Author Archives: RAJESH VELLAKKAT

“MAKE IN INDIA” AS A TRADEMARK

Recently, Secretary of Department of Industrial Policy and Promotion (DIPP) of the Ministry of Commerce and Industry has filed a Trademark Application for the logo “Make in India.”  The Trademark Registry has given an application number : 2829230 for the said application.  The application is filed in class 9, 16, 18, 25, 28, 35, 38, 41 and 42 of the Trademark classes.  The application is filed for the “Make in India” Logo (The Lion Image).

This application by the Secretary of Department of Industrial Policy and Promotion, prompted me to relook some conceptual aspects of Trademark.  Essentially a trademark is something that relates a good or services with its manufacturer or service provider as the case may be.

“A trademark is a distinctive sign which identifies certain goods or services as those produced or provided by a specific person or enterprise. Its origin dates back to ancient times, when craftsmen reproduced their signatures, or “marks” on their artistic or utilitarian products. Over the years these marks evolved into today’s system of trademark registration and protection. The system helps consumers identify and purchase a product or service because its nature and quality, indicated by its unique trademark, meets their needs.” (http://www.wipo.int/trademarks/en/trademarks.html)

A trademark provides protection to the owner of the mark by ensuring the exclusive right to use it to the select goods or services. Actual or proposed trade in goods in goods or services is a requirement for claiming ownership in a trademark and non use is a ground for its revocation. Keeping this in background can  we call a State Department as a trader or a manufacturer or service provider.  DIPP is not dealing with any goods or services.  Let me elaborate on all these in detail.

The above referred Trademark application for “make in India” is filed for the following goods and services.

  • [CLASS : 9]  APPARATUS AND INSTRUMENTS FOR RECORDING, TRANSMISSION OR REPRODUCTION OF SOUND OR IMAGES; MAGNETIC DATA CARRIERS, RECORDING DISCS; COMPACT DISCS, DVD AND OTHER DIGITAL RECORDING MEDIA; COMPUTER SOFTWARE
  • [CLASS : 16]  PAPER AND GOODS MADE FROM THESE MATERIALS (NOT INCLUDED IN OTHER CLASSES) ; PHOTOGRAPHS; PRINTED MATTER ; STATIONERY; OFFICE REQUISITES (EXCEPT FURNITURE); INSTRUCTIONAL AND TEACHING MATERIAL (EXCEPT APPARATUS); PLASTIC MATERIALS FOR PACKAGING (NOT INCLUDED IN OTHER CLASSES); PRINTING BLOCKS; PRINTERS’ TYPE.
  • [CLASS : 18]  LEATHER AND IMITATIONS OF LEATHER, AND GOODS MADE OF THESE MATERIALS AND NOT INCLUDED IN OTHER CLASSES; TRAVELLING BAGS; UMBRELLAS AND PARASOLS.
  • [CLASS : 25] CLOTHING; FOOTWEAR; HEADGEAR
  • [CLASS : 28] GAMES AND PLAYTHINGS; GYMNASTIC AND SPORTING ARTICLES NOT INCLUDED IN OTHER CLASSES.
  • CLASS : 35] SERVICES PERTAINING TO ADVERTISING , BUSINESS MANAGEMENT, BUSINESS ADMINISTRATION AND OFFICE FUNCTIONS WITH THE OBJECT TO HELP IN THE WORKING OR MANAGEMENT OF A COMMERCIAL UNDERTAKING AND MANAGEMENT OF BUSINESS AFFAIRS; ADVERTISEMENT UNDERTAKING COMMUNICATIONS TO THE PUBLIC, DECLARATIONS OR ANNOUNCEMENTS BY ALL MEANS OF DIFFUSION AND CONCERNING ALL KINDS OF GOODS OR SERVICES INCLUDING BANK LOANS; SERVICES RELATED TO REGISTRATION, TRANSCRIPTION, COMPOSITION, COMPILATION OR COMPILATION OF MATHEMATICAL OR STATISTICAL DATA; SERVICES RELATED TO DISTRIBUTION OF PROSPECTUSES, DIRECTLY OR THROUGH THE POST, OR THE DISTRIBUTION OF SAMPLES.
  • [CLASS : 38] TELECOMMUNICATIONS SERVICES BY WAY OF COMMUNICATING FROM ONE PERSON TO ANOTHER BY SENSORY MEANS.
  • [CLASS : 41] EDUCATION; PROVIDING OF TRAINING; SERVICES INTENDED TO ENTERTAIN OR TO ENGAGE ATTENTION; SERVICES FOR DEVELOPMENT OF MENTAL FACULTIES; PRESENTATION OF WORKS OF VISUAL ART OR LITERATURE TO THE PUBLIC FOR CULTURAL OR EDUCATIONAL PURPOSES.
  • [CLASS : 42] SCIENTIFIC AND TECHNOLOGICAL SERVICES AND RESEARCH AND DESIGN RELATING THERETO; INDUSTRIAL ANALYSIS AND RESEARCH SERVICES ; SERVICES INDIVIDUALLY OR COLLECTIVELY IN RELATION TO THEORETICAL AND PRACTICAL ASPECTS OF COMPLEX FIELDS OF ACTIVITIES SUCH AS EVALUATION, ESTIMATES RESEARCH AND REPORTS IN SCIENTIFIC AND TECHNOLOGICAL FIELDS.

It is very clear from the role and procedure of DIPP that DIPP is not a manufacturer, or trader of any goods or services. Its role should lie in governance, regulations, policy making and implementation.  In such case how, could a department own a tademark?

Goods and Services are defined in the Trademark Act.  Goods means anything which is the subject of trade or manufacture, and Service means service of any description which is made available to potential users and includes the provision of services in connection with business of any industrial or commercial matters such as banking, communication, education, financing, insurance, chit funds, real estate, transport, storage, material treatment, processing, supply of electrical or other energy, boarding, lodging, entertainment, amusement, construction, repair, conveying of news or information and advertising.  It is very clear that DIPP would not be either doing a trade or manufacture or doing any service mentioned in the definition of services.  Section 18 of the Trademark Act makes it very clear that only a person who claims to be the proprietor of the Trademark used or proposed to be used by him can apply for the trademark.  Whether DIPP will be considered as a trader or manufacturer  of paper goods, magnetic record carrier, or record disks, leather and imitation of leather, clothing and footwear, games and playthings for which they have made trademark application.  Similarly, whether DIPP shall be doing advertising services, telecommunication services, education services or scientific and technical services for which the application is made.  DIPP is neither a trader, manufacturer or service provider. Thus a trademark application by DIPP in strict sense of law is bad.

