Jan 19, 2018 | IPR & Business, Startups
A limited liability partnership (LLP) is a partnership company in which the partners have limited liabilities, and each partner is not responsible or liable for another partner’s misconduct or negligence.
Steps to register a LLP in India are as below:
Step 1: Getting Digital Signature Certificate (DSC)
The first step towards registering LLP is to acquire the digital signatures of all the designated partners of the LLP since the LLP’s documents are filed online. Digital signatures can be obtained from certified government agencies, such as National Informatics Centre, IDRBT Certifying Authority, E-MUDHRA, CDAC and NSDL. The cost of acquiring a DSC depends upon the certifying agency that the applicant has applied for.
Step 2: Reserving the Name of LLP
To register a LLP, the applicant needs to get a Limited Liability Partnership-Reserve Unique Name (LLP-RUN) that can be processed at the Central Registration Centre. However, before citing or quoting the name, it is always advisable to check from the Ministry of Corporate Affairs (MCA) portal for a free name. This will provide a list of companies with the same or similar names to a proposed LLP. Once the name has been chosen, the registrar will approve the name that is not very similar to any existing LLP. The LLP-RUN will need to be submitted along with a fee that will then proceed for the approval of the registrar.
Step 3: Incorporation of LLP
Form for incorporation of Limited Liability Partnership (FiLLiP) is required to be filled and submitted with the registrar for incorporation of LLP. Prescribed fees have to be paid as per Annexure ‘A’. Application for allotment shall be permitted to be made by 2 individuals only.
Step 4: File Limited Liability Partnership Agreement
This agreement governs the mutual rights and duties amongst the partners. The agreement can be filed in form 3 online on MCA Portal. From the date of incorporation, Form 3 for LLP agreement has to be filed within 30 days. LLP Agreement has to be printed on Stamp Paper, wherein every state has their different stamp paper.
It takes approximately 15 days to get DSC and Form 3, subject to availability of all the documents.
Documents Required for LLP Registration
The documents required to register your LLP are roughly the same as required for most business set-ups. However, there are two sets of documents that will need to be submitted for the LLP registration i.e. documents required of partners and the LLP documents.
Documents of Partners
All partners in the LLP will be required to submit the following documents:
- Identity proofs and PAN cards of all partners.
- Address Proofs of partners that includes Voter ID, passport or driving license.
- A passport size photograph against a white background.
- Passports of NRIs and foreign nationals who wish to become partners in an LLP.
Documents to be submitted
Documents related to the LLP entity that need to be compulsorily submitted are:
- A proof of the registered office of address needs to be submitted at the time of registration or within a time span of 30 days of the incorporation of the LLP. In case, the registered office is a rented facility, an NOC from the landlord is necessary. Additionally, at least one proof of residence will need to submit such as utility bills that are no older than 2 months.
- A Digital Signature Certificate (DSC)
Cost of LLP registration
Find below the cost involved in the registration process:
DSC – Around Rs. 1500-2000 for 2 partners
Name Reservation – Rs. 200
Incorporation – Depends on capital contribution
Contribution up to Rs. 1 lakh – Rs. 500 & Contribution between Rs. 1 and 5 lakh – Rs. 2000
LLP Agreement -Depends on capital contribution.
Contribution up to Rs 1 lakh – Rs 50 for filing Form 3 and stamp duty based on the state where LLP is formed
Limited Liability Partnerships in India
Limited Liability Partnerships in India are based on the Limited Liability Partnership Act of 2008. The Limited Liabilities Partnership Act 2008 was officially published on the 9th of January, 2009 in the official Gazette of India and has been effective since 31st March, 2009. The rules constitutive of this act were later published on the 1st of April, 2009 and amended in 2017. The official incorporation of the LLP happened on the 2nd of April, 2009. An LLP is attractive for many new entrepreneurs since the cost of forming an LLP is little; there is no minimum capital contribution and very few compliance regulations as compared to other kinds of business enterprises. Like many entrepreneurs seeking to become part of an LLP or set it up, you can avail of a range of business loans that will help you in starting a new business or for business expansion purposes.
