Amendments in Intellectual Property Laws in Vietnam

Much awaited fourth amendment to the IP laws of Vietnam finally comes into force today i.e. on January 15, 2018. Circular No. 16/2016/TT-BKHCN (also called Circular No. 16), which was issued on June 30, 2016 by the Ministry of Science and Technology of the Government of Vietnam  which amends as well as supplements a number of articles of Circular No. 01/2007/TT-BKHCN (also called Circular 01). The amended circular no. 16 is a critical guidance document for implementing of IP laws in Vietnam. These amendments as already discussed are effective from January 15, 2018.

The amended circular will have a major impact on the Intellectual Property practice  followed in Vietnam as it modifies almost 49 out of 67 points present in the currently followed circular no. 1. Further, these modifications will resolve certain issues and concerns and align the IP laws of Vietnam with International IP system. The modifications mostly apply on the examination procedures conducted by National Office of Intellectual Property (NOIP) of Vietnam related to Patents, Trademarks, copyrights, Designs and other IPR. These provisions will also create favorable conditions for applicants for obtaining IP rights in Vietnam.

Below mentioned are some of the important amendments and supplements provided by the Circular no. 16 related to examination process of Patents, Trademarks and Designs.

1. General Regulations

1.1 Office Action response timings: Point 13.6.a and Point 15.7.a.i (All these points are present in Circular no. 1)

  • The time frame to respond to an office action concerning Formality Examination will now be 2 months instead of 1 month.
  • The timeframe to respond to an office action concerning substantive examination will now be 3 months instead of 2 months.
  • The deadline for the payment of registration fee will be 3 months instead of 1 month.

These deadlines may once be extended for a similar period. These amendments to the   above mentioned deadlines seems to be a more practical time frame for the applicants as compared to previous practice.

1.2 Appeals and their settlements: Point 22.1.c
The amended circular no. 16, has specifically provided that addition of new facts/details in application will not be accepted at the appeal stage. However, on the request made by the Applicant or appellant, NOIP may reexamine such new facts/details.. The amended circular allows the appeals settlement body to seek opinions of independent experts if the appealed case has a degree of complexity.

1.3 Points 15.7.b and 9.3-5: Decisions on Refusal
In circular no. 16, on getting a decision of refusal after substantive examination, the applicants can overcome the same by submitting new facts/details which were not considered in the examination and the NOIP may consider withdrawing the decision of refusal. The applicants do not have to lodge an appeal against the decision of refusal.

There is an alternative for overcoming decisions of refusal that are issued after considering responses to office actions regarding substantive examination. Instead of lodging an appeal, if the applicant submits new details (which have not yet been considered in the examination) which can affect the examination results, the NOIP will consider withdrawing the decision on refusal. In previous circular it was not the case.

1.4 There are few more general regulations in the amended circular no. 16 such as:

  • Excuses for missing deadlines as provided under Points 9.3-5 which explains force majeure event and Objective obstacles that are few excuses that NOIP considers while considering the late submissions. This will reduce the scope of delays in such procedures.
  • The NOIP has been provided the time period of one month from the receipt date of the request for notice of invalidation or termination, to send such notice to the right holder as has been provided under Point 21.3.a of the amended circular which
  • The new provisions makes it impossible for the right holder to revive their applications that they have withdrawn, thus making the whole procedure, a very substantial one rather than the old casual procedure.[Point 17.5.b]
  • The provision of the amended circular sets out the obligation on NOIP to inform the Opposing party of the examination results of the concerned application which was not practiced by the NOIP till now.

2. Key changes related to examination of Patents and Utility Models

2.1 Points 27.4 and 27.5: Deadlines for PCT applications to enter Vietnamese National Phase
In the old circular 1, PCT applications were allowed to enter national phases within 37 months by paying an extra fee. However, in the amended circular, the time limit for entering the national phase for PCT applications is strictly 31 months.

2.2 Point 25.1.a(ii): Deadline for requesting examination

The deadline to request for examination is 42 months from the priority/filing date for patent applications for invention and 36 months from the priority/filing date for Utility Models. these  deadline can be  extended by 6 months only when the Applicant provides sufficient evidence of some events such as “force majeure event” or “objective obstacle”.

2.3 Amendments relating to specification [Point 17.1.c], features of function or purpose [Point 25.5.d(i)] and annuity payment [Point 20.3.a], etc are also included in the said circular with regard to the Patents and Utility Model.

3. Key changes related to examination of Trademarks

3.1 Rights to object to disclaimers – Point 15.7.a (iii)

The amended circular no. 16 provides applicants the rights to object to disclaimers of NOIP of an/some element(s) of the mark if they do not agree with it. The applicants can file an objection within three months from the notification date. The old circular however was silent on this issue.

3.2 Response to office action regarding international application – Point 41.6.d

In cases where, the Madrid application is rejected by NOIP, the applicant, through the amended circular has a three-month period to respond to the provisional refusal by NOIP, and then 90 days to appeal the decision on refusal, whereas, the old practice only provided fro a period of 90 days to appeal such rejection by NOIP. Thereby, providing a higher chance for Madrid applicants to overcome a refusal than for national marks.

3.3 There are few other amendments related to Trademarks such as:

  • Recognition of well-known marks [Point 42.4] : The amended circular lays that a mark can be recognized as a ‘Well-known mark’ through the settlement of enforcement or opposition/examination of a trademark that is identical/confusingly similar to the concerned mark.
  • Organizations entitled to register certification marks and collective marks: Point 37.5a and 37.5b : The modified circular expressly clarifies the type of organizations that can register collective marks, which was not mentioned in the earlier circulars.

4. Key changes related to examination of Designs

4.1 Definition of product – Point 33.2.b

The amended circular introduces a new definition of a product: “A product is understood as an object, device, equipment, means, or part for assembling or integrating these products, manufactured by industrial or handicraft methods, having a clear structure and function, circulated independently.” This definition is given to exclude intangible products such as “Graphical User Interface” since it is considered a product but cannot be considered a design and have also resulted in a narrow list of products that can be patentable This can be a bit of disappointment to the Applicants.

4.2 Specification in design applications – Point 17.1.c

A specification is needed to describe the appearance and features of a design in words at the time of filing, but this specification is not included in the granted certificate for the design, which results in few concerns on the validity of the specifications. In the amendments, there is a provision that an amendment must not go beyond the specification and set of figures/photos makes the role of the specification more important and therefore design specifications should be prepared with caution.

4.3 Few other amendments relating to Designs were also introduced such as, amendment to granted patent [Point 20.1.b(iv)], Renewal of design patents [Points 20.4.d, 33.2.a, and 33.5.dd(iv)]. Further, although the amended circular has provided for first to file principle, but it has failed to clear its stance on such principle as it is silent on the priority dates in case where the filing dates of the conflicting applications are same.

The amendment has been made keeping in mind the scenario of present practice followed in Vietnam and what kind of changes can help the law on Intellectual Properties be efficient in the country. Thus, the lawmakers have very logically amended the concerned circular as well as complied with the International Standards.

