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Friday, July 20, 2018
DoT moves ASG again, seeking legal opinion on Idea-Voda merger

DoT moves ASG again, seeking legal opinion on Idea-Voda mergerSeeks clarification on payment of administratively-held spectrum and M&A guidelines
In a move that might further delay the merger between Vodafone India and Idea Cellular, the Department of Telecommunications (DoT) has once again sought the opinion of the Additional Solicitor-General (ASG) on payment of administratively-held spectrum and clarity on guidelines related to mergers and acquisitions.
Administratively-allocated spectrum pertains to radio waves given to an operator outside the auction process. Prior to 2010, spectrum was given on a subscriber-linked criteria. Post 2010, all airwaves have been allocated through an auction process, thereby creating a difference in pricing.

This is the second time that the licensor is seeking the ASG’s approval for the impending merger.

Clarifications on merger

In the latest move, the department has sought clarifications on whether the demand for the differential between the initial fee and the market-determined price of administratively-allocated spectrum held by Vodafone is to be raised, in respect of the amalgamation of its subsidiaries in 2014-15, or in connection with the proposed merger with Idea Cellular.

According to the licensor, Vodafone India merging four of its units — Vodafone East, Vodafone South, Vodafone Cellular and Vodafone Digilink with Vodafone Mobile Services in 2014-15 — should be considered the first merger. The proposed merger with Idea should be considered the second merger, sources close to the development told BusinessLine.

Further, DoT has also sought clarification on whether it should raise the demand for the total administratively-allocated spectrum, or for the up to 4.4 MHz held by Vodafone.

DoT has also asked the ASG if bank guarantees from Idea should be for its entire spectrum, on a one-time spectrum charges (OTSC) basis, or only for radio waves beyond 4.4 MHz.

Idea Cellular, an Aditya Birla Group company, held administrative spectrum across Mumbai, Delhi, Rajasthan, Uttar Pradesh (East), Bihar and Himachal Pradesh circles as on January 19, 2018.

When Vodafone units were merged with itself (the first merger, according to DoT), the licensor had sought ₹6,678 core as OTSC dues, which was challenged by the operator in court. Following a Supreme Court order, Vodafone paid ₹2,000 crore for the deal. (Source: The Hindu BusinessLine)
Idea-Vodafone merger may get delayed as DoT readies fresh demand of Rs 4,700 crore

Idea-Vodafone merger may get delayed as DoT readies fresh demand of Rs 4,700 croreIn 2015, Vodafone had merged its four subsidiaries Vodafone East, Vodafone South, Vodafone Cellular and Vodafone Digilink with Vodafone Mobile Services, which is now called Vodafone India.

The mega-merger deal of Idea Cellular and Vodafone India may not meet the expected June 30 timeline as the telecom department is looking to raise a fresh demand of around Rs 4,700 crore, a source said. The demand will be raised from Vodafone India before its merger with Idea Cellular.

"Vodafone India had merged its all arm into one company and there are dues of around Rs 4,700 crore related to one-time spectrum charges (OTSC) on the company. DoT will ask Vodafone to either clear dues or furnish bank guarantee before merger with Idea," an official source told PTI.

In 2015, Vodafone had merged its four subsidiaries Vodafone East, Vodafone South, Vodafone Cellular and Vodafone Digilink with Vodafone Mobile Services, which is now called Vodafone India. DoT at that time had asked Vodafone to clear OTSC dues worth Rs 6,678 core but the company challenged it in court. Following Supreme Court order, Vodafone had paid only Rs 2,000 crore to get the deal cleared.

The telecom minister Manoj Sinha is learnt to have asked DoT (Department of Telecommunications) to take legal opinion whether a demand regarding OTSC dues can be sought from Vodafone India. "The DoT has received legal opinion which affirms that a demand can be raised from Vodafone," the source said.

The official said that final amount is still being worked out, which may involve interest as well and it is likely to be raised next week.

"DoT is working on fresh demand expeditiously and may issue it next week. The demand note will have to be drafted meticulously and there are lot of complexity involved. Therefore, DoT needs some time," the officer said.The demand will be in addition to bank guarantee of around Rs 2,100 crore that DoT will seek from Idea for OTSC dues.

