LEGAL ASPECT OF BUSINESS PROJECT

Assignment of contracts
and
The position under Intellectual property rights

Project by Group B-2

Name Roll Number

Adarsh Agarwal 21P063

Aman Sikka 21P064

J Lalith Reshma 21P083

Jawed Iqbal 21P084

Rishabh Jain 21P103

Rahul Kochar 21P104

Under the Guidance of

Dr. C.L. Bansal
Professor, MDI Gurgaon
 TABLE OF CONTENTS

CONCEPT OF THE LAW ........................................................................................................................... 3

LICENSING OF THE INTELLECTUAL PROPERTY RIGHTS .......................................................................... 3
TYPES OF IP ASSIGNMENT AGREEMENT................................................................................................ 3
LEGAL PROVISIONS OF IP ASSIGNMENT AGREEMENT .......................................................................... 4
HISTORICAL JUDGEMENTS ..................................................................................................................... 6
Bajaj Auto Limited Vs. TVS Motor Company Limited........................................................................ 6
Nuziveedu Seeds Ltd. And Ors. Vs Monsanto Technology LLC and Ors ........................................... 7
B.N. Firos v State of Kerala................................................................................................................. 7
Novartis v. Union of India [CIVIL APPEAL Nos. 2706-2716 OF 2013] ................................................ 7
Parakh Vanijya Pvt. Ltd.v. Baroma Agro Product & Ors ................................................................... 8
CONCLUSION .......................................................................................................................................... 8
REFERENCES ............................................................................................................................................ 9
 CONCEPT OF THE LAW

Intellectual property rights (IPR) are the rights given to individuals or organizations by the
state over their original creations. These rights give the creators an exclusive right over their
creation for a certain period of time. These are usually classified as Trademark, Industrial
Design Copyright, Trade Secrets, Patent etc. which are governed by different statutes in their
respective legislatures. While some rights can be specific to those with registered IPs, some
are available to all owners of IP.
Assignment of intellectual property (IP) is a transfer of ownership between the inventor and
assignee where the assignee is free to exploit the rights for any purpose, and the inventor is
paid for the same. This is performed when the inventor signs an agreement which details an
explicit transfer of all rights and authority over the said IP made during the course of their
engagement to the said commissioning person or organization.
The procedure of intellectual property assignment contains transferring an owner’s rights,
title and interest vested in the intellectual property rights. The transferring party (‘Assignor’)
of the intellectual property rights may transfer all or only some part of his rights – e.g. the
copyright owner could assign only some parts of the IP to the assignee & keep the remaining
part for himself. The transfer of intellectual property rights is completed by making a payment
of a lump sum or through the mode of royalties.

LICENSING OF THE INTELLECTUAL PROPERTY RIGHTS

License is an agreement between 2 or more parties, where the licensor consents upon sharing
the rights to sell, use, make any products covered under the IP, with the licensee under certain
terms and conditions agreed between both parties. Generally, in such a case, royalty is
provided by the licensee in exchange for the license. There are three types of licensing:
1. Exclusive license: This kind of license is where licensee excludes everyone including
the licensor from using the IP, hence reserving them exclusively for themselves.
2. Non-Exclusive License: This kind of license is where the licensee and licensor utilize the IP
rights together and the same can be licensed to any third party as well.
3. Sole License: This is the kind of license where both the licensee and the licensor use their IP
rights but the same cannot be transferred to any third party.

TYPES OF IP ASSIGNMENT AGREEMENT

Assignment of contracts
Copyrights in India are governed by the Copyright Act, 1957 which specifies the rights
assigned, the duration, the territorial extent and the royalties, if applicable of the formed
contract. If the contract doesn’t specify the duration of the contract, then it shall be deemed
to be for five years and in case there is no territorial extent specified in the contract, then it
shall be deemed to be within the country i.e. India.
Section 19A details provisions regarding any kind of dispute that may arise in a Copyright
Assignment. This section states that if an assignee fails to exercise the rights assigned to them
& an inquiry is carried out by the board and the failure is not attributed to any act or omission
by the assigner, then the assignor has the right to apply for revocation of the assignment with
the copyright board.