The total time for registering an LLP is approximately 15 days. The minimum members should be 2 whereas there is no upper limit of members in LLP.
http://www.mca.gov.in/MinistryV2/llpformsdownload.html
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Oct 7, 2017 | General
Forest resources alone will not be able to meet the growing demand for wood and wood-based panel materials. Rice Husk Particle Board, made from readily available rice husk, can effectively replace the demand for panel materials. Additionally, these boards allow for the reuse of waste materials and can be made at a minimal cost. The Indian Plywood Industries Research & Training Institute (IPIR&TI), Bangalore, India, has developed a unique method for manufacturing boards from rice husk using suitable binding agents. This method is unique in terms of value addition and completes utilization of the husk without strict chemical composition requirements. In 1985, IPIRTI’s RHPB technology was transferred to the National Research Corporation (NRDC) of New Delhi, India, a Government of India enterprise, for further development and commercialization. In 1987, NRDC licensed the technology to M/S Padmavathy Panel Boards Pvt. Ltd (PPBL), Bangalore, Karnataka, and cooperated with PPBL to solve the difficulty of moving technology from the lab to the factory.
Rice Husk Board is the first product of its kind to be produced in India as a viable alternative to wood-based panel boards. NRDC has been assigned IPIR’s patented technology for commercial exploitation. In 1988, the technology was licensed to a Bangalore entrepreneur who planned to build a commercial plant. The NRDC has provided the firm with an interest-free developmental loan through its ‘Technology Development Programme’ to fulfill the project’s costs. The NRDC has also provided engineering assistance to the project. The Corporation and the entrepreneur worked together to supervise the project. In a world record time of 18 months, the unit was put into production. The company is currently in regular production and has produced several goods to fulfill a variety of needs. As a substitute for wood-based panel boards, the product is well-received on the market.
GENERAL CHARACTERISTICS: When compared to wood particle boards and other similar panel materials, the upgraded rice husk particle boards have the following distinguishing advantages:
- Resistance to Termites
- Resistance to Decay
- Resistance to fire
- Resistance to Rodents
Rice husk boards are available in a variety of densities, thicknesses, kinds, and grades to meet a variety of needs. The manufacturing method, which is based on cutting-edge technology, provides total quality. Wall Paneling, Doors, Windows, Furniture, Table Tops, False Ceilings, Roofing Panels, Insulation, Partitions, Stage Setting, Industrial and Domestic Floorings, and so on are only a few examples of product applications.
IPIR & TI, Bengaluru, has refined and improved the technology for producing rice husk particle board using modified resin binding technology to achieve multilayers. The RHBP panels are strong enough to meet the requirements of the applicable specifications and standards. RHPB has improved over the years, as shown in the table below:
RHPB Technology was founded in 1985.
(RHPB Technology Post 2010)
- Rice husk particle board with many layers
- Face and core particles are separated, resulting in a clean surface finish.
- The physical and mechanical qualities meet the requirements of IS3087-1985: Medium Density Particle Board Type Specification. 2 three-layered flat pressed boards
- The board is resistant to termites, rot, and fire.
Rice-growing countries around the world have enormous challenges in disposing of rice husk trash, which poses a major environmental concern if burned. Rice Husk Particle Board manufacturing method developed at the Indian Plywood Industries Research Institute in Bangalore has emerged as one of the finest answers to this problem because it helps to maintain eco-balance and conserve the eco-system. In India, as well as many other rice-growing countries, patents have been submitted.
This board has shown to be a viable alternative to wood in a variety of applications. Furthermore, these boards can be created to be decorative. Several Indian companies have been granted licenses, and a turnkey facility has been established in Malaysia. The company has also created floor tiles (made of rice husk), fire-resistant doors, and other products with a granite-like finish. Furthermore, during the Gujarat earthquake, the technology’s licensee assisted in the construction of a huge number of low-cost houses.
Rice husk is the most readily available of all agricultural wastes. It is a by-product of the country’s most major agro-based sector, paddy milling. Rice husk is produced in the country in quantities of 2 million tonnes per year. For the past two decades, researchers have been trying to figure out how to use rice husk to make useful products. However, due to its high silica concentration, the traditional particle board manufacturing method failed.
For the past three decades, researchers have been trying to figure out how to use rice husk to make useful products. However, few successful approaches have been developed because of their peculiar chemical composition.
Using modified phenol cardanol formaldehyde resins, IPIRTI has perfected a process for producing multilayered particleboard. The panels’ strength qualities meet the applicable specifications’ requirements. The boards have a strong termite resistance and are fire-resistant.
The proposed method has a large environmental impact because it uses rice husk to avoid deforestation in one way.
