Wednesday, 12 December 2018

India: Amendment to Appointment and Qualification of Directors

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Although, a company is an artificial person having its independent existence distinguished from its members, the affairs of the company are monitored and regulated by its management which is the board of directors who act as its brain. These directors are designated with numerous powers including power to make calls for shareholders with respect to money unpaid on their shares, authorization of securities buy-back, issue of debentures, borrowing money, investment of funds, grant of loans, diversification of business, corporate restricting, etc.

Directors act as the trustee as well as agent of the company which has appointed them. It is important for them to act with reasonable care with due-diligence exercising their skill. Owing to the vital roles played by the directors in running of the company, it is necessary that they are appropriately qualified for the said position. Section 164 of the Companies Act, 2013 lays down the basic criteria stating the eligibility requirements for a director in the company namely-
·         Possession of Director Identification Number (“DIN”);
·         Soundness of mind;
·         Solvency of financial status;
·         No past record of any conviction or imprisonment (min 6 months) within the last 5 years;
·         No order of Tribunal disqualifying the appointment as director;
·         Non-payment of unpaid amount on shares held.
The Ministry of Corporate Affairs issued the Companies (Appointment and Qualification of Directors) Fourth Amendment Rules, 2018 on July 5, 2018, effective from July 10, 2018, in order to amend the Companies (Appointment and Qualification of Directors) Rules, 2014. The amended provisions are stated below:
  • In addition to the process of cancellation or surrender or deactivation of DIN, the Central Government or Regional Director (Northern Region), or any officer authorised by the Central Government or Regional Director (Northern Region) shall have the power to deactivate the DIN, of an individual who does not intimate his particulars in e-form DIR-3-KYC within stipulated time in accordance with Rule 12A. [Rule 11(2)]
  • The revised provisions allow for the de-activated DIN to be re-activated only after e-form DIR-3-KYC is filed along with fee as prescribed under Companies (Registration Offices and Fees) Rules, 2014 in addition to the requirements of cancellation or surrender or deactivation of DIN. [Rule 11(2)]
  • A new provision Rule 12A has been inserted whereby every individual who has been allotted a DIN as on 31st March of a financial year, as per these rules shall, submit e-form DIR-3-KYC to the Central Government on or before 30th April of immediate next financial year. Provided that every individual who has already been allotted a Director Identification Number (DIN) as on 31st March 2018, shall submit e-form DIR-3 KYC on or before 31st August 2018.
  • In the Annexure after Form DIR-3 i.e. KYC form details of the director along with his verification in the said regard are to be included.
The new amendments aim to ensure the appointment of directors having fulfilled the requisite needs in respect of the DIN.

India: Alternative Investment / Venture Capital Funds: SEBI Regulations

Investment has always been a lucrative scheme for the businesspersons to enhance their earnings among various modes, including direct equity, mutual funds, gold, real estate, fixed deposits, etc. Investments may be made individually or in a group.

Alternative Investment Funds:

One of the means of investments done collectively are through Alternative Investment Funds (hereinafter referred to as “AIF”) meaning any funds established or incorporated in India which is a privately pooled investment vehicle which collects funds from sophisticated investors. These investors may be whether Indian or foreigner, for investing it in accordance with a defined investment policy for the benefit of its investors. The AIF in India is regulated by the Securities Exchange Board of India (hereinafter referred to as “SEBI”), under the provisions of SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”) issued on May 21, 2012.

With a recent SEBI circular on Overseas Investment by Alternative Investment Funds (AIFs) / Venture Capital Funds (VCFs) (hereinafter referred to as “the SEBI notification”) dated July 3, 2018, allowing overseas investment by AIFs and VCFs to the extent of USD 750 million taking a leap from the earlier limit of USD 500 million.

Venture Capital Funds

Another means of joint investment are Venture Capital Funds (hereinafter referred to as “VCF”) which are funds established in the form of a trust or a company including a body corporate having a dedicated pool of capital. SEBI controls such transactions in accordance with the aid of the SEBI (Venture Capital Funds) Regulations, 1996.

