In this article, Aditi Katyan discusses pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, The downsides of setting up a partnership instead of a private limited company.

Are you a budding entrepreneur trying to build a start up? If yes, then the first challenge as a business owner you will have is to decide on the appropriate business structure for your venture. Various choices are available in India including but not limited to Sole Proprietorship, Partnership, Limited Liability Partnership (LLP), Private Limited Company, Public Limited Company, Unlimited Company and Cooperatives. Each business structure has its own pros and cons. Every business owner must choose his business structure based on his individual circumstances and what best suits his business needs. In this article, a comparison is made between two specific forms of business structures that are Partnership and Private Limited Company. Also, have tried to understand why setting up a partnership is difficult as compared to a private limited company.

Under Section 4 of the Partnership Act, 1932[1] Partnership has been defined as

“….the relation between persons who have agreed to share the profits of a business carried in by all or any of them acting for all. Persons who have entered into partnership with one another are called individually, “partners” and collectively “a firm”, and the name under which their business is carried on is called the “firm-name”.

From the above definition, the essential components of a partnership can be derived which are as follows –

• The existence of an agreement (written or oral)
• The agreement must contain the scheme of sharing profits
• The business will be carried by all or any of them acting for all.

Forming a partnership can be advantageous for the following reasons –

• Easy formation – Partnership does not require compulsory registration. It is a cost-effective option and is easy to operate. Partnership will take only around 7 days to incorporate. It need not hold the statutory general meeting nor file a statutory report.
• Operational flexibility – As there are limited number of partners, quick decisions about all the aspects of the business can be made by mutual consent.
• Cost of incorporation – A Partnership comes into existence through a partnership deed which is cost effective. The cost of incorporation is less than thousand rupees.
• Protection against cheating – Fraud or scams can be easily prevented in case of partnership because it is in the interest of every partner to protect each other against fraud.
• Specialization – Each partner of the firm is also the owner so he/she will try to actively participate in the workings of the business per their specialization and expertise. For instance, if few lawyers come together to form a law firm, one can specialize in civil, one in criminal, one in corporate and so on.

Under Section 2(68) of the Companies Act [2], Private company is defined as –

“…means a company having a minimum paid-up share capital of one lakh rupees or such higher paid-up share capital as may be prescribed, and which by its articles,—

(i) restricts the right to transfer its shares;

(ii) except in case of One Person Company, limits the number of its members to two hundred:

Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member:

Provided further that—

(A) persons who are in the employment of the company; and

(B) 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, shall not be included in the number of members; and

(B) prohibits any invitation to the public to subscribe for any securities of the company;

On an inin-depthnalysis, a Private Limited Company seems to be a better form of business structure as compared to a partnership for the following reasons –

• No Separate Legal Entity – A partnership firm has no separate existence from its members. This makes it very uncertain and it may dissolve upon the death of its members or upon separation from them, or due to retirement of a partner. Also, any unsatisfied or discontented partner can give notice at any time for the dissolution of a partnership. This makes it a risky form of business structure. On the other hand, a private limited company has a separate individual legal entity from its shareholders/members. Members of the company are not personally liable for any loans and liabilities of the Company.
• Unlimited Liability – In a partnership, each member or partner has an unlimited liability and is personally liable for all the debts of the firm. At times to satisfy debts, even personal properties of members may be seized. Whereas in a private limited company, as is evident from the name itself, the shareholders or members have a limited liability. The debt of each shareholder individually is limited to the unpaid amount of money towards the shares held by them. If they have no dues towards the payment for shares, then they do not own anything to the company personally. A shareholder is not personally liable to pay anything towards a debt or loan incurred by the company.
• Legal compliances – It is easy to form a partnership because less amount of legal compliances is needed. This also means saving of time and money. It is not necessary to register a partnership firm. But there are certain disadvantages of not registering the partnership firm like – 1) A partner cannot file a law suit against the firm or any other partner 2) The firm and partners cannot file a law suit against the third party. Also, no compulsory legal documentation would also lead to less transparency in the working of the partnership. On the other hand, a private limited company must be compulsorily registered with the Registrar of Companies (ROC) under the Ministry of Corporate affairs. It is easy to carry out due diligence of a private limited company as all the legal paperwork is in order. More number of legal formalities right from the incorporation stage to the daily workings like audits etc, makes the proceedings more transparent.
• Decision making – Consent of each partner is essential for taking any decision in a partnership. This may result in delays and unnecessary complications. But in the case of a company the board of directors, elected by shareholders, control and manage the business. Each shareholder need not worry about the management of the company. Only majority voting power (>50%) is needed to control the most operations of a company (in a few very important cases >75% is required).
• Limited Capital – The capital that can be raised in a partnership firm is limited as there is a restriction on the number of partners. Limited resources mean that the possibility of the partnership growing into a big business is low. Whereas a private limited company should have a minimum paid up capital of Rs.1 lakh and no upper limit is specified.
• Accountability – The administration and control of the firm is in the hands of all partners in a partnership. Each partner may want to run away from responsibility and it will become difficult to hold each one accountable. In a private limited company, the control is with the Board of Directors thereby eliminating any accountability issues.
• No confidentiality – Maintaining secrecy is a daunting task in case of partnership. Sensitive information is known by all partners and chances of leakage are immense. On the other hand, each member of a company does not need to know the trade secrets. So, there are less chances of leakage of vital information.
• Insolvency – In an unfortunate incident of insolvency, the solvent partners may have to pay the debts of insolvent partner also.
• Internal conflicts -In a partnership, every member has a say which may give rise to more disputes and differences. These conflicts may cause harm to the firm.
• Improper use of assets – There is a greater possibility that the partners may use the assets of the firm for their personal use. Misuse of assets is harmful to business interests. This is a rare possibility in the case of a private limited company.
• Lack of public trust – There is no kind of government intervention in the working of a partnership. As such public, may not have confidence in the firm.
• No transferability of shares – A partner or member of a partnership firm cannot transfer his share to any outsider without the consent of other partners. So, if a partner wants to leave the firm, he has no option to sell his shares to others. In a private limited company, there is not such an outright restriction.
• Involvement of foreign nationals – A partnership firm cannot be formed by foreign nationals. They can only be shareholders in a private limited company. Also, as compared to private limited company, partnership would attract less amount of foreign direct investment (FDI).

To conclude, a partnership would be a more suitable business structure for small businesses like retail, wholesale trade or small manufacturing units, legal firms etc. Whereas private limited company would be a more suitable business structure for businesses, trade, manufactures, large industrial establishments etc.

References

[1] http://www.mca.gov.in/Ministry/actsbills/pdf/Partnership_Act_1932.pdf

[2] http://www.mca.gov.in/SearchableActs/Section2.htm

In this article, Kavya Bharadwaj of Rajiv Gandhi National University of Law discusses the evolution of Freedom of Speech under the Indain Constituion.

“Give me the liberty to know, to utter, and to argue freely according to conscience, above all liberties.” – John Milton, Areopagitica

The very fundamental instrument of freedom which any democratic institution or state, at large, can offer its citizens is very right to effectively express one’s views, ideas, thought, expression ,belief, opinion or faith in an utmost secure environment without any fear of retribution, repression, restriction or any other form of state’s arbitrary control from the government. The very essence of freedom of speech lies in the fact that it molds and shapes public opinion, assists in bringing about healthy discussions and discourses, helps in better exchange of idea and opinions, serves as the ground of debates and effective decision making and per say, develops stronger democratic institutions.

Introduction

The Constitution of India guarantees to every citizen certain rights regarding freedom of speech under article 19 of the Constitution of India which involves to the modern date, six clauses in accordance with the freedom of speech which are-:

1. Freedom of speech and expression;
2. Freedom to assemble peacefully without arms;
3. Freedom to form associations or unions (or cooperative societies)^{99th amendment}
4. Freedom to move freely throughout the territory of India;
5. Freedom to reside and settle in any part of the territory^{; 44th amendment}
6. Omitted  by the 44^th amendment act, 1978
7. Freedom to practice any profession, or to carry on any occupation, trade or business.

Article 19 (1) (a) contains the crux of freedom of speech in India as “freedom of speech and expression”. Even the preamble to the Constitution of India echoes the very sentiment of this fundamental freedom as the very “liberty of thought, expression, belief, faith and worship which has been inserted as a human right or specifically a fundamental right under article 19 (1) (a) of the Constitution of India. The very basis of a democracy is the untrammeled flow of word, ideas, thoughts and expressions. The very basic right to speech and express one’s view effectively without any state control is not only seen in the constitutions and statutes of countries but also in international conventions such as the Universal Declaration of Human rights, European Convention on Human Rights and Fundamental Freedoms, International Covenant on Civil and Political Rights. Wide debates often take place on the scope and extension of freedom of speech in democracies and reasonable restrictions have been imposed accordingly for the effective operation of law and public order interest of peace and security.

The need for protection of Freedom of Speech in India

India being the world’s largest democracy and the second most populated state in the world has a very broad need to protect the freedom of speech and expression of its citizens. Being a secular state with a huge diversity in language, religion, caste and creed, freedom of speech basically is a sensitive and essential right guaranteed to the citizens of India. Need to protect freedom of speech can be illustrated as-:

• Active participation in democracy- freedom of speech helps the citizens to actively participate in the smooth functioning and operation of democracy as it helps in proper decision making.
• Expression of beliefs and attitudes- in a country where there exists people of different religion, caste and creed; freedom of speech helps in proper expression of beliefs and attitudes of different
• Self-fulfillment and development – the exchange of ideas and opinions effectively and freely assists in the healthy development of citizens and also provides significant self-fulfillment
• Open discussions- in order to discover the truth and facilitate healthy  and sound decision making, open discussions significantly help in the running of a democracy and other political institutions contained within.

Time and again, judicial precedents serve to reiterate the importance of the freedom of speech which is one of most quintessential fundamental right enshrined under Part III of the Constitution of India.

Birth of Freedom of Speech under the Indian Constitution

Under the colonial era, the liberties of the Indians were at a complete stake. The atrocities of the British Empire actually curbed the freedom of expression and speech of the Indian masses. From the Sedition laws imposed by the English in 1870 to Section 295A of the Hate speech law, the British took every possible way to curb opinion making among Indians in order to suppress the revolutionary sentiments prevailing the masses to an independent struggle. The prevention of Seditious Meeting Act, 1907 which prevented open discussions and formation of Unions was also the driving force behind the very fundamental freedom of speech and expression being guaranteed to the citizens which they were earlier deprived of. The framers and the architects of the Constitution of India have also borrowed the idea of freedom of speech from the democratic ideas laid in the American Constitution. Freedom of speech and expression is a significant feature of the American Constitution.

Status of Freedom of Speech in India

1. Firstly, freedom of speech and expression in India can only be enforced by its citizens. Therefore the freedom to express and speak cannot be exercised by any non-citizen visiting or present in India.
2. Secondly, this fundamental right under article 19 (1) (a) cannot be enforced by a company as given in shree sidhbali steels ltd. V state of uttar Pradesh which stated that company not being a citizen has no fundamental right.
3. Thirdly, there exists freedom of speech and expression on social media/ internet also, where the Supreme Court struck down section 66A of the Information Technology Act which provided for police action for social media posts construed as “offensive” or “menacing” , in shreya singhal v UoI, thus fortifying article 19 (1)(a).
4. Fourthly, the right to expression under Article 19 also involves the right not to express. The  Supreme Court in Excel Wear v UOI  held that the fundamental right under Article 19 has reciprocal rights i.e. the “right to freedom of speech includes the right not to speak and the right not to form an association is inherent in the right to form associations”.

Legal remedies available on infringement of Freedom of Speech

1. In case of violation of article 19 (1) (a), there stands another fundamental right under article 32 of the Constitution which deals with remedies for the enforcement of rights conferred under part III of the Constitution; that is, the right to move to the Supreme Court  for the enforcement of right to speech and expression.

The Supreme Court has the power to issue directions or writs-habeas corpus, mandamus, quo warranto, prohibition, and certiorari; for the enforcement of Article 19(1) (a) of the Indain Constitution).

2. Even the High Courts under article 226 have been conferred the same power like the Supreme court to issue orders and writs in order to enforce the fundamental right to speech and expression of the citizens.
3. Public Interest Litigation can also be filed to the Supreme Court or the High Court directly, by any person if in case the freedom of speech of theirs or any other party is violated, thus acting in bona fide interest

Hence, any aggrieved person may approach these courts which are considered to be the guardian of the Constitution.

Can a non-governmental entity infringe your Freedom to speech?

No, a non-governmental entity is not empowered to infringe and make laws restricting the freedom of speech and expression of a citizen vested under article 19(1) (a) of the constitution. Therefore, freedom of speech and expression exists in workplaces and no non governmental entity has the right to infringe or abrogate the same.

Who can violate your Freedom of Speech and Expression?

One’s liberty must not offend the liberty of others, therefore the exercise of freedom of speech and expression is subject to reasonable restrictions under Article 19(2)  which was inserted by the 1^st amendment to the constitution of India in 1951; whereby a state can make any law which restricts the freedom of speech and expression of an individual, on the following grounds and interests-:

• Sovereignty and integrity of India- any challenge to the sovereignty and integrity of India must be curtailed by imposing restriction on article 19(1) (a).
• Security of the state- it involves restricting freedom of speech which may cause aggravation like riots, affray, waging war against the state, armed rebellion etc which may threaten the security of the state
• Friendly relations with foreign states- any act of speech and expression which may harm India’s relations with foreign states and affect international diplomacy may be restricted by the government. However commonwealth nations are not treated as foreign state; therefore any statement for example adverse to Pakistan would not be restricted on the basis of article 19(2)
• Public order- which refers to public peace and tranquility should always be observed even if it restricts freedom of speech and expression.
• Decency or morality- Section 292 to 294 of the Indian Penal code deals with restrictions on article 19(1) (a) on the provisions of decency and morality. However till date no fixed standard has been set to define what is moral and decent.
• Contempt of court- freedom of speech is restricted if it may lead to contempt of court. However truth may serve as a valid defense.
• Defamation- freedom of speech and expression cannot be used to defame or harm anyone’s reputation. Criminal defamation is punishable under Indian Penal code under section 499.
• Incitement to an offence- article 19 (1) (a) cannot be used to incite any commission of an offence; which is punishable under law.

Freedom of Press in India

Though freedom of press is not explicitly mentioned in the constitution of India but is implied under article 19 (1) (a). In Express newspapers Ltd. V UOI  it was laid down by the Supreme Court that “In today’s free world freedom of press is the heart of social and political intercourse. The press has now assumed the role of the public educator making formal and non-formal education possible in a large scale particularly in the developing world, where television and other kinds of modern communication are not still available for all sections of society. The purpose of the press is to advance the public interest by publishing facts and opinions without which a democratic electorate [Government] cannot make responsible judgments.”

Censorship of press is unhealthy for a democracy however Section 19 (2) also operates on freedom of press in India imposing reasonable restrictions. In Romesh thappar v state of Madras the Supreme Court said, “There can be no doubt that freedom of speech includes freedom of propagation of ideas, and that freedom is ensured by the freedom of circulation. Liberty of circulation is as essential to that freedom as the liberty of publication.”

Cinematographic freedom v state controlled censorship

In K.A Abbas v UOI,  the Supreme Court upheld the constitutionality of censorship and said it comes within the ambit of article 19 (2) and treated motion pictures separately from other forms of art since these motion pictures can stir up  “emotions more deeply than any form of art”. Several pictures till date are  banned because they are not healthy for public society.At one hand we profess right to  information as a form of freedom of speech and on other hand we strangulate freedom of speech by censoring films. Censor board at many instances acted as a puppet in the hands of the government and banned all scenes from films which were against the government or its policies. In Rangarajan v PJagjivan Ra, the Supreme Court overturned the Madras High Court judgment where a Tamil film was banned for criticising the reservation policy of the government of Tamil Nadu and the Supreme Court here upheld article 19 (1) (a).

Recently, Pahlaj Nihalani was sacked from his post and was replaced by Prasoon Joshi as the new Censor Board chief. Director Alankrita won the case after challenging the Censor Board at an appeals tribunal. Nihalani has been widely criticised for his moves like demanding multiple cuts in movies like Udta Punjab and Indu Sarkar as well as his refusal to certify Lipstick Under My Burkha. He had recently objected the use of the word ‘intercourse’ in When Harry met Sejal.He even asked to bleep words like “Hindu India” in a documentary film on economist Amartya Sen. Filmmakers and critics have often accused him of unnecessary cuts and moral policing. Thus the tussle between cinematographic freedom under article 19 (1) (a) and state controlled censorship continues which has had negative impact on the freedom of the film industry.

Sedition and Freedom of Speech

Section 124A of the IPC and its challenge to freedom of speech is widely discussed. However suitable grounds need to be examined as to whether freedom of speech of an individual actually causes sedition. Section 124A is upheld only when it comes within the ambit of “public order”. It is important to differentiate between advocacy and incitement where incitement is required to constitute offence under section 295A.In case of hate speech it is important to lay the burden of proof on those whose sentiments have been hurt. In Balwant Singh v state of Punjab it was laid out that,” Raising of some lonesome slogans, a couple of times by two individuals, without anything more, did not constitute any threat to the Government of India as by law established, nor could the same give rise to feelings of enmity or hatred among different communities or religious or other groups”.

The Facebook status posted by a 21-year-old girl in Maharashtra after Bal Thackeray’s death, which observed significant spark, one could also conclude that there is no real interconnection that could be established between the act and any possibility of violence. In kanhaiya kumar v Nct of Delhi, allegations were made against students of JNU who shouted anti national slogans under section 124A. However students’ president Kanhaiya Kumar was released on bail as enough evidence to prove sedition was not generated by the police.

Forced patriotism and Freedom of Speech

In a widely criticized move the Supreme Court in the case shyam chouskey v UOI, made it mandatory to play the national anthem before the screening of any movie and compulsory for all cinema goers to stand while the national anthem is played. Here the bench consisting of Justice Dipak Misra and Justice Amitva Roy gave emphasis to patriotism over freedom of expression.

Contempt of Court and Freedom of Speech

In Indirect Tax Practioners’ Association v R.K Jain, it was laid down by the Supreme court that freedom of speech and expression shall win over contempt of court as under article 19 (2), if truth as a defense is used in public interest and is bonafide. Therefore freedom of speech can be curtailed on the grounds of contempt of court, only in exceptional circumstances.

Thus to conclude, freedom of speech in India is that fundamental freedom that serves the very basis of the smooth operation of democracy. In an emerging economy like India, liberalization and freedom of thought, expression, beliefs and ideas is significantly essential. Freedom to speech is not just fundamental but natural too, therefore any restriction on it should be widely discussed and debated upon.

In this article, Kanishka Chakrabarti pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses The Legal Metrology (Packaged Commodities) Rules, 2011.

The Legal Metrology (Packaged Commodities) Rules, 2011

The Legal Metrology Act, 2009 came into effect on the 1^st of April, 2011, replacing the Weights and Measures Act. The act was passed with the purpose of establishing and enforcing standards of weights and measures or aspects incidental to the same.

Under the act there are various rules, but a crucial arm of the act is the Packaged Commodities Rules, i.e. Legal Metrology (Packaged Commodities) Rules, 2011 (hereinafter referred to as “Rules”).

The Department of Legal Metrology falls under the Department of Consumer Affairs, and is therefore concerned with fair and honest practices in relation to all aspect of trade.

The Rules deal with goods that are packaged and provide inter alia how declarations are to be made and what declarations are to be contained in a packaged commodity that is meant to be for sale.

Why are declarations required in packaged commodities?

It may be questioned why declarations are required in the first place, after all, when we buy vegetables or meat from sellers, or groceries from vendors that are not packed, they are not mandated to provide any declarations with respect to the same.

The probable answer is because when we buy the things in an unpacked form, we know who we are buying it from, or the identity of the seller, on occasions we even see it being manufactured in front of us (for example flour), however when we buy goods that are packaged we do not know where they are from or how fresh they are or when they expire. Hence it can be said that the purpose of the Rules is to ensure that the end consumer gets clarity and all relevant information when he buys a product that is in packaged form.

Are all packaged commodities covered under the Rules?

Yes and no. While certain provisions are applicable for all packaged commodities there are certain rules that do not apply to certain kinds of commodities. Chapter II of the Rules, for example, deal with packages that are meant for retail sale, these provisions would not be applicable to certain kind of commodities.

Beyond the obvious, these rules would not be applicable for products meant for institutional or industrial consumers, i.e. those institutions who directly purchase from the manufacturer for use by the said institution OR consumers who buy the products directly from the manufacturer for use in that industry.

