.  The application should be in English or Hindi.  It should be filed   at the appropriate office.

5. How to apply for a trade mark in respect of particular goods or services?

 It is provided under the Trade Marks Act, 1999 that goods and services are classified according to the International Classification of goods and services. Currently schedule IV of the Act provides a summary of list of such goods and services falling in different classes which is merely indicative. The Registrar is the final authority in the determination of the class in which particular goods or services fall.    The Schedule IV of the Act is annexed at the end of this questionnaire on trade marks.  For detailed description of other goods and services please refer to the International Classification published by WIPO or contact the local office for assistance.

6.What are different types of trade marks available for adoption?

-                      Any name (including personal or surname of the applicant or predecessor in business or the signature of the person), which is not unusual for trade to adopt as a mark.

                    An invented word or any arbitrary dictionary word or words, not being directly descriptive of the character or quality of the goods/service.Letters or numerals or any combination thereof.

                      The right to proprietorship of a trade mark may be acquired by either registration under the Act or by use in relation to particular goods or service.Devices, including fancy devices or symbols Monograms Combination of colors or even a single color in combination with a word or device Shape of goods or their packaging Marks constituting a 3- dimensional sign.

                      Sound marks when represented in conventional notation or described in words by being graphically represented.

7. What purpose the trade mark system serves ? 

      It identifies the actual physical origin of goods and services. The  brand itself is the seal of authenticity.

      It guarantees the identity of the origin of goods and services.

      It stimulates further purchase.

      It serves as a badge of loyalty and affiliation.

     It may enable consumer to make a life style or fashion statement.

8.Who benefits from a trade mark?

The Regd.Proprietor: The Regd.Proprietor of a trade mark can stop other traders from unlawfully using his trade mark, sue for damages and secure destruction of infringing goods and or labels.

The Government:  The Trade Marks Registry is expected to earn a revenue of nearly Rs.40 crores during the current  year and which is perpetually on the rise.

The Legal professionals: The Trade Marks Registration system is driven by professionals and legal and para legal advisors(Agents) who act for the clients in the processing of the trade marks application.

The Purchaser and ultimately Consumers of trade marks goods and services.

KARNATAKA RECORD OF RIGHTS

What is Pahani(RTC) ?

Pahani(RTC) is a very important revenue records, as it contains details of land such as owners' details,
area, assessment, water rate, soil type, nature of possession of the Land, Liabilities, Tenancy and Crops grown, etc.

Why is Pahani required ? 

Pahani is required for various purposes:
1. To know the genuiness of seller(owner) when land is being purchased.
2. It is required at Sub-Register's office when sale transaction is being done
3. To raise the farm credit / loan from the Bank.
4. Court needs Pahani in case of Civil litigation.
5. For personal purpose."

What does Pahani contain?

Pahani contains valuable data related to piece of Land. It has the following information :
1. Survey Number and Hissa Number of Land.
2. Total Land under the Pahani.
3. Land Revenue details.
4. Land Owner's name with Extents and Khatha Number.
5. The way land is acquired by the owner.
6. Government/Public rights on the Land.
7. Liabilities of the Owners on the Land.
8. Classification of the Soil.
9. Number of Trees.
10. Source of irrigation and area irrigated.
11. Cultivators Details.
12. Utilisation of land under various categories.
13. Details of Crops grown season-wise.
14. Details of Mixed Crops.

How to get the Pahani ?

One can get the signed copy of computerized PAHANI from PAHANI CENTRE, set up at the Tahsildar Office, instantaneously by paying Rs.15.00. If he is unable to come to Taluk office, it can be collected by paying Rs.15.00 to Village Accountant / Revenue Inspector, who inturn will collect computerized PAHANI from PAHANI CENTRE and hand it over.

How is the computerised RTC different from manual RTC ?

There is absolutely no difference in the contents of computerised RTC and manual RTC. However, the computerised RTC is neat and easily readable and understandable as details are printed in the respective Columns.
Further it cannot be tampered easily."


