Pre-incorporation contracts: legal enforceability

The formation of a legal entity or a company is in simple words a matter of legal formality. A contract is that legal obligation by which a legal entity ascertains its legal status. Contracts can be considered as the basis of these formalities. As the formation of these contracts involve various discussions at different stages by more than one person pre-incorporation contracts become inevitable. A company normally will not be able to enter into a contract without coming into existence.

Usually a pre-incorporation contract comes into existence prior to the formation of a company. Such contracts will be entered into by the promoters of a company on behalf of the company before the company comes into existence. These promoters are the people who are involved in the formation of a company. They deal with the required formalities of a company's registration from finding directors and share holders to doing negotiations for business contracts for the new company.

But is it possible for a company which is not in existence to enter into an enforceable contract on behalf of the company? According to common law, a company before existence cannot attain a legal status to attain contractual rights or sustain contractual liabilities existing from a pre-incorporation agreement and so the pre-incorporation agreements cannot oblige a company.

In each case promotion of a company varies according to the factual circumstances. Those aspects range from the day when the promoters begin to make contacts on behalf of the company to the starting of the company continuing to the day when the directors of the company take their place. The status of the promoters cease to exist immediately after the formation of the board of directors and from then onwards they start controlling the company. In the process they may be required to constitute different types of contracts.

The promoters of the company may enter into contracts on behalf of the proposed entity which they may refuse to approve or consent once it is incorporated. These contracts include pre-incorporation contracts, provisional contracts and residuary contracts.  

English Law: The Common Law

In English law the case Kelner V. Baxter (1866) 2LR 2CP 174[1] was one of the first case to consider pre-incorporation contracts. The court held a pre-incorporation contract shall exist when the individual who actually acted as a promoter or agent on behalf of the non-existing entity would be legally liable.  Kelner v. Baxter thus confirmed that a company cannot ratify a contract, or purported contract, entered into on its behalf if the company was not in existence at the time a person purported to enter into a contract on its behalf.

Kelner v. Baxter also highlighted the potential for promoters to be liable on contracts they purport to enter into on behalf of an as yet unincorporated entity. What was not clear after Kelner v. Baxter was whether promoters were automatically liable in these situations, sometimes referred to as the “rule of law” approach, or whether the promoter’s liability depended on whether it was intended that the promoter be a party to the contract, sometimes referred to as the “rule of construction” approach.[2]

But while considering the case Newborne v Sensolid (GB) Ltd [1954] [3] the court took a different approach. A consignment of tinned ham was sold to Sensolid under a contract headed "Leopold Newborne (London) Ltd" and ending "Yours faithfully, Leopold Newborne (London) Ltd" and signed by Leopold Newborne. Sensolid refused to take delivery of the ham. It was held that neither the then unincorporated company nor Mr Newborne personally could sue on the contract. Lord Goddard said: This contract purports to be a contract by the company; it does not purport to be a contract by Mr Newborne. He does not purport to be selling his goods but to be selling the company's goods. The only person to have any contract here was the company, and Mr Newborne's signature merely confirmed the company's signature...In my opinion, unfortunate though it may be, as the company was not in existence when the contract was signed there never was a contract, and Mr Newborne cannot come forward and say: "Well, it was my contract."[4]

The English Court of Appeal held that the correct approach was a rule of construction approach. The real test was whether the promoter was intended, in the circumstances, to be a party to the contract or not. It was held that given the way in which the contract was signed by Leopold Newborne it was intended to be a contract with the company and only the company. In other words, given the way in which it was signed it indicated that it was not intended that Leopold Newborne be a party to the contract himself. Thus Leopold Newborne could not enforce the contract in his own name.[5]

In Buffington v. Bardon 80wis 635(1891) the English court observed that: “The law is that a corporation is liable for its own acts only after it has a legal existence. Until that time no one whether a promoter or not can sustain to the corporation the relation of agent, were this not so, we would have an agent without a principal, which is an absurdity”. That the contract should be between the contractor and the company, in which case the company being non –existent, there is no contract at all & no one is liable on it.[6]