For example, a hospital buying packaged paint directly from a paint company would amount to an institutional consumer, and the products would not require the declarations that otherwise are required had the products been sold in retail market.

Similarly, an automobile company that buys packaged paint and consumes it for the purposes of painting the vehicles would amount to an industrial consumer and the packaged paint would similarly not require the declarations otherwise required.

Further, commodities which contain quantity of more than 25 kg or 25 litre (50 respectively in case cement and fertilizers) are exempted from the specific requirements of retail packages.

Additionally, the Rules do not apply to certain packages even if they satisfy all other criteria if:[1]

1. The package is sold by weight or measure and amounts to less than 10 ml or 10 gm (provided the product is not tobacco); or
2. Package contains fast food items and is packed by hotels/restaurant/similar body; or
3. Contains scheduled drugs and non scheduled drugs covered by the Drugs (Price Control) Order, 1995; or
4. Agricultural farm produce in packages above 50 kgs; or
5. Thread which is sold in the form of coil to handloom weavers.

Which declarations are mandated under the Rules?

Rule 6 of the Rules dictate the declarations that must be present in every packaging. They include

(a) The name and address of the manufacturer/importer/packer, as may be applicable. Note that if the manufacturer and packer are separate entities then their names are to be mentioned separately. Also it is to be noted that address to be mentioned is registered office address (this is a departure from the Weights and Measurements Act as well as the earlier iteration of the rules – this clarification and amendment came into being vide GSR 385 – E, dated 14^th May, 2015, with effect from 1^st January, 2016). It is to be noted that this declaration is waived if the product is or contains a food article, instead the specific provision under the Food Safety and Standards Act, 2006 will be  applicable.

(b) Generic name of the commodity being sold.

(c) Price at which the product is being sold, inclusive of all taxes. Note that there is a specified format at which the same is to be declared, viz. “Maximum Retail Price ……………… Inclusive of all taxes” or “MRP ……………… Inclusive of all taxes”. The symbol of the currency is to be mentioned, i.e. the Rupee symbol, or Rs., or INR. Price is to be declared up to two decimal places.

(d) Date of manufacture/packaging/import, as the case may be, viz. the month and year. If the date of packaging and manufacture differ, separate declarations are to be given.

(e) Quantity of the commodity (explained in further detail later on)

(f) Name, address, telephone number, e-mail address of the person or office who can be contacted for consumer grievances.

Are these the only declarations?

Not necessarily. Different acts may have other requirements, for example the Food Safety and Standards Act requires certain declarations, but these are all in addition to the basic and fundamental declarations under the Rules.

How and where are these declarations to be made?

Just declaring the above mentioned mandatory declarations aren’t sufficient, they have to be made in a particular manner.

The declarations are to appear on the principal display panel of the packaged commodity, and what constitutes the principal display panel is determined as follows:

1. In case the product is rectangular in shape, then one side of the package can be considered to be the principal display panel side – (area of the display panel being the surface area of that particular side).
2. In case the product is pipe shaped or nearly cylindrical, 40% of the surface area.
3. In other cases, 40% of the total surface area of the package.[2]

However, it is to be kept in mind that for the purpose of calculating principal display panel area, the top, bottom, flange at the top and bottom of cans, and shoulders and neck of bottle and jars shall not be included.[3]

Also, the height of fonts are an important aspect of the declarations.

As the purpose of the Rules is to ensure that consumers are made aware of the nature of the goods – specific provisions are in place to ensure that the declarations are prominent and legible.[4] As these are vague and subjective terms, the font height and size are important aspects to ensure that the packaging declarations are made in a proper manner.

Rule 7 (3) provides that the height of any declaration should not be less than 1mm and if the nature of declaration is such that it may be embossed or perforated or molded or blown or formed, then the height should not be less than 2mm.

There is a separate provision for height of ‘numerals’ in the declarations as denoted by the below-mentioned tables.

When quantity is declared in terms of weight/volume:

When quantity is declared in terms of length/area/number – area of principal display panel:

As we can see from the tables above, while the height of the letters in a declaration are to be at least 1mm, for numerals it ranges from 1mm to 6mm.

While it may appear obvious, it is important that we understand what a numeral is because it has an important impact on the manner of declarations, including practicality[5] and aesthetic value of the artwork.

The meaning of numeral has not been defined either in the Act of 2009 or in Rules of 2011. Meaning of the word numeral therefore will have to be looked into Dictionary. Meaning of Numeral has been given in Online Oxford English Dictionary as below:

‘A figure, word or group of figures denoting a number’[6]

Therefore a numeral needs to be a number. Neither the Act of 2009 nor the Rules of 2011 have defined ‘number’. Once again therefore one has to look into Dictionary. Meaning of number has been given in Online Oxford English Dictionary as below:

‘ An arithmetical value expressed by word, symbol or figure, representing a particular quantity.’[7]

From the above it is clear that ‘numeral’ is a ‘number’ having an arithmetical value and a number not having any arithmetical value is not a numeral.

Therefore postal pin codes, telephone numbers, Road Nos, City Survey nos etc.  are not numerals. Such numbers do not represent any value. For example, performing functions of addition, deletion, subtraction or division of quantity expressed in numbers or price in numbers is possible and brings about an arithmetical value. However, the said functions cannot be performed on pin codes are telephone numbers. Such numbers do not have any arithmetical value.

So what are the numerals in the mandatory declarations?

It is the author’s view that the declarations amongst the six mandatory declarations that should be considered as numerals are –

• Quantity related declarations
• Price and
• Month and year of manufacturing/packing/importing (only when expressed in numbers).

These are the only fields on which arithmetical operations can be performed; as illustrated above.

Special requirement while declaring quantity

The Rules specify that the space surrounding the quantity declaration should be devoid of printed information at least to the following extent:

• To the top and bottom by a space equal to the height of the numeral in the quantity declaration.
• To the left and right by a space equal to double the height of the numeral in the quantity declaration.[8]

Can labels be used to make the declarations?

Not all manufacturers and traders are equipped to make the declarations on the artwork of the packaging, the same requires substantial investment and printing costs which a manufacturer or packer may understandably want to avoid; comparatively the costs associated with sticking labels on the product are substantially lower and require lesser investment – therefore labelling on the product is allowed for the purpose of making the declarations. However, this is done through a negative right.

The provisions state that it is not permissible to apply individual stickers[9] on a package for either altering or making declarations. While this provision prima facie disallows a party from making individual declarations through labels – as a corollary it also permits making all mandatory declarations through a single label.

What about the declarations the values of which regularly vary?

Changing an artwork is a time taking and expensive affair, for declarations such as date of manufacture which is bound to vary frequently (every month) it is impractical to make the entire declarations through artwork.

While the act is silent about the aspects of this, the general practice across industries (which prefer declarations through artwork as opposed to labels) is that barring date of manufacture and maximum retail price – all declarations (viz. generic name of product, name and address of manufacturer/packer/importer, quantity, customer care declarations) are made on the artwork and a blank space is left for declaring the MRP and the Date of Manufacture/Packed Date/Date of Import.

These details are then imprinted on the artwork through a separate inkjet, dot-matrix, or any other kind of printer. As the rest of the declarations for a particular artwork will always remain constant, this is the preferred way to make declarations.

Can stamps be used to make the declarations?

There is nothing in the provisions that specifically prohibit the use of stamping to make declarations. But it is of interest to note that previously a proviso to Rule 6 (1) (d)[10] stated that a manufacturer could indicate the month and year using a rubber stamp. This proviso has since been omitted[11] for unknown reasons.

Rule 9 (1) (b) however states that numerals of the retail sale price and net quantity declaration ought to be painted, inscribed, or printed. This could be an indication that stamping is disallowed, at least with respect to the above-mentioned declarations.

Units to be used in the declarations

All units in the packaging material should follow International System of Units (S.I) system. For items sold by number, the qualifying symbol used should be “N” or “U”.

For depicting length, if the quantity is less than one meter, it is to be depicted in centimeter. Else, meter.

For depicting mass, if the quantity is less than one kilogram, it is to be depicted in grams. Else, kilogram.

For depicting area, if the quantity is less than one square meter, it is to be depicted in square decimeter. Else, square meter.

For depicting volume, if the quantity is less than one litre/one cubic meter/one cubic decimeter, it is to be depicted in milliliter/cubic centimeter/cubic centimeter respectively. Else, litre/cubic meter respectively.[12]

A schedule to the Rules specify certain products (i.e. their generic name) and in terms of what their quantity is to be declared. For example, curd is to be expressed in terms of weight, but ice cream and other similar frozen products are to be expressed in terms of weight OR volume. The schedule however only specifies twenty six items, and Rule 12 states how other products may be declared, viz.

• In terms of weight – if the product is solid, semi-solid, viscous or a mixture of liquid and solid.
• In terms of volume – if the product is sold by cubic measure or is liquid.
• In terms of number – if the product is sold by numbers.
• In terms of area – if the product is sold by area measure.
• In terms of length – if the product is sold by linear measure.

Dimensions of the product may be additionally required to be mentioned in case the same is a pertinent factor for the product in question.

The Second Schedule to the Act also specifies certain commodities (i.e. their generic name) and their standard pack sizes, such mentioned products can only be sold in the specified quantities[13], for example Mineral Water and Drinking Water can only be sold in quantities of 100 ml, 150 ml, 200 ml, 250 ml, 300 ml, 500 ml, 750 ml, 1 litre, 1.5 litres, 2 litres, 3 litres, 4 litres, 5 litres, and subsequently in multiples of 5 litres.

For products that do not fall under the ambit of this list, there is no such restriction with respect to pack sizes.

Combination Packs

We frequently see one product containing a number of components which are packed in two or more units for sale as a single commodity (for example razor handle and razor being sold as a kit). In such cases, the declarations required should appear on the main package and such package should also contain information about the other accompanying packages.

From the wordings, it is clear that main package does not amount to a single package in which each of such components are contained, but refers to the single most important component of the package.

It is important to understand what would be construed as the ‘main package’ in such instances, for the aforesaid example it is clear that the razor handle is the main package but for every possible scenario it may not be as lucid.

Therefore, the provision also gives the option of giving independent declaration for all of the components and intimation to that effect should be reflected on the main package. But this is a potential grey area that the law should address.

Wholesale Packages

The Rules define ‘wholesale packages’ to mean packages (a) containing a number of retail packages, where the said package is meant for sale, distribution, or delivery to an intermediary and is not for sale directly to a single consumer, or (b) sold by bulk to an intermediary for further selling, distribution, or delivery to customer in small quantities, or (c) that contain 10 or more retail packages, provided that the retail packages are labelled as mandated under the Rules.

Wholesale packages do not require all of the declarations as provided under Rule 6, but it is mandatory that they state: (a) generic name of the product (b) total number of retail packages within such wholesale package or quantity declaration, as the case may be, and (c) Name and address of the manufacturer/importer/packer.

Miscellaneous Provisions

If a product has an outside container or wrapper, the said container/wrapper should also have the relevant declarations. However, this requirement is waived if the container/wrapper is transparent and the declarations are easily readable through such external packaging.[14]

If a product is likely to undergo variations in quantity that are significant owing to environmental or other factors can be qualified by the words “when packed” in its quantity declaration. This allowance is presently restricted to soaps, lotions, creams (other than cream of milk), and camphor. [15]

When stating quantity in terms of weight, the weight of packaging and/or any other object apart from the product is to be excluded. [16]

Additional information and penalty for offences

The Rules additionally provide for registration of manufacturers, packers and importers with the Director of Legal Metrology or State Controller of Legal Metrology which is a mandatory requirement.[17] Penalty for non-registration is a fine of Rs. 4000/-[18].

Penalty for quoting or publishing non-standard units[19] is a fine of Rs. 2000/- (if compounded by retailer/wholesaler/dealer) or Rs. 4000/- (if compounded by manufacturer/packer/importer).

For manufacturing, packing, importing, selling, or offering to do any of the above with respect to products which do not adhere to the Rules pertaining to the declarations –  the penalty amount may extend to Rs. 25,000 for the first offence. For the second offence, the fine may extend to Rs. 50,000, and for any subsequent offence the fine would not be less than Rs. 50,000 and may extend to Rs. 100,000 or imprisonment which may extend upto one year, or both. [20]

For manufacturing, packing, or importing with error in net quantity – for the first offence, no less than Rs. 10,000 fine but which may extend upto Rs. 50,000. For second and subsequent offences, the fine may extend upto Rs. 100,000 or with imprisonment for upto one year, or both.[21]

Selling products for more than the MRP declared is subject to a fine of Rs. 2000 for retailers or wholesale dealer, and Rs. 5000 for manufacturer or importer. [22]

For any other offence under the Rules, the penalty amount payable shall be Rs. 2000.[23]

The Act also provides for appealing before the relevant state Controller against the findings/order of the Inspector.

Practical Challenges & Conclusion

In spite of the noble intentions, there are certain stumbling blocks being faced in implementation of the Rules.

Lack of manpower to check and enforce the provisions of the Rules is a continuous issue being faced by most state governments. [24]

Further, while the penal provisions lay out consequences of offences and subsequent offences – and there is clearly no intention of restricting the offences to a particular jurisdiction, this inadvertently occurs.

Ideally an offence committed in any state should count as an offence and another offence committed in another state should amount to a subsequent offence; however, owing to difficulties in coordination between different state bodies, offences are tracked independently by each state, so an offence, even if committed by an entity for the nth time but for the first time in a particular state – the same amounts to a first offence.

With the present Government’s increased encouragement of digitization perhaps the day is not far off that a central repository would be kept where offences are tracked irrespective of where they occur.

Lastly, the Legal Metrology Inspectors who carry out checks and seizures are often not very familiar with the Rules themselves, and are not aware of the latest case laws in the matter. This results into unnecessary complications and dragged out proceedings which do not serve the interests of any party concerned. Training programs should be conducted from time to time for knowledge updating of the very people who practically monitor and enforce the law in this regard.

References

Statutes

• The Legal Metrology Act, 2009
• The Legal Metrology (Packaged Commodities) Rules, 2011

Books

• Gupta, S.V. (2016). Landmark judgements in the field of Legal Metrology. New Delhi: Commercial Law Publishers. 

Online Document

• Nair B. (2015, February 6). Legal Metrology plans all out meter testing drive. Retrieved July 30, 2017, from www.dnaindia.com/mumbai/report-legal-metrology-plans-all-out-meter-testing-drive-2058477

Endnotes

[1] Rule 26.

[2] Rule 7.

[3] The Rules however have exception provisions that pertain to “soft drinks, ready to serve fruit beverages or the like.” Not further elaborated as to where the declarations should appear on this kind of commodities owing to limitations in the assignment topic.

[4] Rule 9.

[5] Font heights impact space available for making declaration, this often leads to running out of space for remaining declarations.

[6]https://en.oxforddictionaries.com/definition/numeral

[7]https://en.oxforddictionaries.com/definition/number

[8] Rule 8.

[9] Throughout the Rules, the terms ‘Label’ and ‘Sticker’ have been used interchangeably.

[10] The said rule mandates declaring of the Month and year of manufacturing/packing/importing.

[11] GSR 784 (E) dated 24^th October, 2011 – with effect from 1^st July, 2012.

[12] Rule 13.

[13] Rule 5 read with Second Schedule.

[14] Rule 9 (3).

[15] Rule 11 (4).

[16] Rule 11 (1).

[17] Rule 27.

[18] Rule 32.

[19] An offence under Section 29 of the Legal Metrology Act, 2009 read with Rule 32.

[20] Section 36 (1) of the Legal Metrology Act, 2009. Note that Rs. 5000 is the fine payable for retailers or wholesale dealer in this case. Read with Rule 32.

[21] Section 36 (2) of the Legal Metrology Act, 2009. Note that penalty applicable for Retailer/Wholesale Dealer is Rs. 10,000, read with Rule 32.

[22] Rule 32.

[23] Rule 32.

[24] http://www.dnaindia.com/mumbai/report-legal-metrology-plans-all-out-meter-testing-drive-2058477

In this article, Aparna Ravulavaru, discusses Ten most expensive law firms in India and what makes them stand out.

Definition and Nature of a Law Firm

A law firm is typically a business entity set up as a sole proprietorship concern or as a partnership by a group of lawyers. These lawyers offer their expertise to clients under one firm name.

The lawyers can be Equity Partners or Nonequity Partners, i.e. Associates or Senior Associates of a law firm. It takes three to four years to move from the Associate level to Senior Associate degree in a typical Law Firm in India. With another 4 to 5 years of professional experience, the Senior Associate can become a Partner of the Law Firm. In respect of most of the Indian Law Firms, the Junior Partners even with 7 to 12 years of experience work on a salary basis and do not have an ownership stake in the company. Equity Partners are the real owners of the company who share the profits of the Law Firms and are usually more senior members of the enterprise with known large client basis.

Most Law Firms engage outside lawyers as consultants to the company on an exclusive retainer-ship arrangement with or without into contract that contain provisions relating to exclusivity, non-competition, confidentiality, and non-solicitation.

Large Law Firms, also known as “full-service” firms, can range in size from several dozens of lawyers and employees to several thousands of employees including lawyers, paralegals, administrative staff, human resource specialists, librarians and other officials – and can exist in multiple cities, states, and even countries.

Services Rendered by a Law Firm

A Law Firm works for the interests of Corporate houses that include companies, business and financial enterprises, banks, financial institutions, private equity funds, government bodies, educational and charitable trusts, cultural institutions, estates, and trusts. These are from within the country and overseas and for the interests of individuals too, usually of high net worth.

Larger Law Firms may be composed of several specialized practice groups, allowing the firm to diversify their client base and market, and to offer a variety of services to their customers.

The practice areas of a typically large Law Firm are:

1. General Corporate: Mergers and Acquisitions, Joint Ventures, Private Equity and Business
2. Banking and Finance: Banking documentation to securitization, factoring, setting up payment banks, syndicated loans, structured finance, acquisition finance, and mortgage-backed securities, guarantee structures, equipment financing, non-convertible debentures, external commercial borrowings, and working capital loans.
3. Financial markets: Legal and regulatory advice on IPOs, FPOs, rights issues, QIPs, ADRs, GDRs, IDRs, AIM listings, on the Equity side; issuance and restructuring of FCCBs, non-convertible bonds, unlisted infrastructure bonds, and medium-term note programs on the Debt Capital Markets side.
4. Competition Law: Steering clients through their largest transactions, complex investigations, and high-stakes litigation.
5. Dispute Resolution: Domestic and international arbitrations, commercial, corporate and regulatory disputes in various courts, tribunals, forums, administrative authorities and regulators in India.
6. Intellectual Property Rights: Covers patents, trademarks, copyrights and designs and other allied laws, from conceptualization to enforcement and from negotiations to creation of innovative corporate structures based on intellectual property
7. Projects and Project Finance: Advice to the Clients of Developers, contractors, investors and lenders on various infrastructure projects in areas such as Power, Oil, and Gas, Nuclear Energy, Ports, Roads, and Mining. Advice on regulatory aspects, contractual issues and government tendering aspects associated with such large scale projects.
8. Tax related: Direct and indirect tax services (customs duty, central excise, service tax, value added tax, central sales tax, state excise duty) ranging from tax planning, advisory, implementation, documentation, representation and litigation support.
9. Venture Capital: Mostly stage financings.
10. Other Practice Areas and Industry Expertise: Bankruptcy and Insolvency, Consumer Protection and Product Liability, Corporate/Commercial Advisory, Defense, E-commerce, Employment, Environment and Climate Change, E-trade and Outsourcing, Bribery Investigations, Infrastructure, Internet Governance. Additionally Mining and Energy, Pro bono, Philanthropy and Trusts, Real Estate and Trusts, Regulatory and Public Policy, Retail, Taxation, Trade Law and White Collar Crime.

Success Mantra of a Law Firm

Any good law firm works on the following six principles:

Core Values: A written set of core values or standards that provide clear, firm-wide expectations regarding individual contributions and mutual accountability are needed to deal fairly with people coupled with profitability in the legal business. The typical Law Firm core values can be ownership – responsibility for profit and the success of the company. Investment, engagement, loyalty, communication; 2.Legacy – a commitment to leave the firm for better. Commitment to the long-term health and viability of the enterprise; 3.Respect – for people and their development; 4. Service – to clients and each other; 5.Excellence – striving for the highest quality and professionalism in everything one does; 6.Integrity and honesty – character counts. Reliability, trustworthiness, transparency. A commitment to fairness, honor, and truth; 7.Teamwork – a collaborative approach among lawyers and staff. Available, approachable, generous with one’s time, sharing work, sending work to the right place in the firm. Cooperation; 8. Contribution – a personal commitment to earn one’s spot on the roster each year; and 9.Accountability – agreeing to be bound by the reasonable standards and expectations articulated in the core values.