Yes, make in India as brand has achieved tremendous public attention. And  use of this brand, image etc. should be regulated. However, making these emblems and names as trademark is against the  spirit of law. My intent is not to say that Make in India is not a brand having commercial value.  Make in India is one of the successfully launched initiative of the Government and the logo designed for the said program has become immensely popular and has very high commercial value and it is also true that Department shall take appropriate steps to protect the value of the said commercially viable symbol.  However, filing a trademark application may not be the right step to protect that important government program and its connected symbols. Government is neither a trader, manufacturer, or service provider to qualify for making a trademark application.  Instead of filing trademark applications, government should have used the provisions of the Emblems and Names (Prevention of Improper Use) Act, 1950 which provides protection for all national emblems.  Government should have declared this as a national emblem and should have regulated its use rather than assuming the role of a trader, manufacturer, or service provider.

“Make in India” is a national program of the Union of India. All intellectual property generated, created, belongs to the Union of India. As per Article 299 of the constitution of India all assurances of property of the union of India shall be on behalf of President of India.   Such being the law, whether a Secretary to the Ministry can own property  including intellectual property on behalf of the ministry or on behalf of the Union of India ? In my view, it may not be legally permissible for a Secretary of a Department to Own any property including Intellectual Property, it should belong to the Union of India and is represented by the President of India.

 

INDIAN CONSUMER PROTECTION LAW GETTING AMENDED

The Ministry of Consumer Affairs proposed to amend Consumer Protection Act 1986 and provided in its website the amendment proposals for all stakeholders to comment.  Here is a small note regarding proposed amendments.

  • Introduction of mediation as another way of resolving consumer disputes.  Hence, a new definition of mediation is proposed.  A new chapter 4 is introduced to the enactment establishing a consumer mediation cell which in detail provides the qualification for a mediator, the office of mediator, and its setup and procedure of mediation, the time frame for mediation which is 30 days, etc, and it also narrates process of mediation, how settlement to be arrived, recorded, etc.
  •  The amendment also proposes to create a new executive machinery for investigation and enquiry of Unfair Trade Practices and other complaints relating to the consumer.  Thus, it proposes to create Central Consumer Protection Authority and a new Consumer Protection Commission will be formed.  The amendment proposes additional five deputy commissioners under the commission.  The place and working hours of this authority will be like a central government office and the authority shall be located in Delhi and the additional responsibility of the Central Consumer Protection Authority is provide inexpensive and speedy redressal of grievance and complaints.  This authority can enquire suo moto or upon a complaint or from a direction from a government, parliament, and judiciary any violation of consumer rights enumerated in Consumer Protection Act.  This authority can intervene in judicial proceeding with consent of the court in all allegations of violation of consumer rights.  The Authority can conduct search and seizure of documents, records and articles and other forms of evidence, summon delinquent manufacturers, record oral evidence, make orders on the basis of such investigation to withdraw services and issue safety notices and alerting consumer against unsafe goods, direct discontinuation of practices which are found to be unfair and prejudicial to consumer interest, order withdrawal of advertisements found to be false, declare any unfair consumer contract as null and void, accept undertaking from bodies who breached law that they will desist from continuing such practices, file class action suit at National Consumer Forum on behalf of consumers, draw up code of conduct for fair business practices, impose administrative penalty on those found violating provisions of this law, etc.
  • The definition of the word “Defect” and “Deficiency” contained in section (1)(f) is proposed to be expanded by replacing the word “means” with “include.”  Consciously withholding relevant information to consumer is included within the definition of “Deficiency.”
  • The definition of Unfair Trade Practice is proposed to be expanded by including non-issuance of a cash memo or a bill as an Unfair Trade Practice.  Another proposal was to add the right of the consumer to reject and return the good or refuse to avail services.  A refusal to refund the consideration within 30 days is considered an Unfair Trade Practice.  The concept of Unfair Contracts is proposed and it states that a contract that requires manifestly excessive security deposit to be given by a party to the contract for the performance of contractual obligations, imposing any penalty on a party to the contract disproportionate to the loss occurred to the breach of the other party, refusal to accept early repayment of debt, a right of a party to terminate unilaterally without any cause are considered Unfair Contracts.
  • This Amendment proposes an exclusive bench in National Consumer Authority to hear class action suits.  Consumer protection Authority will have regional offices headed by a deputy commissioner.  The powers of the central consumer commission will be handled at district level by District collector or magistrate who can suo moto or otherwise investigate matters relating to consumer rights violation.  The orders made by the district collector or district magistrate is appealable before the Deputy Commissioner of Consumer Protection Authority and order of Deputy Commissioner shall be appealed to the Central authority.
  • The new amendment proposes that consumer complaint can be filed in the form of an e-mail to either District Collector or Deputy Commissioner and all complaints shall be acknowledged within a week and complaint shall be disposed within one month.
  • Any noncompliance of order of Central Authority will be reported to District Law enforcement authority who will take immediate action and report compliances. The National Consumer Commission and State Consumer Commission will be renamed as National Forum and State forum.  The salaries, perks, and other benefits of judges of consumer forum are amended.
  • Section 13 is proposed to be amended whereby in all claims below 5 lakhs both the parties to the dispute are not allowed to engage advocates.   No advocates can appear before state forum for any parties unless the billed value of the goods or services claimed in a complaint is 50 lakhs or above. In a national forum, no advocate shall appear if the claim is below 1cr and 50 lakhs.
  • The consumer forum after admission of the complaint shall refer the matter for resolution by mediation.
  • The consumer forum is given the power to award punitive damages which shall not be less than 10 times the value of the goods or service or 25% of the profit from the total sale of the said goods whichever is higher.
  • After the proposed amendment to challenge an award of a district forum, the appellant has to mandatorily deposit 50% of the award.    The amendment suggests that there won’t be second appeal.  That means that an order of district forum can be appealed before state forum and no further appeal shall be before national forum.
  • The enforcement of order of the consumer form if not complied with, the person shall be required to pay not less than Rs. 500  per day or 1.5% of the value awarded whichever is higher for each day of delay for such noncompliance of order.  The consumer forum is given the power to attach the property of the person and if the default in compliance of an order continues for more than 3 months, the attached property shall be sold.  The amendment further proposes directing the district collector to recover the money  from defaulter as arrears in land revenue.

This proposed amendments would bring substantial changes in the enforcement of consumer rights. However, some of the provisions like preventing lawyers from appearing in a Judicial process, based on pecuniary limits of the case is unfair and unconstitutional.  I could also notice many drafting errors and inconsistencies. The Ministry has requested all stakeholders to issue comments.  All right conscious citizens may  carefully read the proposed amendments and make meaningful suggestion and participate in this legislative exercise.