IPIR&TI, Bengaluru, will supply all technical know-how, as well as training and process demonstrations on a pilot plant size. Please contact NRDC if your company is interested in commercializing the product in India or other countries.
Conclusion
Rice Husk Particle Board’s research and development is an example of radical product development innovation. In everyday applications, it takes the place of well-known and widely used wood and wood-based particle board. It took a long time to do the research
To avoid depletion of forest resources and environmental deterioration, the Ministry of Science and Technology recognized the necessity to find alternative materials (identification of new products). It was determined that a specialized research institute capable of conducting research projects could be found. The necessary” funds were made available to conduct research. NRDC, which had extensive experience in the subject, was given the duty of technology transfer. The transfer of technology has been smooth and the project has been a success thanks to the provision of necessary funds and the promoter’s commitment.
Author: Pratik Maitra, Symbiosis Law School, Hyderabad
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Apr 20, 2017 | Indian Patents Act 1970, IPR & Business
A patent is one of the most important forms of Intellectual Property Rights (IPR) and can be defined as a set of exclusive rights granted by the Government or a sovereign state to an inventor or assignee for a limited period in exchange for detailed public disclosure of an invention. Patents are granted to the inventions that are novel, inventive and industrially useful. Additionally, the subject matter shall not fall under category of “Inventions not patentable” and the patent specifications shall fulfil the statutory requirements that describe contents of the specifications and manner, in which a patent application is to be submitted. In order to get a patent, the inventor or applicant has to describe the invention in a prescribed format and submit to respective patent office, and upon thorough due diligence and scrutiny, the patent is granted, provided it fulfils statutory requirements. Once the patent is granted, patent holder or patentee gets right to exclude everyone else from making, using, selling, offering for sale and even importing the product or process that uses patented invention.
Now, when the patent is granted, though, patent holder gets a set of rights to prevent other from using the patented invention, grant of patent comes with a set of duties and obligations. After getting a patent, it becomes duty of the patent holder to work the invention, himself or by means of granting a license to third party (ies) because the sole purpose of having a system of patents is to ensure that the inventions are worked in India on a commercial scale and to the fullest extent without any undue delay and patented product is available to the public. In fact, Section 146 of the Indian Patents Act 1970 requires every patentee to disclose every year, the extent to which he/she has commercially “worked” his/her patent. Additionally, having set of rights in the form of patents should also ensure that patentee is not abusing the rights, especially in case of pharmaceutical patents, where the subject matter claimed a patent, may pertain to a lifesaving drug, it becomes critical to ensure that drug is available at affordable price and sufficient quantity to cater market needs.
The history of compulsory license goes back to the time when Africa was in the grip of HIV/AIDS epidemic and the patents for Anti-Retroviral (ARV) drug combination were in hands of few leading pharmaceutical companies such as Glaxo, Merck and SmithKline etc. ARV is one of the most effective drug combinations to not only suppress the HIV virus and but also stop the progression of HIV disease. As these companies had patents on the drugs, they also had right to prevent all other companies from making, selling, offering for same and importing the drug in the territory of Africa. This kind of exclusivity extended by the patent sometimes results in complete monopoly and abuse of patent rights by the patentee. In this case, these multinational companies were exclusively marketing the drugs at exorbitant prices of $10,000 per patient per year, which was unaffordable for majority of patients.
In the meantime, looking at the opportunity to cater needs of patients, Cipla, an Indian Pharma company offered to manufacture and sell a generic version of the drug at about 3 % of the price. The African Government started to procure the drugs from Cipla mainly because of low price and quality, for which it was sued by drug multinationals for violating their patent rights. One important point to be noted here is that Africa is a country with little or no drug manufacturing capacity and therefore, it had to solely depend upon importing the drug from outside. However, the multinationals in this case were forced to withdraw the suit due to an outrage by the international community.
This incident became an issue in international forums like WHO, UN, UNCAD and WTO Ministerial conference at Doha, Qatar on 14th November 2001. In the fourth Ministerial conference at Doha, the issue of pharmaceutical patent and public interest was taken up and a declaration was made on “TRIPS Agreement and Public Health”. Its purpose was to respond to the concerns that have been expressed that the TRIPS Agreement might make some drugs difficult to obtain for patients in poor countries.
