Legal Issues in Offshore Outsourcing to India

With the rise in outsourcing and with more and more global organizations outsourcing business processes and IT services to India, there has been a number of legal issues in outsourcing. Companies outsourcing to India have to face some complex legal issues with outsourcing. If your organization is outsourcing to India, make sure that your organization is aware of the intellectual property protection and the data privacy and protection in India. Before outsourcing to India, also make sure that your organization knows about compliance with applicable Indian laws, enforcing contractual/legal rights in India and dispute resolution procedures.

There are several legal issues in offshore outsourcing and dealing with them effectively can help the organization who wishes to outsource and the outsourcing service provider, to face the legal issues of outsourcing. The following are some tips on efficiently dealing with the legal issues of offshore outsourcing.

1. Taxation

Offshore outsourcing is often influenced by several international and local issues. The taxation policy of India also has a big effect on the offshore outsourcing decision. Before outsourcing, find out about the tax implications that you have to deal with. This is an important legal aspect to deal with, because different countries have different tax laws. You can meet your outsourcing provider in India and decide about which tax provision would be appropriate in the legal contract.

2. Legal Systems that are Heterogeneous

When you outsource to India or any other country, you will discover that the rules of governance are different in different countries. In outsourcing, you and your outsourcing provider have to make sure to include two different legal systems. This heterogeneity in the legal system is an important legal issue with outsourcing that companies have to deal with. This problem exists, because there is no legal system which can be used globally. Different countries even have different intellectual property laws. Since there are no standard legal rules and regulations to follow, it is best to meet your outsourcing provider and make sure that you adhere to both the legal systems. This will help you to sort out any legal issues of outsourcing.

3. The Influence of Local Laws

Some countries have strict data protection and privacy laws, which might be a hindrance in outsourcing. In such cases, the outsourcing provider and the customer would be legally bound and share equal legal responsibilities. This might increase the liability of the customer and in some cases can become a legal issue in outsourcing. Outsourcing service providers also have to protect their business from civil penalties. Conduct some research on the country that you want to outsource to and if the local laws of that country are a hindrance, find another outsourcing service provider. The influence of local laws is another major legal issue in outsourcing.

4. Dispute Settlement

Dispute settlement is yet another legal issue with outsourcing. If a customer from U.S wants to sue an outsourcing provider in China, there would be plenty of disputes. The Chinese outsourcing provider would not want to go to the U.S and the U.S customer would not want to come to China. There is also the legal issue of where the case will be filed, as the case has to be fought in the country where the case is filed. These two countries would also have two different legal systems. When making a settlement contract with your outsourcing provider, ensure that you mention the system of dispute settlement. Clarifying the legal aspects in outsourcing and dealing with the problem of dispute settlement can avoid future problems.

Legal Issues in Outsourcing to India

1. Effective Changes in Indian Laws

India is the most ideal place to outsource to. When you outsource to India, you need not face many legal issues in offshore outsourcing. There are many global organizations which have been outsourcing to India and these organizations have not faced any hindrance with the legal issues of outsourcing to India. Indian laws are always going through amendments and they are often changed to effectively meet the requirements of today and to be in unison with the latest international laws. India complies to the “agreement on trade related intellectual property right”. India also accepted the “world trade organization agreement” even when outsourcing was just starting. The Indian government has brought about many effective changes in patents, copyrights, designs, trademarks to meet the requirements of today. Such effective changes have transformed India’s intellectual property laws.

2. The Proper Law of Contract in India

When a legal contract has to be made between two countries, the legal regime of any single country becomes insufficient to deal with the situation. Outsourcing brings about two legal systems into the picture and this is where the private international law comes into place. Before you sign a legal contract with your outsourcing provider, make sure that you decide about which law would govern the legal contract. In India, the outsourcing service providers ensure that the “Proper Law of contract is applied, before a legal contract is signed.

3. Choice of Law is endorsed by Indian courts

The courts in India have always endorsed the choice of proper law. If you have expressed the choice of law in the legal contract, you can be sure that it will be supported in the Indian courts.

