1. www.indilaw.com
India Business Law Journal
Your partner in legal intelligence
Managing risk in uncertain times
The IP threats facing Indian globetrotters
Getting to grips with the new Companies Act
Head to head:Trademark law in India and China
May 2014
Volume 7, Issue 10
Picking an IP lawyer
Tips from practitioners and in-house counsel
2.
3. Contents
India Business Law Journal 1May 2014
15
15
Practitioners and in-house counsel share their
insights on India’s IP professionals and
how to choose among them
3 Leader
Is India at a tipping point?
4 Inbox
5 News
Louis Vuitton makes its mark
Malhotra returns to OP Khaitan
Madhuryya cycles for cancer charity
Jet-Etihad deal steers clear of turbulence
10 The wrap
Business law digest: page 10
Dispute digest: page 13
15 Cover story
Picking an IP lawyer
22 Vantage point
Back to school
Corporate law firms have raised demands
regarding legal education. Now they should
play a greater role in shaping it, argues
Jonathan Gingerich
23 Spotlight
Head to head
A Chinese and an Indian IP firm join forces
to provide a side-by-side comparison of
their respective trademark regimes
30 Commercial hazards
Managing risk requires an understanding of
the changing dynamics of the environment
in which a company operates
33 What’s the deal?
A new era
39 Intelligence report
Globetrotting
Picking an
IP lawyer
A new
era
What Indian
companies need
to know about
protecting their IP
in other countries
Globetrotting
The Companies Act ushers in far-reaching
changes to corporate governance and
the protection of investors’ interests
33
39
45 Correspondents Expert advice from India Business Law Journal’s correspondent law firms
45 Banking & finance
Economic Laws Practice
46 Canada-India trade & investment
Bennett Jones
47 Capital markets
Economic Laws Practice
48 Competition & antitrust
Trilegal
49 Dispute resolution
Bharucha & Partners
50 Energy & infrastructure
Trilegal
51 Food law
DH Law Associates
52 Intellectual property
Saikrishna & Associates
53 Media & entertainment
LexOrbis
54 Mergers & acquisitions
Amarchand Mangaldas
55 Regulatory developments
Phoenix Legal
56 Taxation & transfer pricing
Economic Laws Practice
5. Leader
India Business Law Journal 3
Opinion
May 2014
Long years ago we made a
tryst with destiny ...
P
owerful oratory from India’s first prime minister,
Jawaharlal Nehru, in a speech made on the eve
of India’s independence, when he famously said
India was awakening to life and freedom “at the stroke of
the midnight hour, when the world sleeps”. Nearly seven
decades later, India’s destiny appears somewhat removed
from the lofty principles Nehru went on to speak about.
Instead, the future of the country hinges on the strength
of the government that will emerge when elections to the
16th Lok Sabha, the lower house of parliament, are com-
pleted later this month.
Given the reality of Indian politics, there
is little doubt that the winning party will
need to cobble together a coalition. But
will such a coalition be sufficiently strong to
provide effective governance? And will the
new government have the wherewithal to
set India on a course for inclusive growth?
For this to be achieved, vast sections of
its legislative framework will need to be
updated and overhauled. Even if the new
government has the appetite for reform
and the power to pursue it, this will be no
mean feat. But neither will it be impossible.
For an example of what can be achieved,
look no further than the recent introduc-
tion of India’s new Companies Act. The
act may have been 10 years in the making,
but as we discuss in A new era (page 33),
its introduction is transforming the rules by
which companies are run and organized.
Several sections of the act came into
force on 1 April, and some of these,
including the provisions governing related-party transac-
tions, mark a seismic shift in the balance of power between
majority and minority shareholders. What will this mean for
domestic and international companies? Sujjain Talwar, a
partner at Economic Laws Practice, warns that the provi-
sions on related-party transactions “may be unworkable in
closely held companies,” while Surbhi Kejriwal, a principal
associate at Khaitan & Co, predicts that foreign companies
will find it challenging to comply with the new corporate
social responsibility norms.
Challenges related to the new Companies Act will hope-
fully be short-lived, as companies hone their compliance
strategies and teething troubles are gradually ironed out. But
other types of challenge are harder to eradicate.
One such challenge is the identification, management
and mitigation of business risks. This challenge is particu-
larly acute during times of economic or political uncertainly
– times such as now, with India in the throes of a general
election. In Commercial hazards (page 30), S Ramaswamy,
the group general counsel at Escorts, discusses how man-
aging such risks requires an understanding of the changing
dynamics of the business environment. He also highlights
the considerable challenge of anticipating new business
risks that are not currently known or understood. These
“new age” risks may know no national boundaries, and as
such, may be difficult, if not impossible, to contain. All one
can do is to remain vigilant and diligent in monitoring trends
on a regular basis and updating risk management strategies
accordingly.
This month, thousands of delegates will gather in Hong
Kong for the 136th annual meeting of the International
Trademark Association (INTA). India Business Law Journal is
proud to a media partner of the meeting and copies of our
April and May issues will be widely available to delegates.
In this issue, we conclude the special line-up of intellectual
property features that we have presented to coincide with
INTA’s meeting. The first such feature is this month’s Cover
story (page 15), in which in-house coun-
sel and legal practitioners share their tips
and tricks on picking the best IP lawyers.
India has thousands of IP-related service
providers and choosing among them is
no easy task, particularly for foreign com-
panies and law firms that may lack local
market intelligence.
As Prabhakar Sastry, the head of legal
at Cairn Energy, explains: “IP rights issues
are too precious to have the sub-optimal
attention of my law firm.”
Ish Bali, the legal director of Coca-Cola
India, adds that “IP law is an ever-chang-
ing law, especially in a country like India,
where such laws are still developing”.
As such, making the right choice is
crucial. Our coverage emphasizes the
importance of getting it right and cau-
tions against accepting second best in the
belief that nothing better is available.
In this month’s Intelligence report (page
39), we look at IP protection from a different perspective and
explore the challenges and solutions the lie in store for Indian
companies protecting their IP in other parts of the world.
Our coverage provides an intriguing snapshot of global
intellectual property regimes, threats and protection mecha-
nisms. It includes insights from practitioners in numerous
jurisdictions, including Brazil, Vietnam, Sweden, Australia
and the US, which continues to be the biggest export market
for Indian companies. As India Inc expands its business glo-
bally, getting the right international IP protection is vital.
This month, we’re also proud to introduce a new con-
cept called Head to head, created in tandem with our
sister publication, China Business Law Journal, as a means
of comparing a key area of the law and practice in the
world’s two largest emerging economies. In Head to head:
A comparison of Indian and Chinese trademark law (page
23), Chinese law firm Wan Hui Da and India’s Anand and
Anand discuss everything from registering and protecting
your mark to the courts and compensation issues in the
two jurisdictions. The comparison makes for fascinating
reading. Expect more Head to head features exploring
various practice areas in future. g
www.indilaw.com
India Business Law Journal
Your partner in legal intelligence
Managing risk in uncertain times
The IP threats facing Indian globetrotters
Getting to grips with the new Companies Act
Head to head:Trademark law in India and China
May 2014
Volume 7, Issue 10
Picking an IP lawyer
Tips from practitioners and in-house counsel
Is India at a tipping point?
6. Inbox Letters to the editor
India Business Law Journal4 May 2014
Meaningful community service
Dear Editor,
Thank you for covering the impor-
tant issue of corporate social respon-
sibility (CSR) in your article Giving back,
published in the April issue of India
Business Law Journal. In my opinion, the
main problem with CSR revolves around
communication. Many CSR consultan-
cies will emerge and help in doing good
work, but consultancies must work
closely with the B2B and B2C segments
in order to involve them in a meaning-
ful way. Many companies are unsure of
where to focus their energies and funds.
CSR should be about more than just
corporate responsibility; it should be
about a community service revolution in
which all shareholders may benefit.
The new CSR provisions are a wel-
come introduction, however non-
governmental organizations, charities
and other community organizations
will no doubt be competing to win
investments from the right corporate
partners.
Onkar Khullar
Creative Director
I Impact India Social Innovation
New Delhi
CSR
Opinions? Observations? Feedback?
We want to hear from you
India Business Law Journal welcomes your letters. Please write to the editor at editorial@indilaw.com.
Letters may be edited for style, readability and length, but not for substance.
Due to the quantity of letters we receive, it is not always possible to publish all of them.
7. India Business Law Journal 5
News
May 2014
T
he Competition Appellate
Tribunal (COMPAT) has dis-
missed an appeal by Jitender
Bhargava, a former executive director
of Air India, who challenged the deci-
sion by the Competition Commission
of India (CCI) to approve the merger of
Jet Airways and Etihad.
Bhargava said that the combination
of the two airlines sought to “eliminate
the competition in the market for inter-
national air passengers, which would
not only impact the operations of Air
India and other domestic airlines but
ultimately the consumers who would
be left without any choice”.
The COMPAT stated that Bhargava
did not have locus standi (the right to
be heard). Justice VS Sirpurkar said
that the combination had not been
objected to by any shareholder, office
bearer or by any competitor com-
panies, but instead by Bhargava in
his private capacity. “Air India, which
would have been the most affected
person by this combination, has also
not chosen to file any appeal against
the order,” the COMPAT order stated.
Representing Bhargava, senior
advocate Ramji Srinivasan argued
that “there would be a likelihood of
increase in fares because of two pow-
erful airlines coming together”, which
would put “an end to the competition”.
However, the COMPAT stated that this
contention was premature and dis-
missed the appeal.
The order comes as a relief to both
companies, which have attracted
regulatoryscrutinysincetheannounce-
ment of their combination.
Senior advocate Harish Salve was
counsel to the airlines. Jet Airways
was also advised by UA Rana, Mrinal
Mazumdar and Raghav Shankar and
Etihad was advised by advocate
Rajshekhar Rao along with a team
from Amarchand Mangaldas compris-
ing partner Nisha Kaur Uberoi, sen-
ior associate Abir Roy and associate
Shruti Aji Murali.
Balbir Singh and Monica Benjamin,
advocates with Dr Shabistan Aquil
& Sriraj, represented the CCI on the
matter.
