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Friday, February 12, 2021

BUDGET 2021 : IMPACT ON SMALL COMPANIES

The Ministry of Corporate Affairs, in it’s notification dated 1st February 2021, amended the definition of Small Company in the exercise of power conferred to Central Government vide sub-sections (1) and (2) of section 469 of the Companies Act, 2013. The Finance Minister in Union Budget 2021-2022 had proposed to modify the changes to increase the limit of Paid of share capital and Turnover of Small company.

Earlier the Paid up share capital of Small company was upto 50 Lakhs Rs and Turnover was upto Rs. 2 crores.

After amendment of Companies (Specification of Definitions Details) Amendment Rules, 2021:-

The limit of Paid up share capital has been increased upto 2 crore rupees and Turnover has been increased upto 20 crore Rupees.

Particulars	Earlier	After Amendment
Paid up share capital	Upto 50 Lakhs Rs.	Upto 2 crore Rs.
Turnover	Upto 2 crores Rs.	Upto 20 crores Rs

When shall it come into force?

They above amendment rule shall come into force on the 1st day April, 2021.

What are the Effects of Amendment?

After Amendment of Companies (Specification of Definitions Details) Amendment Rules, 2021, The private Companies which were having Paid up share capital exceeding 50 Lakhs Rupees but less than 2 crore Rupees, and Turnover Exceeding 2 crore Rupees but less than 20 crore Rupees were not classified as Small Companies, but after the MCA notification, such companies now fall under the purview of Section. 2(85) of companies Act 2013. (Small company).

Now let us analyse the impacts of this Amendment:-

The exemption which were earlier available to private companies having PUSC upto 50 lakhs Rupees and turnover upto 2 crore Rupees will now be available to Private Companies whose PUSC is upto 2 Crore Rupees And Turnover upto 20 Crore Rupees.

Increasing the threshold Limit would allow more companies to take advantage of lesser compliance requirements.

Some of the Exemptions available to small companies are as follows:-

Board Meetings:-Small Company is required to hold only 2 Board meetings in a calendar year i.e. one board meeting in each half of the calendar year.

Cash Flow Statements:- Cash flow statement is not required to be maintained by Small company as a part of its Financial Statements.

Annual Return:. The Annual Return of every Small Company shall be signed by the company secretary or where there is no company secretary by the director of the company.

Rotation of statutory auditors: The provision laid down in Section 139(2) of the Company Act 2013, , is not mandatory for small Company to comply with .

Internal Financial Controls: A small company is not required to report on internal financial monitoring and the company's operational effectiveness in the Audit report.

Remuneration details: – As per section 92 of companies Act, 2013 private companies are required to give a details of remuneration of directors and key managerial personnel , but in small companies only “aggregate amount of remuneration drawn by directors” is required in annual return.

Lesser Penalties:-Lesser penalties for Small Companies under Section 446B of the Companies Act, 2013.

Due to this Amendment, Large number of Private Companies can now take advantage of exemptions which will help them to focus more on business prospects thereby saving time from cumbersome procedures in compliance.

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CS Training Vacancy Sept 2020

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Management Trainee

YOGESH PARTHASARATHY

Qualification: Only Executive Pass (all groups)

Stipend(in INR): 5000

Location: Bangalore

Duration: 04 Sep 2020 - 30 Sep 2020

Address

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Description

We practice in the area of Corporate laws, FEMA, Labour Laws, Corporate Due Diligence, Agreements drafting, Regulatory Compliance under, RBI, IRDA, SEBI and Routine Secretarial Compliance

Apply on https://placement.icsi.edu/

Source ICSI

CS Training Vacancy 5 Sept 2020

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Muds Management Private Limited

Qualification: Professional Pass (all groups)

Stipend(in INR): 5000

Location: Gurgaon

Duration: 05 Sep 2020 - 31 Dec 2020

Address:

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Description:

Assist the team of lawyer in the matter of Insolvency, Directory disqualification, Recovery suits and etc.