Both Idea and Vodafone were expecting the merger deal to create India's largest telecom company to be completed by June 30, 2018. The merged entity is proposed to be named as Vodafone Idea Limited if approved by shareholders of Idea Cellular. It is estimated to have over 40 crore mobile customers from day 1 and 41 per cent revenue market share.

Vodafone Group and existing promoters of Idea will hold 45.1 and 26 per cent of the equity share capital of the merged company, respectively and the balance 28.9 per cent will be held by the public shareholders. (Source: ETtelecom)

Telecom department may clear Vodafone-Idea merger tomorrow

Telecom department may clear Vodafone-Idea merger tomorrowIdea and Vodafone have decided to combine their operations to create the country's largest telecom operator worth over USD 23 billion (or over Rs 1.5 lakh crore), with a 35 per cent market share.

The telecom department is likely to approve tomorrow the merger of Vodafone India and Idea Cellular that will create the country's largest mobile service operator with proposed name of Vodafone Idea Ltd. "DoT is expected to clear the Vodafone-Idea merger on Monday. The certificate will be handed to them," an official source told PTI.

Idea and Vodafone have decided to combine their operations to create the country's largest telecom operator worth over USD 23 billion (or over Rs 1.5 lakh crore), with a 35 per cent market share and a subscriber base of around 430 million.

The proposed merger is expected to give breather to both debt-ridden firms Idea and Vodafone, from cut-throat competition in the market where margins have hit rock bottom with free voice calls. The combined debt of both the companies is estimated to be around Rs 1.15 lakh crore.

"The merger will be taken on-record after Idea furnishes required bank guarantee and gives undertaking of owning the liabilities of Vodafone India that may arise in future," the source said.

The Department of Telecom (DoT) will seek a bank guarantee of around Rs 2,100 crore pertaining to one-time spectrum fee of Idea Cellular and undertaking that the resultant will clear dues pertaining to one-time spectrum fee and other sub-judice matter in accordance with the court's order.

Idea will be asked to replace one-year bank guarantee of Vodafone India submitted for deferred spectrum payment.
Vodafone and Idea will have to give undertaking of clearing dues that are sub-judice as per decision of the courts, the source said.
Idea will hold extraordinary general meeting on June 26 to change its name to Vodafone Idea Limited following the completion of merger.

Vodafone will own 45.1 per cent in the combined entity, while Kumar Mangalam Birla-led Aditya Birla Group would have 26 per cent and Idea shareholders 28.9 per cent.

Birla is proposed to be the non-executive chairman of the merged entity and Balesh Sharma is likely to be the new CEO.
Idea's chief financial officer Akshaya Moondra will head the financial operations of the new entity as its CFO.
Ambrish Jain (currently the deputy MD at Idea Cellular) is set to become the new chief operating officer. (Source: The New Indian Express)

Ad council panel upholds Airtel complaint against Reliance Jio

Ad council panel upholds Airtel complaint against Reliance JioThe latest salvo follows complaints that Jio had made earlier made to ASCI about Airtel's speed claims and in courts against its campaign of broadcasting IPL matches in partnership with Hotstar.

The advertising watchdog's fast track panel on complaints has upheld a complaint by Bharti Airtel against Reliance Jio's advertisements that claimed its data network being the best and the largest, and said the ads were misleading by "ambiguity" and "implication".

Upholding other complaints of Airtel, the Fast Track Complaints Panel (FTCP) of the Advertising Standards Council of India (ASCI) ruled that Jio's claims of "best entertainment" through television commercials and YouTube ads, was not substantiated.

ET reviewed a copy of the interim ruling.  In a statement issued on Sunday, however, Jio said the advertising panel was yet to take a final decision, and termed Airtel's allegations as "frivolous". "This is another instance of an incumbent dominant operator thwarting every initiative of a new entrant to offer state-of-the-art digital services to Indian consumers," it said. 

It's the latest in a series of fights over advertisements between the two. They are involved in a bitter duel for subscribers in the market through tariffs and other means such as content and other services, besides speed of their networks, where, according to experts, perception is sometimes more important than actuals

In mid-May, Airtel had complained that there was no basis - either through clarification or independent third-party data - for Jio to substantiate its claims made in its advertisements, and, therefore, they were violated ASCI code. There are larger networks than Jio in the world and also those that provide better benefits and are faster in terms of speed, it said.