In addition to Srinivasan, Bhargava
was advised by a team from LEXport
including managing partner Srinivas
Kotni, associate partner Mukul
Chandra, corporate lawyer Ajay Yadav
and advocate Pradeep.
For more on this case and other
competition law matters, see page 48.
COMPAT reverses
CCI order
The Competition Appellate Tribunal
(COMPAT) has overturned a finding of
abuse of dominance against Schott
Glass India, a subsidiary of German
specialty glass manufacturer, Schott.
In March 2012, the Competition
Commission of India (CCI) had imposed
a penalty of `56.5 million (US$940,000),
equal to 4% of Schott India’s average
turnover during 2007-10 for abusing
its dominant position in the market for
Jet-Etihad deal steers clear of turbulence
Competition law
8. News
India Business Law Journal6 May 2014
Madhuryya cycles
for cancer charity
Arindam Madhuryya, an associate
at Trilegal, has completed a 1,500-kil-
ometre bike ride from Mumbai to Delhi
for CanKids, a cancer charity in India.
The charity is dedicated to “change for
childhood cancer in India”.
Madhuryya’s contribution was a part
of CanKids’ month-long initiative “Ghar
Se Door Yeh Shehar” (far away from my
home is the city where I come for my
cancer treatment). He was inspired to
raise funds and awareness about can-
cer in honour of two loved ones he had
lost to the disease.
“My friend lost her godmother to
cancer last year and that is when I
planned to do a long ride for the benefit
of a cancer charity,” said Madhuryya.
Instead of looking for sponsorship, he
funded the ride himself. “I spent around
a lakh (US$1,600) on this ride and am
proud to raise a substantial amount
from it,” he added.
He began his journey in Mumbai
on 15 March and reached Delhi on
23 March. Madhuryya said he was
pleased with the quality of the roads as
he rode mostly along highways, how-
ever, the ride was challenging due to
high temperatures during the day. “In
order to combat the heat, I was forced
to start very early in the morning, often
before dawn, and had to rest between
noon and 4pm, and then continue until
about 7pm to complete my daily quota
of about 250 kilometres,” he told India
Business Law Journal.
Madhuryya had a narrow escape
after being hit by a large truck even
before he had left the municipal limits
of Bombay. Due to the high speed at
which it happened, he remained on his
bike unhurt, with only a big dent on his
seat-stay. “Immediately my thoughts
went to the people I was riding in mem-
ory of, because it was indeed a miracu-
lous escape,” said Madhuryya.
The 29-year-old, who is part of the
endurance racing circuit in Mumbai,
has taken part in charity rides in the
past, one of which saw him raise over
£1,600 (US$2,700) for Action Medical
Research by cycling from London to
Paris in 2012.
neutral USP-I borosilicate glass tubes.
The CCI had also directed Schott India
to cease and desist from the practice of
offering discounts linked to the volume
of tubes bought by downstream con-
vertors of tubes into ampoules.
The CCI’s decision provided the first
glimpse into its interpretation of dis-
criminatory pricing as abusive con-
duct and cast doubts on the validity
of volume-linked rebate and discount
schemes, according to AZB & Partners’
competition team. “By reversing the
CCI’s decision, the COMPAT has clari-
fied that a rebate/discount scheme
would be considered discriminatory
only when it results in unequal treat-
ment to similar transactions,” the team
wrote. “Additionally, the COMPAT has
indicated that while examining target-
linked discounts offered by an upstream
manufacturer of intermediary products
to downstream manufacturers of final
products, it is important to examine
the effect of target-linked discounts on
prices of the final products.”
AZB & Partners represented Schott
India before the COMPAT, with senior
partner Percival Billimoria acting as
counsel.
Community service
9. India Business Law Journal 7
News
May 2014
Joint ventures
Stump spins into
joint ventures
Bangalore-based Stump Schuele &
Somappa Springs has sold its heavy
coil spring business to its subsidiary
Stumpp Schuele & Somappa Auto
Suspension Systems. It has also sold
a stake in the subsidiary to Mitsubishi
Steel Manufacturing (MSM) of Japan,
forming a joint venture. The joint ven-
ture will manufacture coil springs and
stabilizer bars.
Stump is part of the MG Brothers
Group, a 60-year-old enterprise with
businesses in the transportation,
agriculture and real estate sectors,
auto dealerships and other interests.
The company owns 12 plants which
produce more than 4,000 varieties
of springs for clients such as Ford
Hindustan Motors and Tata Motors.
J Sagar Associates advised Stump
on the sale and joint venture. It also
advised the company on the formation
of a separate joint venture with MSM,
to be based in Chennai, which will
manufacture construction machinery
recoil springs.
The JSA team comprised part-
ner Murali Ananthasivan, senior
associate Tamara Devanandan and
associates Roy George, Rajashree
Balasubramanian and Malini Rao.
MSM was represented by Herbert
Smith Freehills in Japan and DSK Legal
in New Delhi.
People moves
HSA promotes
eight lawyers
HSA Advocates has promoted eight
lawyers across its practices, pushing
its partner count (including associate
partners) to 13.
Pranav Singh from the infrastructure
and energy practice and Harsh Arora
from the finance practice have joined
the firm’s partnership.
Sumedha Dutta from HSA’s corporate
M&A practice and Arun Mani from the
disputes and infrastructure practice
have been made associate partners.
Avinash Khard (finance practice),
Anshuman Pande (disputes and infra-
structure practice), Pragya Ohri (dis-
putes practice) and Mazag Andrabi
(infrastructure and energy practice) have
become senior associates.
Two more share
ELP’s equity pie
Sanjay Notani and Darshan Upadhyay
have become equity partners at
Economic Laws Practice. Notani is a
member of the firm’s international trade
and customs practice and Upadhyay is
part of the corporate and commercial
team.
Managing partner Rohan Shah said
the two lawyers had “built a strong repu-
tation for excellence in their practices
and client relationships”.
In addition, Economic Laws Practice
promoted eight senior associates to
associate partners; five associate man-
agers to senior associates and nine
associates to associate managers. Of
the 22 lawyers promoted, 15 are based
in Mumbai, three are based in Pune,
two are located in Delhi and one each in
Ahmedabad and Chennai.
Malhotra returns
to OP Khaitan
Nipun Malhotra has rejoined OP Khaitan
& Co as a senior partner. Malhotra left
the firm in 2007 for the post of vice pres-
ident of legal affairs and group general
counsel at EIH and later moved to DLF
as the senior vice president of legal.
Malhotra brings wide experience on
the civil litigation front and while work-
ing in a corporate capacity took on
roles of business management and
development, public relations, labour
management, brand protection and
land use planning. His practice area
specialties include general commer-
cial liability, product liability, labour law
defence, real estate, hospitality, and
dispute resolution.
OP Khaitan managing partner Gautam
Khaitan said that the firm was in “expan-
sion mode” and was focused on “more
lateral recruitments with lawyers of high
potential and recognition”.
Hardinge forks out for India stake
Hardinge, an international provider of advanced metal-cutting solutions,
has acquired the Forkardt workholding products division of ITW India
through a business transfer. The transaction was part of Hardinge’s global
acquisition of the Forkardt business of Illinois Tool Works, a US-based pub-
licly traded company, for US$34 million.
Hardinge purchased Forkardt’s US, Swiss, German and Chinese busi-
nesses in 2013. The Indian leg was completed last month, since this part of
the transaction involved the establishment of the Indian purchaser entity as
a limited liability partnership, which required prior approval from the Foreign
Investment Promotion Board.
Majmudar & Partners managing partner Akil Hirani and associate partner
Christopher Krishnamoorthy represented Hardinge on the deal. Phillips Lytle
was the company’s US counsel while Higgs & Co offered UK legal advice.
Vaish Associates advised ITW India on the Indian leg of the transaction.
Mergers & acquisitions
10. News
India Business Law Journal8 May 2014
Three new hires
at Khaitan & Co
Khaitan & Co has recruited Kartick
Maheshwari in Mumbai and Nishant
Beniwal and Dibyanshu in New Delhi.
Maheshwari joins the firm as an
associate partner in the securities,
capital markets and corporate practice.
Before moving to Khaitan, he worked
at White & Case in Singapore and AZB
& Partners in Mumbai, specializing in
cross-border M&A, private equity and
restructuring transactions.
Dibyanshu and Beniwal are both join-
ing the firm’s energy, infrastructure and
resources practice. Dibyanshu comes
on board from J Sagar Associates
as an associate partner. He advises
clients on corporate and commercial
law, M&A, and project development
issues in the infrastructure area with an
emphasis on the oil and gas sector.
Beniwal joins the firm as a counsel.
His past experience includes working
at Trilegal, J Sagar Associates and
Luthra & Luthra in New Delhi. Beniwal
advises regulatory authorities, devel-
opers and investors on all aspects of
investing, developing and financing
infrastructure projects in India. He also
advises clients on regulatory issues
with respect to power trading, coal-
linkages and mining arrangements,
statutory permits and consents, land
acquisition, the environment and labour
welfare legislation.
Banking & finance
ReNew secures
loan for wind farm
ReNew Wind Energy (Welturi)
has obtained a rupee-denominated
secured term loan facility from Power
Finance Corporation to develop its
wind power project in Maharashtra’s
Beed district.
The loan, valued at approximately
`1.14 billion (US$18.8 million) will be
used to construct, operate and main-
tain the 25.2-megawatt project.
ReNew Wind Power was established
in 2011 by Sumant Sinha, a former COO
of Suzlon Energy. The company has
other wind projects under development
including a 25-MW wind farm in Rajkot,
Gujarat, and a 60-MW wind farm in
Maharashtra. By 2015 the company
aims to reach a 1-gigawatt capacity.
A m a r c h a n d M a n g a l d a s
advised Power Finance Corporation,
drafting and negotiating the term loan
facility agreement, security docu-
ments and other finance documents.
The team consisted of partner Jatin
Aneja, principal associate Anoop
Rawat, and associates Shreyas
Rathore and Sagar Dhawan.
Nishant Beniwal DibyanshuKartick Maheshwari
11. India Business Law Journal 9
News
May 2014
Intellectual property
Louis Vuitton
makes its mark
Delhi High Court has affirmed that
the trademarks of French fashion house
Louis Vuitton are “well-known”.