Under section 51 of the Companies Act 2006, subject to any agreement to the contrary, the person purporting to act for the company, or as an agent of the company, is personally liable on the contract (Phonogram Ltd v Lane [  1982  ] QB 939). It was held that such a person can also enforce a pre-incorporation contract (Braymist Ltd v Wise Finance Co Ltd [2002] EWCA Civ 127, [  2002  ] 3 WLR 322).[7]

High Court of Australia

Considering the case Black v. Smallwood & Cooper (1966), 117 C.L.R. 52 the High Court of Australia took the similar rule of construction approach to Kelner v. Baxter. Western Suburbs Holdings Pty. Ltd. was not incorporated at the time and Smallwood and Cooper signed as directors thinking the company had been incorporated and that they were directors. The plaintiffs wanted to impose liability on the basis of a rule of law reading of Kelner v. Baxter saying that a contract was clearly intended and since it could not be with the principal (i.e. the company) which was not in existence it must have been with the purported agents Smallwood and Cooper personally.[8]

The majority of the court followed the earlier English case of Newborne v. Sensolid Ltd.

It was held that Kelner v. Baxter was not authority for the principle that an agent signing for a non-existent principal is bound.[9] Wickberg v. Shatsky (1969), 4 D.L.R. (3rd) 540 (B.C.S.C.) is a British Columbia case that also addresses the question of the interpretation of Kelner v. Baxter and addresses the possibility of an action against the promoters on the basis of a breach of warranty of authority.[10] The court held that it is not the case that a person signing on behalf of a non-existent company is automatically personally liable.[11]

The common law position created a risk for both the promoter and the third party that there would be no enforceable contract. Black v. Smallwood and Wickberg v. Shatsky involved cases in which the third party could not enforce the contract against the company. Newborne v. Sendolid Ltd. involved a situation in which the neither the promoter nor the company could enforce the purported contract. This creates a risk that reliance on the purported contract will be defeated along with the potential for an unjust enrichment of promoters at the expense of third parties or third parties at the expense of promoters.[12]

Pre-contractual liability

The German legal system was the most receptive to the idea of pre-contractual liability. The first one to point out the need to introduce the concept of pre-contractual liability for failure to observe the fair conduct (good faith) rule, was the German lawyer Rudolf von Iering.[13] In India the Specific Relief Act 1963 provides provisions for enforcing performance against a company where its promoters have entered a pre-incorporation agreement on behalf of the company. Section 19(e) of the act can be invoked only if the company after its incorporation have approved and accepted the contract and have communicated its acceptance or approval to the other contracting party.

According to section 230 of the Indian Contract Act an agent cannot enforce a contract personally entered by him on behalf of his principle, nor he can be personally liable if he clearly mentions at the time of entering the contract that, he is only acting on behalf of the principle as an agent and so he is not personally liable under the contract. Therefore applying this theory the contract can be infructuous as none of the parties is legally liable under the contract.

Nevertheless, section 15(h) and 19(e) of the Specific Relief Act provides specific answer to this. Section 15 states as follows:

15. Who may obtain specific performance.- Except as otherwise provided by this Chapter, the specific performance of a contract may be obtained by-

            (a) any party thereto;

(b) the representative in interest or the principal, of any party thereto: Provided that where the learning, skill, solvency or any personal quality of such party is a material ingredient in the contract, or where the contract provides that his interest shall not be assigned, his representative in interest of his principal shall not be entitled to specific performance of the contract, unless such party has already performed his part of the contract, or the performance thereof by his representative in interest, or his principal, has been accepted by the other party;

           ………………….

(h) when the promoters of a company have, before its incorporation, entered into a contract for the purposes of the company, and such contract is warranted by the terms of the incorporation, the company: Provided that the company has accepted the contract and has communicated such acceptance to the other party to the contract.[14]

The section enables pre incorporation contracts valid even though it is slightly contrary to the common law principles to a certain extent. Going by the act specific performance of a contract is enforceable against a company where its promoters or agents have entered into a valid contract on behalf of the company before its incorporation. In such a situation a contract is acceptable by the stipulations of the company's incorporation.