Airtel alleged that Jio was aiming to entice and lure viewers to subscribe to its network through misrepresentation."This complaint was upheld. The TVC and the YouTube advertisement contravened Chapter 1.4 of the ASCI Code," the panel said on the three separate complaints filed by Airtel against Jio's claims of best and largest network, best entertainment and best post-paid offers.

The observations are interim, with the next date of meeting between the panel and Jio set for June 18.

"The FTCP was of the opinion that 'data consumption' cannot be the parameter to claim 'largest mobile data network'. The infrastructure as well as the number of subscribers, are important parameters for which the complainant provided evidence that China Mobile Ltd has larger number of 4G base stations as well as subscriber base," the panel said. It said the claim refers to only "consumption of data" and not the extent and infrastructure of network. The panel said Jio's claims of offering the "best post-paid offers" was misleading by "omission" since it is not clear what aspect of the advertiser's product was being compared with what aspects of competitors' products.

Jio, however, said the matter was still under discussion with ASCI.

"We believe that the recommendations at this stage do not reflect the submissions made and favourable views expressed by ASCI during the course of discussions. We have followed up with further submissions and clarifications so that the right decision is made," a Jio spokesperson said in response to ET's queries. The latest salvo follows complaints that Jio had made earlier made to ASCI about Airtel's speed claims and in courts against its campaign of broadcasting IPL matches in partnership with Hotstar. 

"Telecom is the new cola in the hands of the new consumer of new India. The category is about speed. And speed is therefore the cutting edge USP. The battle happens here," said brand consultant Harish Bijoor.  "Perception, sadly, is more important than the truth. In the category of the TSP, the perceptual is more important than the real. Therefore, this battle and the war," he said. (Source: ETTelecom)

COAI mulls legal options on Jio defamation suit

COAI mulls legal options on Jio defamation suitA group representing the country’s major telecom operators is evaluating legal options to counter a defamation suit filed by Reliance Jio Infocomm, one of its members, against it and its director general. A group representing the country’s major telecom operators is evaluating legal options to counter a defamation suit filed by Reliance Jio Infocomm, one of its members, against it and its director general. The Delhi High Court accepted the defamation suit against the Cellular Operators Association of India last week. In an interim order, the court asked the association and director general Rajan Mathews to refrain from using “disparaging and defamatory” words or phrases against Mukesh Ambani-owned Jio, which the telco alleged, had hurt its reputation.

Jio’s allegations were “patently misconceived” as all communications were “issued in good faith” and were made to call attention to “regulatory decisions that are detrimental to the growth and development of the telecom sector and to seek intervention of the regulator,” COAI said in a statement on Sunday.“COAI is well within its rights to hold and voice its views on regulatory and policy issues. The matter is currently sub judice and we are in the process of considering and evaluating our legal options,” Mathews said.

He added that it was disappointing to see a member take legal steps against the association. “We believe the allegations are without merit and we intend to defend ourselves vigorously,” said Mathews. Jio had alleged that the industry body and its DG had tried to thwart its entry into the telecom market and later stifle its growth while advancing the interests of other members, including India’s top three telcos Bharti Airtel, Vodafone India and Idea Cellular, which together account for more than 60% of the nation’s mobile phone subscribers.

Jio, which has signed up more than 186 million subscribers (15.7% market share) since starting operations in September 2016, had alleged that COAI’s previous statements had reflected its biases against the telco. The industry body has alleged that some of the Telecom Regulatory Authority of India’s decisions, including local interconnection rate cuts, were detrimental to the industry and favoured Jio. The association defended its comments, saying that a “clear, stable and predictable policy environment is the foremost requirement of any regulatory regime that fosters industry growth and customer services.”