4. Freedom of choice to choose any law

When you outsource to India, you can choose the law that would govern the legal aspects of the contract. You can also decide which court would conduct the jurisdiction. The sections 13, 15 and 44A of the Indian Civil Procedure Code and Section 41 of the Indian Evidence Act, govern the conclusiveness and enforcement of foreign judgments made in India.

Guidelines to help you deal with the legal issues in offshore outsourcing to India

ü     If you choose arbitration as the means of dispute resolution, ensure that the place of arbitration and other important aspects are well defined in the legal contract

ü     If you choose the Indian law and if you want Indian judgment to be used in your country, then make sure that your country has a similar law as the Section 44A of the Indian Civil Procedure Code.

ü     In case, you sign the legal contract in a country, which is different from the country whose law you have chosen, make certain that the formal requirements of that place of contract are fulfilled.

ü     Make sure that the country whose law you choose supports the proper law for enforcement.

ü     Ensure that there is a choice of law which governs the legal contract. 

http://www.outsource2india.com/why_india/articles/legal_aspects_outsourcing.asp
 

Legal Attorney Advice - Points to Remember

Dealing with lawyers can be quite the headache when you yourself have never done it before. Sometimes, you may not even determine what they’re saying. However, if you use the methods you may discover ways to efficiently keep in touch with your lawyer. 

Research your lawyer completely. Carefully have a look at their training and work experience. Make sure special attention is paid by you to how they manage your practice. If they struggle managing their practice, then that is a sure sign that they’ll probably struggle handling your case.

Locating a good lawyer is a lot of work. Some time should be put by you apart to do some research and give your self a few weeks to compare different choices. Meet different attorneys to have estimates and request advice. You shouldn’t expect you’ll look for a quality lawyer straight away.

You’ve worked with in the past if you need legal help, don’t always use the lawyer. You may need a certain type of attorney, somebody who specializes in the type of case you are associated with. Do not worry, though. A specialist is not fundamentally high priced, so you should really be able to manage what you need.

Remember, a good lawyer works hard on your case. If they’re working with multiple clients, but they should give you regular changes, speak to you often and continue to have your absolute best interests at heart no real matter what.

You do not want an arrogant attorney, you want a confident one. An outcome can be matter how good they are guaranteed by no lawyer, no. Your lawyer is wanted by you to be confident they can build a strong case to represent you, however not so arrogant to believe that they cannot lose.

Those people who are wanting to determine a lawyer to hire would be smart to conduct an interview. It is important that you talk with any possible lawyers so that you can gauge their experience level and what they can do for you. It will also allow you to develop a report with whoever you end up engaging.

Make an effort to fit the company that you choose with the significance of the specific situation that you are in. You will wish to have a big organization by your side, if you are in a significant emergency.

A good idea to remember if you’re going to be dealing with an attorney in a criminal case is to be completely honest. For legal reasons, whatever you say to your attorney must remain secret. Telling the facts will also give your lawyer the most effective shot at winning your case.

Tell your lawyer everything. Lawyers are bound by confidentiality policies, even at initial consultations, therefore don’t hold back. Withholding information will simply make your lawyer’s job tougher and might even damage your case. So that you can do the best job possible, your lawyer needs every one of the information regarding your situation.

Make sure you understand the costs associated with a particular attorney beforehand. You need to consider what you are able to afford, before you even begin the process of seeking someone out. Discuss the payment plan and fees, as you call different attorneys. Do not be surprised later on!

Any initial meeting or conversation with legal counsel should include four important issues that you question them. Could be the lawyer experienced in your particular form of situation? Do they cost flat rates or hourly fees? Simply how much do they estimate the total cost is going to be? Just how long will this take to completely solve?

Ensure before hiring legal counsel that work allows you to review all of the charges and expenses. Make certain you know his hourly fee, in addition to the fee for every single one of his office staff, if you are paying your attorney by the hour.

If you have been faced with a crime, are in an accident or think you need legal help, you need to employ an attorney. The total amount of time that you wait to create this choice could be an important factor. You intend to have someone on your side that knows what the law states as quickly as possible.