What are the benefits of computerisation to the Public ?
The Public will have lots of benefits from computerisation. The whole process of updation of Land Records will be transparent. The following are the benefits :
a. Farmer can collect his land records related documents from PAHANI CENTRE instantaneously by paying Rs.15.00.
b. Public can request Revenue Department to carry out the mutation on the land as per their transactions and collect the acknowledgement for that.
c. Farmer can come and see the status of 'mutation requested' by him and status of 'mutation-in-process' on his land.
d. At TOUCH SCREEN KIOSK the Public can view the land records documents, status of mutation and various other reports.

What happens if I take manually written RTC in Computerised Taluk ?

Government of Karnataka has issued the order saying that in Computerised taluka, only computer generated RTC's are valid for all legal purposes and that handwritten RTC will not be recognized by Government"

What is Mutation ?

Mutation is a process through which Owner's name or his particulars like liabilities get changed because of some type of transactions. The type of transaction may be one of the following:

1. J-Slip-Sale through registered deed.
2. Inheritance - Change of Ownership because of death of the Owner.
3. Division of Land within the Family.
4. Pledge / Release - Change in liabilities because of loan from bank or
repayment to bank.
5. Court Decree - Based on the Court Order.
6. Alienation - Conversion of land from agricultural to other purposes.
7. Acquisition by Government for Public purpose.
8. Grant of Land by Government to Poor People."

Is there any difference in Land Records Updation Process after Computerisation ?

NO. Updation process of Land Records is same in both Computerised and Manual systems. All the rules of Karnataka Land Revenue Act are followed as it is, in case of Computerised system with some added precautions."


When does the Owner name and his details Change ?

The change in Owner name and his details will take place when one of the following transactions occurs :
a. J-Slip - Sale transaction takes place at SRO.
b. Inheritance - Death of the Owner.
c. Division of Land within Family Members.
d. Court Decree - Order of the court.
e. Grant by the Government.
f. Alienation for non-agricultural purposes.
g. Acquisition by Government.
h. Podi - Division of RTC into 2 or more.
i. Pledge/Release of the Land with / from banks."

How to bring New Owner's name or change the owner's details in the RTC ?

The Owners of the land will change because of purchase transaction, Inheritance, Division, Grant by Government, Court Decree. When one of these takes place, NEW OWNERS should approach the Revenue Department with the required document to incorporate their names. They can request for the same at the PAHANI CENTRE and collect the acknowledgement.
Similarly when loan is taken or repayment is done, to change the liabilities details, Owner can submit the request at the PAHANI CENTRE with required documents."

What is Objection and how to raise it ?

Objection is a complaint about the transaction. That is, if some transaction comes for change of Ownership, to the Revenue Department, before accepting as it is, department serves the notice to the interested parties and puts in the CHAVADI. If anybody feels it is illegal transaction or feels his rights on the land is in trouble, he can raise the Objection. He has to give a written Objection within 30 days from notice served date to Village Accountant / Revenue Inspector / Taluk Office."


When does crop data change in RTC ?"
Crop details will be written on the RTC once or twice in a year, depending upon the seasons. The Crops information will be written by Village Accountant after inspecting the field."

What to do if crops information is wrong in RTC ?

One can lodge a request to change the crop information on the PAHANI at the PAHANI CENTRE / Village Accountant. The same will be changed after " & " verification by Village Accountant / Revenue Inspector."

.IN DOMAIN REGISTRATIONS IN INDIA

.IN DOMAIN REGISTRATIONS IN INDIA

The Ministry of Information Technology, Government of India, with effect from January 1, 2005 has liberalized the policies for registration of country code Top Level Domains (ccTLDs). According to this policy, it will now be possible for the registered trade mark and service mark owners to register their trade / service marks as secondary level domain names along with the top level domain name in India which is .in. It is also possible for the trade mark owners to register domain names with their trade marks at the third level along with the second and top level domain name .co.in. To give an example, it will now be possible to register domain name Yahoo.in and Yahoo.co.in, subject to Yahoo being a registered trade/service mark in India.

In the past, only registrations were permitted with the secondary and top level domains .co.in. These registrations were only granted to companies having an Indian subsidiary. These norms have now been relaxed and even entities not having a presence in India can register these domains.

