CS EXECUTIVE

NEW SYLLABUS

ECONOMIC, COMMERCIAL
INTELLECTUAL PROPERTY LAWS

VOLUME-2
Module-II

CS GD SALUJA
CS EXECUTIVE BY CS GD SALUJA

INDEX
S. NO. CHAPTERS PAGE NOS.

1. Intellectual Property Rights 1 – 14

2. Law Relating to Patents 15 – 42

3. Law Relating to Trade Marks 43 – 63

4. Law Relating to Copyright 64 – 90

5. Law Relating to Geographical Indications of Goods 91 – 99

6. Law Related to Designs 100 – 107

7. Law Relating to Fugitive Economic Offenders 108 – 115

8. Foreign Trade Policy & Procedure 116 – 167

9. Consumer Protection Act, 2019 9.1 – 9.52

10. Legal Metrology Act, 2009 10.1 – 10.19

11. Real Estate (Regulation & Development) Act, 2016 11.1 – 11.26

ECONOMIC, COMMERCIAL & INTELLECTUAL PROPERTY LAWS

CS EXECUTIVE BY CS GD SALUJA

ECONOMIC, COMMERCIAL & INTELLECTUAL PROPERTY LAWS

CS EXECUTIVE BY CS GD SALUJA

INTELLECTUAL PROPERTY RIGHTS

INTRODUCTION
As the term intellectual property relates to the creations of human mind and human
intellect, this property is called Intellectual property. Creators can be given the right to
prevent others from using their inventions, designs or other creations and to use that right
to negotiate payment in return for others using them. These are Intellectual Property
Rights.

Intellectual Property Rights are considered to be the backbone of any economy and their
creation and protection is essential for sustained growth of a nation. The intellectual
property rights are now not only being used as a tool to protect the creativity and generate
revenue but also to build strategic alliances for the socio-economic and technological growth.

Intellectual Property rights allow the creators or owners to have the benefits from their
works when these are exploited commercially. These rights are statutory rights governed in
accordance with the provisions of corresponding legislations. Intellectual Property rights
reward creativity & human endeavor which fuel the progress of humankind.

Intellectual property is a vital component of economic growth and a tool for corporate
competitiveness in today’s highly competitive global market. Intellectual property rights
serve as a catalyst for the development of innovations and inventions. Ideas, innovations,
and creative expressions on the basis of which there is a public desire to grant the status
of property are referred to as intellectual property rights (IPR). In order for the inventors
or developers of that property to profit commercially from their creative efforts or
reputation, IPR grant them specific exclusive rights. There are various forms of intellectual
property protection, including trademark, copyright, and patent.
Intellectual property rights (IPR) are ideas, inventions, and creative expressions on which
the public is ready to bestow the status of property.

Any original work of the human intellect, including works of art, literature, technology, and
science, is considered to be a work of intellectual property (IP). The legal privileges granted
to the inventor or creator to safeguard his invention or creativity for a predetermined
amount of time are known as intellectual property rights (IPR). For a specific amount of
time, these legal rights grant the inventor or creator’s assignee the sole right to fully
exploit their idea or production. Furthermore, it has been unequivocally proven that the
intellectual work involved in the innovation must be given the attention it deserves if the
innovation is to serve the greater good.

Since it gives the inventor or creator of an IP an exclusive right to exploit his invention or
product for a specific length of time, IPR is a powerful weapon for protecting investments
in time, money, and effort. By enabling healthy competition, industrial progress, and
economic expansion, IPR thereby contributes to the economic development of a nation.

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NATURE OF INTELLECTUAL PROPERTY

• Intangible Rights over Tangible Property:
IP’s intangibility is the primary characteristic that sets it apart from other types of
property. Although there are many significant differences between the various types of
IP, one characteristic they all share is the establishment of property protection over
intangible objects like ideas, inventions, signs, and information as opposed to close
relationships and other intangible assets, which are tangible objects. When works are
exploited for commercial purposes, it enables the creators or owners to profit from
their creations.