The Core values in a Law Firm ensures functional advantages of the parameters of Interdependent, Collaborative, Coordinated, Broad, general communication, Trusting & Firm first; Shared Agenda.

Client Centric: Each client matters. In the issue of delivery of services, a good Law firm gives paramount importance to the unique needs, preferences & priorities and the confidentiality of the clients. Clients have a choice from the menu of the Law Firm on cost containment, efficiency enhancement, and service alternatives. The customer is every penny valued, and the Law Firm accordingly renders services.

The Law Firm provides the clients with workgroup list with contact details of the Associates working on the project with a point person along with a proposed timeline, To make the Law Firm functionaries accessible to the clients. To ensure personal touch regarding client working with the same associate who has a thorough understanding of the customer’s organization.  The Law Firm’s focus is to build long-term relationships for the growth, success and customer satisfaction.

Best Human Resources: A successful Law Firm shall have a proper mix of people with experience and enthusiasm that make up the Law Firm. The people are expected to be much more diverse in their preparation, skills, and range of duties. The legal and non-legal staff that gets selected are trained and nurtured to organizational culture, vision and shared the mission of the Law Firm to become a talented, accountable and stable team. The Law Firm shall also have a fundamental policy of growth of its members and associates.

The quality of Service: Successful Law Firms meet both technical quality (how good is the work?) and service quality (did the client have a positive experience dealing with the firm?) through their efficient work.

Use of Technology: A good Law Firm adopts changing technology that enables increasing portions of legal work to be done better, faster, and more cost-effectively. A unified and shared knowledge system for the employees is the output and outcome of the adoption of such technology.

Cost management and Output pricing: Consolidation of infrastructure and basic legal services in a Law Firm ensures low-cost service to clients; also a good Law Firm charges its customers based on the benefit conferred, not the time and effort it spent to confer it.

Evaluation of Best/Top Law Firms

The focus can be on the bench strength of the team and the consistency of quality of the individuals within the team to improve the performance of a Law Firm. Assessment will cover the complete practice in the Law Firm’s field. Law Firm usually covers these areas in their evaluation:

• Powerful technical ability available foremost complex and innovative work
• Most prestigious clients
• Individuals with the contacts at, and credibility with, the top clients
• In-depth capability beyond Star partners
• Capacity for the biggest transactions/cases
• Market share
• Historical track record on top deals/cases
• Clear investment for the future in a particular practice area
• Progress made with acquiring new clients/ market share
• Strength in associated areas – e.g., can an M&A department undertake competition work to an equal standard?
• Reputation for handling complex, innovative deals
• Capacity to handle all client requirements in an area – e.g., international offices/connections
• Commitment to IT and the use of IT to improve client services
• Perception in the market

Rankings of Best Law Firms in India

Discussed below is the five relevant fields in which the Indian Best Law Firms have established niches

• By the Size of the Law firms, the first ten Top Ranked Law Firms in India are as below:

Source: Asia Legal Business.

• Based on Law Firms’ Market Profile, including the number of spontaneous mentions and recommendations the firm received in independent client interviews and the Average Satisfaction Score from Firms’ clients, the Top Ten Ranked Law Firms are:

(C )The following represents the Practice Areas of the Top Ten Law Firms in India and the share of their Domestic & Foreign Business

Source: RSG Summary, 2015

Turnovers at India’s top 50 corporate law firms range from $500,000(~Rs20 crores) to $40m (~Rs 260.0 crores) with aggregate revenues of all companies amounting to $350m (~Rs.2275.0 crores), estimated an analyst report on the Indian legal industry.

Around 15 Corporate Law Firms in India have annual revenues more than $15m (~Rs.97.5 crores), according to the 2010 India report by legal consultancy RSG India, while the largest Indian Law Firm has generated around $40m (~Rs.260.0crores)in turnover.

There are no figures available for the actual revenues and profits earned by each of the Top Law Firms. However the figures available on Deals contracted during the first three-quarters of 2016 by the Top Ten Law firms is an indication of the profit range these companies might have been in – more the Deal value and the Deal Counts, more the profits involved. These figures are reported to be an increase of 36.2% for the whole of 2015, with one full quarter’s activity yet to be considered.

The remuneration is paid by the Law Firms to its Lawyers at different levels is also an indication (indirect) of the earning spectrum of the Law Firms concerned. Below are the remuneration figures paid to their Partners, Senior Associate & Associate Level Lawyers for the year 2012.

Note: PQ1 to PQ5 represent the Entry Level Associate to Progressive level & Senior Level Associate; PQ6 & PQ7 represent Non-Equity or Equity Partner

Source: Legally India’s 2012’s salary survey (graphic via Mint)

Sustainability of Law Firms

The real viability of Law Firms is their willingness to develop and implement strategic plans to improve their cohesiveness, performance, and profitability.

The following long-term trends will influence the strategic objectives of the Law Firms concerned.

1. The Economy Is Globalizing
2. Technology Is Expanding/Improving at Breakneck Speed
3. Clients have become more demanding
4. Aggressive Competition
5. Big Law Is Getting Bigger
6. Record Level of “Merger & Acquisition” Activity
7. Successful Law Firms Run More Like Businesses

The Strategic Plan encompasses the following

1. Vision & Mission Statement: A Law Firm’s vision and mission should describe what the firm aspires to do throughout the next five years. It represents the big picture direction the firm is taking.
2. A Limited Number of Primary Goals: The Law Firm has to identify small number (three or four) goals that give meaning to its Primary goals become the focal points for the rest of the strategy — identifying those few things that will enable the firm to maintain a solid competitive position and distinguish itself in the marketplace.
3. Resource-Allocating Strategies: A good strategic plan allocates the necessary resources to achieve the company’s goals. Implementing the plan, the Law Firm has to invest considerably in its non-billable time. It should also establish a system that ensures that firm
   reward lawyers for the time that they invest in the company’s future.
4. Objectives and Metrics to Track Progress: Defining key metrics of success is critical to ensure that the Law Firm’s efforts are on track.
5. Financial metrics are critical (g., revenue and profitability).
6. It is important to also measure the depth, breadth, and strength of client relationships; to monitor progress vis-à-vis people-oriented strategies, and to measure performance in operational and other non-financial areas.

A Brief Description of Few Top Most Law Firms in India

 Cyril Amarchand Mangaldas & Co.

The firm consists of 6 partners and 50 other qualified lawyers. Cyril Amarchand Mangaldas, headed by Cyril Shroff, and Shardul Amarchand Mangaldas & Co, led by Shardul Shroff, have been formed as two separate, nationwide firms following the dissolution of Amarchand & Mangaldas & Suresh A Shroff & Co.

Work highlights Advised HDFC Bank on its INR 98.79 billion concurrent qualified institutional placement (QIP) and American depositary receipt issuance.

Acted as sole legal counsel to the founders of Infosys in the USD1.05 billion sell-down of their aggregate stake through block trade.

Acted for YES Bank in its USD497.4 million QIP.

Significant clients International Finance Corporation, Greenko Group, Bank of India, Citigroup Global Markets, JSW Steel.

AZB & Partners

They have two partners. They have a well-regarded practice with depth of expertise regarding both debt and equity work, including IPOs, notes offerings and high-yield bond matters. Clients include major corporate issuers and international financial institutions.

Luthra & Luthra Law Firm

The firm consists of 4 partners and 14 other qualified lawyers.

 They are a highly regarded team handling capital markets work for a range of banks and funds from the firm’s New Delhi and Mumbai offices. Particularly well known for equity capital markets matters, acting on QIPs and IPOs. Also adept at handling debt work.

Work highlights Acted for the placement agents in the USD 497 million QIP of YES Bank.

Assisted the Department of Disinvestment in the creation of a central public sector enterprise exchange traded fund through the sale of shares and listings of units, a transaction worth approximately USD500 million.

Provided Indian counsel to the broker, Goldman Sachs, on Avantha Holdings’ USD162 million sale of equity shares in Crompton Greaves.

Significant clients Goldman Sachs, Citi, Essel Group, Catholic Syrian Bank, ICICI Securities.

Khaitan & Co

 The law firm consists of 7 partners and 20 other qualified lawyers

The law firm is known for its highly experienced team with regular involvement in significant equity issuances, including IPOs and QIPs. Also, handles bond issuances and private placements of debt securities. It maintains an enviable client roster, including domestic issues and major underwriters.

Work highlights Represented the Ministry of Coal, Government of India, on the USD3.69 billion sale of equity shares in Coal India.

Provided Indian law counsel to Inox Wind in its INR 10,205.34 million IPO.

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References and Bibliography

1. Types of Law Firms – FindLaw, http://hirealawyer.findlaw.com/choosing-the-right-lawyer/types-of-law-firms.html (accessed June 22, 2017).
2. Establishing Core Values in Your Law Firm, Eric Seeger, http://www.altmanweil.com/index.cfm/fa/r.resource_detail/oid/c5c0217d-ddf9-4a5c-ab86-46d0b1dc8d4b/resources/Establishing_Core_Values_in_Your_Law_Firm.cfm (accessed June 22, 2017).
3. Shardul Amarchand Mangaldas & Co. – Lex Mundi: The World’s, https://www.lexmundi.com/assnfe/cv.asp?ID=42396 (accessed June 22, 2017).
4. Greenberg Traurig Receives “Top-Tier” Real Estate Ranking, http://www.prweb.com/releases/2015/06/prweb12784817.htm (accessed June 22, 2017).
5. The Legal 500 – How do you rank firms/ sets?, https://www.legal500.com/assets/pages/about-us/how-it-works.html (accessed June 22, 2017).
6. Desai&Diwanji Practice Areas | LawCrossing.com, http://www.lawcrossing.com/lawfirmprofile/Kr0fe/DesaiandDiwanji/practice-area (accessed June 22, 2017).
7. Legally India – News for Lawyers, http://www.legallyindia.com/20100319599/Law-firms/amarchand-turnover-near-40m-law-firms-bill-350m-says-report (accessed June 22, 2017).
8. STRATEGIC PLANNING – Managing Partner Forum, http://www.managingpartnerforum.org/tasks/sites/mpf/assets/image/MPF%20ARTICLE%20-%20Strategic%20Planning%20-%20Remsen-Sterling%20-%207-8-14.pdf (accessed June 22, 2017).
9. About | Khaitan, https://www.khaitanco.com/about.aspx (accessed June 22, 2017).
10. Core Values EAS – Altman Weil, http://www.altmanweil.com/dir_docs/resource/c5c0217d-ddf9-4a5c-ab86-46d0b1dc8d4b_document.pdf (accessed June 22, 2017).
11. Characteristics of Successful Law Firms, https://www.myazbar.org/AZAttorney/Archives/May97/5-97a2.htm (accessed June 22, 2017).

In this article, Sukruta Rajendra Babu pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses Reforms in laws related to Dance Bars in Maharashtra.

HISTORY OF DANCE BARS

Inception

“The city that never sleeps” aka Mumbai boasts of an active night life and some of the best bars in the country.  Ever since 1986, under the provisions of the Bombay Police Act 1951, the bars in the city of Mumbai were instituted and have grown enormously from time to time.

Ban: Insertion of Section 33-A & 33-B to the Bombay Police Act

However, the Mumbai Police conducted a raid in the year 2005 which ultimately led to an amendment to the Bombay Police Act 1951 passed by the Maharashtra Legislative Assembly thereby closing the various dance bars across Maharashtra including Mumbai. The said ban imposed a complete prohibition on performance of dance in various establishments while the same was exempted in other establishments like 3-star hotels, drama theaters etc.[2] The said amendment by adding  Section 33 (A) prohibited dance performances in eating house, permit rooms or beer bars allegedly on the pretext of checking prostitution and human trafficking in the city. The ban being admonishingly selective in nature exempted certain establishments like 3-star hotels and above under Section 33 (B) of the said Act. Various dancers and waitresses working in these bars were uprooted overnight and left jobless leading them to resort to prostitution to support themselves and their families. This lead to sharp criticism by various NGOs, Women Organizations and Unions. Thus came to be challenged Section 33-A & 33-B of the Bombay Police Act before the Maharashtra High Court.

Challenge of the Ban

The impugned provisions of the Bombay Police Act were challenged on the ground that the same was violative of Article 14 having prescribed different standards of morality in the institutions carrying similar activities without any reasonable nexus to its objectives; Article 15  for discrimination against female dancers on the ground of sex; Article 19 for imposing unreasonable restriction upon freedom of expression and right to carry on an occupation or profession and Article 21 for infringing right to life and livelihood. [3]

Court’s ruling

The Court ruled that the ban is not ultra vires Article 15 as it discriminates against identified establishments and not women. It also does not infringe upon freedom of expression or right to life under Article 21 as the dancers were restricted only in prohibited establishments and not elsewhere. However, the High Court struck down the ban as unconstitutional, holding the classification to be palpably arbitrary and imposing an unreasonable restriction upon freedom of profession. On appeal, the verdict was stayed by the Supreme Court and the struggle of the validation continued until the matter was reopened in 2013 in State of  Maharashtra Vs Indian Hotels and Restaurants Association[4]. The Supreme Court struck down the ban as unconstitutional.

Amendment

Maharashtra Police (2^nd amendment) Act 2014 was passed repealing Section 33-B of the Bombay Police Act in order to disregard the arbitrary discrimination contained therein and the exemption granted to 3 star hotels and above were thus no longer in practice. It is pertinent to note that the Supreme Court[5] while striking down the complete ban opined that instead of providing for stringent implementation the bars may be regulated with the intent to curb the menace in the society which heralded a new dawn for women upliftment in the society. The Supreme Court continued to reflect a similar attitude in subsequent judicial orders which harnessed hopes amongst women rights activists and dance bar owners.

New Act

As matters stood thus the Maharashtra Government passed the Maharashtra  Prohibition of Obscene Dance in Hotels, Restaurants and Bar Rooms and Protection of Dignity of Women (working there in) Act 2016.

REGULATING THE DANCE BARS

Maharashtra  Prohibition of Obscene Dance in Hotels, Restaurants and Bar Rooms and Protection of Dignity of Women (working there in) Act 2016 & Rules (hereinafter referred to as Act & Rules)

The Maharashtra Government, with the object of prohibiting obscene dance in hotels, restaurants, bar rooms and other establishments and to improve conditions in works and protect the dignity and safety of women, in such places with the view to prevent their exploitation passed the Act[6] regulating permission, licensure, conditions for grant of license, eligibility for grant of license, suspension, revocation and cancellation of license, grievance mechanism etc. the Act also deleted Section 33(A) of Maharashtra Police Act.

The Act and Rules framed under Section 14 of the Act regulate the conditions of work of the employees of the dance bar.

The Schedule to the Rules provide for conditions to comply before grant of Licence:

1. Separate hygienic and adequate toilet and locker facilities shall be provided for female employees;
2. One stage should not be less than 10ft. x 12 ft. in size in bar room, with non-transparent partition between hotel, restaurant and bar room area. If the applicant is holding permit room licence then there shall be fixed partition between the permit room and dance room.
3. The stage should be separated from all sides by a railing of 3 feet height and not by the non-removable partition.
4. There shall be a distance of 5 ft. between the railing and the customers seating area.
5. There shall be a barrier of not less than 6 inch height restricting the customers from crossing partition and entering the place where dances are staged.
6. The applicant should be holding the certificate regarding health and fire safety from the concerned Municipal Corporation or the concerned local authority, as the case may be. The licensee shall comply with the terms and conditions mentioned in the certificate issued by such authorities in respect of fire prevention measures.
7. At least one separate entry and one separate exit door should be operative at all times for free, safe and unobstructed movements of the visiting customers.
8. Conditions, as laid down in Noise Pollution Control Rules, shall be strictly complied.
9. The Licensee shall ensure that no concealed cavity or a room is created within the place in order to conceal performers/staff. But a green room may be allowed.
10. The licensee shall provide adequate dedicated parking space as per Development Control Regulations.
11. The place shall be at least one kilometer away from the educational and religious institutions.
12. The place shall not be in the residential building. In case it is in partial residential building, the applicant shall obtain No Objection Certificate of at least three-fourth occupants of the building.

Conditions to be fulfilled after grant of Licence:

1. The provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and of the Protection of Children from Sexual Offences Act, 2013, shall be complied with.
2. The working women, the dancers and waiters/waitresses must be employed under a written contract on a monthly salary to be deposited in their bank accounts (with all other benefits as required by law, including provident fund) and a copy of such contract must be deposited with the licensing authority.
3. A register of names of the employees reporting for work in the hotel, restaurant and bar room shall be maintained. The attendance of all the employees be recorded by Biometric Identification System. The proprietor of the establishment must record all particulars of each employee including full name, age, educational qualification, complete address, recent passport size photograph, Aadhar card number (if any), citizenship and other necessary details. The proprietor of the establishment shall be responsible for verifying the information furnished.
4. The provisions of the Maharashtra Shops and Establishment Act shall be applicable to all the employees in establishment.
5. The establishment shall issue a photo ID card to each employee which shall be carried with by that employee at all times during the period of duty.
6. Customer shall not be permitted to throw or shower coins, currency notes or any article or anything which can be monetized on the stage in the direction of the dancer. Customers may, however, make payment of a tip in appreciation of all the dancers by adding a sum to the amount of the bill. Such tip shall be paid by the licensee to the dancers of that evening and under no circumstances such sum shall be deducted from the monthly salary.
7. Licensee shall ensure that there will not be any showering of any currency notes, coins or article or articles in token thereof, on performers, on stage or anywhere in the premises, by the customer himself or through the waiter or through any other person.
8. A person below the age of 21 years shall not be permitted entry into the bar room under any circumstances. For this purpose such person shall be required to produce a valid identity card indicating his age.
9. The bar room where dances are staged shall be open for public only between 6.00 P.M. to 11.30 P.M.
10. Adequate security measures must be taken to prevent the sexual or other harassment in any form of any employee working in the hotel, restaurant and bar room. A provision of at least three female security guards for each establishment shall be made. A female employee may be allowed to remain in establishments beyond 9.30 p.m. only if she consents willingly in writing. In such event the establishment must ensure her safety including providing free and suitable travel arrangements to her place of residence. The proprietor of the establishment must make arrangements for adequate crèche facilities to be availed by any female employee.
11. No intoxicating drugs, psychotropic substances or narcotics shall be permitted in the establishment.
12. No alcoholic beverage shall be served in the bar room where dances are staged.
13. The licensee may permit four dancers/artists to perform on the stage at one time but there can be other artists at green room inside the establishment.
14. The licensee shall ensure that the age of the dancers is not below 21 years.
15. The licensee shall obtain suitability certificate from “Rangbhumi Prayog Parinirikshan Mandal” for starting the performances after verifying the amusement of the Programme/Song Code.
16. The Licensee shall ensure that the employees have no criminal antecedents.
17. The Licensee shall not allow any modification or alteration in the premises without the permission of the licensing authority.
18. The Licensee shall not appoint any manager or an agent to conduct the business on his behalf without obtaining the previous permission of the licensing authority which shall be endorsed on the license.
19. The Licensee shall ensure that either the Licensee himself or his manager or his agent whose name has been endorsed on the license by the licensing authority shall remain present during the whole time for which premises are open to the public.
20. The Licensee shall ensure that all entrances of the bar room, other places of amusement or public entertainment and the area which falls under the definition of public place shall be covered by CCTV cameras and recording shall be preserved for 30 days for the inspection by the Competent Police Authority, if it is requisitioned by him.
21. The Licensee shall at all times allow free access to such place to any Police Officer not below the rank of Police Sub-Inspector on duty entering the same in the execution of his duty.
22. Subject to the provisions of Prohibition of Smoking in Public Places Rules, 2008, the Licensee shall not allow any person including performers to smoke either on stage or in the entire premises.
23. Licensee shall ensure that no performance of dance shall be expressive of any kind of obscenity, in any manner, even remotely.
24. Licensee shall ensure that there is no violation of dignity of women through obscene dances.
25. Licensee will be liable for legal action if any information furnished is found to be false or document furnished is found to be forged.
26. The Licensee shall abide by the provisions of the Maharashtra Police Act, as well as all other laws applicable in this context.
27. The Licensee shall conduct his or her occupation or business in such premises in an orderly manner.