Agarwal and Company Law Offices LLP., New Delhi, India

Limitation Act - Time for Appeal

Law relating to limitation is incorporated in the Limitation Act 1963 which prescribes different periods of limitation for suits, petition or applications. The act applies to all civil proceedings and some special criminal proceedings which can be taken in the court of law unless its application is excluded by any enactment. The Act extends to whole of India except the state of Jammu and Kashmir. The statutes of limitation are based on the principles of public policy which diligence and to prevent oppression.

 

The Law of limitation bars the remedy in a court of law only when the period of limitation has expired, but it does not extinguish the right that it cannot be enforced by judicial process. Thus if a claim is satisfied outside the court of law after the expiry of period of limitation, that is not illegal.

 

The intention of the law of limitation is, not to give right where there is not one, but to interpose a bar after a certain period to a suit to enforce an existing right. The object is to compel litigants to be diligent in seeking remedies in court of law by prohibiting stale claims. It is to help the bona fide claimant and to prevent fraud being practiced by people upon innocent persons by keeping action hanging on them for a long time.

 

Computation of the period of Limitation

 

The Courts in India are bound by the specific provisions of the limitation Act and are not permitted to move outside the ambit of these provisions. The Act prescribed the period of limitation in Articles in schedule to the Act. In the articles of the schedule to the limitation Act. columns 1,2, and 3 must read together to give harmonious meaning and construction.

 

Bar of Limitation

 

Sec 3 of the Act provides that any suit, appeal or application if made beyond the prescribed period of limitation, it is the duty of the court not to proceed with such suits irrespective of the fact whether the plea of limitation has been setup in defence or not. The provision of sec 3 are mandatory. The court can suo  motu take note. The effect of sec 3 not to deprive the court of is jurisdiction. Therefore, decision of a court allowing a suit which had been instituted after the period prescribed is not vitiated for want of jurisdiction.

 

Extension of Time in Certain Cases

 

Doctrine of sufficient cause

 

Sec 5 allows the extension of prescribed period in certain cases on sufficient cause being shown for the delay. This is known as doctrine of “Sufficient cause” for condonation of delay which is embodied in sec 5 of the Limitation Act. 1963. Sec 5 provides that any application other than application under provision of order XXI of the code of civil procedure 1908 may admitted after the period of limitation if the appellant satisfies the court that he had sufficient cause for not preferring the appeal. However it must be a cause which is beyond the control of the party.

 

Person under legal disability

 

Section 6 is an enabling section to enable persons under disability to exercise their legal rights within a certain time. Section 7 supplements section 6,section 8 controls these section, which served as an exception  to sec 6 and 7. The combined effect of section 6 and 8 is that where the prescribed limit expires before the cessation of disability, for instance, before the attainment of majority, the minor will no doubt be entitled fresh period of limitation.

 

Computation of period of limitation:

i)  Section 12 to 24 deals with computation of period limitation. As per section 12 the day to be excluded in computing period is the day from which the period is to be reckoned and the time requisite for obtaining a copy of decree shall be excluded.

ii)  Time which leave to sue or appeal as a pauper is applied for also excluded.

iii)  The time which a suit or application stayed by an injunction and the continuance of the injunction and the time taken for obtaining sanction or consent.

Divorce by mutual consent

i) A separation of one year before filing the case please note that actual physical separation is not required, even if both parties are sleeping in the same bedroom they can be said to be seperated for the purposes of mutual consent, if they are not living together as husband and wife;

 

ii) A flawlessly drafted MoU (Memorandum of Understanding) that settles the terms on which you part away, people don’t understand the importance of this, this is extremely important so as to end the matters with a finality once and for all, there are no loose ends and make sure there is no litigation in future;

 

Once the above is done – you have to get drafted the Divorce petition that encapsulates the contents of your earlier MoU.

 

After Court

 

When you file your divorce by mutual consent petition – it comes up for hearing and your statements are recorded, then the court gives you a period of 6 months (basically to think over your decision) after which,  on recording of final statements divorce decree is passed.

 

Monetary Settlement/Maintenance/Alimony/Child Custody issues.