• Right to sue:
IP is a resource that can be owned and managed, to use the language of the law. The
majority of intellectual property is challenged through legal rights of action that can
only be carried out by people who have legal standing. Since intellectual property (IP)
is a property right, it can be inherited, purchased, gifted, sold, licenced, entrusted, or
pledged. Subject to certain restrictions, the owner of an IPR owns a sort of property
that can be used however they like. They also have the legal right to sue anyone who
uses their innovation without their permission and to be compensated with actual
property.

• Rights and Duties:

IP results in both obligations and property rights. The owner of the IP is entitled to
carry out specific tasks in connection with his creations. He has the sole authority to
create, copy, sell, and otherwise exploit the work. Additionally, there is a negative right
that bars others from using their statutory rights.

• Coexistence of different rights:

In relation to a specific function, various IPR kinds may coexist. For instance, an image
of an innovation might be copyrighted and the invention itself might be patented. A
design may be included in a trademark and may also be protected under the Design Act.
The numerous rights that can coexist in IP share many similarities and distinctions. For
instance, there are similarities between a patent and an industrial design, a trademark
and a geographical indicator, and so forth. Some of the rights related to intellectual
property are positive rights, while the others are negative rights.

• Exhaustion of rights:
The doctrine of exhaustion generally applies to intellectual property rights. Exhaustion
fundamentally means that after the first sale made by the right holder or by the
authority designated for its exhaustion, that person’s right expires and he is no longer
permitted to halt the movement of the goods moving forward. As a result, once an IP
rights holder has sold a physical good that bears IPRs, it cannot stop subsequent sales
of the good. The first consent marks the end of the right. This theory is founded on
the idea of free movement of products, which is legitimate by the owner’s permission
or right. It is prohibited to use the exclusive selling privilege in connection to the same
items twice.

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• Dynamism:
IPR is undergoing continual improvement. The realm of IP is expanding as quickly as
technology in all spheres of human activity. New things are being added to the IPR
scope and the scope of its protection is being enlarged in accordance with the demands
of scientific and technical advancement. Bio patents, Software Copyrights, and Plant
Diversity Protection are just a few examples of terms that highlight recent
advancements in the IPR area. The value of intellectual property and its portability has
long been recognized, and it is represented in all spheres of government, including
legislative, administrative, and judicial levels.

NEED OF INTELLECTUAL PROPERTY

Every invention involves labor, time, and resources. The length of each project varies
substantially. It could be anything from a few seconds to a few years. A certain amount of
actual money is also necessary for any creative endeavor, along with education or knowledge
of course. Any creative professional making all of these investments is making a significant
one. Therefore, it is important to acknowledge and honor a creator’s intellectual works. The
word “intellectual property” did not become common usage until the 19th century, despite
the fact that many of the legal rules governing intellectual property rights have developed
over centuries. It wasn’t until the latter half of the 20th century that it spread throughout
much of the world.

In 1967, the World Intellectual Property Organization (WIPO) was founded as a UN body.
Since then, the phrase has gained significant traction in the US. A comprehensive
international system for defining, safeguarding, and upholding intellectual property rights
exists. It consists of multilateral treaty systems as well as international organizations like
the European Union, World Trade Organization, World Intellectual Property Organization,
World Customs Organization, and United Nations Commission on International Trade Law
(UNCITRAL).

SCOPE OF INTELLECTUAL PROPERTY

The range of IP rights is wide, and there are two methods for classifying IP as either
copyright or industrial property. Patents or inventions, trademarks, trade names, and other
commercial interests are all examples of industrial properties. In order to profit from the
invention, a patent gives its holder the sole right to exploit the Intellectual Property.

A novel creation, procedure, tool, or product is considered to be an invention. Copyright

protects the expression of ideas that are distinct from patents but does not grant you the
sole right to an idea. In addition to technological and scientific works, copyright also applies
to the arts and literature. Copyright rules apply to everything, including music and
audiovisual works. 60 years after the creator’s passing, copyright protection continues to
be in effect. In other words, a writer’s book has copyright protection both during his
lifetime and for 60 years following his passing.