Louis Vuitton had filed a lawsuit
against Arif Khatri, the owner of a shop
in Lajpat Nagar which was dealing in
counterfeit goods bearing the com-
pany’s registered trademarks. Louis
Vuitton accused Khatri and the shop
(named as the second defendant)
of dealing in goods which infringed,
diluted and damaged its marks and of
passing off these goods as those of
Louis Vuitton.
On 29 January, the court granted
an interim injunction restraining the
defendants from dealing in counterfeit
Louis Vuitton goods and also appointed
a local commissioner to visit the shop
and seize all such goods and related
documents.
The defendants subsequently
pledged to refrain from selling coun-
terfeit Louis Vuitton goods in the future
but initially resisted paying damages.
After a hearing on 31 March, Khatri
agreed to pay `300,000 (US$5,000) in
damages.
The court noted that the Louis Vuitton
logo, the Louis Vuitton word mark and
the toile monogram pattern were defin-
ing hallmarks of the company and as a
result were recognized as well-known
trademarks.
Pravin Anand, the managing partner
of Anand and Anand, and Udita Patro,
a senior associate at the firm, repre-
sented Louis Vuitton.
Praveen Chauhan of C&S Law
Offices and Vijay Kumar acted for the
defendants.
Louis Vuitton has fought a number
of IP battles in India over infringements
of its trademarks including one case
where it prevailed against parties which
imitated its epi-style textured mark.
Tide washes
over infringers
Bombay High Court has ordered
Zeeshan Haider Sayeed to cease using
trademarks, artistic works and deceptive
variations of the laundry detergent Tide.
Procter & Gamble, which owns the
Tide trademark, and its Indian sub-
sidiary filed an action for trademark and
copyright infringement as well as pass-
ing off against Sayeed and his affiliates.
It sought to restrain Sayeed’s use of
trademarks which are deceptively simi-
lar to Procter & Gamble’s trademarks
TDC, Tide (bull’s-eye device) and Tide
Nature Fresh.
In addition to awarding an injunc-
tion to restrain the use of the infringing
material, the court seized all infring-
ing products and packaging materials
found in Sayeed’s premises. Sayeed
submitted to a decree of permanent
injunction and the suit was subse-
quently disposed of.
Remfry & Sagar represented Procter
& Gamble on the case.
12. The wrap
India Business Law Journal10 May 2014
Corporate law
Companies Act
2013: new rules
now in place
The Companies Bill, 2012, was
passed by the Lok Sabha (lower house
of parliament) on 18 December 2012
and by the Rajya Sabha (upper house)
on 8 August 2013. Following presi-
dential assent on 29 August 2013, the
Companies Act, 2013, finally came into
force, paving the way for the replace-
ment of the Companies Act, 1956.
The 2013 act has 470 sections
divided into 29 chapters and seven
schedules, reducing it from 658 sec-
tions divided into 13 parts.
The government notified 98 sections
of the 2013 act in September 2013;
section 235, dealing with corporate
social responsibility, on 27 February
2014; and 183 sections on 26 March.
A total of 283 sections are now in
effect. The government notified rules
for a number of chapters after having
considered suggestions and com-
ments from various stakeholders. It
also introduced a new set of forms
that need to be filed with the relevant
authorities.
The following 19 chapters and their
corresponding rules have been noti-
fied, with certain exceptions:
Incorporation of company and•
matters incidental thereto;
Prospectus and allotment of•
securities;
Share capital and debentures;•
Acceptance of deposits by•
companies;
Registration of charges;•
Management and administration;•
Declaration and payment of•
dividend;
Accounts of companies;•
Audit and auditors;•
Appointment and qualification of•
directors;
Meeting of board and its powers;•
Appointment and remuneration of•
managerial personnel;
I n s p e c t i o n , i n q u i r y a n d•
investigation;
Companies authorized to register•
under the Companies Act, 2013;
Companies incorporated outside•
India;
Government companies;•
Registration office and fees;•
Nidhis (companies which encourage•
savings among members and
receive deposits from and lend to
members only);
Schedules I to VII.•
For more on the Companies Act, see
story on page 33 and correspondent
column on page 54.
Foreign portfolio
investors set for
regime rollover
The foreign portfolio investments
regime in India is set for a rollover on
1 June with both the Securities and
Exchange Board of India (SEBI) and the
Reserve Bank of India (RBI) coming out
with required amendments to the legal
framework.
Earlier this year, SEBI had introduced
the SEBI (Foreign Portfolio Investors)
Regulations, 2014, which replaced the
SEBI (Foreign Institutional Investors)
Regulations, 1995, and harmonized
foreign institutional investors (FIIs),
sub-accounts and qualified foreign
investors (QFIs) into a single investor
class.
TheRBIhasnowamendedtheForeign
Exchange Management (Transfer or
Issue of Security by a Person Resident
Outside India) Regulations, 2000
(TISPRO regulations), to reclassify and
regulate foreign portfolio investors
(FPIs) in India, which include FIIs, sub-
accounts and QFIs. A new schedule
2A has been inserted after schedule 2
of the TISPRO regulations to provide
for the purchase, sale of shares and/
or convertible debentures of an Indian
company by a registered FPI under the
FPI scheme.
Paragraph 2(iii) of schedule 2A pro-
vides that the total holding by each
registered FPI must be below 10% of
the paid-up equity capital or 10% of
the paid-up value of each series of con-
vertible debentures issued by an Indian
company. The total holding of all regis-
tered FPIs must not exceed 24% of the
paid-up equity capital or paid-up value
of each series of convertible deben-
tures issued by an Indian company. The
company can increase the aggregate
limit of 24% up to the applicable sec-
toral cap or statutory ceiling if its board
Business law digest
13. India Business Law Journal 11
The wrap
May 2014
passes a resolution and the company
then passes a special resolution.
The RBI has amended schedule 5 of
the TISPRO regulations (Purchase and
sale of securities other than shares or
convertible debentures of an Indian
company by a person resident outside
India) to introduce a new paragraph
1C, which provides that registered FPIs
can purchase certain securities on a
repatriation basis. These securities
include dated government securities,
treasury bills, listed non-convertible
debentures, bonds issued by an Indian
company, commercial paper, units of
domestic mutual funds, etc.
The FII and QFI regimes have been
grandfathered and are to be rolled over
into the FPI regime.
Taxation law
Revised DTC Bill
released for public
comment
A draft Direct Taxes Code (DTC) Bill,
along with a discussion paper was
released in August 2009. After consider-
ing suggestions from various quarters, a
revised discussion paper was released
in June 2010, and an amended DTC Bill,
2010, was introduced in parliament in
August 2010.
The 2010 bill was referred to the
Standing Committee on Finance, which
submitted its report in March 2012.
The bill has been modified substantially
through the Finance Acts of 2011,
2012 and 2013, and a revised DTC Bill,
2013, has now been released for public
comment.
Some of the notable changes are as
follows:
Dividend income: A resident with divi-
dend income on which dividend dis-
tribution tax is applicable will be sub-
ject to an additional tax of 10% on
the aggregate amount of the dividend
where the amount exceeds `10 million
(US$160,000).
Higher tax rates: The DTC Bill, 2013,
has added another slab (bracket) for
income tax. Individuals, Hindu undivided
families and artificial juridical persons are
taxable at a rate of 35% for income that
exceeds `100 million.
Wealth tax: Under the DTC Bill, 2010,
only specified unproductive assets were
subject to wealth tax. The 2013 bill has
widened this to include all assets, physi-
cal and financial. The proposed thresh-
old is `500 million, and the tax proposed
to be levied is 0.25%.
Indirect transfer: Under the 2013 bill, an
asset or a capital asset which is a share
of, or an interest in, a company or entity
registered or incorporated outside India
will be considered to derive, directly or
indirectly, its value substantially from the
assets (tangible or intangible) located in
India if the value of those assets repre-
sents at least 20% of the fair market value
of all assets owned by the company or
entity. Under the 2010 bill, the threshold
for indirect transfer provisions was 50% of
the fair market value of the global assets.
Non-profit organizations: The surplus
of non-profit organizations will now be
taxable at a concessional rate of 15%,
and a basic exemption of `100,000 will
also be provided. Further, under the 2013
bill, investments can be made freely by
non-profit organizations (with the excep-
tion of a few prohibited investments)
and not just in specified areas. However,
the bill proposes to remove the specific
deduction for accumulation and provi-
sion for carry forward of deficit.
The business law digest is compiled by Nishith
Desai Associates (NDA). NDA is a research-
based international law firm with offices in
Mumbai, New Delhi, Bangalore, Singapore, Sili-
con Valley and Munich. It specializes in strategic
legal, regulatory and tax advice coupled with
industry expertise in an integrated manner.
14.
15. India Business Law Journal 13
The wrap
May 2014
Banking law
Stopping advance
payment cheque
is not a crime
Is the dishonor of a post-dated cheque
issuedasanadvancepaymentanoffence
under section 138 of the Negotiable
Instruments Act, 1881?
Allowing an appeal in M/s Indus Airways
Pvt Ltd & Ors v M/s Magnum Aviation Pvt
Ltd & Anr, the Supreme Court recently
ruled it was not an offence, as “there
should be legally enforceable debt or
other liability subsisting on the date of
drawal of the cheque” for criminal liability
to be made out under section 138.
Holding that there is a “fine distinction
between civil liability and criminal liabil-
ity” in section 138, the court ruled that a
cheque issued as an advance payment
for the purchase of goods cannot be
said to have been drawn for an existing
debt or liability if the purchase order is
cancelled.
Indus Airways placed two orders for
aircraft parts with Magnum Aviation
and issued two post-dated cheques as
advance payment for the orders. One
of the conditions of their contract was
that the entire payment had to be made
in advance. The cheques were dishon-
oured on the ground that Indus Airways
had stopped payment. Subsequently,
Magnum Aviation received a letter from
Indus cancelling the orders and request-
ing the return of the cheques.
An additional chief metropolitan mag-
istrate, Delhi, issued a summons to Indus
Airways. A revision petition followed and
the summons was set aside. However,
Delhi High Court restored the summons
on the ground that the issue of a cheque
at the time of signing a contract had to be
considered against a liability.