Assignment of Patents
Patents Act, 1970 governs the patent assignment in India. This Act enables patents to be
assigned in complete or partial manner as well as exclusive & non-exclusive manner. Section
68 of this Act states that for the contract to be considered enforceable, it must be made in
writing and then registered with the Controller.
For the concept of assignment or transfer of IP which affects the proprietorship of the IP or
creates an interest in the IP, all the relevant documents must be presented with the controller
along with 2 copies of assignment deed & other ancillary documents submitted.

Assignment of Designs
Section 15 of Copyright Act, 1957 provides provisions for the assignment of design. For the
execution of the instrument of assignment, an application must be filed within 6 months for
registering the title. The transfer of the design is recorded in the Register of designs which
serves as a proof of the title.

Assignment of Trademark
Rule 68 of Trademark Rules, 2003, allows registered trademarks to be assigned by making a
request under Form TM-23 or 24 which depends if the assignment has to be made between
assignee or with the proprietor as well. The application shall contain details of the claim to
the trademark & a copy must be produced at the Registry for inspection.

LEGAL PROVISIONS OF IP ASSIGNMENT AGREEMENT

Objective and scope
The scope of IP agreement defines and lists the rights along the scope of the agreement to
assign the extent of the contract. The individual who transfers the IP rights must possess the
Intellectual Property which he already possesses or shall possesses in the future as listed in
the agreement itself.

Assignment Clause
The transfer of ownership of the IP rights is enlisted in the main assignment clause which is
the keystone to the IP Assignment Agreement. A well-defined & clear outline of the entire
agreement is laid down in the IP Agreement Assignment which prevents issues of the IP rights
between different individuals. The process of transfer of rights from assigner to assignee is
clearly specified in the IP Assignment clause, for example the assignment clause is completed
and the contract becomes effective if particular actions are completed which are laid down
in the IP Agreement Assignment.
Terms of Assignment
The terms of assignment agreement specify the duration i.e. the time period during which the
IP agreement would remain active on the said Intellectual Property. The length of the
assignment can range from being either indefinite or may remain active only for a limited
definite period of time. The term clause must also specify the details of the process of renewal
of the IP agreement. Many of the IP Agreements have auto renewal clause in the agreement
which specifies that the agreement shall renew perpetually unless the parties agree to
terminate the agreement by giving it in writing.

Territory of Assignment
The territorial limits under which the assignment works is defined under the territory clause
of the IP Assignment Agreement. This clause clearly lays down specificity of operations of the
IP assignment by specifying the boundaries & areas under which the IP assignment is active.
Both the terms and territory are defined together in an agreement e.g. “According to the
agreement, the said Intellectual Property the property has been made the property of the
assignee from the starting date of the agreement till the ending date. This Agreement shall
remain active in the territory of India”.

Future Transfers
Generally, in Perpetual IP Assignment Agreements, the parties give in writing the intentions
regarding the future rights which clarifies the agreement about the future transfer.
Comparatively, in the fixed duration agreements, the future transfer rights are very restrictive
as any rights which have to be transferred are already very limited in scope and territory
under which they are active e.g. “According to this agreement, the assignee shall not transfer
any rights of the Intellectual property to any other third party without a written consent from
the Assignor’s side which would result in the transfer becoming null and void.”

Representation & warranties

The representation and warranties clause clearly lay down the Assignor’s liabilities & specify
provisions on how the assignee or the assignor can lawfully terminate the existing IP
agreement. The agreement must clearly lay out warranties from assignors like the scope,
future transfers etc.