The Government of India has also announced a Sunshine Period from January 1, 2005 to January 21, 2005, during which period registrations shall be granted only to the registered trade mark owners and not to other parties. After the Sunshine Period, registration shall be opened to the general public.

In order to deter cyber squatters, we highly recommend that clients apply for registration of domain names in relation to all their registered trade marks for the country code Top Level Domains .in and .co.in.

To this effect, our charges will be the same what we charge in relation to new trade mark applications i.e. US$ 210. There shall be an additional charge of US$ 110, which is the amount payable to the accredited Registrar as the official fee for registration and subsistence of the registration for an initial period of 5 years. Should you be interested in registering these domains, please contact us and we shall provide you with more details about the registration process.

What to do before signing the Rental Agreement ?

What to do before signing the Rental Agreement ? 

HOUSE ON RENT

There is a huge demand for homes on rent. There are a few essential things that tenants should be aware of before signing on the dotted line. we helps you with the particulars.


What's included?

It is extremely important to have clarity on the facilities included in the rent. "I agreed to pay a whopping amount of rent assuming that it includes the monthly maintenance and charges for using the club facilities of my high end township. I was in for a shock when I realised that my agreement stated otherwise and there was nothing I could not do much as it was a mistake on my part." laments, Rajdeep Sanghi, a techie staying in Kondapur. Clarity at every step from discussion to the final agreement, it is imperative to track every detail.

Read before you sign

A common mistake we usually make is not to read a contract before we sign. Obtain a copy of any rules and regulations, make sure you go through everything and before you sign the lease, check to see if these are mentioned:

• The beginning and the expiration date

• The rental price and information about your security deposit

• What are the reasons for which your landlord can terminate your lease contract

• Are there any penalties for moving out of your apartment before the expiration date?

• Are there any responsibilities on your head for repairs and such?

• One of the most important things is to check the notice period of written in the agreement and if a lock-in period is mentioned. " Lock in period results in loss of security deposits, so one has to be completely sure of the terms mentioned in the agreement."

Inspect the apartment

The most important thing when you inspect an apartment you plan to lease is not to let the looks deceive you. Look for the "hidden" attributes and if there's any damage ask for it to be repaired otherwise you may be blamed for it later.
Here are a few things to take a closer look at:

• Pipes - be it gas, water or anything else, check for leaks.

• Sink faucets, shower heads and water - make sure water (both cold and hot) really comes out of the faucets and the shower head and it's with a decent pressure. Also the toilet has to flush properly and thoroughly.

• Electricity and appliances should all be working. Check if all the lights or other electric devices are operational.

• Walls and windows. Check the windows to see if they open close and lock properly. Also inspect the walls. The more walls in common (shared with adjoining apartments), the greater the chance of noise from next door.

• Noise. If it's a highly trafficked area you may have problems concentrating and even sleeping.

Know your landlord

It's very important to know some basic information about the landlord. "If it's a management company with thousands of apartments for rent it may be harder to negotiate, but if it's a family and they just need to secure the income each month, you have a green light to close the deal with a small discount" shares Amit. While, renting a house may seem a daunting task, if the essential parameters are kept in mind then shifting to new place can actually be a smooth transition.

Beyond the Blame Game: Can Facebook Be Fixed?

By Laura DiDio
E-Commerce Times
05/26/12 5:00 AM PT

Facebook's most daunting challenge in both the near and long term is how to monetize its existing base of users. The obvious answer is to drive greater advertising revenues. One way to do that is to more closely track and sell user information and preferences. However, that strategy is risky and could backfire.

The honeymoon is over for Facebook (Nasdaq: FB) and Mark Zuckerberg. In fact, it ended before it began.

Facebook's long-awaited and much-hyped IPO is just over a week old, and the blame game is on as the company has lost 16 percent of its value since the initial offering. Wall Street's take on Facebook has gone from jubilant to jaundiced.

The stock ended its first full day of trading a week ago Friday at US$38.23, essentially flat from its $38 opening price. It did manage to set an IPO record for sheer volume -- 567 million shares exchanged hands.