The SEBI circular also mandated the disclosure of the below stated details, by AIF/ VCF, in order to monitor the utilization of overseas investment limits-
1.      Reporting the utilization of the overseas limits within 5 working days of such utilization on SEBI intermediary portal at .
2.      Reporting of the following information through SEBI intermediary portal:
  • In case an AIF / VCF has not utilized the overseas limit granted to them within a period of 6 months from the date of SEBI approval (hereinafter referred to as ‘validity period’), the same shall be reported within 2 working days after expiry of the validity period;
  • In case an AIF / VCF has not utilized as a part of the overseas limit within the validity period, the same shall be reported within 2 working days after expiry of the validity period;
  • In case an AIF/ VCF wishes to surrender the overseas limit at any point of time within the validity period, the same shall be reported within 2 working days from the date of decision to surrender the limit.

With the introduction of the SEBI circular SEBI not only aims to protect the interests of investors in securities market but also to promote the development and regulation of the securities market in India.

India: New E-commerce Policy

The growth of science and technology has created great impact on the lives of the modern humans who rely on it for numerous day to day activities. Commercial activities have also held the arm of technology whereby multiple business transactions are now being conducted vis the electronic media. In the recent years, India has witnessed mushrooming and growth of a number of E-commerce companies, such as E-bay, Flipkart, Amazon, Uber,, IRCTC, etc.

Presently, India does not have any E-commerce policy to regulate the affairs of the commercial activities being performed on the e-platforms. However, the legal provisions governing the e-commerce are the Information Technology Act, 2000 and the Consumer Protection Act, 1986. India faces various challenges in the domain of e-commerce including the processing of the transactions, foreign investment thereto.

Owing to the recommendations of the World Trade Organization and with the aim to facilitate an ecosystem for domestic economy, strengthening consumer protection in the e-commerce space, the Ministry of Commerce and Industry proposed a draft E-commerce policy on July 30, 2018. News of the draft policy was not welcomed by all the concerned stakeholders and it received criticism on account of various reasons including, data localization, permission to the Indian-owned and Indian-controlled online marketplaces to hold inventory as long as products are 100% domestically produced, setting up of e-commerce regulator, etc. Although the said policy was welcomed by domestic retailers and small e-commerce players, MNCs and foreign-owned E-commerce businesses have had reservations. 

India: NCLT bench allows e-filing

Advancement of science and technology has led to numerous benefits to the life of the modern man. One of the gifts of this modernization is digitalization which has touched various aspects of our day to day life. India is also matching up with this fast-paced tech-marathon using the e-platform for carrying out various activities such as gaining knowledge, storing data, running e-commerce, making payment online thereby capturing the world with a click.

The increased facilities of the electronic system have now been incorporated in judicial setups as well. Various Courts have opted for displaying the daily orders and judgements online. In furtherance of the same, the National Company Law Tribunal vide its notification dated August 16, 2018, has ordered for the commencement of e-filing of applications, petitions, appeals, replies, etc.

This serves as an addition to the approach of the Government promoting digitalization. Earlier this month, the Chief Justice of India Hon’ble Justice Dipak Misra launched a host of smartphone apps to help litigants, from all parts of the country file cases and even make e-payments to courts.

In the ever-changing times, where technology has solved complicated issues being faced by human life in an easy manner, the progressive approach of the Courts in opting for digital means for filing documents helps creating safe records. In the longer run such steps would also cause reduction in the paper-work.

India: Necessity of licensed food outlets

Being a country of food loving people, India is a market of multiple food joints delighting numerous taste-buds. There has been a rapid and remarkable increase in the restaurant business of the nation which cater to the needs of around 1.2 billion citizens. Ranging between the wide market of the country, eateries are visible throughout the country varying from small hawkers on the roads to the most expensive and lavish restaurants symbolizing the class and status of the segment of the population visiting them.

Legal Requirements

The commercialization of food products in India is administered by the Food Safety Standards Authority of India (hereinafter referred as “FSSAI”) according to the guidelines issued under the Food Safety Standards Authority of India Act, 2006 (hereinafter referred to as the “Act”).

