Friday, September 16, 2011

Barack Obama signs patent reform law

Calling it a jump-start for the economy and a boon for jobs, President Barack Obama signed into law on Friday a bill that overhauls the nation’s patent system for the first time in nearly six decades.
“Right now, there are about 700,000 applications that haven’t even been opened yet. These are jobs and businesses of the future just waiting to be created,” Obama said at Thomas Jefferson High School for Science and Technology in Alexandria, Va., where the signing took place. "Somewhere in that stack of applications could be the next technological breakthrough."
Obama received a rousing applause from the students in the crowd when walking out onto the stage in the school’s gym.
The congressional authors of the bill, Sen. Patrick Leahy (D-Vt.) and Rep. Lamar Smith (R-Texas), along with Reps. Mel Watt (D-N.C.), Jim Moran (D-Va.) and Bob Goodlatte (R-Va.), walked out on stage before the president. Commerce Department Acting Secretary Rebecca Blank, USPTO Director David Kappos, DuPont Chief Executive Ellen Kullman and Eli Lilly CEO John Lechleiter were also on stage.
Signing the patent bill isn’t enough to spur job creation, the president said. He also called on lawmakers to pass the jobs bill he recently presented to Congress.
“I want Congress to pass this jobs bill right away,” he said.
Embattled by high unemployment numbers, the White House is touting the patent reform law as an example of the president’s commitment to job creation. The America Invents Act is designed to help the U.S. Patent and Trademark Office cut through its massive backlog of patent applications, which administration officials argue will enable businesses to get innovations out to the marketplace faster and increase hiring.
When enacted, the bill will shift the U.S. patent system from a first-to-invent to a first-to-file nation. It also sets up a new regime to review patents and gives the USPTO more flexibility to set and spend fees paid for by inventors and businesses to get patents and register trademarks.
On a conference call with reporters Thursday, Kappos said the agency has already begun implementing the provisions outlined in the bill.
The legislation boasted broad support from tech heavyweights — including Microsoft, Apple, Google and Facebook — and medical and manufacturing industries, which cheered the signing of the bill.
“This bill is an important step forward for the nation’s patent system and represents consensus among many key stakeholders and broad support across various industries,” the Coalition for Patent Fairness — which represents Apple, Cisco, Dell and Google — said in a statement. The America Invents Act “will harmonize America’s patent system and allow us to continue to compete in the international marketplace.”

Agarwal and Company Law Offices LLP., India
Solicitors & Advocates

Tuesday, September 13, 2011

3 Judges Appointed to the Supreme Court of India

In exercise of the powers conferred by clause (2) of article 124 of the Constitution of India, the President is pleased to appoint (i) Shri Justice Sudhansu Jyoti Mukhopadhaya, Chief Justice, Gujarat High Court, (ii) Smt. Justice Ranjana Prakash Desai, Judge, Bombay High Court, and (iii) Shri Justice Jagdish Singh Khehar, Chief Justice, Karnataka High Court, in that order of seniority, to be the Judges of the Supreme Court of India with effect from the dates they assume charge of their offices.