A perusal of the aforesaid conditions makes it evident that the Act & the Rules thereunder elaborately regulates the conditions of work of the employees of the dance bar. Most importantly the Act and the Rules framed thereunder provides for various Labour Reforms and regulations of the working conditions of the employees in the Dance Bars. Some of them are broadly classified as under:

1. Working
2. Cleanliness
3. Protecting the dignity of the employees
4. Age permit.
5. Inspection
6. Monitoring
7. Liability of the license
8. Holidays

Applicability Of The Provisions Of The Maharashtra Shops And Establishments Act; Sexual Harassment Of Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013 And Of The Protection Of Children From Sexual Offences Act, 2013:

It is pertinent to note that the provisions of Maharashtra Shops and Establishments Act are made applicable under Rule 4 of part B in the schedule of the Rules. The Applicability of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 is made applicable under Rule 1 of Part B in the Schedule of the Rules. The Applicability of Maharashtra Shops and Establishments Act; Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and of the Protection of Children from Sexual Offences Act, 2013 is a huge step towards the reformation and regulation of the working conditions of the employees of the Dance Bars. It aims at ensuring the protection of the dignity and safety of the employees and prevents the exploitation of the employees.

CRITICISM OF THE REGULATION

The Act & Rules have been severely criticized as the definition of “obscene dance” is ambiguous, leaving scope for a flawed and unreasonable interpretation by the authorities. The provision mandating the installation of CCTV invades the privacy of the customers and patrons of the Dance Bars. Imposing a time restriction for the female workers of the Dance Bars on the grounds of safety has already been declared as an unreasonable encroachment of women’s fundamental rights. Furthermore, there is no rationale for prohibiting dance bars to function within a certain parameter of an educational and religious institution when no such condition prevails for granting liquor licences.

Taking some of these contentions, the Act is under challenge before the Supreme Court. It still remains to be seen the role that the Supreme Court would play in regulating and reforming the Dance Bars.

CONCLUSION

A duty is caste on the part of the State to ensure that the fundamental rights enshrined in the Constitution including dignity of women, right to livelihood, safe and secure working conditions, protection of its citizens against abuse, exploitation etc are enforced. Taking a leaf out of the Supreme Courts book, the Maharashtra Government has attempted to reform and regulate the Dance Bar Industry with a view to protecting the dignity and safety of women working therein, with the view to prevent their abuse and exploitation. The passing of the Act and Rules is step in the direction of regulating and reforming the Dance Bar Industry.

References

[2] Kritika Sethi, Constitutional Morality and Bar Dancers Judgement, (2014) PL February 58.

[3] Shruti Kheta, Towards Empowering Women: Judicial Responses to Maharashtra’s Ban on Dance Bars Published on December 14, 2016.

[4] (2013) 8 SCC 519.

[5] (2013) 8 SCC 519

[6] Preamble to the Maharashtra  Prohibition of Obscene Dance in Hotels, Restaurants and Bar Rooms and Protection of Dignity of Women (working there in) Act 2016

In this article, Samyukta Ramaswamy pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses the procedure for converting a firm into an LLP.

INTRODUCTION

A Limited Liability Partnership, more commonly known as LLP is an entity that combines the advantages offered by both a Company and a Partnership Firm into its organizational structure. The new entity thus acts as a good alternative corporate vehicle to a traditional partnership firm with respect to the liability of its members. That is to say, a Limited Liability Partnership will have the added advantage of limited liability of its members as opposed to that of a traditional partnership firm having unlimited liability, but continues to allow its members the flexibility of organising its internal structure as a partnership on the basis of a mutually arrived agreement.

The present article is an attempt to shed more light on the concept of a Limited Liability Partnership and its key features, and further provide a comparative analysis with a partnership and a sole proprietorship to show how its organisational structure proves more advantageous than the latter two. Most importantly, however, the article aims to provide a step-by-step procedure for the conversion of a firm to a LLP.

Advantages of an LLP over a Partnership, Sole Proprietorship, and a Private Limited Company

The most distinct advantage that a LLP has over a partnership firm is with regards to the liability of the partners. A partner’s liability in a LLP is limited to the amount of their contribution to the capital, and further, the partners are not personally liable for the liabilities of the partnership. The LLP and its partners therefore constitute separate legal entities with the former having a perpetual existence unless it gets dissolved by the promoters.[1] On the other hand, in a traditional partnership, the partners have an unlimited liability and are personally liable for the liabilities incurred by the partnership firm. Therefore, the partners and the firm are not regarded as separate legal entities, and no perpetual existence can be attributed to the latter. Secondly, taking into consideration that a LLP forms a distinct legal entity by itself, it acts as a real person capable of owning property and funds, which is not the property of the partners. Therefore, in case of any dispute, the partners of the LLP are not entitled to make any claim on the property of the LLP. For the same reason, a LLP can sue and can be sued. Another point of distinction that can be made between a traditional partnership and a LLP is that the partners in the latter are not agents of the firm, and hence no liability can be imputed on them for the individual acts of the other partners.

It is due to these significant advantages observed in the LLP structure that the organizational structure is also seen to be ideal for various Small and Medium Enterprises (SMEs) which would otherwise have opted for either a proprietorship or a Private Limited Company structure. For instance, a LLP structure proves to be more beneficial than a proprietor-type organisation because, being a regulated entity unlike the latter, it is easier for the former to attract investments from Private Equity Investors and financial institutions. Similarly, a LLP is more beneficial as an organisational set-up in comparison to a Private Limited Company as it has very little regulatory compliances to adhere to.

SALIENT FEATURES OF AN LLP

A Limited Liability Partnership is governed by the Limited Liability Partnership Act, 2008. As I have already mentioned, the distinct feature of a LLP lies in the fact that it is a body corporate whose legal entity is separate from that of its partners, whose liability is limited to the capital contributed by them to the corporate, and who are not personally liable for acts of the partnership.[2]

Secondly, the mutual rights and duties of the partners of a Limited Liability Partnership inter se and those of the partners and the LLP are generally governed by an agreement as concluded between themselves or between the LLP and the partners of the firm subject to the provisions of the LLP Act, 2008.[3] Where there is no such agreement however, the mutual rights and duties are governed by the provisions laid down under the Act.[4]

Thirdly, every LLP must have at least two partners and at least two designated partners who are individuals, of whom at least one is resident in India in accordance with Section 7 of the Act and the duties of such designated partners are those prescribed under Section 8 of the same Act.

HOW TO CONVERT A FIRM INTO AN LLP

The conversion of a firm into a Limited Liability Partnership is governed by the provisions of Section 55 of the LLP Act, 2008 read along with the Second Schedule. This provision is applicable in the conversion of both a Partnership Firm and a Sole proprietorship Firm into a Limited Liability Partnership. But first, when addressing the question of how the process of conversion of a firm into an LLP works, it is pertinent to know what exactly the said conversion entails. For this purpose, a definition for ‘convert’ has been provided in the Second Schedule of the Limited Liability Act, 2008[5] to mean a transfer of the property,  assets, interests, rights, privileges, liabilities, obligations along with the undertaking of the firm to the LLP in accordance with the same Schedule.[6]

One of the primary requirements for the conversion of a firm into an LLP is that the LLP that is formed out of the Partnership is required to consist of the same partners as were present in the original Partnership in the same proportion in which their capital accounts stood in the books of the Firm as on the date of conversion. Therefore, the LLP cannot have more or less partners than the extant Partnership Firm, and any changes in the number of partners are to be made only after conversion into the LLP. Secondly, prior to conversion, the Firm is required to have an up-to-date filing of all their Income Tax Returns and also obtain consent of all the unsecured creditors for the proposed conversion.[7]

The Firm in addition, is also required to obtain Digital Signature Certificates (DSC) for digital authentication of the Incorporation documents for all the Designated Partners as well as a Directors Identification Number[8] or a Designated Partnership Identification Number (DIN/DPIN) issued by the Ministry of Corporate Affairs.  Once the DIN has been obtained from the Ministry of Corporate Affairs, the first step in the conversion process is to apply for name reservation from MCA. Approval of the name of the LLP from MCA is mandatory before any documents regarding the conversion into a LLP are filed. The approval of the name is to be done by filling e-form LLP-1 with the Registrar of Companies. The form is to include the name of the LLP, the State in which the registered office of the LLP is to be situated, the address of the registered office of the LLP, the business that is to be carried on by the LLP, a summary of the partners and designated partners such as the number of partners, number of designated partners, the number of designated partners resident in India, and other such details as required. The Registrar will approve the name applied for, provided it is not undesirable in the opinion of the Central Government or identical with or that which too nearly resembles the name of any existing partnership firm or LLP or body corporate or trade mark registered, or which is pending registration under the Trade Marks Act, 1999.

Once the name has been made available to the Registrar, LLP Form-17 is required to be filed containing the Application and Statement of conversion of the Firm into an LLP along with certain attachments which include the statement of partners, list of all unsecured creditors along with their consent for the conversion, statement of all assets and liabilities duly certified by a Chartered Accountant, duly stamped LLP Agreement, a copy of acknowledgement of latest Income Tax Return, a Clearance Certificate from the Tax Authorities and approval from any other Body or Authority as may be required. Along with Form-17, certain other forms are also to be filed with the ROC including Form-2 containing the Incorporation document and subscriber’s statement, and Form-3 containing the LLP Agreement entered into between the partners.

The Registrar, on satisfying that the firm has complied with the provisions contained in the Second Schedule shall, subject to the provisions of the LLP Act and the rules made thereunder, register the documents submitted under the Schedule and issue a certificate of registration.[9] Rule 32(1) of the LLP Rules also provides that the Registrar shall on conversion of a firm into an LLP, issue a certificate of registration under his seal in Form- 19. Lastly, in accordance with paragraph 5 of the Second Schedule, the LLP so formed, within fifteen days of the date of registration, is required to inform the concerned Registrar of Firms with which it was registered under the provisions of the Indian Partnership Act, 1932, about the conversion and of the particulars of the LLP in Form – 14 and attach along with it a copy of the Certificate of Incorporation of the LLP as well as a copy of the Incorporation documents submitted in Form-2.

References

[1] Section 3, Limited Liability Partnership Act, 2008.

[2] Refer http://taxguru.in/corporate-law/salient-features-llp-act-2008-statewise-lise-number-firms-converted-llp-years.html last visited on 27/06/2017.

[3] Section 23(1), Limited Liability Partnership Act, 2008.

[4] First Schedule, Limited Liability Partnership Act, 2008.

[5] Para 1(b) of Second Schedule, Limited Liability Partnership Act, 2008.

[6] Id.

[7] Refer http://www.bmcgroup.in/llp-registration/partnership-firm-into-llp.html last seen on 28/06/2017.

[8] A Directors Identification Number is a unique number given to every Director or Designated Partner of a Company or a Firm including an LLP. Once it has been issued, it can be used for a lifetime without any renewal.

[9] Section 58(1), Limited Liability Partnership Act, 2008.

In this article, Reeja Elizabeth Varghese pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses how to file a complaint with RoC against a company.

A complaint against a company can be filed by any person to know the functioning and management of the company or by an investor who suffers when a company floats fake schemes and defrauds the investor. If a company defaults, an investor might be left in lurch. There is no direct remedy to ensure repayment of the deposit/investment amount. All one can do is to put pressure on the company to pay and may take the option of raising the matter with concerned authorities.The most recent case in point is the Sahara Group of companies which under the garb of several investment schemes have defaulted in payments of Rs.20,000crores and is now struggling to pay back thousands of investors. Under such circumstances, the legal and procedural remedy available to a person is to approach the Registrar of Companies which is under the administrative control of the Ministry of Corporate Affairs or explore other alternate remedies.

Who can file a complaint?

Under Section 206(4) of the Act, a representation can be made by any person alleging concerns over the management of the business or the way it is being conducted for any unlawful or fraudulent purpose or non-compliance with the statutory compliances.

The corresponding provision in the Old Act to Section 206(4) of the Companies Act, 2013 stated that the representation to the Registrar was to be made by any contributory or creditor or any other person interested. The new Act does not impose any such limitation. It is now open to any person to bring to the notice of the RoC.

What is the role of the Registrar of Companies?

Under Section 75 of Companies Act, 2013, a registrar is statutorily responsible for registering new companies and discharging various functions under the Companies Act, 2013( herein referred to as the Act). Section 396 of the Act explains that The Registrar of Companies (RoC) is vested with the primary duty of registering companies across various states in the country and the Central Government manages the state offices through the Regional Directors of the respective state or zone comprising of one or more states.

The primary role of RoC is to issue certificate of incorporation of the companies. Besides this, it also operates as registry of records of all the corporations registered with them and are accessible to the general public for inspection on payment of fees. ROC is not merely an office of record but it also plays a vital role in ensuring statutory compliances under the Act. It is mandatory for all incorporated companies to fulfill all statutory compliances and legal norms. In the event there is a violation by the companies in abiding these requirements, the RoC is empowered to take necessary action against the companies. Section 206 to 209 discusses the power of the Registrar of RoC.

The RoC under Section 206 of the Act to call for information, inspect books and conduct inquiries. The Registrar can demand documents or records through a written notice and also seek an explanation in writing within the prescribed time. In case, the response received is not satisfactory it can demand further explanations or inspection of records.

In this regard, it is important to mention that the Registrar can take up an issue suo-moto or he can launch an inquiry on the basis of a representation made by any person furnishing adequate information indicating that the defaulting company is not carrying the business lawfully or in a fraudulent manner or in violation of the statutory requirements.

Section 207 of the Act vests in the registrar the power of the Civil Court for conducting inspection and inquiry under Section 206. It can call for records, summon persons and examine them on oath. Under Section 208, the Registrar is of the opinion that further investigation would be required into the affairs of the company then he can submit a report to the central Government along with supporting documents to further investigate.

How to file a complaint with the RoC?

Earlier there was no prescribed format to file a complaint to make a representation to the RoC under the Act. The representation requires be unambiguous and descriptive in its narrative including all material facts. It should be addressed to the RoC of the respective region where the company is incorporated. It complaint should specify the details of the company such as its name and full address. It should also indicate the particular activity and names of officials or agents who are guilty of unlawful activity. The complaint may be sent along with supporting documents to demonstrate the alleged non-compliance.

But now with easy access to digital media, filing a complaint is more time efficient and less cumbersome. The Ministry of Corporate Affairs[1] has a dedicated page on its website where one can lodge a complaint in the comfort of a room. The same can be done in easy steps given below;

1. Go to the website of Ministry of Corporate affairs(MCA) and click on the MCA services and in the drop down list, click on complaints and you will be given an option to create Investor Complaint and you will be directed to the Investor Complaint form. You may fill in all the necessary information and submit your complaint online.
2. You all have the option of filing a specific complaint such as service related complaints, following which you will be directed to the appropriate form and submit it online.

The form has to be filled in according to the guidelines laid down in the respective form along with all mandatory information.

1. After these steps, one has to fill up the check form and Pre-srcutinize the form to avoid errors. One should ensure that there is proper internet connectivity while performing these steps on the MCA portal.
2. Log in to the portal using the registered user login id created while filling up the form and use the E-form upload functionality under the E-forms tab on the portal to upload the Investor Complaint Form.
3. On successfully uploading the form, one should note down the Service Request Number for any future communication reference.

The MCA website provides for a wide range of options for filing a complaint against a company. One can file a complaint about non-filing of the change in nature of business carried out by the company, non-filing of the change in the name of a director of the company, complaints regarding shares, bonds, Fixed Deposits etc.

Other Alternate remedies to seek redressal against erring defaulters

Investors and public are lured to invest in companies through various schemes such as Company fixed deposits or lucrative investment schemes. Complaints concerning deposit schemes by companies are majorly regulated by the MCA. However, collective investment schemes are regulated by Securities and Exchange Board of India. All non-banking financial schemes are overseen by the Reserve Bank of India.

State level Coordination Committee(SLCC) is the joint forum formed in all states to facilitate information sharing among all the Regulators such as RBI, SEBI, RoCs  and other enforcement agencies of the states through various Government Departments with the objective to control the incidents by unscrupulous entities. In case of companies involved in deposit schemes, one can also approach for redressal of the complaint through its website sachet.rbi.org.in

In addition to this, one can file complaints with SEBI on irregularities related to issue and transfer of securities and non-payment of dividend with listed companies. It also takes up complaints against the various intermediaries registered with it and all subsequent issues. SEBI facilitates an online complaint forum through its website called SCORES[2] which is a web based centralized grievance redress system.

References

[1] Complaints- http://www.mca.gov.in/MinistryV2/complaints.html

[2] http://scores.gov.in/

In this article, Uday Agnihotri pursuing Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, discusses Transfer of Partnership Rights under the LLP Act.

Introduction

A business entity can take the shape of any of the accepted forms of business organization. With respect to India, there are a number of business organizational forms legally accepted. These include, but are not limited to, sole proprietorship, Hindu undivided family (HUF), partnership, cooperatives, limited liability partnership, companies etc. Out of these, the most commonly accepted and recognized business organizational forms are Partnerships, Limited Liability Partnerships, and Companies. LLPs are the most recent form of organization.

A Limited Liability Partnership (LLP) is a form of organization having the advantages of both a company as well as a partnership. Like a company, each partner in an LLP has limited liability to the extent of his/her contribution and is not liable to for another partner’s misconduct or negligence. Furthermore, an LLP, just like a corporate entity, has perpetual succession and a separate legal entity. However, unlike the complex procedural requirements for the establishment and working of a company, the establishment and working of an LLP is relatively simpler. LLPs are governed by the LLP Agreement signed among the partners, in the absence of which, by the framework provided in Schedule 1 of Limited Liability Partnership Act, 2008. Further, unlike a corporate entity and like a partnership, the partners have a right to take part in the management and functioning of the firm directly. An LLP is relatively a newer concept than both partnership (Indian Partnership Act, 1932) and company (The Companies Act, 1956) that was introduced in India in 2008 in the form of the Limited Liability Partnership Act, 2008.

Even though an LLP cannot raise funds from the public (as is the case with a corporate entity), it offers numerous other advantages. These advantages include, but are not limited to, low cost of formation, no requirement for a minimum capital contribution, no restriction as to the number of members, limited liability, less governance interference, less compliance requirements, easy to dissolve or wind up etc.

As mentioned above, LLPs in India are governed by the Limited Liability Partnership Act, 2008 and various Rules made thereunder. The Act (and the relevant rules) provide for compulsory registration with the ROC. Furthermore, the suffix ‘LLP’ or Limited Liability Partnership has to be added to the name of the partnership. An important point to keep in mind is that the partners of an LLP are agents of the LLP (and not of other partners). Thus, on one hand, it implies that the ownership of the assets is with the LLP and the partners merely have capital contribution in the LLP and on the other hand, it means that a partner of an LLP is not responsible or liable for the misconduct or negligence of another partner.

The Limited Liability Partnership Act, 2008

The LLP Act came into effect by way of notification dated 31st March 2009. It lays down the matters dealing with mutual rights and duties of partners of the LLP as well as of the limited liability partnership and its partners. The Act consists of 81 sections which are divided into XIV Chapters. The act also contains 4 Schedules. Chapter I deals with title, extent and definitions. Chapter II deals with the nature of the limited liability partnership whereas Chapter III deals with the incorporation of an LLP. Chapter IV of the act covers the eligibility of the partners and their relations. Chapter V deals with the extent and limitations of the liability of LLP and the partners. Chapter VI deals with the contribution of a partner in an LLP. Chapter VII deals with financial disclosures. Chapter VIII deals with the assignment and transfer of partnership rights (Section 42 deals with a partner’s transferable interest). Chapter IX deals with the investigation and prosecution in respect to LLPs. The Act provides for the conversion of a partnership firm (Section 55), a private company (Section 56) or an unlisted public company (Section 57) into a Limited Liability Partnership (LLP). Chapter XI lays down the concept of a Foreign LLP. Chapter XII of the Act deals with compromise, arrangement or reconstruction of LLPs whereas Chapter XIII deals with the winding up and dissolution of LLPs. Chapter XIV contains miscellaneous provisions such as Electronic filing of documents (Section 68), Enhanced Punishment (Section 70), General Penalties (Section 74) etc.

Transfer of Partnership Rights

Section 42 of the Act deals with the provisions related to the assignment and transfer of partnership rights in an LLP. The relevant section is extracted herein under:

“42. Partner’s transferable interest.—(1) The rights of a partner to a share of the profits and losses of the limited liability partnership and to receive distributions in accordance with the limited liability partnership agreement are transferable either wholly or in part.

(2) The transfer of any right by any partner pursuant to sub-section (1) does not by itself cause the disassociation of the partner or a dissolution and winding up of the limited liability partnership.