 

A Mutual Consent petition gives you the flexibility to come to your own terms with respect to the issue. If a full and final settlement is reached – the money can be paid before the court at the time of final hearing.

 

In all this procedure enables couples to part away amicably on a good note, without ruinous litigation, and without much expense.

Points to remember before purchasing a Re-Sale property

A resale property:

Who does not wish to live in a house of their own? Buying a new flat will take a long time, so some of us may wish to settle for buying a resale property.  However buying a resale property could involve many legal and other procedural requirements. It is prudent to first understand the various procedures and safety measures for buying resale property to avoid hassles in future. 

Buying Resale Property –A Guide

Consult Experts:

It may be ideal to engage a good real estate agent to locate a resale property. He would be in a position to locate sellers as well as guide you regarding the price of such properties in different localities. They would also be in a position to tell you about the seller of the property. Most real estate agents charge a fee and also help with registration, payment of stamp duty and other paper work involved in the purchase of resale property. In addition, taking the help of a good lawyer would also help to make sure that things are clear legally also.

Title of the property:

It will help engaging experts like real estate agents and lawyers to help you, but it is always better to be well-informed yourself when entering into deals for buying resale property. The first step in this regard would be to establish the title of the seller; whether he is the real owner of the property or has been given the power of attorney to transact the deal. All the documents with regard to the property need to be clear. In addition you need to make sure that all the original documents with regard to the property that were given by the builder or original developer are in order.

Documents:

Buying resale property seems great, but it could become a big problem if the documents regarding the original purchase and subsequent transfer of title are not properly stamped. Firstly it could pose great problems especially if you want to apply for a loan for purchase of the resale property. Subsequently it could prove to be unacceptable in case you wish to transact further on the property.

Existing Loan:

It is also necessary to make sure that the property documents are not lying mortgaged in the bank’s custody against a loan taken by the seller. The bank will consider a loan only once the loan taken by the seller is repaid and the documents released.  

Loan Eligibility:

Buying a resale property would definitely provide you with a bigger space in case of older properties. However it is best to note that some banks may not lend money on buildings older than 10 years. This may be due to the reason that they may not want to take the risk of the price of the property going down. Banks also make sure to ensure that the bank’s outstanding loan should always be lower than the value of the property in the market.

Property Valuation:

Next it is imperative to note that the loan amount is highly dependent on the cost of the property. Technical experts would evaluate the property. However it would be useful to yourself avail the services of a property valuer at a small fee before approaching the banks. The bank’s property valuer may valuate the property at a much lower rate. They would also like to safeguard their interests against the fall in the price of the property in future.

More Down Payment:

Most banks wish to make sure that you be responsible for the maintenance and good upkeep of the resale property. So banks would expect you as the purchaser of the resale property to pay a certain percentage of the price as down payment. You may have to pay about 20% of the price as down payment; property of 50 lakhs requires 10 lakh as down payment.

Age of the property:

This down payment could be more in case of older properties. In addition, banks usually lend only on properties that are unto 50 years old. The tenure of the loan also decreases with the age of the property.

Flat Society:

The bank may grant the loan and you may make the down payment, but there could be another problem. It arises out of the need for some Flat societies that require the payment of a heavy price for change of ownership. It is best to consider this cost also when coming to a conclusion while purchasing resale property in cooperative and other societies.

Conclusion:

Buying resale property would give you a chance to settle in your own house fast and save you of high rents paid and the need to frequently shift your place of living. Taking a loan from the bank could give you tax deductions on the interest paid soon. You would not have to wait till the possession as in the case of new flats. It is always prudent to be well   informed about the various details of the resale property. 

http://www.agarwalandco.com/

Delhi HC judgment in Lt Foods Ltd v. Sunstar Overseas Ltd &Anr.

The Delhi HC, in Lt Foods Ltd v. Sunstar Overseas Ltd &Anr., decided on a bunch of interim applications filed by the parties in the cross-suits, seeking injunction against each other. The parties, in the instant case, claimed ownership rights over the mark “HERITAGE” used in respect of rice. While plaintiff claimed to be the user of the mark since 1997, the defendant claimed to be the user from 1985.The parties did not dispute that the marks used by them viz., “HERITAGE” by plaintiff (Registration no. 799246) and “INDIAN HERITAGE” & “INDIAN HERITAGE SELECT” (Registration no. 1149872) by defendants were deceptively similar.