The Madras High Court while considering the case Weavers Mills Ltd. v. Balkies Ammal [AIR 1969 Mad 462][15] had made a comprehensive decision. The promoters of the company had consented to buy for the company some properties on behalf of the company to be incorporated. After incorporation structures were constructed on the property by the company after assuming possession. The court took its view that even if the properties were not conveyed on to the company at the time of making the contract by its promoters the company's title over the property could not be set aside.

Therefore, in India, despite the fact that pre incorporation contracts are entered into by promoters or agents of the company before the company's existence they are legally enforceable and has contractual obligations that continue to exist under the Specific Relief Act.

by

Vinitha Prasannan
Google+

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[1] http://www.nls.ac.in/distanceeducationnotes/MBLI/Decembercorporatelawnotes.pdf

[2] http://www.law.uvic.ca/mgillen/315/documents/Ch15-Pre-IncContracts.pdf

[3] http://www.law-essays-uk.com/revision-area/company-law/cases/newborne-vs-sensolid.php

[4] Ibid

[5] http://www.law.uvic.ca/mgillen/315/documents/Ch15-Pre-IncContracts.pdf

[6] Ibid

[7] http://law.jrank.org/pages/16822/pre-incorporation-contract.html

[8] http://www.law.uvic.ca/mgillen/315/documents/Ch15-Pre-IncContracts.pdf

[9] Ibid

[10] Ibid

[11] Ibid

[12] Ibid

[13] Alyona N. Kucher Doctor of Law, Moscow State University School of Law, Russia -paper rtf

[14] http://www.indiankanoon.org/doc/1999481/

[15] http://legalservices.co.in/articles/article/pre-incorporation-contracts-134-1.html

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Saluting Women Reservation Bill- A Step towards Women Empowerment

 "O Lord Why have you not given woman the right to conquer her destiny?

Why does she have to wait head bowed,

By the roadside, Waiting with tired patience,

Hoping for a miracle in the morrow?"[1]

                                                                     ---------        Rabindranath Tagore

All the way through history women have been placed in an inferior status than men in various societies throughout the world. Even though there are differences of opinion regarding the status of women in ancient India, many scholars believed that women used to enjoy equal status with men in all fields of life in those days. It is to be inferred from ancient Indian literary works that suggests that women were educated in early vedic period. Approximately about 500 BC, with the coming of Dharmasathra tradition of Hinduism and the incursion of Babur and the mughal dynasty and later on Christianity had paved way for the decline of woman’s status in India.

Status of women in India was further deteriorated during the medieval period evidenced by sathi, child marriages and forbiddance of widow remarriages within the society. This period is considered to be the “dark age” for women in India. One of the major reasons for such deterioration was foreign invasion. These invasions brought with them their culture which is still reflected in our society. The Muslim evasion in India had brought the purdah system among women in the country.

Although these conditions prevailed in those periods there still existed some women who excelled in their fields of politics, education, religion etc. In spite of the fact that modern era prohibits traditions like sathi, jauhar[2], child marriages etc., in some parts of remote India these practices are still in existence. Pardah has become even more prevalent in recent period. Issues related to women’s identity and status has become much more complex due to civilization and today’s modern technology.

Some of the major issues faced by Indian women in today include Malnutrition, poor health, maternal mortality, lack of education, mistreatment, overwork, lack of power, marriage, dowry, female infanticide and divorce. Considering these aspects the issue of identity and status to women in India has to be considered in a broad spectrum.    

In India during the period of British rule, women were enfranchised on the same terms as men under the Government of India Act of 1935; following independence, the Indian Constitution, adopted in 1949 and inaugurated in 1950, established adult suffrage.[3] Sarojini Naidu headed a deputation of the Women's India Association, which met with the British viceroy to demand the vote in 1919. The Indian National Congress supported woman suffrage. In 1950, soon after Indian independence, women were granted the vote.[4]

Today Indian women are struggling their way to find a space in all fields of the society along with men. Women politicians were rarely seen in the past as compared to women in today’s legislative processes. As the parliamentary method of legislation is the basis of democracy in India, the parliament has to be legitimate machinery that helps to enhance the country’s progress. Therefore, the citizens of the country shall not be divided on the basis of gender.