Investors hoped for a turnaround, but it hasn't materialized. On Monday, a selloff prompted the shares to fall by nearly 11 percent, ending at $34.03. The news worsened Tuesday. The stock sank another 8 percent, trading in the $31-$32 range. By the one-week mark, the picture hadn't improved. The stock closed Friday at $31.91.

Investors have been quick to assign blame, and they didn't have far to look. Facebook's lead banking underwriters, Morgan Stanley (MS), JP Morgan (JPM), and Goldman Sachs (GS) all slashed their Facebook earnings forecasts in the middle of the IPO road show, according to Reuters.

The underwriter analysts cut their estimates after Facebook issued an amended IPO prospectus, in which it used vague language to state that the number of users was growing faster than revenue. That was a big red flag. But the worst part of this story is that the sales slippage was only disclosed to a select few underwriters and not the public-at-large, who were eager to cash in on what they thought would be a great deal.

Industry Calls for SEC to Widen Facebook Probe

The Securities and Exchange Commission (SEC) is already investigating the opening day glitches that delayed Facebook being traded on the Nasdaq exchange for about an hour. There are calls for the SEC to widen its probe into why there was not a full disclosure about Facebook's lower earnings forecast in advance of the IPO.

The failure to reveal the sales and earnings slowdown helped make Facebook the second largest IPO in U.S. history behind Visa (NYSE: V).

Regardless of any actions by the SEC, the takeaway is this: Zuckerberg and Facebook executives became instant millionaires, but the average investor lost because the company was overvalued.

Can Facebook do anything to reverse its initial slide and avoid a backlash that could cause it to sink even deeper? The company must at least attempt to live up to the hyperbole. As a public company with a very high profile, Facebook is answerable to shareholders and investors.

The slightest fluctuation in the stock price -- or worse yet, a continued downward spiral -- will be analyzed and second guessed as witnessed by the headlines and commentary.

It is imperative for Facebook to quickly find ways to accomplish the following:

• expand its base beyond its current 900-plus million members by attracting new users internationally;
• monetize and productize its services; and
• build a cogent, compelling and cohesive mobility strategy that includes mobile applications.

Facebook founder Mark Zuckerberg, who's firmly in charge with 56 percent ownership, realizes this. That's why he, his executives and engineers engaged in an all-night "hackathon" at Facebook's Menlo Park, Calif., headquarters brainstorming ideas to attract new users and coding software that could potentially enrich the company's coffers.

Investors will be more anxious than ever to see Facebook's short-term tactical and long-term strategic plans to grow the company and swell the ranks of the 900 million current users -- particularly in international markets.

Established competitors like Google (Nasdaq: GOOG) and newcomers like Pinterest will also be keeping a close eye on Facebook's fortunes. Facebook must move quickly and decisively to put the billions it made in its IPO to work immediately before the stock declines further. Zuckerberg must continue to grow the company, develop new products to sustain and expand profitability, and avoid being a flash-in-the-pan.

Facebook's Growth Strategies: Organic and by Acquisition

Growth comes from two avenues: organic, in which companies develop their own applications and products; and by acquisition, in which they purchase expertise and immediate credibility and an entrée into new markets. Facebook must do both.

The global economic climate remains challenging. Many of the top-tier high technology firms, including Google, HP (NYSE: HPQ), IBM (NYSE: IBM) and Oracle (Nasdaq: ORCL), have made large, high-profile acquisitions. Google, for example, spent more than $10 billion purchasing nearly 200 firms since its 2004 IPO -- plus another $12.5 billion for its acquisition of Motorola, a deal it just closed after receiving regulatory approval in China.

Facebook's most notable acquisition to date has been the $1 billion purchase of Instagram, which makes a mobile photo application.

Fixing Facebook

That's a start. The type of company Facebook elects to invest in or purchase is equally important. Mobility is unquestionably one of the most lucrative and hotly contested vertical markets. As a mobile photo application, Instagram has the potential to appeal to both consumer and corporate users. And Instagram is also less likely to fall prey to the fickleness that is so pervasive in gaming applications, which typically have the greatest appeal among young users.

Facebook could conceivably ink a deal with a wireless carrier to charge fees to transfer photos and photo albums on mobile phones and tablets. For Facebook to play successfully in the big leagues and challenge the likes of Google, it will have to make targeted acquisitions in the mobility space that will enhance its current offerings to ensure a continuing, solid revenue stream.