Doha Declaration constituted a milestone in the TRIPS Agreement for two reasons because:
- It ensures balance between public health and patent rights, and
- Sets forth a clear preventive standard
According to Section 83 (General principles applicable to working of patented inventions) of Indian Patents Act 1970, there has been emphasis on “Working of the patents” which means that the patented invention shall be commercialized in order to meet reasonable requirements of the public and patented products are available at reasonable price to the public. Patents are granted to the inventors for the purpose of encouraging inventions as well as to enhance industrial development and, therefore, should be worked in its fullest extent within the territory of India. The patents are not granted merely to enable patentees to enjoy a monopoly for the importation of the patented article, but the invention shall be worked commercially to meet demands of the public. The patents granted shall not delay protection of public health and nutrition and should act as instrument to promote public interest, especially in sectors of vital importance for socio-economic and technological development of India. The patent rights should not be abused by the patentee and the patentee shall not resort to practices, which unreasonably restrain trade or adversely affect the international transfer of technology. The patents are granted to make the benefit of the patented invention available at reasonably affordable prices to the public.
if the patentee is not commercializing the invention and because of that, the reasonable requirements of the public are not met or the patented product is not available to public at reasonable price, the compulsory license is available as a remedy against abuse of patent right. The provisions for compulsory licenses are made to prevent the abuse of patent as a monopoly and to make the way for commercial exploitation of the patented invention by an interested person. Compulsory licensing is granted by the Government to produce the patented product or process without the consent of the patent owner. With respect to the pharmaceutical industry, the compulsory license attempts to strike a balance between promoting access to existing drugs and promoting research and development into new drugs.
If the invention is not commercialized for 3 years or in case of national emergency or urgency, the compulsory license may be granted to the person who requests the controller for the same. After thorough assessment of entire situation such as necessity and demand of commercializing the invention, capacity of the applicant to manufacture the patented product or process, the Controller may grant compulsory license. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) also sets out specific provisions that shall be followed if a compulsory license is issued. All significant patent systems comply with the requirements of TRIPs.
Section 84, 92 and 92A are the three main provisions that talk about compulsory license. According to section 84 (Compulsory License) of Indian Patents Act 1970, if patentee doesn’t commercialize the invention for 3 years, any person interested can request the Controller to grant him a compulsory license in order to manufacture and commercialize the patented invention so that reasonable requirements of the public are met and the product is available to the public at reasonable cost. The application for compulsory license under Section-84 can be filed only after expiry of 3 years from the date of grant of the patent.
According to Section 92 (Special provision for compulsory licenses on notifications by Central Government), if the Central Government is satisfied that it is necessary that compulsory licenses should be granted at any time after the sealing of patent to work the invention, it may make a declaration to that effect, by notification in the Official Gazette. The compulsory license under this section is granted under following circumstances:
- National emergency; or
- In circumstances of extreme urgency; or
- In case of public non-commercial use.
The Controller shall grant to the applicant a license under such circumstances on the terms and conditions as he thinks fit. He shall settle the terms and conditions of a license and try to secure that the articles manufactured under the patent shall be available to the public at the lowest prices consistent with the patentees deriving a reasonable advantage from their patent rights. The public health crises may be related to Acquired Immuno Deficiency Syndrome (AIDS), Human Immuno Deficiency Virus (HIV), tuberculosis, malaria or other epidemics.
Section-92A (Compulsory license for export of patented pharmaceutical products in certain exceptional circumstances) was introduced by The Patents (Amendment) Ordinance, 2004 which came into force on 1st January 2005, to provide for grant of compulsory license by the Controller for export of patented pharmaceutical product in certain exceptional circumstances, where compulsory license has been granted by the country to which the export is intended. This provision is introduced to address the public health concerns of the countries having insufficient or no manufacturing capacity in the pharmaceutical sector to implement the decision of the TRIPS council on Para 6 of the Doha Declaration on TRIPS Agreement and Public Health. This section lays down the conditions that are required to be fulfilled, when the compulsory licenses for export purposes will be available. The compulsory license is available only for:
(a) The patented pharmaceutical product;
(b) Manufacture and export to any country having insufficient or no manufacturing capacity in the pharmaceutical sector and
(c) The product addressing the public health problems in such country.
Compulsory license is available for manufacture and export of patented pharmaceutical products to any country having insufficient or no manufacturing capacity in the pharmaceutical sector for the concerned product to address public health problems. Such country shall permit importation of the patented pharmaceutical products from India by notification or otherwise. On receipt of an application in the prescribed manner, the Controller shall grant a compulsory license solely for manufacture and export of the concerned pharmaceutical product to such country under such terms and conditions as may be specified and published by him.