Opportunity to work from home for complete training and it's optional if you come office or not in complete training.

Source: ICSI

Procedure For Registration of Trademark, Its Duration , Removal , Restoration and Renewal of Trademark

THE STEPS WORTH Intellectual Property Rights , IPR

Procedure For Registration of Trademark, Its Duration , Removal , Restoration and Renewal of Trademark

Who can File application?

According to Section 18 (1) Any person claiming to be proprietor of trademark used or proposed to be used by him, may apply in writing to the registrar in the prescribed manner for registration of his trademark.

Single application for different classes of goods and services.

S.18(2) A single application may be made for registration of a trademark for different classes of goods and services and fee payable therefor shall be in respect of each such class of goods or services.

Where a single application under section 18(2) is filed from convention country for more than one or more classes of goods or services, the applicants shall establish a sufficient ground to the satisfaction of Registrar for the date of filing of application in all such cases.

Where to file Application?

S.18(3) Every application shall be filed in the office of the Trade Marks Registry within whose territorial limits the principal place of business in India of the applicant or in the case of joint applicants the principal place of business in India of the applicant whose name is first mentioned in the application as having a place of business in India, is situate:

However, that where the applicant or any of the joint applicants does not carry on business in India, the application shall be filed in the office of the Trade Marks Registry within whose territorial limits the place mentioned in the address for service in India as disclosed in the application, is situate.

Acceptance or Refusal Of Application.

S.18(4) : The Registrar may refuse the application or may accept it absolutely or subject to such amendments, modifications, conditions or limitations, if any, as he may think fit.

S.18 (5) : In the case of a refusal or conditional acceptance of an application, the Registrar shall record in writing the grounds for such refusal or conditional acceptance and the materials used by him in arriving at his decision.

According to Section 46 No application for the registration of a trade mark in respect of any goods or services shall be refused nor shall permission for such registration be withheld, on the ground only that it appears that the applicant does not use or propose to use the trade mark if the Registrar is satisfied that—

(a) a company is about to be formed and registered under the Companies Act, 1956 (1 of 1956) and that the applicant intends to assign the trade mark to that company with a view to the use thereof in relation to those goods or services by the company, or

(b) the proprietor intends it to be used by a person, as a registered user after the registration of the trade mark.

P.M. Diesels Pvt. Ltd. vs Thukral Mechanical Works & ANR

Bona fide use of a registered trademark as postulated by Section 46(1)(b) of the Act can only be by the proprietor thereof or any person authorized by that proprietor.

Conversely, a person other than a registered proprietor, or somebody authorized by that registered proprietor, cannot be said to be a bona fide user of the registered trademark he will be an infringer of the trademark.

Therefore Section 18 of the Act clearly has no relevance. That section deals with an application for registration of an unregistered trademark. It is possible that a person may use a trademark without actually registering it but that has absolutely no concern with Section 46(1)(b) of the Act, which deals with a case where the trademark is in fact registered. Therefore, no reliance can be placed upon Section 18 to interpret Section 46(1)(b) of the Act.

Correction and Amendment.

According to section 22, The Registrar may at any time, whether before or after acceptance of an application for registration permit the correction of any error in or in connection with the application or permit an amendment of the application:

However, if an amendment is made to a single application referred to in sub-section (2) of section 18 involving division of such application into two or more applications, the date of making of the initial application shall be deemed to be the date of making of the divided applications so divided.

Intellectual Property Attorneys vs Union Of India & Anr on 9 October, 2014

It was held the power vested in the Registrar of Trademarks under Section 22 is a quasi-judicial power.

It is so contended, because:-

(i) the Registrar of Trademarks is a Tribunal;

(ii) The Registrar of Trademarks has all the powers of a Civil Court for the purposes of receiving evidence, administering oaths, enforcing the attendance of witnesses, compelling the discovery and production of documents and issuing commissions for the examination of witnesses;

Also in Madan Mohan Lal Garg Vs. Brijmohan Lal Garg AIR 1971 Delhi 313 it was held that the Registrar, while dealing with an application for amendment and in deciding whether or not to allow such amendment, acts quasi-judicially.