Facebook's most daunting challenge in both the near and long term is how to monetize its existing base of users. The obvious answer is to drive greater advertising revenues. One way to do that is to more closely track and sell user information and preferences. However, that strategy is risky and could backfire.

Recently, U.S. automaker General Motors (NYSE: GM) dealt Facebook a blow when it announced it would withdraw its ads from the social media site. According to GM, it did not realize the hoped-for return on investment from new car sales.

This signals that corporate giants still view Facebook as largely a social media site geared more toward entertainment and games sales. The company also suffered a recent setback on the consumer games front. CrowdStar, one of its biggest developers, said last month it would stop making new consumer games for Facebook. Instead, CrowdStar will now focus on creating mobile games.

Facebook's ads do not yet support mobile advertising, and its click-through rate is "under 0.05 percent, about half the average CTR for banner ads across the Internet, thus earning a grade of B+ compared to Google's A," according to a recent study from WordStream.

WordStream founder and chief technology officers (CTO) Larry Kim was openly critical of Facebook's prospects in an open letter to investors, stating, "So far, Facebook's advertising platform hasn't kept pace with the explosive growth of its social network, and it remains to be seen if CEO Mark Zuckerberg even wants to focus on advertising as a source of revenue."

The study gave Facebook only a "C" grade for targeting ads, noting that it earns "no significant revenue" from its mobile applications used by 425 million people on iPhones and Androids each month.

Facebook must find a way to turn this around. As the majority stakeholder with veto power over minority investors, Zuckerberg must convince Wall Street and the industry-at-large that he and Facebook are more than just a social network aimed primarily at the under 21-crowd.

Several critics focused on Zuckerberg's dressed down appearance and his penchant for wearing a hoodie. The criticisms are not without merit. The late Steve Jobs could proudly sport his "uniform" of black turtlenecks and black jeans, but Jobs and Apple (Nasdaq: AAPL) had a proven track record of success that spanned both the consumer and corporate market segments.

If Zuckerberg expects Facebook to be taken seriously, he'll have to signal his intentions by targeting a larger and more diversified customer base.

In another potential setback for Facebook, game maker Zynga's (Nasdaq: ZNGA) stock price dropped by 5 percent, perhaps impacted by insider selloffs and dwindling numbers of users playing the company's staple online games like "Farmville," "Zynga Poker" and "Draw Something."

There is no doubt that Zynga has been a cash cow for Facebook, which has helped propel its popularity. But the social games market is cyclical, and extremely sensitive to user fads and whims; it is not a reliable source of long-term recurring revenue.

Zynga's fortunes are subject to sharp reversals. This trend is reinforced by less-experienced investors who panic at the first sign of weakness. If one high-technology bellwether stock performs badly on a given day, it will create a domino effect, with investors downgrading the entire market sector.

Zynga could just as easily be back on top next week with a new online social game that catches the public's fancy and helps spur an advertising boom on Facebook, but that's not something Facebook can count on.

Diversification is another element that's pivotal for Facebook's immediate and long-term success. It must have a strong, variegated portfolio of products and partnerships.

Wooing Wall Street and corporate partners, as well as making strategic acquisitions and investments in mobile and business applications, must be top priorities for Facebook. The company will also have to respond satisfactorily to any SEC investigation. Zuckerberg can't move quickly enough. Otherwise, Facebook could crash and burn faster than the Hindenburg and suffer the blowback from angry users.

LAW OF CONTRACT

The Law of Contracts is the basis of business law because the bulk of transactions of the people engaged in trade, commerce and industry is based on contracts. In India, the Law of Contracts is governed by the Indian Contract Act, 1872. The Act lays down the general principles relating to formation, performance and enforceability of contracts and the rules relating to certain special types of contracts like, Indemnity and Guarantee; Bailment and Pledge, and Agency. The Transfer of Property Act; The Sale of goods Act; The Indian Partnership Act; The negotiable Instruments Act The Companies Act, though technically belonging to the Law of Contracts, have been covered by separate enactments. However, the general principles of the Contract Law are the basis for all such contracts as well.