Confidentiality
Confidentiality clause is responsible for not only the assignor’s interest while the Agreement
is active but also provides a safeguard when the agreement has expired. A well drafted
confidentiality clause prevents losses to companies or individuals by preventing the leak of
confidential information which could harm the assignor. Confidentiality clause paired with a
non-disclosure agreement safeguard the interest of the assignor by preventing the misuse or
disclosure of confidential data.

Indemnification
On account of any misrepresentation in the Assignment Agreement or any other breach of
warranties by the Assignor himself or by his officers, shareholders, successors or partners, an
Indemnification clause is important to protect the assignee from any financial losses or
litigation expenses. This acts as a major protection against fraud by protecting the assignee
from any penalties or fine which might have been imposed to assignee through no fault of
their own.

Further Assurances
In further assurances clause, any assist regarding the further procedural clearances or
permissions which may come up in the future are assured by the assignor to the assignee.
This clause also specifies the procedure to use IP rights & make effective use of the same,
hence preventing being stuck in legal hurdles. Therefore, this clause helps the assignee
effectively complete the transfer procedure.

Power of Attorney
One of the most important clauses during transfer of assigned IP is the power of attorney
which is responsible for ensuring that in case assignor’s signature are not available on any
patents, trademarks or copyrights then the assignor can appoint someone else on his behalf
to execute such applications & other documents to fulfil the required duties.

Remedy Provisions
This is a clause which is responsible for providing relief specifying the rights of different parties
under various multitudes of conditions to approach the court of law. This helps both the
parties as it reduces the burden of both by saving time & money in case of conflicts. This
clause can be used to provide remedies as well as damages as per the already negotiated
price between parties.

HISTORICAL JUDGEMENTS
Bajaj Auto Limited Vs. TVS Motor Company Limited

Fact: Dispute between the parties over patent to use Twin-Spark Plug Engine Technology. It
involves the unauthorised application of the patented application DTSi. This case involves the
patent infringement by the defendant and the damages caused by its use.

Argument: After the case filed by the plaintiff the defendant argued that the plaintiff through
the case is obstructing the launch of their product (TVS FLAME). Therefore, the defendant
also filed the suit to stop plaintiff from issuing threat and interfering the launch of their
product under section 108 and 109 of patent act, 1970.

Judgement: Supreme court granted interim injunction in the favour of the applicant & also
directed all the courts in India for speedy trial and disposal of causes related to the intellectual
property.
Nuziveedu Seeds Ltd. And Ors. Vs Monsanto Technology LLC and Ors

Fact: The dispute was over the royalty and license for patented seed technology. The issue
raised in this case was complicated, and it required technological and expert evidence to see
whether patented DNA sequence was a plant or a part of the plant, and to see chemical
process, biochemical or microbiological process etc.
Argument: Naziveedu according to the section 3 contended that plants and animals as whole
is basically a biological process for production. The claims by appellant does not hold as plant
or seed which has a nucleic acid sequence cannot be granted a patent in India. According to
the Monsanto the subject matter is a non-living organism as gene is merely a code used for
production of protein in living organism.
Judgement: The appeal filed by Monsanto was allowed by the Supreme court. Considering
the facts and circumstances the apex court decided to provide no interference during the
pendency of the suit and it should be remanded with single judge for disposing it in
accordance to the law.
B.N. Firos v State of Kerala

Fact: A developer of the software program, which was created while working in government
project, on seeing the state government notification to declare it as ‘Protected System’
challenged it under Section 70 of the IT act 2000. Microsoft undertook to make Kerala
government as the owner of the software.
Argument: The appellant challenged the Kerala government in Supreme Court on ground that
this is the violation of his ownership of the software as it was developed by them as part of
the project. The Kerala government argued that the appellant developed this software under
the contract with Microsoft. Microsoft undertook to make the software available to Kerala
government, making them the owner of the copyright.
Judgement: The supreme court rejected the appellant developers claim by stating that the
government should be the first owner of the software since the software was created as part
of the government project. It holds that the work was first published by the government body
as per section 2(k) of the copyright Act. Since the conditions were satisfied, section 70 of the
IT Act 2000 can be considered as lawful.
Novartis v. Union of India [CIVIL APPEAL Nos. 2706-2716 OF 2013]