(3) The transfer of right pursuant to this section does not, by itself, entitle the transferee or assignee to participate in the management or conduct of the activities of the limited liability partnership, or access information concerning the transactions of the limited liability partnership.[1]”

According to Section 42(1), there are specifically two economic rights of a partner that are transferable to a third party. These rights are namely:

• (a) The rights of a partner to a share of the profits and losses in accordance with the LLP Agreement and
• (b) the rights of a partner to receive distributions in accordance with the LLP Agreement. These two rights can be transferred from a partner to any person either wholly or in part. This right to transfer is unconditional in nature and thus, it cannot be curtailed even by an LLP agreement. Such a transfer or assignment necessarily has to be a free transfer, which is not qualified by any express or implied conditions, to one or more transferees either in whole or partly.

The 2nd sub-section of Section 42 lays down that a transfer of rights under sub-section 1 will not, by itself, lead to either

• (a) the disassociation of the partner from the LLP,
• (b) dissolution of the LLP or
• (c) winding up of the LLP. Thus, merely the transfer of the economic interests of a partner to others does not lead to the change in the structure of the LLP. If, however, a transfer or assignment of rights results in the change in the LLP agreement or in the partners or it leads to

Thus, merely the transfer of the economic interests of a partner to others does not lead to the change in the structure of the LLP. If, however, a transfer or assignment of rights results in the change in the LLP agreement or in the partners or it leads to cessation of partnership interest, the provisions laid down in Sections 22 to 25 have also to be complied with. Section 24 of the Act deals with the cessation of partnership interest. It lays down the ways in which the cessation of interest in partnership can take place and its consequences.

According to sub-section 3, the mere transfer of economic rights (the rights of a partner to a share of the profits and losses and the rights of a partner to receive distributions in accordance with the LLP Agreement) does not lead to the transfer of non-economic rights (such as participating in meetings, managing and conducting the activities, inspection of books etc.), unless the LLP agreement provides so. As a result, LLP allows the transfer or assignment of economic rights without changing the management of the LLP. Hence, even if rights are transferred or assigned, the transferee does not automatically become a partner. Thus, he cannot participate in management/conduct or inspect the books of the LLP. These non-economic rights are not automatically transferable unless the LLP agreement specifically provides for.

Conclusion

Out of all the business organizational structures, limited liability partnerships (LLP) are the most recent and most popular form of structures. They not only provide the benefits of a corporate entity but also of a partnership firm. Thus, on one hand, they have perpetual succession, separate legal entity, offer limited liability etc. and on the other hand, they have much less procedural requirements, less governmental interference, allow partners to take part in the management and functioning of the firm directly etc. Even though the concept of limited liability partnerships has been there for quite some time, it was only in 2009 that the concept was introduced in India through the Limited Liability Partnership Act, 2008. The act was based on the LLP Act of various nations such as England and Singapore.

Chapter VIII of the act deals with the assignment and transfer of partnership rights (Section 42 deals with a partner’s transferable interest). According to Section 42, economic rights of a partner that of, the rights of a partner to a share of the profits and losses and the rights of a partner to receive distributions in accordance with the LLP Agreement can be transferred or assigned to others. Such a transfer or assignment can be in part or whole. However, this transfer or assignment does not lead to the disassociation of the partner from the LLP, dissolution of the LLP or the winding up of the LLP. Since, it is merely a transfer of economic rights, non-economic rights do not get transferred and therefore, the transferee does not become a partner of the firm. And hence, he has no right to participate in the meetings of the firm or to inspect the books of the firm. However, since these provisions are subject to the LLP Agreement, whatever is agreed by the partners in the agreement has to be followed. Hence, it is advised to carefully draft and negotiate the LLP agreement so as to clearly indicate the intentions of the partners in the case of transfer of partner’s interests.

[1] Section 42, Limited Liability Partnership Act, 2008.

In this article, Rounak Biswas of Symbiosis Law School Pune discusses “Guide to IPR and Patent in India”.

“Piracy begins where creativity ends.” ― Kalyan C. Kankanala

A creative mind does not need to imitate the work of others. A creative mind is always capable of creating something new, something of value. And the problem of piracy arises when one runs short of owns imagination and creativity and in order to get quick money and fame resort to the practice of stealing. In other words piracy of creativity or Intellectual Property Rights is nothing but a form of stealing.

Intellectual property rights – What is it?

Intellectual property has become a new age sensation among people across the world. People talk about intellectual property rights. The entrepreneurs, businessmen, institutions and almost anyone in this world who runs business is concerned about their intellectual property rights (IPR). It can be said that the free market economy and innovation and technological advancement is fuelling the growth of the field of intellectual property rights. But what exactly is this IPR? In India we do not have any legislative definition of IPR. However taking cue from the articles published by WIPO and the various online and offline sources, IPR can be defined as something that is a product of human intellect, something that involves an application of human reasoning and intelligence based on an idea. The importance of intellectual property rights can be attributed by the fact that the developed economies like United States of America, China, Japan and the OHIM/ European Union Intellectual Property Rights are at the forefront as per the 2015 WIPO’s World Intellectual Property Indicators[1]. Innovation, intellectual property and the protection on one hand and the business on the other are inter-dependent and are important for the innovation driven economy. IPR can be said to be THE DIFFERENTIATING FACTOR helping the customers identifying and distinguishing the products when it comes to a particular sector. The rise of the Google, Facebook, Uber in the US markets and all over the world and their contribution to world economy proves the necessity of intellectual property in business.

Prominent examples of IPR

People identify different products with the help of various logos, but does not understand the intrinsic value or importance of the same. IPR in itself can be called to be the identity of an organization or an individual. IPR can be of different types ranging from trademark to shapes and designs. Say for example – The Uber logo  is unique and therefore is an identity of the business. The same is true with Ola , Indian Railways  , Delhi Metro Railway Corporation , Kolkata Metro , iPleaders , ClikLawyer , MobiKwik , Quickheal , UrbanClap , BMW ,  TATA Group etc. The logos are an identity in itself and the popularity of the same can be manifested by how people connect to these logos. The uniqueness and innovativeness of the design for every company is the USP of the particular company. These logos are primarily involves the trademark aspect. The peculiar shape of a bottle of an alcoholic beverage  or a lighter  or a packaging (otherwise known as trade-dress)  can be considered as prominent examples of intellectual property rights. IPR helps in distinguishing products of same nature produced by different brands.

Marie Gold and Marie Light are both Marie biscuits but are being offered by Britannia Industries and ITC Limited respectively.

Types of intellectual property

Intellectual property in India can be of different types and can be broadly classified into two types, namely – copyright and industrial property.

Copyright is the right given by law to an individual or an organization to reproduce his/ her work any number of times with a profit or non-profit motive. Copyright is essentially a bundle of rights and can be used as a bundle or separately as per the terms and conditions of the author or the publisher whoever owns it. The Indian copyright law, Copyright Act, 1957 provides protection primarily to three kinds of areas – original literary, dramatic, musical and artistic works, cinematograph films and sound recording. Copyright comes into existence as soon as musical piece or artistic work or an article is penned down and does not necessarily require registration unlike trademark or patent registration. For something to claim protection under the copyright law it should be original and should not be copied in toto if someone has written a story inspired from a pre-existing story. This is a fact that copyright does protect the ideas and therefore several people can develop musical piece or novels or the script of cinematographic films on the same topic or idea but one should be different from the other in terms of execution of the idea. However slogans, names and taglines for product and business identification aren’t protected under copyright law and the trademark law comes into picture for the same. In case an author or writer writes something and it is being published by a publisher, the ownership does not pass on to the publisher by default. The ownership of the article penned down by the author only in case the same has been assigned to the publisher. Assigning of the writing should be avoided since it is less profiting and one should prefer licensing as the latter allows royalty which in turn is more profitable over the former. In case, one has to assign the article, the author should always charge a handsome amount obviously considering the quality. Because in case some literary, dramatic, musical  or artistic work has been assigned to a publisher by the author, the author cannot claim any profit which the publisher may get by selling it to business concern. Therefore it is always good to license one’s literary works or publish the books yourself. Though publishing on one’s own cost is costly, in case it becomes successful becomes a double bonanza – one the copyright remains with the author itself and second, it helps the author in owning and running a successful start-up publishing house. The copyright act in India gives monopoly over its creation for sixty years excluding the life of the author. In case the work is a creation or work of joint authorship, the author who dies last shall be considered as the reference point for calculating the term of sixty years. For any other protection regarding the term of protection the Copyright Act, 1957 can be followed.

Computer software

Computer software/ program (computer program, tables and compilation including computer databases) can be registered as literary work and can also be protected by the use of Copyright Act, 1957. The owner or the developer whoever is applying for copyright should give their source code in the copyright application in case he wants to get it registered in the trademark registry. In case of open source software, the ownership of the same is determined by what has been stated in the agreement. If an employee develops a software using employee’s resources, and there is no agreement at all in that case the employer will have the ownership. However it is always advisable to assign the copyright of the open source software developed from copyrighted software to a group of administrator overseeing the project to reduce complexity later. Also it is advisable to keep a record of all licenses given by the original author to other people for a quick detailed reference in case of any conflict in future[2].

For getting an estimate of the cost involving copyright registration and the allied serives one may refer to the link, http://copyright.gov.in/frmFeeDetailsShow.aspx.

Under the broad classification of IPR, the second one is industrial property. The industrial property is again a broad idea and the class in itself is comprised several sub-classes trademark, patent, layout designs of integrated circuits, geographical indications, trade-secrets, know-how and protection against abuse of intellectual property. The reason why it is called industrial property is perhaps because this class of IPR is totally idle and useless without proper industrial application. Without their application, the class of industrial property is absolutely useless and therefore it does not add any value to the concerned innovation.

Industrial Property

Ø  Patent – A patent can be defined as a protection given under law for a limited period of time to an individual for inventing something new. The novelty, utility, inventive step and the necessity of industrial application is a must for an invention be made patentable. The patent application also needs to be made in such a way so that it has clarity and completeness of all the technical details in a lucid style so that any layman can understand the same without any difficulty. The main purpose as to why patent information needs to be made public is to reduce the chances of duplication of effort and finances in inventions. A patent is being granted for a period of twenty years during which a monopoly is being given to the inventor restricting others from using it. However in case it is used for not allowing the use of the invention, it will defeat the purpose of patent. Also the patent-holder will not get any monetary benefit from his/ her effort. Therefore it is always advisable that if a patent-holder does not exploit the patent at personal basis, should always license its use and implementation by other parties through which it can gain substantially, earning substantial royalty.  In case a product has changed a little bit which does not necessarily bring a hell lot of changes in the same, the product cannot be considered for patent. In other words, ever-greening of patents just by bringing minor changes in the existing products is totally against the law. Often for the purpose of protecting an invention, some people takes the route of trade-secret by which they do not disclose important information and can therefore protect the secret of an invention for an infinite period of time without the danger of disclosing at the end of certain time period. Coca-cola’s secret formula or PageRank can be considered to be of such nature. Protecting the trade-secret is an easier option though since in many cases, reverse engineering fails to get the process as it has happened in the case of Google PageRank. GoogleRank in its patent application has mention of the number of signals and codes but did not disclose them in the patent application. They kept the rest as trade-secret, therefore the chances of getting the information public and being exploited by some party or organization at the end of the term period of twenty years was prevented. Though patent is very common pertaining to the technology aspect, however in India any invention related to atomic energy is not patentable[3].

Ø  Trademark & Domain names – A trademark can be defined as a shape, mark ,device, name, signature, brand, heading, label, word, letter, numeral, shape of goods, colors, slogans individually or a combination of several of them which gives it an unique and aesthetic look capable of distinguishing the goods of one person or company from  the other. The chief utility of trademark is that it protects the public from confusion and deception and on the other hand protects the trademark owner’s trademark and goodwill and the business in the long run. Trademark can also be a certification trademark or collective mark or a composite mark or a trademark for goods and services.

Certification trademark as defined in the Trademark Act, 1999 is a mark which helps in differentiating between the products on the basis of quality, material or manufacture of the product. Certification marks helps in differentiating between low quality and high quality products and are generally issued by the authority supervising various sectors of business. For example – India Organic, AGMARK , FPO, ISI Mark, Hallmark, Ecomark or Non Polluting Vehicle Mark. These are the typical examples of certification marks which are used by Agricultural and Processed Food Products Export Development Authority (APEDA) – India Organic, Directorate of Marketing and Inspection – AGMARK, Ministry of Food Processing Industries (India) – FPO, Bureau of Indian Standards – ISI Mark, Hallmark, Ecomark and Central Pollution Control Board of India – Non Polluting Vehicle Mark. The certifying agencies certificates or marks are considered to be supreme in their respective arenas and anyone using this mark is considered to be of supreme quality. In other words certification marks are an indicator of quality of products.

Collective Mark – There are certain companies which want to get multiple trademarks of their subsidiary companies at one go. And the trademark they apply for have certain similarities. For example almost all TATA Sons companies have the iconic TATA mark. In this case TATA is the collective mark.

Composite Mark – Marks which cannot be registered solely by combination of words and for inducing the uniqueness and distinguishing factor of products or services are needed to be registered in a design format preferably with a tagline or a combination of words can be called as composite marks. For example – The mark  of McDonald’s or ClikLawyer’s mark  are some of the examples of composite marks.

Trademark for goods and services – Every goods and services are classified into certain number of classes, thirty four classes of goods and eleven classes of services in total forty-five classes of goods and services based on which different products are classified. A list for the same can be found at http://www.smartbrain.in/downloads/Trade%20Mark%20Classification.pdf and http://euipo.europa.eu/ec2/.

However, names mentioned in International Non-proprietary Names list cannot be applied for registration. The list is being published in four volumes every year and the same can be accessed here http://www.who.int/medicines/publications/druginformation/innlists/en/.

Domain names are nothing but the internet address of a website which is essentially a combination of the name of a person or a company, unique in its nomenclature which will help a person in finding someone or something affiliated to a person in the World Wide Web. There is no law for the protection of domain names; however the law of passing off can be used to seek protection. Just like trademark which helps the customers in distinguishing the products and the owners of business in protecting the goodwill of the business, the domain name helps the customers or people in distinguishing people and products and the goodwill involved with them. For example Bandhan Bank and United Bank of India are both financial and banking service companies. People know the two banks by their names and goodwill they have. By the the domain names http://www.bandhanbank.com/ and  http://www.unitedbankofindia.com/english/home.aspx people can differentiate and locate the two banks in the web arena. Few years back in 2011, Arun Jaitley, the current Finance Minster of India won a case against one Network Solutions Pvt. Ltd. And Ors. who had earlier registered the domain www.arunjaitley.com in 2009. In an attempt to register the domain name in his name, Mr. Jaitley found his name have been encroached in the web arena by someone else than him. The court held that the defendant company is accused of passing off his name. It is quite probable that someone else having control of a domain name bearing a popular personalities name can fall prey to mischief which may cause irreparable injury to the person’s social status. Recently an Indian based law firm assisted Rhiti Sports, the celebrity management agency handling Mahendra Singh Dhoni’s IPR rights in getting a favorable judgment for the domain name www.msdhoni.com which one Mr. David Hanley based out of New York was involved squatting in the cyber world. It is always advisable for any individual or a business to have their domain name registered at the start of the business to prevent any chances of cyber-squatting which will certainly affect a business in a lot of ways. As it happened with Dhoni, the name that was registered by Mr. Hanley was back in 2005, few years after Dhoni started playing international cricket. The domain names can be registered as per UDRP and INDRP, provided the domain names which are to be registered has no mala fide intention behind it.

Ø  Designs – Designs in India are protected by the Designs Act, 2000 and the protection can be extended to shapes (in case of three-dimensional objects) and configuration, pattern, ornament or composition of lines or colors used in any article (in case of two-dimensional objects) or a combination of one or two more features of them. The only parameter for judging the design is that the features of the object and the appeal should be judged solely by eyes and no other parameter can be used.

Ø Plant Varieties – Plant varieties in India is protected by a sui-generis law i.e. The Protection of Plant Varieties & Farmer’s Rights Act, 2001 enacted following the Article 27(3) (b) of the TRIPS agreements which makes it an obligation upon the signatory countries to protect plant varieties through patent or a sui-generis law in India. The sole motive of the act is to protect the right of those farmers and plant-breeders who are involved in the development of new plant varieties as also to encourage newer developments in the area. However for any plant to be protected by the same act, the plant should not be of extant variety (a variety which exists for a long time, a farmer’s variety or those varieties notified by Section 5 of the Seeds Act). The subject matter should meet the conditions namely novelty, stability, uniformity and distinctiveness. In case some variety has been developed and that too no much time ago, then in that case it is registrable. Any eligible person can submit the application for the same.

Ø Geographical Indications – Geographical indication is essentially a very important aspect of a business which indicates the country or region of origin of particular goods. GI as it otherwise referred to as is a sort of an identity of a good the mere reference of which determines a class among the similar class of goods, while it guarantees a quality too. For example Darjeeling Tea or Champagne or Roquefort Cheese or Porto or Swiss Watches. As the names suggests the commodities signifies the area of origin of the product. Protection in India on the same can be done by the Geographical Indications of Goods (Registration & Protection Act, 1999). Unlike the exclusive nature of copyright or patents, the exclusivity is not centered around only individual or organization but can be extended to all the products belonging to multiple parties originating from the same place. Like Benarasi Sarees. All the producers of Benaras producing the same saree and maintaining the same quality can claim protection under GI legislation in India or abroad.

Ø Layout designs of integrated circuits – Designs of integrated circuits in India are protected by the Designs Act, 2000 and the legislation provides anyone registering a technical design (comprising of the layout of transistors and the corresponding elements of circuits and lead wires connecting with such elements and being showcased in any manner in the semiconductor integrated circuit.) for a period of ten years from the date of filing of registration or from the date of first commercial exploitation whichever is earlier. The main purpose of providing registration of the integrated circuits is to provide protection even for a limited period to the innovators and the scientist community. With the more innovation it becomes possible to make the circuits smaller and more effective which in the long run helps in making better electronic products which are smaller than the previous one yet more effective. The innovation in the long run contributes to the economic growth. At the same time, the exclusivity of others help the innovator in exploiting the same design commercially therefore benefiting commercially.

Ø Trade Secrets – Trade secret is essentially confidential information which is very important to one’s business or enterprise and may prove to be very costly for one’s business in case the information is compromised with individuals outside the business and enterprise and may totally affect or jeopardize the business of the person who is the original owner of the same. The owner of the trade-secret should take utmost care to protect the secret ad should never share with any other individual who is an employee of the business and they may prove injurious in future when the same person comes in the same business. Once the trade-secret goes public, it will be totally disastrous. Therefore it is always advisable to keep trade-secret to one self, specifically in franchisee businesses. The following are some examples of the trade-secrets – designs, drawings, architectural plans, algorithms and processes implemented in  computer programs and software, teaching instructions and methods, techniques and know how, manufacturing process, marketing plans, information related to R&D procedure. Google’s Page Rank and Coca Cola’s preservation of its secret ingredient are the best examples of how trade-secret should be kept secure from prying eyes.

Ø Know-how – Know-how is mostly the knowledge arising from one’s daily activity in business or research procedures and should be kept securely with an individual to prevent the theft which may prove very costly for a business concern. This is true that there is no dedicated legislation for the protection of know-how and people working on something will certainly gain know-how and therefore it is not possible to absolutely rule out the possibility of know-how getting leaked. It is always advisable to have the mention of know-how in one’s Non Disclosure Agreement with huge pecuniary obligation in case of any leak of information from the concerned employee.

How to spot valuable IP in a business

Spotting a valuable IP depends on what business a person or an organization is inclined to do. While the trademark will always be an important aspect of running any form of business, the other types of IP will be dependent on the type of business that is being carried out. Say for example Paytm and Mobikwik are technology based payment system which basically stores money in their account in an intangible form, the one which is popularly now being called cashless system. These websites employ technology for transfer and payment of money through cashless form without actually revealing card and account details every time someone is keen to make an online payment. Therefore apart from trademark, patent, know-how and trade-secret is important for doing the same business. The Paytm also hosts lot of commodities for sale much like Amazon, Flipkart or Snapdeal which also involves trade-secret and therefore this is one area which should be protected by the company in order to avoid any losses arising out of the same. Again say for example Tupperware which deals with home products line, trademark, patent, know-how, trade-secret will come into play. While if we refer to food-chains like Domino’s, Pizza Hut, Fassos, McDonalds apart from trademark, trade-secret, know-how and design (the box in which the food is being delivered) will come into play. In case of mobile or laptop manufacturing companies like HP, Motorola, Samsung or Asus, the patents will play a very important role apart from respective trademark and know-how and should be preserved carefully so that the vital information do not pass out to the competitors inadvertently thereby causing loss. Therefore it is quite understandable by now that IP of a business is totally dependent on the nature of business is and the IP and the concerned protection will change from case to case basis! For an individual or organization coming into business with the plan of expanding and possible franchising, it is always advisable to consult with an expert regarding the same for detailed understanding.