The amended circular No. 16/2016/TT-BKHCN, w.e.f January 15, 2018 will have a significant impact on IP practice in Vietnam and will provide a synchronization between IP laws in Vietnam and the IP laws practiced internationally.

Author: Shilpi Saxena, Jr. Patent Associate at Khurana & Khurana Advocates and IP Attorneys can be reached at shilpi@iiprd.com.

 References:

[1] https://www.most.gov.vn/vn/Pages/ChiTietVanBan.aspx?vID=28856&TypeVB=1

[2] http://www.noip.gov.vn

[3] Key Changes in Amended Circular 01

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Macquarie Bank Limited vs. Shilpi Cable Technologies

Facts of the Case

The Corporate Debtor/Respondent (Uttam Galva Metallics) defaulted in the payment to the Operational Creditor/Appellant (Macquarie Bank) amounting to USD 6,321,337 equivalent to Rs. 43,11,15,190. Although repeated reminders as to the payment of the debt via emails were made, but such communications could not influence the Debtor to make the payment, pursuant to which a Statutory Notice was sent by the Appellant under Section 433 and 434 of the Companies Act. The reply to such notice denied the existence of any such outstanding debt on the part of the Respondent. After, the Insolvency and Bankruptcy Code was enacted in 2016, the Appellant furnished a Demand Notice to the Corporate Debtor under Section 8 of the Code. The Respondent replied to the notice saying that there existed no outstanding default on its part and simultaneously, also questioned the validity of the Purchase Agreement. The Appellants approached the National Company Law Tribunal and applied for the initiation of the Corporate Insolvency Resolution Process.

NCLT Order

The NCLT rejected the application of the Appellant based on two grounds that:

(1) The application for initiation of the Corporate Insolvency Resolution Process was incomplete as it did not comply with the mandatory requirements under Section 9(3)(c) of the Insolvency and Bankruptcy Code which required a certificate from a financial institution with regards to the non-payment of the outstanding amount by the Corporate Debtor. The certificate from the Appellant Bank itself was not held to be a certificate from a financial institution as it was a foreign bank which did not fulfill any of the requirements to qualify as a “financial institution” as per Section 3 (14)[1] of the Code.

(2) There was an existence of dispute before the Demand Notice was furnished upon the Corporate Debtor as per Section 8(2)(a) of the IB Code which was also raised at the time when a reply to the Statutory Notice was furnished under Section 433 and 434 of the Companies Act by the Respondent.

NCLAT Decision

The Appellants aggrieved by the order of the NCLT approached the National Company Law Appellate Tribunal for remedy against the Respondent. But, the NCLAT upheld the NCLT order stating that the application has to be complete before the initiation of the Corporate Insolvency Resolution Process and that the appellant failed to comply with the mandatory requirement of furnishing a certificate by a financial institution in which the Corporate Debtor has its account with regards that it has failed to pay the outstanding debt. Moreover, it reiterated that the Appellant Bank was not a “financial institution” as per Section 3(14) of the IB Code. Also, as it is a mandatory document which acts as an evidence to the existence of default, it has to be necessarily furnished and without it the application is incomplete.

Furthermore, the Appellant tribunal took cognizance of the Demand Notice which was furnished by the lawyer of the Appellant and noted that such Demand Notice has to be in compliance with Form 3 under Rule 5 of the Insolvency and Bankruptcy Code Rules, 2016. It was also observed that such Demand Notice was invalid as it has to be furnished as per Form 3 by the Creditor himself or by any authorized person on his behalf and lawyer cannot come under such purview as there was absence of any authority by the Operational Creditor.

Thus, the appeal was dismissed based on such grounds and the issue relating to the ‘existence of the dispute’ adjudicated by the NCLT was left unmentioned in the said order of NCLAT.

Supreme Court’s Judgment

The Appellants further aggrieved by the order of the NCLAT appealed before the Hon’ble Supreme Court. It was contended by the Appellants that if Section 9(3)(c) is read conjointly with Rule 6 and Form 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, it could be observed that the requirement of the certificate by the financial institution is not mandatory but is only directory in nature as it is just another document along with the other documents which could be relied upon by the Operational Creditor in order to prove the existence of an Operational Debt. On the other hand the Respondent contended that Section 9 uses the word ‘shall’ which clearly shows the intention of the legislature to make it a necessary and a mandatory requirement and cannot be derogated upon.

The Hon’ble Supreme Court observed that a creative interpretation of Section 9(3)(c) is necessary in the present case as the literal interpretation would be unreasonable and would create hardships for Appellants and other foreign banks in the future. Also, the requirement of certificate as a document is not necessary for substantiating the existence of default as it can be proved by other documents as well. Also, in such cases where such certificates are impossible to furnish, serious inconvenience will be caused to the innocent persons like Appellant when such requirements are not even necessary to further the object of the Act.

While dealing with the other issue related to whether a lawyer can issue a demand notice on behalf of the Creditor, the Hon’ble Supreme Court read sections 8 and 9 of the IB Code conjointly along with Section 30 of the Advocates Act which talks about the Right of the Advocates to practice. The Hon’ble Supreme Court relied upon the judgment of “Byram Pestonji Gariwala v. Union Bank of India”[2] where a signature affected by the lawyer on behalf of his client on a document related to a compromise was held to be effective in law. It was observed in the judgment that “the courts in India have consistently realized the role of lawyer when it comes to disputes and the extent and nature of the implied authority to act on behalf of their clients, which included compromising matters on behalf of their clients. The Court held there is no reason to assume that the legislature intended to curtail such implied authority of counsel.”

Therefore, the decision of the NCLT and NCLAT was overruled by the Hon’ble Supreme Court and the matter was remanded back for consideration.

Conclusion

In my opinion, the Hon’ble Supreme Court did a fair job by overriding the procedural irregularities by observing the subjective nature of the case where the general procedure was clearly out of place. Also, the objective of the statute was kept in mind at all times by the Supreme Court and language of the statute was construed in a manner which is not unjust to any party. Moreover, a liberal interpretation of the procedural aspects of the case would help the creditors recover their debts in an efficient manner, while not allowing the debtors to pull out loopholes in order to evade liability while delaying the process on the expense of the creditor.

Author: Pratyush Rao, 5th year student at ILNU, Nirma University, intern at Khurana & Khurana, Advocates and IP Attorneys and can be reached at info@khuranaandkhurana.com.

References:

[1] Section 3 (14): “financial institution” means— (a) a scheduled bank; (b) financial institution as defined in section 45-I of the Reserve Bank of India Act, 1934; (c) public financial institution as defined in clause (72) of section 2 of the Companies Act, 2013; and (d) such other institution as the Central Government may by notification specify as a financial institution

[2] 1992 (1) SCC 31

[3] http://www.taxscan.in/section-93c-insolvency-bankruptcy-code-2016-directory-nature-says-supreme-court/15454/#popup1

[4]NCLT http://www.nclt.gov.in/Publication/Chandigarh_Bench/2017

[5]NCLAT http://www.nclat.nic.in/final_orders/Principal_Bench/2017/insolvency

[6]Supreme Court judgment   https://drive.google.com/file/d/1_QCold0R9UcG1cCRE9JBzVCw4LNppJOM/view

[7] Certificate from a recognized financial institution is not a threshold bar to initiate Insolvency Proceedings: The Supreme Court’s view in Macquarie Bank Limited v. Shilpi Cable Technologies

[8] Ibc-Lawyer Can Issue Demand Notice of Unpaid Operational Debt on Behalf of Operational Creditor

Bigtree Entertainment Pvt. Ltd. vs. Brain Seed Sportainment Pvt. Ltd. & Anr

 

“A brainy person does not abuse copyright; instead he respects it and upholds it.” – Maximillian Degenerez.