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The General Agreement on Trade in Services (GATS)

The General Agreement on Trade in Services (GATS) is the first ever collection of legally
binding, multinational regulations governing global trade in services. One of the most
important outcomes of the Uruguay Round, whose conclusions came into effect in January
1995, was the founding of the GATS.
The General Agreement on Tariffs and Trade (GATT), the GATS’s counterpart in
merchandise trade, served as a model for it, sharing many of the same goals:

- establishing a trustworthy and reliable system of international trade regulations;

- guaranteeing the non-discrimination of all participants;

- boosting economic activity through guaranteed policy bindings; and

- advancing trade and development through progressive liberalization.

The GATS functions on three levels, similar to the accords on goods:

- the primary text, which contains basic principles and obligations;

- annexes, which deal with rules for particular sectors; and

- individual nations’ explicit commitments to allow access to their markets.

The two key pillars that support the GATS’ contribution to global services trade are:

(a) increasing the openness and predictability of pertinent rules and regulations and

(b) fostering progressive liberalization through subsequent rounds of talks.

The latter idea is equivalent, within the meaning of the Agreement, to enhancing market
access and extending national treatment to foreign services and service providers across a
broader variety of sectors. But it doesn’t involve deregulation. Instead, the Agreement
emphasizes clearly both the need for developing nations in particular to exercise this right,
as well as governments’ right to regulate and enact new regulations to fulfil national policy
objectives.

The Agreement’s overall framework and specific sections were influenced by the concerns
of developing countries. In particular, the Preamble to the Agreement and the provisions of
Article IV are motivated by the goal of supporting the growing participation of developing
nations in services trade. This Article requires members to negotiate specific commitments
regarding the improvement of developing countries’ access to distribution channels and
information networks, the strengthening of developing countries’ domestic service capacity,
and the liberalization of market access in sectors of export interest to these countries,
among other things.

Although one of the fundamental principles of the GATS is the idea of progressive
liberalization, Article XIX stipulates that liberalization must take place with due
consideration for national policy objectives and members’ levels of development, both
generally and in specific sectors. Thus, developing nations are given the option to gradually
expand market access while opening fewer sectors and fewer types of transactions in
accordance with their stage of development. Other sections make sure that developing
nations have more freedom to pursue economic integration policies, uphold balance of
payments limits, and control who can access and utilize their telecommunications transport

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networks and services. Additionally, the WTO Secretariat is permitted to provide technical
assistance to developing nations.

World Intellectual Property Organization (WIPO)

The United Nations organization devoted to using intellectual property as a tool to foster
innovation and creativity is known as the World Intellectual Property Organization (WIPO).
Following the WIPO Convention’s entrance into effect in 1967, WIPO was founded in 1970
with a mission from its Member States to advance the protection of intellectual property
all over the globe through intergovernmental cooperation and cooperation with other
international organizations. Its goal is to foster innovation and creativity through the
creation of a fair and efficient international intellectual property system for the benefit
of all nations’ economic, social, and cultural development.

In 1974, the Organization was designated as a specialized agency of the UN. The WIPO’s
main office is in Geneva. It is committed to creating a fair and open worldwide intellectual
property (IP) system that encourages innovation, rewards creativity, and advances economic
growth while protecting the general welfare. By signing a cooperative agreement with the
World Trade Organization in 1996, WIPO enlarged its mandate and further illustrated the
significance of intellectual property rights in the administration of globalized trade.

