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Assignment of Contract

An agreement enforceable by law becomes a contract. A contract involves both rights and obligations because a contract is an agreement enforceable by law. An agreement involves promises from both sides, and thus, there is the creation of both rights and obligations. For instance, X promises to sell his car to Y, and Y promises to pay Rs. 5,00,000 for his car. This constitutes a valid contract between X and Y. Here, the right on the part of X is to get Rs. 5,00,000 as consideration for selling his car, and the obligation for X is to deliver the car to Y as consideration for Rs. 5,00,000 paid to X by Y for selling his car.

Similarly, the right on the part of Y is to get the car delivered as consideration for Rs. 5,00,000 paid, and the obligation for Y is to pay Rs. 5,00,000 as consideration for the vehicle. If either X or Y fails to discharge their responsibility, there will be a breach of contract. In this way, a contract leads to the creation of both rights and obligations for both parties.

Assignment of contract refers to transferring contractual rights and liabilities under the contract to the third party with or without the other party’s concurrence. For instance, X owes Y Rs. 1,000, and Y owes Z the same amount. In this case, Y is under obligation to pay Rs. One thousand to Z and has the right to receive Rs. 1,000 from Z. In this case if Y asks Z to directly pay Rs. 1,000 to X, and if X accepts the same, there will be an assignment of Y’s right to Z. But, if in a similar situation, instead of transferring his ownership, Y would have transferred any of his obligations, then it would amount to novation. Section 37 of the Indian Contract Act, 1872, enables the parties to dispense the performance by way of the contract’s Assignment. Apart from conforming with the Indian Contract Act, 1872, there are exceptional circumstances where the contract assignment must be duly stamped in conformity with the provisions of the Indian Stamp Act, 1899.

The common law system did give effect to three kinds of transactions, viz., acknowledgment, novation, and power of attorney, which to some extent did work of an assignment. Under the Indian Contract Law, any form of contract can be assigned as long as consent is involved in the Assignment. The consent of the ‘promisee’ is necessary for assigning any obligation under the contract. There are three parties involved in contracts of Assignment, namely, the assignor, assignee, and obligor. The working and application of the contract assignment depend on a multiplicity of factors such as the contract’s language, applicability, availability of the assignment clause in the agreement, etc. There are contracts that contain a clause prohibiting Assignment, while other contracts require the consent of the other party to the Assignment.

But if a contract between two parties relies entirely on the’ promisor’s skill or expertise, then such a contract cannot be assigned under any circumstances. This is because the ‘promisee’ has entered into the contract based on the’ promisor’s skill or expertise. The case of Robinson v Davison is important case law in this regard . In this case, the defendant’s wife promised to play piano on a particular at a concert. She was unable to discharge her liability, that is, to play piano at the concert because of her illness. In this case, it was held that the contract was directly dependent on the good health and the personal skill of the defendant’s wife, and the illness of his wife discharged the contract. It was also stated that the defendant could not be made liable to pay compensation for the non-performance of the contract. As the contract was based on the ‘promisor’s skill in the above case law, the wife could not assign her right/obligation to any third party.

Case Study: Kapilaben & Ors. v Ashok Kumar Jayantilal Seth through POA Gopalbhai Manusudhan Case

Kapilaben & Ors. v Ashok Kumar Jayantilal Seth through POA Gopalbhai Manusudhan is a recent judgment delivered by the Supreme Court of India on November 25, 2019, concerning the Assignment of rights and Interests in a contract. In this judgment, the Supreme Court reaffirmed that a party to a contract could not assign its liabilities or obligations without the consent of the other party.

The facts of the case are: The appeals to the Supreme Court resulted from the Gujrat High Court’s decision that had allowed the appeals of the respondent against the trial court’s decision. The dispute, in this case, is related to a property owned by the appellants (Vendor). The appellant has had formulated an agreement to sell in favor of some of the respondents in 1986 regarding the above-mentioned property. The respondents, who were the original vendees, had paid a part of the consideration part. The Original Vendees, in 1987, assigned the former’s rights in favor of Respondent 1 and executed an agreement in favor of Respondent 1. This led to several disputes, and subsequently, Respondent 1 filed suits against the Original Vendees and the vendor demanding specific performance of the agreement executed in 1987. The Respondent’s suits were dismissed by the trial courts stating that the Original Vendees could not have assigned their outstanding obligation of paying Vendor the remaining money to Respondent 1 without the consent of the Vendor. On the other hand, Gujrat High Court reversed the decision of the trial court and declared the Assignment of rights in favor of Respondent 1 as valid.

The Supreme Court in its judgment reaffirmed the view of the trial courts and stated that: “ It is further relevant to note that under the 1987 agreements, payment of the outstanding consideration amount is to be made to the original vendees, not the Appellants, and possession/ownership of the suit property is to be handed over by the original vendees. The 1987 agreements nowhere provide for the discharge of the original vendees’ pending obligations towards the Appellants by Respondent Nos. 1. Hence, we are inclined to accept the Appellants’ argument that the 1987 agreements were not a case of Assignment but appear to be independent/sovereign agreements for sale which were contingent and dependent on the execution and implementation of the 1986 agreement. Therefore, the only way Respondent Nos. 1 can seek specific performance of the 1986 agreement against the Appellants is by proving the Appellants’ knowledge of and consent to transfer the original vendees’ rights and liabilities Respondent Nos. 1.”

From the above discussion, it is clear that the Assignment of contract refers to transferring contractual rights and liabilities under the contract to the third party with or without the other party’s concurrence. Section 37 of the Indian Contract Act, 1872, thatenables the parties to dispense is the performance by way of Assignment of the contract. Under the Indian Contract Law, any form of contract can be assigned as long as consent is involved in the Assignment. The consent of the ‘promisee’ is necessary for assigning any obligation under the contract. The working and application of the contract assignment depend on a multiplicity of factors such as the contract’s language, applicability, availability of the assignment clause in the agreement, etc. There are contracts that contain a clause prohibiting Assignment, while other contracts require the consent of the other party to the Assignment. The Assignment of obligations/liabilities is not possible in the case of contracts solely relying on the personal skill or expertise of the ‘promisor’.

The recent judgment of the Supreme Court in Kapilaben & Ors. v Ashok Kumar Jayantilal Seth, through POA Gopalbhai Manusudhan Case, also reaffirms that in case of transfer/assigning of outstanding obligations under the contract, the consent of the other party is a necessary condition to make the Assignment valid. Even though this judgment reaffirms the point upheld by law, it still suggests the parties to a contract consider the various complexities of contracts, the intent contract, the availability of the assignability clause in the written agreement, etc., before drafting a commercial contract.

References:

The Indian Contract Act, 1872, No. 2(h) (Indian).
Dr. R.K. Bangia, The Indian Contract Act, 2 (12 th Edition, 2005), Allahabad Law Agency, Haryana.
Krishnendu Kanungo & Pritisha Chakraborty , Assignment Of Rights And Its Practical Relevance In Financial Transactions: A Lender’s Perspective Manupatra, http://docs.manupatra.in/newsline/articles/Upload/E915DA6B-361C-493B-91D1-96D8EB703128.pdf (last accessed Mar. 12, 2021).
The Indian Contract Act, 1872, No. 37 (Indian)
Sir Oshley Roy Marshall, The Assignment of Choses in Action (Pitman Publishing 1950).
Krishnendu, supra note 3, at 1.
Khared & Co. Ltd. v Ramon & Co. Ltd., AIR 1962 SC 1810.
Krishnendu, supra note 3, at 2.
Robinson v Davison, (1871) L.R. Ex. 269.
BANGIA, supra note 1, at 255.
Ramesh Vaidyanathan & Aishini Mandal, Assignment Of Contractual Obligations – Is Consent Necessary Advayalegal (Dec. 6, 2019) https://www.advayalegal.com/blog/contractual-rights/ (last accessed Mar. 13, 2021).

Assignment clause: stating intent clearly in contract is the best policy

The principle of assignment as recognized under Indian law—and affirmed and applied by Indian courts—derives its origins from English law.

Simply put, the word “assignment" means transfer of rights or obligations held by one party to another party. The Black’s Law Dictionary has defined the word “assignment" to mean “a transfer or making over to another of the whole of any property, real or personal, in possession or in action, or if in estate or in right therein". Assignment of rights under a contract is the complete transfer of rights to receive benefits accruing to one party to that contract.

Common law systems have favoured freedom of assignment, such that when there is no express prohibition against assignment in a contract, then assignment should be freely permitted.

However, courts in India have taken a different view—in the absence of a specific clause restricting transfer of a contract, the intention of the parties has to be taken into account, which can be gathered from the nature of the agreement and the surrounding circumstances.

Where a contract is silent or incomplete as regards the parties’ intention concerning assignment, one will have to rely on the provisions of the Indian Contract Act, 1872, and the principles of assignment enshrined therein.

If the agreement between the parties does not spell out their intention as regards assignment, then—under Indian laws—it will have to be determined on the basis of whether the contract is of personal nature—that is, contracts involving personal qualities, skill or qualifications.

A contract of personal nature or those involving personal skills is such that it needs to be performed by the promisor himself and, therefore, is not assignable.

For instance, if a painter promises to paint a picture for a customer, the painter has to perform this promise personally, since the painter has been engaged for his personal artistic skills, style and capabilities.

The judicial trend in India has reiterated this position and laid down that rights under a contract are capable of assignment unless (a) the contract is personal in nature; or (b) the rights are incapable of assignment either under law or under an agreement between the parties. Hence, if the parties intend to restrict assignability, it is best to state it expressly in the contract between the parties.

Likewise, it is prudent to expressly record a party’s right to assign, if that is the intention. Any agreed limitations on such assignment rights should also be expressly recorded.

An important issue that often arises is with respect to assignment of “obligations" under the agreement versus assignment of “rights".

The Supreme Court—in the case of Khared and Co. Ltd v Ramon and Co. Pvt. Ltd—has observed that, as a rule, obligations under a contract cannot be assigned except with the consent of the promisee. Where such consent is obtained, it will be considered as a deemed novation, resulting in the substitution of liabilities and obligations to the assignee.

The introduction of a new party into an existing contract would itself amount to a novation of the existing contract, that is, the creation of a new contract between the original party and the new party. Courts have proceeded on the basis that a transfer of “obligations" can be effected only through a novation. Hence, the assignmentclauses in contracts should also deal with novation, if the intention is to transfer obligations as well.

Drafting the assignment clause in any contract, therefore, requires careful consideration. The treatment may be different depending on the nature of the contract. For example, in agreements with private equity investors, it is common to see a right to freely assign rights and obligations in favour of its affiliates. A pre-consent of other parties to the agreement is obtained through such clauses, and all that is usually required to give the assignment effect is the execution of a deed of adherence between the assignor and the assignee.

In real estate transactions, a proposed buyer would like to retain the right to assign the “agreement to sell" in favour of a nominee (which may be an affiliate or an independent third party), so that the final conveyance can occur in favour of the intended buyer. This is sometimes necessitated when large areas of land are being consolidated for the purposes of a final acquisition by a developer.

Assignment rights are usually limited in contracts that pertain to licensing of intellectual property rights or technology. Sometimes, contracts may enable sub-licensing, subject to specified conditions.

In lending transactions, a borrower will expressly be prohibited from assigning rights or novating the contract, whereas the lender will retain an absolute and free right of assignment. Such a right enables the lender to sell loan portfolios to other lenders/parties or to a securitization company.

Factoring transactions and assignment of receivables also depend significantly on the assignment clauses of the relevant agreements in relation to which the receivables are being assigned. Assignment clauses under various agreements determine the contract’s treatment in a transaction that involves the sale of a business or undertaking, together with such contracts.

So, even though “assignment" usually appears in the boiler plate section of a contract, it does require special consideration on a case-by-case basis, depending on the nature of the contract and the specific requirements of the transaction.

It is prudent to expressly set out the intention of the parties as regards assignment in the relevant contracts. Whether the intent is to allow or disallow or limit assignment, the advice is usually towrite it expressly.

Send your comments to [email protected]

This column is contributed by Aparna Tuteja of AZB & Partners, Advocates & Solicitors.

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Kluwer Arbitration Blog

Does the assignment of a contract assign the arbitration agreement: the indian perspective.

Under the Indian Contract Act 1872 (“ ICA ”), an arbitration agreement is a distinct and separate contract. Like all other contracts, it can be transferred by way of assignment to third parties under Section 37 of the ICA. The Supreme Court of India in Khardah Company Ltd vs Raymon & Co. (India) Private Ltd has held that there is a distinction between the assignment of “rights” and “liabilities.” A contract stands novated when assigning rights and liabilities to a third party. This raises a fundamental question – does the arbitration agreement also stand novated when the principal contract is assigned to a third party? If it does, then as held by the Supreme Court in Kapilaben v. Ashok Kumar Jayantilal Sheth the assignment of every obligation, such as the obligation to refer the dispute to arbitration, requires the parties’ fresh consent.

If, on the other hand, the arbitration agreement does not stand novated on assignment of the principal contract, does it mean that the arbitration agreement is automatically transferred along with the principal contract to the third party without the need for fresh consent (“ Automatic Transfer Approach ”)?

The United States courts have always been divided in their approach. Some earlier decisions, such as Hosiery Mfrs’ Corp. v. Goldston and Nissan Motor Acceptance Corp v. Ross , support the Automatic Transfer Approach. On the contrary, decisions like Lachmar v. Trunkline LNG Co . require express consent of the assignee (third party). However, in recent years courts have critically analysed the principal contract than merely choosing sides to ascertain assignment of the arbitration agreement, adopting an approach similar to the highest court of Bulgaria .

In similar vein, the Indian courts have been inconsistent in their decisions on whether the assignment of a contract also amounts to the assignment of the arbitration agreement to a third party.

Requirement of Specific Consent

In Delhi Iron and Steel Co. Ltd. v. U.P. Electricity Board , the Delhi High Court took the view that the assignment of the principal contract does not ipso facto result in the assignment of the arbitration agreement. The principal contract is assignable, but the arbitration agreement is not. Since an arbitration agreement is a distinct and separate agreement, the arbitral intent between the original party and the assignee of the other party must be made manifest. A similar view was adopted in Vishranti CHSL v. Tattva Mittal Corpn. (P) Ltd . holding that in the absence of specific consent to the assignment of the arbitration agreement, the arbitration agreement would not be assigned to the third party, even if the principal contract has been assigned.

The basis for this view can be found in the judgement of the Indian Supreme Court in M.C. Chacko v. State of Travancore which held that a person who is not a party to the contract cannot enforce the terms of the contract. However, it is pertinent to note that even in this judgement, the Supreme Court had recognised the assignment exception. Thus, the requirement of specific consent by the assignee to transfer the arbitration agreement is an approach adopted by Indian courts only in a handful cases.

No Separate Consent Required

The predominant view by Indian courts has been that the doctrine of separability enshrined under Section 16 of the Arbitration and Conciliation Act 1996 (“ Act ”) relates to the right of the arbitral tribunal to rule on its own jurisdiction. The doctrine of separability and its jurisprudence cannot be extended to mean that a separate arbitration agreement is to be executed between the parties at the time of assignment of a contract. Therefore, as held by the Bombay High Court in DLF Power Ltd. v. Mangalore Refinery & Petrochemicals Ltd . (“ DLF ”), a third party, to whom the principal contract is assigned, can enforce the arbitration agreement.

Specifically, if the rights and obligations under the principal contract are assigned to a third party and this third party also performs obligations under the contract, such as making payments, seeking extension of time or approval, joint survey, etc., this third party is entitled to invoke arbitration.

Consensual Theory of Arbitration

Taking a similar approach, the Delhi High Court in Rajesh Gupta v. Mohit Lata Sunda held that if the parties to the principal contract knew of the assignment and were fully aware that a third party ‘had stepped into the shoes’ of another party, the arbitration agreement stood assigned. These views are essentially based on the consensual theory in arbitration stated in Aerens Goldsouk International Co. Ltd. v. Samit Kavdia , which recognises that non-signatories to the arbitration agreement can invoke the arbitration clause and are thus ‘parties’ to the arbitration agreement under Section 2(1)(h) of the Act.