The industry body hoped that the legal authorities would take “a more balanced view on this issue, which may be impacting the relationship of the member and the association and also the entire industry.” Earlier, the regulator and Jio had dismissed as “baseless” allegations by India’s top three operators that Trai’s recent rulings and policies were biased against them. Trai had said the companies were free to move court if they found any anomaly in its orders. (ETTelecom)

Facebook gave over 60 phone companies deep access to data on users and friends

Facebook gave over 60 phone companies deep access to data on users and friendsAs Facebook sought to become the world’s dominant social media service, it struck agreements allowing phone and other device-makers access to vast amounts of its users’ personal information. Facebook has reached data-sharing partnerships with at least 60 device-makers — including Apple, Amazon, BlackBerry, Microsoft and Samsung — during the last decade, starting before Facebook apps were widely available on smartphones, company officials said. The deals, most of which remain in effect, allowed Facebook to expand its reach and let device-makers offer customers popular features of the social network, such as messaging, “like” buttons and address books.

But the partnerships, whose scope has not previously been reported, raise concerns about the company’s privacy protections and compliance with a 2011 consent decree with the Federal Trade Commission. Facebook allowed the device companies access to the data of users’ friends without their explicit consent, even after declaring that it would no longer share such information with outsiders. Some device-makers could retrieve personal information even from users’ friends who believed they had barred any sharing, The New York Times found.

Facebook came under intensifying scrutiny by lawmakers and regulators after news reports in March that a political consulting firm, Cambridge Analytica, misused the private information of tens of millions of Facebook users.

In the furor that followed, Facebook’s leaders said that the kind of access exploited by Cambridge in 2014 was cut off by the next year, when Facebook prohibited developers from collecting information from users’ friends. But the company officials did not disclose that Facebook had exempted the makers of cellphones, tablets and other hardware from such restrictions.

“You might think that Facebook or the device manufacturer is trustworthy,” said Serge Egelman, a privacy researcher at the University of California, Berkeley, who studies the security of mobile apps. “But the problem is that as more and more data is collected on the device — and if it can be accessed by apps on the device — it creates serious privacy and security risks.”

In interviews, Facebook officials defended the data sharing as consistent with its privacy policies, the FTC agreement and pledges to users. They said its partnerships were governed by contracts that strictly limited use of the data, including any stored on partners’ servers. The officials added that they knew of no cases where the information had been misused.

The company views its device partners as extensions of Facebook, serving its more than 2 billion users, the officials said.

“These partnerships work very differently from the way in which app developers use our platform,” said Ime Archibong, a Facebook vice president. Unlike developers that provide games and services to Facebook users, the device partners can use Facebook data only to provide versions of “the Facebook experience,” the officials said.

Some device partners can retrieve Facebook users’ relationship status, religion, political leaning and upcoming events, among other data. Tests by The Times showed that the partners requested and received data in the same way other third parties did.

Facebook’s view that the device-makers are not outsiders lets the partners go even further, The Times found:They can obtain data about a user’s Facebook friends, even those who have denied Facebook permission to share information with any third parties.

In interviews, several former Facebook software engineers and security experts said they were surprised at the ability to override sharing restrictions.

“It’s like having door locks installed, only to find out that the locksmith also gave keys to all of his friends so they can come in and rifle through your stuff without having to ask you for permission,” said Ashkan Soltani, a research and privacy consultant who formerly served as the FTC’s chief technologist.

Details of Facebook’s partnerships have emerged amid a reckoning in Silicon Valley over the volume of personal information collected on the internet and monetized by the tech industry. The pervasive collection of data, while largely unregulated in the United States, has come under growing criticism from elected officials at home and overseas and provoked concern among consumers about how freely their information is shared.

In a tense appearance before Congress in March, Facebook’s chief executive, Mark Zuckerberg, emphasized what he said was a company priority for Facebook users."Every piece of content that you share on Facebook you own,” he testified. “You have complete control over who sees it and how you share it.”

But the device partnerships provoked discussion even within Facebook as early as 2012, according to Sandy Parakilas, who led Facebook’s third-party advertising and privacy compliance department at the time.

“This was flagged internally as a privacy issue,” said Parakilas, who left Facebook that year and has recently emerged as a harsh critic of the company. “It is shocking that this practice may still continue six years later, and it appears to contradict Facebook’s testimony to Congress that all friend permissions were disabled.”

The partnerships were briefly mentioned in documents submitted to German lawmakers investigating the social media giant’s privacy practices and released by Facebook in mid-May. But Facebook provided the lawmakers with the name of only one partner — BlackBerry, maker of the once-ubiquitous mobile device — and little information about how the agreements worked.