In order to establish and unify laws and procedures for the protection of intellectual
property rights, WIPO serves as a platform for its Member States. Additionally, WIPO
provides global patent filing services as well as global registration services for trademarks,
industrial designs, and appellations of origin. Systems for protecting intellectual property
have existed in the majority of developed countries for decades. However, many emerging
and developing nations are still constructing their legal frameworks and systems for
copyright, patents, and trademarks. Through treaty negotiation, registration, enforcement,
legal and technical assistance, and training in various forms, WIPO plays a critical role in
assisting these new systems in evolving in light of the increasing globalization of trade and
the rapid changes in technological innovation.

The World Intellectual Property Organization works to advance the growth and application
of the global intellectual property system by:

• Services - run systems which make it easier to obtain protection internationally for
patents, trademarks, designs and appellations of origin; and to resolve IP disputes.

• Law - develop the international legal IP framework in line with society’s evolving needs.

• Infrastructure - build collaborative networks and technical platforms to share

knowledge and simplify IP transactions, including free databases and tools for
exchanging information.

• Development - build capacity in the use of IP to support economic development.

Legal Frameworks under WIPO

• Patent Cooperation Treaty (PCT): The Paris Convention’s Patent Cooperation Treaty
(PCT) enables public access to a plethora of technical data pertaining to such inventions
while also assisting applicants in securing patent protection for their ideas on a global
scale. Applicants are able to concurrently apply for protection of an innovation in a large
number of nations by submitting a single worldwide patent application under the PCT.
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• Madrid Agreement: The Madrid Agreement, signed in 1891, and the Protocol pertaining
to that Agreement, signed in 1989, set forth the rules for the Madrid System for the
International Registration of Marks. By acquiring an international registration that is
valid in each of the specified Contracting Parties, the method enables the protection
of a mark across a wide range of nations.

• Vienna Agreement: For marks that are composed of or incorporate figurative features,
the Vienna Agreement creates an International Classification of the Figurative
Elements of Marks known as the Vienna Classification.

• Nice Agreement: Regarding the International Classification of Goods and Services for
the Registration of Marks, the Nice Agreement came into force.

• Locarno Agreement: The Locarno Agreement creates the Locarno Classification, an

international classification system for industrial designs.

• WIPO Copyright Treaty (WCT): A particular agreement under the Berne Convention known
as the WIPO Copyright Treaty (WCT) deals with the protection of works and the rights
of their authors in the digital sphere. The Treaty also addresses two items that must
be covered by copyright protection: (i) computer programmes, regardless of how they
are expressed; and (ii) collections of data or other materials (“databases”).

• WIPO Performances and Phonograms Treaty (WPPT): In especially in the digital

context, the WIPO Performances and Phonograms Treaty (WPPT) deals with the rights
of two categories of beneficiaries:

(i) Performers (actors, singers, musicians, etc.); and

(ii) manufacturers of phonograms (persons or legal entities that take the initiative
and have the responsibility for the fixation of sounds).

• WIPO Intergovernmental Committee : According to its mandate, the WIPO

Intergovernmental Committee on Intellectual Property and Genetic Resources,
Traditional Knowledge, and Folklore is engaging in text-based negotiations to find a
text or texts for an international legal instrument that will effectively protect
traditional knowledge (TK), traditional cultural expressions (TCEs), and genetic resources
(GRs).

• Standing Committee on Copyright and Related Rights (SCCR): During the biennium
of 1998–1999, the Standing Committee on Copyright and Related Rights (SCCR) was
established to look into issues of substantive law or harmonisation in the area of
copyright and related rights.

• Hague System/Agreement: Through the submission of a single international

application, the Hague System for the International Registration of Industrial Designs
offers a useful commercial option for registering up to 100 designs in 74 contracting
parties spanning 91 countries.

• Lisbon System/Agreement: By using a single registration process and a single set of

costs, the Lisbon System for the International Registration of Appellations of Origin
and Geographical Indications provides a way to secure protection for an appellation of
origin or a geographical indication in the contracting parties.

Trade-Related Aspects of Intellectual Property Rights (TRIPS)

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Beyond simply transporting items across borders, trade has developed to include the value
it brings to societies. Today’s international trade involves a significant amount of value
exchanged through innovation, creativity, and branding. Development and trade policy
increasingly heavily weighs how to increase this value and make it easier for knowledge-rich
commodities and services to move across borders.