As a realization to the above thought the draft proposal for 33.3 % of women’s reservation in parliament and state legislatures was first put forth by the United Front Government under the leadership of H. D. Deve Gowda. The bill was first introduced in Lok Sabha on September 12, 1996.[5] From then onwards the bill has been introduced several times in parliament but was not able to pass due to lack of political support and the male chauvinistic attitude of the existing members.

Each individual is distinct in his/her own way regardless of the gender. Some people may be more efficient than the other due to different factors surrounding their upbringing. But some may argue about the need for women’s reservation as this alone cannot bring a change in society’s attitude towards women. Even though reservation or division of power between men and women is not a sole tool for changing women’s status in India, this can certainly be considered as a stepping stone towards women’s empowerment.

One aspect is certainly worth appreciable as this women’s reservation bill was passed with a striking majority. The Bill’s rotational method of reservation will make two-thirds of parliament, about 360 members, one-term MPs. 181 women’s seats will get reserved in a general election, and 181 other general seats will be reserved for women in the following election.[6]

Granting space in the legislative process may not be sufficient to change the status of women in the country. Today hundreds of women in India are still left to face the atrocities of the society. Women may be in a better position to understand her problems in relation with the existing social and political environment prevalent in the county. There are sufficient women in the country who are capable of running the legislative process and they shall be given an opportunity to exercise their rights. It is now evident that for the social and economic development of the country participation of people beyond any gender barrier is highly essential. Even though the percentage of women in our parliament shall not be a deciding factor in changing present attitude of the society towards women, it surely can bring up a positive change in the mind of people.

India has the history of great women leaders who proved to be capable of distinct administrative capacity. In the year 1966 India Gandhi caught the news headlines by becoming the female head of the State. In the recent years there has been an increase in the rate of women leaders in India and around the world.  Many political parties like NCP had favoured passage of the women's reservation bill by the Lok Sabha in order to provide political empowerment to the fair gender. India has passed laws that make it mandatory for local governments to include women. [These laws do not apply to state and national level legislatures.] One third of the seats in local bodies—gram or village panchayats, municipalities, city corporations and district bodies—are "reserved" for women.[7]

Elections to zilla and taluk panchayats will see 50% reservation for women.

Governor H R Bhardwaj has approved the Panchayat Raj Act (Amendment) Bill, 2010, paving the way for enhancing women's reservation from the existing 33% to 50%, and use of electronic voting machines (EVMs) in elections to panchayat raj institutions.[8] The Panchayat is a system of village-level (Gram Panchayat), block-level (Panchayat Samiti), and district-level (Zilla Parishad) councils, members of which are elected by the people, and are responsible for the administration of local public goods. Each Gram Panchayat (GP) encompasses 10,000 people in several villages (between 5 and 15).[9]

The Left Front government in Tripura has decided to enforce 50 per cent reservation for women in the elections to the Agartala Municipal Council and the 15 nagar panchayats.[10] The amendment bill has been passed in the Lok Sabha of Jharkhand and in the Jharkhand Panchayat Election 2010 there will be a reservation of 50% for the women. Bihar, Uttarakhand, Andhra Pradesh, Gujarat and Madhya Pradesh have already implemented the policy of providing 50% reservation for women at the local level. Enhanced reservation will be applicable to the total number of seats to be filled by direct elections, offices of chairpersons, and seats and offices of chairpersons reserved for scheduled castes and tribes. At the national level, of the total elected representatives of panchayats (28.1 lakh approx), 36.87% are women. With the proposed constitutional amendment, the number of elected women representatives is expected to touch more than 14 lakh.[11]

Even though women will be faced with substantial difficulties in politics considering her other responsibilities than men, the participation of efficient women with great developmental plans is what our country need today.