Registration and Licensing prerequisite

In order to ensure the safety of the consumers, the Government emphasizes on the need of obtaining requisite licenses and adhere by the standards prescribed. The Food Safety and Standards (Licensing and Registration of Food Business) Regulations, 2011, (hereinafter referred to as the “Regulations”) lays down the procedure for registration and licensing of food business in India. Some of the provisions of the Regulations state the following:

  • For the purpose of registration of the business, the applicant is required to submit application with the Registering Authority with payment of prescribed fees and a self-attested declaration of adherence assuring that the applicant shall follow the basic hygiene and safety requirements;
  • No person shall commence any food business unless he possesses a valid license for commencing or carrying on food business granted by the Central Licensing Authority. For the said purpose, the applicant is required to submit documents such as Blueprint/layout plan of the unit, details of directors/ partners/ proprietor & equipment, proof of possession of premises, Food Safety Management System plan, documents indicating constitution of the food unit (like partnership deed, articles of association), NOCs from Municipality or local body and from State Pollution Control Board, source of raw material, etc.

The grant of the aforesaid registration and license certifies that the food business operators carry out their activities in a clean, adequately lighted & ventilated, hygienic environment, having proper storage facilities and sanitation facilities thus safeguarding the interests of the consumers.

Food delivery entities delist non-licensed food joints

Food delivery entities such as Zomato and Swiggy have adopted a pragmatic approach of working towards the safety of its customers. These corporates have delisted the restaurants lacking the license issued by FSSAI in furtherance of the FSSAI directive issued on July 20, 2018 requiring the online food operators for delisting such joints by July 31, 2018.[1]

With the revolution in the food services industry, there has been a substantial rise in the number organized food outlets. Since food has a major contribution in the growth of the Indian economy, it is important that the businesspersons involved therein follow the legal compliances to deliver highest quality service.


India: RERA- Haryana: Withdraw certifications to incomplete projects

Improvement in opportunities and the growing scale of economy in the country has elevated India to emerge as one of the favourable destinations for carrying out business. This has led to rise in the real estate sector as well. It is one of the major sectors dominating the argo-based economy of the nation. With increasing Gross Domestic Product, real estate has expanded the scope in residential as well as commercial arena.

Regulatory framework governing Real Estate

In order to promote the real estate sector and to ensure sale of plot, apartment or building, or sale of real estate project, in an efficient and transparent manner to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute redressal, the Government has enforced the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as the “Act”). The Act has also established the Real Estate Regulatory Authority (hereinafter referred to as the “Regulatory Authority”) and the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Authority.

The monitoring of the issues relating to real estate at the local level, each State has formulated its independent real estate regulation and development rules.

Legally Saleable

According the provisions of the Act, no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase any real estate project unless a completion certificate has been obtained certifying that the real estate project has been developed according to the sanctioned plan, layout plan and specifications, as approved by the competent authority under the local laws. [Section 3(1) read with Section 2(q) of the Act].

In furtherance to the execution of conveyance deed in favour of the allottees, the promoter of the real estate project is required to obtain the occupancy certificate permitting occupation of any building, which has provision for civic infrastructure such as water, sanitation and electricity, as applicable as per local laws to enable handing over of the possession to them. [Section 17 read with Section 2(zf) of the Act]

The promoter of the real estate project is responsible to obtain the completion certificate or the occupancy certificate, or both, as applicable as per local laws or other laws for the time being in force and to make it available to the allottees [Section 11 (4) (b) of the Act].

In the news…

Considering the troubles faced by the homebuyers, the Haryana Real Estate Regulatory Authority - Gurugram bench has ordered the Town and Country Planning Department (hereinafter referred to as “DTCP”) Haryana, to withdraw the Completion Certificate, or Occupation Certificate, issued to projects that are yet to complete the development. [1] The DTCP has been required to initiate an inquiry as to how such certificates have been procured fraudulently. Show-cause notices have been issued to such builders who have deceived to obtain the aforesaid certifications in respect of incomplete projects. The regulatory authority has directed DTCP to take disciplinary action against officers with whose connivance builders have secured clearances.  

With a view to safeguard the interests of the real estate buyers, the Regulatory Authority of Haryana has come forward with a pragmatic approach to take action against the developers who have illegally obtained occupation/ completion certificate in respect of projects which fail to meet the criteria of completion.