The submission followed testimony by Joel Kaplan, Facebook’s vice president for global public policy, during a closed-door German parliamentary hearing in April. Elisabeth Winkelmeier-Becker, one of the lawmakers who questioned Kaplan, said in an interview that she believed the data partnerships disclosed by Facebook violated users’ privacy rights.

“What we have been trying to determine is whether Facebook has knowingly handed over user data elsewhere without explicit consent,” Winkelmeier-Becker said. “I would never have imagined that this might even be happening secretly via deals with device-makers. BlackBerry users seem to have been turned into data dealers, unknowingly and unwillingly.”

In interviews with The Times, Facebook identified other partners: Apple and Samsung, the world’s two biggest smartphone makers, and Amazon, which sells tablets.

An Apple spokesman said the company relied on private access to Facebook data for features that enabled users to post photos to the social network without opening the Facebook app, among other things. Apple said its phones no longer had such access to Facebook as of last September. Samsung declined to respond to questions about whether it had any data-sharing partnerships with Facebook. Amazon also declined to respond to questions.

Usher Lieberman, a BlackBerry spokesman, said in a statement that the company used Facebook data only to give its own customers access to their Facebook networks and messages. Lieberman said that the company “did not collect or mine the Facebook data of our customers,” adding that “BlackBerry has always been in the business of protecting, not monetizing, customer data.”

Microsoft entered a partnership with Facebook in 2008 that allowed Microsoft-powered devices to do things like add contacts and friends and receive notifications, according to a spokesman. He added that the data was stored locally on the phone and was not synced to Microsoft’s servers.

Facebook acknowledged that some partners did store users’ data — including friends’ data — on their own servers. A Facebook official said that regardless of where the data was kept, it was governed by strict agreements between the companies.

“I am dumbfounded by the attitude that anybody in Facebook’s corporate office would think allowing third parties access to data would be a good idea,” said Henning Schulzrinne, a computer science professor at Columbia University who specializes in network security and mobile systems.

The Cambridge Analytica scandal revealed how loosely Facebook had policed the bustling ecosystem of developers building apps on its platform. They ranged from well-known players like Zynga, the maker of the “FarmVille” game, to smaller ones, like a Cambridge contractor who used a quiz taken by about 300,000 Facebook users to gain access to the profiles of as many as 87 million of their friends.

Those developers relied on Facebook’s public data channels, known as application programming interfaces, or APIs. But starting in 2007, the company also established private data channels for device manufacturers. At the time, mobile phones were less powerful, and relatively few of them could run stand-alone Facebook apps like those now common on smartphones. The company continued to build new private APIs for device-makers through 2014, spreading user data through tens of millions of mobile devices, game consoles, televisions and other systems outside Facebook’s direct control.

Facebook began moving to wind down the partnerships in April, after assessing its privacy and data practices in the wake of the Cambridge Analytica scandal. Archibong said the company had concluded that the partnerships were no longer needed to serve Facebook users. About 22 of them have been shut down. The broad access Facebook provided to device-makers raises questions about its compliance with a 2011 consent decree with the FTC.

The decree barred Facebook from overriding users’ privacy settings without first getting explicit consent. That agreement stemmed from an investigation that found Facebook had allowed app developers and other third parties to collect personal details about users’ friends, even when those friends had asked that their information remain private.

After the Cambridge Analytica revelations, the FTC began an investigation into whether Facebook’s continued sharing of data after 2011 violated the decree, potentially exposing the company to fines.

Facebook officials said the private data channels did not violate the decree because the company viewed its hardware partners as “service providers,” akin to a cloud computing service paid to store Facebook data or a company contracted to process credit card transactions. According to the consent decree, Facebook does not need to seek additional permission to share friend data with service providers.

“These contracts and partnerships are entirely consistent with Facebook’s FTC consent decree,” Archibong, the Facebook official, said. But Jessica Rich, a former FTC official who helped lead the commission’s earlier Facebook investigation, disagreed with that assessment. “Under Facebook’s interpretation, the exception swallows the rule,” said Rich, now with the Consumers Union. “They could argue that any sharing of data with third parties is part of the Facebook experience. And this is not at all how the public interpreted their 2014 announcement that they would limit third-party app access to friend data.”