Background

The plaintiff, in March 2009, came to know that the defendant exported rice under the mark “INDIAN HERITAGE”. The plaintiff, along with an interim application, filed the first suit (CS (OS) No. 612/2009) for permanent injunction restraining the infringement of trademark, passing off, rendition of accounts of profits/damages etc. against the defendants. The defendants filed a separate suit against the plaintiff (CS (OS) No. 639/2009) for permanent injunction restraining the infringement of trademark, passing off, rendition of profits etc. The plaintiff filed its second suit (CS(OS) No. 653/2009) wherein it made additional statements based on subsequent events. The plaintiff, in the aforesaid suit, argued that the invoices adduced by the defendant were dubious and fabricated and did not establish any substantial, continuous and genuine commercial use of the mark “INDIAN HERITAGE SELECT”. The instant judgment, discussed in this post, decided upon a bunch of interim applications filed by the parties in the above mentioned cross-suits, seeking injunctions against each other.

Judgment

Considering Section 28(3) of Trade Marks Act, 1999, the Court held that the suits filed by them against each other for infringement of trademark were not maintainable. [ Section 28(3): Where two or more persons are registered proprietors of trademarks, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trademarks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those persons as against any other of those persons merely by registration of the trademarks but each of those persons has otherwise the same rights as against other persons (not being registered users using by way of permitted use) as he would have if he were the sole registered proprietor.] However, suit for passing off was held to be maintainable.

The Court, in this context, examined the evidence adduced by parties for determining the prior user of the mark in question. The Court appointed Local Commissioners to verify the copies of invoices presented before the Court by the plaintiff and the defendant. On perusing the evidence produced by the plaintiff (application for registration dated 20.04.1998 in class 30, statement of total annual sales during the period 1998 – 2009 & invoices during the period 1998 – 2009), the Court prima facie determined that the plaintiff was using the mark continuously since 1998.

The Court, however, dismissed the documents filed by defendants as “not genuine”. Considering the report of Local Commissioner which stated that the defendant did not use the mark “HERITAGE” in any of the exports as evidenced by the shipping bills and supporting documents made available by the customs department, it was held that the defendants argued their case based on documents which were prima facie forged and fabricated. The report of the Local Commissioner noted that the defendants interpolated the mark “HERITAGE SELECT”by replacing the words “SUPER” or “KITCHEN KING” marks in the invoices produced before the Court.

The judgment noted that there was not any clear and cogent evidence available on record to show use of mark prior to 11.11.2002 (date of application filed by defendant) by the defendant. It was noted that the defendant did not furnish sales figures for any financial year. It was also noted that the defendants did not produce and furnish the originals in spite of being given ample opportunities. The Court applied the principle of adverse presumption viz., the Court can draw an adverse presumption against the party if the party withholds a document or evidence knowing that the said document will operate to his disadvantage and held that Court would not assist a party whose case was founded on falsehood. The Court accordingly dismissed the interim applications filed by the defendant. The defendants, their licensees and franchisees were restrained from selling, exporting or dealing in rice under the impugned marks “INDIAN HERITAGE SELECT”/ “HERITAGE SELECT” or any other mark which might be deceptively similar to the mark “HERITAGE” of the plaintiff till the disposal of the suit. Further, the defendant was asked to deposit INR 50,000 with the Prime Minister’s Relief Fund for wasting the time of the Court.

Analysis

The conduct of defendant prima facie did give an impression that the case was built on forged and fabricated documents. It will be highly unfortunate (both legally and ethically) if it is conclusively determined in the final judgment. Further, the judgment is a warning to those who fail to adduce originals as and when they are required to be produced before the Court- especially in a suit for passing off as it is imperative to produce clear and cogent evidence in such a suit. Passing off protects a mark only if goodwill and reputation are effectively demonstrated. The burden is upon the aggrieved to gather survey evidence for demonstrating the possibility or existence of confusion.