Bureau of Indian standards- Electronics and Information Technology goods (requirement for compulsory registration) order, 2012

Bureau of Indian standards,(BIS)  a statutory body formed by an Act of Parliament is the nodal agency to set standards on various consumer products. This authority provides quality certification of goods and ensures certain standards. 90 products are under mandatory certification. It allows the licensees to use the popular ISI mark on their product, which is synonymous with quality products.

Government of India introduced Electronics and Information Technology goods( requirement for   compulsory registration)  order 2012 making it mandatory that all Indian and Foreign manufacturers to register before the BIS.  As per this order, already some 722 companies, including all major computer, and electronics product manufacturing companies have registered. As per this Electronics and IT goods (requirement for the compulsory registration) order 2012 no person shall manufacture or store for sale, import, sell, or distribute electronics & IT goods which do not confirm to the specified  standard and do not  bear registration number  for the product. It also mandates all substandard on defective goods, which do not confirm to the specified standard, should be disposed of scraped. This order is applicable to all electronics gods like electronic games(IS13616:2010), laptop, notebook(IS 30252:2010), plasma LCD, LED TV screens of screen size 32 inch and above (IS 6016:2010), optical displays with multiple amplifiers(IS 616:2010), micro wave ovens(IS 302-02-25:1994), video monitors(IS 13252:2010), set top boxes and automatic data processing machines,(13252:2010) etc.

The IT and Electronics product manufacturers were consistently opposing the implementation of this order. In order to accommodate and give them adequate time to follow the BIS standards and compulsory registration, Government of India granted an extension of implementation of this order up to 03/10/2013. There after it was again extended up to January 2014 and further extender up to 03/04/2014. The Bureau of Indian Standards has issued detailed guidelines with regard to the electronic goods in order to enable them to get registration.

Manufacturers Association of Information Technology (MAIT), the apex body of IT product manufacturers are not very happy with this order. MAIT has of view that the labeling requirements are very complex and are unworkable. According to them the labeling requirements are not in accordance to international practices. Embossing or engraving is particularly not feasible due to many reasons: a) The size of the many electronics goods are very small and form size requirements stipulated cannot be applied on them, b) Many IT products are multiple factories in multiple territories and thus embossing and engraving the marking may not be feasible. And they are demanding the government to allow them to use stickers. According to MAIT ,  the BIS  should have given sufficient time for IT manufacturers before implementation  of this requirement.

It is true that introducing BIS standards on electronics and IT goods  will make some inconvenience to the industry at the beginning. However on long term, perspective this will definitely ensure more standardized products  in the market and eliminate the dominance of spurious and sub-standard products.

Rajesh Vellakkat

Supreme Court Judgment in Vodafone case

Indian Tax authorities have imposed capital gain tax against Vodafone International Holdings, a Netherland based company for the capital gains for that they received by the acquisition of C.G.P Instruments Holdings,  a Cayman Islands Company.  Tax authorities say that, by this acquisition Vodafone has acquired 65% interest in Hutchison Essar Limited. Thus taxable for the gains in India. The claim of Indian tax authorities are based on an interpretation of Section 9(1) (i) of Income tax Act. The said Section states,” all income accruing or arising, whether directly or indirectly, through or from any business connection in India, or through or from any property in India, or through or from any asset or source of income in India or through the transfer of a capital asset situate in India”.

As per the section 5(2) of Income Tax Act a non-resident (including a company incorporated outside India) is chargeable to income tax in India for the income that received or deemed to be received, accrues, or arises or deemed to accrues or arise from India. Indian Tax authorities argued that by acquiring stake in C.G.P instrument, Vodafone has acquired 67% interest in Hutchison Essar, an Indian company. Hence, they have indirectly gained from the property or asset or source of income in India. According to the interpretation of the tax authority the word used in Section 9(1)(i) is relating to the asset or source of income in India. Hence, indirect sale of parent company would also attract capital gain tax.  Full bench of the Supreme Court of India comprising Justice S. H. Kapadia, Justice Swatantar Kumar, Justice K. S. Radhakrishnan consider the appeal against Mumbai High Court judgment, upholding the arguments of tax authorities. Supreme Court in a detailed Judgment decided against the tax authorities interpreting Section 9(1) (i)  court observed that the legislature has not used the word “indirect transfer” in section 9(1)(i). The direct or indirect used in relation to the income and is not in relation to the assets. On the other hand if the word indirect used in section connected to the  word asset then the word “ Capital asset situate in India” would be rendered  nugatory. Court in its detailed judgment discussed about the FDI policy of the country, share holding structures, tax havens,  and other related  the section in detail while arriving at the conclusion, Court further re emphasizes the legitimacy of tax planning and approved investments through tax havens. This land mark judgment once again demonstrates the independence of Indian judiciary and its resole to implement law appropriately without interference from the executive.

However, to nullify the judgment the legislature introduced amend to section 9(1) (i) is with amendments as follows

“Certain judicial pronouncements including the Supreme Court judgment in the case of Vodafone International Holdings have created doubts about the scope and purpose of sections 9 and 195. Further, there are certain issues in respect of income deemed to accrue or arise where there are also conflicting decisions of various judicial authorities.

Therefore, there is a need to provide clarificatory retrospective amendment to restate the legislative intent in respect of scope and applicability of section 9 and 195 and also to make other clarificatory amendments for providing certainty in law.

 

Hence, the following clarifications have been inserted in various sections:-

 

Clarification regarding section 9(1) (i)

 

(i) Explanation 4 has been inserted in section 9(1) (i), w.e.f. A.Y. 1962-63 to clarify that the expression ‘through’ (used in section 9(1) (i) in relation to any asset or source of income in India) shall mean and include and shall be deemed to have always meant and included “by means of”, in consequence of” or “by reason of”.

 

(ii) Explanation 5 has been inserted in section 9(1) (i), w.r.e.f. A. Y. 1962-63 to clarify that an asset or a capital asset being any share or interest in a company or entity registered or incorporated outside India shall be deemed to be and shall always be deemed to have been situated in India if the share or interest derives, directly or indirectly, its value substantially from the assets located in India”.

This amendment was internationally criticized sating that foreign investor’s faith in Indian legislative process and the certainty of taxation have been critically   impacted. Retrospective amendments and introduction of explanations to counter and nullify Supreme court judgements, whereby foreign investors are charged with huge tax liability has highly impacted FDI flows in to this country. This amendment is again challenged before Supreme Court and is pending consideration.

Rajesh Vellakkat

ENFORCEABILITY OF SHAREHOLDERS AGREEMENT

Various agreements are entered into by and between companies or its shareholders with others regarding transfer of shares, restrictions on voting,  and other rights attached to the shares of a company. These agreements are  of various kinds like shareholders agreement, share subscription agreement, pledge agreement, investment agreement, etc.  This article deals with couple of Supreme court judgments,  that discuss the legality of those agreements.