The Main  features of the Law of Contract are:

• The parties to the contract make the law for themselves.

• The Act is not exhaustive since it does not take into its purview all the relevant legislations.

• It does not override customs or usages.

• The Law of Contracts is not the whole law of agreements.

Indian Contract Act, 1872, Define -“contract" is an agreement enforceable by law. The agreements not enforceable by law are not contracts. An "agreement" means 'a promise or a set of promises' forming consideration for each other. And a promise arises when a proposal is accepted. By implication, an agreement is an accepted proposal. In other words, an agreement consists of an 'offer' and its 'acceptance'.

An "offer" is the starting point in the process of making an agreement. Every agreement begins with one party making an offer to sell something or to provide a service, etc. When one person who desires to create a legal obligation, communicates to another his willingness to do or not to do a thing, with a view to obtaining the consent of that other person towards such an act or abstinence, the person is said to be making a proposal or offer.

An agreement emerges from the acceptance of the offer. "Acceptance" is thus, the second stage of completing a contract. An acceptance is the act of manifestation by the offeree of his assent to the terms of the offer. It signifies the offeree's willingness to be bound by the terms of the proposal communicated to him. To be valid an acceptance must correspond exactly with the terms of the offer, it must be unconditional and absolute and it must be communicated to the offeror.

An "agreement" is a contract if 'it is made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and is not expressly declared to be void'. The contract must be definite and its purpose should be to create a legal relationship. The parties to a contract must have the legal capacity to make it. According to the Contract Act, " Every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of a sound mind, and is not disqualified from contracting by any law to which he is subject". Thus, minors; persons of unsound mind and Persons disqualified from contracting by any law are incompetent to contract.

Types of Contract

Express Contract: A contract wherein both the offer and acceptance are made in words, spoken or written.

Implied Contract: A contract which is inferred from the conduct of parties or course of dealings between them.

Quasi Contract: It is a contract which does not arise by virtue of an agreement, express or implied, but the law recognises the contract under certain special circumstances. These contracts are based on the principle of equity, justice and good conscience. The Act describes the obligations arising under these contracts as 'certain relations resembling those created by contracts'. Some of the transactions that will be considered as 'quasi-contract' under the law are:-

• When a person who is interested in the payment of money which another person is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the other person

• When a person finds goods belonging to another person, it is his duty to restore them to the rightful owner;

• A person to whom money is paid or anything delivered, by mistake or under coercion, is liable to repay or return it

• Where necessaries are supplied to a person, who is incompetent to contract such as minors or to someone whom he is legally bound to support, the supplier is entitled to recover the price of the property of the incompetent person,etc.

Valid Contract: A valid contract is a 'contract which satisfies all the requirements of the Act'. Such a contract creates rights in personam and is legally enforceable.

Void Agreement: It is an agreement not enforceable by law. It is void ab initio because it lacks one or more of the essentials of a valid contract. Such an agreement does not create any legal relations. However, it is different from unlawful agreements which are forbidden by the law. An illegal agreement must necessarily be void but a void agreement need not be illegal.The following agreements that have been declared void by the Contract Act:-

• Agreements by incompetent persons

• Agreements wherein consideration and objects are unlawful

• Agreements in restraint of marriage

• Agreements in restraint of trade

• Agreements in restraint of legal proceedings

• Agreements the meaning of which are uncertain,etc.

Void Contract: A contract which ceases to be enforceable by law becomes void. In other words, an agreement may be enforceable initially and due to certain circumstances may become void subsequently. Thus a contract is not void from its inception.Some of such circumstances which makes a contract void are:-

• An agreement without lawful consideration becomes void

• A contingent contract to do or not to do something on the happening of an event becomes void when the event becomes impossible

• When the party, whose consent is not free, repudiates the contract,etc.

Voidable Contract: A voidable contract is 'an agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of other or others'. In such a contract, the consent of one of the parties is not free and the law regards it as an aggrieved party. The aggrieved party has the option to either affirm or rescind the contract within a reasonable time.The other party does not have any such right. However,the aggrieved party is entitled to recover from the other party the damages which it may have suffered but it must restore the benefits received by it.