 Submitted by Vinitha Prasannan

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[1] Words of Rabindranath Tagore quote from http://www.mapsofindia.com/culture/indian-women.html

[2] Jauhar and Saka refer to the honorary self killings of men and women of the Rajput clan in order to avoid capture and dishonour at the hands of their enemies

[3] http://teacher.scholastic.com/activities/suffrage/history.htm

[4]  Women's suffrage in Asia

[5] http://news.rediff.com/special/2010/mar/08/whats-the-womens-reservation-bill-all-about.htm

[6] India’s Women’s Reservation Bill - Rakesh Mani

[7] Women in Panchayati Raj: Grassroots Democracy in India Experience from Malgudi by Poornima and Vinod Vyasulu¨

[8] http://timesofindia.indiatimes.com/city/bangalore/Woman-power-in-panchayat-elections/articleshow/6423954.cms

[9] The Impact of Reservation in the Panchayati Raj: Evidence from a Nationwide Randomized Experiment

by Raghabendra Chattopadhyay and Esther Duflo ∗

[10] http://www.telegraphindia.com/1100828/jsp/northeast/story_12856931.jsp

[11] Ibid

India s Accession to Madrid Protocol

India’s Accession to Madrid Protocol- A new arrow in the quiver of Indian Trademark Law

Introduction

ONE application, in ONE place with ONE set of documents in ONE language with ONE fee in ONE currency resulting in ONE registration with ONE number and ONE renewal date covering more than ONE country [1]

In essence, this is what the Madrid Protocol aims to achieve while providing for international registration of trademarks. In India there is no system yet wherein a single trademark application is sufficient to protect the trademark right internationally. At present, a person desirous of obtaining registration of his trademarks in other countries has to make separate applications in different languages and pay different fees in the respective countries. There is no provision under the Trademarks Act, 1999 to facilitate Indian as well as foreign nationals to secure simultaneous protection of trademarks in other countries. On 8th February 2007, the Union Cabinet ratified India’s accession to the Madrid Protocol, which will provide extensive protection to Indian trademarks overseas and facilitate foreign firms to file their trademarks in India.[2] “The accession would facilitate speedy registration of Indian marks in different markets worldwide and promote business confidence in the Indian Intellectual Property Rights system globally”, Finance Minister P. Chidambaram told reporters after a meeting of the Cabinet Committee on Economic Affairs (CCEA) on the same day. However, India has clearly specified that it intends to join the Madrid Protocol for the international registration of trademarks and not the Madrid agreement (difference between the two discussed further). The Union Cabinet gave its approval for India’s accession to the Madrid Protocol in February 2007. Steps are now being taken to amend the Trademarks Act 1999 and hence a Bill has been introduced in the Parliament to start the necessary procedure for accession to the Protocol. The Indian Trademarks Rules, 2002 will also be amended pursuant to the amendments in the Trademarks Act, 1999.

India’s accession to the Protocol - Pros & Cons

The Indian trademark practice of filing applications in each country for registration and tracing them simultaneously is quite time consuming and expensive. For that reason, it is a boon for India that it has become a member of the Madrid system, and we should realize the advantages of the same since it enables an applicant company seeking international registration to file only one application and pay only one fee in local currency.

The trademark protection under Madrid Protocol may be extended to additional jurisdictions at any time, as and when they join the Madrid system. A mark registered under the Madrid system is deemed to get the same protection as if it is being directly registered in each country. If the trademark office of a designated country does not refuse protection within a specified period, the protection of the mark is the same as if it had been registered by that office.

It is also pertinent to note that under the Madrid system the applicant can make any change of name, address and so on and so forth and also renew the registration across all applicable jurisdictions through a single administrative process.

The pharmaceutical industry is the major beneficiary of India’s decision to join the Madrid Protocol and the benefit derived by the Pharmaceutical industry is also seen to have percolated to other industries such as Coffee, Tea, Cocoa and Electronic industry[3]. Though the corporate houses are set to gain a lot by this step taken by India but it will not be so for the small sector industries owing to the high cost involved in registration.

Another major criticism is that the Madrid Protocol still retains ‘dependency’ of the international registration on the existence of the basic registration. Although under the Madrid system the number of international registrations subjected to a central attack is less than 1%[4], there seems to be a lack of policy consideration behind inserting such a provision. This is especially so when each national office has been given sufficient time to enable them to invalidate trademarks based on their domestic law, including opposition proceedings.