Consequently, the consensual theory aims to infer consent from the parties’ behaviour if an agreement is not self-evident. Agency, assignment, and group of companies doctrine are among such theories. Recently, the Delhi High Court in Tomorrow Sales Agency (P) Ltd. v. SBS Holdings Inc. , held that the non-signatories may either invoke the arbitration agreement, being the beneficiaries of the contract, or otherwise be bound by the same. The Court noted, “ 30. Gary B. Born, has explained that the legal basis for holding that a non-signatory is bound by an arbitration agreement includes “both purely consensual theories (e.g., agency, assumption, assignment) and non-consensual theories ( e.g. , estoppels, alter ego).” However, this decision has been challenged in an appeal which is currently pending. It would be interesting to see how the court deals with the question of third parties invoking arbitration, especially in cases of assignment of the principal contract.

Nonetheless, the Bombay High Court in DLF echoed a similar view and held that the arbitration clause does not take away the right of assignment of a party to a contract if it is otherwise assignable. The High Court noted that there is a clear distinction between the assignment of rights under a contract by a party who has performed its obligations under the contract and the assignment of a claim. The latter is a mere claim which cannot be assigned in law. It further observed that once the other party has accepted the assignment and insisted on compliance with rights, duties and obligations, the assignee steps into the shoes of the assignor and will be entitled to all rights, obligations and benefits, including the arbitration agreement forming part of the said agreement.

Similarly, in Bestech India (P) Ltd. v. MGF Developments Ltd. , the Delhi High Court considered the parties’ conduct post-assignment of the contract and rejected the submissions of the original party that the assignee had no locus standi to file an application for appointment of an arbitrator or that the assignee had no privity of the contract with the original party.

While Indian courts have been inconsistent in following the Automatic Transfer Approach when the principal contract is assigned, the predominant view aligns with international practices. Though the minority view requiring specific consent for assignment of the arbitration agreement may be correct on a strict reading of the requirement of express consent to refer the dispute to arbitration, a more practical and pragmatic approach requires inferring such consent by the assignment.

As explained by the Singapore Court of Appeal in the case of BXH v. BXI , “an arbitration agreement does not have a purpose or life independent of the substantive obligations that it attaches to.” Thus, the requirement of express consent, though sound, defies a more holistic understanding of the purpose of the arbitration agreement, i.e. , to refer disputes arising out of the obligations under the principal contract to arbitration.

While the views discussed above were from different Indian High Courts, the applicability and binding nature of the arbitration agreement to non-signatories through assignment has now been recognised in the recent landmark judgment by the Indian Supreme Court in Cox and Kings Ltd. v. SAP India Pvt. Ltd. and Another which has been discussed on the Blog here . Though the Supreme Court has not explicitly addressed the issue of the requirement of express consent for assignment of the arbitration agreement, the extension of the arbitration agreement to non-signatories implies that specific consent may not be required for assignment of the arbitration agreement when the principal contract is assigned.

The author would like to thank Mr. Ankit Singh, Senior Associate, Mr. Ayush Kumar, Associate, ANR LAW LLP and Ms. Ramya Singh, Final Year Student, Ram Manohar Lohia National Law University, Lucknow for their research assistance.

________________________

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References [ + ]

References
1	, Thomson Reuters: Legal Archives (Aug. 2002)
2	Anita Garnuszek, , 82 Arbitration: The International Journal of Arbitration, Mediation and Dispute Management 4, 350 (2016).
3	Julian D. M. Lew, Loukas A Mistelis & Stefan M Kröll, Comparative International Commercial Arbitration 147-48 (2003).
4	Chee Ho Tham, 37 Butterworths Journal of International Banking and Financial Law 4, 234-35 (2022).
5	Albana Karapanco, , Central European University 39 (Mar. 2015).

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Understanding the Law of Assignment

Understanding the Law of Assignment

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Book description

The practical importance of intangible personalty such as debt, bonds, equities, futures, derivatives and other financial instruments has never been greater than it is today. The same may be said of interests in intellectual property. Yet the assignment of these intangible assets from one to another remains difficult to understand. Assignments are often taken to operate as a form of transfer akin to conveyances of legal titles to tangible personalty. However, this conception does not accurately reflect the law of assignment as it has developed in the caselaw in England and Wales. This book sets out a different model of the workings of assignments as a matter of English law, one that provides an analytical, yet historically sensitive, framework which allows us to better understand how, and why, assignments work in the way the cases tell us they do.

‘Chee Ho Tham has here produced a remarkably well-written, erudite and thoroughly informative work, and in addition a very distinct accretion to the scholarship on assignment. I recommend it without hesitation to commercial and obligations lawyers alike.’

Andrew Tettenborn Source: Lloyd's Maritime and Commercial Law Quarterly

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Understanding the Law of Assignment pp i-ii

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Understanding the Law of Assignment - Title page pp iii-iii

Copyright page pp iv-iv, contents pp v-viii, foreword pp ix-x, preface pp xi-xiv, cases pp xv-xxxii, legislation pp xxxiii-xl, abbreviations pp xli-xlvi, part i - introduction pp 1-30, 1 - introduction pp 3-15, 2 - a conceptual account of equitable and statutory assignments pp 16-30, part ii - the model pp 31-150, 3 - invariability pp 33-66, 4 - different models of equitable assignment pp 67-105, 5 - misconceptions pp 106-126, 6 - combination pp 127-150, part iii - joinder pp 151-202, 7 - joinder of assignor in equitable proceedings pp 153-170, 8 - joinder of assignor in common law proceedings pp 171-178, 9 - non-joinder of assignor of legal choses pp 179-202, part iv - notice pp 203-324, 10 - giving notice of equitable assignments and its effect on competing assignees: the ‘rule’ in dearle v. hall pp 205-245, 11 - knowledge of assignment: substantive effects in equity between obligor and assignor pp 246-280, 12 - knowledge of assignment: procedural avoidance in equity and by statute of ‘equities’ or ‘defences’ pp 281-324, part v - statutes pp 325-410, 13 - ‘statutory’ assignments under law of property act 1925, section 136(1) pp 327-387, 14 - statutory dealings in specific classes of intangible assets pp 388-410, part vi - consequences pp 411-455, 15 - why it matters pp 413-455, altmetric attention score, full text views.

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Importance of Assignment Agreements under Intellectual Property Laws in India

This article was published in Journal of Intellectual Property Rights on November 2009

Sindhura Chakravarty [**] Hidayatullah National Law University, HNLU Bhawan, Civil Lines, Raipur, Chhattisgarh 492 001

Received 20 August 2009, revised 29 October 2009

A well-established statutory, administrative and judicial framework exists in India to safeguard intellectual property, relating to patents, trademarks, copyright or industrial designs. [1] An important aspect of these laws deals with assignment agreements. An assignment agreement is an intellectual property (IP) transaction that deals with the ownership and disposition of intellectual property rights as well as with the control over the use of or access to intellectual property. This paper attempts to briefly explain assignment agreements in general terms as well as the essential requirements for assignment agreements under the Indian Contract Act, 1872, and the Indian Stamp Act, 1899. It discusses in detail the sections pertaining to assignment agreements in the legislations on Intellectual Property Law in India. It also provides information regarding the forms through which assignment of the intellectual property can be registered. The Madrid protocol and the rules regarding assignment of trademarks in the international forum have also been discussed.

Assignment Agreement, Contract Act, copyrights, patents, trademark, geographical indications, designs, semiconductor integrated circuit layout design, plant varieties, biological resources, Stamp Act, recordal procedure.

Assignment Agreements

Assignment agreements pertain to the transfer of intellectual property rights from the owner of the rights to another person or organization. An Intellectual Property Agreement (IP Agreement) or an Intellectual Property Assignment Agreement is a written and enforceable contract that consummates and formalizes an agreement between two companies for the purchase and sale of intellectual property rights. The intellectual property being purchased can consist of copyrights, trademarks and/or patents. [2] Assignment agreements differ from license agreements on the grounds that an assignment agreement actually transfers the ownership of that intellectual property from the assignor to the assignee whereas a license agreement only permits the licensee to use the intellectual property for a given period of time.

An assignment agreement cannot be compared to a negotiable instrument because in case of negotiation, the transferee can get better title than transferor, which can never happen in assignment/transfer.

For example, if A assigns to B, the assignment is stolen by C and assigned to D who takes it in good faith and for value without any notice of the defect in C’s title, D will have no rights against A. However if A draws a cheque (negotiable instrument) in favour of B, the cheque is stolen by C and negotiated to D, who takes it in good faith and for value without any notice of the defect in C’s title then D will be entitled to value of cheque. [3]

Intellectual property created by students in a University Research and Development (R&D) programme can be assigned by the student in the absence of an agreement as the student is the owner of the intellectual property created. Most universities, however, have policies requiring students to sign pre-invention agreements regarding the same.

An assignment agreement may involve a complete and exclusive sale of the rights, thus giving the assignee complete ownership to exploit the intellectual property rights in whatever way, shape, or form it likes, and this is, however, subject to any limitations listed in the agreement. Partial assignments are also possible as specified in Section 18 of the Indian Copyright Act. Usually the assignee will pay the assignor cash or stock consideration in exchange for these rights. [4]

Essential Requirements of an Assignment Agreement

Requirements under the indian contract act, 1872.

As per Section 2(h) of the Indian Contract Act, 1872, any agreement that is legally enforceable by law can be called a contract. An assignment agreement to be valid must satisfy the requirements of the Indian Contract Act, 1872. Therefore, it has to be made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object and also has to be made in such a manner that it is not declared void under Section 10 of the Indian Contract Act, 1872. For instance in the case of Alexander v Rayson, [5] P let a flat to R of $1200 a year. To reduce the municipal tax he entered into two agreements with R. One, by which the rent was stated to be $450 only and the other by which R agreed to pay $750 for services in connection with the flat. In a suit filed against R to recover $750, it was held that the agreement was made to defraud the municipal authority and was void and A cannot recover the money.

In contract law, the term ‘assignment’ means a transfer or making over to another of the whole of any property, real or personal, in possession or in action, or if in estate or in right therein. [6] To simplify, it refers to an agreement by means of which the rights or obligations of one party can be transferred to another party. Though not specifically mentioned in the Indian Contract Act, 1872, assignments have been inherited from English Contract Law. [7] Assignment agreements in the context of intellectual property law refers to the transfer of a specific kind of rightsintellectual property rights, which are personal, movable property. This is considered a lawful object.

To be a valid and legally enforceable contract it must be ensured that the consideration provided is also lawful and the contract itself is lawful. An agreement stating that a person would work for another person for two years in return for Rs 100 and in case of default would have to pay an exorbitant interest and principal at once was held to be indistinguishable from bonded labour and was thus held void. [8] Assignment can only be made from free consent of both parties. The parties to the agreement must also be competent to contract- thus neither can be a minor or of unsound mind according to Section 11 and 12 of the Indian Contract Act, respectively. It is interesting to note at this point that as per English law, a minor can dispose of a copyright in the same way as an adult subject to the rules of infant contracts. [9]

The Indian Contract Act, 1872 does contain certain provisions which indirectly refer to assignment yet it does not specify what assignments are or are not good in law. [10] The courts have however made certain guidelines regarding the same. For instance, it has been determined by the Madras High Court that an agreement regarding the publishing of a book between an author and a publisher is personal to the individuals entering it and the benefit received from this cannot be assigned. [11] It has also been determined by the High Court of Lahore that a copyright cannot be assigned for a non-existing work. [12]

Both Section 37 and Section 40 of the Indian Contract Act, 1872 allude to the enforceability of assignments by laying down that subject to certain exceptions, a contract in the absence of a contrary intention, express or implied, will be enforceable by and against the parties and their legal heirs and legal representatives including assignees and transferees. [13] Section 40 of the Indian Contract Act, 1872 specifies that a contract which the promisor is required to perform personally is not capable of assignment. [14]

Assignment agreements are thus a form of contract and must therefore satisfy the requirements that are mentioned under the Contract Act. It is only then that the assignment agreement can be enforced by filing a suit for damages under Section 73 of the Indian Contract Act, 1872.

Requirements under the Indian Stamp Act, 1899

The Stamp Act is a fiscal measure enacted to secure revenue for the state on certain classes of instruments. [15] As per Section 2(14) of the Indian Stamp Act, 1899, an instrument includes every document by which any right or liability is, or purports to be, created, transferred, limited, extended extinguished or recorded. An assignment agreement involves the transfer of intellectual property rights and hence it would fall under the purview of the definition of the term ‘instrument’ as per the Act. As per the schedule, depending on whether the assignment pertains to ‘conveyance’, ‘transfer’ or ‘transfer of lease’ different stamp duty is to be charged. As per Section 23 on ‘conveyance’ in the Indian Stamp Act, 1899, an assignment of a Copyright is exempted from Stamp Duty. Therefore, in a Deed of Assignment, assigning copyright along with some other property, say trademarks, it is advisable to state as to what part of consideration is towards the assignment of copyright, thereby exemption from stamp duty can be sought on that portion of the assignment. In Bihar, however, the above-mentioned exemption of copyright assignments has been deleted by the Amendment made by the State Act with effect from 31st March 1958 as a result of the examination of exemptions suggested by the Taxation Enquiry Committee. [16] In Uttar Pradesh, the exemption is restricted to assignment of copyright in musical works. [17]

In a recent case regarding trademarks, [18] it was determined that Section 35 of the Indian Stamp Act, 1899 prohibited the courts from admitting into evidence documents not duly stamped merely to ensure Stamp duty collection and could not be used as a means of denying a person rightful ownership. Thus, it can be seen that though Stamp duty is applicable on assignment of intellectual property (except Copyright) in most States of India, the non-payment of this cannot invalidate the assignment.

Assignment of Intellectual Property

Assignment of copyrights.

Copyright is often referred to as the ‘Cinderella of Intellectual Property Law’. [19] This is because it was once over-shadowed by the twin sisters- Franchise Law and Patent Law but it now plays a very important role in the IP regime. It provides protection to authors, composers and other artists against unauthorized reproduction of their work. [20] The exact meaning of the term with respect to India is given in detail in Section 14 of the Copyright Act, 1957.

Copyrights are personal, moveable property and can be transferred though assignment agreements from one person to the other. In India, Sections 18, 19 and 19A of the Copyright Act, 1957 govern the assignment of copyrights. Section 18 of this Act gives every copyright holder the right to transfer his copyright to an assignee by means of an assignment agreement.

Section 19(1) of the Copyright Act, 1957 clearly states that no assignment of the copyright in any work shall be valid unless it is in writing signed by the assignor or by his duly authorized agent. Thus, no particular form of assignment is required under Section 19 of the Copyright Act, 1957 and it will suffice if the assignment can be culled out in writing from some document. [21] Oral assignment of copyright is neither permissible nor valid. [22] In a case, [23] the Supreme Court held that an existing and future right of a music composer and lyricist is capable of assignment, subject to the conditions that the assignment shall take effect only when the work comes into existence and the assignment is required to be in writing, signed by the assignor or his duly authorized agent. A deed of assignment of copyright is not compulsorily registrable. [24]

Section 19A of the Copyright Act, 1957 makes provisions in the case of disputes arising with respect to a transaction. It states that any such complaint will be dealt with by the Copyright Board. The Board cannot pass any order to revoke the assignment unless it is satisfied that the author is the assignor and that the terms of assignment are harsh to the assignor. In any event, no order of revocation of assignment can be made within a period of five years from the date of assignment. [25]

The term copyright encompasses a bundle of rights, one of which is a ‘moral right’. This constitutes certain specific rights that the author of an original literary, dramatic, musical or artistic work and the director of a film enjoy in their creation. It can only be exercised by the creator himself and these rights are not assignable as per English law. [20] The Law of the United States of America does not protect these rights conclusively. [26] Moral Rights of an author has been acknowledged under Section 57 of the Copyright Act, 1957. This states that even after the assignment of the copyright, the author of a work shall have the right to claim authorship of the work; and to restrain or claim damages in respect of any distortion or other act in relation to the said work which is done before the expiration of the term of copyright which brings the author into disrepute. [27]

The primary function of copyright law is to protect the fruits of a man’s work, labour, skill or test from annexation by other people. [28] This requires for the copyright owner to possess several rights including the right to transfer the intellectual property, if he chooses to do the same. Assignment agreements are integral to copyright law as it helps the copyright owner to implement this right. [29]

Assignment of Patents

A patent is a monopoly right granted to a person who has invented a new and useful article or an improvement of an existing article or a new process of making an article. During the term of the patent, the patentee can prevent any other person from using the patented invention. [30] Patent law recognises the exclusive rights of the patentee to gain commercial advantage out of his invention. [31] In India, patent law is covered by the Patents Act, 1970 which has been extensively amended vide the Patents (Amendment) Act, 1999, Patents (Amendment) Act, 2002 and Patents (Amendment) Act, 2005.

