Pujarini Guha Maulik is Practice Counsel and Head of Contracts and Disputes at mobile advertising startup, InMobi.
In this interview with Bar & Bench’s Aditya AK, the Symbiosis Law School graduate talks about the role of an in-house counsel in the startup environment, issues in IP law, potentially disruptive technologies, and more.
Aditya AK: Having worked with MNCs like Infosys in the past, what prompted the shift to a startup environment?
Pujarini Guha Maulik: To be honest, too much of an organized setup got to me after a point of time because, it stifles dynamism. Your offerings and services stay the same and there is hardly any scope for evolution. While this environment is great for you to develop, after a point, the growth stagnates. Startups have that freshness – every day there is a new issue and a new product. As a professional, it is very gratifying. So I would say, the reasons were evolution, dynamism and challenges.
AK: Does the strategy of a legal team in a startup differ from one in an established company?
PGM: At the heart of it, it is the same, because all legal teams are expected to maintain checks and balances and ensure that the company’s risk profile is under control. The only difference lies in the systems and its complexity. In a startup, there is a larger challenge of setting up a system from scratch, which holds some appeal.
The other part is about sustenance. If you are a big company with a lot of money in the bank, your approach to a deal will be very different from what it would be if you are trying to penetrate a sector of the market or a particular jurisdiction in order to make an impact.
In a startup setup, even a lawyer has to wear the business hat, without compromising the material legal implications.
AK: How much of work is outsourced to law firms? How do you choose the law firms?
PGM: The percentage of work outsourced is quite minimal, because we mostly do everything in-house and that’s what we prefer.
We choose a mix of firms to work with – large, medium-size and small. It depends on a case-by-case basis. We reach out to law firms in exceptional circumstances or where there is a local nuance, and we need regional expertise. We usually prefer a mix, because it gives a balance in terms of work as well as cost effectiveness.
AK: What are the legal issues startups often don’t take into account?
PGM: For a startup, business is always the first priority. The only difference is that if you are a listed company, you operate in an organized set up and are more aware of the regulations that you are required to be compliant with. But that does not absolve anyone.
I think today, most companies understand the legal implications and the regulatory regime within which they operate. Only the really small startups who don’t have a setup tend to sometimes be unaware of the regulatory requirements. But now, even they are working with small law firms or engage consultants to make sure that they are on the right side of the law.
From an absolutely personal perspective, and this is just an observation, sometimes the really small startups without in-house guidance tend to overlook the compliance requirements.
AK: Do you insist on using standard form contracts for deals?
PGM: That depends on a case to case basis. There are a lot of advantages of using templates; it also helps us negotiate better. So, yes we do insist on using them. But there are some companies in which partners insist on their own paperwork, which we review and re-negotiate in order to come to an understanding which is acceptable to both parties.
AK: What do you think is the best method of valuing startups?
PGM: Some industry standard matrices which would be helpful, to my mind, are the IP portfolio, which is asset in some form, gross profit and book versus actual revenue.
You have to look at the revenue stream and annual contract value etc. So it is a mix of various factors which help you evaluate whether or not there is potential.
AK: What are the issues involved in joint ownership of IP?
PGM: There are a lot of issues; I do not recommend joint ownership of IP at all. That is because of the various legal nuances around the difficulty of enforcement. Joint ownership raises a few fundamental questions like how the commercialization would work. Who would enjoy the entire proceeds of commercialization? Would it be on a license basis? Is it sub-licensable by both parties? Can both parties assign? How do you enforce an IP that is jointly owned?
Joint ownership raises a few fundamental questions like how the commercialization would work. Who would enjoy the entire proceeds of commercialization? Would it be on a license basis?
It becomes a great deal of work for the lawyers; you have to carefully craft everything, including the exit rights. The largest issue I see is that different intellectual property rights in different jurisdictions have different laws associated with them. For instance, in the US, you have to share the profits from exploiting a jointly developed copyright, whereas for a patent, there is no such obligation.
AK: What are your thoughts on the draft IP Policy?
PGM: My opinion is that it is a good move, while we are aligned with TRIPS, our IP policy needed a review. Currently things like application and enforcement takes forever very long time. Also, there is a lack of general awareness re intellectual property rights. Also, if you look at the Make In India policy, it promotes more IP-related applications and aims at spreading awareness. As I understand, the intent is to introduce e-filing, digitisation of IP and to launch a single portal for all statutory requirements required for various types of IPR, which would make everybody’s life easier.
To encourage small and medium industries to file more patent claims, the application fee will be waived. If we are able to implement all of these, then we will move in the right direction.
AK: What are the technologies within the legal field which are disruptive or could prove to be disruptive?
PGM: I see a lot of LPO solutions which say that they have automated systems which can help you out with your contract management system and generate templates etc. My biggest problem with these is that they are not intelligent enough. If I have all the details, I can create a template myself. What we need is an intelligent legal management system which has some kind of analytical capability beyond the creation of templates or search-ability.
What we need is an intelligent legal management system which has some kind of analytical capability beyond the creation of templates or search-ability.
I have no idea how one can put that in place, because law as a subject matter is completely subjective and depends on a case to case basis, taking into consideration facts and merits of each matter. Contracts are being automated, but I’m not sure how intelligently. It can become disruptive if it adds that analytical ability.
Another thing which would be great is if we could make legal advice available in everybody’s pocket. For instance, it could be used to help women in distress. When in trouble, it is difficult for her to find the nearest police station, know if it is the right jurisdiction, how to file an FIR etc. There should be some kind of collaboration between lawyers and the police to create a free app available on all smartphones.
AK: What is your take on the latest TRAI Regulations on Net Neutrality?
PGM: I think it is fantastic. I was completely against the differential pricing approach, because the choice of what kind of websites should be available to a person is completely that person’s prerogative. No two or three companies should decide what websites should be available to you.
If they really want to make free internet available, they could consider something like Google’s Project Loon (though I am not sure about the details), purported to put balloons in the stratosphere capable of providing free Wi-Fi.
AK: What changes in the laws governing e-commerce transactions would you like to see?
PGM: We all need to understand that much is at stake. If we are serious about Make In India and want to promote startups in India, then we should realise that FDI is a key factor. E-commerce companies, in my view, should not be equated with dealers and traders, because that would really stifle their growth and put their business model and investment framework into question.
The government needs to formulate laws which are specific to e-commerce instead of putting them in different buckets, where different laws have different interpretations.
AK: What are the requisite skills of an in-house counsel?
PGM: Needless to say, you need legal acumen and qualification. You also need a deep understanding of your business and the keenness to understand the business side of things. Unlike law firms, we do not provide opinions with disclaimers!
We actually make suggestions which have an impact on business, and therefore take both aspects – law and business – into consideration. So you need a balanced approach, a lot of perseverance and a great deal of reading.