Overruling the high court, the Supreme
Court said that if a condition of the con-
tract is breached the purchaser may
have to make good a loss occasioned to
the seller but that does not create crimi-
nal liability under section 138.
Taxation
Provident fund
account cannot be
attached for taxes
In Dineshchandra Bhailalbhai Gandhi
v Tax Recovery Officer, Surat, Gujarat
High Court recently held that depos-
its in a public provident fund (PPF)
account are immune from attachment
for recovery of tax dues.
In the case, a tax recovery officer
(TRO) issued a notice in 2005 under
section 226(3) of the Income Tax Act,
1961, to the Salabatpur branch of
State Bank of India stating that as the
sum of `2,516,790 (US$41,700) was
due from Gandhi the amount lying in
his PPF account was to be remitted to
the TRO.
Gandhi challenged the order before
the high court, arguing that under sec-
tion 9 of the Public Provident Fund
Act, 1968, the amount outstanding in
his PPF account cannot be attached
for the recovery of tax dues. The TRO
defended its action by relying on a
Central Board of Direct Taxes circular
of 1990 in which it was clarified that
section 9 of the Public Provident Fund
Act applies only to attachment under a
decree or order of a court of law and not
to attachment by the tax authorities.
Rejecting the TRO’s contention the
high court held that a conjoint reading
of three provisions, namely, section 9
of the Public Provident Fund Act, rule
10 of schedule II to the Income Tax Act
and clause (ka) to the proviso to section
60(1) of the Code of Civil Procedure,
1908, makes any amount lying in the
PPF account of a subscriber immune
from attachment and sale for the recov-
ery of the income tax dues.
Dispute digest
16. The wrap
India Business Law Journal14 May 2014
Corporate law
Breach of court
undertaking is
contempt
Does the breach of undertakings
given to a court in the course of agree-
ing a settlement amount to contempt
of court?
Ruling in Prominent Advertising
Services v Koutons Retail India Limited
Delhi High Court found that “wilful and
intentional breach” of undertakings
would constitute contempt of court
as defined under section 2(b) of the
Contempt of Court Act, 1971. The
court held that as “dishonouring an
undertaking given to the court would
amount to a fraud on court and …
would inevitably affect the administra-
tion of justice”, it naturally follows that
“furnishing of an undertaking, being
fully aware that there was a reasonable
probability that it may not be possible
to comply with the same” would also
amount to contempt of court.
Prominent Advertising filed a contempt
petition, asking Delhi High Court to pun-
ish Koutons Retail for violating an order
it had passed. Koutons had failed to pay
its admitted debt of almost `49 million
(US$812,000) to Prominent Advertising.
Koutons said it regretted the breach
of the undertakings and tendered an
unqualified apology. It stated that the
breach was not deliberate but was due
to its deteriorating financial affairs and
on account of non-availability of funds.
Delhi High Court found Koutons
guilty of contempt of court, holding
that Koutons had been well aware that
it might not be in a position to adhere
to the payment schedule. Koutons had
therefore committed a fraud on the
court by persuading it to dispose of
the winding-up petition on the basis
of an undertaking which it knew it was
unlikely to honour. However, in view
of the apology tendered by Koutons,
the court deemed it fit to impose a
penalty of `20,000 on each of three
respondents.
Arbitration
Section 8
application held
not necessary
Ruling in Sharad P Jagtiani v Edelweiss
Securities Limited, Delhi High Court held
that section 8 of the Arbitration and
Conciliation Act, 1996, merely requires
a party to an action before a judicial
authority to bring to the notice of the
authority that the action being brought
before it is the subject of an arbitration
agreement.
Ruling on whether a plea in the writ-
ten statement suffices to refer par-
ties to arbitration, the court took the
view that legislative intent required it
to interpret section 8 widely and not
in “a constricted and pedantic fash-
ion”. As such, the court said that “it is
the substance of the plea and not the
nomenclature which matters”.
Jagtiani had filed suit for recov-
ery of `4,671,768 (US$77,600) from
Edelweiss Securities. Objecting to the
suit, Edelweiss argued that the court
lacked jurisdiction to entertain it as the
parties had agreed to refer any claims
or disputes that arose between them
to arbitration. Edelweiss submitted a
list of documents along with its written
statement which included a copy of an
agreement between the parties that
contained an arbitration clause.
Jagtiani unsuccessfully argued that
the dispute was non-arbitrable as the
dispute related to rights and liabilities
that give rise to or arise out of a crimi-
nal offence, on the ground that he had
filed a complaint with the police with
respect to the same transaction.
Jagtiani also argued that the mat-
ter could not be referred to an arbitral
tribunal because the parties to the
arbitration agreement had not filed an
application under section 8 of the act to
refer the dispute to the arbitrator.
Rejecting both arguments Delhi High
Court said “it is the court which owes
a duty to refer the parties to arbitration
upon the arbitration being invoked”.
The dispute digest is compiled by Bhasin &
Co, Advocates, a corporate law firm based in
New Delhi. The authors can be contacted at
lbhasin@bhasinco.in or lbhasin@gmail.com.
Readers should not act on the basis of this infor-
mation without seeking professional legal advice.
17. Cover story
India Business Law Journal 15
Intellectual property
May 2014
C
hoices over which intellectual property (IP)
lawyers to engage in different jurisdictions are
among the most important decisions facing IP
owners around the world.
In India, IP owners face a bewildering array of lawyers
and other professionals to choose from. They range
from sole practitioners to partners at well-known law
firms; from regional experts to those more accustomed
to strutting their stuff on the global stage; and from
technical specialists with skills in various scientific and
technological disciplines to litigators whose strengths lie
in winning battles in the courtroom.
The exact number of IP professionals plying their trade
up and down the country is anyone’s guess. “With the
number of young people entering this field in India, it is
truly difficult to estimate,” concedes Dev Robinson, an
IP-focused partner at Amarchand Mangaldas. “But were
one to look at it from the total number of applications
being filed in the Patent Office, litigation and foreign
prosecution, I would hazard a guess that about 1,500
professionals could be kept busy. In trademarks this
number could be double.”
“I believe the number would be not less than 5,000,”
says Santosh Vikram Singh, a partner and head of the IP
practice at Fox Mandal in Bangalore.
Others think the number is higher still. “There are at
least 7,000 to 8,000 IP attorneys,” says Vaibhav Vutts,
the managing partner of Delhi-based IP boutique Vutts
& Associates. “How many of these actively pursue IP I
am not aware.”
Sudhir Ravindran, the CEO of Altacit Global, notes
that 355 trademark agents were listed in 2009 by the
Picking an IP lawyer
Practitioners and in-house counsel share their insights on India’s IP
professionals and how to choose among them
James Burden reports
18. Cover story
India Business Law Journal16
Intellectual property
May 2014
Registrar of Trademarks and that 1,540 patent agents are
listed in the electronic database of the Controller General
of Patents, Designs and Trademarks. He estimates that
the total size of India’s IP profession is around 2,800.
Is this headcount sufficient to handle India’s IP needs?
Perhaps not.
“India could do with more IP lawyers, especially in the
area of patent law,” says Sunita Sreedharan, the manag-
ing partner of SKS Law Associates in Delhi.
Rajeshwari, the managing partner of Rajeshwari &
Associates in Delhi, concurs: “I think the number of IP
lawyers is highly inadequate when compared to the
number of users of IP in India.”
Singh at Fox Mandal notes that “it is really tough to
find a good IP lawyer in the market if we want to recruit”.
But others see no shortage of talent in the profession.
Vikram Grover, the managing partner of GroverLaw, says
there are enough IP lawyers in India. He also notes that
“the numbers are steadily increasing”.
“I think at present the IP field is oversaturated,” says
Vutts.
A mixed bag
The first step in choosing an IP professional is to
understand the choices that are available.
A key distinction can be made between patent agents
and IP lawyers. Singh explains that patent agents have
a technical background that enables them to handle the
drafting and prosecution of complex patent applications,
for which specialist knowledge of a discipline other than
law is normally required.
Patent agents do not need to be lawyers but must
pass a qualifying examination set by the Patent Office.
They are also required to hold a degree in a scientific
or technical subject (although Madras High Court ruled
in March last year that those with a law degree are also
eligible to become patent agents).
Arjun Bala, a patent agent at Meta Yage IP Strategy
Consulting, explains that while patent agents can repre-
sent clients before the Patent Office and the Intellectual
Property Appellate Board, a qualified lawyer is required
for any cases that go to court.
The choice of that lawyer could not be more important.
“Patent law, above all, requires particularly keen lawy-
ering skills,” says Robinson. “A lawyer literally makes
or breaks a case in patents, as so much depends on
articulation.”
Among India’s qualified IP lawyers, more sub-divisions
can be made. “In India we have many kinds of lawyers,”
says Rajeshwari. “Each is different from the other and
while it is possible to make clear distinctions between
prosecutors and litigators, the lines between the other
categories are quite fuzzy.”
Vutts breaks it down into three broad categories: IP
prosecuting lawyers, who handle the drafting and filing
of trademarks, patents and other categories of intellec-
tual property; IP enforcement lawyers, who typically han-
dle local enforcement-related issues, including dealing
I think the number of IP lawyers
is highly inadequate when
compared to the number
of users of IP in India
Rajeshwari
Managing Partner
Rajeshwari & Associates
Patent law, above all, requires
particularly keen lawyering skills
Dev Robinson
Partner
Amarchand Mangaldas
Clockwise from top: Anuradha Salhotra, Lall
Lahiri & Salhotra; Tarun Khurana, Khurana &
Khurana; Pravin Anand, Anand and Anand; Manisha
Singh Nair, LexOrbis; Dev Robinson, Amarchand
Mangaldas; Vikrant Rana, SS Rana & Co; Gunjan
Paharia, ZeusIP; Mohan Dewan, RK Dewan &
Co; Vaibhav Vutts, Vutts & Associates; Prathiba
Singh, Senior Advocate; Sunil Krishna, Krishna &
Saurastri Associates; Bahram Vakil, AZB & Partners;
Shwetasree Majumder, Fidus Law Chambers; Ranjan
Narula, Ranjan Narula Associates; Ashwin Julka,
Remfry & Sagar; Jatin Trivedi, YJ Trivedi & Co.