Patent law gives every inventor a reason to exercise his creative faculties by protecting his efforts and ingenuity from imitation. It has been held by the Supreme Court of India that the object of patent law is to encourage scientific research, new technology and industrial progress. Grant of exclusive privilege to own, use or sell the method or the product patented for a limited period, stimulates new inventions of commercial utility. [32]

In patent law, assignment refers to the act of the patentee by which the patent rights are wholly or partially transferred to the assignee who acquires the right to prevent others from making, using or exercising or vending the invention. The assignment can either be exclusive or non exclusive. The exclusivity can be further limited, for example exclusivity to a territory or market or line of products. There are three main types of assignments in patents, each of which have been discussed briefly as follows:

Legal Assignments

An assignment of an existing deed is a legal assignment. A patent which is created by deed can only be assigned by a deed. [33] A legal assignee entitled to be registered as the proprietor of the patent and acquires all the rights thereof.

Equitable Assignments

A document agreeing to transfer a patent or a share of a patent with immediate effect is an equitable assignment. This affects proprietorship, but does not directly change it. The man to whom it is equitably assigned gets the right in equity to have the ownership of the patent altered in law.

A mortgage is a document through which patent rights are transferred to the assignee in return for a sum of money. Once the assignor repays the sum, the patent rights are restored to him. [30] The term assignee as per Section 2(1) of the Patents Act, 1970 includes in its meaning the legal representative of a deceased assignee. Section 70 of the Patents Act, 1970 confers inter alia the right on a grantee to or proprietor of the patent to fully or partially assign his patent to another or others. As per the Patents (Amendment) Act, 2005 which replaces Section 68 of the Patents Act, 1970 an assignment of a patent shall not be valid unless the same were in writing and the agreement between the parties concerned is reduced to the form of a document embodying all the terms and conditions governing their rights and obligations and duly executed.

Section 69 of the Patents Act, 1970 describes the registration of those assignments. It is necessary for the agreement between the parties concerned to be reduced to the form of a document embodying all the terms and conditions governing their rights and obligations and the application for registration of such document ought to be filed in the prescribed manner with the Controller. The time-limit under the earlier law requiring ‘the application for registration of such document filed in the prescribed manner with the Controller within six months from the date of execution of the document’ has been omitted by the Patents (Amendment) Act 2005. Section 68 does not stipulate any time-limit for registration. [34]

As per the Law of the United States, the applicant for a patent must always be an individual. A corporation or a partnership, or other legal entity cannot properly be an inventor in an American Patent. [35] The government can own an invention, however. [36] This was reiterated in the case of Wright v US. [37] A corporation may be made an assignee to a patent through an assignment agreement.

Patents are a very important branch of intellectual property, as life saving drugs and other essentials come within its sphere. Thus assignment agreements of such rights must be couched in clear and concise terms to ensure that no controversy arises as to its interpretation.

Assignment of Trademark

Consumers all over the world seek quality. Brand consciousness is a very common method of achieving this end. Trademarks are the means by which consumers distinguish between brands. A trademark is any word, name, symbol, device or any combination thereof used by a manufacturer or retailer of a product, in connection with that product, to help consumers identify that product and to distinguish it from the products of competitors. [38] For example, the LEVI v-shaped stitching on the back pocket Levi’s blue jeans can be called a trademark. [39] The main purpose behind protecting trademarks is because it is of use both to the manufacturer and the consumer. For the merchant, the trademark serves as an advertising tool, facilitating repeated sales and successful marketing of new products. [40] Trademarks foster competition and the maintenance of quality by securing to the producer the benefits of a good reputation. [41]

In India, trademarks are protected by the Trademarks Act, 1999. Assignment is an important aspect of the Act. As per the Section 2(1)(b) of the Trademarks Act, 1999, assignment has been described as an assignment in writing by act of the parties concerned. Thus, this clarifies that for the assignment of trademarks it is necessary for the agreement to be in writing and to be an act of the assignor and the assignee of their own volition and not a third party. In Section 2(1)(zc) of the above-mentioned Act, assignment has been differentiated from other forms of transmission. Section 6 of the Trademarks Act, 1999 allows for the notification of assignment of trademarks which have been registered. Section 31 of the same Act states that registration of trademark and notification of assignments will act as prima facie evidence of the existence of a trademark.

Chapter V of the Trademarks Act, 1999 deals in depth with the transfer of trademark by means of assignment and transmission. Section 37 of the Act clearly states that only the registered proprietor has the right to assign a trademark. He is also subject to the rights conferred to him by registration. Section 38 of the Trademarks Act, 1999 provides the assignment of a registered trademark. Trademarks in India can be assigned with or without goodwill. In a marked change from the previously valid Trade and Merchandise Mark Act, 1958, Section 39 of the Trademarks Act, 1999 provides the assignment of an unregistered trademark. These Sections are subject to Section 40 and Section 41 of the Trademarks Act, 1999.

Section 40 of the Trademarks Act, 1999, prevents the occurrence of a situation wherein exclusive right of a trademark resides in more than one person. This is because if assignments and transmission lead to the creation of multiple exclusive rights in more than one person this may lead to deception and confusion. [42] The proprietor of a registered trademark who proposes to assign it may submit to the Registrar in the prescribed manner a statement of case setting out the circumstances and the Registrar may issue to him a certificate stating whether, having regard to the similarity of the goods or services and of the trademarks referred to in the case, the proposed assignment would or would not be invalid under Section 40(1). The certificate is subject to appeal. It will also be conclusive as to the validity or invalidity under Section 40(1), of the assignment in so far as such validity or invalidity depends upon the facts set out in the case. A certificate in favour of complete validity of assignment/transmission can be given only if application for the registration is made under Section 45 of the Trademarks Act, 1999 of the title of the person becoming entitled is made within six months from the date on which the certificate is issued as per Section 40(1).

Section 41 of the Trademarks Act, 1999 prohibits the assignment of a trademark whether it be registered or unregistered which may result in different people using trademark in different parts of the country. If an assignor retains exclusive right over trademark even after the assignment agreement, then the assignment will be void as per Common Law. [43]

Chapter V of the Trademarks Act, 1999 refers to the concept of ‘goodwill’ as previously mentioned, in Section 38, however the Act does not define the term. In Churton v Dogules, [44] it was determined that goodwill must mean every advantage that has been acquired by an old firm by carrying on its business, everything connected to the premises and the name of the firm, and everything connected or carrying with it the benefit of the business. There was a time when the law in UK considered goodwill to be inseparable from trademark. [45] This was subsequently changed. [46]

Section 42 of the Indian Trademarks Act, 1999 further provides for means by which a sale of trademark not in connection with goodwill must occur. It has to be registered before the expiration of six months from the date on which the assignment is made or within such extended period, if any, not exceeding three months in the aggregate, as the Registrar may allow. Thus the assignee applies to the Registrar for directions with respect to the advertisement of the assignment, and advertises it in such form and manner and within such period as the Registrar may direct.

Section 43 of the Trademarks Act, 1999 deals with certification trademarks, it states that the assignment of certified trademarks would not be possible without the consent of the registrar which was to be applied for in writing. Section 44 of the Trademarks Act, 1999 states that associated trademarks must be assigned or transmitted together and not separately. This provision is intended to ensure that the marks associated under Section 16 of the Trademarks Act, 1999 are not assigned separately to different persons entailing confusion and deception as a result of simultaneous use of same or similar mark by a different person in respect of the same goods or description of goods or same services or description of services. [47] Section 45 of the Trademarks Act, 1999 discusses the registration of assignments or transmissions in detail. Thus the significance of assignment agreements in Trademark law is amply clear from its exhaustive treatment in the Trademarks Act, 1999.

Assignment of Geographical Indications

Geographical indications have been defined under Section 2(e) of the Geographical Indications of Goods (Registration and Protection) Act, 1999. It basically pertains to an indication that is used to identify agricultural, natural or manufactured goods originating from a specific geographical territory having a special quality or reputation.

Section 24 of the Geographical Indication of Goods Act, 1999 clearly indicates that assignment, transmission, licensing, pledge, mortgage or any such agreement is prohibited by law. Hence there is no way in which the right over a geographical indication can be passed to another person except on the death of the authorized user. In case of which the geographical indication shall devolve to his successor. This is mainly because a geographical indication is a public property belonging to the producers of the concerned goods which cannot be used to describe another good as it is indicative of the reputation and quality of another product. [48]

Assignment of Designs

When we admire the sleekness of the cellular phone model or the cut of a formal shirt or even the shape of a new car, we are actually referring to its aesthetics or design. The object of the Designs Act, 2000 is to protect new or original designs so created to be applied or applicable to particular article to be manufactured by industrial process or means. It provides the creator of a design with the security that his aesthetic look will not be applied by others to their goods. [49]

This effort can be protected from imitation by seeking protection under the Design Act, 2000. As per Section 2(d) of the Designs Act, 2000 ‘design’ means only the features of shape, configuration, pattern, ornament or composition of lines or colours applied to any article whether in two dimensional or three dimensional or in both forms, by any industrial process or means, whether manual, mechanical or chemical, separate or combined, which in the finished article appeal to and are judged solely by the eye; but does not include any mode or principle of construction or anything which is in substance a mere mechanical device. Section 11 of the of the Designs Act, 2000 clearly states that a copyright upon design can last for 10 years from date of registration and can be extended to a maximum of 15 years.

Section 30 of the Design Act, 2000 read with Rules 32, 33, 34 and 35 of the Design Rules, 2001, recognizes the contracts relating to assignment of designs and provides procedure for the recordal thereof. Section 30(1) of the Design Act, 2000 states that where a person becomes entitled by assignments, transmission or other operation of law to the copyright in a registered design he may make application in the prescribed form to the Controller [50] to register his title. Section 30(3) of the Design Act, 2000 makes it clear that for an assignment to be valid it must be in writing and the agreement between the parties concerned has to be reduced to the form of an instrument embodying all the terms and conditions governing their rights and obligation and the application for registration of title under such instrument is filed in the prescribed manner with the Controller within the stipulated time- that being within six months from the execution of the instrument. Section 30(4) of the Design Act, 2000 states that the absolute right to assign the design rights lie with the person registered as proprietor of the design.

The Copyright in the design is only protected if the same is statutorily recognized under the provisions of the Designs Act, 2000. Similarly, the rights acquired by third parties by way of assignments or licenses are only made effective if the same is duly registered in accordance with the provisions of the Act and the Rules framed there-under. There is no concept of common law license under design law. [51]

Assignment of the Semiconductor Integrated Circuits Layout Design

Semiconductor integrated circuit is an electronic circuit manufactured on the surface of semiconductor material. [52] Integrated circuits are used in almost all electronic equipment in use today and have revolutionized the world of electronics. The sheer number of electronic appliances we use on an everyday basis is a clear indication of how important semiconductor integrated circuits or chips are in the modern world.

The manner of arrangement or the lay-out of the chip is what enables it to perform a particular function. Thus there was a need to protect the investment of the chip-designer by way of a separate enactment. [53] This protection is to be provided by the means of the Semiconductor Integrated Circuits Layouts Design Act, 2000 in India. This was enacted in keeping with India’s obligation under the TRIPS Agreement. [54]

Assignment as per Section 2(b) of the Semiconductor Integrated Circuits Layout-Design Act, 2000 has been defined as ‘an assignment in writing by act of the parties concerned’. Registration of the design as well as all subsequent assignments will act as prima facie evidence of the validity thereof as per Section 19 of the Act.

Chapter V of the Semiconductor Integrated Circuits Layouts Design Act, 2000 deals with Assignments and Transmissions. Section 20 of the Semiconductor Integrated Circuits Layouts Design Act, 2000 allows the proprietor of a layout-design the power to assign the layout-design, and to give effectual receipts for any consideration received for such assignment. This is subject to the provisions of the abovementioned Act and to any right appearing from the register to be vested in any other person. Section 21 of the Semiconductor Integrated Circuits Layouts Design Act, 2000 makes a registered layout-design assignable and transmissible with or without the goodwill of the business concerned. As per Section 22 of the Semiconductor Integrated Circuits Layouts Design Act, 2000, when an integrated circuit layout is assigned without goodwill then the assignment shall not take effect unless the assignee, not later than the expiration of six months from the date on which the assignment is made or within such extended period, if any, not exceeding three months in the aggregate, as the Registrar may allow, apply to the Registrar for directions with respect to the advertisement of the assignment, and advertises it in such form and manner and within such period as the Registrar may direct. Section 23 of the Semiconductor Integrated Circuits Layouts Design Act, 2000, states that the assignee must register the title with the registrar. Section 24 of the Semiconductor Integrated Circuits Layouts Design Act, 2000 prevents the assignee from using the registration as proof of title if the matter is still before the registrar or an appeal from an order there-from is pending.

Assignment of Plant Varieties

A need was felt in the latter half of the 20th century to provide for the establishment of an effective system for the protection of plant varieties, farmer’s rights and plant breeders, in order to encourage the development of new varieties of plants. [53] The Protection of Plant Varieties and Farmer’s Rights Act, 2001 was enacted by India under the obligation created by the TRIPS Agreement it had ratified in 1994. [55] India through the Protection of Plant Varieties and Farmer’s Rights Act, 2001 implemented a sui generic [56] system of protection. [57] It is essentially [but loosely] modelled on the Union for the Protection of new Varieties of Plants, 1978. [53]

Assignment agreements are permissible under the Plant Varieties and Farmers Rights Act, 2001. A plant breeder may through an assignment agreement transfer his right of ownership upon the plant strain he created to another person in return for pecuniary gain. Section 16(1)(c) of the Plant Varieties and Farmers Rights Act, 2001 acknowledges the legal validity of assignment agreements by stating that any person being the assignee of the breeder of the variety in respect of the rights to make such application, can apply for registration under Section 14(a) of such genera and species as specified under Section 29(2) or an extant variety or a farmers’ variety.

The Plant Varieties and Farmers Rights Act, 2001 provides some safeguards to ascertain the legitimacy of the assignment in the form of Section 18(3). The Section states that in case an application for registration is made by virtue of an assignment of the right to apply for registration, there shall be furnished at the time of making application, or within such period after making the application as may be prescribed, a proof of the rights to make the application. Thus the validity of the transfer of the intellectual property is gauged at the time of registration itself.

Assignment of Biological Resources

The Biological Diversity Act, 2002 was created in a bid to conserve, use sustainably and equitably distribute benefits accruing from use of biological resources and the traditional and contemporary knowledge associated therewith. [58] It prevents anyone claiming an intellectual property right (IPR), such as a patent, over biodiversity or related knowledge, without permission of the Indian Government. It contains measures for sharing of benefits from the use of biodiversity, including transfer of technology, monetary returns; joint R&D and joint IPR ownership. [59]

Section 4 of the Biological Diversity Act, 2002 states that the previous approval of the National Biodiversity Authority is necessary to transfer the results of any research relating to any biological resources occurring in, or obtained from, India for monetary consideration or otherwise to any person who is not a citizen of India, or is a non-resident [60] or a body corporate or organization which is not registered or incorporated in India or which has any non-Indian participation in its share capital or management. Collaborative research efforts and papers for the dissemination of knowledge are made exceptions to this definition of transfer. [61]

There is no specific provision in the Biological Diversity Act, 2002, dealing with Assignment Agreement. Assignment is also a form of transfer which under specific circumstances is permitted. It can be inferred that assignment agreements are not per se prohibited by the Biological Diversity Act, 2002 provided the assignment does not contravene any other rules of the Act.