Introduction

With the rise in number of businesses using the global internet portal for running their businesses and with the increase in the number of start-ups in the current economic scenario, we come across many new issues that have to be dealt with in depth and have to be decided accordingly keeping in mind the far-fetched affect it would have on the domain of intellectual property right. On one such latest instance was a question posed before the High Court of Delhi when it to deal the process to determine whether a phrase is invented or descriptive. Through this article, the author would be discussing one of the latest judgments pronounced by the High Court of Delhi (hereafter, the “Court”)in the matter of Bigtree Entertainment Pvt. Ltd. vs. Brain Seed Sportainment Pvt. Ltd. &Anr.[1]

Brief Facts

Brief facts of the case are that Bigtree Entertainment Pvt. Ltd. (hereafter, the “Plaintiff”) operates an online ticketing platform for booking tickets for movies and entertainment related events through its web portal popularly known as “bookmyshow”, for which the Plaintiff has a secured registration of the marks and logos under class 41 (education, entertainment and training)[2] and class 42 (technology and software services)[3] as “bookmyshow”. The Plaintiff had at present applied for the registration of the mark “bookmy”, which does not separately possess any trademarks of over that terms.

However, the case of the Plaintiff was that the defendant in the present case, Brain Seed Sportainment Pvt. Ltd. (hereafter, the “Defendant”) operates a web portal, namely, ‘http://www.bookmyshow.com’, an online portal for booking sporting events, venues and other sporting facilities. The suit was filed by the Plaintiff claiming an infringing off and passing off the Plaintiff’s registered trademark by the Defendant of using the term “bookmy” in the Defendant’s mark which is deceptively similar to its own, and that it is apprehended by the Plaintiff that the Defendant would mislead the consumers into associating itself with the Plaintiff’s goodwill and mass connection that the Plaintiff’s trademark has with its consumers. In particular, the Plaintiff claimed that the usage of the term “bookmy” was just an interplay of words from the Plaintiff’s registered trademark of “bookmyshow” which is distinctive trademark. The main issue that the Court was faced with was that the Plaintiff’s goodwill over its mark carried over to a part to a part of the mark and thus the mark of “bookmyshow” would pass on to the terms book and my as well and thus their mark had acquired a secondary meaning which deserves to protected in order to protect their goodwill and media connect with the consumers.

The defendants contested the contentions of the Plaintiff on two counts. Firstly, it challenged the merit of the Plaintiff’s claim over concealment of certain facts relevant to the present case before the Court and secondly, the Defendant’s claimed that the words “bookmy” were merely descriptive in nature and it had not acquired any distinctness as claimed by the Plaintiff. Additionally, the Defendant’s argued that the Plaintiff’s claim over the mark of “bookmy” were distinctiveness were indeed flawed by the aspect that there were various other websites operating in similar fields which have been being used prior to or subsequent to the Plaintiff’s web portal coming into existence.

The Defendant’s further claimed that the prefix “bookmy” is not an invented phrase meriting any legal protection, but a descriptive one that is common to a particular business format being run in a particular field. For instance, in the present case, both the parties to the suit are involved in the business of running a web portal of booking tickets, as in the case of the Plaintiff or any sporting event, as in the case of the Defendant. Thus, the Plaintiff’s claim that their trademark of “bookmyshow”  would imply that a part of the mark that is “book” and “my” would also imply a relation to their mark, is flawed on the proposition that no other web portal which deals with the aspect of acting as an intermediary in booking tickets or events in any other field cannot use the term “book” and “my”, which would be necessary to imply the format of business being run by them, hence resulting to the conclusion that the Plaintiff is not the exclusive user and adopter of the mark “book” and “my” or “book” and “my” and “show”.[4]

Issues

The issue that the Court had to looked into by the Court was:

Whether a phrase in a registered trademark is descriptive or invented one for its part trademark also would result in violation of the usage of any part thereof or not.[5]

Analysis

The single judge bench of the Court headed by Hon’ble Justice Mukta Gupta dismissed an interim application for grant of an injunction under Order XXXIX Rule 1 & 2 of the Code of Civil Procedure, 1908[6] on an application filed by Plaintiff against Defendant, against the use of the of the prefix of “bookmy” or the mark of “bookmySPORTS”.

The judgment of the Court delivered on December 13, 2017 dismissed the application on referring to numerous judgment on the same subject matter before the Hon’ble Supreme Court of India and other High Courts as well in the past.

The judgment related the present matter in light with the question of whether a phrase is descriptive or invented was considered at great lengths by the Supreme Court in the case of J.K. Kapoor vs. Micronix India,[7] where it was held that a word which is descriptive of the industry or market in which the concerned parties operates cannot be deemed to be invented as it would restrict the chance of other new participants to be able to relate their product with the industry they wish to pursue their business. Thus providing an undue advantage to the predecessor who has registered any such trademark over an industry specific mark thus refusing other participants to be able to use any part of the mark for their own identification of their product. The Court stated that a brand name cannot claim exclusivity or monopoly over a term which is descriptive of any activity in an industry.

The Court also referred to another decision of the Supreme Court in Reliance Industries Ltd v/s Reliance Polycrete Ltd,[8] the issue that was raised in this matter was whether a goodwill attached to a complete trademark carries over to a part of that trademark. It was held that the existence of any industry using the term ‘Reliance’ would only make a person conclude it was being referred to‘Reliance Industries’ alone, the Supreme Court held that reliance Industries Ltd. could not claim monopoly over the use of the term ‘Reliance’ exclusively as it was not an invented terminology but a generic term which can be used for other usages as well by other participants in the market for propagating a message across to the consumers for a better understanding of what their product is about and what the product is being sold to the consumers.

Referring to the above mentioned judgments, Justice Mukta Guptain her judgment in paragraph 16 of the judgment held:

“In the present case, defendant has placed on record examples of numerous other companies that operate with the same domain prefix, and the plaintiff has yet to put on record any evidence suggesting that the prefix “BOOKMY” is only associated in the minds of the public with the plaintiff’s business and nobody else, thus has acquired a secondary meaning and distinctiveness. Considering the facts that the use of the words “BOOKMY” are descriptive in nature and plaintiff’s trademark “BOOKMYSHOW” has not acquired a distinctive meaning, no case for grant of injunction pending hearing of the suit is made out.”[9]

The Court while dismissing the application revered to another case decided by the High Court of Delhi in the matter of P.P. Jewellers vs. P.P. Buildwell Pvt. Ltd.,[10] wherein a similar contention was raised by the plaintiff that the usage of the term “P.P.” was an exclusive trademark of the plaintiff any other person using it would affect its goodwill and would thus result in the violation of its rights protected under the trademark legislations. Hence the usage of the terminology of “P.P.” is not an invented term but just a generic one over which monopoly of one person cannot be safeguarded to prevent any harm to its goodwill.