The photographs appear in no particular order.
Lucky for some
The following Indian IP lawyers
are pictured on the
main image
19. Cover story
India Business Law Journal 17
Intellectual property
May 2014
with local commissions and authorities and organizing
raids; and IP litigating lawyers, who go to court and han-
dle contentious matters.
“Usually IP lawyers are either into prosecution or litiga-
tion,” notes Sreedharan. “There are very few who handle
both.”
Choosing among them
So what should clients look for when selecting an IP
lawyer in India?
“When choosing an IP lawyer, a key consideration is
whether the lawyer has the expertise to deliver a range of
services concerning procedural and administrative issues,
prosecution, dispute resolution and documentation,” says
Rajarshi Chakrabarti, the vice-president, corporate legal,
at Bennett Coleman & Co. “In other words, the emphasis
is on identifying a competent team with sufficient experi-
ence standing before authorities, domain knowledge and
subject specialization in all facets of IP law.”
Chakrabarti adds that it’s “imperative that the team has
adequate IT and other relevant infrastructure support to
augment its efforts. Another important factor in choosing
the lawyer and the team is their exposure to emerging
issues such as IP monetization, the valuation of IP and
international best practices in IP portfolio management.
“Last but not the least, the lawyer should be cost effec-
tive for the company and should have an appreciation of
the company’s business culture,” he says.
The choice of an IP firm will depend on the nature of
one’s business, says Akhil Prasad, the country counsel
for India at Boeing. “For instance, media will have differ-
ent requirements than a pharmaceutical or a defence and
aviation organization. As in-house counsel, what we look
for is expertise in the particular area of business that we
are supporting.”
Prasad adds that “India has great legal expertise in
Usually IP lawyers are either into
prosecution or litigation. There
are very few who handle both
Sunita Sreedharan
Managing Partner
SKS Law Associates
20. Cover story
India Business Law Journal18
Intellectual property
May 2014
trademarks and copyrights and is fast developing good
capabilities in patents”.
According to Tarun Khurana, a partner at Khurana
& Khurana, the top priority is to find a lawyer who can
“understand the subject matter very quickly, who is
extremely responsive, and most importantly, very accu-
rate in their opinion and assessment”.
Insights into whether a lawyer meets these exacting
standards can be gleaned from looking at their previous
cases.
Hemant Kumar, the group general counsel at Essar
Services, says he has two goals when looking for an
IP lawyer: firstly, to find someone who will “work hard,
provide superior legal services on a timely, effective and
efficient basis, and maintain the highest standards of
professional integrity with regard to achieving the goal of
obtaining IP certificates and also to protecting the same”;
and secondly, “to foster an enjoyable working environ-
ment … based on open communication and mutual
respect, and to encourage initiative, innovation, teamwork
and loyalty”.
Rajeshwari advises clients to look for lawyers “who
are efficient and skilled, both in drafting legal documents
and in advocacy,” while Singh at Fox Mandal places the
emphasis as much on the firm as on the individual lawyer.
“The credibility of the firm is very important,” he says.
“Clients must look for a firm which has some credibility
and not just the cheapest rates.”
Singh adds that turnaround time is another import
aspect to consider when choosing a lawyer. “Many Indian
law firms are still behaving like typical litigation firms
where everything can wait,” he says. “If [clients] do not
get a response on time, obviously they will not come
back.”
As in-house counsel, what
we look for is expertise in the
particular area of business
that we are supporting
Akhil Prasad
Country Counsel, India
Boeing
21. Cover story
India Business Law Journal 19
Intellectual property
May 2014
Special relationships
Prabhakar Sastry, the head of legal at Cairn Energy, goes
further than Singh and focuses on the law firm more than
the individual. “The firm should have good domain experi-
ence, both on the legal and technical matters involved,” he
says, and “at least a couple of partners of the firm should
have good expertise on IP and its processes and also
related litigation. [These two partners] should have global
experience as well. IP rights often have global exposure”.
Sastry also considers the working relationship he can
enjoy with the law firm. “I would like to have a special
relationship with the firm so that I can have the privilege of
having their assured optimal time and effort for my IP work.
There is no point in having the best firm but not being able
to work with it closely. IP rights issues are too precious to
have the sub-optimal attention of my law firm.”
For Grover, the relationship that can be built with the law
firm and the nature of the law firm are equally important
considerations. He advises clients to look for lawyers who
are specialists in intellectual property and cautions against
handing IP work to lawyers whose primary focus is a dif-
ferent field of law. His comments reflect the growing trend
for general practice law firms to accept intellectual property
work even if they do not have specialist IP lawyers on staff.
His words are echoed by Dev Bajpai, the executive direc-
tor, legal, at Hindustan Unilever: “I would hesitate to go to
a law firm which ‘also’ has an IP practice as against a law
firm that specializes in IP,” he says. “This is because IP is
a separate and distinct field and any lawyer practising IP
should have great degree of interest and passion for it.”
Bajpai also emphasizes the importance of finding a law-
yer who is a forward thinker. “I would look for an IP lawyer
who thinks progressively and helps clients in giving sug-
gestions in shaping the IP law for the future. In short, an IP
lawyer who is thinking in the future and in shaping IP laws
with the growth of the businesses.”
IP rights issues are too precious
to have the sub-optimal
attention of my law firm
Prabhakar Sastry
Head of Legal
Cairn Energy
22. Cover story
India Business Law Journal20
Intellectual property
May 2014
Transparency and honesty
Bala at Meta Yage says that clients should look for
lawyers who provide transparency in terms of processes,
timelines and fees, and who are upfront and honest
about the challenges that will be faced.
Vutts, meanwhile, advises IP owners to seek out law-
yers who offer “clarity of thought and advice coupled
with reliability and responsiveness”. He stresses that a
lawyer’s ability to understand a client’s changing needs
is very important, as is “their ability to put their head
down and work through a matter”.
While referrals and reputation may provide sufficient
grounds for assessing someone’s lawyering skills, gaug-
ing their level of technical expertise can prove trickier.
Ravindran at Altacit Gobal stresses the importance of
ensuring that a lawyer has the necessary technical skills,
particularly for patent prosecution work, where specialist
scientific or technological knowledge is often required.
He also advises clients to check the team sizes of their
chosen law firm, particularly teams in branch offices, to
ensure that sufficient resources are available.
Flexibility and adaptability are two more traits that
are commonly sought in IP lawyers. “IP law is an ever-
changing law, especially in a country like India, where
such laws are still developing,” says Ish Bali, the legal
director of Coca-Cola India. As such, “an IP lawyer has
to be an eager learner with a flexible bent of mind.”
Bali continues: “Since IP law is not mere licensing and
research, but also involves litigation, experience as a liti-
gator always helps. Besides this, prior experience in the
required job area is always an added advantage.”
Problem areas
On the whole, India’s IP profession is held in high regard.
“I think Indian IP lawyers are extremely competent and
An IP lawyer has to be an
eager learner with a
flexible bent of mind
Ish Bali
Legal Director
Coca-Cola India
23. Cover story
India Business Law Journal 21
Intellectual property
May 2014
have a very strong hold on their law and the subject matter
involved,” says Khurana.
That said, most observers agree that there are gaps.
“India has modern regulations for IP, is a signatory to all
major treaties and conventions and possesses good legal
expertise to protect IP,” says Prasad at Boeing. “However,
the enforcement of IP related to copyrights and trademarks
is an area that needs a lot of focus.”
Grover highlights IP valuation and commercialization as
other areas in which India’s IP profession may not be up to
scratch, while Ketana Babaria, a director at Babaria IP & Co,
notes that patent search and analysis capabilities should be
boosted in order to enhance IP protection in the country.
Bala highlights three problem areas: inadequate technical
expertise among Indian patent agents and patent lawyers; a
lack of counselling and advisory services; and poor drafting
and arguing skills. “Lawyers’ competencies are restricted to
certain transactions or procedures, but they are unable to
look at alternative scenarios,” he says.
Rajeshwari also mentions poor drafting. “I think that IP
lawyers in India need to improve their patent drafting skills,”
she says, adding that this has been a problem for a long
time.
But despite the gaps and the areas in which the supply of
talent lags behind demand, the expertise is normally there
for those who are prepared to look for it. So, while finding
the perfect IP lawyer can be a frustrating process, the best
advice for would-be clients is to search hard and not be
fooled into accepting second best in the belief that nothing
better is available.
The situation in the area of patents is summed up suc-
cinctly by Robinson at Amarchand Mangaldas: “Good
patent lawyers are still rare,” he says. “It’s not that they are
missing, but they are rare.”
The same could apply to IP generally. g
I would hesitate to go to a law
firm which ‘also’ has an IP
practice as against a law
firm that specializes in IP
Dev Bajpai
Executive Director, Legal
Hindustan Unilever
24. Vantage point Opinion
India Business Law Journal22 May 2014
C
orporate law firms have emerged as a small but eco-
nomically important part of the Indian legal sector in
the past 20 years. These firms are seeking lawyers
with different skill sets than those typically possessed by
elite lawyers prior to the liberalization of India’s economy.
Particularly, in order to satisfy the demands of clients, Indian
corporate law firms are keen to employ lawyers who can con-
duct rigorous legal research, write clear legal prose, and work
on teams with other lawyers. Rather than hiring experienced
lawyers, firms turn to fresh law school graduates.
Corporate law firms tend to have relatively little involvement
with law schools. Several firms express an interest in stronger
participation and believe that these institutions provide inad-
equate preparation for complex corporate legal work, but
many have no direct involvement aside from conducting on-
campus recruitment. As a result, the impact of corporate law
firms on law schools has, so far, been indirect.
The primary mechanism through which these firms have
impacted legal education is in changing the perception of
the profession from low-paying and unattractive to lucrative
and glamorous. Corporate law firms have raised demands
regarding legal education and law schools have responded
to this in different ways.
Legacy law schools associated with historically prestig-
ious public universities, such as the Delhi Law Faculty, face
significant institutional rigidity and largely retain the same
curricula that they have used for decades. Students typically
receive minimal instruction in legal writing and research and
student assessment consists almost entirely of final exams.