Recordal Procedure with respect to Transfer of Trademark under Madrid System

Recordal or recordation [62] refers to the process or action of recording of any transfer. [63] The term came to the fore in the international forum with respect to trademarks after the advent of the Madrid Agreement. The Madrid Agreement was signed in 1891, yet it was only after the creation of the Madrid Protocol in 2004 that the concept of international registration became plausible. The Madrid Agreement and the Madrid Protocol jointly form the Madrid System that provides a centrally administered system of obtaining a bundle of single jurisdiction trademark registrations based on an ‘international registration’, and therefore provides a mechanism for obtaining trademark protection in many countries around the world. [64]

The Madrid System amongst other innovations suggested that the recordal of assignment agreements in an international register. India is in process of making amendments to its trademark law regime to streamline its trademark law and to make it consistent with evolving international trademark law regime and is also contemplating accession to the Madrid System.

The applicant for an international registration is required to file only one application, pay one fee in local currency, and is not required at least initially, to submit foreign powers of attorney. Renewals, assignment recordals, changes of name and/or address of an international registration may be effected by filing one document with the International Bureau. [65]

The Trademarks (Amendment) Bill, 2007 incorporates the changes necessitated by the Madrid Protocol. [66] Section 36F of this Bill states that from the date of the international registration of a trademark where India has been designated or the date of the recordal in the register of the International Bureau about the extension of the protection resulting from an international registration of a trademark to India, the protection of the trademark in India shall be the same as if the trademark had been registered in India. The bill is yet to be presented before the Lok Sabha and has no legal binding-ness as of now. However, there is a lot to suggest that the recordal system put forth by the Madrid Protocol will be implemented in India in the near future, thus the process for recordal of change of ownership [including assignment] has been analysed as follows:

Rule 25 of the Common regulations of the Madrid Agreement and Protocol explains the means by which transfer of ownership can take place. [67] First of all, a request for change in ownership through request for recording shall be presented to the International Bureau on the relevant official form, in one copy, where the request relates to a change in the ownership of the international registration [including assignment] in respect of all or some of the goods and services and all or some of the designated Contracting Parties. The request for the recording of a change in ownership may be presented through the Office of the Contracting Party, or of one of the Contracting Parties, this must comply with conditions of Article 2 of the Madrid Protocol [68] as Section 2(a)(iv) of rule 25 reiterates. The contents of the request must include the number of registration, the name of the holder, the name of the new holder their addresses and other specifications given in Rule 25 Section 2 of the Common Regulations of Madrid Protocol. [67]

As per Article 9 of the Madrid Protocol, the International Bureau shall record in the International Register any change in the ownership of that registration, in respect of all or some of the contracting parties in whose territories the said registration has effect and in respect of all or some of the goods and services listed in the registration, provided that the new holder is a person who, under Article 2(1), is entitled to file international applications.

Article 9sexies (1) also states that where, with regard to a given international application or a given international registration, the Office of origin is the Office of a State that is party to both this Protocol and the Madrid (Stockholm) Agreement, the provisions of this Protocol shall have no effect in the territory of any other State that is also party to both this Protocol and the Madrid (Stockholm) Agreement.

Assignment agreements are of considerable importance in IPR since they allow the intellectual property owners to transfer their intellectual property for commercial returns, ensuring that the intellectual property can be used for monetary gain. Intellectual property that is created is utilized and exploited by the Assignment Agreement, where the purchaser or assignee takes benefit of the assignment rights that are created. These assignment agreements give rise to legal and equitable rights in law and purport many issues if they are not carefully constructed as required by law.

Issues relating to ownership of IPR must be carefully considered where employees may be creating IPR outside the scope, time and available resources of the company that they work for. Companies who own valuable IP rights should execute non-disclosure agreements with their employees, agents, or other third parties and make sure to define the term ‘confidentiality’ and the obligations of the parties not to disclose it. It is prudent to include Assignment Agreement clauses which address issues relating to governing law, jurisdiction, Alternative Dispute Resolution [ADR] to seek speedy resolution of disputes. Intellectual Property Assignment Agreement is a legal contract and required to be in compliance with existing Laws.

It is important, in the field of intellectual property, to define transparent criteria for terms and conditions under which the institution/organization would be the owner of the IPRs and the situation in which the inventor or creator would have the right or privilege to be the owners of the IPRs that they created. [69] The enforceability of assignment agreements act as an incentive to these individuals to create new inventions which ultimately benefits society.

It is also essential to define the ownership of created intellectual property with relation to employeremployee agreements and contract for service to encourage innovation.

IPR legislations in India provide specific rules, regulations and procedure when dealing with assignment agreements. The Rules/Acts make provisions for registering the assignment agreements and their respective schedules also provide for forms through which parties can register their assignment agreements. In order for an assignment agreement to be valid and enforceable it is essential that the assignment agreement be recorded as prescribed by the Acts and relevant Rules.

In addition to abiding by the Rules, to avoid ambiguity it is essential to ensure that the agreement clearly defines which person the ownership rests with. The assignment must be concrete and also clarify the tenure for which the individual would be the owner of the intellectual property. This would provide a precaution in case of a potential dispute on the ownership of the intellectual property.

The position of an Assignment Agreement in the intellectual property law of India is one of great consequence despite being a private transaction between the assignor and the assignee. One of the reasons for this is that the law is required to protect the owner of the intellectual property from being defrauded. It must be noted, however, that though the law does provide certain safeguards, the onus of creating a suitable assignment agreement is upon the parties concerned. A valid assignment agreement and one that benefits all parties involved can only come into being if the fundamental issues, some of which have been discussed above, are addressed.

*Edited by Dr Sudhir Ravindran, Solicitor-England & Wales, Patent & Trademark Agent and Attorney with Altacit Global, Altacit Global, Creative Enclave, III Floor,#148-150, Luz Church Road, Mylapore, Chennai 600 004. Email: [email protected] **Email: Corresponding author: [email protected]

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...whether it is transferable or non-transferable. There was considerable argument before us on the question as to assignability of a contract . The law on the subject is well settled and might be stated in simple terms. An ...assignments. As a rule obligations under a contract cannot be assigned except with the consent of the promisee, and when such consent is given, it is really a novation resulting in substitution of liabilit... contract is personal in its character and incapable of assignment on that ground. But it is settled law that an arbitration clause does not take away the right of a party to a contract to...

...clients of ICICI Bank in favour of the assignee”. That, the assignment of a debt can never carry with it the assignment of the obligations of the assignor. Unless there is ...the borrower(s), an assignment of a debt can never carry with it the assignment of the obligations of the assignor unless there is a novation of the contract by all part...the borrower(s), the impugned deed of assignment is legally unsustainable without novation of original contract between ICICI Bank Ltd. (assignor) and the borrower(s) (assignee). We find no merit in the above argum...

...make assignment of the plot. The real question is whether the assignee has a legal right to claim performance of any part from the allottor. The answer of the said question depends upon the terms ... assignment of a contract might result by transfer either of the rights or of the obligations thereunder. But there is a well-recognised distinction between these two classes of assignments. As a rule...obligations under a contract cannot be assigned except with the consent of the promisee, and when such consent is given, it is really a novation resulting in substitution of liabilities. On the other hand ...

..., the Supreme Court held the compensation as falling in the latter category of a capital receipt. But, so far as the case before us is concerned, the assignment of the contract and the payment received...impaired the assessee in any manner in carrying on its business. In these circumstances, the payment for assignment of the contract , in our view, clearly is in the nature of a revenue receipt...business receipt. In the present case also the amount which is received by the assessee-company for assignment of a contract which it had entered into and which formed a part of its business activ...

...property, and the contract to assign thus becomes a complete assignment .”Applying the above principles to the facts of the instant case the High Court came to the... contract would, in equity, transfer the beneficial “interest” and of Jessel, M.R, in Collyer v. Isaacsthat “the contract to assign thus becomes a complete assignment ”. I find...mortgage security on existing chattels and also the benefit of what in form was an assignment of non-existing chattels which might be afterwards brought on to the premises. That assignment , in fact, constituted onl...

...appreciating that the assignor bank is only transferring its rights under a contract and its own asset, namely, the debt as also the mortgagee's rights in the mortgaged properties without in any manner affecting the rights ...held that the law on the subject of assignment of a contract is well settled. An assignment of a contract might result by transfer either of the rights or by transfer of...is a well recognized distinction between the two classes of assignments. As a rule, obligations under a contract cannot be assigned except with the consent of the promisee, and when such consent is given, it is really ...

...other party for assignment under Section 15(b) of the Specific Relief Act is only applicable in cases where the obligation is of a personal nature or where there is an express bar in the contract prohibiti...regarding development of housing scheme in the suit property shows that there was implied consent for assignment of rights under the 1986 agreement in favour of Respondent Nos. 1.III. Validity ...particularly deal with the assignability of contracts, this Court has opined time and again that a party to a contract cannot assign their obligations/liabilities without the consent of the other party. A ...

...P. Somarajan, J.:— The accused Nos. 4 and 5 respectively came up in two criminal cases foisted against them under Section 500 IPC, on the basis of a news item published in ‘Madhyamam Daily’ newspaper dated 29/06/2011. It...give the contract to Keltron, subsequently it was cancelled. It is at that juncture a news item was published in ‘Madhyamam Daily’ newspaper detailing the history of the alleged contract and attempt on...the part of the government to give the contract work to the defacto complainant, company. Now the company came up claiming that it would constitute defamation as against the company. 2...

...No.1, but what the learned Single Judge has overlooked is that there is a distinction between assignment of an obligation and the assignment of a right. The Constitution Bench of the ...obligations under a contract cannot be assigned except with the consent of the promise, and when such consent is given, it is really a novation resulting in sub-situation of liabili...concerned was situated. 14. Concerning the assignment of the right under the contract , on hiving off the business of defendant No.1 and the hived off business vested in defendant No.2...

...us, however, have no bearing on the point in question. They relate to sub-letting or assignment of a contract , contrary to the terms on which the contract was granted. For example there are cases in...own allegations. A large number of cases were cited before us as to whether the agreement was vitiated, as found by the learned Judge of the court below. Most of the cases cited before...contracts obtained from the railway company, that the defendants worked as the plaintiff's servants and that all the profits received by the carrying out of the contract ought to go to the plaintiff...

...vested in the insurer.16. The equitable assignment of the rights and remedies of the assured in favour of the insurer, implied in a contract of indemnity, known as “sub...is part of the law of contract and the other part of the law of restitution.”23. An “ assignment ” on the other hand, refers to a transfer of a.... Subrogation, as an equitable assignment , is inherent, incidental and collateral to a contract of indemnity, which occurs automatically, when the insurer settles the claim under the policy, by...

...essential from the assignment of a contract already broken, under which the only surviving right is the right to sue for damages? This right, it is to be observed, is quite distinct from and must not be...transferee of the reversion no question arises here, and we have nothing to do with it. But as between the lessor and the lessee the case is different. They had entered into a contract of leasing on...notice and thereupon to sue on the contract and enforce the penalty. That is the very point. Could he? For what is this, thus isolated, but a mere right to sue? How can it be distinguished in any...

...action, but as the enforcement of a cause of action legitimately supported by the underwriter's interest in recouping himself in respect of the amount of the loss which he had paid under the policy as ...insurance money or the right to claim the benefit of a contract not coupled with any liability.14. Section 6(e) of the Transfer of Property Act states that a mere right...maintenance. That interest must exist apart from the assignment and to that extent must be independent of it.15. A chose in action for breach of contract was not assignable at...

...he took the assignment of the policy on October 18, 1945 he was merely indulging in a gamble on Mahajan Deolal's life; the contract was therefore, void by reason of s. 30 of the Indian ...these contentions; because if Mahajan Deolal was himself guilty of a fraudulent suppression of material facts on which the respondent company was discharged from performing its part of the contract , the ap.... On behalf of the appellant, however, the contention was that s. 38 of the insurance Act provided a complete code for assignment and transfer of insurance policies and the assignment made in favour of...

...plaintiff in his evidence that the ' contract of bailment had been entered into by his agent. 4. I need not consider the case of assignment of a contract because in the in...filed by the consignor who was a party to the contract of consignment, the suit should have been dismissed, as it was a suit filed by a bare consignee against the Railway. The contention is well founded.... This is a case of bailment of goods to the Railway. The word "bailment" is thus defined in Section 148 of the Indian Contract Act :- "A "bailment" is the...

...sales-tax again, which the appellants contended, was not demandable as there were no second sales; the delivery of a kutcha delivery order did not amount to a sale of goods, but was only an assignment ...was only an assignment of a forward contract . Held, that the agreements...and the delivery of the kutcha delivery order did not amount to a sale of goods, but was only an assignment of a right to obtain delivery of the gunnies, which were not in existence ...

...Khardah Company Ltd. v. Raymon & Co. (India) Private Ltd. and Company, AIR 1962 SC 1810, the Supreme Court observed that an assignment of a ...rights or of the obligations thereunder. But there is well recognised distinction between these two classes of assignments. As a rule obligations under a contract cannot be assigned, except with the consent of the promisee ...the law or under an agreement between the parties.The doctrine of assignment is also known to the insurance law and an assignment of the policy is a transfer of the ...

....20. In Kapilaben's case (supra) this Court had considered that assignment of a contract might result in transfer of either rights or obligations thereunder. The transfer of oblig...particularly deal with the assignability of contracts, this Court has opined time and again that a party to a contract cannot assign their obligations/liabilities without the consent of the other party. A ...between these two classes of assignments. As a rule obligations under a contract cannot be assigned except with the consent of the promisee, and when such consent is given, it is really a novation resulting in subs...

...any case there was no evidence of compliance with Section 16(c) of the Act either by the seventh defendant or by the plaintiff. It is also contended that the assignment of the agreement in favour of the pl...bar for the allottee to make assignment of the plot. The real question is whether the assignee has a legal right to claim performance of any part from the allottor. Answer of the said question depends upon...well settled and might be stated in simple terms. An assignment of a contract might result by transfer either of the rights or of the obligations thereunder. But there is a well-recognized distinction...

...substitute the original contract with a new contract or rescind or alter. It cannot be done unilaterally…”33. In any case, obligations under a contract cannot be assigned, wit.... Novatio, rescission or alteration of a contract under Section 62 of the Indian Contract Act can only be done with the agreement of both the parties of a contract . Both the parties have to agree to... a ...

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Assignment under Insurance Policies

By J Mandakini, NUALS

Editor’s Note: This paper attempts to explore the concept of assignment under Indian law especially Contract Act, Insurance Act and Transfer of Property Act. It seeks to appreciate why the assignment is made use of for securities of a facility sanctioned by ICICI Bank. Also, it explains how ICICI Bank faces certain problems in executing the same.

INTRODUCTION

For any facility sanctioned by a lender, collateral is always deposited to secure the same. Such mere deposition will not suffice, the borrower has to explicitly permit the lender to recover from the borrower, such securities in case of his default.

This is done by the concept of assignment, dealt with adequately in Indian law. Assignment of obligations is always a tricky matter and needs to be dealt with carefully. The Bank should not fall short of any legally permitted lengths to ensure the same. This is why ambiguity in its security documents have to be rectified.

This paper attempts to explore the concept of assignment in contract law. It seeks to appreciate why the assignment is made use of for securities of a facility sanctioned by ICICI Bank. The next section will deal with how ICICI Bank faces certain problems in executing the same. The following sections will talk about possible risks involved, as well as defenses and solutions to the same.

WHAT IS ASSIGNMENT?

Assignment refers to the transfer of certain or all (depending on the agreement) rights to another party. The party which transfers its rights is called an assignor, and the party to whom such rights are transferred is called an assignee. Assignment only takes place after the original contract has been made. As a general rule, assignment of rights and benefits under a contract may be done freely, but the assignment of liabilities and obligations may not be done without the consent of the original contracting party.

The liability on a contract cannot be transferred so as to discharge the person or estate of the original contractor unless the creditor agrees to accept the liability of another person instead of the first. [i]

Illustration

P agrees to sell his car to Q for Rs. 100. P assigns the right to receive the Rs. 100 to S. This may be done without the consent of Q. This is because Q is receiving his car, and it does not particularly matter to him, to whom the Rs. 100 is being handed as long as he is being absolved of his liability under the contract. However, notice may still be required to be given. Without such notice, Q would pay P, in spite of the fact that such right has been assigned to S. S would be a sufferer in such case.