Any company established in India has its functions regulated by Articles of Association.  The Articles regulate the rights attached to shares, lien; transfer, transmission, and forfeiture of shares, alteration of capital; company meetings;  resolutions, etc. of the company and all other relevant aspects of governance of a company.

In case of a private company, transfer shares are restricted as per the articles of Association. Section 3(1)(iii) of The Indian Companies Act 1956 mandates the restrictions required.  This section is quoted hereunder:

3(1)(iii) ” private company” means a company which, by its articles,-

(a)restricts the right to transfer its shares, if any;

(b)limits the number of its members to fifty not including-

(i)persons who are in the employment of the company, and

(ii)persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased; and

(c)prohibits any invitation to the public to subscribe for any shares in, or debentures of, the company: Provided that where two or more persons hold one or more shares, in a company jointly, they shall, for the purposes of this definition, be treated as a single member;

Section 3(1)(iii)(a) clarifies that Articles of a private company restricts the right to transfer its shares, if any.  Articles not only restricts transfer of shares but also prohibits invitations to general public to subscribe.  Thereby any transfer of shares of the private company should have to qualify the necessary restrictions in the Articles.  Section 82 of The Indian Companies Act 1956 further states that the transfer of shares or debentures should be considered as that of transfer of movable property and in the manner provided by Articles.  Section 82 is reproduced hereunder:

Section 82:  The shares or debentures or other interest of any member in a company shall be movable property, transferrable in a manner provided by the articles of the company.

 

Hence, it is clear from these sections that for any transfer of shares or debentures has to follow the rule book of Articles for it to be considered a valid transfer.

On the other hand Agreements such as shareholder agreement, share subscription agreement, pledge agreement, investment agreement, share purchase and cooperation agreement, etc., are signed by and between companies and shareholders or between two shareholders or between shareholders and outsiders as the case may be.  These agreements creates contractual obligations in relation to transfer of shares or enjoyment of shares or exercise of rights attached to the shares Viz. voting etc. What is the validity of  such agreements, if the provisions of the said agreements are a) not incorporated in the Articles of association of the company or b) if the provisions of the said agreements are contradictory to the Articles of Association.

The supreme court in V.B. Rangaraj vs. V.B. Gopalakrishanan & Others 1992 AIR (SC) 453  considered on whether the shareholders can among themselves enter into an agreement which is contrary to or inconsistent with the Articles of the company.  It is a case of a private  agreement whereunder there is a restriction on a member for transfer of his shares only to members of the company who belongs to a branch of family to which he belongs.  The agreement obviously therefore imposes some additional restrictions on the members right to transfer the shares other than those prescribed in the articles of the company. Court opined that such  additional restrictions are not binding on the company.

The only restriction on the transfer of shares of a company is as laid down in its Articles, if any.  A restriction which is not specified in the Articles is, therefore, not binding either on the company or on the shareholders.  The vendee of the shares cannot be denied registration of the shares purchased by him on a ground other than that stated in the Articles.”

 

A private agreement, the terms of which are not incorporated into the Articles, is only valid to the extent the Articles permit.

However, Supreme Court in the recent case of Vodafone International Holdings v Union of India & Another CDJ 2012 SC 068, this judgment was reconsidered by Justice Radhakrishnan.  Quoting another judgment of the Supreme Court in Gherulal Parekh v. Mahadeo Das Maiya (1959) SCR supp (2) 406 which states that freedom of contract can be restricted by law only in cases where it is for some good for the community.  Companies Act 1956, FERA 1973, RBI regulations or I.T. Act do not explicitly or impliedly forbid shareholders of a company to enter into agreements as to how they should exercise voting rights attached to their shares.  The court viewed shareholders can enter into any agreement in the best interest of the company but the only thing is that the provisions in the Shareholders Agreement shall not go contrary to Articles of Association.  The essential purpose of a shareholders agreement is to make provisions for proper and effective internal management of the company.  The court summarized the position very clearly.  A breach of Shareholders agreement which does not breach the Articles of Association is a valid corporate action and parties can get remdies under the general law of the land.

Earlier Supreme court In  Supreme Court in S.P. Jain v Kalinga Cables Ltd. (1965) 2 SCR 720 considered the validity of shareholdres agreement.  In this judgement supreme court distinguished between the shareholders agreement for issuance of new shares and agreement for transfer of already issued shares. In cases where agreement offering issuance of new shares, court viewed that it is imperative to have company a  party. On the otherhand  it is not mandatory to make company a party in cases where the agreement is relating to already issued shares of a company.

Hence, the position of law is very clear that agreement between two shareholders of a company or between shareholders and outsider of company in relation to rights attached to the shares of the company is valid & legally enforceable provided the provisions of the said agreement are not in breach of the Articles of Association.  In order to bind the company it should be made party to the agreement. Inroder, to bind all the stake holders of a company, all agreements imposing restrictions relating to rights attached to a shares are to be incorporated in the Articles of Association of the company.

Rajesh Vellakkat

RETIREMENT OF PARTNER FROM PARTNERSHIP

Here is a small note on the legal steps to be taken when a partner retires from partnership, to have safe exit. What steps are to be taken by the firm, so that firm is escaped from future acts and wrong doings of the retired partner.

Following the appropriate procedure laid down in Partnership Act is highly important because firm could be sued for the acts of retired partner. The retired partner can be sued for the wrong-doing of the firm as well.

A firm, unlike a company is not separate entity in the eye of law. A Partnership is an association of people, a partner is an agent of the firm and a partner can represent all other partner and bind them.  Hence, any act of the partner will be considered as the act on behalf of the firm and vice-versa. As per partnership law, a partner is entitled to share profit and loss of the firm.  This being a legal status of the partner and the firm, it is important to announce to the public at large when partner is retiring from a partnership.

In the absence of a public notice of retirement, a third party can make claim against the firm for the acts of the retired partner, in similar way, third parties can sue the partner even for the act done by the firm.  Section 32 of the Partnership Act describe the procedure to follow on retirement.

Section 32: Retirement of a partner.

(1) A partner may retire-

(a) with the consent of all the other partners,

(b) in accordance with an express agreement by the partners, or

(c) where the partnership is at will, by giving notice in writing to all the other partners of his intention to retire.

(2) A retiring partner may be discharged from any liability to any third party for acts of the firm done before his retirement by an agreement made by him with such third party and the partners of the reconstituted firm, and such agreement may be implied by a course of dealing between such third party and the reconstituted firm after he had knowledge of the retirement.

(3) Notwithstanding the retirement of a partner from a firm, he and the partners continue to be liable as partners to third parties for any act done by any of them which would have been an act of the firm if done before the retirement, until public notice is given of the retirement: Provided that a retired partner is not liable to any third party who deals with the firm without knowing that he was a partner.