The term ‘pharmaceutical products’ used in this section means any patented product, or product manufactured through a patented process, of the pharmaceutical sector needed to address public health problems and shall be inclusive of ingredients necessary for their manufacture and diagnostic kits required for their use.
Compulsory license once granted under certain circumstances such as national emergency or extreme urgency expires when the circumstances under which it was granted do not exist anymore. While considering an application for termination of compulsory license, the Controller shall take into account that the interest of the person who had been granted the license is not unduly prejudiced.
March 2012 , Indian Patent Office granted its first compulsory license to a domestic generic drug-maker, Natco for anti-cancer drug called Nexavar. German pharmaceutical company Bayer AG had monopoly over an anti-cancer drug, and it authorized the production of a low-cost version for the Indian market. Under Section 84 (1) of the Indian Patent Act 1970, any person may request a compulsory license if, after three years from the date of the grant of a patent, the needs of the public to be covered by the invention have not been satisfied; the invention is not available to the public at an affordable price; or the patented invention is not “worked in,” or manufactured in the country, to the fullest extent possible.
Bayer acquired an importing license for the drug Nexavar (sorafenib tosylate) in 2007 but, according to the Indian Patent Office‘s decision, the Bayer did not begin importing the drug to India in 2008 and only small quantities were available during the following two years. Bayer “took no adequate or reasonable steps to start the working of the invention in the territory of India on a commercial scale and to an adequate extent,” the decision notes. The drug was found to be exorbitantly priced and out of reach of most of the people. ” the patent authority wrote in its 62-page decision. “The product in question is not a luxury item but a lifesaving drug and it is highly important that a substantial part of the demand be met strictly. In the present case, even 1 percent of the public doesn’t derive benefit of the patented drug.[1]”
In its compulsory license request, Indian generic manufacturer Natco proposed selling sorafenib tosylate at Rs. 8,800 per patient per month, approximately US $175, resulting in a 97 percent price cut compared to Nexavar. The Indian Patent Office also said that Natco must pay royalties to Bayer on a quarterly basis at the rate of 6 percent of the net sales of the medicine.
Compulsory license is a kind of permission or license granted by controller of patents with respect to the working of the invention. This is one of the effective remedies to keep drug price under control and ensure that the drug is available to public at affordable price in the territory of India and balance between patent rights and public health is maintained well.
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Apr 20, 2017 | Indian Patents Act 1970, IPR & Business, Startups, Trademark
Amritdhara Pharmacy Vs. Satya Deo Gupta (AIR 1963 SC 449)
Satya Deo Gupta (hereinafter referred to as Respondents), in this case, had filed application for registration of the mark “Lakshmandhara” in 1950 under class 5 of fourth schedule of Trademark Rules, 1942. Averments were made that they were honest user of the mark since 1923 and that their products were sold not only in India but in foreign market as well. Amritdhara Pharmacy (hereinafter referred to as Appelant) objected the application on the grounds that they were user of the mark “Amritdhara” since 1901, the name “Amritdhara” has acquired commendable reputation throughout India and the composite word “Lakhmandhara” was used to denote the same medical preparation as that of “Amritdhara”. The registration of mark “Lakshmandhara” by respondent is likely to deceive and cause confusion and thus the registration of the mark should be refused. In response to this a counter affidavit was filed by the Respondents claiming that they were honest user of the mark and that their mark does not deceptively resembles with that of appellant’s mark. The Respondent further alleged that the single word ‘dhara’ had no particular significance in relation to the medicine, nor did that word mean or convey any special or exclusive meaning or effect in relation to the medicine.
Proceedings
Primarily there were two issues involved in this case which were disputed before Registrar of Trade Marks, High Court and Supreme Court which are:
- Whether the mark “Lakshmandhara” closely resembles with the mark “Amritdhara” and is likely to deceive public.
- Whether there was any acquiescence on behalf of Amritdhara Pharmacy for the use of mark “Lakshmandhara” as contended by the Respondents.
Before Registrar of Trade Marks
As to the first issue, on the basis of evidence produced before it, Registrar held that there is sufficient similarity between the mark of Appellant and mark of Respondent so as to deceive and cause confusion among public. Had it been only the matter of trademark infringement, Registrar would have no hesitation in allowing opposition.