With the possible exception of Government Law College
Mumbai, the graduates of top legacy schools are much less
likely to secure jobs with law firms than are the graduates of
national law schools. Successful legacy schools such as Delhi
Law Faculty instead provide a gateway to a successful career
in litigation and to positions as judges in the lower courts
across the country. The impact of the growth of corporate law
firms on legacy schools has been, in large part, to concentrate
students who aspire to careers in litigation and the judiciary in
such schools.
National law schools took hold as part of India’s legal edu-
cation landscape with the opening of National Law School of
India University (NLSIU) in 1987. Other national law schools
followed in the late 1990s followed by many more in the
2000s. NLSIU broke with how legal education had previ-
ously been conducted. NLSIU incorporated significant legal
research and writing requirements into its curriculum and
required its students to undertake internships during their
breaks. These curricular innovations were not designed to
cater to the needs of law firms, however, combined with the
school’s success in attracting high quality students, they
made NLSIU graduates attractive to law firms as the legal
market boomed in the late 1990s.
Today, a majority of students graduating from NLSIU,
National Academy of Legal Studies and Research, National
University of Juridical Sciences, and National Law University
Jodhpur are able to snap up many of the available corporate
legal jobs with law firms and in-house legal teams. However,
as competition has emerged from younger national law
schools and private law schools, the oldest and most estab-
lished national law schools have responded by increasing
their offerings in areas of law important to corporate legal
practice and partnering with prestigious law firms to sponsor
moot courts or send partners to teach compressed courses.
Many prospective law students aspire to careers with
corporate law firms but only a small percentage are able to
secure admission to a national law school. In response to this
demand, a new breed of private law schools has surfaced in
the past decade, aggressively jostling to position their stu-
dents for jobs with corporate law firms in a bid to displace
the handful of schools that presently dominate recruitment by
corporate firms. Schools such as Jindal Global Law School
(JGLS), Amity Law School, and Symbiosis Law School market
themselves as more flexible and innovative than public law
schools and therefore as better able to produce graduates
with the skills demanded by the corporate legal sector.
JGLS, for instance, has tied up with foreign universities,
signed agreements with international and Indian law firms
to provide internships to students, and established a profes-
sional career services office, something that exists at few if
any legacy law schools and national law schools.
As the number of private and national law schools contin-
ues to grow, we should expect to see increasing competition
among them to groom and place their graduates with law
firms. Many managing partners of law firms say that they want
closer connections with law schools. In the coming years, they
are likely to have the opportunity to develop such connections,
however, they will need to devote more time and resources to
relations with these institutions if they hope to more directly
influence the shape of legal education in India. g
Corporate law firms have raised demands regarding
legal education. Now they should play a greater
role in shaping it, argues Jonathan Gingerich
of the University of California
Back to school
Jonathan Gingerich is a lawyer and a PhD student at the
University of California, Los Angeles. He can be contacted at
jgingerich@humnet.ucla.edu. This article is based on research he
conducted with Nick Robinson as part of the Harvard Law School
Program on the Legal Profession’s initiative on Globalization, Law-
yers and Emerging Economies. Their findings are available at
http://ssrn.com/abstract=2398506.ucla.edu.
25. Co-published feature Spotlight
India Business Law Journal 23May 2014
Head to head
I
n a collaborative feature to coincide with the 136th
annual meeting of the International Trademark
Association, a Chinese and an Indian IP firm have
joined forces to provide a side-by-side comparison of
trademark regimes. India analysis, provided by Anand
and Anand, can be found on the left-hand pages, while
China coverage, provided by Wan Hui Da, is on the right-
hand pages.
A comparison of Indian and Chinese trademark law
26. Spotlight
India Business Law Journal24
Co-published feature
May 2014
T
he Indian legal system comes under frequent criticism
for various reasons – systemic delays being among the
top reasons, followed by corruption in enforcement
bodies and the lower judiciary. Delays particularly haunt those
foreign entities that have not until recently had India on their
map.
An outstanding aspect of India’s legal system is that it
affords the same protective rights to citizens and domestic
legal entities as it does to foreign individuals or legal entities
under its IP laws.
Evolution of the legal system
Indian courts have incorporated the principle of trans-
border reputation in trademark law jurisprudence and granted
countless foreign trademark right owners wide protection for
their brands, often in the absence of even a trademark regis-
tration in India, and frequently without use of the trademark in
the Indian market. Indian courts have protected these trade-
marks on broad principles of equity and the desirability of
upholding good business ethics under the law of torts.
There are adequate opportunities in India’s legal system to
remedy an incorrect decision or wrongly laid down law. The
writ jurisdiction of the courts under the constitution is a pow-
erful tool for any person to seek an effective remedy against
acts of arbitrariness, inaction and/or negligence on the part of
government authorities, and this has come to the aid of many
foreign entities with a grievance against the authorities estab-
lished under IP laws.
The primary legislation on trademarks in India is the Trade
Marks Act, 1999, along with the Trade Mark Rules, 2002,
which contain the rules and procedures for the implementa-
tion of the substantive law. There are other statutes that are
relevant for trademarks and their application, such as the
Intellectual Property Rights (Imported Goods) Enforcement
Rules, 2007, under the Customs Act, 1962, which provides for
the enforcement of trademark rights by customs authorities.
India completed its accession to the Madrid Protocol in
July 2013, a move that is expected to greatly benefit brand
owners and attract higher trademark filings in India through
a simplified, consolidated application. India is also a signa-
tory to the World Trade Organization’s Agreement on Trade
Related Aspects of Intellectual Property Rights (TRIPS) and
a longstanding member country of several World Intellectual
Property Organization-administered treaties.
The mark: Protecting or challenging
Registrable marks
Words, logos, three-dimensional shapes, textures, colours
and sounds are all capable of being protected as trademarks
in India. For instance, the shapes of Gorbatschow Vodka
bottles, Ferrero Rocher chocolates, the red sole signatures
of Christian Louboutin footwear, the shape of the Zippo ciga-
rette lighter and the Louis Vuitton Epi leather design were all
found to meet the standards of distinctiveness under Indian
trademark law, and recognized as trademarks.
Unregistered marks
Unregistered marks are entitled to protection under the tort
of passing off. Passing off has also been statutorily recog-
nized under section 27(2) of the Trade Marks Act. Passing off
is established through evidence of reputation and goodwill;
priority in use and adoption form the criteria for ownership. A
large number of foreign unregistered marks that have a trans-
border reputation in India have been protected by the courts.
Timeline of registration procedures
A registration process without objections from the Trade
Marks Registry and opposition from any third parties can
take 12-15 months for the stages of filing, examination,
hearing, advertisement, and issuance of certificate. The
procedure involves the following steps:
Filing of application, where the applicant indicates itsa.
intention to register a mark for a specific class of goods or
services;
Examination – the examiner issues a report containingb.
objections under grounds of absolute and relative refusal,
if any, which can be contested by the applicant within one
month of issuance of the report;
Publication – after all objections are satisfactorily clearedc.
by the applicant, the mark proceeds to publication in the
Trade Marks Journal within six months of a written reply or
hearing of the applicant;
Opposition – within four months of such publication,d.
any person may oppose the registration of the mark on
grounds laid down in the statute. The Trade Marks Registry
takes up the opposition for hearing, depending on its roster
and backlog of pending cases;
Registration/rejection – if the opposition is dismissed ore.
the mark is unopposed, it proceeds towards registration.
Alternatively, the application is rejected upon a successful
opposition;
Rectification/cancellation – after grant, the mark can bef.
challenged by an aggrieved party and/or cancelled by
the registrar on the grounds of being wrongly granted or
wrongly remaining on the register, or of non-use within a
prescribed period under the statute.
All orders of the Registrar of Trade Marks are appealable to
the Intellectual Property Appellate Board.
Obligations on use of a trademark
Section 47 of the Trade Marks Act provides for the
removal of the trademark from the register of trademarks
on the ground of continuous non-use of the mark for a
period of five years from the date of the issuance of the
registration certificate up to three months before the filing
of an action for removal or rectification of the mark.
India’s massive market beckons for your marque, but read what
Pravin Anand, Binny Kalra and Kirti Balasubramanian have to
say before you take the plunge. Familiarity with the system,
the law and how it is enforced is a definite advantage
P26
27. Spotlight
India Business Law Journal 25
Co-published feature
May 2014
A
fter years of fumbling, adapting, learning and accu-
mulating experience, especially since its reform and
opening up, China is finally managing to set up a
complete legal system for the protection of intellectual prop-
erty (IP) rights.
In order to bring its legislation up to an international
standard, China has participated in most of the international
treaties on trademarks, including the Paris Convention
for the Protection of Intellectual Property, the World Trade
Organization’s Agreement on Trade Related Aspects of
Intellectual Property Rights (TRIPS), the Madrid Agreement
Concerning the International Registration of Marks, etc.
Evolution of the legal system
The Trademark Law is the backbone to the system, and
needs to be construed with the Implementing Regulation
of the Trademark Law, the Regulations for Recognition and
Protection of Well Known Trademarks, the Measures for the
Implementation of the Madrid Agreement Concerning the
International Registration of Marks, etc. Apart from these,
the Supreme People’s Court (SPC) has issued several judi-
cial interpretations on issues concerning the trial of trade-
mark cases. The volume of trademark cases filed in China
has increased, year after year.
Recently, China enacted the third revision of its Trademark
Law, which entered into effect on 1 May 2014. This article,
based on the new Trademark Law, addresses the major
points on the registration and protection of a trademark in
China.
The mark: Protecting or challenging
Registrable marks
The revised PRC Trademark Law removes the restriction of
the word “visual” and gives an example of a non-visual sign:
sounds. This word is followed by “etc.”, which implies that
the door is theoretically open for other non-visual signs.
Prohibition of registration and use in bad faith
The law introduces “good faith” as a general principle in
article 7.1: “The application for registration and the use of
a trademark shall be made in good faith.” Article 15.2 pro-
vides a practical example of bad faith: “Where … the appli-
cant has contractual or business contacts, or other rela-
tions other than (being the agent) with the prior trademark
user, so that the applicant definitely knows the existence of
this person’s trademark, if this person files opposition, the
applied trademark shall not be registered.”