The TRIPS Agreement is essential for facilitating intellectual property trade, settling
intellectual property trade disputes, and giving WTO members the freedom to pursue their
own national goals. The Agreement formally acknowledges the importance of the connections
between intellectual property and trade. That was accomplished by the Uruguay Round. The
TRIPS Agreement is an attempt to put these rights under common international law and to
close the gaps in how they are safeguarded and upheld globally. It provides minimal
requirements for enforcement and protection of intellectual property owned by citizens of
other WTO members by each government.

WTO countries have a great deal of flexibility under the TRIPS Agreement to customise
their methods to IP protection and enforcement to meet their needs and realise public
policy objectives. The Agreement gives members plenty of leeway to strike a balance
between the long-term advantages of encouraging innovation and the potential short-term
costs of restricting access to works of creative genius. Through a variety of procedures
permitted by TRIPS provisions, such as exclusions or exceptions to intellectual property
rights, Members can lower short-term costs. Additionally, the WTO’s dispute resolution
mechanism is accessible in cases of trade disputes involving the application of the TRIPS
Agreement.

The TRIPS Agreement addresses five main topics:

⚫ How general rules and fundamental ideas of the global trading system apply to
international intellectual property?
⚫ What are the minimum protection criteria for intellectual property rights that members
should offer?
⚫ What mechanisms should members offer to defend those rights in their home countries?
⚫ Specific interim framework for resolving intellectual property disputes between WTO
members in order to implement TRIPS requirements.
⚫ Special transitional arrangements for the implementation of TRIPS provisions

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THE CONCEPT OF INTELLECTUAL PROPERTY

The term “intellectual property” refers to works produced by the human mind and intellect.
In other words, intellectual property refers to information that may be used to create
tangible goods simultaneously in an infinite number of copies at various locations throughout
the globe. The information reflected in those copies, not the copies themselves, is what
grants the property right. Similar to property rights in movable and immovable property,
intellectual property is also characterized by certain rights as well as limitations such as
right to use and license and also limited duration in the case of copy right and patents.

• Industrial Property
The expression ‘Industrial Property’ is sometimes misunderstood as relating to movable
or immovable property used for industrial production. However, industrial property is a
kind of intellectual property and relates to creation of human mind, e.g., inventions and
industrial designs. Simply stated, inventions are new solutions to technological problems,
and industrial designs are aesthetic creations determining the appearance of industrial
products. In addition, industrial property includes trademarks, service marks,
commercial names and designations, including indications of source and appellations of
origin, and the protection against unfair competition.

The term ‘Industrial Property’ may not appear entirely logical in the sense that the
inventions are only concerned with the industry. In other words, the inventions are
exploited in industrial plants while the trademarks, service marks, trade names and
service names are concerned with both the commerce as well as industry.
Notwithstanding the lack of logic, this term has acquired a meaning which clearly
covers inventions as well as other marks. The Paris Convention also recognized industrial
property to cover patent, trademark, service mark, trade names, utility models,
industrial designs, indication of source and appellations of origin and the repression of
unfair competition.

Hence, industrial property right is a collective name for rights referring to the
commercial or industrial activities of a person. These activities may include the activities
of industrial or commercial interests. They may be called inventions, creations, new
products, processes of manufacture, new designs or model and a distinctive mark for
goods etc.

A person’s commercial or industrial activities are covered by a group of rights known as

industrial property rights. The actions of commercial or industrial interests may be
among these activities. They can be referred to as inventions, creations, new products,
manufacturing methods, new designs or models, and distinguishing marks for
commodities, among other terms.

• Patent
A patent is a monopoly award that gives the inventor control over the output and, up to
a certain point in the demand curve, the price of the patented goods. The patent system’s
primary economic and commercial justification is that it encourages investment in
industrial innovation. The upkeep and expansion of a country’s stock of valuable,
transferable, and industrial assets are both facilitated by innovative technologies.