Thursday, 29 November 2018

India: Delhi High Court disposes of the suit against Ishu Narang regarding infringement

On April 11, 2018, The Delhi High Court, in the case of Sandisk LLC vs Ishu Narang passed an order in favor of Sandisk LLC (hereinafter referred to as Plaintiff) issuing permanent injunction restraining  Ishu  Narang (herein after referred to as Defendant no. 2), their partners, proprietors, servants, agents and all others in active concert or participation with them, from manufacturing, selling, offering for sale, advertising, directly or indirectly dealing in packaging and/or products  which infringe the Plaintiff’s copyright in the artistic work comprised in the color  scheme, product layout or any substantial part thereof.

The Court directed the Defendant to pay INR 4,45,000 (US$ 6659 approx.) for value of goods seized at its premises and hand over those goods for destruction to the Plaintiff.

Brief Background

  • The Plaintiff, a Fortune 500 and S&P 500 company, was incorporated under the laws of State of Delaware. It is the world’s largest dedicated provider of flash memory storage solutions which designs, develops and manufactures data storage solutions under the mark SANDISK.
  • The Plaintiff is using the trademark SanDisk since 1988 for consumer electronic goods throughout the world.
  • The Plaintiff is a registered proprietor of the mark SANDISK and has both common law trademark rights along with trademark registrations in more than 150 countries. Its trademark is used extensively and continuously globally since 1995 and in India since 2005.
  • In the last week of May 2015, the Plaintiff came to know that large quantities of counterfeit SanDisk memory cards were being sold in the market. Thereafter, the Plaintiffs filed a suit in this Court seeking permanent injunction restraining infringement of trade dress, copyright, passing off; rendition of account of profits, damages and delivery up.
  • The Court arrayed the suit John Doe, since the Defendant was unknown.  The Court vide order dated May 29, 2015 appointed a Local Commissioner.
  • The Local Commission so appointed, found Defendant No.2, selling counterfeit products infringing the Plaintiff’s trademark and had seized a total of 890 infringing goods on June 10, 2015 from the premises of the Defendants.


  • Whether the Plaintiff is entitled to relief of permanent injunction restraining infringement of trade dress, copyright, passing off; rendition of account of profits, damages and delivery up against the Defendant?

   Plaintiff’s Contentions

  • It was submitted that the Local Commission appointed by this Court seized a total of 890 infringing goods on June 10, 2015 from the premises of Defendant no.2.
  • The Plaintiff stated that the total value of goods seized from the Defendant’s premises was INR 4,45,000 (USD 6603 approx.). He prayed the same to be granted.

Observations by the Hon’ble Court 

  • The Court took note of  Order XIII-A of the Code Of Civil Procedure, 1908, and observed that Defendant No. 2 has no real prospect of defending the claim as the Defendant had not filed its written statement; therefore, a summary judgement was passed.
  • Thereafter, the Court held that the Defendant was liable to pay to the Plaintiff for the value of goods seized by the Local Commissioner and the legal costs incurred by the Plaintiff.


The Court passed an order of permanent injunction against the Defendant along with INR 4,45,000 to be paid to the Plaintiff for the value of goods seized at the premises of the Defendant. Further, the Court ordered that the Defendant shall hand over the goods seized by the Local Commissioner to the Plaintiff for destruction on May 14, 2018.