Further, if the registration in India is invalidated on the ground that the trademark is in violation of an earlier mark,[5] then the impugned mark automatically loses its protection in other countries even if the infringed earlier mark did not even exist in that other country!!! However, the risk of central attack is mitigated by the introduction of the possibility of “transformation”. Thus, the filing date of the international registration will be maintained. Although, the Protocol mitigates such attacks by way of the principle of transformation, transforming the application into a direct national application may be more costly and time-consuming than filing separate national applications[6].

In the fairness of the scheme, it seems beneficial for India to have joined the Madrid Protocol and help Indian business community to get international registration of their trademarks at affordable cost and on a time bound manner. However, infrastructure and the resources available to Indian trademark registry need to be strengthened and training has to be imparted to the officials of Trademarks Registry to be able to handle such international applications. Similar training is also desirable for the legal fraternity with assistance from WIPO.

It is often found that the filing rate is quite high in case of member countries having depository system as against the countries which follow comprehensive system of examination of applications for registration of trademark. Accordingly, the filing rate of application for registration of trademarks in India is quite high and the infrastructure and resources available with the Indian Trademark Registry are insufficient as compared to other countries having lesser or same filing rate.  Although the Indian Trademark Registry has cleared the backlog of five years by ad hoc measures so that it could be in a position to join Madrid Protocol, yet it needs a long term strategy so as not to allow the backlog to resurface since the human mechanism cannot be sustained for long. This requires strengthening of the infrastructure and raising IT level supports[7].

The IT system in the Indian Trademarks Registry needs a holistic revamping for which strong support is needed from Indian Government and WIPO, together with the assistance of a team of dedicated officers. As of today, the working strength of officers therein is sufficient to discharge the day to day statutory duties. If these officers are diverted, a strong possibility of the backlog resurfacing exists. A solution for this is to hire experts from technical as well as legal fields.

It is often debated that the concept of e-filing cannot be achieved by India. But the Intellectual Property Offices in India have commenced e-filings of patents and trademark applications. Now applicants can file their patent and trademark applications from anywhere in the world at any time as per their convenience with the help of the internet. Payments can also be made through the Payment Gateway of authorized bankers, which will save time and money and the hassles involved in visiting and filing the applications in the offices[8]. A major program of modernization of the infrastructure of Intellectual Property offices of India costing Rs. 153 crore was implemented during the 10^th Five Year Plan. Computerization has been one of the key components of the modernization initiative. As part of this, facilities have been created for e-filing of patent and trademark applications[9]. Soon, the complete process of grant of patent or registration of trademarks will become online and the Indian Patent and Trademarks Offices will function almost as paperless offices. The modules for the e-filing and online processing have been developed by the National Informatics Centre. Thus with the launching of the e-filing facility the first phase of the modernization drive comes to an end.

Factors like difficulties over delay and the differences in level of strictness of Indian Registries compared to their foreign counterparts are such that can have serious implications in India while implementing the Madrid Protocol. There would be a penalty on Indian trademark owners if the Indian trademark registry does not transmit and ensure receipt of their international applications by the International Bureau within two months of filing. In such an event, instead of the date of filing, date of receipt by the IB would become the date of the international application. If the Indian trademark registry does not expedite its processing it would put its nationals at a relatively disadvantaged spectrum since offices of other countries work faster.

It is also notable that to oppose the extension of international applications into India, notice of publication of both, international registrations and of recordals of extension, would have to be taken from the Gazette of the International Bureau even though it warrants that a few copies shall be furnished to the Indian trademark registry. From the date of the international registration or recordal in favour of a foreign trademark, its protection in India will also commence as if the mark had been deposited directly with the Indian trademark registry. This will require the Indian trademark owners to engage internationally savvy trademark agents. Though this step would result in a burdensome expense for some Indian trademark owners yet, it is necessary so as to safeguard their rights.

The Bill provides that the Indian Registrar of trademarks will be empowered to take up applications from the countries that are the part of this Protocol; But this sure to become an additional burden for the Registrar of Trademarks Office. Further, no clear procedure has been laid down in the Bill regarding the processing of the international and domestic applications.

Further, the Bill also fails to look into the aspect of providing protection to the non-visible marks. In the present scenario, protection of these non-visible marks has gained a lot of importance on the international front. But the proposed Bill does not contain any references about this new emerging branch of trademark.