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An innovation, such as a product or a technique that gives a novel approach to a problem

or a new technical solution, is given an exclusive right known as a patent. An invention is
the concept for creating a novel and practical product, process, or substance. Without
the permission of the patent holder, the innovation cannot be made, utilised,
disseminated, or sold for a profit. For the duration that the invention is shielded by a
patent, the patent holder has the authority to decide who may or may not use the
invention. The owner of the patent may provide another party a licence to exploit the
innovation under mutually agreeable terms. Additionally, he has the option to transfer
ownership of the patent to the buyer of the right to use the innovation. From the day
the patent application was submitted, the patent is valid for 20 years. After a patent
expires, the invention is no longer protected and becomes part of the public domain,
meaning that the owner no longer has the sole right to use the invention.

• Trade Mark
A trade mark tries to safeguard both the interests of the trader and the customer by
differentiating the items of one manufacturer or trader from comparable goods of
others. A trademark can be any combination of words, characters, numbers, symbols, or
devices showing images of people, animals, or both. A trademark acts as an effective
form of advertising for the goods and their quality since it denotes the relationship
between the merchant and the items during the course of commerce. The goal of
trademark law is to give businesses the ability to acquire an exclusive right to use, share,
or assign a mark by registering their mark. Similar to this, service marks set one
company’s services apart from those of other companies.

Like inventions and industrial designs, it is patentable. Various combinations of words,

letters, numbers, symbols, drawings, images, and even sounds can be used as a trademark.
These are typically registered for seven years, but by reapplying, they can be renewed
indefinitely. It guarantees the owner of the mark the sole right to use it to distinguish
products or services, or to grant another person permission to use it in exchange for
payment. Because of the nature and quality of the goods or service, which are denoted
by its distinctive trademark, it aids consumers in recognising and purchasing it.

• Copyright
The idea of Copyright protection only began to emerge with the invention of printing,
which made it for literary works to be duplicated by mechanical processes instead of
being copied by hand. This led to the grant of privileges, by authorities and kings,
entitling beneficiaries exclusive rights of reproduction and distribution, for limited
period, with remedies in the form of fines, seizure, confiscation of infringing copies and
possibly damages.

However, the criticism of the system of privileges led to the adoption of the Statute of
Anne in 1709, the first copyright Statute. In the 18th century there was dispute over
the relationship between copyright subsisting in common law and copyright under the
Statute of Anne. This was finally settled by House of Lords in 1774 which ruled that at
common law the author had the sole right of printing and publishing his book, but that
once a book was published the rights in it were exclusively regulated by the Statute. This

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common law right in unpublished works lasted until the Copyright Act, 1911, which
abolished the Statute of Anne.

Copyright is a well-recognised form of property right which had its roots in the common
law system and subsequently came to be governed by the national laws in each country.
Copyright as the name suggests arose as an exclusive right of the author to copy the
literature produced by him and stop others from doing so.

There are well-known instances of legal intervention to punish a person for copying
literary or aesthetic output of another even before the concept of copyright took shape.
The concept of idea was originally concerned with the field of literature and arts. In view
of technological advancements in recent times, copyright protection has been expanded
considerably. Today, copyright law has extended protection not only to literary, dramatic,
musical and artistic works but also sound recordings, films, broadcasts, cable programmes
and typographical arrangements of publications. Computer programs have also been
brought within the purview of copyright law.