Meaning of intellectual property: What is intellectual about intellectual property? How is it different from other kind of properties? – Concept of tangible and intangible property.

Property in India can be classified into two classes, namely physical and non-physical property. Physical properties are those which can be perceived by their physical properties, namely touch. In other words physical properties are those which are tangible and cannot be easily reproduced. Also the cost of individual production is high. Non-physical properties are those which are intangible in nature, cannot be perceived be physical properties such as touch and are capable of being reproduced easily at lesser costs. Intellectual property is the best example of physical or intangible property. Now the question may arise in one’s mind is that what is so intellectual about intellectual property rights. Intellectual property can be called to be product of an individual’s human intellect in plain language. But the important question pertinent to the matter is that why do we even need intellectual property rights for our life. Clause 1 of Article 27 of Universal Declaration of Human Rights, 1948[4] talks about the importance of everyone to take free participation in contributing for the cultural life and enjoyment of the arts and also for benefit sharing of the scientific advancement. Clause 2 of the same article says that an author of artistic, literary and scientific creation have the moral and material interest arising out of the same. The same article gives an individual an equal right over its creation the same way the law provides an individual the right over the tangible properties such as land, building etc.

How valuable IP can be

IP in itself is very important for a business or an individual. Considering the future prospects of a business and also the likely chances of sale, merger and acquisitions, licensing and franchising, division of business it is more important for an existing business to be valued at the very beginning of the business and a track should be kept on the rise or fall of the value of IP. IP is valuable not just for the business but also for those who are investors, bankers who keep the IPR as collateral in cases of loans, judges and arbitrators, and taxing authorities just to name a few. The IP valuation is a very important part of a business and profiling the same as per the individual IP value is very important for the IP portfolios.

Four basic ways of valuation of IPR are as follows, namely – cost approach, market approach, income approach and relief from royalty approach[5][6][7][8].

IPR can be used effectively to prevent one’s attempt to pass off under trademark law, or by taking refuge of litigation a person who is using patent illegally can be stopped from using it with recourse to damage and compensation too. Same is true for design, copyright or trade-secret. IPR’s value cannot be defined and can be used in multiple ways so as to make profit from them.

IP value of SME

SME or Small and Medium Industries are considered to be the backbone of a country’s economy[9]. It can be India or Nigeria or European Union, but the fact remains unchanged for all the countries across the globe[10]. There is no fixed definition of a SME and countries consider various entities as SME’s depending on the number of employees attached with them. However as per a WIPO statistics, 90% of business in Asia, 88% in USA and 95% of business enterprises in OECD are SMEs[11]. The figure in itself speaks for itself.

A majority of business in these developed and developing countries are of the type of SMEs. The numeral statistics also drives home a point how much contribution SMEs has for income generation and for the job creation in the long run. However in most cases there is a general tendency among the SME owners to avoid the established methods for IPR protection and instead they chose a traditional yet less protective measure. Many people also rely on trust more than the IPR protection as per the established law of land. The owners of SMEs also tend not to get involved in legal battles with the fear that it may cost a fortune. All these together, not protecting the IPR in the first place and avoiding legal entangle may cost a business which may contribute to SME enterprises being in trouble which will contribute to unemployment in short run and poverty and economic loss of a country in the long run. Therefore it is quite easily understandable how important role IPR plays for a business enterprise belonging to the SME category. Now another major question arises that why should a business concern take a bullet for someone else. Now the answer to this lies within. In many cases the enterprises belonging to SMEs’ are not aware about their IPR values and those who have less literacy (including legal literacy) are more susceptible to the loss of their IPR. The solution to the same lies in IP Auditing which helps a business understands what are the areas where the business has IPR value, the possible areas they can have and what the ways of protecting them are. Intellectual Asset Management is an effective way of making an IP valuation and thereby knowing the areas which may prove to be profitable. The whole purpose of IPR is to protect one from using or exploitation of others, so that only the concerned person can exploit the related IPR for his/ her own profit. Therefore valuation plays a major role in knowing one enterprise’s worth which in the long run contributes towards profit making and revenue generation.

For example companies like Emmbi Polyarns or CONTROLPRINT, apart from the trademark that distinguishes their product from the other, the patent and business strategy or plans (trade-secret) plays an important role in giving them an advantageous position in the market and a possible edge over the market. Even though owners of SMEs’ are familiar with patent, in many case they feel helpless when it comes to trade-secret laws as we don’t have any specialized law for it in India. Therefore the thumb rule for any business concern is to identify its IP through its valuation and therefore take steps accordingly. A miscalculated approach can actually lead the concerned business to its doomsday. It is always advisable for the stakeholders to either take a calculated step after conducting an IP valuation themselves by employing an appropriate person bearing considerable command over the subject matter or to consult a lawyer dealing with or specializing in intellectual property rights.

How important the Government of India is considering the IP for SMEs can be proved by the fact that in the National IPR Policy that has been published in the middle of this year. The Government has kept the MSME’s and start-ups at its focal point with the intention of creating conducive ambience that will promote innovation to create an Indian counterpart of Silicon Valley. The Government wants to tap the inventions of the MSMEs and start-ups to meet the needs of the country, while ensuring the concerned stake-holders can reap their benefits too. The Government intends to make materials for the benefit of the enterprises (MSMe’s and startups), to make the IP mechanism easy for them and also to lessen the cost involved with the IPR registration and protection. The government in this case wants to make a level playing field so that even a small innovator promoting MSME or start-up can have accessibility to all mechanism as a dominant player of the field has. Another motive of the initiative is to encourage Indian players to acquire in foreign markets and playing a pivotal role n launching products.

SME’s has multiple ways of reaping benefit from an innovation. In case the innovation can be patented, the same can be sold to another party for exploitation or can be used by themselves for manufacturing. In case someone wants to exploit the same by keeping it as trade-secret, the same can also be possible[12][13].

How do intellectual property rights impact business?

Intellectual property without any doubt is an important aspect of the business and without IP a business is nothing but radar less ship. The importance of IP can be manifested by how much importance Government is giving to IP nowadays. Let’s just take few examples to prove the point about how important IP can be for business. Let’s just take for example some businesses and let’s see what the IPR involved are.  Mahindra Marksman and Mahindra Axe are two armored vehicles capable of carrying defense personnel. Here in this case the trademark does not only remain with the name of the vehicle but also with the design of car and specifications of the engine (the engine can be patented). With the country giving more emphasis on the defense sector and more specifically on the ‘Make in India’ campaign, intellectual property is no doubt going to become an important tool in India. Same is true for TATA Armored Vehicle and Anti-mine vehicles. China is ill-famed for making counterfeit products of anything and everything under the sun. Due to the Chinese counterfeits, the US economy loses millions of dollars every year[14][15][16]. Very less IPR protection in China coupled with the financial inability of the smaller firms of USA, are making the problem worse day by day. Though USA is going all-out against counterfeits still they cannot do away with the counterfeits. Recently a Chinese car company came up with a car model Landwind X7 SUV which is an almost exact copy of Land Rover Evoque[17]. Now the Land Rover is suing the company which has copied the design of the car. What happens to the future of the case is not known, but getting someone’s IPR already protected gives them certain edge over the party which copies the product. Consequently one can understand how powerful impact intellectual property can have on the business.

How to manage IP portfolio?

Patent portfolio is an important aspect of business of an enterprise. IP portfolio is nothing but an accounting system by which one measures the strength and weakness of the IPR of an organization. Portfolio is mapping a business’s landscape by drawing a SWOT diagram[18] of the enterprise and its competitor and matching them with each other to measure the comparative strength and weakness of a business and finding a way out to deal with the lacunas. The primary way of protecting a business is to identify first what are the areas of the business which is coming under the IPR regime. For example – a portfolio which can be better protected under trade secret law need not be protected under patent law as is the case of Coca-colas formula. Also another important point that should be kept in mind for making and maintaining portfolio is to make sure how do one wants to protect its invention. Say for example if someone comes up with a complex invention as that of Google’s PageRank and wants to protect the secret behind the same to get the maximum profit, an individual may not get it solely patented. Instead they may chose a judicious balance of patent and trade-secret as what Google did to keep its creation PageRank totally away from one’s reach forever while making a part of it patentable thereby making a way out for income for a fixed period of time for anyone who wants to use the same technology. Again a producer of a movie or a singer should manage its IP portfolio through Copyright law. The renowned marks and taglines can be protected by trademark law based on its novelty. And a product which is identifiable by its visual appeal can be protected by acts pertaining to design law[19].

Alphabet for example (earlier known as Google), since it is very much into technology therefore the IP portfolio will mostly be based on the patent. Therefore for managing the patent portfolio it is important to take note of what are the advanced technologies one party has that will give an edge over others. Similarly Samsung and IBM whose business involves technology too, deal with lots of patents and therefore they have a dedicated patent centric IP portfolio management system[20]. For maintaining IP portfolio an entity needs to know what it is dealing with and the main purpose of creating the portfolio is make one well conversant with the technological strengths of a business. Canon being primarily in the manufacture of imaging and optical products has lot of patents on the same and will focus primarily its IP portfolio in the patens. The same is true with Qualcomm the company which is a designer of wireless telecommunication products and services and manufacture products.

Can IP improve the valuation of a company?

Intellectual property rights or IP, though intangible in nature are economically of the same value as that of a tangible asset like a building or a property or an automobile and therefore can be used conveniently by anyone. The economic nature of the IP and its infinite nature of use makes it a suitable source of money which can be infinite too in case it a worthwhile breakthrough and products of same genre or an advanced type is in use. Therefore, IP valuation is likely going to improve the valuation of the business unless other factors involving the valuation (such as public image of the company etc.) does not goes against it.

Can IP be sold separately from the business?

IP can be sold separately from the business. IP is one of the many pillars of a business and therefore a business can be sold separately after keeping one or multiple IP with them. Let’s just take for example Motorola Mobility. Motorola Mobility was bought by Google in August 2011[21] which was sort of a strategic move to prevent any lawsuit on important patents which is quite common in technology sector and that is one source of constant trouble for technology companies like Google, Apple. By buying out Motorola Mobility, Google strengthened its patent portfolio. Google strategically took away all the useful patents of the Motorola Mobilty and later on again sold the same company to Lenovo. Thus we can understand that IP can be sold separately from the business. In many cases, IP can be sold despite having any business. For that matter, let’s take the example of Laszlo Biro, the person who had invented the ball pen sold only the patent to another person. In many cases, universities and research institutions which are into innovation get their innovations and inventions patented and later on sell them to organization or institutions in need of the patent at high price. The innovators in these cases are though human beings by working condition and contract transfer the same to University which in turn sells the same. Therefore it is possible for someone to sell the IP separately from the business.

Can IP portfolio – patents, copyright or trademark be used as security to raise finance?

IP has a capital value and like any other property can be used as a security to raise finance. In countries like Japan and USA mortgaging of intellectual property is allowed. Now as per the new national intellectual property rights policy, in India one can use IP as collateral for raising finance[22][23]. In case someone is in need of finance may mortgage it for the purpose of raising finance. The IP remain as security and in case of default of payment can be sold to get a return of the money[24][25]. However amount of finance that can be recovered is directly proportional with the IP portfolio of a person or a company. The finance that can be raised depends on the value of the IP in the market and whether it is still in use or not. Like if someone today comes up with a modified version of cassette and gets it patented and tries to sell it to the financier, it is highly possible that no one will use it as a collateral or security to give a huge loan. Again if someone comes up with an advanced version of storage facility, which is more advanced than pen-drives and memory chips, the same patent can be used to get sizeable amount of finance from the market, provided it is useful for the general public. The purpose is to get a good buyer in case the person from whom collateral has been taken fails to pay off their loan or debt finance.

IPR policy of major corporations

IPR policy of Major Corporation changes from organization to organization. However one thing that may remain common more or less is that all the corporations are well aware about the application of their products, their popularity and makes sure no one gets away by infringing their IP portfolio. The IPR policy again depends on the type of business one is in and what are the types of IPR they want to get protected. Apple in concerned about the trademark and the software privacy issues apart from the patent issues[26]. Samsung apart from the patents they have, are concerned about their trademark and domain name[27]. TATA for that matter are likely to protect their trademark which in itself has become a standard apart from the different kinds of business and the IP involved in it. IPR policy of major corporations can be of several types, one meant for general masses or for specific groups like investors, employees etc.

IP consulting in India

IP consulting in India can be done by anyone who is an expert in IP law. Law firms like Anand & Anand, K&S Partners, Remfry & Sagar, S. Majumdar Patents & Trademark Attorneys Cliklawyer and a host of others does the work of IP consulting in India. IP consulting helps and guides one to indentify its IP and a possible legal problem and recourse to that. The IP consulting lays down a map of what all to do to keep the IP portfolio safe and secure and also advises the IP owners how to exploit them to get the maximum return from their IP property.

IP Protection in India

What is the status of intellectual property protection in India?

Here comes the most controversial and relative issues of intellectual property. As per the Indian standards and the Government IP protection is up-to the mark and many countries including US has expressed its faith on the Indian Judiciary. However things are not smooth as they appear. Even though various developed countries lead by USA has reliance on Indian legal system, they express their constant displeasure with patent law of India. In order to teach India a lesson it has put India in the Priority Watch List with other countries with whom India does not have any comparison[28] at least in IP protection. India was ranked second last, 37^th out of 38 countries in the U.S. Chamber of Commerce-International Intellectual Property Index. The 38 countries or economies incidentally represent eighty-five percent of global GDP. USA incidentally ranked first in the same list, which is quite outrageous considering the list was published by US industry body only. Also the parameters, on which the ranking was done is quite popular in developed countries and the developed countries IP laws have those principles incorporated. This is not true that IP protection is great in India and the rank is totally wrong. Trademark infringement and online piracy do happen in India, but the legal system is taking appropriate steps to counter the problem too. China which is quite unpopular with their copying attitude and producing counterfeits[29] have been placed better than India (22^nd)[30] and this is what questions the true intention of this ranking system. Even developing economy like Brazil has been ranked better compared to India at 29^th position has an ill reputation of producing counterfeits[31]. Therefore, all this makes the entire gamut of ranking a little controversial issue. US as usual with its highly advanced laws have a tendency to protect the corporate interests and IP protection is quite strict there. Therefore someone who wants a full-proof IP legal environment for protecting their innovation and invention USA is the best place for them. But at the same time, this is true that Indian legal system does not allow ever-greening of patents and this in itself is quite satisfactory from the point of view of access to medicine and life-saving products[32]. The court as a matter of fact have prevented a situation where by making minor changes big pharmaceutical companies could have continued the patent of the products for infinite time and same would have prevented access to medicine for the needy people[33]. So the entire issue of IP protection, at least from the point of view of patent has two sides to it.

IPR policy

IPR Policy in India has been published recently on May 2016. The IPR Policy is the first of its kind in India and has been drafted so as to promote a positive and progressive IP regime in India while encouraging innovation, creativity and fostering a spirit of entrepreneurship. Another intention of the IPR policy is to discourage piracy. The new policy is compliant to TRIPS too. The new policy has been tailor made to protect and promote the interests of entrepreneurs and stakeholders making products in India under Make in India, Start-up and Digital India campaign. The IPR policy talks about criminalizing any attempt to violate the provisions of the copyright law. The policy also talks about the management of innovation (something that is covered under portfolio management). The policy while aligning the laws to the most advanced treaties also made sure those old and backdated laws should be abolished or amended. The policy also talks about making application under IPR regime easier and less time consuming. The policy also talks about various tax benefits related to IP innovation. DIPP or Department of Industrial Policy and Promotion have been made a nodal point for all IP related activities. The policy also discusses about generating IP awareness and ways of exploiting the innovation and IP through commercialization and by encouraging them through incentives. The policy has got both pros and cons and therefore can prove beneficial or harmful, or both[34].

Intellectual property lawyers – all you need to know about them

Any lawyer specializing in IPR or having profound knowledge in IPR are fit enough to serve the client. There is not any rule saying no other lawyer other than those specialized in IPR laws can provide services to the client. However it is always preferable that a lawyer practicing in the specific field of law should have sound knowledge on the working and applicability of the concerned law.

How to find IP lawyers – Online and Offline?

Finding an IP lawyer is not a difficult task. Though as per the Advocates Act, no lawyer can actually advertise for itself, but the law firms or lawyers can have their own websites. The websites provides a way out of finding IPR lawyers. Even a generic search across any web platform also helps one in finding an IPR lawyer. However for an effective way of finding out one may refer to various websites and platforms like Lawfarm which acts as an aggregator of lawyers. Some websites also have a rating system which helps client in knowing about individual lawyers. For getting the service of IPR lawyers from renowned law firms one may also refer to Hg.org or Legal500 website. The name of various law firms are given as per tier of services, so that one may find out the details of a firm before approaching a law firm or a lawyer. Start-ups like Cliklawyer have also started doing work in IPR and is looking to build up its practice in the same domain.

How to choose IP lawyers – what are the important factors?

This is one tricky question. Choosing an IP lawyer is not based upon a single factor. A lot of factors are taken together by clients to take a decision on the same. Some of the factors which contribute to the same are client satisfaction or dissatisfaction associated with a law firm. Sometimes a renowned lawyer’s name plays an important role as is the case of Advocate Pravin Anand of Anand & Anand or Advocate Ashwin Julka of Remfry & Sagar. Sometimes clients rely on the number of cases won by the particular lawyer or law firm in the recent times and cases of the celebrities certainly pave a way of choosing the lawyers. Sometimes strategic location of a law firm is given consideration. For example a Media & Entertainment Company based out of Mumbai will prefer not to appoint an IP lawyer from Bengaluru or Kolkata for that matter and their natural choice will be someone or some law firm from Mumbai itself.

Top IP law firms in India

As per the recently published Legal 500 list of IP law firms, firms like Anand & Anand, Krishna & Saurashtri Associates LLP, R.K. Dewan & Co, Remfry & Sagar are in the tier 1 of the concerned category. Other law firms, namely Khaitan & Co, K&S Partners, W.S. Kane & Co, DP Ahuja & Co. Inttl Advocare, S.S. Rana, Scriboard and S.Majumdar Patent & Trademark Attorney are quite popular. Every law firm has their own positive and negative point. Therefore it is always suggestible to personally assess thing before making decisions[35]. And it is always unwise to place a particular law firm in a hierarchy. Few days back, Scriboard Consultants advised Rhiti Sports in acquiring a website in Mahendra Singh Dhoni’s name originally registered illegally by another person[36].  Again RSG India Law Centre’s ranking report on Anand & Anand has given 9.3 score out of 10 in client satisfaction proving how popular Anand & Anand is among it’s clients[37].

Top IP law experts in India

As per the Legal500 report the leaders among IPR lawyers are Mr. Ashwin Julka, Mr. Chander Lall, Mr. Sunil B. Krishna, Mr. Pravin Anand and Mr. Manish Saurashtri. (Names are not in any chronological order). However there is no ground rule that only these lawyers are the best and no one can be better than them.  The top priority should be given to lawyers, who can play with words, law and at the same time can provide the client with top quality hassles less services.

Top IP academics in India

Like the lawyers, India is fortunate to have a group of leading IP academicians from all age groups and part of India. To name few of them, they are Mr. Swaraj Paul Barooah, Mr. Shamnad Basheer, Mr. V.K. Unni, Mr. Yogesh Pai, Mr. N.S.Gopalakrishnan.

Top law schools in India for IP

More or less every law school in India has some form of cells/ committees and dedicated faculties and posts of IPR Chair sponsored by MHRD, Government of India for promoting IP studies among law students in India. However when it comes to a dedicated IP law school, there is only one law college in India which deals with the same. Rajiv Gandhi School of Intellectual Property Rights Law (RGSOIPL), a constituent college of IIT Kharagpur deserves special mention for their IP centric courses. The college offere three years LLB course, LLM and PhD program. However for anyone to be eligible for their LLB course, it’s mandatory to have studied Science or Engineering before during graduation. The presence of such conditions makes it impossible for any student from arts or commerce background to study here for making a career only in IPR laws. N.C. Banerjee Centre for Intellectual Property Rights Studies is another good centre of IP laws among the National Law School framework.