Conclusion & Suggestions

Even though the Trademarks (Amendment) Bill, 2007 is pending before the Parliament for consideration, India still has to bring several changes in the existing infrastructure. In this regard, we can take a clue from South Africa. In September 2003, South Africa approved the ratification of the Madrid Protocol but temporarily suspended their accession to the Protocol. This was done with a view to allow the Companies and Intellectual Property Registration Office (CIPRO) time to reduce the period of examination of trade mark applications before the Protocol kicked in. This was done so as to reduce the backlog of trademark applications awaiting examination. However, when we think of India, we have to admit that we have not given enough thought to this particular aspect while implementing the Madrid Protocol even though India has no better record than South Africa in the time taken for examination of applications.

Accordingly, before implementing the system care should be taken as regards the possible ways to reduce the backlog of applications already awaiting examination as well as the time taken by the trademark office in examining these applications. It is submitted that if the delay in examination of application is not reduced, considerable loss would have to be borne by the Indian proprietors.

I would like to put forth a few suggestions which might help us to cope better with the changes that will be brought about by the Amendment in the Trademarks Act, 1999. These suggestions are :-

·         Update the government website and have facilities for online make trademark search

·         Make trademark journals and records of the already registered trademarks available online.

·         More IT trained personnel should be inducted and there should be a complete computerization of records besides making substantial additions to the main infrastructural facilities.

·         The Indian Trademark Journal should contain special issues dealing with Indian marks that should be made available in the Gazette of the International Bureau so that engaging of internationally savvy trademark agents can be avoided and thus, the time and cost involved can be reduced.

·         An additional provision should be added in the Bill by way of which the definition of goods and services in the Bill would comply with the provisions of the NICE agreement.

·         The concept of non-visible marks and their protection should be included in the proposed bill.

·         The e-filing system should be started in full-fledged manner and it should not remain merely on paper.

·         Government should provide funds for modernizing the IP infrastructure. For that requisite funds should be allocated and provided for in the country’s annual budget

·         Provisions should be included in the Bill regarding the procedure of international registration.

Now that India has acceded to the Madrid system, major changes (as specified above) in the prevailing Indian trademark registration regime are warranted, which India is already in the process of adopting. Thus, the step taken by India of acceding to the Madrid Protocol could not have been more appropriate than anything at this point of time, with more and more Indian companies going global.

References :

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[1] The Madrid system for international registration of marks, (International Trademarks Association, New York) 2000, p.8, http://www.inta.org/ (10 October 2007)

[2] “India accedes to Madrid Protocol on trademarks protection”- THE HINDU- Online edition of India’s National Newspaper, Friday, Feb 9, 2007.

[3] Should India join Madrid Protocol, K.K.Sharma, Advocate and IPR consultant, Halsbury’s Law, March 2008.

[4] Protecting your trademark abroad: 20 questions about Madrid Protocol (WIPO, Geneva) 2001, at p.13.In 2000, nearly 23000 international registrations were effected; during the same period, only 140 international registrations were cancelled (in whole or in part) as a result of the central attack.

[5] Trademarks Act 1999, sec 33

[6] Celedonia Baila.H. & Epstein Jeffrey H, Limitations of the Madrid Protocol for US companies, Practising Law Institute: Patents, Copyrights, Trademarks and Literary Property, Course handbook series, 387 (1994), 257-284

[7] Online registration of trademark applications in all the regional offices and headquarters has begun from October 2002 and a digital database library on CD-ROMs of 150000 Trademarks Certificates and 1250 Trademarks Journals has been created.

[8] India to file application for ISA and IPEA recognition soon,- Kamal Nath launches e-filing of patent and trademark applications. The Hindu, 20 July 2007. Shri. Kamal Nath, the former Union Minister of Commerce and Industry, has launched the e-filing of patent and trademark applications, at the function oraganised by the Department of Industrial Policy and Promotion(DIPP).

[9] There are only a dozen or so countries which have e-filing facilities at present and India now gets into this elite group consisting of countries like USA, Japan, South Korea, China and the European Patent Office.