Ratio Dicidendi

Thus, the Court while laying the ratio, also laid down the precedent that the usage of the term “bookmy”is vast and does nowhere give the impression that it is created but one of a descriptive nature providing a description of the type of business being conducted and that the plaintiff’s claim that the use of the prefix of “bookmy”is not only associated in the minds of the public with that of the plaintiff’s business and nobody else, thus has not acquired a secondary meaning and distinctiveness.

Conclusion

With the rise in the current scenario of the newly evolved businesses, the rise in mass reach over a media like that of an internet, a trademark violation can often be contended by certain businesses as in the present case. The Court in the past has already dealt with these kinds of issues and is also dealing with these issues at present, the fate of such matters might end in the same manner as is being dealt with in the current scenario wherein the Media law and the trademark laws are interjecting with each other and the court have to decide whether a certain trademark can be given exclusivity in times where a single word or even a letter can be industry specific.

Thus to conclude, media is very sensitive issue that is to be looked into very cautiously, and to decide if any usage of any trademark or any part thereof could result in damage of the goodwill of the trademark owner. The Court in the present matter before us dealt it very meticulously to arrive at a conclusion that any part of a registered trademark cannot be said to be part of the complete trademark. In the opinion the judgment of the Court is indeed on the right track and lays down that very important precedent for future references by the judiciary while deciding such matters wherein such contentions can be raised for relating a part of the trademark with the complete trademark which might result in monopoly of a single player in an industry thus violating the very essence of Article 19(1)(g) of the Constitution of India[11] and preventing any person to conduct any business by using any part of registered trademark for identifying their product with the arena in which their business offers product(s).

Author: Ms. Swatilekha Chakraborty, Intern at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at   anirudh@khuranaandkhurana.com.

References:

[1]Bigtree Entertainment Pvt. Ltd. vs. Brain Seed Sportainment Pvt. Ltd. &Anr., CS(COMM) 327/2016

[2] http://www.wipo.int/classifications/nice/nclpub/en/fr/20180101/hierarchy/class-41

[3] http://www.wipo.int/classifications/nice/nclpub/en/fr/20180101/hierarchy/class-42

[4]Paragraph 14 of the judgment, accessible at CS(COMM) 327/2016

[5] Paragraph 9 of the judgment, accessible a CS(COMM) 327/2016

[6] https://www.nls.ac.in/lib/bareacts/civil/cpc/cpco39.html

[7]J.K. Kapoor vs. Micronix India, 1994 Saupp (3) SCC 215

[8]Reliance Industries Ltd v/s Reliance Polycrete Ltd, (1997 PTC (17) 581)

[9] Paragraph 16 of the judgment, accessible at CS(COMM) 327/2016

[10]P.P. Jewellers vs. P.P. Buildwell Pvt. Ltd., [(2010) 169 DLT 35]

[11] Article 19(1)(g): “(g) to practise any profession, or to carry on any occupation, trade or business”

M/s. Sunwhite Infrastructure Pvt Ltd. V. Kindle Developers Pvt Ltd, CP No. 40 (ND)/17 (decided on 23.08.2017)

Facts

The petition was filed by M/s Sunwhite Infrastructure Pvt Ltd (hereinafter referred to as “the petitioners”) against Kindle Developers Pvt Ltd (hereinafter referred to as “the respondents”) Sec 241[1] and Sec 242[2] of the Companies Act, 2013 alleging acts of mismanagement and oppression prejudicial to the interests of the company as well as the stakeholders. The respondent company, engaged in the business of real estate development was incorporated in March 2011 with a paid up capital of Rs. 1 Lakh of which the petitioner acquired a 40% shareholding from respondent No. 3. The petitioners alleged that upon the representation of the respondents that they had been allotted a plot by Greater Noida Authority for development of a group housing project and were in need of financial assistance, the petitioners extended a loan of Rs. 6 Lakh to the respondents upon the following conditions:

  1. The loan was to be repaid within the period of one year.
  2. The respondent undertakes not to borrow any further money from third parties without the petitioners consent.

However, due to the failure of the respondents to repay the loan within the time specified, the petitioners filed a suit for permanent and prohibitory injunction in Court of Civil Judge, Delhi to restrain the defendants from parting, selling or creating rights of third parties over the allotted land. An order of injunction was passed against the respondents by the said Judge. The present petition was filed subsequently against the acts of oppression and mismanagement by the respondents who failed to appear despite being served and were, thus, proceeded ex parte.

Contentions of the Petitioner

The petitioners in the present petition contend that:

  1. In complete disregard of the loan agreement entered into by the petitioners and the respondents, the respondents not only defaulted on the payment but also took further loans from various third parties.(Para 5)
  2. The defendants were defrauding investors by siphoning off the funds collected from prospective buyers without engaging in any significant construction work. The petitioners also entered into record the audited balance sheet of the defendants for 2015-2016 reflecting advances of Rs. 157 crores collected for booking of flats against which very little construction was completed.(Para 5)
  3. The petitioners further alleged that statutory compliances were not carried out on time, no Annual General Body meeting had been conducted since Sept, 2014 and books and accounts of the defendant company were not available for inspection to the petitioners.(Para 6)
  4. It is also contended by the petitioner that in complete contempt of the order of Civil Judge, Delhi, which restrained them from altering the management of the company, respondent no. 4 & 5 were appointed as Additional Directors by the respondent company. Such appointment is otherwise illegal as well due to it not being ratified by the remaining management. (Para 6)

Issues

  1. Whether there has been oppression and mismanagement by the respondent company?
  2. Whether the appointment of additional directors is in violation of the order of civil judge, Delhi?

Judgement

The NCLT held that there had been no oppression of the petitioners in their capacity as shareholders and that their grievance was misplaced as they were aggrieved in capacity of creditor whose entitlement under a loan agreement was violated  for which the appropriate remedy would lie in a civil forum. It observed that, “The non-payment of a creditor could not be held as oppressive to the shareholder. The order of Civil Court Judge restraining the respondent from alienating the said property was enough to secure the interest of the creditor” (Para 9d).

It was held that allegations of siphoning off of funds by the respondents were largely uncorroborated and unsubstantiated and on the basis of the material placed on record, it was not possible for the Tribunal to conclude whether the advances justified the quantum of work done (Para 9a). On absence of any cogent material, the Bench was unable to accept allegations of siphoning off of funds, duping of prospective buyers or direct an investigation into the affairs of the company.