The judgment also highlighted the law of adverse presumption by referring to the Supreme Court judgment in Pradip Buragohain v. Pranati Phukan (2010 (11) SCC 108): “We may in this regard refer to illustration (g) to Section 114 of the Evidence Act which permits the Court to draw an adverse presumption against the party in default to the effect that evidence which could be but is not produced would, if produced, have been unfavourable to the person who withholds it. The rule is contained in the well-known maxim: omniapraesumuntur contra spoliatorem. If a man wrongfully withholds evidence, every presumption to his disadvantage consistent with the facts admitted or proved will be adopted.”

.

.

.

http://www.agarwalandco.com

.

.

.

.

.

.

Source: http://spicyipindia.blogspot.in/2012/06/note-on-delhi-hc-judgment-in-lt-foods.html

Passing Off Action by Mid-Size Foreign Companies Having Unregistered Marks in India

There are often cases that we undertake for representation, wherein the cases relate to enforcement of trademarks by/of mid-sized foreign corporations that have not been filed and/or used in India against Indian companies that have deceptively used their marks thereby constituting misrepresentation, which might amount to passing off. Rupkatha and Poorva, interns at Khurana & Khurana, look at some of these cases and try to identify certain parameters based on which the mid-sized foreign companies can protect their interest.

Perry v. Truefitt[1], the English case where the tort of passing off was first articulated had clearly pointed out that “a man is not to sell his own goods under the pretence that they are the goods of another trader.” The House of Lords further laid down the essential elements of passing off in Reckitt & Colman Ltd v Borden Inc [2] as:

• The existence of claimant’s goodwill
• Misrepresentation
• Damage or likely damage

Section 27(2) of the Trade Marks Act, 1999 authorizes any trader to institute passing off action against another in spite of the fact that his mark is unregistered. The Hon’ble Supreme Court of India has laid down three elements that need to be fulfilled in order to institute a passing off action by the plaintiff in Satyam Infoway Ltd. v. Sifynet Solutions Pvt. Ltd.[3]:

• The defendant must have sold its goods or offered its services in a manner which has deceived or would be likely to deceive the public into thinking that the defendant’s goods or services are the plaintiffs.
• The likelihood of confusion in the minds of the public that the goods or services offered by the defendant are the goods or the services of the plaintiff.
• The likelihood of confusion in the minds of the public that the goods or services offered by the defendant are the goods or the services of the plaintiff.

Unregistered Marks of Foreign Companies

Section 18 of the Act allows foreign nationals to register their mark in India. Once a mark is registered, the company can take action for infringement against any person who tries to do so. The problem arises when the mark is unregistered. Is there any remedy for the company in such a situation? Or will it remain at the receiving end?

The Indian judiciary has played its role of filling up the gap in the law in such situations. Time and again it has granted relief to foreign companies who are yet to register their marks in India even though the defendant had registered its mark. In N.R Dongre v. Whirlpool Corporation[4], injunction was granted in favour of Whirlpool Corporation based on the fact that although their mark was not renewed, they had gained enough goodwill and reputation in the Indian market which was being wrongly used by the defendant.

The general trend has been to grant relief only to multinational corporations who have a good market in India or who are big names in the international arena. The Hon’ble Bombay High Court in Centrol Industrial Alliance Ltd. versus Gillette U.K. Ltd.[5], the Hon’ble Delhi High Court in Jolen Inc. vs Doctor & Company[6] and Indian Shaving Products Ltd. v. Gift Pack[7] and several other High Courts have held that in order to get injunction in favour of a foreign company with an un-registered trademark, goodwill in the Indian market is an essential pre-requisite.

The problem then arises with the mid-sized companies. There are about 40 marks in the latest trademark journal published by the Controller General of Patents, Designs and Trademark which are deceptively similar or rather have been ‘copied’ from the trademark of some foreign company, big or small. Till now, the trend has been to provide no relief to companies having without any trans-border reputation. The Intellectual Property Appellate Board rejected the opposition posed by the appellant in Kraft Jacobs Sucharc Ltd. v. Government of India by Secretary[8] on the ground that the opponent did not have any presence in the Indian market and did not intend to come to do business here in the near future.