In this case, that condition is being fulfilled since P has assigned his right to S. However, P may not assign S to be the seller. P cannot just transfer his duties under the contract to another. This is because Q has no guarantee as to the condition of S’s car. P entered into the contract with Q on the basis of the merits of P’s car, or any other personal qualifications of P. Such assignment may be done with the consent of all three parties – P, Q, S, and by doing this, P is absolved of his liabilities under the contract.

1.1. Effect of Assignment

Immediately on the execution of an assignment of an insurance policy, the assignor forgoes all his rights, title and interest in the policy to the assignee. The premium or loan interest notices etc. in such cases will be sent to the assignee. [ii] However, the existence of obligations must not be assumed, when it comes to the assignment. It must be accompanied by evidence of the same. The party asserting such a personal obligation must prove the existence of an express assumption by clear and unequivocal proof. [iii]

Assignment of a contract to a third party destroys the privity of contract between the initial contracting parties. New privity is created between the assignee and the original contracting party. In the illustration mentioned above, the original contracting parties were P and Q. After the assignment, the new contracting parties are Q and S.

1.2. Revocation of Assignment

Assignment, once validly executed, can neither be revoked nor canceled at the option of the assignor. To do so, the insurance policy will have to be reassigned to the original assignor (the insured).

1.3. Exceptions to Assignment

There are some instances where the contract cannot be assigned to another.

Express provisions in the contract as to its non-assignability – Some contracts may include a specific clause prohibiting assignment. If that is so, then such a contract cannot be assigned. Assignability is the rule and the contrary is an exception. [iv]

Pensions, PFs, military benefits etc. Illustration

1.4. enforcing a contract of assignment.

From the day on which notice is given to the insurer, the assignee becomes the beneficiary of the policy even though the assignment is not registered immediately. It does not wait until the giving of notice of the transfer to the insurer. [vi] However, no claims may lie against the insurer until and unless notice of such assignment is delivered to the insurer.

If notice of assignment is not provided to the obligor, he is discharged if he pays to the assignor. Assignee would have to recover from the assignor. However, if the obligor pays the assignor in spite of the notice provided to him, he would still be liable to the assignee.

The following two illustrations make the point amply clear:

Illustrations

1. Seller A assigns its right to payment from buyer X to bank B. Neither A nor B gives notice to X. When payment is due, X pays A. This payment is fully valid and X is discharged. It will be up to B to recover it from A

2. Seller A assigns to bank B its right to payment from buyer X. B immediately gives notice of the assignment to X. When payment is due, X still pays A. X is not discharged and B is entitled to oblige X to pay a second time.

An assignee doesn’t stand in better shoes than those of his assignor. Thus, if there is any breach of contract by the obligor to the assignee, the latter can recover from the former only the same amount as restricted by counter claims, set offs or liens of the assignor to the obligor.

The acknowledgment of notice of assignment is conclusive proof of, and evidence enough to entertain a suit against an assignor and the insurer respectively who haven’t honoured the contract of assignment.

1.5. Assignment under various laws in India

There is no separate law in India which deals with the concept of assignment. Instead, several laws have codified it under different laws. Some of them have been discussed as follows:

1.5.1. Under the Indian Contract Act

There is no express provision for the assignment of contracts under the Indian Contract Act. Section 37 of the Act provides for the duty of parties of a contract to honour such contract (unless the need for the same has been done away with). This is how the Act attempts to introduce the concept of assignment into Indian commercial law. It lays down a general responsibility on the “representatives” of any parties to a contract that may have expired before the completion of the contract. (Illustrations to Section 37 in the Act).

An exception to this may be found from the contract, e.g. contracts of a personal nature. Representatives of a deceased party to a contract cannot claim privity to that contract while refusing to honour such contract. Under this Section, “representatives” would also include within its ambit, transferees and assignees. [vii]

Section 41 of the Indian Contract Act applies to cases where a contract is performed by a third party and not the original parties to the contract. It applies to cases of assignment. [viii] A promisee accepting performance of the promise from a third person cannot afterwards enforce it against the promisor. [ix] He cannot attain double satisfaction of its claim, i.e., from the promisor as well as the third party which performed the contract. An essential condition for the invocation of this Section is that there must be actual performance of the contract and not of a substituted promise.

1.5.2. Under the Insurance Act

The creation of assignment of life insurance policies is provided for, under Section 38 of the Insurance Act, 1938.

When the insurer receives the endorsement or notice, the fact of assignment shall be recorded with all details (date of receipt of notice – also used to prioritise simultaneous claims, the name of assignee etc). Upon request, and for a fee of an amount not exceeding Re. 1, the insurer shall grant a written acknowledgment of the receipt of such assignment, thereby conclusively proving the fact of his receipt of the notice or endorsement. Now, the insurer shall recognize only the assignee as the legally valid party entitled to the insurance policy.

1.5.3. Under the Transfer of Property Act

Indian law as to assignment of life policies before the Insurance Act, 1938 was governed by Sections 130, 131, 132 and 135 of the Transfer of Property Act 1882 under Chapter VIII of the Act – Of Transfers of Actionable Claims. Section 130 of the Transfer of Property Act states that nothing contained in that Section is to affect Section 38 of the Insurance Act.

I) Section 130 of the Transfer of Property Act

An actionable claim may be transferred only by fulfilling the following steps:

Signed by a transferor (or his authorized agent)

The transfer will be complete and effectual as soon as such an instrument is executed. No particular form or language has been prescribed for the transfer. It does not depend on giving notice to the debtor.

The proviso in the section protects a debtor (or other person), who, without knowledge of the transfer pays his creditor instead of the assignee. As long as such payment was without knowledge of the transfer, such payment will be a valid discharge against the transferee. When the transfer of any actionable claim is validly complete, all rights and remedies of transferor would vest now in the transferee. Existence of an instrument in writing is a sine qua non of a valid transfer of an actionable claim. [x]

II) Section 131 of the Transfer Of Property Act

This Section requires the notice of transfer of actionable claim, as sent to the debtor, to be signed by the transferor (or by his authorized agent), and if he refuses to sign it, a signature by the transferee (or by his authorized agent). Such notice must state both the name and address of the transferee. This Section is intended to protect the transferee, to receive from the debtor. The transfer does not bind a debtor unless the transferor (or transferee, if transferor refuses) sends him an express notice, in accordance with the provisions of this Section.

III) Section 132 of the Transfer Of Property Act

This Section addresses the issue as to who should undertake the obligations under the transfer, i.e., who will discharge the liabilities of the transferor when the transfer has been made complete – would it be the transferor himself or the transferee, to whom the rest of the surviving contract, so to speak, has been transferred.

This Section stipulates, that the transferee himself would fulfill such obligations. However, where an actionable claim is transferred with the stipulation in the contract that transferor himself should discharge the liability, then such a provision in the contract will supersede Ss 130 and 132 of this Act. Where the insured hypothecates his life insurance policies and stipulates that he himself would pay the premiums, the transferee is not bound to pay the premiums. [xi]

FACILITIES SECURED BY INSURANCE POLICIES – HOW ASSIGNMENT COMES INTO THE PICTURE

Many banks require the borrower to take out or deposit an insurance policy as security when they request a personal loan or a business loan from that institution. The policy is used as a way of securing the loan, ensuring that the bank will have the facility repaid in the event of either the borrower’s death or his deviations from the terms of the facility agreement.

Along with the deposit of the insurance policy, the policyholder will also have to assign the benefits of the policy to the financial institution from which he proposes to avail a facility. The mere deposit, without writing, or passing of any document of title to such a claim, does not create any equitable charge. [xii]

ETHICS OF ASSIGNING LIFE INSURANCE POLICY TO LENDERS

The purpose of taking out a life insurance policy on oneself, is that in the event of an untimely death, near and dear ones of the deceased are not left high and dry, and that they would have something to fall back on during such traumatic times. Depositing and assigning the rights under such policy document to another, would mean that there is a high chance that benefits of life insurance would vest in such other, in the event of unfortunate death and the family members are prioritized only second. These are not desirable circumstances where the family would be forced to cope with the death of their loved one coupled with the financial crisis.

Thus, there is a need to examine the ethics of:

The bank accepting such assignment

The customer should be cautious before assigning his rights under life insurance policies. By “cautious”, it is only meant that he and his dependents and/or legal heirs should be aware of the repercussions of the act of assigning his life insurance policy. It is conceded that no law prohibits the assignment of life insurance policies.

In fact, Section 38 of the Insurance Act, 1938 , provides for such assignments. Judicial cases have held life insurance policies as property more than a social welfare measure. [xiii] Further, the bank has no personal relationship with any customer and thus has no moral obligation to not accept such assignments of life insurance.

However, the writer is of the opinion that, in dealing with the assignment of life insurance policies, utmost care and caution must be taken by the insured when assigning his life insurance policy to anyone else.

CURRENT STAND OF ICICI REGARDING FACILITIES SECURED BY INSURANCE POLICY, WITH SPECIFIC REFERENCE TO ASSIGNMENT OF OBLIGATIONS

This Section seeks to address and highlight the manner in which ICICI Bank drafts its security documents with regard to the assignment of obligations. The texts placed in quotes in the subsequent paragraphs are verbatim extracts from the security document as mentioned.

Composite Document for Corporate and Realty Funding

“ 8 . CHARGING CLAUSE

The Mortgagor doth hereby:

iii) Assign and transfer unto the Mortgagee all the Bank Accounts and all rights, title, interest, benefits, claims and demands whatsoever of the Mortgagor in, to, under and in respect of the Bank Accounts and all monies including all cash flows and receivables and all proceeds arising from Projects and Other Projects_______________, insurance proceeds, which have been deposited / credited / lying in the Bank Accounts, all records, investments, assets, instruments and securities which represent all amounts in the Bank Accounts, both present and future (the “Account Assets”, which expression shall, as the context may permit or require, mean any or each of such Account Assets) to have and hold the same unto and to the use of the Mortgagee absolutely and subject to the powers and provisions herein contained and subject also to the proviso for redemption hereinafter mentioned;

(v) Assign and transfer unto the Mortgagee all right, title, interest, benefit, claims and demands whatsoever of the Mortgagors, in, to, under and/or in respect of the Project Documents (including insurance policies) including, without limitation, the right to compel performance thereunder, and to substitute, or to be substituted for, the Mortgagor thereunder, and to commence and conduct either in the name of the Mortgagor or in their own names or otherwise any proceedings against any persons in respect of any breach of, the Project Documents and, including without limitation, rights and benefits to all amounts owing to, or received by, the Mortgagor and all claims thereunder and all other claims of the Mortgagor under or in any proceedings against all or any such persons and together with the right to further assign any of the Project Documents, both present and future, to have and to hold all and singular the aforesaid assets, rights, properties, etc. unto and to the use of the Mortgagee absolutely and subject to the powers and provisions contained herein and subject also to the proviso for redemption hereinafter mentioned.”

ICICI Bank’s Standard Terms and Conditions Governing Consumer Durable Loans

“ insurance.

The Borrower further agrees that upon any monies becoming due under the policy, the same shall be paid by the Insurance Company to ICICI Bank without any reference / notice to the Borrower, but not exceeding the principal amount outstanding under the Insurance Policy. The Borrower specifically acknowledges that in all cases of claim, the Insurance Company will be solely liable for settlement of the claim, and he/she will not hold ICICI Bank responsible in any manner whether for compensation, recovery of compensation, processing of claims or for any reason whatsoever.

Reference has been made only to assignment of assets, rights, benefits, interests, properties etc. No specific reference has been made to the assignment of obligations of the assignor under such insurance contract.

THE ISSUE FACED BY ICICI BANK

Where ICICI Bank accepts insurance policy documents of customers as security for a loan, in the light of the fact that the documents are silent about the question of assignment of obligations, are they assigned to ICICI Bank? Where there is hypothecation of a life insurance policy, with a stipulation that the mortgagor (assignor) should pay the premiums, and that the mortgagee (assignee) is not bound to pay the same, Sections 130 and 132 do not apply to such cases. [xiv] With rectification of this issue, ICICI Bank can concretize its hold over the securities with no reservations about its legality.

RISKS INVOLVED

This section of the paper attempts to explore the many risks that ICICI Bank is exposed to, or other factors which worsen the situation, due to the omission of a clause detailing the assignment of obligations by ICICI Bank.

Practices of Other Companies

The practices of other companies could be a risk factor for ICICI Bank in the light of the fact that some of them expressly exclude assignment of obligations in their security documents.

There are some companies whose notice of assignment forms contain an exclusive clause dealing with the assignment of obligations. It states that while rights and benefits accruing out of the insurance policy are to be assigned to the bank, obligations which arise out of such policy documents will not be liable to be performed by the bank. Thus, they explicitly provide for the only assignment of rights and benefits and never the assignment of obligations.

Possible Obligation to Insurance Companies

By not clearing up this issue, ICICI Bank could be held to be obligated to the insurance company from whom the assignor took the policy, for example, with respect to insurance premiums which were required to be paid by the assignor. This is not a desirable scenario for ICICI Bank. In case of default by the assignor in the terms of the contract, the right of ICICI Bank over the security deposited (insurance policy in question) could be fraught in the legal dispute.

Possible litigation

Numerous suits may be instituted against ICICI Bank alleging a violation of the Indian Contract Act. Some examples include allegations of concealment of fact, fraud etc. These could be enough to render the existing contract of assignment voidable or even void.

Contra Proferentem

This doctrine applies in a situation when a provision in the contract can be interpreted in more than one way, thereby creating ambiguities. It attempts to provide a solution to interpreting vague terms by laying down, that a party which drafts and imposes an ambiguous term should not benefit from that ambiguity. Where there is any doubt or ambiguity in the words of an exclusion clause, the words are construed more forcibly against the party putting forth the document, and in favour of the other party. [xv]

The doctrine of contra proferentem attempts to protect the layman from the legally knowledgeable companies which draft standard forms of contracts, in which the former stands on a much weaker footing with regard to bargaining power with the latter. This doctrine has been used in interpreting insurance contracts in India. [xvi]

If litigation ensues as a result of this uncertainty, there are high chances that the Courts will tend to favour the assignor and not the drafter of the documents.

POSSIBLE DEFENSES AGAINST DISPUTES FOR THE SECURITY DOCUMENTS AS THEY ARE NOW

This section of the paper attempts to give defences which the Bank may raise in case of any disputes arising out of silence on the matter of assignability of obligations.

Interpretation of the Security Documents

UNIDROIT principles expressly provide a method for interpretation of contracts. [xvii] The method consists of utilizing the following factors:

This defence relates to the concept of estoppel embodied in Section 115 of the Indian Evidence Act, 1872. According to the Section, when one person has, by his declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative shall be allowed, in any suit or proceeding between himself and such person or his representatives, to deny the truth of that thing.

If a man either by words or by conduct has intimated that he consents to an act which has been done and that he will not offer any opposition to it, and he thereby induces others to do that which they otherwise might have abstained from, he cannot question legality of the act he had sanctioned to the prejudice of those who have so given faith to his words or to the fair inference to be drawn from his conduct. [xviii] Subsequent conduct may be relevant to show that the contract exists, or to show variation in the terms of the contract, or waiver, or estoppel. [xix]

Where the meaning of the instrument is ambiguous, a statement subsequently interpreting such instrument is admissible. [xx] In the present case, where the borrower has never raised any claims with regard to non assignability of obligations on him, and has consented to the present conditions and relations with ICICI Bank, he cannot he cannot be allowed to raise any claims with respect to the same.

Internationally, the doctrine of post contractual conduct is invoked for such disputes. It refers to the acts of parties to a contract after the commencement of the contract. It stipulates that where a party has behaved in a particular manner, so as to induce the other party to discharge its obligations, even if there has been a variation from the terms of the contract, the first party cannot cite such variation as a reason for its breach of the contract.

Where the parties to a contract are both under a common mistake as to the meaning or effect of it, and therefore embark on a course of dealing on the footing of that mistake, thereby replacing the original terms of the contract by a conventional basis on which they both conduct their affairs, then the original contract is replaced by the conventional basis. The parties are bound by the conventional basis. Either party can sue or be sued upon it just as if it had been expressly agreed between them. [xxi]

The importance of consensus ad idem has been concretized by various case laws in India. Further, if the stipulations and terms are uncertain and the parties are not ad idem there can be no specific performance, for there was no contract at all. [xxii]

In the present case, the minds of the assignor and assignee can be said to have not met while entering into the assignment. The assignee never had any intention of undertaking any obligations of the assignor. In Hartog v Colin & Shields, [xxiii] the defendants made an offer to the plaintiffs to sell hare skins, offering to a pay a price per pound instead of per piece.