Contracts of Indemnity and Guarantee

A contract of indemnity is one whereby a person promises to save the other from loss caused to him by the conduct of the promisor himself or of any third person.For example,a shareholder executes an indemnity bond favouring the company thereby agreeing to indemnify the company for any loss caused as a consequence of his own act.The person who gives the indemnity is called the 'indemnifier' and the person for whose protection it is given is called the 'indemnity-holder' or 'indemnified'. A contract of indemnity is restricted to cover the loss caused by the promisor himself or by a third person.The loss must be caused by some human agency.Loss arising from accidents like fire or perils of the sea are not covered by a contract of indemnity.

A contract of 'guarantee' is a contract,whether oral or written,to perform the promise,or discharge the liability,of a third person in case of his default. A contract of guarantee involves three persons,viz. a person who gives the guarantee is called the 'surety'; the person in respect of whose default the guarantee is given called the 'principal debtor'; and the person to whom the guarantee is given is called the 'creditor'. A contract of guarantee is a conditional promise by the surety that if the principal debtor defaults he shall be liable to the creditor. 

Difference between Indemnity and Guarantee:

• In a contract of indemnity there are two parties i.e. indemnifier and indemnified. A contract of guarantee involves three parties i.e. creditor, principal debtor and surety.

• An indemnity is for reimbursement of a loss, while a guarantee is for security of the creditor.

• In a contract of indemnity the liability of the indemnifier is primary and arises when the contingent event occurs. In case of contract of guarantee the liability of surety is secondary and arises when the principal debtor defaults.

• The indemnifier after performing his part of the promise has no rights against the third party and he can sue the third party only if there is an assignment in his favour. Whereas in a contract of guarantee, the surety steps into the shoes of the creditor on discharge of his liability, and may sue the principal debtor.

Contracts of Bailment and Pledge

 

A 'bailment' is the delivery of goods by one person to another for some purpose upon a contract that they shall, when the purpose is accomplished,be returned or disposed of according to the directions of the person delivering them. The person delivering the goods is called the 'bailor' and the person to whom the goods are delivered is called the 'bailee'. The examples of a contract of bailment are:- delivering a watch or radio for repair; leaving a car or scooter at a parking stand; leaving luggage in a cloak room; delivering gold to a goldsmith for making ornaments; leaving garments with a dry cleaner,etc. The essence of bailment is the transfer of possession. The ownership remains with the owner. There cannot be a bailment of immovable property.

A 'pledge' is a bailment of goods wherein the goods are delivered as a security for payment of a debt or performance of a promise.The bailor is called the 'pledgor' or 'pawnor' and the bailee is called the 'pledgee' or 'pawnee'. Thus, pledge is a special kind of bailment. Pledge can be made only of movable properties. In order to make the pledge legally valid it is essential that the pledgor has the legal right or title to retain the goods. 

Difference between Bailment and Pledge:

• Purpose: A pledge is made for a specific purpose, while bailment can be made for any purpose.

• Property: In bailment, the bailee gets only the possession of goods bailed. The ownership remains with the bailor. In the case of pledge, the pledgee acquires a special property in the goods pledged whereby he gets possession coupled with the power of sale, on default.

• Right of sale : Bailee can exercise a lien on the goods bailed. He has no right of sale. But in case of a pledge, the pledge can sell the goods after due notice to pawner.

Contracts of Agency

An 'Agent' is a person employed to do any act or to represent another in dealings with third persons. The person who employs the agent and for whom such act is done,or who is so represented,is called the 'principal'. The relation between the agent and the principal is called 'Agency'. It is only when a person acts as a representative of the other in the creation,modification or termination of contractual obligations,between that order and third persons,that he is an agent. The essence of a contract of agency is the agent's representative capacity coupled with a power to affect the legal relations of the principal with third persons.

Contracts of agency are based on two important principles:

• Whatever a person can do personally shall also be allowed to be done through an agent except in case of contracts involving personal services such as painting, marriage, singing, etc.

• He who does an act through a duly authorised agent does it by himself i.e. the acts of the agent are considered the acts of the principal.