Time limits for CTMO and TRAB procedures
In order to shorten the registration process and the various
trademark-related procedures before the China Trademark
Office (CTMO) and the Trademark Review and Adjudication
Board (TRAB), the law introduces time limits, such as nine
months for the examination of a trademark, nine months –
plus a possible extension of three months – for the TRAB to
review the decision, or 12 months – plus a possible exten-
sion of six months – for deciding on an opposition.
Opposition procedure
In order to limit the number of oppositions, the law pro-
vides that oppositions may only be raised by “a prior right
owner or interested party” if based on relative grounds.
However if an opposition is raised on absolute grounds, it
may be raised by “any person”.
The main change introduced by the law is that when
an opposition is rejected by the CTMO, the trademark
is immediately approved for registration and the only
recourse is to file an application to declare the trademark
invalid with the TRAB. Before the recent revision, the oppo-
nent could appeal to the TRAB for revision of the decision.
This is now not possible.
This is not without serious concern, in particular in view
of the SPC opinions regarding the assessment of the
similarity between two marks. According to the SPC, when
assessing the similarity of two trademarks the judge should
take into account the reputation of both trademarks: the
“senior” registered trademark and the “junior” trademark.
Therefore, even though the junior trademark is subject to
invalidation, it is allowed during the procedure to develop
a reputation, which the judge will take into account in the
decision.
Reputation gained overseas
Whether the reputation gained overseas can be consid-
ered to support an opposition is still not clear, as the law
does not specify. In a 2005 case (Ferrero), the SPC admit-
ted that reputation gained outside of China could support a
case based on the reputation of a product (under the Anti-
unfair Competition Law).
Keen to burnish your brand in the China market? Bai Gang, Huang Hui
and Paul Ranjard set the scene with all you need to know.
Amendments to the Trademark Law and how it is
enforced are key to understanding China’s system
P27
2009 2010 2011 2012 2013
2.0
1.5
1.0
0.5
0
Trademark applications in China
(Million)
28. Spotlight
India Business Law Journal26
Co-published feature
May 2014
Ownership changes and rights transfers
Both registered and unregistered marks can be assigned
and transmitted on the condition that they do not create mul-
tiple exclusive rights, and all such transactions are governed
broadly by the Indian Contract Act and the Specific Relief Act.
A registered trademark is assignable in respect of all or a part
of the goods or services for which the mark is registered.
Related rights
In India, a single object/good/service can be the subject
matter of multiple forms of IP protection, subject to the fol-
lowing express exclusions for overlapping subject matter:
The definition of design excludes trademarks and copyrighta.
in artistic works;
If an object is a registered design or is mass produced, theb.
copyright in the design is extinguished.
Online issues
India has formulated a specific “.in” domain name dispute
resolution policy, which enumerates the terms and conditions
applying to disputes pertaining to “.in” and “.co.in” domain
names. Indian courts have recognized and innovatively tack-
led issues of domain name trafficking, hyperlinking, meta-
tagging, framing, phishing, etc., by the creative intersection
of domain name policy and the law of trademarks.
Trans-border reputation
The concept of trans-border or spillover reputation of for-
eign trademarks was recognized by Indian courts in the early
stages of the development of Indian trademark law, as far
back as the 1980s. The essence of the concept is captured in
section 35 of the Trade Marks Act, and serves to highlight that
brand goodwill and reputation are adequately protected.
Well known trademarks
When a mark is recognized as “well known” in India, it
enjoys protection against deceptively similar or confusing
marks that may be applied for across all classes of goods
and services. The criteria for a mark to be recognized as
well known by a court of law have been laid down in sec-
tion 11(6) of the Trade Marks Act. The Trade Marks Registry
provides a register of well known marks on its website.
Enforcement: Where authorities step in
Administrative procedures
There are no procedures where the Ministry of Commerce
and Industry may take an action to fight against trademark
infringement ex officio at the request of a trademark owner
or an interested party. The Office of the Controller General of
Patents, Designs and Trademarks comes under the purview
of the Department of Industrial Policy and Promotion, within
the Ministry of Commerce and Industry. Infringement and
passing off actions can only be instituted before law courts.
Criminal procedures
Falsifying a mark is an offence under section 103 of the
Trade Marks Act, and a criminal action may be instituted
against the infringer or counterfeiter. Criminal actions may
be instituted in the following ways:
Police complaint – after the complainant lodges aa.
complaint, the police must obtain a clearance from the
Registrar of Trade Marks. After clearance, the police
may raid the premises of the infringer and seize goods,
following procedures under the criminal code to finally
convict the infringer;
Complaint before a magistrate’s court – upon a complaintb.
being entertained by the magistrate’s court, the judge may
order search, seizure and/or investigation of the alleged
infringer. Thereafter, charges are framed and the matter
proceeds to trial for conviction of the infringer.
Border enforcement
The Intellectual Property Rights (Imported Goods)
Enforcement Rules were promulgated by the central govern-
ment in 2007. Under these rules, a right holder can register its
work, invention, trademark, etc., with the customs authorities
and request that the authorities seize any goods deemed to
be infringing. The authorities must ensure that the infringer is
given sufficient notice to defend itself. Upon a determination
that the goods detained or seized have infringed IP rights, the
customs authority is authorized to destroy the goods.
The courts: How they work
India’s courts are witnessing a significant rise in lawsuits
for infringement of IP rights. India has four high courts with
original side jurisdiction – namely Delhi, Mumbai, Kolkata and
Madras – that can entertain infringement lawsuits in the first
instance, in addition to district courts. On average, Delhi High
Court handles 600-800 lawsuits a year, which is 70% of the
IP-related litigation in India.
Special IP tribunals
Infringement actions are heard by general law courts
and there are no special IP courts in India. The Intellectual
Property Appellate Board, however, hears and decides
appeals from the order or decision of the Registrar of Trade
Marks, which until 2003 was under the jurisdiction of the
high courts. The appellate board can also entertain rectifi-
cation petitions seeking cancellation of trademarks.
E-courts
Key functions of courts – such as case filing, allocation,
registration, case workflow, orders and judgments – are
now IT-enabled. Cause lists, case status, orders and judg-
ments are available on the internet and accessible to liti-
gants, advocates and the public. Delhi High Court has also
begun digitizing entire case records and documents for
easy access by judges and litigants.
Fast track trials
Measures such as “fast track trials” and recording of
evidence by way of videoconferencing are hallmarks of
IP litigation at Delhi High Court. Fast track trials envisage
completion of various stages of a suit within a prescribed
period of time, which is fixed by the court. There have been
instances where strict timelines have been ordered at the
stage of admission of the suit in the very first hearing. P28
P24
29. Spotlight
India Business Law Journal 27
Co-published feature
May 2014
Well known trademark
For recognition of the well known status of a trademark,
the law adds a condition: it may only be determined “where
the recognition decision is a necessary fact of the case”.
The reason behind this restriction needs to be clarified. It
seems that well known trademarks should be recognized
on a case-by-case basis and follow the “principle of pas-
sive protection”.
On the other hand, the law introduces a very welcome
prohibition concerning well known trademarks: “The manu-
facturer or operator is not allowed to use the ‘well known
trademark’ expression on the commodities, the commodity
packages, the containers, or in advertisements, exhibitions
or other commercial activities”. This should discourage lots
of applications and might facilitate, a little, the recognition
of foreign trademarks that used to account for around 1%
of the well known trademarks recognized by the Chinese
authorities.
Trademark licence recordal
Where a registered trademark is licensed, the licensor
should record the trademark licence with the CTMO, and
the trademark office will make publication. It is not compul-
sory, but if the licence is not recorded, it cannot be claimed
against a third party of good faith. In this respect, the new
law has clarified that the licence itself, and not the entire
agreement, needs to be recorded.
Enforcement: Where authorities step in
Administrative enforcement
The law aims to raise the level of penalties against
infringers, with a special mention, for the first time, con-
cerning repeat offenders (see table above right).
Criminal procedures
Criminal procedure only applies in cases of counterfeit-
ing, i.e. where the trademark is identical, or almost identi-
cal. In addition, a certain threshold needs to be reached
– RMB50,000 (US$8,000) for one trademark or RMB30,000
if several trademarks are counterfeited. The procedure
usually starts with an investigation and a raid conducted
by the Public Security Bureau (police). Customs and the
Administration for Industry and Commerce will also transfer
cases to the Public Security Bureau for investigation when
large quantities are involved.
After the first investigation by the police, the case
is transferred to the People’s Procuratorate for public
prosecution. All along, the trademark owner needs to be
active and assist the police with all the necessary infor-
mation gathered through its own prior investigation. It is
then advisable to follow up the case before the People’s
Procuratorate, and be present during the criminal hearing
before the court.
Trademark holders can also directly initiate criminal pro-
ceedings before a court without the involvement of the pub-
lic security organs (police) or the People’s Procuratorate.
However, this direct procedure is extremely rare and, in any
event, when the case is considered as presenting serious
danger to public order and state interests, it should be initi-
ated by the People’s Procuratorate.
Circumstances Administrative penalties
Turnover > RMB50,000 Penalty not more than five times
Turnover
0 to RMB50,000
Penalty not more than
RMB250,000
Repeat offender
within five years
Heavier punishment
The penalties for trademark crimes include fixed-term
imprisonment of less than three years and/or a fine where
conditions are “serious” or the sales are “large”, or impris-
onment of three to seven years where the conditions are
deemed “extremely serious” or the sales are “huge”.
Customs protection
In China, customs controls the flow of goods for the
protection of IP rights, during both import and export.
There are two ways to obtain protection – supply all rel-
evant information in advance and ask customs to detain a
suspicious shipment, or record one’s right with the General
Administration of Customs in order to benefit from the ex
officio actions of customs.
One of the most controversial issues is the situation of
original equipment manufacturers, i.e. where the entire
production of goods made in China is exported. In recent
years, some jurisdictions have decided that with goods
bearing a trademark that belongs to a third party in China,
the fact that they are exported and therefore not sold on the
Chinese market means there is no infringement committed
in China.
If such decisions were to be confirmed – the SPC is pre-
paring an analysis of this issue and is expected to deliver
a decision in the near future, in the Petul case – customs
might lose the power to protect IP rights on export.
