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TRANSFORMATION OF CORPORATE LAW THROUGH TECHNOLOGY


INTRODUCTION

Technology has been rapidly occupying its significance in each and every segment of world’s working and it is an undeniable truth that technology is also revolutionizing the business world. Not only this it is also continuously expanding and changing every field. One important aspect which is need to be understood is that here corporate law involves in two ways, one is with respect to law firms and second is with respect to business because of the reason that legal guidance is needed in every business. The reason why it is important to understand technology with respect to corporate is of the fact that technology is one way recognised as one of the necessary method for growth, and also the way forward for any business to expand.


The term corporate law is actually a study of legal and external affair matters of companies, it reflects how consumers, stakeholders, shareholders and other parties gets involves in various transactions. The main part which is involved here is that internally they interact through corporate governance and externally through various commercial transactionTherefore corporate law is comprehensive term which is covering larger portion of the corporate sector. The question involved here is that who will be held liable if there is a situation where the technology itself malfunctions because there is no living entity involved

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INDIAN CONTEXT WITH RESPECT TO LAW SOCIETY

There is no doubt in that technology makes working and management easier and efficient that is the reason number of good technologies help in doing various tasks like reviewing the documents, contract making, doing legal research, most importantly it makes comprehensive client managements. The technology adopters have significantly analysed its impact on business as well as in the practice areas of law. With the increase of Artificial Intelligence, firms have evidently observed increased accuracy with an improved resource management. As per research by the Law Society, the law firms which are using Artificial Intelligence have seen a significant saving of a times which is between 20% and 60% on the review.

There is no doubt in that market has many options of LegalTech for various business components and practice in law. At the same time one issue which generally involves is the adoption of technology because of the process which revolves around the same is some way critical.


INNOVATION THROUGH TECHNOLOGY AND SUCCESS

World is aware of the fact that Legal has formed its own space and reputation and at the same time it is also resistant to change but the external pressure is forcing law firms one way or the other to bridge the gap between the profession and the technology. It is an evident fact that legal profession has been seen as the most competitive field. In contemporary, in addition to the competition from neighbouring law firms, lawyers also contend competition with non-legal service provider firms as well. Apart from all this the main issue when it comes to a Corporate law firm, even though they see large structural changes but still they tend to stick to their own structure that is to say they continue to maintain their traditional partnership and the organizational form. Apart from this good corporate governance can be attained through technology. Illustration for the same is e-filing of a Trademark Application which is a simple process.


INTERFACE BETWEEN TECHNOLOGY AND CORPORATES

It is very important to understand technology in connection to corporates because there might be situations where a lot of issues can take place between these two sectors. Since it has already been mentioned that corporates here will be dealt in two ways one viz-a-viz to law, second in general market context. If one may observe carefully then it will be evidently known that India does not have much exhaustive laws when it comes to technology. Recently some amendments has been made in the Consumer Protection Act, these amendments also specifically related to the e-commerce sector as well. The purpose behind the passing the Consumer Protection Act,2019 is to keeping in mind the challenges which are faced by the consumers in the digital age. Anyhow this is with respect to consumers but there are sectors and issues which are still left, where technology is stepping but there is no specific regulations. It is very important to understand technology and more importantly to understand the IT law. Use of technology is being seen much as it was ever seen before in the corporate sector since the advent of Covid-19. The main question which involves here is that if corporate sector is getting evolved so much due to technology then the corporate law also tend to evolve as per the market requirements and needs.


Apart from this Indian companies are using technologies to reach consumers, digital technologies facilitates interactions at the micro and macro levels which provides an opportunity to tap large groups of customers. No doubt in that in India, 21st Century digital technology exists but at the same time its exists with the 19th century challenges. The Information technology Act, 2000 which is made particularly aims towards the growth and development of the e-commerce sector but it fails to satisfy the consumer confidence and satisfactory so far consumer perspective is involved. Seeing this gap new provisions has been made in the Consumer Protection Act, 2019 which are also not very exhaustive in its nature.

REQUIREMENT OF LEGAL ASPECTS IN TECHNOLOGY UNDER CORPORATE LAW

There are certain requirements when it comes to technology and corporate law lets take an illustration of Intellectual Property Rights with respect to Indian companies. It is well known fact that India is signatory of TRIPS and in the last few years it has been observed that India has enacted fully TRIPs compliant Trademarks Act, Copyright Act, Designs Registration Act and also the other Acts relating to the this field. Discussing it further most of the Acts are TRIPS compliance. As far as Patent Acts is involved to comply with TRIPS, substantive or procedural amendments can be made.


While doing all these changes what is required is that keeping in view about the Indian companies and that to by giving protection under the Patents Acts to business methods which are qualifying as technology, also those are not patentable so far. The major drawback is that business methods qualifying as technology or the computer programming which compromises of only mathematical or scientific principles, are not patentable under the present Act. Therefore this marks as a question whether IPR viz-a-viz technology is a boon to Indian companies?


