Jain & Partners

INTELLECTUAL PROPERTY

TRADE MARKS

A trade mark (popularly known as brand name) in layman’s language is a visual symbol which may be a word signature, name, device, label, numerals or  combination of colours used by one undertaking on goods or services or other articles of commerce to distinguish it from other similar goods or services originating from a different undertaking.

The legal requirements to register a trade mark under the Act are:

    * The selected mark should be capable of being represented graphically (that is in the paper form).
    * It should be capable of distinguishing the goods or services of one undertaking from those of others.
    * It should be used or proposed to be used mark in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services and some person have the right to use the mark with or without identity of that person.

PATENTS

A Patent is an intellectual property right relating to inventions and is the grant of exclusive right, for limited period, provided by the Government to the patentee, in exchange of full disclosure of his invention, for excluding others, from making, using, selling, importing the patented product or process producing that product for those purposes. The purpose of this system is to encourage inventions by promoting their protection and utilization so as to contribute to the development of industries, which in turn, contributes to the promotion of technological innovation and to the transfer and dissemination of technology. Under the system, Patents ensure property rights (legal title) for the invention for which patent have been granted, which may be extremely valuable to an individual or a Company. One should make the fullest possible use of the Patent System and the benefits it provides. Patent right is territorial in nature and a patent obtained in one country is not enforceable in other country. The inventors/their assignees are required to file separate patent applications in different countries for obtaining the patent in those countries.


DESIGN

Design’ means only the features of shape, configuration, pattern or ornament or composition of lines or colour or combination thereof applied to any article whether two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye, but does not include any mode or principle or construction or any thing which is in substance a mere mechanical device, and does not include any trade mark, as define in clause (v) of sub-section of Section 2 of the Trade and Merchandise Marks Act, 1958, property mark or artistic works as defined under Section 2(c) of the Copyright Act, 1957

COPYRIGHT

Copyright is a right given by the law to creators of literary, dramatic, musical and artistic works and producers of cinematograph films and sound recordings. In fact, it is a bundle of rights including, inter alia, rights of reproduction, communication to the public, adaptation and translation of the work. There could be slight variations in the composition of the rights depending on the work.

TAXATION

Since the onset of liberalization in the country, tax structure of the country is also being rationalized keeping in view the national priorities and practices followed in other countries.  Foreign nationals working in India are generally taxed only on their Indian income.  Income received from sources outside India is not taxable unless it is received in India.  The Indian tax laws provide for exemption of tax on certain kinds of income earned for services rendered in India.  Further, foreign nationals have the option of being taxed under the tax treaties that India may have signed with their country of residence.

Remuneration for work done in India is taxable irrespective of the place of receipt.  Remuneration includes salaries and wages, pensions, fees, commissions, profits in lieu of or in addition to salary, advance salary and perquisites.  Taxable payments include all allowances and tax equalization payments unless specifically excluded.  The stock options granted by the employer are taxable as capital gains at the time of sale of shares acquired due to exercise of options.

FOREIGN DIRECT INVESTMENT (Cont.)

A branch office is not allowed to carry out manufacturing activities on its own but is permitted to subcontract these to an Indian manufacturer. Branch Offices established with the approval of RBI, may remit outside India profit of the branch, net of applicable Indian taxes and subject to RBI guidelines Permission for setting up branch offices is granted by the Reserve Bank of India (RBI).

Stand alone Branch Office

Such Branch Offices would be isolated and restricted to the Special Economic zone (SEZ) alone and no business activity/transaction will be allowed outside the SEZs in India, which include branches/subsidiaries of its parent office in India.
 No approval shall be necessary from RBI for a company to establish a branch/unit in SEZs to undertake manufacturing and service activities subject to specified conditions.


2. INCORPORATING AN INDIAN COMPANAY

Private Limited: Following are the requirements

1. One digital signature certificate.

2. Director Identification Number of all the proposed directors.

3. Minimum two shareholders, seven in case of Public Limited Company.

4. Minimum two directors, three in case of Public Limited Company.

5. Name should reflect the main objects of the company. But it is not necessary in case of foreign company incorporate a subsidiary in India.

6. Minimum authorized share capital should not be less than INR 1, 00,000. In case of public limited company it should not be less than INR 5, 00,000.
Public Limited Companies: In addition to all basic requirements as mentioned aforesaid following are some additional requirement:

7. Filing of Statement in Lieu of Prospectus with the Concerned Registrar of Companies

8. Filing of other required papers viz. Board Resolution etc. with the concerned Registrar of Companies.

FOREIGN DIRECT INVESTMENT

Foreign Direct Investment in India is allowed on automatic route in almost all sectors except

    * Proposals that require an industrial license and cases where foreign investment is more than 24% in the equity capital of units manufacturing items reserved for the small scale industries.
    * Proposals in which the foreign collaborator has a previous venture/tie-up in India.
    * Proposals relating to acquisition of shares in an existing Indian company in flavor of a Foreign/Non-Resident Indian (NRI)/Overseas Corporate Body (OCB) investor; and
    * Proposals falling outside notified sectoral policy/caps or under sectors in which FDI is not permitted and/or whenever any investor chooses to make an application to the Foreign Investment Promotion Board and not to avail of the automatic route.


Entry Strategy for foreign investors

A foreign company planning to set up business operations in India has the following options

1. OPENING OF PROJECT OFFICE, LIAISON OFFICE OR BRANCH OFFICE IN INDIA

Foreign Companies can set up their operations in India through

    * Project Office
    * Liaison Office/Representative Office
    * Branch Office

Such offices can undertake any permitted activities. Companies have to register themselves with Registrar of Companies (ROC) within 30 days of setting up a place of business in India.

Project Office

Foreign Companies planning to execute specific projects in India can set up temporary project/site offices in India. RBI has now granted general permission to foreign entities to establish Project Offices subject to specified conditions. Such offices can not undertake or carry on any activity other than the activity relating and incidental to execution of the project.  Project Offices may remit outside India the surplus of the project on its completion, general permission for which has been granted by the RBI.

Liaison office

Liaison office acts as a channel of communication between the principal place of business or head office and entities in India.  Liaison office can not undertake any commercial activity directly or indirectly and can not, therefore, earn any income in India.  Its role is limited to collecting information about possible market opportunities and providing information about the company and its products to prospective Indian customers.  It can promote export/import from/to India and also facilitate technical/financial collaboration between parent company and companies in India.
Approval for establishing a liaison office in India is granted by Reserve Bank of India (RBI).

Branch Office

Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up Branch Offices in India for the following purposes:

1. Export/Import of goods

2. Rendering professional or consultancy services

3. Carrying out research work, in which the parent company is engaged.

4. Promoting technical or financial collaborations between Indian companies and parent or overseas group company.

5. Representing the parent company in India and acting as buying/selling agents in India.

6. Rendering services in Information Technology and development of software in India.

7. Rendering technical support to the products supplied by the parent/ group companies.

8. Foreign airline/ shipping company.