AVOIDING THESE RISKS

To concretize ICICI Bank’s stand on the assignment of obligations in the matter of loans secured by insurance policies, the relevant security documents could be amended to include such a clause.

For instances where loans are secured by life insurance policies, a standard set by the American Banker’s Association (ABA) has been followed by many Indian commercial institutions as well. [xxvi] The ABA is a trade association in the USA representing banks ranging from the smallest community bank to the largest bank holding companies. ABA’s principal activities include lobbying, professional development for member institutions, maintenance of best practices and industry standards, consumer education, and distribution of products and services. [xxvii]

There are several ICICI security documents which have included clauses denying any assignment of obligations to it. An extract of the deed of hypothecation for vehicle loan has been reproduced below:

“ 3. In further pursuance of the Loan Terms and for the consideration aforesaid, the Hypothecator hereby further agrees, confirms, declares and undertakes with the Bank as follows:

(i)(a) The Hypothecator shall at its expenses keep the Assets in good and marketable condition and, if stipulated by the Bank under the Loan Terms, insure such of the Assets which are of insurable nature, in the joint names of the Hypothecator and the Bank against any loss or damage by theft, fire, lightning, earthquake, explosion, riot, strike, civil commotion, storm, tempest, flood, erection risk, war risk and such other risks as may be determined by the Bank and including wherever applicable, all marine, transit and other hazards incidental to the acquisition, transportation and delivery of the relevant Assets to the place of use or installation. The Hypothecator shall deliver to the Bank the relevant policies of insurance and maintain such insurance throughout the continuance of the security of these presents and deliver to the Bank the renewal receipts / endorsements / renewed policies therefore and till such insurance policies / renewal policies / endorsements are delivered to the Bank, the same shall be held by the Hypothecator in trust for the Bank. The Hypothecator shall duly and punctually pay all premia and shall not do or suffer to be done or omit to do or be done any act, which may invalidate or avoid such insurance. In default, the Bank may (but shall not be bound to) keep in good condition and render marketable the relevant Assets and take out / renew such insurance. Any premium paid by the Bank and any costs, charges and expenses incurred by the Bank shall forthwith on receipt of a notice of demand from the Bank be reimbursed by the Hypothecator and/or Borrower to the Bank together with interest thereon at the rate for further interest as specified under the Loan Terms, from the date of payment till reimbursement thereof and until such reimbursement, the same shall be a charge on the Assets…”

The inclusion of such a clause in all security documents of the Bank can avoid the problem of assignability of obligations in insurance policies used as security for any facility sanctioned by it.

An assignment of securities is of utmost importance to any lender to secure the facility, without which the lender will not be entitled to any interest in the securities so deposited.

In this paper, one has seen the need for assignment of securities of a facility. Risks involved in not having a separate clause dealing with non assignability of obligations have been discussed. Certain defences which ICICI Bank may raise in case of the dispute have also been enumerated along with solutions to the same.

Formatted by March 2nd, 2019.

BIBLIOGRAPHY

[i] J.H. Tod v. Lakhmidas , 16 Bom 441, 449

[ii] http://www.licindia.in/policy_conditions.htm#12, last visited 30 th June, 2014

[iii] Headwaters Construction Co. Ltd. v National City Mortgage Co. Ltd., 720 F. Supp. 2d 1182 (D. Idaho 2010)

[iv] Indian Contract Act and Specific Relief Act, Mulla, Vol. I, 13 th Edn., Reprint 2010, p 968

[v] Khardah Co. Ltd. v. Raymond & Co ., AIR 1962 SC 1810: (1963) 3 SCR 183

[vi] Principles of Insurance Law, M.N. Srinivasan, 8 th Edn., 2006, p. 857

[vii] Ram Baran v Ram Mohit , AIR 1967 SC 744: (1967) 1 SCR 293

[viii] Sri Sarada Mills Ltd. v Union of India, AIR 1973 SC 281

[ix] Lala Kapurchand Godha v Mir Nawah Himayatali Khan, [1963] 2 SCR 168

[x] Velayudhan v Pillaiyar, 9 Mad LT 102 (Mad)

[xi] Hindustan Ideal Insurance Co. Ltd. v Satteya, AIR 1961 AP 183

[xii] Mulraj Khatau v Vishwanath, 40 IA 24 – Respondent based his claim on a mere deposit of the policy and not under a written transfer and claimed that a charge had thus been created on the policy.

[xiii] Insure Policy Plus Services (India) Pvt. Ltd. v The Life Insurance Corporation of India, 2007(109)BOMLR559

[xiv] Transfer of Property Act, Sanjiva Row, 7 th Edn., 2011, Vol II, Universal Law Publishing Company, New Delhi

[xv] Ghaziabad Development Authority v Union of India, AIR 2000 SC 2003

[xvi] United India Insurance Co. Ltd. v M/s. Pushpalaya Printers, [2004] 3 SCR 631, General Assurance Society Ltd. v Chandumull Jain & Anr., [1966 (3) SCR 500]

[xvii] UNIDROIT Principles, Art 4.3

[xviii] B.L.Sreedhar & Ors. v K.M. Munireddy & Ors., 2002 (9) SCALE 183

[xix] James Miller & Partners Ltd. v Whitworth Street Estates (Manchester) Ltd., [1970] 1 All ER 796 (HL)

[xx] Godhra Electricity Co. Ltd. v State of Gujarat, AIR 1975 SC 32

[xxi] Amalgamated Investment & Property Co. Ltd. v Texas Commerce International Bank Ltd., [1981] 1 All ER 923

[xxii] Smt. Mayawanti v Smt. Kaushalya Devi, 1990 SCR (2) 350

[xxiii] [1939] 3 All ER 566

[xxiv] Terrell v Alexandria Auto Co., 12 La.App. 625

[xxv] http://www.uncitral.org/pdf/english/CISG25/Pamboukis.pdf, last visited on 30 th June, 2014

[xxvi] https://www.phoenixwm.phl.com/shared/eforms/getdoc.jsp?DocId=525.pdf, last visited on 30 th June, 2014

[xxvii] http://www.aba.com/About/Pages/default.aspx, last visited on 30 th June, 2014

Assignment of Debts under the Insolvency and Bankruptcy Code

[ Aayush Mitruka is a lawyer based in Delhi]

Synergies Dooray Automotive, the first corporate entity to be resolved under the new Insolvency and Bankruptcy Code ( Code ) posed a few very interesting questions and highlighted some grey areas in Code. In the present post I intend to discuss one important issue that came up in the context of assignment of debts.

To put things in perspective, the Code stipulates that after the National Company Law Tribunal ( NCLT ) admits an insolvency application, the Insolvency Resolution Professional ( IRP ), among other things, constitutes a committee of creditors ( CoC ) on the basis of claims received against the corporate debtor. The committee comprises all the financial creditors of the corporate debtor, and they are assigned voting shares based on the size of their debt. However, a related party to whom a corporate debtor owes a financial debt does not have any right of representation, participation or voting in the meetings of the CoC.

Before discussing the issue, it will be beneficial to allude to the brief facts of the Synergies Dooray case. In November 2016, just a week before the Code became operational, Synergies Castings, a sister concern of Synergies Dooray, assigned a major portion of its debt to third-party Millennium Finance by way of three assignment deeds. Note that Synergies Castings had acquired the debt from a consortium of banks by way of a one-time settlement in 2011. In the usual course, Synergies Castings, being a related party would not have been permitted to participate/vote in the meetings of the CoC. Therefore, the maneuvering had secured Millennium Finance ( Millennium ) a place in the CoC.

Understandably, there is no reason to complain when a creditor (related party or otherwise) assigns its loan to somebody, as that is well within their rights. However the important question is whether the assignee should get a seat in the CoC by virtue of the assignment? The Code does not seem to directly provide any answer in this regard. [1]

This particular question came up for consideration in an application filed by Edelweiss Asset Restructuring Company Limited ( Edelweiss ) against Synergies Dooray. Edelweiss challenged the assignment and the constitution of the CoC (which included Millennium), alleging that the assignment of debt by Synergies Casting to Millennium was carried out with the ulterior motive of reducing its (i.e. Edelweiss’) voting rights. It was also argued that the assignment deeds were inadequately stamped and unregistered. However, Edelweiss’ argument did not find favour with the NCLT, Hyderabad and while rejecting the application, the NCLT remarked :

“29. Therefore, the assignment deeds between the two entities also legal and permissible. At most it can be said to be similar to “tax planning” rather tax avoiding. Because of this assignment deed, not only the applicant’s share in total debt is reduced, but other financial creditors/Assignees share also proportionately reduced and they did not object to the same but only the applicant agitates with oblique motive/reasons best known to it. Therefore, a fraudulent attempt made to reduce the Applicant’s share in the total voting rights is not a plausible plea by the Applicant. In the absence of any documentary proof/evidence to the claim of the Applicant, the same is liable to be rejected. Accordingly, the bench rejects the above allegations/claim of the applicant.”

[Emphasis supplied]

Although the NCLT held that such an assignment was legal and permissible, it did not delve into the critical aspect of whether such an assignment would secure the assignee a seat in the CoC. The reasoning provided does not appear very convincing. This question ought to have been discussed at length. A reading of the above quoted paragraph also brings to fore that the decision lends it approval to an assignment undertaken even with the sole objective of securing a seat in the CoC because it is akin to “tax planning”. Edelweiss has preferred an appeal before the NCLAT and the matter is currently pending for its decision.

This issue was once again considered by the NCLT, Mumbai in the case of Fortune Pharma Private Limited . Interestingly, in this case, after filing applications initiating the corporate insolvency resolution process ( CIRP ) but before its admission, two related party creditors assigned their debts to an unrelated third party. Naturally, this diminished the voting share of the applicant creditor, who then filed an application contending that the assignments were executed with an ulterior motive. The NCLT held that disqualification that existed at the time of initiating the CIRP cannot be removed by a mere assignment. It noted that assignment is transfer of one’s right to recover debt to another person and that the rights of the ‘assignee’ are no better than those of an ‘assignor’. Accordingly, the assignee does not get the right to change its status from ‘related’ to ‘unrelated.’

In other words, the NCLT, Mumbai reasoned that since at the inception of the debt it belonged to a related party (who is barred to participate in the proceedings of CoC), the assignment of such a debt will not remove the bar. In my view, though the NCLT was correct in debarring the assignee from participating in the proceedings of the CoC, however the reasoning provided does not appear to inspire much confidence because of the following reasons.

First, it is important to understand that the bar is on the person who is holding the debt and not the nature of the debt per se. It will not be entirely correct to bar somebody (who is otherwise eligible) from voting just because it bought the debt from a related party. Imagine a situation where an original creditor (unrelated) assigns a debt to a related party. Now when this related party creditor assigns a debt to an unrelated X in the usual course of business, will X in this case be barred since at some point in time the debt was held by a related party? The answer to this has to be in the negative.

Second, this will prove to be counter-productive and have unintended repercussions. It will strongly discourage genuine asset reconstruction companies or other interested parties from buying the debt from any related party creditor. Surely, the Code could not have intended to hinder assignments which are undertaken in the usual course of the business.

Third, how do we exactly deal with situations when a CIRP application is being made by an operational creditor under section 9 of the Code? An operational creditor needs to deliver to the corporate debtor a demand notice as per section 8 before invoking section 9. Do we, in these cases, also allow an assignment before filing of an application? It would be impractical to have a one-size-fits-all approach.

The two views and the approaches adopted by two benches of the NCLT on this critical question throws open a can of worms. Let us try to closely examine this issue.

Assignment is essentially a contractual concept and refers to an agreement by which the rights and obligations of one party can be transferred to another. By virtue of assignment, the assignee steps into the shoes of her assignor and agrees to be both bound by it and is entitled to enforce it. Further, to be valid, an assignment agreement must satisfy the requirements under the Indian Contract Act, 1872 ( Act ). Accordingly, an assignment agreement can be declared void under section 23 of the Act if the object of the assignment agreement is (a) of such a nature that, if permitted, it would defeat the provisions of any law; or (b) fraudulent; or (c) involves or implies injury to the person or property of another; or (d) the court regards it as immoral, or opposed to public policy.

At this juncture, it is significant to examine if the NCLT (which exercises summary jurisdiction) would have the power to undertake such an investigation or would it be the prerogative of a civil court? The language of section 60(5)(c) of the Code seem to suggest that the NCLT will have the authority since this will be a “ question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code .”

It cannot be the intention of the Code to allow the promoters to appoint a proxy on the CoC by means of an assignment. It is a well settled principle of law that what may not be done directly cannot be permitted to be done indirectly. However, at the same time it must also be borne in mind that the Code does not aim to discourage any bona fide assignments. In the absence of any guidance in the Code, in order to determine the validity of such assignments, the NCLT ought to investigate the objective behind the assignment. In this regard, the time and the circumstances under which the assignment is made would be one relevant factor. Among other factors, the NCLT may also consider if the assignment is executed in the usual and ordinary course of the business.

This issue undermines the efficiency of the Code and therefore warrants serious consideration. The Code envisages provisions for scrutinizing certain transactions which may compromise the CIRP. One way to address this issue could be by amending the law to include such assignments also within its ambit. Pertinently, under section 240 of the Code, the Insolvency and Bankruptcy Board of India has the power to make regulations. However, since Parliament has been quite proactive in the past in preventing the promoters trying to game the system, it would not be surprising if an amendment is brought in to bring some clarity. It remains to be seen how and when this issue does gets finally elucidated.

– Aayush Mitruka

[1] Regulation 28 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 does not address this issue.

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Thanks for the above post. Its very helpful. Can you share a draft Assignment Agreement as per IBC?

Ad Mr Ayush. Sir.we have settlements our loans with J.M Arc on 12.8.15 in rs 7 Cr.J.M ARC not given permission to sell extra open land to deposit upfront 25% payments. Hence company not sine agreement. B.J.M ARC revoked on 11.12.15.J.M ARC file petition with NCLt for rs 14.5 cr in application. Pls advice your view.

With respect to Mr Mitruka’s views on the issue of assignment, I humbly submit that no amendment in the Code is called for. The Code, in several places, has expressly equated a creditor (by virtue of a business deal) with a creditor who has simply acquired a debt from another, say through assignment. Once the assignment agreement comes out unscathed, the assignee (of any debt) is as much a creditor as any other creditor. So, post the assignment, Millenium is a creditor in his own right. This way there is no question of any ‘related party’. A financial creditor gets a seat in the CoC, irrespective of his lineage. This should be looked at in this simple manner. In the proceedings before NCLT, Hyderabad, all that was said was that these 3 Agreements smacked of malafide because their date of signing was so close to the date of SICA Repeal . To be sure, I fail to see the connection between the two. It was known to all and sundry that SICA Repeal will be brought into force as soon as NCLTs got ready to be constituted.What was the fault of the Assignor or Assignee , even if agreements were signed on the very day on which SICA Repeal was made effective. Edelweiss does not appear to have led any evidence to show that the parties were planning to get around the section 21(2) by signing those assignment agreements. In fact, if the objective was just to get around this section, the date of signing did not need to be close to the date of SICA Repeal coming into effect. Neither NCLT nor the RP could afford to waste time on mere allegations unsupported by any evidence.

Please sir help…. Bank insolvency pr assignment ready krna h… So plz explain I am so very confused..

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Patent Assignment in India

January 17, 2023 | Corporate & Commercial Law Patents are intellectual properties that provide exclusive rights to the owner for a specific invention, but which can be transferred to someone else through the process of patent assignment that must be duly executed as per legal norms.

What is a Patent?

Need for Patents

What is patent assignment.

