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India has adopted the UN Sustainable Developmental Goals with an objective to “ensure inclusive and equitable quality education and promote lifelong learning opportunities for all” by 2030.

According to the Economic Survey 2023-24, India has 265.2 million students in schools, about 43 million in higher education and more than 110 million learners in skilling institutions. These figures reveal the scope of the challenge in the education sector. It is in this context that technology will continue to play a critical role in learning and development, as endorsed by the National Education Policy 2020. Today, edtech is a necessity, not a luxury.

Opportunities

Edtech provides solutions for a broad educational spectrum, including areas such as pre-kindergarten, K-12, higher education, upskilling for individuals, and technology providers for businesses.

This translates into products and services such as online tutoring including certification courses, diploma and degree courses, language learning, as well as curriculum production, corporate skilling, learning management systems, and administration tools.

Edtech includes B2B, where customers can be educational bodies like schools, colleges and enterprises, as well as B2C, where the customers can be students or professionals. In the past decade, India has witnessed the rise of multiple startups offering one or many of the above-mentioned solutions, leading to significant fundraising and growth in scale and impact.

Legal landscape in edtech

Education is on the concurrent list in the seventh schedule of the Constitution of India, which empowers both the central government and states to make laws on it. It is imperative for edtech players that interact with conventional establishments like schools, colleges and universities to review laws at both the central and state levels.

Many edtech players are operating in this largely unregulated domain beyond these conventional setups, or act as service providers to them. Edtech provides a focal point where laws regarding IP, contract law, consumer protection, data privacy, corporate governance and more intersect.

Intellectual property

The importance of IP in an edtech business cannot be overstated. It can be either in the form of content or technology, or both, and be developed in-house, or acquired or licensed from a third party.

IP is generally the main asset of an edtech company and hence it becomes critical that the asset stays protected. The common forms of IP rights in edtech are copyright, trademarks, domain names and trade secrets. Ownership is best secured via statutory mechanisms like registrations or through watertight contracts.

Clear clauses related to the licence and assignment should be present in agreements with employees, consultants and third parties. Such ownership should be vehemently protected by aggressive enforcement of rights.

A case in point is Fermat Education v Sorting Hat Technologies Pvt Ltd (commonly known as Unacademy), which was placed before the Madras High Court in 2018. The petitioner alleged that content created and owned by it was uploaded and available on Unacademy without prior consent, and was granted an injunction.

While this is a common issue faced by edtech companies that have their content uploaded without consent, there are clear procedures for takedowns of such material by private players, which requires consistency in judicial pronouncements for the development of the market at large. It is vital that a party enforcing a claim has clear documentation proving ownership.

Contract enforcement

Timely payment coupled with additional nuances in the edtech sector, specifically when catering to institutional customers such as schools and colleges, is a concern for all. Issues caused due to receivables management were among the major reasons for initiating the insolvency resolution process of Indian listed edtech company, Educomp Solutions.

This is because these institutions take the legal form of trusts and societies and not companies. The usual methods of contract enforcement, such as judicial process and arbitration, pose significant time and financial impediments so it may be recommended to assess solutions like mediation and conciliation.

Consumer protection

The significant rise of edtech companies has resulted in the government introducing laws to adequately deal with issues arising. The Consumer Protection Act, 2019, and the Consumer Protection (E-Commerce) Rules, 2020, which were implemented recently, are both examples of the evolving nature of laws with respect to edtech.

These define e-commerce to mean “buying or selling of goods or services including digital products over digital or electronic network”. This provides clarity on the key differences between edtech companies and institutions, and further justifies the scope of consumer protection law in India with regard to edtech. Several cases, such as Joginder Singh Saini v Byju’s Think & Learn Pvt Ltd (Consumer Complaint No. 207 of 2019), have reinforced this.