Withdrawal of acceptance.

After the acceptance of an application for registration of a trade mark but before its registration, the Registrar is satisfied -

(a) that the application has been accepted in error; or

(b) that in the circumstances of the case the trade mark should not be registered.

or should be registered subject to conditions or limitations or to conditions additional to or different from the conditions or limitations subject to which the application has been accepted,

the Registrar may, after hearing the applicant if he so desires, withdraw the acceptance and proceed as if the application had not been accepted.

Advertisement of application.

According to section 20, When an application for registration of a trade mark has been accepted, whether absolutely or subject to conditions or limitations, the Registrar shall, as soon as may be after acceptance, cause the application as accepted together with the conditions or limitations, if any, subject to which it has been accepted, to be advertised in the prescribed manner:

The Registrar may, however, cause the application to be advertised before acceptance if it relates to a trade mark to which sub-section (1) of section 9 and sub-sections (1) and (2) of section 11 apply, or in any other case where it appears to him that it is expedient by reason of any exceptional circumstances so to do.

Where -

(a) an application has been advertised before acceptance; or

(b) after advertisement of an application, -

(i) an error in the application has been corrected; or

(ii) the application has been permitted to be amended under section 22,

the Registrar may in his discretion cause the application to be advertised again or in any case falling under clause (b) may, instead of causing the application to be advertised again, notify in the prescribed manner the correction or amendment made in the application.

Opposition to registration.

According to section 21, Any person may give notice of opposition to registration in writing to the registrar within 4 months from the date of advertisement or re-advertisement of an application.

Counter-Statement:

The Registrar shall serve a copy of the notice on the applicant for registration and, within 2 months from the receipt by the applicant of such copy of the notice of opposition, the applicant shall send to the Registrar a counter-statement of the grounds on which he relies for his application, and if he does not do so he shall be deemed to have abandoned his application.

If the applicant sends such counter-statement, the Registrar shall serve a copy thereof on the person giving notice of opposition.

Submission of evidences:

Any evidence upon which the opponent and the applicant may rely shall be submitted in the prescribed manner and within the prescribed time to the Registrar, and the Registrar shall give an opportunity to them to be heard, if they so desire.

The Registrar shall, after hearing the parties, if so required, and considering the evidence, decide whether and subject to what conditions or limitations, if any, the registration is to be permitted, and may take into account a ground of objection whether relied upon by the opponent or not.

Where a person giving notice of opposition or an applicant sending a counter-statement after receipt of a copy of such notice neither resides nor carries. on business in India, the Registrar may require him to give security for the costs of proceedings before him, and in default of such security being duly given, may treat the opposition or application, as the case may be, as abandoned.

The Registrar may, on request, permit correction of any error in, or any amendment of, a notice of opposition or a counter-statement on such terms as he thinks just.

Registration

when an application for registration of trade mark has been accepted and either-

(a) the application has not been opposed and the time for notice of opposition has expired; or

(b) the application has been opposed and the opposition has been decided in favour of the applicant,

the Registrar shall, unless the Central Government otherwise directs, register the said trade mark .

The trade mark when registered shall be registered as of the date of the making of the said application and that date shall be deemed to be the date of registration.

Certificate of Registration:

On the registration of a trade mark, the Registrar shall issue to the applicant a certificate in the prescribed form of the registration thereof, sealed with the seal of the Trade Marks Registry.

Abandonment of Application:

Where registration of a trade mark is not completed within 12 months from the date of the application by reason of default on the part of the applicant, the Registrar may, after giving notice to the applicant in the prescribed manner, treat the application as abandoned unless it is completed within the time specified in that behalf in the notice.

The Registrar may amend the register or a certificate of registration for the purpose of correcting a clerical error or an obvious mistake.