Trusted source of information on IP laws

Like any other field of law, IPR is another field that needs timely update of IPR news and cases so that everyone get an idea of what is happening around. The professionals due to their sheer work pressure do not get enough time to read about the same and therefore IP blogs and news centers come handy for knowing about everything happening in the field of IP.

Trusted sources for IP news – Top IP blogs in India & abroad

SpicyIP in India is a very trusted source of information in India, where the articles are written by IP enthusiasts and only quality articles are being published. Apart from this there are certain other blogs in IPR which provide reliable news. They are as follows, namely – IP Watch, IP Watchdog, IPKat, Patent Baristas, Sinapse, Banana IP News Centre etc. Other than this occasionally articles come across in leading magazines and newspapers authored by leading academicians and lawyers. Apart from all this blogs like iPleaders blog, LegalserviceIndia, though being not IP specialized blogs are another important source of knowledge regarding IP law in India and abroad.

Intellectual property authorities in India – Where can IPR be registered in India?

Intellectual property in India is of several types and hence can be registered under various laws and under different Indian authorities. Patent, Design and Trademark related issues are administered and resolved at preliminary level by the Office of the Controller General of Patents, Designs & Trade Marks (CGPDTM). Under the aegis of CGPDTM (which is based out of Mumbai) works the Patent Office, Design Registry, Trademarks Registry, Geographical Indications Registry, Rajiv Gandhi National Institute of Intellectual Property Management (NIIPM) and Patent Information System. NIIPM and Patent Information System are located at Nagpur. The patent office is headquartered in Kolkata with branch offices spread across India in three major metropolitan cities, namely New Delhi, Mumbai and Chennai. The registry of design is located at Kolkata too. The Geographical Indications (GI) registry is located at Chennai. Among the other authority, the Copyright office is located at New Delhi. These are the suitable bodies where the registration of IP is being done. Apart from all these there are certain Copyright societies in India which has been mandated by Copyright Act and they keep a tab on violation of copyright of the owners and collect royalties and carry out all the compliance work and penalty collection for the authors/ owners. As per the general rule, not more than one copyright society is allowed to do business in a particular class and if found that the society is proving to be detrimental for the owners, the license for such registration societies shall be revoked[38].

The Intellectual Property Board (IPAB) headquartered at Chennai and the benches are based out of Kolkata, Mumbai, Delhi and Ahmadabad apart from the Chennai itself. The IPAB has jurisdiction over Trademark, Patents and Geographical Indication matter. The tribunal has an impeccable record of being the only tribunal in India which has a certain global impact.

Where do you have to go to get IP enforcement in case of IP INFRINGEMENT?

In case an IP is infringed, filing a criminal complaint by means of an FIR in the police station or moving to a competent court (competent magistrate) for issuing search and seizure warrants for the police to carry out raid to collect evidences.  Certain injunction can be pressed against the infringer like permanent injunction, interim injunction, Anton pillar order, John Doe order, seizing the accounts and handing them over to the person who is affected is a convenient way of enforcing the law against the infringer. Apart from this Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 along with certain provisions of Indian Customs Act are a good way of combating the issue of IP infringement in India[39][40].

How to patent an idea – Can ideas be patented in India or anywhere in the world?

Idea cannot be patented, copyrighted or be protected by any IP laws, no matter whichever jurisdiction one goes to. As per the Indian Patent Act 1970 a patent protection can be extended only to the inventions. However the Patent Act does not explicitly state that an idea cannot be patented thereby leaving a scope that in case someone comes up with an idea which he is capable of developing fully can get his idea patented provisionally. However in case the concerned person fails to transform the idea into a functional innovation or fails to give the proper product specification within a time period of twelve month, the patent application will stand as cancelled.

Can provisional patent protect an idea?

A provisional patent can protect an idea but only for time being, i.e. only for one year in case the application gets revoked due to failure on part of the applicant to submit the concrete and final patent and for the term period of the patent as mandated by the patent act, in case the patent is being granted. The provisional patent has several benefits compared to full patent protection. Apart from an extra year the patent gets the protection, the cost of application is much less expensive. In case of any conflict at later, provision patent filing date will be given more privilege. Provisional patent provides ample time to find out the lacunas of the patent which may help one to file a better patent application, one year later. However, one need not have to fear about the details getting disclosed, since the patent application filed under provisional patent application does not get disclosed to the public[41].

What does it take to get a patent?

The novelty, utility and inventive step is a necessary feature of product to be eligible for patent.

Patent Consideration in India

Patent consideration in India is something which should be considered carefully by any business concern, before they start any commercial activity in India. India and its patent law are totally against ever-greening of the patents and therefore will never allow a patent to over-shoot the term of its protection unless significant changes has been made to the efficacy of the product. India does not allow patent protection to a method of medical treatment either. In case two known and active substances are mixed which in turn increases the efficacy of the final product to the extent that it can be considered to be a new compound, patent protection can be granted[42].

What is a design patent?

Design patent is a concept not being known among the people. A design patent is the protection given to a particular design of a functional item. Say for that matter a beer’s bottle or Coca-colas bottle design. In some countries like USA a design can be patented by means of design patent which is otherwise known as industrial design right. Apple has several design patent registered. The shape of the Apple – rectangle with four rounded corners is an example of a design patent.

Can one get a design patent in India?

India’s law regarding design and the protection of the same is a little bit different. In India design is protected by Industrial Design Act, 2000 and not by patent act. Though the term of protection is same as that of the patent and the granting of protection is being done by the same office, but a design cannot be patented in India. Also a particular design can be protected in India on the basis of its visual appearance and not otherwise. So, whether a design has been infringed or not depends solely by the physical look.

What is PCT and how can you get a patent through PCT?

PCT stands for Patent Co-operation Treaty – an international patent treaty that was concluded in 1970 and was made effective in 1978 aimed at protecting patents across several jurisdictions (countries) by means of a single patent application made in any one jurisdiction. The contracting states which are a party of the PCT form a union which is known by the name International Patent Co-operative Union. The main purpose of the union is to make sure that by a single window system a patent can be protected across all the 151 contracting states without the need to apply for protection in several jurisdictions by means of individual and separate applications[43]. The unified payment of fees is another key aspect of the PCT. By making a single payment one can apply for a patent, which again saves time while ensuring proper patent protection at the same time. A reference to the fees can be found here[44]. The details of patent filing under PCT, its procedure and documents necessary can be found here[45]. However only nationals of the states which are the contracting parties to the treaty (151 as of now, may shoot up in case more countries decide to be part of the treaty) only can apply for patent under PCT.

For one who is interested in getting a patent registered, the following steps are needed to be complied with. An application for the patent should be made with the national office of the any of the 151 contracting countries to be filed in the International Bureau of WIPO in Geneva. Once the application is made in a national patent office, automatically it will be considered as if the same application has been made into all the national office of the contracting states and the filing date will be considered same for all countries. In case the patent application is being filed in a country which is party to any of the following conventions, namely European Patent Convention, Eurasian Patent Convention, the Bangui Agreement or Harare Protocol the patent application under PCT can be made with the respective following offices too, namely European Patent Office (EPO), Eurasian Patent Office (EAPO), African Intellectual Property Organization (OAPI) and African Regional Intellectual Property Organization (ARIPO).  Once the application is being filed it is made to undergo an international search which is normally carried out by a competent authority known as International Searching Authority. At the conclusion of the search an international search report is being prepared having the details of published documents which may affect the invention claimed in the international application. Along with the search report another non-binding preliminary report is being attached which clearly lays down whether the applied patent application meets the patent criteria or not. Following this, the search report and written opinion will be communicated to the applicant and the applicant may withdraw (in case the written opinion and search report suggests that it is difficult to get it patented) or amend to the existing patent application. In case the patent is not being withdrawn the patent application along with the search report is being published by the International Bureau. However during the publication, the written opinion which is non-binding in nature is not published. The applicant may request for a Supplementary International Searching Authority (to be conducted by any ISA which is interested in carrying out the searching) before the expiry of 19 months time (to be calculated from the priority date – the date when the application was filed). This is done to make eliminate the chances of further documents coming to the light later on which may affect the chances of a patent to get protection later on. The national procedure starts after the passage of 30 months from priority date of a patent application before each designated office of various countries member to the Union. During this process, the application is being sought translated in local languages (in which ever jurisdiction it is necessary and it is being sought). The payment of the necessary fees of different jurisdiction and the service of the local patent agents are done at the same time. In case the patent applicant makes any change to the application, an optional preliminary examination may be requested, the report of which is generally being prepared by any International Preliminary Examining Authorities (IPEA) and is being published as IPRP Chapter II. In case no request has been made by the applicant for optional preliminary report which is obviously not binding, the International Bureau establishes an International Patent Report on Patentability which is published as IPRP Chapter I.[46]

What is a patent search?

A patent search is the process of searching and identifying any patent which has been issues and published in a country or in jurisdiction of several countries on the same subject matter and the same may be considered as  prior art. The prior art helps in comparing between a patent application and something that is exiting for a long time. It helps in two ways; first it helps in reducing patent application based on copying of the exiting one. Secondly in case of a bona fide applicant it prevents the applicant from working on the same project, thereby saving invaluable time and money. The novelty of a patent plays an important role in deciding the patentability of an object, apart from other conditions.

Why to do a patent search

A patent search is necessary because it helps the patent applicant and the authorities administrating patents in understanding whether any similar type of invention had been made before or not. Thus it deters filing application devoid of novelty and are just mere copies with little or no modification and in case the same thing happens, does not violate the rights of the earlier patentee. And the patent search helps the authority governing and giving the monopoly to the patentee on deciding whether any technology of same type is in existence or not. It reduces the chance on the part of authority of being unfair to the original patentee. Furthermore, a patent search at any stage preserves valuable time and money and labor of all the stake-holders involved in different stages.

At what stage should you do a patent search?

Though normally patent search is being done just before a patent application has been filed, it is always advisable to search the patentability of the invention before one starts working on the same. In case something has already been patented, the patent applicant can save his/ her valuable time, not to mention he/ she may use the same time and money to invent something that is more novel and has more utility and inventive step in it. Even if a patent search in the same area has been done before attempting to make something which is innovative and novel and the same results in providing that there exists no evidence of something of same nature; it is always advisable to keep a tab on the development in the field of patents by means of search to understand whether someone has already patented the said subject matter or not. It also helps the patent applicant in incorporating more changes and utility to make it suitable for patent in future.

Can you conduct a patent search yourself?

With the advancement and development of various user-friendly websites, it is not that difficult to conduct a patent search by oneself. Say for that matter the InPass setup of the ipindia website which actually helps any layman searching about patent i.e. about prior art. The system has very simpleified setup whereby any person mentioning just the application date (range of dates), abstract, description, patent number, application name, number, title of the patent, claims of the patent, inventor name, address, filing office and many others shall help an individual in finding prior art and in conducting the atent search oneself. A screenshot of the InPass System is being attached below:

However it is always advisable for a skilled person trained in the art to conduct the patent search. A person who has experience over a period of time in the field of patent law (patent/ IP lawyers) or any person who has studied science (physics, chemistry, mathematics or engineering) in graduation is a suitable person for conducting patent search. The knowledge pertaining to technology in this case will certainly help them in finding prior art and differentiating and comparing the new ones with the prior ones in deciding whether the subject matter involves novelty, utility and inventive step or not.

Top patent search engines & patent databases

In today’s world when everything from buying a pin to buying a plane is being done online, how can it be possible that there will be no dedicated search engines for finding prior arts related to patents? Every Government has come up with their innovative and user-friendly search engines. A name of few of them is given below. In India we have InPass (http://ipindiaservices.gov.in/publicsearch/), Australia (http://pericles.ipaustralia.gov.au/ols/auspat/welcome.do;jsessionid=8LbUlMA6vyXFdgUQ142YIeA6qtI35ahhFnowpeU_0T-q6TMEoozH!1879099504), Canada have got Canadian Patents Database (http://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/h_wr00001.html), European Patent Organization WIPO and European Patent Office has  Espacenet (http://worldwide.espacenet.com/), Germany has DPMAregister (https://www.dpma.de/english/index.html), Hungary has PIPACS (http://pipacsweb.hpo.hu/), Ireland has Patents Office Register & Database Search (https://www.patentsoffice.ie/en/), Japan has Patent and Utility Model Gazette Database (http://www.jpo.go.jp/index.htm), Korea has Korean Patent Abstracts Database (http://kpa.kipris.or.kr/kpa/search/search_kpa.do), LATIPAT for Latin American countries (http://www.oepm.es/internet/bases_datos/inven.htm), New Zealand has IPONZ Databases (https://www.iponz.govt.nz/), Romania has RoPatentSearch (http://bd.osim.ro/cgi-bin/invsearch8), UK has UK Patent Office and Spain has OEPMAT. For a detailed account one may access the following links[47][48][49].

How to do a world patent search

It is really difficult to do a world patent search at the same time. This is due to the fact that not all the countries are under one patent co-operation treaty or union. Therefore it cannot be done through centralized and uniform way. However since Patent Co-operation Treaty has 151 members, in that case a single patent search in PATENTSCOPE will help. For the rest of the countries it is advisable to check the respective country’s website so as to come to a conclusion as to whether a particular patent application matches with prior art or not. A judicious balance of search in PATENTSCOPE (https://patentscope.wipo.int/search/en/search.jsf) and other databases and search engine will certainly help an individual to search for patents (prior art) across the world.

In which countries should I apply for patent?

For an inventor the prime concern other than protecting his or her invention is to find a jurisdiction where he or she can apply for a patent. While Patent Co-operation Treaty has given a chance to protect patent easily across several jurisdictions at the same time, the protection may fall short in case the destination country where the patent has been filed for protection or has been protected refuses to give the desired protection. In those cases, the attempt to protect the invention by patents can become counter-productive which may lead to disclosure of important information. Therefore a patent holder needs to be very careful on which countries or jurisdictions to choose for patent filing. Another point every patent applicant should keep in mind before applying for patent is that it is always ideal to file patent in a country which is developing or developed in terms of economy. This is because the developed and developing countries in it’s attempt to become powerful economically always employs new technologies to make things and life easier. Presence of large number of companies which are into manufacturing and business sector makes sure one thing that if patent be filed in those economies, the new technology will have many takers which will not just contribute to a country’s economy but will also contribute to the riches/ wealth of the inventor too who can accordingly decide the value of his/ her invention. As per the 2014 Global IP Filings China reports to have registered the highest patent filing of close to 9.5 Lakh at 9, 28,177. USA and Japan registers 5,78,802 and 3,25,989 filings[50]. We will take few examples of USA, EU, Japan and India to understand the same.

USA – USA is no doubt one of the countries which leads the leader board when it comes to patent filing. Patent protection in USA is covered by Title 35 of the United States Code which talks about protecting patent in USA. USA follows a first to file system of patent filing which means one who applies for patent application successfully is the one who is entitled for the patent. The Leahy-Smith America Invents Act which came into effect in March 2013 made this transition from first to invent, which was mostly based on the evidence of who first made the invention. For a person to get an invention patented in USA, one needs to incorporate the best way practice. By this one may not get patent on the same, but until the Leahy-Smith Act of 2013, if there was no mention of the same, it was sufficient to cancel the patent application. However now even if the same application is not a requirement, but it is a formal condition which needs to be incorporated in the patent application.  In US, a patent application is published after 18 months of filing unless requested not be published and the application is only for USA. The rights conferred by the patent in USA are valid only in US jurisdiction and not outside US. However US in itself have a huge market and therefore cannot be any better option. Considering the market size the amount of royalty from those using the patent will be huge too. Another important aspect of patent in USA is that in any case, there is any opposition to any grant of patent unlike other jurisdiction there is no formal way of Opposition. There is a re-examination procedure by which anyone can present the reasons for such application. Bur for deciding on the same the patent holder is being engaged in a discussion with the USPTO (United States Patent & Trademark Office) examiner and the person who challenges the patent is not kept inside such discussion. Another important feature of the US patent system is that it has one part claim. Anything filed in the first part of two-part claim is considered as a prior art claim. Thereby any of the part of one’s invention if added to the first part may lead to jeopardizing the patent itself.

EU – EU’s patent filing is not a local one, unlike USA but spreads over a region or over a continent i.e. Europe. As of now 38 countries are part of the European Patent Office (EPO) – the body which oversees patent filing in EU. The EPO is a PCT styled patent cooperation treaty which gives an opportunity for a patent applicant to get protection in as many number of states at one go. The European Patent Office grants patent protection in a bundle as one patent application makes it fit to be protected in several EU countries. Also every patent is considered as national patent in this case.  The EU patent application is a two part application which needs an invention to be novel and should necessarily involve an inventive step. In case someone wants to oppose a patent, he or she can file an application mentioning the reasons for such opposition in writing within 9 months. The EPO generally gives its judgment after both the patent holder and opponent argues over a matter. While first part of filing opposition and reply happens in several rounds in writing, the second part of argument and hearing happens orally. The EPO does not need a patent applicant to mention the best use of his/ her patent. Also it is noteworthy that the patent application under EPO gets published after 18 months and the same cannot be kept secret unlike in case of US[51].

Japan – Japan much in the lines of the most advanced countries has a first to file system. In case two applications for the same type of product are filed on the same day, and none of them manages t come into a mutual understanding, none of the applicant will get their patent registered. The ownership of the patent can be decided by the contracting party which means in case someone who invents a new product was under a contractual obligation of a company, a company may claim for the same patent. However the Japanese patent law also says that in case the patent application has been filed by someone who is totally unrelated to the inventor, the patent application will be nullified. For getting a patent to be registered in Japan, a product needs to be something of the utility, the product should be non-obvious (it should be an inventive step) and novel in nature. The Japanese Patent law mentions of a six month grace period and that too in case of special circumstances only. For further information on the same and a detailed study, one may refer to the following link[52].

India – India is no doubt a great place to get an innovation registered as a patent. The country is advancing both in terms of technology and innovation and the economy is booming. Therefore patent protection under Indian law (Patent Act 1970) has become an essential condition for a business entering into Indian market. However Indian patent law is totally against ever-greening of patents and therefore it may prove to be risky and dangerous destination for the money minded pharmaceutical companies. Also the compulsory licensing under Indian patent law is another big headache for the foreign companies looking to protect their patents in India. One can file a patent in India under Indian Patent Act 1970 for getting protection only in India. However anyone from India trying to get protection worldwide may use the PCT route for the same[53]. When the Indian Patent act 1970 was enacted, in order to fulfill the government’s aim to protect the poor and the vulnerable and to provide them with medicines at lower rates, only the process patents were enacted. That means patent on product was not given and the Indian companies started producing medicines using reverse engineering and by using other procedures the same medicine[54]. However as soon as India acceded the TRIPS Agreement, it was decided that India will henceforth respect the products patents, but only the ones that are being provided in India and the protection will be of 20 years from the date of filing of the application. In a positive note India is no doubt a good place to file ones patent if not better[55].

However under the present regime when PCT has become a possibility, in case one wants to protect its invention in multiple jurisdictions, PCT is the best route. In case one wants to protect his or her invention and the concerned country has not acceded to PCT, the corresponding law of the country or the region can be used.

What is process patent and product patent – what is the difference?

Patent is considered to be one of the most important IP and is definitely an important driving force behind a country’s economy and development. Patent is a statutory protection given by the Government of a country to its owner and is also a source of revenue and income for state and people respectively. Naturally people have more interest in getting things patented. Patent can be of two types, namely – product patent and process patent. Product patent is a type of patent whereby the final product is granted protection. Whereas process patent is a utility patent whereby only a specific process of the patent is being granted protection and the main product is not being provided any protection. Developed and developing countries follow different way of patent, the developed countries follow the product patent way whereas the developing countries in fuelling their development and welfare activities prefer the process patent route[56]. However countries which are within the ambit of TRIPS have to protect product patent.

Is getting process patent easier than getting product patent?

Process patent may be easier to get since by means of reverse engineering one can get the product and its composition elements and can find out a way to get a different process patented. But in case the product is patented, no matter whatever process is being used no one can patent the product which is most likely to be already patented. However one will be interested to know that currently under Indian Patent Regime, a product can be patented and therefore the question does not arise of whether it is easier to get a product patent or process patent. Henceforth whosoever will apply for patent protection will apply for product patent and getting a process patent will become impossible[57][58].

What is the role of the patent office in the patent process?

