Monthly Archives: October 2013

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

Apostille

When documents such as birth certificates, judgments, notorial attestations (acknowledgement of signatures) and other public documents from one country for use in another country, it needs to be legalized. Traditionally it involves a complex process and officials of the country where the document was issued as well as the foreign embassy or consulate of the country where the document to be used have to put their seal. In order to avoid this complex process apostle convention was formed. A large number of countries have joined a treaty called Hague convention of  5th October 1961 abolishing the recruitment of legislation of foreign public documents. It is commonly known as apostle convention. The list of countries  who are members to this convention is listed in http://www.hcch.net/index_en.php?act=conventions.status&cid=41. By this treaty by a single formality of issuance of an authenticating certificate by a competent authority, designated by the country where the document was issued, the document will become an authenticated document in every member country. This authentication certificate is called Apostille.

India is a member of this convention from 2005. The competent authority in  India is  Joint Secretary, Ministry of External Affairs. Please see the address at http://www.hcch.net/index_en.php?act=authorities.details&aid=643. Hence any public documents from India  could apostlle. India being a federal system documents originated  from different states requiring apostilles should be first authenticated by the designated officer of the state government. To know the details of the competent officers please  read  http://www.mea.gov.in/legalization-of-documents.htm. There after the ministry of external affairs legalize the documents. In earlier days the ministry of external affairs had a special counter to accept documents for apostle. Recently, MEA has outsourced document collection work to some private agencies. These private agencies have offices in many cities.  Details of those agencies are in the above link.

The apostle is required for use of certificates abroad like birth, marriage and death certificates, documents emanating from various courts, commissions, commercial registers, notorial act, university certificates etc.  An apostille does not certify the content of the document it merely authenticate the signature of the person issued the certificate.

 By:  Rajesh Vellakkat

Transfer Pricing- Safe Harbour Rule notified

Transfer pricing disputes are increasing these days. To avoid legal disputes between companies and tax department,  the Finance Act, 2009 had introduced the concept called safe harbour rules. This gives certainty in determination of arms length price for international transactions. Section 92 CB of the income tax act empowers the central board of direct taxes the power to make such safe harbour rules. Safe harbour means circumstances in which income tax authorities shall accept a transfer prize (arms length prize decided by the assessee). However, till recently the safe harbour rules were not notified by the Government.  Some time back Government appointed a committee headed by Mr. N. Rangachari to address the concerns of industry in this regard and suggest appropriate policy.  The committee made its recommendation and based on which the government of India on 18th September 2013 notified safe harbour rules. This rule is applicable from assessment year 2013-2014  onwards and is applicable for the next five assessment years.

An assesses can opt for safe harbour regime for a period of his choice but not exceeding five years. This option can be exercised filing of form 3CEFA. As per this rules for IT and IT enabled companies if  the aggregate transactions entered in to during the provisions year if doesn’t exceed a sum of 500 crores the safe Harbour declared  is (operating profit margin) not less than 20%  and  similarly  if the transaction value is above 500 crores then the operating profit margin ( safe harbour margin ) is not less than 22%. If a company declares profit margin as above, those transaction will be considered as arms length transaction. Similarly for knowledge process outsourcing industry margin stipulated is 25%. Depending on the kind of corporate guarantee given to the associate enterprise, if the commission of fee in relation to the guarantee is in the range of 1.75% – 2% of the amount guaranteed, such transactions are considered at arms length. Incase of contract research and development services relating to the software development the margin required is 30% and for research and development services relating to pharmaceutical process it is 29%.

On receipt of form 3CEFA the assessing officers shall verify whether the assesses exercising the options is an eligible assessee and whether the international transaction is an eligible transaction. Transfer pricing officer has the right to ask for more information and evidence and transfer pricing officer has the authority to declare that transfer pricing position declared by the assessee as invalid.

The new initiative of the income tax department would definitely help to reduce the transfer pricing litigation in future. It is worthwhile to mention here that total transfer pricing litigation is valued NR 60000 crores, according to some sources (not verified by the author). It would be appropriate if associated enterprises make use of the benefits of this new provision to avoid future tax litigation.