Secondly, with regard to non-availability of books & accounts of the respondent company, it was observed that there was nothing to show that the petitioners ever made any effort to inspect the same which they, as shareholders of the company, had a right to do. (Para 9b)

The NCLT held that insofar as the appointment of the Additional Directors was concerned, the appropriate form to deal with such appointment was the Court of Civil Judge, Delhi who has passed the impugned order restraining the respondents from doing so. (Para 9c)

Lastly, in response to the allegations that no AGM had been held since Sept, 2014, and that statutory compliances have not been complied with, the Bench held that as shareholders with 40% equity in the respondent company, the petitioners were well within their rights to requisition the management to convene a meeting to discuss any agenda or matter they thought fit. (Para 9e)

Directions

The NCLT gave the following directions:

  1. The Bench directed the respondents to hold AGM for defaulting years as well as the Financial Year ending on 31.03.2017 in exercise of provisions of Sec97[3] of the Companies Act, 2013, holding, the allegation of non-compliance with statutory requirements would, in absence of any defence by respondents, be tantamount to mismanagement. (Para 13)
  2. The respondents were also directed to lay before members, all Financial Statements, Annual Returns, Directors Report etc followed by filing them with the Registrar of Companies as statutorily required as well as paying all taxes required by Government. (Para 14)
  3. Lastly, though observing that courts should not ordinarily interfere with the management, with due regard to the fact and circumstances of the present case, the Bench directed the appointment of an independent Observer/ Administrator to oversee proper convening of the AGM and ensuring that all statutory requirements are complied with. The Bench also remarked that failure to comply with any of the directions would invite penal consequences under the Act. (Para 15 & 16)

 

Author: Ms. Noyonika Mukherjee, Intern at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at   anirudh@khuranaandkhurana.com.

References:

[1] Sec 241, Companies Act, 2013 provides that any member may apply to the Tribunal who complains that the affairs of the company are  being conducted in a manner prejudicial to public interest, interest of the company or is prejudicial/oppressive to him or any member of the company OR any material change has taken place in the management/ control of the company by reason of which it is likely that affairs of the company will be conducted in a manner prejudicial to interests of the company, any members or any class of member. The Central Government can also apply to the Tribunal for an order under this section.

[2] Sec 244, Companies Act, 2013 provides that an application may be made under Sec 241 by any member- (a) in case of a company having a share capital, not less than 100 members or not less than 1/10th of total members or any members(s) holding not less than 1/10th of issued share capital provided that have paid all calls/sums due on their share;(b) in case of company not having share capital, not less than 1/5th of total members. The Tribunal may, on an application, waive any of the requirements.

[3] Sec 97, Companies Act, 2013 provides that the Tribunal may, on the application of any member of the Company, call or direct calling of an AGM and give such ancillary/consequential directions as it thinks expedient, if any default is made in made in holding the AGM under Sec 96, provided that the directions may include a direction that one member of the company present in person or proxy shall be deemed to constitute a meeting. A general meeting held in pursuance of the above may be deemed to be an annual general meeting.

Online Disputes and Forum Jurisdiction

The Delhi high court on 3rd January, 2018 in Impresario Entertainment & Hospitality Pvt. Ltd. vs S&D Hospitality[1], took a different view with respect to the Internet jurisdiction[2].

In the above case, plaintiff sought permanent injunction against the defendants who was running a restaurant at Hyderabad, under  the impugned trademarks ‘SOCIAL’ and ‘STONE WATER’ and its services were available through Zomato. The court held that the plaintiff would have to produce material prima facie to show that some commercial transaction using the website was entered into by the Defendant through the app- ZOMATO, within the forum state and that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the plaintiff within the forum state.

Defendants contended that this Court has no territorial jurisdiction to entertain the present suit  as the defendant neither has his registered office within the jurisdiction of the said Court nor carries on any business within the jurisdiction of this Court. Mere existence of a website without proof of ‘the effect’ does not clothe this Court with territorial jurisdiction to entertain the present suit. Returning the plaint, the court held that a mere hosting of a website that is  accessible by anyone within the jurisdiction of the court is not sufficient for this purpose[3].

Convinced with the Defendant’s contention, the Court Further relied on Banyan Tree Holding (P) Limited v. A. Murali Reddy and Anr[4] which held that a passive website, with no intention to specifically target audiences outside the State where the host of the website is located, cannot vest the forum court with jurisdiction. The Hon’ble Court also observed that for the purposes of a passing off or an infringement action (where the plaintiff is not located within the jurisdiction of the court), the injury on the plaintiffs business, goodwill or reputation within the forum state as a result of the Defendant’s website being accessed in the forum state would have to be shown.

Earlier, the stance of the court was a bit different  in the case of World Wrestling Entertainment v. M/S Reshma Collection & Ors[5]– The Delhi High court had held that the mere website of the party referring to various goods  is not an offer but an invitation to an offer, just as a menu in a restaurant. The invitation, only if accepted by a customer in Delhi, becomes an offer made by the customer in Delhi for purchasing the goods “advertised” on the website of the appellant/plaintiff. Further, it held that mere accessibility of website in a forum state which ‘solicits’ its business, through which Defendant’s goods and services are sold, is enough to raise cause of action and in determining the personal jurisdiction in Delhi.

Legal Provisions in Regard to Jurisdiction

The Code of Civil Procedure, 1908 contains the provisions under section 20 with respect to institution of the suits where defendant resides or cause of action arises . It reads as : Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction –

  • The defendant, or each of the defendants where there are more than one, at the time of the commencement of the Suit, actually and voluntarily resides, or carries on business, or personally works for gain; or
  • any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution; or 
  • the cause of action, wholly or in part, arises.”

[Explanation]: A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place.

Section 62 [6] provides that every suit or other civil proceeding in respect of the infringement of copyright in any work or the infringement of any other right conferred by this Act shall be instituted in the district court having jurisdiction.

 Learned author Mulla in the Code of Civil Procedure, 18th Edn., has observed that under clauses (a) to (c) of section 20, plaintiff has a choice of forum to institute a suit. The intention behind Explanation to section 20 of the Code of Civil Procedure is that once the corporation has a subordinate office in the place where the cause of action arises wholly or in part, it cannot be heard to say that it cannot be sued there because it did not carry on business at that place. The linking of the place with the cause of 12 action in the Explanation where subordinate office of the corporation is situated is reflective of the intention of the Legislature and such a place has to be the place of the filing of the suit and not the principal place of business. Ordinarily the suit has to be filed at the place where there is principal place of business of the corporation.

The Indian Courts have always followed the parent legislation – Civil Procedure Code, 1908 and have  constantly tried to harmonize the technological advancement with the statute. Therefore, in the following caselaws, the courts have explained Section 20 of the CPC with reference to IPR and internet jurisdiction.

Indian Performing Rights Society Ltd. v. Sanjay Dalia & Anr The Supreme Court of India interpreted section 62 of the Copyright Act, 1957 and section 134(2) of the Trade Marks Act, 1999 with regard to the place where the plaintiff can institute a suit. Wherein it observed that “The very intendment of the insertion of provision in the Copyright Act and Trade Marks Act is the convenience of the plaintiff. The rule of convenience of the parties has been given a statutory expression in section 20 of the CPC as well. The interpretation of provisions has to be such which prevents the mischief of causing inconvenience to parties.”