Sunday, September 11, 2011

Winding up of a Company

Compulsory winding up
As the name suggests, in this kind of winding up, the situation of the company becomes as such that there would be no other option left but to wound up the company. The grounds on which a company is to be compulsorily wound up are given in section 433 of the Companies Act, 1956. The general procedure to be followed in such kind of winding up is:
·Filing of a petition for winding up – may be by the company, any creditor, contributory, Registrar or any person authorized by Central Government in case of oppression mismanagement [sec 439]
·If petition is admitted, winding up commences [sec 441]
·Intimation by court to an Official Liquidator (OL) for his appointment and taking charge of the company [sec 444]
·Notice to the company for filing Statement of Affairs (SOA) and filing of SOA with the OL [sec 454]
·Submission of preliminary report by OL to court within 6 months from the date of the order [sec 455]
·On satisfaction with the report of the OL, dissolution of the company is to be initiated [sec 481]
Voluntary winding up
1.Members Voluntary Winding up
2.Creditors Voluntary Winding up
A company may opt for voluntary winding up either by passing an ordinary resolution, where the object or the time limit for which the company was formed has achieved or by passing a special resolution. Once the resolution is general meeting is passed, the company may go either for members or for creditors voluntary winding up. The only difference between the two is that in case of members voluntary winding up, the directors are required to furnish a declaration of solvency in Form 4A which is not required in the other case.
The general procedure in a voluntary winding up is:
·Passing of requisite resolutions in a general meeting and appointment and fixation of remuneration liquidator [sec 490(1) and (2)]
·Notice of appointment of liquidator to the Registrar within ten days of appointment [sec 493]
·Filing of Declaration of Solvency with the Registrar within five weeks of passing resolution for winding [Sec 488]
· Report of the liquidator on statement of affairs of the company in a general meeting duly called by publishing the notice of the meeting in newspaper and in Official Gazette [sec 497(1) and (2)]
·Liquidator’s report to the Registrar and the Official Liquidator within a week from the meeting [sec 497(3)]
·Company deemed to be dissolved from the date of the report to the court, if the Official Liquidator has no objection on the report [sec 497(6)]
Winding up under the supervision of court
Winding up subject to supervision of court, is different from "Winding up by court."Here the court only supervises the winding up procedure. Resolution for winding up is passed by members in the general meeting. It is only for some specific reasons, that court may supervise the winding up proceedings. The court may put up some special terms and conditions also. However, liberty is granted to creditors, contributories or other to apply to court for some relief. [sec 522]. The procedure involved is as follows:
·Filing of winding up petition
·Appointment of liquidator as per the instruction of the court
·Liquidator to have all the powers as if the company is being wound up voluntarily
·Submission of SOA with the Liquidator by the company
·Liquidator’s report to the court on SOA
·Application of assets of the company on priority of payments basis [sec 529/529A/ 530]
·Dissolution of the company [sec 481]
Winding up in the light of recently issued circulars
Above are the procedures to be followed by the companies, professionals for getting the company dissolved. However, the process is quite time consuming which sometimes do not even have a favorable order from the court. To hasten the process with better governance and compliance, Ministry has issued some circulars for its various departments opening another field for practicing professionals.
Accelerating the process of winding up
It is clear that in the whole winding up proceeding, the role of the liquidator is very vital. Ministry has issued a General Circular 54/2011 dated 26th July, 2011 to expedite the winding up proceeding. As per the Circular, the petitions filed before the high courts without providing adequate information can now be closed in lesser time with the help of the Official Liquidators (OL). The OL will be taking the following additional steps in order to fasten the disposal of the winding up petitions:
·Keeping a track of all the pending cases by appointing a staff of company court
·Obtain information from “institution register” maintained with high courts
·Application to court praying to direct the management of the company to file the following information duly verified by a chartered accountant or a company secretary or a cost accountant in practice.
oCurrent Addresses of directors, secretary and statutory auditor of the company
oLocation and physical details of each immovable asset of the company along with its current valuation;
oDetails of all the debtors and creditors with their complete addresses and occupations;
oDetails of each movable asset of the company along with value;
oDetails of workmen/employees and any amount outstanding to them;
oDetails of all movable and immovable assets held in the personal names of director by providing its location, value, dates of acquisition and nature of right, title and interest therein;
oCopies of last three years audited balance sheet of the company;
oDetails of location of the registered office of the company.
The Circular also binds the RDs for the winding up cases. It will be the duty of the RD to ensure that all the pending applications are moved before the Court before the next date of hearing and in all new cases, these are filed before the Hon’ble Court before the second hearing of the case. RDs will also ensure that a standard draft is prepared by them after taking legal advice and the same is used in all cases by OLs.
Inspection and investigation in all winding up cases
Vide General Circular 55/2011 dated 26th July, 2011[1][3], the Ministry has prescribed some stringent steps to be followed while dealing with the malpractice and mismanaged companies. There are many winding petitions filed by the companies after having committed major violations of Companies Act and involving misappropriation of funds. In order to curb such malpractices, following guidelines have been prescribed for the OL while dealing with winding up petitions for such companies:
1. OL will obtain a copy of the petition as soon as the same is filed before the court and forward the same to the Registrar for their report
2. RoC will conduct a detailed scrutiny of the details and documents available in its records for the previous five years and will submit a preliminary report to the Ministry within a week
3. MCA will take its view based on the preliminary report of the RoC within 15 days and any inspection under section 209A and/or investigation under section 235/237, if directed by the Ministry, is to be carried out by the RoC within 30 days.
4. If found guilty, necessary actions may be initiated against the directors, ex-directors and other key managerial personnel of the company for any violation under Companies Act or any other law.
5. As the last step, the OL will submit the final report with the High Court for passing necessary order.
The RD is entrusted to supervise all these actions of RoC and the OL prescribed above and to monitor all such cases of malpractices.