India: Effects of Sending Cease and Desist Notices in Cases of IP Infringement

In cases of IP infringement, be it with respect to trademarks, copyrights, patents or designs, a number of legal options are available to the IP holder to enforce their IP rights.
While the option to sue the infringer is always available, a more practical option is to issue a cease and desist legal notice to the infringer, inter alia, establishing the IP holder’s rights in the IP being infringed and, on the basis thereof, calling upon the infringing party to cease and desist from all infringing activity and further is undertake never to repeat such infringing actions again, under notice of legal action in case of non-compliance.
In developing markets such as India, one of the most popular defences taken by IP infringers is ignorance of the law in respect of the matter and also lack of knowledge of the IP holder’s rights in the impugned IP.
A cease and desist letter, therefore, sent prior to initiating a lawsuit helps obviate this defence being taken by the infringer and, in case of continued non-compliance, further helps in establishing the mala fides of the infringing party in case of a lawsuit on the grounds of infringement.
Briefly, the effects of sending a cease and desist legal notice to an infringer, whether prior to or as an alternative measure to, an infringement lawsuit are as follows:
  • Establishes the IP holder’s rights in his IP;
  • Serves notice to the infringer regarding the prevalent law protecting the IP’s holder’s rights;
  • Serves notice to the infringer regarding the IP holder’s requisitions/demands;
  • Serves notice to the infringer that non-compliance with the IP holder’s requisitions/demands will constrain the IP holder to pursue other (stricter) courses of legal action, which may involve a lawsuit;
  • Establishes the IP holder’s bona fide attempt to reach an amicable resolution to the matter by making the infringer aware of the law as well as the IP holder’s rights in his IP and giving the infringer an opportunity to cease all infringing (illegal) activities without unnecessarily escalating the matter;
  • Serves to protect the IP holder’s rights in future against the same infringer;
  • Sets a precedent of the IP holder enforcing his rights.

Some of the primary advantages of issuing a cease and desist legal notice to an IP infringer are:
  • If it results in compliance on the part of the infringer, then issuing a cease and desist legal notice proves a very cost-effective and simple way to combat IP infringement;
  • Pro-active, yet amicable method of resolution;
  • Helps ascertain the infringer’s stand in the matter prior to pursuing any further (stricter) course of legal action, based on whether or not the infringer chooses to comply with the requisitions made in the notice;
  • Less time and cost-intensive, as compared to contesting a lawsuit on the grounds of IP infringement.
  • Establishes the IP holder’s bona fide attempt to protect and enforce his IP rights;
  • In case of non-compliance by the infringer, serves to establish the infringer’s mala fide intentions in subsequent legal proceedings.

However, it is important to keep in mind that issuing a cease and desist legal notice does not guarantee a resolution or a cessation of the opposite party’s infringing activities. Certain disadvantages of choosing to issue cease and desist letters instead of filing an infringement lawsuit are as follows:
  • The infringer may simply choose to ignore the notice and continue infringing activities, in which case the IP holder will be forced to consider further (stricter) courses of legal action in order to successfully protect and enforce his IP rights;
  • It may serve to give the infringer advance notice of the IP holder’s intentions of enforcing his IP rights and thereby may help the infringer take precautions or prepare for subsequent enforcement actions;
  • It may incite the infringer to file a suit against the IP holder on the basis of groundless threats of legal action, in which case the IP holder, to preserve his IP rights, shall be forced to consider instituting an infringement lawsuit;
  • It is important for the IP right holder to react with due diligence by filing a lawsuit for enforcement of his rights. As in many cases the IP right holder pays no heed to the groundless threat because of which the suits are decided ex parte in the favour of the infringer.
  • In case the IP holder fails to successfully enforce his IP rights against the infringer, could result in setting a negative precedent vis-à-vis future infringer.

In conclusion, based on an analysis of the nature and extent of any case of IP infringement, issuing a cease and desist legal notice can be a simple, cost-effective and expeditious option to combat infringement, and in any case, certainly serves as a useful pre-cursor to potential IP litigation.

India: Tis Hazari Court awards damages worth INR 2 Lakhs for infringement of the mark ‘Orient’

The Tis Hazari, Court in Delhi in the case of M/S. Orient Bell Limited Vs M/S. Royal Marketing & M/S. Orient Cera Tiles, granted a permanent injunction in favor of M/S Orient Bell Limited (hereinafter referred to as the ‘Plaintiff’) restraining M/S. Royal Marketing and M/S. Orient Cera Tiles (hereinafter collectively referred to as the ‘Defendants’ and individually as ‘Defendant no. 1’ and Defendant no. 2 respectively) from passing off goods bearing their trademark and copyright ‘Orient’, infringement of the same in any manner and a mandatory injunction for the destruction/erasure of labels, blocks, dies etc.