Banyan Tree Holding (P) Limited vs A. Murali Krishna Reddy & Anr. on 23 November, 2009– The division bench of the Delhi High Court held that “Under clauses (a) to (c) of section 20 CPC, a plaintiff has a choice of forum and cannot be compelled to go to a place of business or residence of the defendant and can file a suit where the cause of action arises.”

In Icon Health And Fitness, Inc vs Sheriff Usman And Anr. – the Delhi High Court assumed jurisdiction under Clauses (a) and (b), stating that the defendants ‘carried on business’ in Delhi. The entirety of the Court’s reasoning for the above is contained in two sentences – “Though the defendants are not residing in Delhi, however, the defendants are offering their fitness apps and brands through App Store, Google Play Store and e-commerce portals like http://www.amazon.in which can be accessed and operated from all over the country, including from Delhi. Thus, it can be said that the defendants are carrying on business or working for gain at Delhi and this Court has territorial jurisdiction to try and decide the present suit as per section 20 of the CPC, 1908

Conclusion

At the outset, the Court does not subscribe to the view that mere accessibility of the Defendants website in Delhi would enable this Court to exercise jurisdiction. However, a passive website, with no intention to specifically target audiences in the forum State where the host of the website is located, cannot vest the forum court with jurisdiction.[7] The Court in Impresario Entertainment & Hospitality Pvt. Ltd. vs S & D Hospitality, took a very balanced stand and logically differentiated the concept of ‘mere presence of website’ and ‘targeting the forum state’. Thus, it is appreciated that the Court is not rigid and is flexible in providing a reasonable and tenable judgments by considering different facts and circumstances. Hence, it can be seen that the Indian Judiciary is swiftly moving towards a new jurisprudence on internet jurisdiction, in accordance to section 20 of CPC.

Author: Mr. Himanshu, Intern at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at   anirudh@khuranaandkhurana.com.

References:

[1] Decided on: 3rd January, 2018 ; CS(COMM) 111/2017

[2] The Code of Civil Procedure, 1908, S-20 (c) – Other suits to be instituted where defendants reside or cause of action arises.

[3] Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414

[4] CS (OS) No. 894/2008

[5] https://indiankanoon.org/doc/71641182/

[6] The Copyright Act, 1957, Section-62-Jurisdiction of court over matters arising under this chapter.

[7] Banyan Tree Holding (P) Ltd

Patent (Amendment) Rules 2017

Department of Industrial Policy and Promotion (DIPP) has amended Patent Rules 2003 with effect from 1st December 2017 called as the Patent (Amendment) Rules, 2017. The definition of “startup” under rule 2(fb) has been substituted with a new definition. A more liberal definition of startup has been incorporated that can allow domestic as well as foreign entities to claim benefits such as fast-track mechanism and lower fee for filing patents.

According to the Patent (Amendment) Rules, 2017:

“Startup” means

(a) an entity in India recognized as a startup by the competent authority under Startup India Initiative.
(b) In case of a foreign entity, an entity fulfilling the criteria for turnover and period of incorporation/ registration as per Startup India Initiative and submitting declaration to that effect.

Explanation: In calculating the turnover, reference rates of foreign currency of Reserve Bank of India shall prevail.[1]

According to the Patents (Amendment) Rules, 2016 startups were defined as entities which are working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property where more than five years have not been lapsed from the date of incorporation/registration with a maximum turnover of INR 25 crore per year.[2] However, according to the Patent (Amendment) Rules, 2017, a startup can be any Indian entity recognized as a startup by the competent authority under the Startup India Initiative or a foreign entity that fulfils criteria for turnover and period of incorporation/registration as per Startup India Initiative.

Under Startup India Initiative an entity shall be considered as a Startup, if it fulfils following criteria:

1. incorporated as a private limited company or registered as a partnership firm or a limited liability partnership in India;
2. incorporated or registered in India not prior to seven years, however for Biotechnology Startups not prior to ten years;
3. turnover for any of the financial years since incorporation/ registration has not exceeded INR 25 crores;
4. has not been formed by splitting up or reconstruction of a business that was already in existence; and
5. working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.[3]

In view of the foregoing, it can be concluded that the period of incorporation/registration that was 5 years under 2016 rules has been extended to 7 years (10 years in case of biotechnology startups) by the 2017 rules. Also, foreign companies can now claim benefits if they fulfill above mentioned criteria for turnover and period of registration as per Startup India Initiative. Further, to claim benefits for filing patents, Indian entity should be recognized as a startup by a competent authority under Startup India Initiative, whereas foreign entity may provide equivalent documents as an evidence for fulfilling criteria for turnover and period of incorporation/registration as per Startup India Initiative along with a declaration to that effect.

[1] http://www.egazette.nic.in/WriteReadData/2017/180577.pdf

[2] http://www.ipindia.nic.in/writereaddata/Portal/IPORule/1_42_1_Patent__Amendment_Rules

[3] Notification Number G.S.R. 501 (E), https://startupindia.gov.in/notification.php#

A Reminder for Online Retailers

Here’s one case that involves an online retailing businesses that is having a link with Trade mark Law – Jadebay Ltd and others v Clarke-Coles Ltd (t/a Feel Good UK) [2017] EWHC 1400 (IPEC).

However, overlooking the customary practice of online retailing methods, the Intellectual Property Enterprise Court followed the theoretical root of the Trade mark laws and over-turned such practices by upholding that‘re-use of a third party’s Amazon listing without consent to sell the same goods may, on appropriate facts, amount to trade mark infringement or passing off.

The factual matrix of this case lies as below:

In this matter there were two claimant, the first one was the statutory and common law owner of the Trade mark ‘Design Elements’ for the purpose of  “flagpoles plastic storage box garden furniture”, while the second Claimant was the sole licensee since 2011 to sell the products of the first claimant.  These products were also sold through online shopping portal namely – www.amazon.co.uk, via three listings created by the second claimant.

Usually, the common practice while listing products for sale on Amazon or any such kind of online portals are that each new listing is given a Unique Amazon Identification Number (ASIN). It is pertinent to note that an Amazon listing created by one party can be used by multiple sellers selling common product. Amazon then tends to promote the cheapest of the offerings by selecting them as the default seller, allowing consumers to review each listing in more detail.

Thus, in this case, the issue arose when the defendant listed its product under the listing created by the claimants, with a low price due to which they appeared as the default seller, attracting majority of sales from the said listing.

Interesting fact about this case is, that the claimants sued the defendants for trade mark infringement and passing off and did not even involve Amazon, who encourages sellers to use pre-existing generic ASINs where possible.

Arguments

The claimant focussed on the basic concept of rights of trademark. Firstly, the owner of the trademark has the right to prevent the third party from commercially using any sign (without the permission of the TM owner) that is ‘identical to the trade mark in respect of goods or services which are identical to those for which the mark is registered (double identity) (section 10 (1), Trade Marks Act 1994) (TMA) (section 10(1))’ or ‘ by such use of trademark that causes a likelihood of confusion or association on the part of the public (section 10(2)(b), TMA) (section 10(2)(b)).”