(4) Notices under sub- section (3) may be given by the retired partner or by any partner of the reconstituted firm.

The above section makes it abundantly clear that a public notice is to be given regarding retirement otherwise the retiring partner will be liable for the acts of the firm.

Hence it is important  to know,  how public notice is given. The same  is discussed in Section 72. Of the Partnership Act

Section 72 of Partnership Act is reproduced below;

72. Mode of giving public notice. A public notice under this Act is given-

(a) where it relates to the retirement or expulsion of a partner from a registered firm, or to the dissolution of a registered firm, or to the election to become or not to become a partner in a registered firm by a person attaining majority who was admitted as a minor to the benefits of partnership, by notice to the Registrar of Firms under section 63, and by publication in the Official Gazette and in at least one vernacular newspaper circulating- in the district where the firm to which it relates has its place or principal place of business, and

(b) in any other case, by publication in the Official Gazette and in at least one vernacular newspaper circulating in the district where the firm to which it relates has its place or principal place of business.

From these two sections it is very clear that if a retiring partner fails to  issue a public notice in any vernacular newspaper as well as in public gazette, he is liable to the acts of the firm and vice-versa.

Incase, the firm is a registered partnership, then the retiring partner/ firm should ensure that the entries in the Register of Firms are amended reflecting the retirement of the person concerned.

Partnership is an important legal structure, popularly followed as preferred choice of entity for all small and medium  sized enterprises. However, partners of a firm while retiring from the partnership, ignore the above legal prescriptions and fail to give public notice. This has resulted in many legal disputes and financial liabilities impacting the partner/ or the firm, for the acts not done by him or authorized by him and vice versa.

Rajesh Vellakkat  and Prathap.K

Software companies fall within the ambit of “Industry” as per Industrial Disputes Act and Procedure for dismissal of an employee mentioned in ID Act to be followed.

The employees of software companies have a general impression that none of the labour laws and workmen welfare legal measures are available to them as they are in the category of white collar jobs.  It is prevalent among software companies to terminate services of employees by giving one or two months’ notice or salary in lieu of notice that might have been mentioned in the respective employment contract that they might have signed with the employer.  Employees, assuming that they have no other legal remedy or special protection available under Industrial Disputes Act, Factories Act, and other labour welfare legislations, quietly discontinue the employment without raising any demands.  There are some instances where a loyal employee who has contributed all his youth and energy for the company are forced to discontinue the job without providing any benefits.  Here is an attempt to know where the law stands in this regard:

Section 2(j) of the Industrial Disputes Act 1947 defines “Industry” as

Industry” means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or a vocation of workmen;

Using this definition, the word Industry is connected with the work workmen.  The workmen is defined in Section 2(s) of the Industrial Disputes Act as hereunder:

 

workman” means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with. or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person-

(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or

(ii) who is employed in the police service or as an officer or other employee of a prison ; or

(iii) who is employed mainly in a managerial or administrative capacity; or

(iv) who, being employed in a supervisory capacity, draws wages exceeding one thousand six hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.

From the two definitions above it is clear that a skilled worker ( software engineer) comes under the definition workmen and a software company is an Industry whereby Industrial Disputes Act is applicable.

However, the  questions to be looked at is what should be the procedure to be followed in case of dismissal of an employee.  Dismissal, retrenchment, layoff, etc. of a workman and the remedies available are discussed in Chapter V-A and Chapter V-B of Industrial Disputes Act.  Chapter V-A Especillay Section 25 C-E are for Industrial establishments where 50 to 100 employees are working.  For these Section, a separate definition of industrial establishment is provided.  The industrial establishment is defined under S 25-A as hereunder.

industrial establishment” means

 (i) a factory as defined in clause (m) of Section 2 of the Factories Act, 1948 (63 of 1948); or

(ii) a mine as defined in clause (f) of Section 2 of the Mines Act, 1952 (35 of 1952); or

(iii) a plantation as defined in clause (f) of Section 2 of the Plantations Labour Act, 1951 (69 of 1951).

Hence to qualify the application of Chapter V-A and provisions relating to layoff the Industrial Establishment should be a factory under Factories Act.  Section 2(m) of the Factories Act 1948 defines what is a factory.

m) “factory” means any premises including the precincts thereof-

(i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or

(ii) whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on,- but does not include a mine subject to the operation of the Mines Act, 1952 (35 of 1952), or a mobile unit belonging to the armed forces of the Union, a railway running shed or a hotel, restaurant or eating place.

Explanation. I–For computing the number of workers for the purposes of this clause all the workers in different groups and relays in a day shall be taken into account;

Explanation. II.–For the purposes of this clause, the mere fact that an Electronic Data Processing Unit or a Computer Unit is installed in any premises or part thereof, shall not be construed to make it a factory if no manufacturing process is being carried on in such premises or part thereof;

The explanation 2 of the said definition makes it clear that a mere electronic data processing unit or computer unit installed in a premises shall not be construed to make it a factory.  If no manufacturing process is being carried out in such premises.  Most of the software companies are not doing any manufacturing activities.  It mainly provides services.  Manufacturing process is defined in Factories Act 1948.  S 2(k) of the Factories Act is reproduce below:

Manufacturing Process” means any process for-

(i)     making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use sale, transport, delivery or disposal, or

(ii)   pumping oil, water, sewage or any other substance; or

(iii) generating, transforming or transmitting power; or

(iv)  composing types for printing, printing by letter press, lithography, photogravure or other similar process or bookbinding; or

(v)    constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels; or

(vi)  preserving or storing any article in cold storage;

The High Court of Bombay in The Assistant Director Employees’ State Insurance Corporation & Another v M/S Western Outdoor Interactive Pvt. Ltd. & Another First Appeal No. 143/2012 interpreting whether a software company is covered under ESI Act made some interesting observation relating to manufacturing process as defined in Section 2(k) of Factories Act mentioned above and concluded that even software service companies come under the definition of manufacturing process and ESI Act is applicable to them.  Despite all these definition and judgment referred above, it is not very clear whether software companies will come under Industrial Disputes Act, Factories Act, and whether provisions relating to layoff, retrenchment, and whether V-A and V-B of Industrial Disputes Act is applicable to software companies.  In this context, it is pertinent to mention a Madras High Court judgment Seelan Raj R. And 14 Others vs P. O., I Addl. Labour Court and others on 14 August, 1997.  In this case, relying on the explanation II of the Factories Act defining what is a factory, court  concluded that a software development activity or software service company even if doing a manufacturing process is not a factory under the Factories Act and thus it is not an Industrial Establishment.  Hence Section 25C to 25E and Chapter V-B of Industrial Disputes Act is not applicable to software company, and accordingly, dismissed the writ appeal filed by the employer.  This judgment is challenged in the Supreme Court.  However, to our understanding Supreme Court has not pronounced any final judgment on this so far. 