The courts: How they work
Special IP tribunals
Civil trademark disputes are heard at the first instance
level by IP tribunals of the intermediate people’s courts,
or in some jurisdictions by basic courts designated by the
SPC. Administrative litigation – appeals from decisions
made by the TRAB – is handled by the IP tribunal of the
intermediate people’s court in Beijing.
The SPC is conducting research and will, in the near
future, decide whether and how specialized IP courts could
be set up with total jurisdiction over all IP rights matters.
Pre-trial measures
Injunctions and pre-trial property preservation: An IP
rights owner who can prove that failure to stop an infringe-
ment promptly would cause irreparable damage to his/her
legitimate rights and interests may file, before instituting
legal proceedings, an application with the people’s court
to obtain an order for immediate cessation of the infringing
activity. The IP rights owner may also apply for property
preservation before filing a lawsuit, subject to paying a
bond.
Pre-trial evidence preservation: Where the evidence
risks being destroyed, or it would be impossible to obtain it
later, the trademark registrant or any interested party may, P29
P25
30. Spotlight
India Business Law Journal28
Co-published feature
May 2014
An innovative feature of fast track trials is the appointment
of court commissioners, usually retired judges or other senior
officers of the court, who are assigned the responsibility to
record evidence within the prescribed period, which may be
as short as three to six months. Recording of evidence by
court commissioners allows parties to conduct the trial at
their convenience, instead of relying on the roster of sitting
judges for available dates.
Recording evidence via videoconferencing
Delhi High Court has also allowed recording of evidence
– primarily the process of cross-examination – by vide-
oconferencing. This is especially relevant and useful for for-
eign litigants and/or rights holders who are unable to travel
to India to depose their evidence. The court has developed
a robust set of guidelines to safeguard the interests of both
litigating entities. In effect, a right holder today can reason-
ably expect its lawsuit to conclude within three years.
Jurisdictional advantages
Certain IP statutes have given due recognition to the predic-
ament of a right holder chasing after pirates. Section 62(2) of
the Copyright Act, 1957, and section 134(2) of the Trade Marks
Act provide the right holder/plaintiff can institute the suit in the
place where the plaintiff actually and voluntarily resides, carries
on business, or works for gain. These provisions are crucial
given the nature of counterfeiters, who often escape detection
or flee upon the institution of an infringement action.
Quia timet jurisdiction
Courts in India may entertain suits based on the “reason-
able apprehension of injury or harm” held by a right holder.
As recently as November 2013, Delhi High Court held that
the degree of apprehension necessary to grant a permanent
injunction in a suit based on such apprehension can only be
determined after a trial has been conducted in the matter.
In the meantime, in patent suits, where there is no presump-
tion of validity and the defendants are yet to commence their
infringing activity, a status quo order has been granted on
numerous occasions. In trademark matters, Delhi High Court
has passed numerous orders granting interim injunctions
restraining any possible infringing activity of the defendants
during the pendency of the suit.
Game-changing jurisprudence
Indian courts are poised to explore new paradigms of
protection. As pirates get more creative, colours, shapes,
celebrity rights and internet service provider liability regard-
ing sponsored “adwords” have come under the scanner.
Damages and compensation
Damages awarded in India are usually compensatory, but
can also be punitive or exemplary. The culture of awarding
damages began to be seen in 2005, and now damages to
the equivalent of up to US$100,000 have been awarded.
Preliminary injunctions
Indian courts are inclined to grant preliminary injunc-
tions against alleged infringers or counterfeiters in lawsuits
for infringement and/or passing off, upon being satisfied
that there is a prima facie case, balance of convenience in
favour of the plaintiff, and the likelihood of irreparable injury
if such a relief was denied.
Anton Piller orders
These orders were first introduced in India in the con-
text of piracy of broadcasts by unnamed cable operators,
gradually including the rampant piracy of software and
counterfeiting of luxury brand products, until the present,
where courts issue commissions for search and seizure
of infringing goods belonging to named and/or unnamed
defendants for a variety of infringement actions.
Over the years, tangible successes have been achieved
in the anti-counterfeiting campaigns of brands such as Louis
Vuitton, Hermes, Chanel, Cartier, Microsoft, etc., leading to
timely seizures of goods of unnamed counterfeiters and send-
ing a strong message to the market, categorically indicating
low tolerance of counterfeits.
John Doe orders
Popularized as Ashok Kumar orders in India, Indian
courts have gradually come to pass interim injunctions
against unnamed defendants in recognition of the rampant
counterfeiting prevalent in the country. They have allowed
right holders the flexibility to tackle even the covert infring-
ers who would escape detection in the absence of such
blanket protection.
Writs and other constitutional remedies
Orders of various governmental authorities under the
Indian Intellectual Property Office can be challenged before
a writ court seeking extraordinary remedies such as writs of
mandamus and certiorari. The high courts in India, capable of
entertaining such petitions, have over the years recognized
the urgency and importance of IP to the business of the rights
holder. Numerous writs filed by rights holders have yielded
results, in that government authorities have been directed to
remedy any arbitrary, unreasoned or capricious orders.
Alternative dispute resolution
Alternative dispute resolution (ADR) mechanisms such as
mediation, conciliation, etc., have received statutory recog-
nition under India’s Code of Civil Procedure, 1908, under
section 89 and order 10 rule 1, after the code underwent
dramatic amendments in 2002. These provisions cast a
duty on the court to encourage settlement between parties
by means of ADR methods. In 2006, judges were trained
and exposed to progressive models of early neutral evalu-
ation, plea bargaining and mediation.
The Delhi High Court Mediation Centre is estimated to
have a 70% success rate with a significant number of mat-
ters being referred to it daily. The experience of rights hold-
ers has been that as the courts’ awareness and expertise
increase, defendants are increasingly unwilling to suffer
damages or adverse decrees. g
P26
Pravin Anand is the managing partner of Anand and Anand, where Binny
Kalra is a senior partner and Kirti Balasubramanian is an associate. The
authors can be contacted at pravin@anandandanand.com.
31. Spotlight
India Business Law Journal 29
Co-published feature
May 2014
before instituting legal proceedings, request the people’s
court to take measures to preserve evidence.
Plaintiff’s burden of proof
The new law prescribes in article 63.2 that the judge
may order the defendant to submit elements of evidence,
such as account books, that are in his or her possession
and “where the infringer refuses to provide such informa-
tion or provides false information, the people’s court may
determine the amount of compensation at its discretion by
taking into account the claims and the evidence submitted
by the infringed”.
Expert witness and survey evidence
The revised Civil Procedure Law introduces the concept
of “person with expertise” in article 79, which provides that
upon request of a party, the people’s court may notify a
“person with expertise” – commonly called as an “expert”,
an “expert assessor”, or a “judicial expert” – to appear
in court and offer an opinion regarding an “identification
opinion” issued by an “identifier”, or regarding a technical
issue.
In a recent guideline, the Beijing Higher People’s Court
provides that in order to bring evidence of likelihood of
confusion between two marks, both parties may submit
survey reports concerning their position in the market.
Damages and compensation
The new Trademark Law increases the financial compen-
sation for trademark infringement by specifying, in article 63,
the calculation standards for civil compensation in trade-
mark infringement cases. Article 63 is a three-part system:
The calculation methods are in the following order:1.
• the actual damages that the right holder has suffered
from the infringement;
• the profit that the infringer has earned through the
infringement;
• a reasonable multiple of the royalty that the infringed
registered trademark might have earned, which is a
welcome new provision;
When the circumstances are serious, an amount of2.
compensation not more than three times but not less than
the amount calculated by the preceding approaches; and
A statutory damage, when no calculation is possible,3.
with a maximum of RMB3 million.
Strengthen the obligation to use
The new law adds to the definition of use a reference to
distinguishing the origin of the commodities as per article
48: “affixing trademarks to commodities, commodity pack-
ages or containers, as well as commodity exchange docu-
ments or using trademarks in advertisements, exhibitions
and other commercial activities to distinguish the origin of
the commodities”.
Consequences of non-use
Revocation: If a trademark is not used for “three con-
secutive years without proper reason, any entity or indi-
vidual may file an application with the Trademark Office for
the revocation of the registered trademark”.
No Compensation: If the trademark owner cannot
prove having used the trademark within the last three
years “the accused infringer shall not be held liable for
compensation”. g
P27
Bai Gang is the founding partner of Wan Hui Da, where Huang Hui is a
senior partner and Paul Ranjard is of counsel. The authors can be
contacted at huanghui@wanhuida.com.
Head to head: a comparison of Indian and Chinese trademark law is a joint initiative by China Business Law Journal and
India Business Law Journal, in partnership with Anand and Anand and Wan Hui Da.
Anand and Anand is a leading intellectual property law firm based in New Delhi, India. The firm was a recipient of
India Business Law Journal’s Indian Law Firm Award, 2013, in the category of intellectual property.
Wan Hui Da is a leading intellectual property law firm based in Beijing, China. The firm was a recipient of China
Business Law Journal’s China Business Law Award, 2013, in the category of intellectual property.
Anand and Anand
First Channel Building
Plot No. 17 A, Sector 16 A
Film City, Noida – 201 301 (UP)
India
T: +91 120 4059300
F: +91 120 4243056
E: pravin@anandandanand.com
Contact: Pravin Anand, Managing Partner
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32. Spotlight
India Business Law Journal30
Commercial risks
May 2014
I
n June 2013, exceptionally heavy rain in the north-
ern Indian state of Uttarakhand washed away roads
and bridges. Around 5,000 fatalities occurred, many
thousands were left stranded, and the cost to the local
economy was colossal.
As most commentators pointed out, this was a disaster
waiting to happen. Yet no steps had been taken to prevent
it. Worse still, as the events unfolded it was evident that the
state machinery had no quick response plan in place.
Sobering evidence
Uttarakhand has significant investments in both hydro-
electric power and tourism. Companies operating in
these areas needed to have in place sufficient risk miti-
gation measures to deal with all eventualities, but most
reports suggest that they didn’t.
One study calculated the loss to Uttarakhand’s tour-
ism industry on account of the floods in 2013 at around
Commercial
hazards
Managing risk requires an understanding of the changing dynamics of
the environment in which a company operates
S Ramaswamy explains