Secondly, the law of passing off a trade mark, which is considered as an element of Tort, the essential feature that is considered to attract this tort is the goodwill attached to the trade mark, such misrepresentation leads to likelihood of confusion among consumers due to which the claimant suffer damage as mention in the case of Reckitt & Coleman Products Ltd v Borden Inc [1990] RPC 341.

However, the defendant relied on the generality of the Amazon listing number. They claimed that since the listing was generic and did not refer to a specific brand, it could list its product under the same listing and that the brands of the competing products were significantly different as the defendant’s brand was “Feel Good UK”.

However, the claimant argued that due to the use of the same listing number namely “20ft aluminium flagpole “by Design Elements”, any consumer can link the defendant’s product as that of the claimant’s product.The defendants should have sold their products through another Unique Identity ASIN number.

The question was not whether the Defendant attached the sign or trade mark to the product or packaging itself, but whether the use of the listing in this way infringed (and/or passed off) the Claimants’ rights.

Judgement

The Intellectual Property Enterprise Court  accepted the claimant’s argument and  further observed that by having the same listing number and linking one’s goods to a competitor’s branded product listing would undoubtedly cause a misrepresentation and confusion among the consumers leading to Trademark infringement and passing off.

Conclusion

The present case has shown the online businesses a reality that the presence of Trade mark law is every where. It is another reminder that these businesses should consider their online marketing very carefully. Attaching products to an existing Amazon listing when the products are clearly not the same could potentially be an infringing act.  Moreover, as per the Objective of Trade Mark law, that is to avoid confusion in the market place, the decision of the court was not strange and perhaps was very apt.

Author: Ms. Pratistha Sinha, Intern at Khurana and Khurana Advocates and IP Attorneys and can be reached at anirudh@khuranaandkhurana.com.

References:

[1] https://www.lexology.com/library/detail.aspx?g=55745fd6-0397-4222-9d31-a3b3a8447e19

[2] https://www.rpc.co.uk/perspectives/ip/flagging-the-risk-of-a-new-type-of-trade-mark-infringement

Mobilox Innovations Private limited vs. Kirusa Software Private Limited

The much debated question with respect to the interpretation of what amounts to “existence of a dispute” has been finally answered by the Supreme Court in the (Mobilox vs. Kirusa) judgment. The interpretation of “existence of dispute” was seen in the context of initiation of CIRP of corporate debtors under the Insolvency and Bankruptcy Code, 2016.

The Corporate Insolvency Resolution Process (CIRP) can be initiated by the operational creditor in cases of payment default, through an application filed in the NCLT. Prior to such application, a demand notice (demanding the payment of the amount) needs to served upon the corporate debtor under Section 8 (1) of the Insolvency and Bankruptcy Code, 2016.

FACTS

The appellant (Mobilox) was engaged in a Star TV program “NachBaliye” conducting telephonic voting mechanism. The appellant engaged the respondent company (Kirusa) for providing various services relating to the TV program, and the parties also executed a non-disclosure agreement. The NDA stipulated certain conditions such as confidentiality obligations towards Mobilox. During the time period Kirusa raised necessary monthly invoices for the rendered services. However, Mobilox informed Kirusa about the payments that were subsequently withheld due to breach of the NDA obligations.

Kirusa senta demand notice to Mobiloxunder Section 8 of the Insolvency and Bankruptcy Code, due to non- payment. Mobilox’s response to the demand notice stated that there was a bona fide and serious dispute between the parties, inclusive of the breach of obligations mentioned under the NDA.

NCLT

Kirusa subsequently filed an application before the NCLT, Mumbai under section 9 for the initiation of Corporate Insolvency Resolution process (CIRP) of Mobilox. NCLT rejected the application on the grounds that Mobilox had issued a notice of dispute to the operational creditor.

NCLAT

An appeal against the order of NCLT was subsequently filed by Kirusa stating that mere dispute to the demand notice by the operational creditor does not amount to a valid ground for rejection of application under Section 9 of the ‘I & B Code’. The question before the Appellate Tribunal was with respect to the clarification of meaning of “dispute” and “existence of dispute” for the purposes of application under Section 9 of the Insolvency and Bankruptcy Code.

Section 8 provides for the requirements which should be complied with prior to filing an application under Section 9 of ‘I & B Code’.

Under Section 8 (2) of the I & B Code, once the demand notice is served upon the corporate debtor by the operational creditor, the corporate debtor needs to inform the creditor about the payment of the debt or dispute if any, within 10 days of receiving the notice.

Section 9 enshrines the right to file an application for the initiation of corporate insolvency resolution process after the expiry of 10 days from the date of delivery of demand notice.

NCLAT allowed Kirusa’s appeal on the groundthat the reply to the Demand Notice by the Mobilox cannot be seen within the purview of Section 8(2) and Section 5(6) of the Insolvency and Bankruptcy Code. It stated that the defense raised by Mobilox was vague and motivated as the debt demanded was not in connection with the non-disclosure agreement. Further NCLAT stressed upon the interpretation of “dispute” stating the a dispute would not be limited to only arbitration proceedings or suits but shall include any proceedings initiated before any tribunal, consumer court, labour court etc.

SUPREME COURT

Mobilox went in appeal before the Hon’ble Supreme Court against the order passed by NCLAT.

OBSERVATIONS

1. The Hon’ble Supreme Court allowed the appeal by Mobilox, while interpreting the expression “existence of a dispute” under Section 8(2) (a) of the Insolvency and Bankruptcy Code. The Hon’bleSupreme Court was of the opinion that the breach of NDA was sufficient to construe the existence of a dispute to invalidate the CIRP application filed by the operational creditor.

2. Interpretation of Section 8 (2) (a): “The word “and” occurring in Section 8 (2) (a) must be read as “or”. According to the earlier interpretation,the Code provides that a dispute between operational creditor and corporate debtor would only be valid if a suit or an arbitration proceeding with respect to the dispute has been filed prior to the receipt of demand notice. The Supreme Court was of the opinion that such an understanding shall lead to “great hardship” as the corporate debtor would then be able to stave off the bankruptcy process provided a dispute is already pending in a suit or arbitration proceedings”. An important point was highlighted by the Hon’bleSupreme Court stating that, if the “and” mentioned under Section 8(2)(a) is not read as “or”, such persons shall be excluded from the ambit of Section 8 (2) and application of CIRP shall be easily obtained which was not the intent of the legislature.

3. Pre-existing Dispute: The Hon’bleSupreme Court held that the existence of the dispute and/or suit or arbitration proceeding necessarily be “pre-existing”, that is to say, it should exist prior to receipt of the Demand Notice.

4. Plausible Contention Test: The Hon’ble Supreme Court while deciding the matter scrutinized the background of IB Code. It observed that the Insolvency and Bankruptcy Bill 2015 defined “dispute” as “a bona fide suit or arbitration proceedings”. However, when the Bill was passed the term “dispute” under Section 5 (6) was dropped from the definition. The Supreme Court stressed upon the interpretation that the previous jurisprudence with respect to the definition “dispute” does not apply to the current IB code. Instead the Hon’bleSupreme Court provided a new test “plausible contention” to determine the “existence of dispute”.