Section 70 of the Patent Act grants power to the proprietor (assignor) to assign, grant license, etc. to other individuals (assignee) with respect to the patent. This grant of power must be in written and duly executed for it to be a legally acceptable transfer of rights.
: Owner of the patent (proprietor)
: Individual to whom the rights are being assigned to

Types of Patent Assignments

Legal Assignment: A legal assignment is where the assignee may enter their name as the patent owner in the government records. A patent created through a deed can only be assigned through a deed. Once the assignor has completed the process, the assignee gains all the rights of the patent.
Equitable Assignment: Any form or agreement including a letter in which the proprietor agrees to share a certain share of the patent with another individual is referred to as the equitable assignment of the patent. While the assignee cannot get their name entered in the register as one of the owners, they can notify the register of their interest in the patent.
Mortgages: Mortgages are assignments where the owner provides partial or complete right to an assignee in exchange for a certain amount of money. Once the amount is repaid, the owner gains back all rights to the mortgaged property. The lender cannot register themselves as the proprietor in the records, but get their name entered in the register as mortgagee.

Requirements for Patent Assignment

As mentioned before, patent assignment can only be considered a valid assignment if it has been drafted in writing and duly executed through the legal process.
The written draft must define all the rights and obligations of both the parties with respect to the patent.
The assignee shall apply in writing to the Controller of Patents to enter their name into the register of patents. Once the Controller of Patents is satisfied that the assignee has a genuine interest in the patent, they shall enter the details of assignment into their register.
Form-16 must be duly filled and filed before the Controller General of Patents, Designs and Trademarks. It records the necessary details that must be mentioned for assignment, such as name of the applicant, details of all parties involved, description of the draft through which assignment is being sought.
Two copies of the deed must be attached to the application as well.
Fees for the process varies for different individuals and entities and is different when applied physically and through the Internet. A detailed breakdown of the official fees for the process is mentioned in the First Schedule of the Patent Act.

Contents of Patent Assignment Agreement

Details of the parties to the agreement, i.e., the assignor and the assignee.
Description of the patent – registration number, date of registration, type of patent, etc.
Consideration in lieu of assignment.
Rights and obligations of all parties involved.
An undertaking of the assignor that they have not assigned or otherwise dealt with patent to create a third-party interest in the patent.
Termination clause.
Dispute resolution clauses.
Indemnity clause in favor of the assignee.

Difference between Assignment and Licenses

Assignment	License
Assignment refers to the transfer of ownership and of the patent to the assignee.	A license grants you the permission to use any patented invention, which would otherwise be referred to as infringement.
Assignments must be executed in writing.	Licenses can be granted without any written documentation.
Assignees don’t need to pay any royalties to the original owner.	Licensees may be expected to pay certain royalties in exchange of using the inventor’s product.
As you become a proprietor of the patent, it may be a bit expensive to get an assignment.	Licenses are much cheaper than assignments as you will also be paying some royalty in exchange of using the patent.

Amendments and Termination

Amending Patent Assignment Agreement
Termination of Patent Assignment Agreement

We can assist you with Patent Assignment Agreement concerns. You can get in touch with us by submitting a query below.

Definition of Resolution plan will now include provisions for corporate restructuring: The amendment act has inserted an explanation in the definition of resolution plan to clarify that a resolution plan that proposes the insolvency resolution of a corporate debtor may include the provisions for corporate restructuring, including by way of merger, amalgamation and demerger.
NCLT will have to record reasons for delay in discarding an application for initiation of CIRP: As per the Code, the NCLT must dispose of an application for initiation of CIRP within a period of 14 days from the receipt of application. However, there have been cases when the NCLT has taken more than 14 days to make a decision on the application. Therefore, to ensure speedy disposal and value maximization of the corporate debtor's assets, a proviso has been added which requires that NCLT to record its reasons in writing in case an application is not disposed within 14 days.
Corporate Insolvency Resolution Process to be concluded within 330 days: Earlier, the IBC demanded completion of CIRP within 180 days including a one-time extension of 90 days. However, many a times the Courts have allowed removal of certain periods, for instance, time consumed in litigation, from the compulsory completion period resulting in a lot of unresolved CIRPs well beyond the time duration allowed in the IBC. The Amendment act makes it compulsory for a CIRP to be completed within 330 days including any extension of time granted and time taken under legal proceedings. It further states that any pending CIRPs that have been going on for over 330 days should be completed within 90 days from the date of commencement of the Amendment Act.
Voting by authorised representative representing a class of financial creditors: To avoid any confusion and facilitate decision making in the Committee of Creditors, especially in cases where financial creditors are a large group, the Amendment Act provides that an authorized representative representing a class of financial creditors shall vote on behalf of all the financial creditors he/she represents in accordance with the decision approved by more than 50% of such financial creditors. This principle however would not be applicable in case of voting for withdrawal of CIRP.
Amount payable to functional creditors and disagreeing financial creditors: The Amendment Act provides that payment of debts of operational creditors shall be the higher of
the amount to be paid to these creditors at the time of liquidation of the corporate debtor u/s 53 or
the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance of priority as mentioned u/s 53 (1)
NCLT has not approved or rejected a resolution plan
an appeal is pending at the Supreme Court or at the NCLAT (National Company Law Appellate Tribunal)
a lawsuit has been launched in a court challenging the decision of NCLT in relation to a resolution plan
Committee of Creditors (COC) to contemplate way of distribution submitted in the resolution plan: Besides the current need of approval of resolution plan after keeping in mind the practicality and acceptability of the resolution plan, the amendment act requires that the CoC consider the manner of distribution proposed in the resolution plan by taking into account the order of priority amongst creditors, as prescribed u/s 53 (1) relating to liquidation waterfall, including the priority and value of security interest of a secured creditor.
NCLT approved resolution plan will be binding on the Central Government, State Government or any local authority to whom corporate debtor owes a statutory debt: As per the Code, the approved resolution plan was only binding on the corporate debtor and its employees, creditors, members, guarantors and other stakeholders included in the resolution plan resulting in instances where the Government used to follow up for the balance dues after the said approval of resolution plan. The Amendment Act has now modified Section 31(1) to illuminate that any NCLT approved resolution plan will be binding on the Central Government, State Government and any local authority to whom a corporate debtor owes a debt in respect of payment of dues arising under any law.
Liquidation after setting up the Committee of Creditors (COC): The Amendment Act simplifies by way of an explanation, u/s 33(2) which covers liquidation, that the COC may decide to liquidate the corporate debtor any time after the setting-up of the COC until the confirmation of the resolution plan, including at any time before the development of the information memorandum. This change is pertinent as there have been cases where NCLTs have demanded that a liquidation order may be passed only after failure of the CIRP even though an early liquidation would have resulted in value maximization.

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Ownership And Forms Of Transfer Of Patents Rights In India- A Primer

Contributor.

Introduction

Once a patent for an invention is granted, it is important to consider (1) if the patentee/proprietor of the patent is going to manufacture, market, sell and/or distribute the invention, (2) whether the patentee/proprietor of the patent is going to sell all rights in his/her invention to someone else for a sum of money, or (3) if the patentee/proprietor of the patent will license someone else to produce and bring the patented product to market under specified terms by the Patentee that must be met for the licensee. This article discusses how one may effect, use or monetize the patented invention.

A patent is considered as a transferrable property that can be transferred from the original patentee to any other person by assignment or by operation of law. A patent can be licensed or assigned only by the owner of the patent. In case of co-owners or joint-owners, a co-owner can assign or license the patent only upon consent of the other owner(s).

Requirements for creation of any interest in a patent:

Section 68 of the Indian Patents Act 1970 provides for the mortgage of, license or creation of any interest in the patent.

" Assignments, etc., not to be valid unless in writing and duly executed. 1 —An assignment of a patent or of a share in a patent, a mortgage, license or the creation of any other interest in a patent shall not be valid unless the same were in writing and the agreement between the parties concerned is reduced to the form of a document embodying all the terms and conditions governing their rights and obligations and duly executed "

Requirements 2 :

The assignment, mortgage or license should be reduced to writing in a document embodying all the terms and conditions governing the rights and obligations between the parties;
An application for registration of such document should be filed in the prescribed manner in Form-16 within the time prescribed under section 68. The document when registered will have effect from the date of execution.

Forms/Nature of Transfer of Patent Rights:

Grant of a Patent confers to a patentee the right to prevent others from making, using, exercising or selling the invention without his permission. The following are the ways in which a patentee can deal with the patent:

Transmission of patent by operation of law

1. Assignment

The term 'assignment' is not defined in the Indian Patents Act. Assignment is an act by which the patentee assigns whole or part of his patent rights to the assignee who acquires the right to prevent others from making, using, exercising or vending the invention. There are three kinds of assignments

Legal Assignment
Equitable Assignment

Legal Assignment : An assignment (or an agreement to assign) of an existing patent is a legal assignment, where the assignee may enter his name as the patent owner. A patent which is created by deed can only be assigned by a deed. A legal assignee entitled as the proprietor of the patent acquires all rights thereof.

Equitable Assignments : Any agreement including a letter in which the patentee agrees to give a certain defined share of the patent to another person is an equitable assignment of the patent. However an assignee in such a case cannot have his name entered in the register as the proprietor of patent. But the assignee may have notice of his interest in the patent entered in the register.

Mortgages: A mortgage is an agreement in which the patent rights are wholly or partly transferred to assignee in return for a sum of money. Once the assignor repays the sum to the assignee, the patent rights are restored to assignor/patentee. The person in whose favor a mortgage is made is not entitled to have his name entered in the register as the proprietor, but he can get his name entered in the register as mortgagee.

2. Licenses:

The Patents Act allows a patentee to grant a License by the way of agreement under section 70 of the Act. A patentee by the way of granting a license may permit a licensee to make, use, or exercise the invention. A license granted is not valid unless it is in writing. The license is contract signed by the licensor and the licensee in writing and the terms agreed upon by them including the payment of royalties at a rate mentioned for all articles made under the patent. Licenses are of the following types,

Voluntary License
Statutory License(such as compulsory License)
Exclusive/Limited License
Express/Implied License

Voluntary licenses:

It is the license given to any other person to make, use and sell the patented article as agreed upon the terms of license in writing. Since it is a voluntary license, the Controller and the Central government do not have any role to play. The terms and conditions of such agreement are mutually agreed upon by the licensor and licensee. In case of any disagreement, the licensor can cancel the licensing agreement.

Statutory licenses:

Statutory licenses are granted by central government by empowering a third party to make/use the patented article without the consent of the patent holder in view of public interest. Classic example of such statutory licenses is compulsory licenses. Compulsory licenses are generally defined as "authorizations permitting a third party to make, use, or sell a patented invention without the patent owner's consent 3 .

Compulsory Licenses(CLs)

Though CLs works against the interest of the patent holder, it is granted under certain provided conditions under the Patents Act. Under section 84 of the Indian Patents Act 1970, any person can make an application for grant of a compulsory license for a patent after three years, from the date of grant of that patent, on any of the following grounds:

(a) The reasonable requirements of the public with respect to the patented invention have not been satisfied; (b) The patented invention is not available to the public at a reasonably affordable price. (c) The patented invention has not worked in the territory of India.

Under Section 92 A of the Act, CLs can also be granted for exporting pharmaceutical product(s) to any country incapable of manufacturing pharmaceutical products for the benefit of the people in that country, further when working of the patent required another related patent under Section 88 of the Act or on notification by the Central Government, the controller can grant a license to an interested person. The Central or State Government can use the invention or its process for its own purpose either with or without royalty.

Exclusive Licenses and Limited Licenses:

Depending upon the degree and extent of rights conferred on the licensee, a license may be Exclusive or Limited License. An exclusive license excludes all other persons including the patentee from the right to use the invention. Any one or more rights of the patented invention can be conferred from the bundle of rights owned by the patentee. The rights may be divided and assigned, restrained entirely or in part. In a limited license, the limitation may arise as to persons, time, place, manufacture, use or sale.

Express and Implied Licenses:

An express license is one in which the permission to use the patent is given in express terms. Such a license is not valid unless it is in writing in a document embodying the terms and conditions. In case of implied license though the permission is not given in express terms, it is implied from the circumstances. For example: where a person buys a patented article, either within jurisdiction or abroad either directly from the patentee or his licensees, there is an implied license in any way and to resell it.

3. Transmission of Patent by Operation of law

When a patentee dies, his interest in the patent passes to his legal representative; in case of dissolution or winding up of a company or bankruptcy transmission of patent by operation of law occurs.

Conclusion:

An assignment is the transfer of all the proprietary rights by the patentee to the assignee while the license is the right granted to work the invention by withholding the proprietary rights with the patentee 4 . An assignee can in turn reassign his rights to third parties while the licensee cannot change the title or cannot reassign his rights to the third person. An assignee is assigned with all the rights that the patent owner can enjoy while the licensee cannot enjoy such rights. Also an assignee has the right to sue the infringer while the licensee is not empowered with the rights to sue any party for the infringement of the patent in his name. Having known the difference between assignment and license from the aforesaid, the patentee can decide the best possible way of commercializing his/her invention.

1. https://indiankanoon.org/doc/1027357/

2. Patent Law, Fourth edition , P.Narayanan, Eastern Law House, Pg: No:268

3. F.M. SCHERER & JAYASHREE WATAL, POST-TRIPS OPTIONS FOR ACCESS TO PATENTED MEDICINES IN DEVELOPING COUNTRIES 13 (Comm'n on Macroeconomics & Health, Working Paper No. WG4:1, 2001), available at http://www.cmhealth.org/docs/-wg4_paper1.pdf (last visited Dec. 16, 2013 ).

4. IPR, Biosafety and Bioethics, Deepa Goel, Shomini Parashar, Pg Nos 88-89

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Intellectual Property

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Trademark Act

Trademark assignment in India : with reference to transmission and assignment agreements

This article is written by Pradhnya Deshmukh, pursuing a Certificate Course in Trademark Licensing, Prosecution and Litigation from LawSikho .

Table of Contents

Introduction

Trademarks are intellectual property which initially gained popularity during the industrialization era of human development. With manufacturing processes getting more efficient with each technological and scientific research and innovation, competition in the market became stiff. Traders and manufacturers began to use unique symbols and words to identify and differentiate their goods from that of other similar goods being sold in the market. It is a misconceived notion that trademarks, per se, is a new legal concept. In the 19th Century, bakers found an unexpected blank canvas in the plain and taught round bread doughs. The bakers started using unique scoring techniques to distinguish their bread loafs from that of other bakers. The French scientist Vaudry appreciated the “breads with cuts on their surface” as an artistic creation backed by science causing an improvement in the appearance of the bread.

This article discusses assignment of trademarks in India with respect to the ways in which this can be done, its limitations, documents required for assignment agreement registration, fees and costs, and registrar’s discretion.

What are trademarks

Trademarks are artistic symbols, words, phrases or combination thereof, used to identify and distinguish certain goods or source of services from that of other similar goods or services available in the open market.

In India, trademarks are governed under the Trade Marks Act, 1999 ( “the Act” ) and are defined under Section 2 (zb) thereof.

To know more about Trademarks please visit

Nature of trademarks

Trademarks are assets or property with its nature similar to that of other physical properties such as land or house. It is pertinent to note that under the 1999 Act trademarks owners do not have to mandatorily register their marks to be considered the rightful proprietors of their trademarks and even unregistered trademarks can be assigned or transmitted. A trademark or brand owner has the rights to sell, license, assign and transmit its asset and its rights with respect to the said asset.

What is the ‘assignment’ and ‘transmission’ of Trademarks

Assignment of trademarks takes place when there is a transfer of ‘ownership’ of the mark from one party to another with or without goodwill of the business. In India, in case of assignment of registered trademark, such assignment is required to be recorded in the register by filing Form TM-P (Application for Post registration changes in the trademarks). (Form available here http://www.ipindia.nic.in/FORM-TM-P.pdf ) along with the prescribed fees. In case of unregistered trademark, all assignments must be registered on Form 23 (Form available here http://www.ipindia.nic.in/TM-23.pdf ) or Form 24 (Form available here http://www.ipindia.nic.in/tm-24.pdf ) before the Registrar of Trademarks.

Assignment of trademarks is conducted by way of a properly executed Trademark Assignment Agreement signifying the transfer of the mark from one person or entity (owner) to another party.

Transfer of rights by operation of law, devolution on the personal representative of a deceased person and any other mode of transfer, not being assignment, is also as transmission of trademarks under Section 2 (1) (zc) of the Act.