By: Rajesh Vellakkat

A Discussion on Stamping of Arbitral Award

Arbitration is increasingly used as tool for dispute resolution. Hence, any provision relating to arbitral award is of intense scrutiny. Karnataka Stamp Act 1957 and the other similar stamp acts applicable in other states consider an arbitral award as an instrument chargeable with duty.

Schedule 1 Article 11 of Karnataka Stamp Act says

Award:- that is to say, any decision in writing by an arbitrator or umpire, not being an award directing a partition, on a reference made otherwise than by an order of the Court in the course of a suit :

The same duty as a conveyance ( under Article no 20 (1) on the  amount or market value of the property (which is subject matter of the award) which ever is higher

Similar such provisions are available in stamp acts of other states as well.

From this it is very clear that Arbitration award  relating to certain types of issues mentioned  above attracts stamp duty. However, it is not very clear who is bound to pay stamp duty on an arbitral award relating to an arbitral award in relation to a contractual dispute.

Section 30 of the Karnataka Stamp Act  provides Stamp Duty  by whom payable:  “In the absence of an agreement to the contrary, the expenses of providing the proper stamp shall be borne:

(a)   in the case of any instrument described in any of the following articles of the schedule namely No. 2( administration bond, No.6 Agreement relating to deposit of tiled deeds pawn or pledge) No 12( Bond) , No 13 ( bottomry bond) No 23( customs bond) , No 27 (Further charge), No 29 ( indemnity bond) , No 34 Mortgage deed) , No 45 ( release) , No 46 (Respondential Bond) , N0 47 Security Bond or Mortgage deed), No 48 Settlement, No 52 (a) transfer of debentures, being marketable securities, whether the debenture is liable to duty or not) No 52 (b) transfer  of any interest secured by a bond, mortgage deed or policy of insurance) by the person daring , making or executing such instrument,

(b)   in the case of a conveyance (including a re-conveyance of mortgaged property) by the grantee; in the case of a lease or agreement to lease-by the lessee or intended lessee;

(c)    in the case of a counterpart of lease__by the lessor;

[ca) in the case of power of attorney - by the principal.]

(d)   din the case of an instrument of exchange __ by the parties in equal shares;

[(dd) in the case of a certificate of enrolment in the roll of Advocates maintained by the State Bar Council __ by the Advocate enrolled)];

(e)    in the case of a certificate of sale__by the purchaser of the property to which such certificate relates; and

(f)     in the case of an instrument of partition by the parties thereto in proportion to their respective shares in the whole property partitioned, or, when the partition is made in execution of an order passed by a Revenue authority or Civil Court or Arbitrator, in such proportion as such authority, Court or Arbitrator direct

From the  above it is not very clear whether for arbitral awards other than awards relating to partition of property stamp duty is payable by whom.

Another question is whether the court should look in to the aspects of payment of stamp duty on the arbitral award while admitting petitions for setting aside such arbitration awards is  highly debated.

Section 31 (5) of the Arbitration  Act award merely says that arbitrator should provide a signed copy of the award to each party. The Arbitration Act does not mention anything about the stamp duty and the person responsible to pay the stamp duty. On the other hand section 34 of the Arbitration Act is very clear that an aggrieved party to an arbitral award has a resource to file an application to setting aside the arbitral award. The copy of the arbitral award received from the arbitrator if provided in a court of law with a petition to setting aside the said award whether courts in such instances should look in and confirm that the stamp duty is paid on the arbitral award ?

Supreme court of India’s judgement in M. Anasooyadevi Vs M. Manik Reddy (2003) 8 SCC 565 considered this question. This case was a case against the order of the Andhra Pradesh high court.  The Andhra Pradesh high court took a view that since the award was not stamped and registered,  it was there fore invalid. The Supreme Court on the other hand opined that the question as to whether the award is required to be relevant only when the parties filed the award for enforcement under section 36 of the Arbitration Act. The question whether an award requires stamping and registration should be considered only at the execution stage and not  in a proceedings to set aside the arbitral award.

By: Rajesh Vellakkat