Brief Facts
Ø  The Plaintiff was initially incorporated on May 18, 1997, as Orient Ceramics and Industries Ltd., which was later merged on February 7, 2012, with Bells Ceramics Ltd. after obtaining orders from Hon'ble Court at Gujarat. It is the registered proprietor of the mark ‘ORIENT’ for its business of manufacturing tiles.
Ø  In January 2002, the Plaintiff came to know about the infringement of his trademark Orient by Defendant No. 1. It is alleged that Defendant no. 2 is supplying tiles to Defendant no. 1 and to other shops at Delhi.
Ø  It is further alleged that Defendant no. 2 has created impression in the market that his goods are connected with the Plaintiff and thereby passing off the goods by infringing the registered trademark of the Plaintiff. Additionally, the trade name adopted by Defendant no.2 is alleged to be identically and deceptively similar to the corporate name of the Plaintiff.
Ø  Thus, the Plaintiff filed this suit for permanent injunction restraining infringement of trademark, passing off, infringement of copyright, damages, delivery up etc. against the Defendants.
Ø  Whether the Plaintiff is entitled to relief of permanent injunction against both the Defendants and its agents for passing off and infringement of the trademark ORIENT by way of manufacturing, exporting, selling, exhibiting etc. in the said name?
Ø  Whether the Plaintiff is entitled to mandatory injunction against the Defendants and their agents as to delivery of labels, blocks, dies, strips, cartons, stationery, literature or any other printing material bearing impugned trademark and copyright and for their destruction/erasure?
Ø  Whether Plaintiff is entitled to damages for a sum of INR 10 lakhs (USD 15600 approx.) against both the Defendants for such infringement of trademark and copyright?
Plaintiff’s Contention
Ø  The Plaintiff claimed to be using the mark uninterruptedly and continuously since the year 1982 in respect of tiles which is painted on reverse side of each tile.
Ø  The Plaintiff submitted that it has acquired substantial goodwill and reputation and has spent large amounts on publicity and advertisement of his trademark. The advertising expenses runs into multiples of lakhs since the year 1995-96.
Ø  It claimed to be holding registration of copyright as Orient Tiles vide no. A-68840/2005.
Ø  The Plaintiff further submitted that the tiles are purchased by both illiterates and literates that causes confusion. In addition, the act of the Defendants has harmed the reputation and goodwill of the Plaintiff. It stated that the loss cannot be calculated in money.
Ø  It was contended that the triple test of identical goods, identical trademark/trade name and identical trade channel are satisfied in the present case and dishonest motive and mischief of the Defendants are revealed.
Defendant’s Contention
Ø  The Defendants failed to appear and to disprove the case of the plaintiff in evidence.
Ø  However certain averments were made by them in the written statement. These averments were:
o   Defendant no. 2 through the written statement submitted that the trade of the Defendant is in existence since the year 1995 and the Plaintiff is non-suited on ground of acquiescence.
o   The trade name ‘Orient’ is a generic name and the Plaintiff cannot have monopoly over it. The Plaintiff himself has commenced his business only from the year 1997 and at that time the Defendant’s business was in existence in fans and cement.
o   The Defendants contented that there are more than 100 companies doing business under the name of Orient. It stated that there is no likelihood of deception as there is a huge price difference in the products of Plaintiff and the Defendants.
o   The Defendants further stated that the word Orient is written differently. They write Orient Cera Tiles in bold letters and the Plaintiff writes Orient Walls. In addition, the cartons and boxes both of them are different.  
o   The expense on advertisement and volume of sale does not entitle the Plaintiff with monopoly over the word Orient when the Defendant itself is in existence since the year 1996. It is submitted that the first user is not the only criteria for determining the right and entitlement in the intellectual property rights. There is difference both in quality and price of which the buyers can clearly make distinction. Accordingly, Defendant no. 2 has denied the claim of the Plaintiff and prayed for dismissal of the suit.
Court’s Decision
Ø  While dealing with issue no. 1 the Court held that ‘the proprietor of an unregistered trademark whose mark is unauthorisedly used by another cannot, however, sue for the infringement of such trade mark. His only remedy lies in bringing a passing-off action, an inconvenient remedy as compared to an infringement action.’
Ø  The Court also differentiated between passing off action and infringement. It opined that ‘in a passing-off action the Plaintiff will have to prove that his mark has by user acquired such reputation as to become distinctive of the Plaintiff's goods so that if it is used in relation to any goods of the kind dealt with by the Plaintiff, it will be understood by the trade and public as meaning that the goods are the Plaintiff's goods. In an infringement action, the Plaintiff is not required to prove the reputation of his mark. Further, under Section 37 a registered mark is assignable and transmissible either with or without goodwill of the business concerned while under Section 38 an unregistered trade mark is not assignable or transmissible except in the three cases set out in Section 38(2).
Ø  The Court agreed that ‘the Plaintiff is using the said mark ORIENT which is also signified by the name of the Plaintiff company which is M/s. Orient Ceramics and Industries Ltd. Plaintiff company is using the name since the year 1977 when it was incorporated and in the year 1982 it had adopted the trademark name ORIENT.’ It further stated that ‘the Plaintiff must show the actual infringement on the date of filing of the suit. The Plaintiff company filed the suit on February 22, 2002, by which time the said mark ORIENT was in use. As per claim of the Plaintiff, the mark ORIENT for plastic flushing cistern has date of registration on June 26, 2001. The other trademarks of the Plaintiff are dated after the year 2002, i.e. after the date of filing of the suit. As per the case of the Plaintiff, the Defendant no. 2 is manufacturing Cera Tiles in the name of ORIENT on or before the filing of the suit. Thereby the case of the Plaintiff falls under category of passing off mark ORIENT with the plaintiff and not the infringement of trademark in favour of plaintiff bearing date of registration as 01.08.2005.’
Ø  Regarding damages, the Court pointed out that the Plaintiff could have shown its figure of net profit made from the year 1995 till the date of filing of the present suit. Since the Plaintiff failed to do that, the total damages are awarded in favor of the Plaintiff and against both the Defendants for a sum of INR 2 lakhs (USD 3120 approx.) out of which INR 1 Lakh (USD 1560 approx.) are in the nature of compensatory damage and INR 1 Lakh (USD 1560 approx.) are in the nature of punitive damage.
Thus, the suit was decreed in favor of the Plaintiff with relief of permanent injunction against both the Defendants and its agents who are restrained in passing off goods in the trademark and copyright ORIENT and its infringement of trademark and copyright by way of manufacturing, exporting, selling, exhibiting etc. in the said name.