Jointly owned trade marks.

The Act does not authorise the registration of two or more persons who use a trade mark independently, or propose so to use it, as joint proprietors thereof.

However, Where the relations between two or more persons interested in a trade. mark are such that no one of them is entitled as between himself and the other or others of them to use it except-

(a) on behalf of both or all of them; or

(b) in relation to an article or service with which both or all of" them are connected in the course of trade,

Then those persons may be registered as joint proprietors of the trade mark.

The Act shall have effect in relation to any rights to the use of the trade mark vested in those persons as if those rights had been vested in a single person.

Duration, renewal, removal and restoration of registration

DURATION:

The registration of a trade mark shall be for a period of 10 years, but may be renewed from time to time in accordance with the provisions of this section.

RENEWAL:

On application made by the registered proprietor of a trade mark in the prescribed manner and within the prescribed period and subject to payment of the prescribed fee, the Registrar shall renew the registration of the trade mark for a period of ten years from the date of expiration of the original registration or of the last renewal of registration, as the case may be,

However, the Registrar shall not remove the trade mark from the register if an application is made in the prescribed form and the prescribed fee and surcharge is paid within six months from the expiration of the last registration of the trade mark and shall renew the registration of the trade mark for a period of ten years under sub-section (2)

RESTORATION.

According to section 25(4),Where a trade mark has been removed from the register for non-payment of the prescribed fee, the Registrar shall, after six months and within one year from the expiration of the last registration of the trade mark, on receipt of an application in the prescribed form and on payment of the prescribed fee, if satisfied that it is just so to do, restore the trade mark to the register and renew the registration of the trade mark either generally or subject to such conditions or limitations as he thinks fit to impose, for a period of ten years from the expiration of the last registration.

REMOVAL OF TRADEMARK:

Before expiration of last registration of trademark, the Registrar is duty bound to send notice at prescribed time and in prescribed manner to the registered proprietor of the date of expiration and the conditions as to the payment of fees and otherwise upon which a renewal of registration may be obtained.

The registrar may remove the Trademark from the register if at the expiration of prescribed time,those conditions have not been duly complied with. The registrar shall advertise the fact in the Journal.

M/S. Epsilon Publishing House vs Uoi And Ors.: Learned Single Judge held as follows:-

It is necessary to note that the word used in section 25(3) of the Act is 'may‟ and not 'shall'. The proviso to Section 25(3) is also couched in negative language which proscribes the Registrar from removing the mark, if an application is made in the prescribed form and prescribed fee and surcharge is paid within a period of six months. Thus, in any event, the Registrar has to continue to retain the trademark on the Register till the expiry of the period of six months from the expiry of registration in order to provide a full play to the proviso to Section 25(3) of the Act.
Thus, even if an application for renewal with the prescribed fees and surcharge is received within a period of six months from the expiry of the registration of the trademark, the Registrar cannot remove the trademark from the Register.

Effect of removal from register for failure to pay fee for renewal

Section 26 provides that Where a trade mark has been removed from the register for failure to pay the fee for renewal, it shall nevertheless, for the purpose of any application for the registration of another trade mark during one year, next after the date of the removal, be deemed to be a trade mark already on the register, unless the tribunal is satisfied either-

(a) that there has been no bona fide trade use of the trade mark which has been removed during the two years immediately preceding its removal; or

(b) that no deception or confusion would be likely to arise from the use of the trade mark which is the subject of the application for registration by reason of any previous use of the trade mark which has been removed.