From the above discussions, it is clear that the prevailing position of law is that a software company is an industry as defined under Industrial Disputes Act but it is not a factory under the Factories Act.  However, it should be considered as a factory for the purpose of ESI Act.  A software establishment is thus not an industrial establishment as defined in Section 25A or 25C of Industrial Disputes Act.  The provisions relating to layoff or retrenchment is not applicable to them.  Hence, the question arises what should be the procedure to be followed to terminate employee working in software companies and what are the remedies available to employees in cases of termination.

Termination of an employee other than by way of a disciplinary proceedings is legally termed as retrenchment.  Retrenchment is defined in section 2(oo) of Industrial Disputes Act and is reproduced hereunder:

Retrenchment” means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include 

(a) voluntary retirement of the workman ; or 

(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or 

(bb) termination of the service of the workman as a result of the non-removal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or 

(c) termination of the service of a workman on the ground of continued ill- health; 

Section 25F. Conditions precedent to retrenchment of workmen.- No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until—

(a) the workman has been given one month’ s notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice:

(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days’ average pay 2[ for every completed year of continuous service] or any part thereof in excess of six months; and

(c) notice in the prescribed manner is served on the appropriate Government 3[ or such authority as may be specified by the appropriate Government by notification in the Official Gazette].

The procedure to be followed for retrenchment is provided in section 25G and 25H.

25G Procedure for retrenchment.

Where any workman in an industrial establishment, who is a citizen of India, is to be retrenched and he belongs to a particular category of workmen in that establishment, in the absence of any agreement between the employer and the workman in this behalf, the employer shall ordinarily retrench the workman who was the last person to be employed in that category, unless for reasons to be recorded the employer retrenches any other workman.

25H. Re-employment of retrenched workmen.

Where any workmen are retrenched and the employer proposes to take into his employ any persons, he shall, in such manner as may be prescribed, give an opportunity to the retrenched workmen who are citizens of India to offer themselves for re-employment, and such retrenched workmen] who offer themselves for re-employment shall have preference over other persons

For larger establishments with more than 100 employees, the procedure for retrenchment is defined in section 25M.  It is reproduced below:

Conditions precedent to retrenchment of workmen.

(1) No workman employed in any industrial establishment to which this Chapter applies, who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until,-

(a) the workman has been given three months’ notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of notice; and

(b) the prior permission of the appropriate Government or such authority as may be specified by that Government by notification in the Official Gazette (hereafter in this section referred to as the specified authority) has been obtained on an application made in this behalf.

(2) An application for permission under sub-section (1) shall be made by the

employer in the prescribed manner stating clearly the reasons for the intended retrenchment and a copy of such application shall also be served simultaneously on the workmen concerned in the prescribed manner.

(3) Where an application for permission under sub-section (1) has been made, the appropriate Government or the specified authority, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen concerned and the person interested in such retrenchment, may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the workmen and all other relevant factors, by order and for reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such order shall be communicated to the employer and the workmen.

(4) Where an application for permission has been made under sub-section

(1) and the appropriate Government or the specified authority does not communicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days.

(5) An order of the appropriate Government or the specified authority granting or refusing to grant permission shall, subject to the provisions of sub-section (6), be final and binding on all the parties concerned and shall remain in force for one year from the date of such order.

(6) The appropriate Government or the specified authority may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (3) or refer the matter or, as the case may be, cause it to be referred, to a Tribunal for adjudication:

Provided that where a reference has been made to a Tribunal under this sub-section, it shall pass an award within a period of thirty days from the date of such reference.

(7) Where no application for permission under sub-section (1) is made, or where the permission for any retrenchment has been refused, such retrenchment shall be deemed to be illegal from the date on which the notice of retrenchment was given to the workman and the workman shall be entitled to all the benefits under any law for the time being in force as if no notice had been given to him.

(8) Notwithstanding anything contained in the foregoing provisions of this section, the appropriate Government may, if it is satisfied that owing to such exceptional circumstances as accident in the establishment or death of the employer or the like, it is necessary so to do, by order, direct that the provisions

of sub-section (1) shall not apply in relation to such establishment for such period as may be specified in the order.

(9) Where permission for retrenchment has been granted under sub-section (3) or where permission for retrenchment is deemed to be granted under sub-section (4), every workman who is employed in that establishment immediately before the date of application for permission under this section shall be entitled to receive, at the time of retrenchment, compensation which shall be equivalent to fifteen days’ average pay for every completed year of continuous service or any part thereof in excess of six months.

From the reading of the above sections, for all industry, it is mandatory that before retrenching or terminating services of employee, the management should give 1 month notice or salary in lieu of notice, a retrenchment compensation which is equivalent to 15 days average pay for any completed year and a notice is issued to the appropriate government (labour commissioner) intimating such retrenchment.  Section 25G mentioned above further mandates that if retrenchment is carried out in an industrial establishment in order to reduce the workforce, then it should be the last person employed who should be retrenched.  The law further mandates that in case of recruitment of similar category jobs, the retrenched employee should get preference over other candidates.

In the larger establishments, the procedure for retrenchment is more stringent and requires prior permission from labour commissioner.  The failure of large establishment to do so prescribes even penalties including imprisonment to the employer.  The above discussions abundantly makes it clear that Indian Law is not permitting any hire and fire in any industry.

The misconceived understanding of software company employees that none of the labour laws are applicable to software companies/ employees is wrong.  The above referred legal provisions establishes otherwise.

Rajesh Vellakkat

Domestic Transfer Pricing; a new Tax Compliance Requirement

Indian finance act of 2012 with effect from financial year 2013-14, introduced a new tax law compliance requirement in relation to transaction between group companies. According to which two domestic companies under the same management or under common control ( Associated enterprises)  do transaction aggregating five crore rupees in a year, is required to comply  with the following;-

(a)Ensure the value of transaction is at arms – length price as per the method prescribe by income tax act 1961, b) maintain and keep information and documents in relating to such transaction as statutorily required, c) obtain and file an accountant’s  report in respect of such transaction along with return of Income.

This amendment to the income tax act was caused to be made in accordance of Supreme court judgement , in CIT Vs Glaxo Smith Kline  Asia Pvt Ltd.(2010)195 Taxman 35 SC.  In this judgement, Supreme court addressed the issue whether transfer pricing regulation should be limited to cross border transaction, or that to be extended to domestic transaction as well. Supreme Court noticed that even in certain domestic transaction, the under invoicing of sale and over invoicing of expenses in certain circumstance create tax arbitrage. For example-by under invoicing of sale and over invoicing of expenses they could save tax a) if one of the related company is loss making, and other is profit making concern, b) if the tax rates are different from two related units, on account of different status and if profit is diverted to towards the unit of lower side of arbitrage, for example;- sale of goods and services from a non special economic zone(SEZ) areas,(Taxable unit ) to SEZ unit(non taxable unit),at a price below the market price so that taxable division will have less profit taxable, and non taxable division will have a higher profit exemption. Citing these two instances, Supreme Court  has suggested making amendments  to income tax act incorporating domestic transfer pricing provisions.