The Indian patent office plays a very important role in the entire patent process and procedure. Like starting from the application to the final granting of the patent, the patent office and the examiners plays a very sincere role. An error on their part would certainly cause the patent applicant and the country a lot of losses and therefore no can belittle the effort put by the patent office. Starting from objecting to a wrong patent to a company’s attempt to ever-green a patent – anything and everything under the sun is being regulated by the patent office. The examiner and controller in the patent office can be considered to be two arms of the patent office. The importance of them can be comprehended from The Ayyangar Committee Report on the ‘Revision of the Patents Law’. For knowing about them one may refer to the Spicy IP article authored by Mr. Prashant Reddy on the same. A few snapshots of the relevant report can be found here.[59]

Who are patent officers in India and what their qualification is

Patent officers in India are those who are actually entrusted with the day to day operation of the patent office in terms of patent examination. Patent officers are primarily entrusted with sorting and managing the patent application in the various offices across India, analyzing the patent on the basis of novelty, utility, inventive step and industrial application. For a person to be appointed as a patent officer one need to be a science graduate or a n engineering graduate. One may also have master’s degree in science. The primary reason why a patent examiner needs to be a science graduate is that most of applicants that are being applied for protection are technology based. Therefore it is almost impossible for a person without having science knowledge to analyze the scientific aspect of an invention; hence the science qualifications do really plays an important role.

How does one get a job in patent office?

From time to time, the patent office expresses its intention to appoint patent agent in its various offices. For keeping a tab on the same, one may refer to the Employment News; a weekly published by Government of India or may refer to ipindia.nic.in website.

How can one become a patent agent in India? Why can’t advocates file patents or appear before patent authorities in India?

For an individual to be eligible for becoming a patent agent one needs to pass the patent examination or should have at least 10 years experience as an examiner in the office. The applicant should be of minimum 21 years age, and Indian citizen and ideally one needs to be a science or engineering graduate who can understand the technological intricacies necessary to be understood in cases of patents. Therefore the controlling body believes that anyone other than a science or engineering graduate will not be able to carry its work effectively[60][61]. However, recently Madras High Court has struck down this eligibility for one to be a patent applicant. But the same judgment have been challenged, which raises question on whether an advocate can also be patent agent or not?[62] However to play safe it is always suggestible that a patent drafting be carried out both by an advocate and a science graduate, so that one may compliment the other.

Patent filing

How to get patent – basic universal steps

Getting a patent may seems to be a pretty easy task. However in case the correct procedure is not followed, a patent may even get invalidated. Therefore ideally a patent should follow certain procedures, which are considered as the minimum requirements for getting a patent. Firstly, it is important to identify the inventor. Secondly, it is important to mention the area of invention along with the advantages which can be derived from the same, description of the invention and the working of the invention. Thirdly one needs to find out whether the invention that is applied for patent has any novelty in it or not which is also known as patentability search. Also one should keep in mind the industrial applicability of the patent and how much non-obvious the product is. The patentability report and opinion helps an individual in deciding whether to continue with patent or not. One should also try to spot where his / her patent lies (design patent or a utility patent) and what kind of patent one may expect to get. One also needs to find out by what time one aims to complete the procedure of patent examination and publication. In case the patent faces any opposition the same issue should be addressed as soon as possible to make sure patent is being granted as soon as possible without any unnecessary delay[63][64][65][66].

How to draft a patent application

Drafting a patent application forms the main part of a patent. A meticulously detailed and well researched patent application decides the fate of a patent and during the time of its filing, examination or prosecution or granting of the patent plays a significant role. A well drafted patent needs to incorporate the following points. A patent should have a cover page which is also known as first page and front page. The cover page should ideally have the name of applicant, date of filing, name of inventor and the title of invention, date of priority, publication, and abstract of invention and grant of patent. In a word the first page generally covers the factual information related to the invention in the form of a bibliography. Secondly the patent document should have the patent specification which is also known as disclosure or description. Ideally the written description should be just next to the cover page. The patent specification is nothing but a written illustration of the purpose and along with diagrams and pictures of the invention showcasing the functioning of the object which is the subject matter of patent application. However hard and complicated languages in the patent specification should be avoided as much as possible as the complexity may mar the chances of a patent to be granted. While drafting patents, one should keep in mind whether any layman can face any trouble in understanding the same! The body of the patent specification changes from jurisdiction to jurisdiction. The style Indian Patent Office follows can be listed down here – Title of invention, Field of invention, Background of invention with regard to the drawback associated with known art, Object of invention, Statement of invention, A summary of invention, A brief description of the accompanying drawing, Detailed description of the invention with reference to drawings/ examples, Claim(s) and the abstract[67].  The PCT again follows somewhat different format for patent specification, namely – technical field, background art, disclosure of information, brief description of drawings, best mode(s) for carrying out the invention, industrial applicability and claims[68]. Whereas the USPTO follows a different formant divided under the following sub-headings, namely – Title of invention, cross-reference to related application, statement regarding federally sponsored research or development (if any), reference to a sequence listing (if any), background of the invention, brief summary of the invention, brief description of the several views of the drawing (if any), detailed description of the invention, claims and the abstract of the disclosure[69].

The title of the invention as the name suggest, clarifies what the main art of invention is! It should ideally be not more than fifteen words. The field of invention signifies the scope and the area of the invention. The field of invention should be to the point so that the patent examiner may understand the same at one reading. The crispness of the draft is an important element in this case. In the part of the background provisions one needs to say how is his / her invention different from the prior art and how the invention can solve the problem which is common in the prior arts. The object of the invention should necessarily incorporate the advantages the said patent is set to bring. The object of invention should have a comparative analysis of the innovated product with the one existing in the market already. The statement of the invention describes the novelty or inventive step involved with the patent. The summary of invention basically sums up the detailed overview of the patent and its specification that in spite of being a gist actually brings to the light what exactly the invention is all about! In the brief description of the drawings it is necessary to mention the procedure by which the object has been produced. All the technicalities should be explained well enough so that someone who is skilled in the art may understand the same and perform the functioning I f needed. The detailed description should necessarily show the detailed procedure of the invented product, all the pictures of the invention which will help a person to comprehend the invention, how the invention works in an application with real life example wherever possible. The real life examples help one understand in a lucid and better way. The abstract should be short (ideally within 150 words) summing up the invention in a simple language. A claim is the part where the author or inventor is limiting the boundary of his / her invention. In other words, the claim is the submission made by the applicant whereby he is marking the area or territory which he/ she is asking to be protected legally by the act. The claim has three parts – an introduction regarding prior art, one applicant’s contention on its invention and a link connecting two of them. The claim part should be totally free from any error, there should not be in repetition of facts, words should be crystal clear so that the actual meaning of the applicant comes out. Only a single line should be used in each claim. All the claims are judged individually and therefore refusal of acceptance of one of the claim makes the application invalid.  Also one should have a look at various terms and conditions related to the fees as there are different fees for individual, company and entrepreneurs / start-ups. Start-ups under the newly framed IP and Start-up Policy has got certain discounted fees[70].

Patent drawings – how important?

It is often said that a patent drawing is equivalent to thousand words. In other way patent drawing is another pillar of success/ failure for a patent application. Patent drawing incorporate minute differences in the drawing and the same difference can be noticed if shown through image instead of words. Words, in many case fails to illustrate and elucidate a certain point through simple words and therefore pictures play a very important role. It is not an issue for simple patents, but in case of complex patent involving combination several parts drawings play an important role in understanding the reality of innovativeness. Without picture one may find it very difficult to comprehend and may pose a big challenge while comparing the exiting application with the prior art. Also in case of any patent litigation, pictures come handy in proving one’s point as to the degree of innovativeness involved in the said subject matter[71][72].

Who should do your patent drawings?

Though there are no statutory instructions or rules regarding as to who can make a patent drawing, ideally someone who has got knowledge in technology or science should be the best person to execute the patent drawing. The reason being an engineer, or a scientist or a technical bears the proper acumen to draw and has the best knowledge to design and amend changes in the design in case there is any technological error. Making a patent drawing with the help of a technology specialist helps in reducing the chances of error in patent drawings, which will certainly help one in the long run in case of any conflict on the later stage. For the purpose of drawing, one may use CAD (Computer Aided Design) Software which is a flexible platform for drawing and making amendment to the patent drawing in an effective yet easy way.

How and where should I apply for patent in India? Can patent filing be done online?

Patent are supposed to be applied in the respective patent offices in India. Since the patent filing has been made centralized and the Patent Amendment Rules of 2016 has made it obligatory for the applicants to file the application through online mode only, there one may file the patent one and only through Comprehensive E-Filing. The same can be accessed at https://ipindiaonline.gov.in/epatentfiling/goForLogin/doLogin. Patent can be filed by an inventor, or his legal representative or his assignee at the head office or its associated branch offices. The jurisdiction of the office where the application can be made will be decided by the residence, domicile status or the place where his principle business office is located. This rule is applicable for Indian applicants. In case of foreign applicants, the jurisdiction is decided by the place where the business is intended or by the patent attorney’s office, the general trend being the later one. The application should have the declaration where the inventor has made a declaration to that effect, a statement and undertaking as regards to the invention, applicant’s proof of right of making the application and the agent authorization by which the agent is free to carry out the case and take the decision on the client’s (applicant’s) behalf. The filing of patent can be of three different types as per the Indian jurisdiction, namely – Ordinary Application, Convention Application and PCT National Phase. The three applications are different and have terms and conditions involved.

• Ordinary application as the name suggests is the general form of patent application which is filed first and where no priority is being claimed in comparison t any other patent application which is under process in patent office or the ones which has just been filed. An ordinary application can be provisional or a non-provisional one (in case a patent has been filed directly for patent) depending on varied terms and conditions.

For applying a provisional patent application under the ordinary form of application, one needs to submit the provisional application in Form 2 along with an application in Form 1 and other documents in a copy of two. The prescribed fees for the same are according to the First Schedule[73]. The front page of the From 2 should have the mention of the title of the invention, name, address and nationality of the applicants of the patent and also introduction of the preparatory statement as regards to the invention. The ordinary provisional patent application also needs to include the description of the invention with a proper title explaining the same, illustration (wherever necessary). Since the application is a provisional one, claims may not be made a part of the claim as the sole purpose of making the provisional application is to make a priority claim. It is advisable not to file ordinary provisional patent application if the patent application is made as a divisional, convention or PCT National Phase application. It is also noteworthy that in case the complete specification is not filed within twelve months of filing the provisional application, the whole purpose of the same will get defeated as according to the Patent Act, 1970 the same shall be considered to be abandoned.

This is what a provisional ordinary application is all about. Now let’s have a look at its counterpart, the non-provisional application. As stated earlier, the non-provisional application needs the complete specification where full concept about the invention, its use and the operation along with the method of performance is necessary. Apart from this the following condition also needs to be satisfied, namely the best method of performing the invention (which is known to the applicant) should be made out in the application, the claim which ultimately defines the scope of the invention should be mentioned, should have an abstract which will provide a scope of the invention and in case the specification has a biological material mentioned, the application shall be made public once and only when the same material is deposited to an International Depository Authority (IDA) as per the Budapest Treaty. The claims made in the application should be clear and such that all the road should lead to a single invention. In case multiplicity of concept is being found the same may lead to cancellation of the application. The paten application should also have a power of authority in From 26. In case a general power of authority has been filed in other jurisdiction or other application, the same needs to be self attested and should be submitted. In case the company is a small entity one needs to submit Form 28 while making payments every time to prove the entity status. Also there is a specific time as to by what time Form 3 can be submitted. It can be filed wither with the application or within six months of filing the application, in case it is not filed earlier. One can refer to the Forms for a better understanding.

• Convention application is the form of application by which an application should be filed in the patent office with a claim mentioning a priority of the application. In other words, the application which is filed in the patent office should have substantial similarity with the application filed earlier in patent office of some other country which is also a part of the convention as like India. In order to get application through this route one needs to file the application within twelve months of applying the first application in one of the convention country. A convention application should have the mention of all the specifications, should be accompanied by an abstract, a list of complete specification filed in the convention in respect of which the protection has been sought, or additional specification compared to the one already applied in ca convention country. The application under convention application also needs to have a mention of date on which the first application was made along with the date on which such an application has been made. The applicant should mention that no other application has been filed for protection before the date provided in any other convention country by the applicant or by any person who hold the title originally. Also, a certified copy of the priority document issues by the controller of the concerned authority of the country where the first application was filed should be submitted. In case the original application is of some other language, a certified copy of the translated version of the same should be submitted. A Form 28 should also be filed in case the entity is a small one whenever any fee is being paid.
• The last way among the filing of patent is the PCT National Phase which is usually the second phase in PCT, following the International phase. The National phase as the name suggest is the time when a patent is being filed with respective offices of different nations who are part of PCT. Generally one needs to file the national phase within a definite time period i.e., 31 months from the priority date. The time limit, however be extended from country to country as per the national laws of different countries. In case the international application has been published in languages other than Hindi or English, a translated version of application is necessary along with the claims (originally and amended), abstract, descriptions, illustrations. By rule title description and all details mentioned in international application should be taken unless the same has been amended and modified. In that case, amended versions should be taken. The applicant can also request for an amendment to the Controller in the complete specification filed with the controller in a separate form. The fee payable is being decided on the number of pages in the application and the claims mentioned in the PCT Application (till the date of patent filing in India).

If any change is being made in the International Application before ISA or IPEA, if the applicant wants the same change can be made in India too. For that one needs to make an application with the Controller. In case o change in the name of applicant, if the change has been effected in International application the same can be done in India to by filing form 6 and/ or 13. In case one fails to file the priority document by the said time, a three month grace period will be given to provide it failing which the priority application will be disregarded. Processing an application will not be made before the expiry of 31 months. Also since with WIPO all documents are accessible, people should try to submit as much correct information as possible. Apart from this all other formalities related to National Phase Application should also be made applicable.

However for a better and proper handling of the case, it is suggested to advise a seasoned patent lawyer to strategize the steps[74].

References

[1] http://www.wipo.int/ipstats/en/wipi/index.html

[2] http://oss-watch.ac.uk/resources/iprguide

[3] Section 20 (1) of Atomic Energy Act, 1962

[4] http://www.ohchr.org/EN/UDHR/Documents/UDHR_Translations/eng.pdf

[5] http://www.ipinbrief.com/three-approaches-to-value-ip/

[6] http://www.ipwatchdog.com/2015/02/11/alternate-approaches-to-the-valuation-of-intellectual-property/id=54651/

[7] http://www.inc.com/jared-hecht/are-small-businesses-really-the-backbone-of-the-economy.html

[8] http://www.ipwatchdog.com/2015/02/11/alternate-approaches-to-the-valuation-of-intellectual-property/id=54651/

[9] http://www.investmenteurope.net/other/smes-are-the-backbone-of-the-european-economy-jp-morgans-perez-comments/

[10] www.seap.usv.ro/annals/ojs/index.php/annals/article/download/495/547

[11] http://www.wipo.int/edocs/mdocs/sme/en/wipo_ip_bak_03/wipo_ip_bak_03_www_34145.pdf

[12] http://www.wipo.int/edocs/mdocs/sme/en/wipo_ip_bak_03/wipo_ip_bak_03_www_34145.pdf

[13] http://www.politico.com/story/2011/11/crackdown-launched-cyber-monday-069212

[14] http://www.jec.senate.gov/public/_cache/files/aa0183d4-8ad9-488f-9e38-7150a3bb62be/intellectual-property-theft-and-the-economy.pdf

[15] https://www.usitc.gov/publications/332/pub4226.pdf

[16] http://fortune.com/2013/08/27/how-companies-can-beat-the-counterfeiters/

[17] http://auto.ndtv.com/news/jaguar-land-rover-sues-chinese-automaker-for-evoque-copy-1415404

[18] http://www.ipwatchdog.com/2015/09/02/5-tips-to-align-your-ip-portfolio-corporate-strategy/id=61130/

[19] http://www.cbsnews.com/news/how-to-manage-an-ip-portfolio/

[20] https://ipcloseup.com/2016/04/06/samsung-is-the-leading-us-patent-leader-24000-ahead-of-ibm/

[21] http://www.zdnet.com/article/googles-motorola-acquisition-nail-in-the-android-patent-coffin/

[22] http://economictimes.indiatimes.com/news/economy/policy/national-policy-suggests-use-of-intellectual-property-rights-as-collateral-to-raise-funds/articleshow/50194124.cms

[23] http://dipp.nic.in/English/Schemes/Intellectual_Property_Rights/National_IPR_Policy_08.08.2016.pdf

[24] https://united-kingdom.taylorwessing.com/synapse/ti_ip_raise_debt_finance.html

[25] http://www.wipo.int/wipo_magazine/en/2008/05/article_0001.html

[26] http://www.apple.com/legal/intellectual-property/piracy.html

[27] http://www.samsung.com/us/common/legal.html

[28] https://ustr.gov/sites/default/files/USTR-2016-Special-301-Report.pdf

[29] http://www.worldtrademarkreview.com/blog/detail.aspx?g=b524e0e3-088c-478d-802b-438d0e533542

[30] http://www.thehindu.com/business/Industry/india-near-bottom-of-intellectual-property-index/article8219628.ece

[31] http://www.marcasurmi.com/en/articles/brasil/Brazil_shifting_trends_for_manufacturing_counterfeits.html

[32] http://economictimes.indiatimes.com/industry/healthcare/biotech/healthcare/why-was-novartis-denied-a-patent-for-glivec-in-india/articleshow/19337942.cms

[33] http://in.reuters.com/article/india-drugs-patent-novartis-glivec-idINDEE93000920130401

[34] http://dipp.nic.in/English/Schemes/Intellectual_Property_Rights/National_IPR_Policy_08.08.2016.pdf

[35] http://www.legal500.com/c/india/intellectual-property

[36] http://indianexpress.com/article/sports/cricket/ms-dhoni-and-rhiti-sports-evict-cybersquatter-form-msdhoni-com-3730886/

[37] http://rsg-india.com/rankings

[38] http://www.legalservicesindia.com/article/article/copyright-societies-417-1.html

[39] http://www.mondaq.com/india/x/406950/Trademark/Enforcement+Of+Intellectual+Property+Laws+In+India

[40] http://nacen.gov.in/inspire/uploads/downloads/53c7a6d74bd7a.pdf

[41] http://www.pmgip.com/provisional_patent_india.html

[42] http://files.mwe.com/files/Publication/6fa01d26-38fe-4966-aa0a-037499992a25/Presentation/PublicationAttachment/6fc70ff2-a087-4181-81a3-07e3d55586e6/Patent-Considerations-for-India-and-China.pdf?

[43] http://www.wipo.int/pct/en/texts/articles/a1.htm

[44] http://www.wipo.int/export/sites/www/pct/en/fees.pdf

[45] http://www.wipo.int/pct/guide/en/gdvol1/annexes/annexc/ax_c_in.pdf

[46] http://www.wipo.int/treaties/en/registration/pct/summary_pct.html

[47] http://ptrca.org/patentdatabases

[48] http://researchguides.library.tufts.edu/patents/patentdatabases

[49] http://wiki.piug.org/display/PIUG/Patent+Databases

[50] http://www.wipo.int/export/sites/www/pressroom/en/documents/wipi_2015_infographic.pdf

[51] http://www.iusmentis.com/patents/uspto-epodiff/

[52] http://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=1088&context=iplj

[53] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2900001/

[54] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2900001/

[55] Ibid.

[56] http://www.businessdictionary.com/definition/process-patent.html

[57] http://www.isical.ac.in/~eru/erudp/2005-11.pdf

[58] http://www.indianeconomy.net/splclassroom/98/what-is-the-differencebetween-product-patent-and-process

[59] http://spicyip.com/2010/09/role-of-examiner-and-controller-in.html

[60] https://www.intepat.com/blog/patent/patent-agent-in-india/

[61] https://www.intepat.com/blog/patent/indian-patent-agent-exam/

[62] http://www.paai.org.in/paa/faq-patent-agents-association/pae-aspirants/

[63] https://www.richardspatentlaw.com/faq/what-are-the-stages-of-the-patent-process/

[64] http://patentinindia.com/procedure-patent-registration-india/

[65] https://www.uspto.gov/patents-getting-started/patent-basics/types-patent-applications/utility-patent/patent-process-0

[66] https://www.epo.org/learning-events/materials/inventors-handbook/protection/patents.html

[67] http://www.patentwire.co.in/images/Guidelines.pdf

[68] Ibid.

[69] Ibid.

[70] Ibid.

[71] http://www.invntree.com/blogs/patent-drawings-and-their-importance-in-a-patent-specification

[72] http://www.wipo.int/wipo_magazine/en/2010/02/article_0008.html

[73] http://www.wipo.int/edocs/lexdocs/laws/en/in/in067en.pdf

[74] http://www.ssrana.in/Intellectual%20Property/Patents/Patents-Filing-Patent-in-India.aspx