Fact: On 17th July 1998, Novartis a Swiss company filed a patent in Chennai office. Here, due
to the lack of novelty, non-obviousness and invention, Novartis was not allowed to patent the
drug and use it as exclusive product.
Argument: For one of the drugs named ‘Gleevec’, Novartis filled an application for patent,
covering it as invention as mentioned in section 3 of Patent Act, 1970. Novartis sought to
prevent various literature on imatininb to be considered a prior art.
Judgement: After 7 years of long battle supreme court rejected the plea by giving following
reasons: This was a landmark judgement as the court acted beyond technicalities to quell the
attempts of companies to increase the patent, which made medicines inaccessible at nominal
rates.
Parakh Vanijya Pvt. Ltd.v. Baroma Agro Product & Ors

Fact: This case was initiated after the order passed by the Calcutta High Court where it
allowed the respondent to use the word ‘MALABAR’ along with ‘BAROMA’ to sell its product
– Biryani Rice.
Argument: The appellant filed a suit against the defendant who was using the tag ‘MALABAR
GOLD’, which was also used by the appellant to sell a similar product, that is ‘Biryani rice’. In
response the defendant changed the tag by adding ‘BAROMA’ along with the word
‘MALABAR’. To react to this appellant filed the suit in supreme court.
Judgement: Supreme court affirmed the decision of Calcutta High Court, and dismissed the
appeal without cost. The court directed that the respondent can use the word ‘MALABAR’ in
conjunction with the word ‘BAROMA’, where he can increase the relative size of the word
‘MALABAR’ by not more than 25%. The apex court held that the two labels looked significantly
different on comparison. Therefore, the supreme court upheld the order of Calcutta high
court as it did not find any serious infringement in IP by the respondent.

CONCLUSION
Intellectual Property are the rights given for an idea or the creation of mind. It gives the
creator an incentive to innovate and a protection to have an exclusive use of that idea over a
period of time. In general IP are of four types in India: Trademark, Patent, Copyright, and
Trade Secrets.
Just like the Competition Act, IP law has procedures for both criminal and civil proceedings.
Except design and patent criminal law is applicable all other intellectual property. One of the
major disadvantages with the civil proceedings in IP law is that it is unlikely that extremely
large or major damages can be recovered through civil proceedings.
Supreme court has set precedent for future IP related cases through its various judgements.
Through these cases the apex court has not only stopped major firms from misusing the
patent laws for making their own hegemony in the market but also helped in stopping the
infringement of trademark or other IP of an existing organization. Some of the precedent set
by the apex court through its judgements are:
• Certain goods might belong to the same class but their commercial application,
business and market might be very different. This will obviate any likelihood of
confusion and hence this will not infringe the IP of an organization
• Just an incremental change in existing technology or drug cannot be considered as
novel innovation. Hence, the existing patents cannot be extended as the
companies might use this to control the production of the product, which will
make the product inaccessible at nominal rates.
• Supreme court directed that hearing for the intellectual property cases should
take on day to day basis and final judgment should be given within four months
from the date when the suit was filed.
• It opined that the consumers from high income group cannot be taken as general
proposition and should be taken as individual as each person has a different
mindset to a particular situation.
• Any software or technology developed by a developer while working for a
government or an independent organization’s project cannot be patented by the
developer as his own, and should be considered as government or an organization
as an owner.

REFERENCES
• https://blog.ipleaders.in/important-provisions-ip-assignment-agreement/
• https://legex.in/blog/transfer-assignment-of-intellectual-property-rights
• https://www.lexorbis.com/pdf/IP_Cases_2019.pdf
• https://www.vakilno1.com/slider/5-important-judgments-intellectual-property-rights-
cases.html