India: Delhi High Court awards damages worth 10 Lakhs for Patent Infringement

The Hon’ble Delhi High Court in a recent judgement in the case of, Vior (International) Ltd. & Anr. v. Maxycon Health Care Private Ltd., held that the acts of the Defendants for unauthorized manufacturing and selling of patented product amounts to infringement of Plaintiffs rights granted under Section 48 of the Patents Act, 1970. Further, the act of the Defendants of blatantly copying the content of Plaintiffs website is in violation of the copyright vested with the Plaintiffs and amount to infringement as per Section 51 read with Section 14 of the Copyright Act, 1957.

The Case

Vior (International) Ltd. (hereinafter referred to as ‘the Plaintiff No. 1’), a Switzerland based company, are exclusive owners of registered Indian Patent no. 221536, a product by process patent on Ferric Carboxymaltose, a novel water-soluble iron carbohydrate complex prepared by a novel process. The patented product is useful in the intravenous treatment of iron deficiency when oral iron preparations are ineffective or cannot be used. The Plaintiff 1 has granted a licensee to Plaintiff 2, a company incorporated under the Companies Act, 1956, for the manufacture and commercialization of above patented product, in India. Further, Plaintiff 2 is the owner of the copyright with respect to literary work on website the

The Plaintiffs filed a suit for restraining the Defendants from infringement of Indian Patent No.221536; infringement of copyright in the literary work; dilution & tarnishment of brand image of the Plaintiffs; malicious falsehood; delivery up; rendition of accounts; damages etc. against the Defendants.

Further, the Plaintiffs pleaded that the Defendants are manufacturing and selling the impugned patented product and falsely represented on their website that the Plaintiff no.1 has given an IP license to the Defendant no. 1 to manufacture and commercialize the impugned patented product. 

Still, further, the Plaintiffs pleaded that Defendant no. 1 has blatantly copied the literary write-up/content of the Plaintiff No.2s website, thereby amounting to infringement of the copyright of Plaintiff No.2. Such activities of the Defendant no.1 also amounts to dilution of the brand image of the Plaintiffs thereby resulting in unlawful enrichment.