To test one partner’s access to Facebook’s private data channels, The Times used a reporter’s Facebook account — with about 550 friends — and a 2013 BlackBerry device, monitoring what data the device requested and received. (More recent BlackBerry devices, which run Google’s Android operating system, do not use the same private channels, BlackBerry officials said.) Immediately after the reporter connected the device to his Facebook account, it requested some of his profile data, including user ID, name, picture, “about” information, location, email and cellphone number. The device then retrieved the reporter’s private messages and the responses to them, along with the name and user ID of each person with whom he was communicating.

The data flowed to a BlackBerry app known as the Hub, which was designed to let BlackBerry users view all of their messages and social media accounts in one place. The Hub also requested — and received — data that Facebook’s policy appears to prohibit. Since 2015, Facebook has said that apps can request only the names of friends using the same app. But the BlackBerry app had access to all of the reporter’s Facebook friends and, for most of them, returned information such as user ID, birthday, work and education history and whether they were currently online.

The BlackBerry device was also able to retrieve identifying information for nearly 295,000 Facebook users. Most of them were second-degree Facebook friends of the reporter, or friends of friends. In all, Facebook empowers BlackBerry devices to access more than 50 types of information about users and their friends, The Times found. (Source: Economic Times)

DoT extends deadline for comments on new telecom policy to June 1

DoT extends deadline for comments on new telecom policy to June 1 The Department of Telecommunications (DoT) today extended the deadline for submission of public comments on the new telecom policy to June 1 as many stakeholders had sought more time to give their views, according to an official release.

The DoT had released the draft of the policy branded as National Digital Communications Policy, 2018, on May 1 and invited public comments by May 25. The department received request from several stakeholders to provide more time for giving inputs on the draft policy, the release said.

“The Department of Telecommunications has extended the last date for submission of comments on the recently published draft National Digital Communications Policy(NDCP), 2018. Public and stakeholders can give their comments till 1st June 2018 through the MyGov portal, where the draft Policy has been hosted for public comments,” it said. “The key objectives of the Policy include broadband for all, creating 4 million additional jobs in the Digital Communications sector, enhancing the contribution of the digital communications sector to 8 per cent of India’s GDP from around 6 per cent in 2017,” the statement said.

It also aims to propelling India to the top 50 Nations in the ICT Development Index of ITU from 134 in 2017, enhancing India’s contribution to Global Value Chains, and ensuring Digital Sovereignty of the country. The policy aims to attract over 6.5 lakh crore investment in the sector and ensure broadband coverage at 50 mbps for every citizen by 2022. It also proposes to address the woes of debt-ridden telecom sector by reviewing licence fees, spectrum usage charges, universal service obligation fund levy — all of which add to cost of telecom services.(Source: Financial Express)

Arbitration panel to hear Vodafone challenge to Rs 22,100 cr tax in Feb 2019

Arbitration panel to hear Vodafone challenge to Rs 22,100 cr tax in Feb 2019An international arbitration tribunal will in February next year begin hearing in British telecom giant Vodafone's challenge to India using a retrospective legislation to seek Rs 22,100 crore in taxes. The tribunal, headed by Sir Franklin Berman, will hear the government's objection to tax matters being covered under the Netherlands-India Bilateral Investment Treaty, which was used by Vodafone to trigger an arbitration over the tax demand, a senior official with direct knowledge of the development said.

India has also challenged tribunal's jurisdiction to decide on such matters, he said.

While Vodafone is supposed to file its response to the government objection by July, India will respond to this by December, he said, adding that thereafter the tribunal will begin hearing in February 2019.

Vodafone has challenged India using a 2012 legislation that gave it powers to retrospective tax deals like Vodafone's USD 11-billion acquisition of 67 per cent stake in the mobile phone business owned by Hutchison Whampoa in 2007.

It has challenged the demand of Rs 7,990 crore in capital gains taxes (Rs 22,100 crore after including interest and penalty) under the treaty.

Tax authorities had in September 2007 served notice to Vodafone International Holdings BV for its alleged failure to deduct withholding tax from consideration paid to the Hutchison Telecommunications International Ltd.

Vodafone challenged this in the Supreme Court, which in January 2012 set it aside saying the transaction was not taxable in India and so the company had no obligation to withhold tax.