The amendment made to income tax act by finance act 2012 is based on the recommendation of Supreme Court. The finance act 2012 introduced section 92BA ,  40 A, 80 A, , 10 AA , 80 IA etc to the income tax Act

Based on this amendment transaction between two related domestic  parties ( it could e companies, individuals,  firm ) if they transact each other should ensure that, the transaction is at arms length price.   The method of arms length price determination are same as that applicable to international transaction between associated enterprises.

Internationally countries like UK, Malaysia, Ireland, Peru, Hong Kong, Norway and Russia had similar provisions in their tax laws.  The new amendment to the Income tax act is definitely  create additional tax revenue. However, the implementation of the same will definitely open up another window for litigation and friction between tax officers and assesses;  unless we have more standardization  and better approved processes in determination of arms length price.  Arms length price determination should not be left at whims and fancies of the tax officers.

By: Rajesh Vellakkat

 

 

EMPLOYMENT CONTRACTS ARE NOT SPECIFICALLY ENFORCEABLE

It is prevalent in the industry when an employee joins an organization to sign employment contract.  Such employment contract generally contains all terms of employment including work hours, duration; whether permanent, temporary, or contractual; the perquisites and benefits, leaves and holidays, condition of service, duties and responsibilities, etc.  Can such an employment contract be specifically enforced is what is discussed below.

The word “specifically enforced” means whether an aggrieved party can approach the court of law seeking an injunction order against the other asking the other party to perform the terms of the contract.

The law relating to such specific reliefs (relief in the form of injunction both mandatory and preventive) is contained in the Specific Relief Act of 1963.  The relevant section of this enactment addressing or answering to the above question is Section 14.  The same is reproduced below.

Contracts not specifically enforceable.

14. Contracts not specifically enforceable.-(1) The following contracts cannot be specifically enforced, namely:–

(a) a contract for the non-performance of which compensation in money is an adequate relief;

(b) a contract which runs into such minute or numerous details or which is so dependent on the personal qualifications or volition of the parties, or otherwise from its nature is such, that the court cannot enforce specific performance of its material terms;

(c) a contract which is in its nature determinable;

(d) a contract the performance of which involves the performance of a continuous duty which the court cannot supervise.

(2) Save as provided by the Arbitration Act, 1940 (10 of 1940), no contract to refer present or future differences to arbitration shall be specifically enforced; but if any person who has made such a contract (other than an arbitration agreement to which the provisions of the said Act apply) and has refused to perform it, sues in respect of any subject which he has contracted to refer, the existence of such contract shall bar the suit.

(3) Notwithstanding anything contained in clause (a) or clause (c) or clause (d) of sub-section (1), the court may enforce specific performance in the following cases:-

(a) where the suit is for the enforcement of a contract,-

(i) to execute a mortgage or furnish any other security for security for securing the repayment of any loan which the borrower is not willing to repay at once:

Provided that where only a part of the loan has been advanced the lender is willing to advance the remaining part of the loan in terms of the contract; or

(ii) to take up and pay for any debentures of a company;

(b) where the suit is for,-

(i) the execution of a formal deed of partnership, the parties having commenced to carry on the business of the partnership; or

(ii) the purchase of a share of a partner in a firm,

(c) where the suit is for the enforcement of a contract for the construction of any building or the execution of any other work on land:

Provided that the following conditions are fulfilled, namely:-

(i) the building or other work is described in the contract in terms sufficiently precise to enable the court to determine the exact nature of the building or work;

(ii) the plaintiff has a substantial interest in the performance of the contract and the interest is of such a nature that compensation in money for non-performance of the contract is not an adequate relief; and

(iii) the defendant has, in pursuance of the contract, obtained possession of the whole or any part of the land on which the building is to be constructed or other work is to be executed.

 

The Supreme Court of India in “Nandganj Sihori Sugar Company Limited, Rae Bareli & Another Versus Badri Nath Dixit & Others, 1991 AIR(SC) 1525” has explained this legal provision succinctly.  In the said case, the question that was addressed was “whether a suit for mandatory injunction can be allowed in relation to a contract of employment against the company asking the company to retain him as an employee.”  Justice Thommen T.K. delivering the judgment beautifully summarized the legal provision.  The court held that

“A contract of employment cannot ordinarily be enforced by or against an employer.  The remedy is to sue for damages.  The grant of specific performance is purely discretionary and must be refused when not warranted by the ends of justice.  In the absence of any statutory requirement, courts do not ordinarily force an employer to recruit or retain service of employment required by an employer.  There are of course certain exceptions to this rule such as i) In the case of a public servant dismissed for service in contravention of Article 311.  ii) reinstatement of a dismissed worker under the Industrial Law; and (iii) a statutory body acting in breach of statutory obligations.”

 

The above judgment is in tune to the internationally accepted concept. Halsbury’s Laws of England, Fourth Edn., Volume 44, paragraphs 405 to 420, was quoted in the judgment.  The relevant portions of the quoted reference is as below.

“Courts do not ordinarily enforce performance of contracts of a personal character, such as a contract of employment. Subject to certain well defined categories of exceptions, law does not permit, and the Specific Relief Act does not contemplate, the enforcement of a contract of a personal nature by a decree for specific performance.”

 

The above judgment clarifies the legal recourse in cases of dispute between an employer and employee for the alleged or threatened breach of contract between employer and employee.  Nobody can be forced to work.  Nobody can be asked to retain a person as employee.  If one of the parties wanted to get out of the contractual relationship, the only remedy available to the aggrieved party is to sue for damages.  The rule narrated above is equally applicable in relation to all contracts of personal nature.

 

Forgetting this fundamental legal concept, there are thousands of pending litigations in various Indian courts seeking specific relief of mandatory injunction based on employment contracts.  Can our justice administration collectively address to the cases and dispose of the same expeditiously in the interest of justice?

By: Rajesh Vellakkat & Indran MB

INTERNATIONAL TRADEMARK REGISTRATION FROM INDIA : STEP BY STEP PROCESS

Till recently for Indian companies to get trademark registered   in other countries, they  had to apply in each country separately. For this, they had to engage  attorneys in  each country, pay fees in each country  and   follow documentation requirements  specfic to each country.  It was time consuming and costly. Maintaining the registration thereafter was also difficult; as renewals in each country will be at different point of time. After India joining Madrid Protocol, now all these procedural hassles are removed to a great extent.  Now we can apply for international trademark registration through Indian trademark office.