Arbitration Agreement

“Whether an agreement is an arbitration agreement or not” is crucial point in any contractual matter. Now-a-days it is a common practice in contract drafting to put arbitration clause in almost all the commercial contract and refer the disputes to arbitration. If both the parties are agree for arbitration then there is not difficulty but when a parties denies the appointment of agreement then a larger litigation starts. Here, we are examining the legal point where on party to a contract denies the agreement and resist the arbitration.
Section 7 of the Arbitration & Conciliation Act, 1996 lays down the provision for an arbitration agreement. Few points to keep in mind for an arbitration agreement.
· It can be a separate agreement or a clause in a Contract but there must be clear intention to refer the disputes to arbitration.
· The agreement must be in writing.
· The arbitration agreement can be in document signed by parties, letters, telex, telegrams,
· It can be a part of a complete full length agreement having arbitration clause.
Now, Supreme Court has said in case of Jagdish Chander v. Ramesh Chander, (2007) 5 SCC 719 that even it there is any agreement or clause in an agreement requiring further consent or consensus before a reference to arbitration, is not an arbitration agreement.
The legislature has entrusted the power of appointment of arbitration to the holders of High Judicial Officers like the chief justice and judge of supreme court/ High Court to give a strong reasoning for appointment of arbitrator.
Section 11 of the Arbitration & Conciliation Act, 1996 lays down the provision for appointment of the arbitrator. Following are the basic condition for appointment of an arbitrator.
· Arbitrator can be of any nationality.
· Parties must agree for his appointment.
· On disagreement on one name , parties can appoint one arbitrator from each side and both the arbitrator will appoint the presiding arbitrator.
· When parties fails to appoint an arbitration within 30 days then the dispute would be refer to Chief Justice of Concern High court.
· The decision of the Chief Justice would be final for appointment of arbitrator.
· If the request of appointment of arbitrator made to different Highcourt then the Chief Justice where the application made first would take the decision.
· If the name of the arbitrator is given in the agreement the court does not normally interfere with dispute of appointment.
In case there are two agreement between the parties namely agreement A and agreement B and agreement A have arbitration clause and agreement B does not have arbitration clause then the dispute arising from agreement A can only be referred to arbitration and not the dispute relating to agreement
Two cases are of very high importance which gives clarity on appointment of arbitrator.
S.B.P. & Co. vs. Patel Engineering Ltd. [2005 (8) SCC 618] and National Insurance Co. Ltd. vs. Boghara Polyfab Pvt. Ltd. [2009 (1) SCC 267]
Supreme Court has laid down following principle in these cases :
· Chief Justice or his designate to decide whether there is an arbitration agreement, as defined in the Act
· Request before High Court is made by such a party to an arbitration agreement?
· High Court have jurisdiction to entertain the application section 11.
· Whether the claim is a dead (long barred) claim or a live claim.
· Whether the parties have concluded the contract/ transaction by recording satisfaction of their mutual rights and obligation or by receiving the final payment without objection.
· Merits or any claim involved in the arbitration
This may be disputed that if the agreement itself is disputed a party to the contract says that agreement is forged then what will be the situation whether an arbitrator can be appointed on the basis of an agreement where it is claimed to be forged?.
This situation is being dealt by Supreme Court in case of Bharat Rasiklal Ashra Vs.Gautam Rasiklal Ashra & Anr where High Court had appointed an arbitrator in a matter where one party was claiming the arbitration agreement is forged and fabricated and delegated the duty to examine the objection of ‘forged contract’ by arbitrator himself. Supreme Court has set aside the order of High Court for appointment of arbitration and remitted back the matter for Chief Justice for deciding the correctness of the agreement in dispute and also order that if the agreement found to be forged and fabricated then heavy cost should be imposed.

Simplifying Procedure in External Commercial Borrowings

A. P. (DIR SERIES) CIRCULAR NO. 11, DATED 7-9-2011 simplifying procedure in External Commercial borrowings as below :

1. As per the extant ECB procedures, any request for change of the lender for an existing ECB is required to be referred by the Authorised Dealer Bank to the Reserve Bank for necessary approval.

2.As a measure of simplification of the existing procedures, it has been decided to delegate powers to the designated AD Category-I banks to approve the request from the ECB borrowers with respect to change in the recognized lender when the original lender is an international bank or a multi-lateral financial institution (such as IFC, ADB, CDC, etc.) or a regional financial institution or a Government owned development financial institution or an export credit agency or supplier of equipment and the new lender also belongs to any one of the above mentioned categories, subject to the Authorised Dealer ensuring the following conditions:-
(i) the new lender is a recognized lender as per the extant ECB norms;
(ii) there is no change in the other terms and conditions of the ECB; and
(iii) the ECB is in compliance with the extant guidelines.