Furthermore, the Plaintiffs pleaded that the Defendant No.1, despite the operation of an ad-interim injunction against it, continued its infringing activities through the Defendant No.3 and under the able guidance of the Defendant No.2.

As none appeared on behalf of the Defendants despite service of notices hence the proceedings are treated ex-parte.

  • Whether the acts of the Defendants for unauthorized manufacture and sale of patented product amounts to infringement of Plaintiffs’ patent rights?
  • Whether the act of the Defendant no. 1 for misrepresenting on the website as being an IP license holder of impugned patent amounts to infringement of Plaintiffs’ patent rights?
  • Whether the act of the Defendant no. 1 for blatantly copying the content of the Plaintiff no. 2 website, amounts to infringement of Plaintiff no. 2’s copyright?

Plaintiff’s Contentions

The Plaintiffs relying upon the evidence of sole witness, Shri Pankaj Pahuja (PW1) and the documents Ex. PW1/1 to Ex.PW1/23, Ex PW1/B, Ex.PW1/A1 to Ex.PW1/A5 as well as Mark E to Mark H, argued that the act of the Defendants are nothing short of oppressive, arbitrary and unconstitutional.

The Plaintiffs’ relying upon the decision by the Division Bench of Delhi High Court in paragraph number 69 and 70 of Hindustan Unilever Limited v. Reckitt Benckiser India Limited, 2014 (57) PTC 495 [Del] [DB] claimed for damages to the tune of INR 1,00,01,000 (USD 142861 approx.). The Plaintiffs have claimed the rendition of accounts of profit illegally earned by Defendants or in the alternate damages to the extent of INR 1,00,01,000 (USD 142861 approx.).

Further, for claiming the punitive damages, the Plaintiffs relied upon the case of Jockey International Inc & Anr. vs. R. Chandra Mohan & Ors. CS(OS) 253/2012, wherein it was held that one who chooses to stay away from the proceedings of the Court, should not be permitted to enjoy the benefits of evasion of Court proceedings. The damages in such case must be awarded. 

Analysis by the Court on unauthorized manufacture and sale of patented product under misrepresentation as IP license holder

The Court while determining whether a patent has been infringed, took into consideration Section 48 of the Patents Act, 1970, and held that the act of the Defendants to deal with the impugned API clearly relates to the product Ferric Carboxymaltose as has been claimed by the Plaintiff No.1 in its independent claim 1. Further, such a product cannot be clinically effaceable without using the
process as claimed. The Court agreed with the Plaintiffs that the acts of the Defendants amount to infringement of the Plaintiffs’ rights.

Analysis by the Court on blatant copying of literary work

The Court while examining the issue of copying of literary work, took into consideration Section 51 read with Section 14 of the Copyright Act, 1957, and held that the act of the Defendant No. 1 of blatantly copying the content of the Plaintiff No.2’s website is in violation of the copyright vested with the Plaintiff No.2 and amounts to infringement of copyright by the Defendant No.1. The Court relied on the case of R.G Anand vs M/S. Delux Films & Ors. and held that the literary work of Defendant No.1 in its website is substantially similar to the content of the Plaintiff No.2, thus, such an adoption is mala fide and is with a clear intention on the part of the Defendant to save himself of the labour. Moreover, the acts of the Defendant No.1 in publication of a statement indicating a false association with the Plaintiff No.1 amounts to a tort of malicious falsehood.

The Court also relied on the decision of Rookes v. Barnard (1964) and awarded damages that is not merely to compensate the Plaintiffs for the loss that has been sustained by reasons of the Defendants’ wrongful act, but also to punish the Defendants in an exemplary manner and vindicate the distinction between a willful and innocent wrongdoer.

Decision of the Court

The Court held that the act of the Defendants amounts to infringement of patent and copyright of the Plaintiffs. In view thereof, damages for a sum of INR 10,00,000 (USD 14284 approx.) in favour of the Plaintiffs and against the Defendants, is passed on account of infringing the registered marks, trade dress and violating interim order.