 In order to apply for an International trademark the applicant or the agent ( attorney) should have a digital signature. The digital signature should be registered with the trademarks registry website http://www.ipindia.nic.in.  While doing so each applicant or agent (attorney) has to obtain a login ID and password. Before filing an international trademark application the applicant should have an Indian trademark application  or a trademark registration in India. Based on the Paris convention, if an applicant flies an international application within six months from the date of filing of the Indian trademark application, said international application will be considered as filed  on the Indian trademark application filing date.

Before filing an international trademark application, it would be appropriate for you to decide whether your logo or trade name, caption, shape of packaging or other trade symbols connected with your product or services are eligible for registration.  To get the trademark registered the mark should be distinctive and distinguishable from other trademarks. For this you need to do a search in all the relevant trademark registry databases to identify other similar or deceptive trademarks. To get registration mark should be a unique trade symbol that connect you with your products  and services.  While registering a trademark you should also consider, whether you should apply for colour images or for the black and white images of your trademark. A trademark in colour gives protection to those specific colours, whereas a black and white application covers all colours.

If you are engaging an attorney to file the trademark for you, you need to provide power of attorney in a prescribed format. The trademark law has classified various goods and services in to 45 classes. This is based on the international treaty called NICE agreement. You need to identify the appropriate classes relevant to the products and services offered by you. In some countries use of the trademark in that country is a prerequisite for registration.  But in most of the countries intent to use is sufficient. Once all these aspects are addressed then log on to http://www.ipindia.nic.in  and select the sub section” comprehensive e Filing services”  and login using your ID. International application should be filed in a prescribe format (form MM2E). Once the application filled appropriately,  you need to file the application online.  The Indian trademarks registry will charge 2000/- as application fee. While making this international application you need to select the countries  where you wish to get the trademark registered. Once all formal requirements are met, Indian trademarks registry will forward the application to World Intellectual Property Organization (WIPO).  WIPO will issue a demand notice asking the applicant to pay the international filing fee. International filing fee is in Swiss frank (653/- where no reproduction of the mark is in color, Swiss franc 903/-where any reproduction of the mark is in color and  100/- as Complementary fee for the designation of each designated Contracting State). International bureau of WIPO thereafter forwards the international application to the concerned countries where you opted for registration. In addition to the international filing fee you need to pay the national trademark filing fee of each country where you want the registration. The current trademark fee  of each country is as below.

Country                                                                                Amount in Swiss francs

Armenia

221
22

for one class
for each additional class
Australia

407

for each class of goods or services
Bahrain

274
274

for one class
for each additional class
where the mark is a collective mark or a certification mark:

297
297

for one class
for each additional class
Belarus

600
50

for three classes
for each additional class
Benelux

211
21

for three classes
for each additional class
where the mark is a collective mark:

301
21

for three classes
for each additional class
Bonaire, Saint Eustatius and Saba

195
20

for three classes
for each additional class
where the mark is a collective mark:

279
20

for three classes
for each additional class
Bulgaria

376
25

for three classes
for each additional class
where the mark is a collective mark or a certification mark:

683
62

for three classes
for each additional class
China

249
125

for one class
for each additional class
where the mark is a collective mark:

747
374

for one class
for each additional class
Colombia

387
193

for one class
for each additional class
where the mark is a collective mark or a certification mark:

516
258

for one class
for each additional class
Cuba First Part:

274
91

for three classes
for each additional class
where the mark is a collective mark:

320
91

for three classes
for each additional class
Second Part:

82

independent of the number of classes
where the mark is a collective mark:

82

independent of the number of classes
Curaçao

272
28

for three classes
for each additional class
where the mark is a collective mark:

540
55

for three classes
for each additional class
Denmark

419
107

for three classes
for each additional class
Estonia

176
56

for one class
for each additional class
where the mark is a collective mark:

240
56

for one class
for each additional class
European Union

1111
192

for three classes
for each additional class
where the mark is a collective mark:

2070
383

for three classes
for each additional class
Finland

279
100

for three classes
for each additional class
where the mark is a collective mark:

378
100

for three classes
for each additional class
Georgia

314
115

for one class
for each additional class
Ghana First Part:

129
129

for one class
for each additional class
Second Part:

86
86

for one class
for each additional class
Greece

133
24

for one class
for each additional class until the tenth class
where the mark is a collective mark:

663
120

for one class
for each additional class until the tenth class
Iceland

180
41

for one class
for each additional class
where the mark is a collective mark:

180
41

for one class
for each additional class
India

61

for each class of goods or services
where the mark is a collective mark or a certification mark:

175

for each class of goods or services
Ireland

325
93

for one class
for each additional class
Israel

386
290

for one class
for each additional class
Italy

121
41

for one class
for each additional class
where the mark is a collective mark:

403

independent of the number of classes
Japan First Part:

114
87

for one class
for each additional class
Second Part:

380

for each class of goods or services
Kyrgyzstan

340
160

for one class
for each additional class
Mexico

193

for each class of goods or services
New Zealand

115

for each class of goods or services
Norway

345
107

for three classes
for each additional class
where the mark is a collective mark:

345
107

for three classes
for each additional class
Oman

484
484

for one class
for each additional class
where the mark is a collective mark or a certification mark:

1211
1211

for one class
for each additional class
Philippines

107

for each class of goods or services
Republic of Korea

233

for each class of goods or services
Republic of Moldova

307
64

for one class
for each additional class
where the mark is a collective mark:

370
64

for one class
for each additional class
San Marino

178
47

for three classes
for each additional class
where the mark is a collective mark:

320
83

for three classes
for each additional class
Singapore

272

for each class of goods or services
Sweden

322
126

for one class
for each additional class
Switzerland

350
50

for three classes
for each additional class
Syrian Arab Republic

116

for each class of goods or services
Tajikistan

420
16

for one class
for each additional class
Tunisia

155
20

for one class
for each additional class
Turkey

248
49

for one class
for each additional class
Turkmenistan

178
90

for one class
for each additional class
Ukraine

429
86

for three classes
for each additional class
United Kingdom

262
73

for one class
for each additional class
United States of America

301
301

for one class
for each additional class
Uzbekistan

1028
103

for one class
for each additional class
where the mark is a collective mark:

1543
154

for one class
for each additional class
Viet Nam

101
84

for one class
for each additional class

The new mechanism will provide substantial savings in terms of money and time. The management of your trademarks becomes easier as you can renew the trademark registration in all the countries  in a similar manner by filing a single request to WIPO.

By Rajesh Vellakkat