3. However, changes in the recognized lender in case of foreign equity holder and foreign collaborator will continue to be examined by the Reserve Bank.

4. The changes in the recognized lender should be promptly reported to the Department of Statistics and Information Management, Reserve Bank of India in Form 83.

5.The above modifications to the ECB guidelines will come into force with immediate effect. All other aspects of the ECB policy, such as, USD 500 million limit per company per financial year under the automatic route, eligible borrower, end-use, all-in-cost ceiling, average maturity period, pre-payment, refinancing of existing ECB and reporting arrangements shall remain unchanged.

(The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.)

Saturday, September 10, 2011

China Ranks 6th in International Trademark Registry Applications

China became the world's sixth largest applicant for International Trademark Registry this year, up one place from 2010, a deputy director general of the World Intellectual Property Organization (WIPO) said on Sept 6.
The country is the among the world's most active applicants in terms of the number of applications, said Wang Binying, the deputy director general.
The WIPO received a total of 39,687 applications worldwide in 2010. Among them, 1,928 came from China, up 42.2 percent year-on-year, the second fastest increase worldwide after the Republic of Korea, Wang said at the 4th China Trademark Festival being held in Chengdu, capital of southwest China's Sichuan province.
Meanwhile, China's domestic trademark registry applications are also rapidly increasing, with the number of applications exceeding 1.4 million so far this year, according to Wang.
Wang said this reflects the steadily rising comprehensive national strength of China and its strong economic growth. It also shows that the government has made substantial progress in intellectual property rights protection.
Despite the massive number of Chinese trademark applications, the country lacks well-recognized trademarks. "Actually, we cannot yet name a truly internationally-recognized Chinese brand," said Zhang Yumin, an intellectual property rights researcher with the Southwest University of Political Science and Law.
Meanwhile, trademark protection is not adequate in the country, said Yuan Qi, an official with the Trademark Department of the State Administration for Industry and Commerce.
Yuan said this has led to rampant trademark rights violations.
Zhang urged enterprises to form specialized departments for managing intellectual property rights and to actively register their trademarks.
The government should also crack down on trademark violations and punish the parties involved, Zhang said.

Patent reform bill gets Senate approval

The Leahy-Smith America Invents Act, also known as the latest version of the patent reform bill, was approved by the U.S. Senate today. The legislation now heads to President Barack Obama for his signature.

The bill, which Bloomberg reports as having passed 89-9 today, is the fourth such attempt to reform patent legislation in the U.S., following similar proposals in 2005, 2007, and 2009. It was approved by the House in late June.

Among the major changes in the legislation is turning the U.S. patent system into a first-to-file patent system as opposed to a first-to-invent system. The U.S. Patent and Trademark Office's current use of the first-to-invent system awards a patent based on the conception of the invention, not necessarily when it's filed. The first-to-file system, as the name suggests, awards a patent to the first person who files for it.

Proponents, including technology companies like Microsoft, Google, and Apple have rallied for the first-to-file system, saying it makes our intellectual-property system more competitive with those in foreign countries. While smaller businesses have said the change in filing standards puts them at a disadvantage.

Among the other changes in the bill is the capability for the USPTO to set and collect its own fees for new patent filings. The bill also introduces a review process for challenging granted patents, and a change to the grace period wherein the inventor has time to file for a patent after disclosing it.

"The supplemental examination procedure allows patent owners proactively to make voluntary disclosures of information to the PTO after patent issuance to correct or remedy missing information in the original patent prosecution," explains intellectual property expert Bruce Wexler. "Overall, this allows for stronger patents and protects patent owners from charges later in litigation that they committed fraud in the original patent prosecution. Until enactment of this law, patent owners had no way to cure defects in patents like this."

Patents and intellectual-property protection have become an increasingly important topic in technology, with companies building up massive patent collections to fend off, as well as go on the offensive against, other companies. Most recently that's been the high-profile feud between Apple and Samsung, with the two companies suing one another in courts around the world for patent infringement. There has also been the spat between Google and Oracle, and Apple and HTC.

Companies are now buying up troves of patents from others, including last year's acquisition of Novell for $2.2 billion (which was later altered by the Justice Department); the $4.5 billion purchase of Nortel's patents by a consortium of companies led by Apple, Microsoft, and Research In Motion; and the expected upcoming sales of patent collections from InterDigital and Eastman Kodak.