Some important forms:

Section 18(1),Rule 25(2) : Application for registration of a trade mark for goods or services (other than a collective mark or a certification trade mark) – TM-1

Section 21(1),64, 66, 73 : Notice of opposition to an application for registration of a trade mark, collective mark or certification trade mark. - TM-5

Section 21(2), 47, 57, 59(2): Form of counter statement: TM-6

Section 25 Application for renewal after expiry of last registration of a trade mark/collective mark/certification trade mark: TM-12

25(4) :Application for restoration of a trade mark removed from the register: TM-13

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Vacancy For the post of Senior Assistant Director (Banking) in SFIO

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Vacancy For the post of Senior Assistant Director (Banking) in SFIO

Details :

No of Posts: 4,
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Commercialization of Intellectual Property Rights and its Key Business Concerns

THE STEPS WORTH Intellectual Property Rights , IPR

Topic:Commercialization of Intellectual Property Rights and its Key Business Concerns

INTRODUCTION:-

As you all know Copyrights Trademarks Patents etc are buzzing words of this decade.To elaborate IPR in India are broadly classified in five categories that is Copyright, Trademark, Patent, Designs, Geographical indication

The biggest opportunity/advantage as well as the threat in IPR is that it is an intangible asset.

For example if I want to own a flat in Mumbai it is quite easy to search for the same, value the property and purchase it.

Almost all of us know the legalities involved in buying and selling a flat but frankly how many of us really do know all of the above mentioned procedures for say Patents?

So today is the need of an hour to throw the light on the various processes in making IPR marketable .

What is Commercialisation of IPR?

In its Layman sense commercialization of IPR refers to making your IPR marketable and earning profits through it. In India if we discuss commercialization of IPR it is like opening a Pandora's box – One thing leads to many complications.

So I would like to pinpoint the major steps in simple language.

Let's go back to our earlier example :-

Imagine you have a piece of land and you want to do business from it so the options available to you is to sell the land as it is

2)Another option is to construct a shop on land and give the shop on rent.

Similarly if you own IPR you can either transfer it to someone else as it is or you can develop marketable product through joint venture or collaborations and commercially exploited to earn rewards.

Having discussed this now let us enter into a bit technical zone regarding commercialization of IPR .

WAYS IN WHICH IPR CAN BE COMMERCIALIZED?

First of all let's discuss the ways in which IPR can be exploited commercially. It is certainly not easy to manage IP commercialization as success of whole process depends upon various endogenous and exogenous factors like:

-business objectives,

-Type of IPR

-capital resources etc.

Three Major Ways for IP Commercialization:-
Broadly IPR commercialization can be achieved through three ways.

1. Commercialization directly by owner of IP

2. By Assignment

3. By building a business partnerships .

All these ways have their own pros and cons let's discuss them in a bit detail.

Commercialization directly by owner of IP:

As mentioned IPR can be commercially exploited by owner himself . This approach comes with best returns as well as it is most risky because being the individual owner of IP and converting them into marketable product or service is altogether a different game .

The factors to be considered before undertaking this are how an IPR you own can be developed to a desired product in market ,then time included ,the funding required and how to get it .

Moreover the owner has to keep focus of all the process from view of market. Once you find the product in the market and it is desired by customers then your returns are going to be enormous.

The major setback in this type of commercialization is availability of necessary financial and technical capabilities to take your product to market by yourself

For example in biotechnology and nanotechnology the major market is international market. Thus in many situations and organisation owning IPR will need commercial partners to develop a product

Also the time gap between production and generation of sales revenue is quite long. Thus it puts pressure on financial position of IP owner.

so it is clear from above discussion that on one hand this way of marketing IPR can give best returns but if not successful at can lead to enormous financial losses to IP owner.

2) Assignment:

Second way to commercialize IPR is by assignment. In this process IPR owner transfers all or any part of his rights.The owner of IPR assigns the right to use IPR to certain organisation who will develop , produce and market the product or services

In this process the reward of owner is limited to the amount of royalty he gets from the organisation.

The Owner is not concerned with the profits or losses owned by organisation. His amount of royalty is fixed.

The major problem around this structure is to fix the amount of royalty .In India it is quite difficult to assess valuation of IPR ,we will have deep insight on valuation aspect in later part of a discussion now let us restrict our self to the point that valuation of IPR is crucial issue in assignment of IPR.