5. Questions to be seen by the Adjudicating Authority while examining any application under Section 9 of the I &B Code
6. Whether there is an “operational debt” of more than One Lakh?
7. Whether the documentary evidence provided with the application shows the debt is due and payable and has not yet been paid?
8.Whether there is an existence of a dispute between the concerned parties or any record of pendency of suit or arbitration proceeding filed before the receipt of Demand Notice.?

If any one of the conditions is not satisfied, NCLT must reject the application.

CONCLUSION

There appears to be no doubt that the interpretation with respect to “dispute” and “existence of a dispute” has been quite in debate since the inception of IB Code. Conflicting interpretations have been provided by different benches of NCLT. However, a conclusive ruling by the Supreme Court has finally provided a settled position.

It would be interesting to note as to how various NCLT’s would interpret and apply this landmark ruling relating to “plausible contention” test. Moreover, the Supreme Court has been vigilant to highlight the strict adherence to the time lines provided under the Code. The Supreme Court has clarified the object of the code keeping in mind the legislative intent. The court through this judgment has provided a balance between the rights of the creditors and also the remedies to the debtor companies.

Author: Tarun Gaur, 5th year student at ILNU, Nirma University, intern at Khurana and Khurana, Advocates and IP Attorneys and can be reached at info@khuranaandkhurana.com.

References:

[1] Interpreting The Nature Of The Notice Under Section 8 Of The Insolvency And Bankruptcy Code, 2016

[2] http://www.livelaw.in/supreme-court-finally-interprets-existence-dispute-ibc-mobilox-v-kirusa

[3] http://www.livelaw.in/key-takeaways-nclat-judgment-kirusa-vs-mobilox

[4] http://ibbi.gov.in/webadmin/pdf/order/2017

Khurana & Khurana Opens DELHI (Jangpura) Office

Khurana & Khurana, Advocates and IP Attorneys (K&K) along with its IP Asset Management Practice, IIPRD, upon successful completion its 10 years of practice,are happy to announce that they are opening up their 7’th branch Office in Jangpura, Delhi  w.e.f  2nd January 2018, in wake of its growing Intellectual Property (IP) and Commercial Litigation Practice, and with an intent of expanding its services verticals across Corporate and Tax Practices in the coming couple of years. The Delhi Office would also cater to IP/Patent professionals based in Delhi/Gurgaon and wanting to work out of the Delhi Office, with Greater Noida continuing to remain the main practice location for the firm.

Khurana & Khurana (K&K) is a leading Legal 500, MIP, IAM, Asia-IP, Acquisition-INTL, Corp-INTL, and Chambers & Partners recommended/ranked full service IP Law Firm in India with exclusive affiliate offices in Bangladesh, Vietnam, USA, Myanmar, and Nepal, and represents Indian and International clients ranging from small start-ups to Fortune 10 companies through its team of over 110 professionals spread across 7 offices in India and focusing on all aspects of IP, Commercial Law, and Media/Entertainment Matters. With 10 years of firm completion, K&K is looking forward to its next level of growth and the next 10 years would help K&K further refine its underlying positioning in the market.

IIPRD, on the other hand, is an established IP Asset Management Practice with a diversified business practice focusing on Patent support Matters ranging from executing mandates from Patent/IP Analytics to Litigation/Prosecution Assistance to Licensing Support for Global Corporates, Licensing Firms, and Law Firms, along with providing services in the domain of Commercialization, Valuation, Licensing, and Technology Transfer Matters.

K&K and IIPRD have completed 10 years of exemplary services. Excellence is our IP services, has given us an up thrust for expansion to Trademark and Copyright domains as well. With the vision of providing dynamic services and expanding our roots geographically, we are proudly opening our Delhi Branch.

Delhi Branch Office Address:

K-16, Jangpura Extension,

New Delhi – 110014, India

Appointment of Chairman of the Intellectual Property Appellate Board

IPAB is one of the most important IP tribunals in the country and was established by the Central Government by notifying in the Official Gazette on 15.07.2003. IPAB is an administrative body that has appellate jurisdiction over the decisions of the Controller of Patents, Registrar under the Trade Marks Act, 1999, and the Geographical Indications. However, IPAB has no statutory powers for trial infringement proceedings.

After the retirement of the Chairman of IPAB, K.N Basha on 13th May 2016, IPAB was run by only one member i.e. Mr.  Sanjeev Kumar Chaswal (Technical Member of Trade Mark) leaving behind other two posts vacant namely Vice-Chairman and Technical Member (Patents). This situation left IPAB almost non-functional for an year, leading to backlog of almost about 50,000 applications, due to which India was put under Priority watch list by US. Trade Representative.

As a result of which writ petitions were filed in Delhi as well as in Chennai, in order to fill up the vacant seats so as to make IPAB functional. This resulted in an expedited appointment of the Chairman, however, other positions are yet to be appointed. Therefore, through the Notice dated 1st January 2018 issued by IPAB (here) in accordance to the order dated 29.12.2017 of Ministry of Commerce and Industry (Department of Industrial Policy and Promotion), Shri Justice Manmohan Singh has been appointed as the Chairman of the said Board.

Justice Manmohan Singh is a well renowned persona in the field of IPR, who practiced the over 10 years and served as the Additional Judge of High Court of Delhi from 11th April, 2008- 21.09.2016.

As to who appointed the present Chairman and the constitutionality thereof are still contentious issues as the Madras High Court had upheld that the selection committee for appointing members of IPAB, shall have a predominant role of the Judiciary rather than of the Executive. Further, pointed that while appointing the ‘chairperson’, the recommendation of the Chief justice of India must be given ‘due consideration’. The concerned High Court,  elaborately explained and also struck down various parts of Section 85[1] of the Trade Mark Act, 1999 in order to upheld the ‘Doctrine of Separation of Power’[2], thereby making the IPAB, a constitutionally valid Judicial body.

However, it is alleged that this appointment has been made under Tribunal, Appellate and other Authorities (Qualifications, Experience and other conditions of Service of Members) Rules, 2017. The said Act provides for composition of the selection committee that consists of Chief Justice of India or his nominee, two secretaries to the Government of India and two experts nominated by the Central Government, leading to greater dominance of Executive rather than judiciary in the appointment procedure of the Chairperson. This blatantly violates the judgement of the Madras High Court as mentioned earlier.

Moreover, let’s wait whether the said appointment of Justice Manmohan Singh will be challenged on the ground of constitutionality or not, keeping in mind the rulings held by the Hon’ble High Court of Madras.

Author: Ms. Pratistha Sinha, Intern at Khurana and Khurana Advocates and IP Attorneys and can be reached at anirudh@khuranaandkhurana.com.

References: 

[1] Qualifications for appointment as Chairman, Vice-Chairman, or other Members.

[2]Shamnad Basheer vs Union Of India on 10 March, 2015, W.P.No.1256 of 2011; The petition challenged the constitutional validity of the eligibility criteria, appointment of the members of IPAB