Provisions of Section(s) 37 to 45 under Chapter V of the Act postulate the form and procedure of assignment and transmission of trademarks in India.

Various ways in which assignment agreements can be executed

Complete Assignment – All rights in the trademark as transferred to another entity including the rights to earn royalties etc.
Assignment with respect to specific products or services also known as Partial Assignment – The transfer of ownership is restricted to the type of goods or services agreed upon by the parties.
Assignment with goodwill – All rights and value of the trademark as associated with the goods or the services are transferred. Herein, the assignment is such that the rights and value are transferred not only with respect to the class of goods the trademark was previously benign used for. The party receiving the ownership of such trademark is free to use the such trademark for any class of goods. (under Section 39 of the Act).
Assignment without goodwill also known as gross assignment – All rights and value of trademark are transferred to the assignee (buyer) without the transfer of right to use such trademark for the class of goods it was previously being used for by the original owner of the trademark. For e.g., Where the trademark “LOVEKART” was being used for gift box delivery services, any assignment without goodwill of the same would not allow the assignee to use such trademark “LOVEKART” for gift box delivery services. The assignee may use with respect to any other class of goods or services and has to create a separate goodwill in the same. (under Section 39 of the Act).

Unregistered trademarks assigned without goodwill restrict the assignee’s right to protect the trademark against passing off actions. Unless, there is a registration of the trademark, no enforceable rights shall be within the scope of the assignee.

Limitations of trademark assignment under the 1999 Act

Creation of exclusive rights in more than one person with respect to same or similar goods or services including allied and cognate class of goods and services is restricted since it would create confusion in the minds of the general public with average memory.
Assignment to different people to use the marks in different parts of the country is also restricted.
Assignment to different people using the mark in different parts of the country together is also restricted.

Parameters to consider in drafting of an effective assignment agreement

The Assignment and the obligations mentioned therein must not detrimentally affect the rights of the owner.
Whether the assignment is with or without goodwill must be expressly mentioned.
The drafting of the said agreement must show a clear purpose of the transaction and the clauses of the said agreement must be in flow of the said purpose.
The geographical scope of locations where the rights and value in the trademark would be possessed by the assignee must be expressly mentioned.
Whether the trade dress (if any) is also being transferred along with the trademark must be expressly mentioned.
If the trademark being assigned includes the name of any person, living or deceased, a written consent from such person (or their representative) must be procured.
The transfer of right to sue and collect damages for past and future infringements must be mentioned.
The Agreement must be in writing. Oral transmission is not recognised in India.
The Agreement must clearly identify the parties involved i.e., the owner (assignor) and the buyer (assignee).
There must be a clear indication of the nature and value of the consideration for which the ownership is being transferred for.
The date and day of assignment to be mentioned clearly is of utmost importance in order to prevent any complications in case disputes concerning the same arise in future.
Relevant application or registrations being transferred must be clearly mentioned rather than merely stating agreement for transfer of trademarks in ownership of the assignor.
Agreement must be duly executed i.e., it must be notarized, stamped as per the applicable Stamp Act, stamp duty.
Signatures and Witnesses along with the date and place of execution must be clearly provided.
Whether or not the said agreement would be binding on the legal heirs shall be duly mentioned.
Any provision for co-operation and assistance to assignee by the assignor in enforcing, recording or taking any legal action in the near future must be duly mentioned to be agreed upon. Moreover, the party who shall bear the expenses must also be duly specified.

Documents required to be attached with trademark assignment agreements

Certificate of Trademark Registration or pending applications including, domain names. (Where the domain name is not registered as a trademark, a copy of invoice indicating proof of ownership of the trademark may be attached)
Acknowledgement slip from the assignor for receipt of consideration from the assignee for trademark assignment which is duly signed, stamped and notarized.
No Objection Certificate from the assignor which is duly stamped and notarized.
No Objection Certificate from the assignee which is duly stamped and notarized.
Where either one of the parties involved is a Company, a Board Resolution on Company’s letter head approving the assignment agreement and authorizing any representative to deal with the said trademark assignment which is duly stamped and notarized.
Where the trademark is registered, Form TM-P must be filed along with the governmental fees of Rs 9,000 for each trademark, if filed online or Rs 10,000 if filed offline.
Where the trademark is registered, a Power of Attorney to authorize the Trademark Agent/Attorney to file the subsequent proprietor by way of assignment must be filed along with governmental fees of Rs 900 for each trademark if filed online or Rs 1000 for each trademark if filed offline.
Where the trademark is pending registration, Form TM-M (Form available here http://www.ipindia.nic.in/FORM-TM-M.pdf ) for correction of clerical error or for any miscellaneous function under Rule 37 of the Trade Marks Rules, 2000 must be filed along with governmental fees of Rs 900 of each pending trademark if filed online or Rs 1000 for each trademark if filed offline.
Where the trademark is pending registration, Power of Attorney in Form TM-M to authorize a Trademark Agent/Attorney representing the assignee must be filed. This document may be required where the assignee already has a Trademark Agent/Attorney.

Assignment where transmission of money is taking place outside India

Where there is any law in force regulating the transfer of money outside India, the Registrar of Trademarks shall not register the title of the assignee except on production of the permission or consent of the authority specified under the applicable law in force for such transmission.

Discretion of the registrar

The trademark Registrar may ask for production of an Affidavit on Form TM-18 (Form available here http://www.ipindia.nic.in/form-TM-18.pdf ) for the verification of title along with the proof of title for his satisfaction.

Registrar’s certificate or approval

Under Section 40 (2) of the Act any person desiring registrar’s approval certificate must make an application under Form TM-P and attach align with it the statement of case (background facts) and copy of any instrument/proposed instrument affecting the assignment. The registrar may ask to furnish proof of title or any further evidence thereof. In cases where the statement of case is amended, three copies of the same in its final form must be filed with the registry.

Fees for assignment of trademarks in India

Where the trademark assignment is done within six months from the date of acquisition of proprietorship then statutory fee would be Rs 5,000.
Where the trademark assignment is done after the expiry of six months but before twelve months from the date of acquisition of proprietorship then the statutory fee would be Rs 7,500.
Where the trademark assignment is done after twelve months from the date of acquisition of proprietorship then the statutory fee would be Rs 10,000.

Trademark Assignment Agreements facilitate innovation and gain benefits of such future creations and is essentially a subset of Technology Transfer Agreements which essentially covers all assignment agreements related to the Intellectual Properties.

Often the assignee attempts to ride upon the rights of the owner by demanding same or similar rights to that of the assignor. This is where precise and sound drafting of the trademark assignment agreement becomes essential and demands assignment as per intention of the parties.

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

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Patent Assignment Natural person(s) and/ or Startup Small entity, alone or with natural person(s) and/ or Startup Others, alone or with natural person(s) and/ or Startup and/ or small entity Natural person(s) and/ or Startup Small entity, alone or with natural person(s) and/ or Startup Others, alone or with natural person(s) and/ or Startup and/ or small entity On application for the entry in the register of patents of the name of a person entitled to a patent or as a share or as a mortgage (patent assignment) 1600 (In respect of each patent) 4000 (In respect of each patent) 8,000 (In respect of each patent) 1750 (In respect of each patent) 4400 (In respect of each patent) 8,800 (In respect of each patent)

*Official fees for patent assignment depends on the type of applicant. Professional fees not included.

The “First Schedule” appended to Rules, providing for the official fees for assignment of patent in India can be accessed here .

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Leader of Opposition Mallikarjun Kharge on Monday started the discussion in Rajya Sabha on the Motion of Thanks on President's address. Speaking in the Upper House, the Congress chief said, "There was no vision, direction in President's address to Parliament. There was no mention of poor, Dalits, minorities in President's address."

Focus on 'nyay' instead of 'dand': Amit Shah details 3 new criminal laws

Focus on 'nyay' instead of 'dand': Amit Shah details 3 new criminal laws

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Assignment of contract
As per the existing laws in India, there are broadly two types of assignment. They are: Legal - A legal assignment is the one that is carried out as per Section 130 of the Transfer of Property Act, 1882. it is characterised by all the formalities, intention to assign, communication to the assignee, and notice to the debtor. In this, a proper ...
Sub-contracting and Assignment
Assignment. Assignment of contract refers to an act of transferring contractual rights and liabilities under the contract to a third party with other party's concurrence. Section 37 of the India Contract Act, 1872 ("Contract Act") enables the contracting parties to dispense with the performance of a contract by way of an assignment.
Assignment of Contract
Assignment of contract refers to transferring contractual rights and liabilities under the contract to the third party with or without the other party's concurrence. For instance, X owes Y Rs. 1,000, and Y owes Z the same amount. In this case, Y is under obligation to pay Rs. One thousand to Z and has the right to receive Rs. 1,000 from Z.
Law of Assignment of Receivables
Raymon & Co (India) Private Ltd. AIR 1962 SC 1810, the Constitution Bench laid out the principle as follows: "An assignment of a contract might result by transfer either of the rights or of the obligations thereunder. But there is a well-recognised distinction between these two classes of assignments.
PDF Law of Assignment of Receivables
A contract is a bunch of mutual rights and obligations. Assignment of a contract would mean assignee steps in the shoes of the assignor and assumes all the rights and obligations of the assignor. For example: X enters into a contract of sale with Y where X is the seller. The contract would obviously provides for rights and obligations of either ...
India
Assignment of contract refers to an act of transferring contractual rights and liabilities under the contract to a third party with other party's concurrence. Section 37 of the India Contract Act, 1872 ("Contract Act") enables the contracting parties to dispense with the performance of a contract by way of an assignment. While the principle of ...
Assignment clause: stating intent clearly in contract is the best
The judicial trend in India has reiterated this position and laid down that rights under a contract are capable of assignment unless (a) the contract is personal in nature; or (b) the rights are ...
PDF Assignment of Rights and Its Practical Relevance in Financial
The judicial trend in India has reiterated this position time and again. It has lain down; rights under a contract are freely assignable unless: a) The contract is of a personal nature; b) The rights are incapable of assignment either under law or under an agreement between the parties. Hence, if the parties intend to restrict assignability, it ...
Assignment (law)
Assignment (law) Assignment [a] is a legal term used in the context of the laws of contract and of property. In both instances, assignment is the process whereby a person, the assignor, transfers rights or benefits to another, the assignee. [1] An assignment may not transfer a duty, burden or detriment without the express agreement of the assignee.
PDF Article
of financing takes place, and the recommendations to strengthen the law of assignment in India. It must be noted that since India is a common law country therefore relevant ... Contract Law in India, p. 171 19 Nilima Bhadbhade, Contract Law in India, p. 171 20 United India Fire And General v Pelaniappa Transport Carriers AIR (1986) AP 32; Hindustan
Does the Assignment of a Contract Assign the Arbitration Agreement: The
Like all other contracts, it can be transferred by way of assignment to third parties under Section 37 of the ICA. The Supreme Court of India in Khardah Company Ltd vs Raymon & Co. (India) Private Ltd has held that there is a distinction between the assignment of "rights" and "liabilities." A contract stands novated when assigning ...
Assignment in Arbitration: Scope and Issues in India
The concept of assignment in arbitration is based on the principles of transfer of contractual rights. Assignment can be undertaken during any of the stages and this is beneficial to the parties involved in arbitration. Assignment may be beneficial in various ways. Prior to the dispute if there is some acquisition which occurs or the party does ...
Understanding the Law of Assignment
Yet the assignment of these intangible assets from one to another remains difficult to understand. Assignments are often taken to operate as a form of transfer akin to conveyances of legal titles to tangible personalty. However, this conception does not accurately reflect the law of assignment as it has developed in the caselaw in England and ...
PDF Intellectual property right assignments Q&A: India
No income tax is chargeable in India on an assignment of IP rights if the assignor is a foreign corporation or individual. IP rights are intangible assets under Indian tax law.
Importance of Assignment Agreements under Intellectual Property Laws in
The position of an Assignment Agreement in the intellectual property law of India is one of great consequence despite being a private transaction between the assignor and the assignee. One of the reasons for this is that the law is required to protect the owner of the intellectual property from being defrauded.
Assignment In Arbitration: Scope And Issues In India
The concept of assignment in arbitration is based on the principles of transfer of contractual rights. Assignment can be undertaken during any of the stages and this is beneficial to the parties involved in arbitration. Assignment may be beneficial in various ways. Prior to the dispute if there is some acquisition which occurs or the party does ...
assignment+of+a+contract
An assignment of a contract might result by transfer either of the rights or by tr...is a well recognized distinction between the two classes of assignments. As a rule, obligations under a contract cannot be assigned except with the consent of the promisee, and when such consent i... Vishveshwar Vighneshwar Shastri v.
Assignment under Insurance Policies
1.5. Assignment under various laws in India. There is no separate law in India which deals with the concept of assignment. Instead, several laws have codified it under different laws. Some of them have been discussed as follows: 1.5.1. Under the Indian Contract Act. There is no express provision for the assignment of contracts under the Indian ...
Assignment of Debts under the Insolvency and Bankruptcy Code
Accordingly, an assignment agreement can be declared void under section 23 of the Act if the object of the assignment agreement is (a) of such a nature that, if permitted, it would defeat the provisions of any law; or (b) fraudulent; or (c) involves or implies injury to the person or property of another; or (d) the court regards it as immoral ...
Patent Assignment in India
License. Assignment refers to the transfer of ownership and of the patent to the assignee. A license grants you the permission to use any patented invention, which would otherwise be referred to as infringement. Assignments must be executed in writing. Licenses can be granted without any written documentation.
India
Assignment; Licenses; Transmission of patent by operation of law; 1. Assignment. The term 'assignment' is not defined in the Indian Patents Act. Assignment is an act by which the patentee assigns whole or part of his patent rights to the assignee who acquires the right to prevent others from making, using, exercising or vending the invention.
Trademark assignment in India : with reference to transmission and
This article discusses assignment of trademarks in India with respect to the ways in which this can be done, its limitations, documents required for assignment agreement registration, fees and costs, and registrar's discretion. ... Assignment where transmission of money is taking place outside India. Where there is any law in force regulating ...
Patent Assignment Agreement India
Patent Assignment in India. The term "patent assignment" is not defined in the Indian Patent Act, 1970. However, the Act states that an assignment of a patent or of a share in a patent, a mortgage, or the creation of any other interest in a patent shall be valid only if the same is in writing and the agreement between the parties is in the form of a document.
India Opposition Parties, Lawyers Hit Out at New Criminal Laws
India's opposition groups and lawyers have raised concerns about the rollout of new criminal laws, saying the changes are being implemented too hastily and without proper consultation.
India's New Criminal Laws: A Symbol of Progress and Resilience
The BJP on Monday hailed the enactment of new criminal laws as a landmark moment for India's progress and resilience. Spokesperson Gaurav Bhatia emphasized the replacements for the outdated Indian Penal Code and Indian Evidence Act cater to contemporary societal issues, ensuring a more secure and just future.
Rahul Dravid Recalls His "Fondest Memories" Ahead Of Last Assignment As
Ahead of his last match as the team's head coach, former India skipper Rahul Dravid shared thoughts on his coaching journey on Friday. The ICC T20 World Cup 2024 final between India and South ...
How government has prepared for rollout of 3 new Criminal Laws
- Bar Council of India has made it mandatory to include the three new criminal laws in the curriculum of universities and legal education centres from the academic year 2024-25 (May 20, 2024). - School Education Department: NCERT is planning to introduce the new laws in different stages of school education i.e., for Classes 6-7 by October 2024 ...
Justice Department charges nearly 200 people in $2.7 billion health
The Justice Department announced a sweeping series of charges Thursday against nearly 200 people accused of participating in health care fraud schemes with false claims topping $2.7 billion.
Pune Porsche case: Police to move Supreme Court against ...
Pune police are planning to approach the Supreme Court against the Bombay High Court order for the release of a 17-year-old boy allegedly involved in the Porsche car accident here in May, a senior official said on Monday. The High Court on June 25 directed that the boy be released immediately, saying the Juvenile Justice Board's (JJB) orders remanding him to an observation home were illegal ...
Focus on 'nyay' instead of 'dand': Amit Shah details 3 new criminal laws
India News: NEW DELHI: Union home minister Amit Shah, who spearheaded the introduction of the new criminal laws, emphasized on Monday that the new legislation pri.