As to the acquiescence registrar found in the favour of Respondent as the advertisement for both the marks were made through same media and it cannot be said that the Appellant did not had knowledge of use of mark by the Respondent. And on the basis of circumstances Registrar allowed for registration of the mark “Lakshmandhara” for sale in the State of Uttar Pradesh only.
On such decision of Registrar two appeal were sought by Appellant and Respondent respectively before High Court.
Before Allahabad High Court
As to the honest concurrent use, the Court held in the favour of Respondent, but on the issue of acquiescence they held in favour of Appellant. They observed that from the fact that both the medicines were being advertised in the same journals or periodicals it did not follow that the attention of the appellant was drawn to the use of the word ‘Lakshmandhara’ by the respondent. Hon’ble High Court allowed for registration of mark “Lakshmandhara” throughout India and observed that:
“There is no possibility of any Indian confusing the two ideas. Even phonetical differences are wide enough not to confuse anybody. The claim of the Amritdhara pharmacy that both the words ‘Amrit and dhara’ have become so associated with their goods that the use of each part separately or in any combination is likely to mislead is an untenable claim. The whole phrase ‘Amritdhara’ had been registered and the monopoly has to be confined only to the use of the whole word. The words of common language like ‘Amrit’ and ‘dhara’ cannot be made the monopoly of any individual. We, therefore, see no reason to disallow registration of the trademark “Lakshmandhara”.”
Before Supreme Court
Hon’ble Supreme Court devised the test of imperfect recollection and overall impression in the appeal filed before them. As to the issue of similarity the court framed two questions i.e., (1) who the persons are whom the resemblance must be likely to deceive or confuse, and (2) what rules of comparison are to be adopted in judging whether such resemblance exists. The Court observed that the medical preparation in question is likely to be purchased by people with or without doctor’s prescription and an ordinary unwary consumer having imperfect recollection would not split the terms or even look for the etymological meaning of the two marks as observed by High Court, he would go for the overall structure and similarity. The court observed:
“A critical comparison of the two names may disclose some points of difference, but an unwary purchaser of average intelligence and imperfect recollection would be deceived by the overall similarity of the two names having regard to the nature of the medicine he is looking for with a somewhat vague recollection that he had purchased a similar medicine on a previous occasion with a similar name.”
And thus, the Court held that their exists overall similarity between two Trade Marks and High Court was erred in their observation.
On the question of acquiescence, the Hon’ble Supreme Court agreed with the observation and decision of the Registrar and thus upheld the decision of Registrar.
By Dhruv Dangayach
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Feb 20, 2017 | Indian Patents Act 1970, IPR & Business
There is a myriad of factors to consider when it comes to licensing. For instance, the licensor should first recognize that simply creating IP does not result in revenue. Before it can be monetized, successfully generated intellectual property must be properly secured and managed. Accordingly, the licensor must ensure that the IP is registered, renewed, and protected against infringers incessantly. IP that is well-protected reflects with a high market value. For efficient and maximum revenue of its IP, the licensor should be extremely clear on provisions of exclusivity, royalties, whether sub-licensing is allowed, cost of maintaining the IP portfolio, provisions about quality inspections, and so on, when entering into the agreement.
The licensee, on the other hand, should be aware of a few requirements seeing as it will be the entity responsible for paying royalties and licensing fees to the licensor. The licensee is responsible for conducting due diligence on the intellectual property involved in the agreement. The agreement’s success hinges on the IP’s upkeep and maintenance. To avoid conflicts, it is imperative to document all of the purposes for which the IP will be used. To avoid additional expenditures or who would have the right to develop the IP, the licensee should insist on a clear demarcation of cost sharing. For better drafting of the terms and conditions, it is necessary to understand and articulate what is anticipated from the agreement.
Besides the fundamental aspects listed above, there are legal requirements that further protect the Intellectual Property which is mandated by law.
Is registration of a licensing agreement mandatory?
The laws governing various types of IP include caveats mandating the registration of a license agreement. When a statute requires the registration of a licensing agreement, both the licensor and the licensee must corroborate enforcing that it is executed within the specified period.
Patents
A license agreement must be registered, according to the Patents Act of 1970, and a licensee must apply in writing to the Controller of Patents for registration of his title. The Patents Act of 1970, Section 68, explicitly states that a patent assignment is not legitimate unless it is in written and duly executed. It additionally reiterates that an assignment of a patent or a share in a patent, a mortgage, a license, or the creation of any other interest in a patent is not valid unless it is in writing and the agreement between the parties is reduced to the form of a document comprising all of the terms and conditions governing their rights and obligations and duly executed.