Next issue to be considered while assigning IPR is to ensure integrity of counter Party.

For example you are author of novel and have copyright on it, you have assigned the copyright to publisher @ 50 rupees per copy sold of book .

Now publisher may manipulate the data regarding number of copies sold and therefore financially hitting your royalty.

Building a Business Collaborations :-

Now let us take into consideration the last way to commercialize ip i.e building a business collaborations .

In this strategy IPR owner enters into business agreement with third party who play role of an investor and helps in converting IP into marketable product or services .

This concept is quite new in India IP owner generally prefers to design product by himself or directly endorses it to other by way of assignment.

But for long term sustainability partnering of IP owner and corporate houses would play an important role

Other important aspect related to Commercialization of IPR.

Having discussed first part of our discussion on commercialisation of IPR let's pave our way to some other important aspect related to commercialization of IPR.

Valuation:

The paradox of valuation is that most corporates are aware of potential value of their IP but invariably neglect to determine its value with accuracy . As rightly said by Peter Drucker “if you cannot measure it you cannot manage it”

Investors can optimise their IP portfolios and increase their returns with more realistic valuations. Various approaches to determine IP valuation replacement cost approach, market value approach, fair value approach and tax valuation approach.

Under these approaches and IP valuation will assist in making informed decisions concerning IP development or acquisitions

IP AUDIT:

Next point here is IP audit the first and foremost objective of IP audit is to ascertain the existence of IP. An IP audit should identify all the IP generated by particular department of an organisation

IP DUE DILIGENCE:

■IP due diligence generally seeks to:

■Identify and locate IP assets, and then assess the nature and scope of the IP to evaluate their benefits and allocate risks associated with the ownership or use of the relevant IP assets; in particular, it seeks to determine whether the relevant IP is free of encumbrances for its intended business use(s).

■Identify problems in and barriers to the transfer, hypothecation or securitization of the IP assets under consideration.

■Identify and apportion between the two parties the expenses incident to the transfer of IP assets under consideration

IPR ENFORCEMENT:

In this penultimate leg of discussion I would like to draw your attention to the most important aspect as well as the concern in IPR commercialization i.e IPR enforcement .

By entering into IP transaction one of the most important assessment to be made relates not only to validity and market relevance of asset but also capacity to protect and enforce IP .

Once new product is offered for sale in market and is successful in the market it is likely that competitors will attempt to make competing cheaper product with identical or similar features.

This may lead to undue financial pressures. It is therefore important that parties have recourse to effective enforcement of IPR

COMPETITION LAW V/S IPR LAW:

v/s

Relationship between competition law in India and intellectual property law :

Often these laws are seen conflicting with one another. On one hand it is necessary to create monopolies under intellectual property law to encourage innovation and on the other hand competition law seeks to prevent Monopoly but in reality these laws of complementary rather than conflicting

Because both laws have same fundamental goals of

1) promoting fair competition and

2) promoting innovation.

For example of pharmaceutical company comes up with medicine for cancer so it is very obvious that other company will also come up with similar type of medicine accordingly there will be sustainable competition

CONCLUSION:

To conclude I would like to say that major lacunae in commercialization of IPR in India to the extent we want is lack of professionals in this field .

Also one of the major setback we have in India is we have fragmented structure of IPR laws i.e we have Copyright Act, Trademark Act , Designs Act, Geographical Indication Act.

If we have uniform IP laws just like how we have Insolvency and Bankruptcy code 2016 this fragmentation will not be there and it will be much clearer to understand as well as to implement it on a large scale.

As a lawyer we are proficient to be able to guide our client write from registration of IPR , commercializing it , protecting it and providing necessary guidelines regarding infringement of IPR and other cases .A lawyer as a professional has a huge opportunity in IPR.

In coming 5 to 10 years IPR will be huge demand in country as well as in the world

Author: Richa Phale

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Commercialization of Intellectual Property Rights and its Key Business Concerns

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