Next question which comes to the hand is that how much IPR is important when it comes to the companies, if one may look carefully it will be noted that the globalisation and rapid increase in the technology have also simultaneously increased importance of the intellectual property protection specifically when it comes to small and medium sized enterprises. Understanding this in broader way from the perspective of biotechnology industry which also has a strong and the effective Intellectual property system. For the biotechnology companies a strong intellectual protection is essentially required to the success. Now from the perspective of these companies what is required is the patent which will also encourage development of new medicine. The actual gap is that as far as the interpretation of the TRIPS is concerned public health should be the prime rather than merely protecting the interests of the company.


IPR AND COMPETITION LAW

Discussing it further in the areas of competitive law, competition Commission of India has established the Competition Act, 2002 and the objective of the same it to prohibit the anti-competitive agreements. Apart from this technology holder also has the every right to impose reasonable conditions for the protection of any Intellectual Property rights for the reason to restrain the infringement. Technology transfer which can lead to an abuse of market position by imposing such kind of unreasonable conditions which are not essential for protection of Intellectual Property Rights would be considered as anticompetitive. Following can be the situations where technology transfer can be considered as a anticompetitive. Like when two or more companies come together and cross license the technology specific to technology so that they can restrict others to acquire it. Second it could be to prohibit the rival company from technology and its usage. Now coming to the relevance of the intellectual property for the purpose of business.


A company should be active enough in implementing Intellectual Property solutions and also to identify innovations and increase in the revenues. The reason for the same is that intellectual Property is not just limited to technology but it also pays a lot of value to those business which invests a lot of sums, research for creating a new valuable product. What is important here is that a thorough and well understanding can help the organization specifically when it comes to managing the patent portfolios.The most important question which arises here is that whether the technology pose a threat from the competition? Answering this question its important firstly to understand the out - licensing patented technologies and why would company out-license the valued assets to others. The probable reason could be to drive more revenues. Anyway there are two reasons which are helping to actually drive the increase in the more number of out-licensing deals. The very first is that it creates more challenging environment for the development or for the advent of the new product. Secondly to narrow the Research and Development (R&D) budgets. As far as potential market is concerned with respect to the software tech industry, is something which is increasing at the rapid rate and also becoming one of the leading destinations for Information technology and facilitating for Information technology. India has been the now the ideal choice for companies and also for the market needs as well.


REGULATIONS WITH RESPECT TO ARTIFICIAL INTELLIGENCE IN VARIOUS INDUSTRIES

Since Artificial Intelligence is making its presence all over the world. There are various industries where can we see the Artificial Intelligence robots have been developed, one such illustration is Sophia which is actually a AI human-like robot it has been developed by Hong Kong-based company. Apart from this it also became the first robot in the whole world which became citizen of Saudi Arabia, Sophia was also vested with all the rights and duties of the citizen as well. This was the world scenario but the main question is regarding the citizenship which is being given to the Artificial Intelligence which is also a question of law because considering the same with respect to India there is no such regulation though which an artificial Intelligence can be given a citizenship. No doubt in that company is considered as a separate legal entity which also means that it can sue or can be sued in its own name but at the same time the word ‘artificial’ legal entities given to company is narrow and it does not include the word Artificial Intelligence.


What is actually required is the need for regulation for Artificial Intelligence that is AI specifically to robots which are permeating in various industries. There are countries which have come with certain regulations like USA for regulating the conduct of Robots but there is no such regulation which have came in India so far. The existing laws are only pertaining to humans and Company that is to say there are criminal laws, civil laws and also laws relating to corporates and its governance. Another question which are coming into the context are like a driverless car which is running on Artificial Intelligence which can also cause loss of life and property but there are no existing laws which can make AI responsible or liability can be imposed for the damaged caused. Apart from this insurance companies can also refuse to acknowledge the claim with respect to AI because there is no such clause given the insurance laws and policy before the entering into the contract. Thus there is need for the making of laws which can make Artificial Intelligence accountable for injuries which can be caused to the society.


CONCLUSION

In the era of digitalization what we need to understand is that inclusion of technology in the business sector is taking place but with some issues and problems also because of which it is very genuine to know that law too has to step in the same for the resolution. When this happens then it certainly leads to the transformation of the corporate law as well because what is required to be understood here is that if some function is being installed in the technology/ Artificial Intelligence per se lets assume the functions has been installed relating to Intellectual Property Rights, Sale and Purchase or it could be relating to the contract. The fact is the one can install function and the technology/ Artificial Intelligence will work as per the installed programming or the instructions given means that it will repetitively perform the same function but this is not in the case of humans once they learn about the provisions and the regulations they are able to think and comprehend as per the situation and its requirements, which is evidently not in the case of technology and there are chances that an Artificial Intelligence may go wrong at some point or the other. At last more strict laws with respect to technology will also protect both lawyers and their clients from any situation where there are chances of data breach or any sort of information security issue.


Name – Hitashi Bansal

Name of the Institution – Bennett University

Course – 3rd Year BA LLB



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