The road ahead

The Court has definitely observed in the Jolen Inc. case[9] “even if it is assumed that such advertisements or marks do not travel beyond the borders of the countries where the plaintiff has the business, still it has a right to protect its reputation and goodwill. It is more so where the trade name has been pirated in totality and not by way of having deceptive or confusing similarity.” The Supreme Court in Milment Oftho Industries & Ors. v. Allergan Inc.[10] held that non-use in India would be irrelevant if the plaintiff was the first in the world market. However, the decision carried a word of caution that foreign brand owners who have no intention of coming to or introducing their product in India will not be allowed to stifle an Indian company by not permitting it to sell a product in India, if the Indian company has genuinely adopted the mark.

Therefore, if it can be shown that the defendant had adopted the complete mark knowing very well that another company of some other country has already adopted that mark, then mala fide on part of the Indian company can be argued.

Now, the Indian courts have been conservative in their approach and constantly relied upon the circulation of magazines, journals and extent of Indian travellers going abroad while deciding these types of cases. This approach is outdated in the light of modern means of exchanging information. The internet, for example, provides a global forum for any product manufactured in one country. Thus, when an Indian company launches a website bearing the trademark of some foreign company, it becomes easier to hold it liable. The Internet Corporation for Assigned Names and Numbers (ICANN) manages the top-level development and architecture of the internet domain name space. It authorizes domain name registrars through which domain names can be registered and re-assigned. Thus, any person who seeks to register a domain name is informed about the availability of that domain name. Rule 2 of the Uniform Domain Name Dispute Resolution Policy[11] requires an applicant to determine that the domain name for which registration is sought does not infringe or violate another’s rights. Thus, if the proposed domain name violates another person’s trademark rights, it will violate Rule 2 of the policy. In such eventuality, the registrar can refuse to register the domain name. Thus, a domain name that is properly registered under international requirements is still subject to the Trademarks Act if a rights owner successfully proves that it has rights flowing from the act.

It was held in the celebrated UK case of Marks and Spencer’s v. One in a Million[12] that any person who deliberately registers a domain name on account of its similarity to the name, brand name or trademark of an unconnected commercial organization must expect to find himself on the receiving end of an injunction to restrain the threat of passing off. This was reiterated by the Delhi High Court in Yahoo!, Inc. v. Akash Arora[13]. After the celebrated case of Satyam Infoway Ltd. v. Sifynet Solutions Pvt. Ltd.[14], there is no doubt that internet domain names are subject to the legal norms applicable to trademarks.

Conclusion

A person who has directly copied the trademark of a foreign company having a proper accessible website and trading in the same goods and services, cannot take the plea that he was not aware of his opponent’s presence in the market. Further, it is strongly recommended that the plight of the mid-sized companies be addressed soon and internet as an advertising and communicating forum gets acknowledged. After all, this is a wrong committed by the Indian company and thus a remedy must be sort out.

---

[1] (1842) 6 Beav. 66

[2] [1990] 1 All E.R. 873

[3] 2004(6) SCC 145

[4] 1996(5) SCC 714

[5] 1998 PTC (18) (DB)

[6] 2002 (25) PTC 29 (Del.)

[7] [1998] PTC 698 (Del)

[8] 2004 (29) PTC 376 IPAB

[9] Supra n6

[10] 2004 (28) PTC 585 (SC)

[11] It is a process established by ICANN for the resolution of disputes regarding the registration of internet domain names. It currently applies to all .aero, .asia, .biz, .cat, .com, .coop, .info, .jobs, .mobi, .museum, .name, .net,.org, .pro, .tel and .travel top-level domains,and some country code top-level domains. Refer to http://www.icann.org/en/help/dndr/udrp

[12] 1998 FSR 265

[13] 78 (1999) DLT 285

[14] AIR 2004 SC 3540

 www.agarwalandco.com

Source: http://iiprd.wordpress.com/2012/06/02/passing-off-action-by-mid-size-foreign-companies-having-unregistered-marks-in-india/