In May that year, Parliament passed the Finance Act 2012 that amended various provisions of the Income Tax Act 1961 with retrospective effect to tax any gain on transfer of shares in a non-Indian company, which derives substantial value from underlying Indian assets.

The company was in January 2013 served a tax notice of Rs 14,200 crore after including interest on the principal amount. A year later, Vodafone challenged the tax demand under the Dutch BIT. The official said the company in April 2014 served the notice of arbitration after out-of-the-court dispute resolution talks failed.

The tax department in February 2016 served a demand notice of Rs 22,100 crore, including interest accruing since the date of the original demand.

Vodafone has maintained that there is no liability and that it will "continue to defend vigorously any allegation that VIHBV or Vodafone India Ltd is liable to pay tax in connection with the transaction with Hutchison and will continue to exercise all rights to seek redress". (Source: Economic Times)

Apple-Samsung iPhone design copying case goes to jury

Apple-Samsung iPhone design copying case goes to jurySamsung no longer sells the smartphone models at issue in the case.

Jurors return to a Silicon Valley courtroom Monday to put a price on patented iPhone design features copied by Samsung in a legal case dating back seven years. Apple is seeking slightly more than a billion dollars in damages, while Samsung wants a figure closer to $28 million. The jury has been asked to determine whether design features at issue in the case are worth all profit made from Samsung smartphones that copied them or whether those features are worth just a fraction because they are components.

"Samsung isn't saying it isn't required to pay profits," Samsung attorney John Quinn said during closing arguments on Friday.
"It is just saying it isn't required to pay profits on the whole phone." The three design patents in the case apply to the shape of the iPhone's black screen with rounded edges and a bezel, and the rows of colorful icons displayed.

Samsung no longer sells the smartphone models at issue in the case.
Two utility patents also involved apply to "bounce-back" and "tap-to-zoom" functions.

"This is a case that is focused on design, and the application of design to smartphones," Apple attorney Joseph Mueller said in closing arguments.

When one company copies a rival's design, that "is not a level playing field, and that is just not right," he contended.
Apple argued in court that the iPhone was a "bet-the-company" project at Apple and that design is as much the "article of manufacture" as the device itself.

Apple attorney Bill Lee equated the notion to a carmaker copying the look of the Volkswagen Beetle and coming to market with a competing model.
Determining whether the design features qualify as the "article of manufacture" will be key to whether jurors award the profit from all the Samsung phones involved, according to legal standards presented by the court.

The case dates back seven years. An original trial finding that Samsung violated Apple patents was followed by lengthy appellate dueling over whether design features such as rounded edges are worth all the money made from a phone.

Technology vs Style

Samsung, which had been ordered to pay $400 million, challenged the legal precedent that requires the forfeiture of all profits from a product even if only a single design patent has been infringed.

The US Supreme Court in 2016 overturned the $400 million patent infringement penalty imposed on the South Korean consumer electronics giant.

Justices ruled that Samsung should not be required to forfeit the entire profits from its smartphones for infringement on design components, sending the case back to a lower court.

The ruling found that the penalty -- one element of a major patent infringement case -- was inappropriate because it represented "Samsung's entire profit from the sale of its infringing smartphones" for copying the iPhone's "rectangular front face with rounded edges and a grid of colorful icons on a black screen."

The key question of the value of design patents rallied Samsung supporters in the tech sector, and Apple backers in the creative and design communities.

Samsung won the backing of major Silicon Valley and other IT sector giants, including Google, Facebook, Dell and Hewlett-Packard, claiming a strict ruling on design infringement could lead to a surge in litigation.

Apple was supported by big names in fashion and manufacturing. Design professionals, researchers and academics, citing precedents like Coca-Cola's iconic soda bottle.

The Supreme Court stopped short of delving into details of how the lower court should determine how much phone design components are worth when it comes to patent infringement violations.

Presiding US District Court Judge Lucy Koh gave jurors in her San Jose courtroom a four-factor test to determine an "article of manufacture," but it is up to the panel to decide how the evidence fits that framework.

The case is one element of a $548 million penalty -- knocked down from an original $1 billion jury award -- Samsung was ordered to pay for copying iPhone patents. (Source: ETtelecom)

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