The terms of a patent license are thus obvious, and they can be summarized as follows:
- It must be written down.
- It must be properly executed.
- Document embodying all terms and conditions regulating the parties’ rights and duties.
The provisions for registration of assignments, transmissions, and other similar acts are set forth in Section 69 of the Patents Act of 1970.
The Patent Rules, 2003, were also issued by the government, and they include the procedural aspects of patent license agreement registration. Here mentioned is a brief overview of the rule:
The application for registration of title and interest in patents must be made in Form 16 according to Rule 90 of the Patent Rules, 2003. The following documents must be presented with Form 16:
- The document presenting evidence of a patent transfer, or
- The document affecting proprietorship, or document producing interest, and
- Two copies of the assignment or other instrument certified to be true copies by the applicant or his agent,
The Controller may also request additional confirmation of title or written consent.
The form in which the Controller shall record the details in the register is prescribed by Rule 92 of the Patent Rules, 2003.
The courts in Sergi Transformer Explosion Prevention Technologies Pvt Ltd. vs. Kumar Pratap Anil and Ors[1], entertained the issue of legality of the license or assignment agreement as evidence will be recognized only when the document has been registered with the Controller, according to Section 69(5) of the Patents Act, 1970.
The agreement will only be considered if the Controller or Court permits or directs it with grounds stated in writing.
The judgment goes on to say that if the relevant sections are read together, there is no obstacle to the licensee filing a complaint for infringement even if the licensing agreement is not registered. The admission of an unregistered agreement, on the other hand, is only at the Controller’s or the Court’s discretion. Since, the Controller’s or Court’s instructions were missing in this case, hence the Delhi
The agreement will not be considered unless it is registered, ruled by the High Court.
Trademark
The Trade Marks Act of 1999 does not require the registration of a license agreement, but it does introduce the concept of a “registered user.” Provisions have been made to allow someone other than the registered proprietor to register as a registered user for the purposes of utilising the mark in commerce. A registered user can file infringement proceedings in his or her own name under the statute.
It is recommended that the Registered User Agreement/ License Agreement be registered with the Registrar of Trade Marks, even though recording of approved usage is optional. Only registered trademarks can be used to file an application for recordal of a License Agreement/Registered User Agreement with the Trade Marks Registry, and the application must be filed within six months of the date of the license agreement. When the Registrar is convinced with the application and the required particulars, he registers the intended registered user/licensee for the goods or services with which he is satisfied. The date on which the application for registration of a registered user was made must be recorded in the register. This is when agreement becomes effective and enforceable against third parties. Within two months of the registration date, the records will be published in the Trade Marks Journal. The Registrar is also required to notify other registered users/licensees of the concerned trade mark, if any, in the prescribed manner of such licensee’s registration. The Registrar, on the applicant’s request, will take steps to ensure that information provided for the purposes of an application under this section (other than facts put in the register) is not divulged to competitors in trade.
Copyright
The License Agreement is not mandatorily required to be registered under the Copyright Act of 1957.
Design
Under the Designs Act of 2000, an application for registration of title under a license agreement must be filed with the Controller within six months of the license agreement’s execution. Unless the court orders contrarily, a license agreement for which no entry has been made in the register cannot be entered in evidence in any court as proof of title to copyright in a design or any interest therein.
Are license agreements subject to stamp duty?
Stamp duty is a tax paid to the government on a transaction, and it is charged on the instrument that records the transaction. On license agreements, stamp duty is due, and the rate of stamp duty is different in each state. Prior to executing a license agreement, it is critical to determine whether there is a merit to executing the license agreement in a specific state and obtaining reduced stamp duty rates.
Consequences of not paying stamp duty
If sufficient stamp duty has not been paid on a document, the said agreement cannot be entered in evidence for any purpose, nor can it be acted upon, registered, or authenticated, according to the Indian Stamp Act of 1899.
Considering the intellectual property licensing attract the monetizing culture, here are certain mandatory provisions required by law regarding the registration and the stamp duty applicable on the same.
By: Vinita R. Gaud, Pravin Gandhi College of Law
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[1] I.A. No.16042/2010 in CS(OS) No.1610/2010