Thus, the copyright deals with the rights of intellectual creators in their creation. The
copyright law deals with the particular forms of creativity, concerned primarily with mass
communication. It is also concerned with virtually all forms and methods of public
communication, not only printed publications but also with such matters as sound, and
television broadcasting, films for public exhibition etc. and even computerised systems
for the storage and retrieval of information. The copyright law, however, protects only
the form of expression of ideas themselves. The creativity protected by copyright law
is creativity in the choice and arrangement of words, musical notes, colours, shapes and
so on. In India, the law relating to copyright is governed by the Copyright Act, 1957
which has been amended in 1983, 1984, 1985, 1991, 1992, 1994, 1999 and 2012. The
amendment introduced in 1984 included computer program within the definition of
literary work and a new definition of computer program was inserted by the 1994
amendment. The philosophical justification for including computer programs under
literary work has been that computer programs are also products of intellectual skill like
any other literary work.

In 1999, the Copyright Act, 1957 has been amended to give effect to the provisions of
Article 14 of the TRIPs agreement providing term of protection to performers rights at
least until the end of a period of fifty years computed from the end of the calendar year
in which the performance took place. The Amendment Act also inserted new Section 40A
empowering the Central Government to extend the provisions of the Copyright Act to
broadcasts and performances made in other countries subject to the condition however
that such countries extend similar protection to broadcasts and performances made in
India. Another new Section 42A empowers the Central Government to restrict rights of
foreign broadcasting organisations and performers.

• Industrial Designs
Industrial designs belong to the aesthetic field, but are at the same time intended to
serve as pattern for the manufacture of products of industry or handicraft. An industrial
design is the ornamental or aesthetic aspect of a useful article, which must appeal to the
sense of sight and may consist of the shape and/or pattern and/or colour of article. An

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industrial design to be protectable, must be new and origin. Industrial designs are
protected against unauthorised copying or limitation, for a period which usually lasts for
five, ten or fifteen years.
Textile designs were the first to receive legal protection. As early as 1787 the first Act
for design protection was enacted in Great Britain for the Encouragement of the Arts
of design and printing Linens, cotton, calicoes and Muslims, by vesting properties thereof
in the Designers, Printers and Proprietors for a limited time. This was an experimental
measure extending protection for a limited duration. Shortly thereafter its life was
extended and soon afterwards it was made perpetual. In 1839 the protection under the
Act was enlarged to cover “Designs for printing other woven Fabrics”.
In the same year another Act was passed for design protection for articles of
manufacture generally. An Act to secure to Proprietors of Designs for Articles of
Manufacture the Copyright of such Designs for a limited time. The legislative process
for design protection took rapid strides thereafter. A consolidating and updating
measure enacted in 1842. An Act to consolidate and amend the laws relating to the
Copyright of Designs for ornamenting Articles of manufacture-repealed all the earlier
statutes referred to above.
It is significant to observe that when the designs law was codified in 1842 and took its
modern day shape, copyright protection had not yet been extended to drawings, paintings
and photographs. This came only twenty years later with the enactment of the Fine Arts
Copyright Act, 1862. Codification of copyright law was nowhere in sight and came only
seventy years later with the enactment of the Imperial Copyright Act, 1911. Until 1883
the statutes relating to patents, designs and trademarks remained separate. They were
combined in a single enactment by the Patents, Designs, and Trade Marks Act, 1883,
which repealed all the then existing statutes in the three areas. Soon trademarks law
parted company and was separately enacted as the Trade Marks Act, 1905, leaving
patents and designs to remain together. The Patents and Designs Act, 1907, consolidated
the enactments relating to patents and designs.
The first designs legislation enacted in India was the Patterns and Designs Protection
Act, 1872. It was enacted as a supplement to the Statute-Act 15 of 1859-passed by the
Governor-General of India in Council which for the first time made provision for granting
to inventors of “new manufacture the exclusive privilege of making, selling and using the
invention in India or authorising others to do so for a specified term. The Act of 1872
was passed to extend similar privileges to the inventors of new patterns and designs in
British India, though for a very shorter duration of years. It included in the term new
manufacture any new and original pattern or design, or the application of such pattern or
design to any substance or article of manufacture”. The Act, however, left undefined the
expression new pattern or design.
The Inventions and Designs Act, 1898, which consolidated and amended the law relating
to the protection of inventions and designs contained provisions relating to designs in a
separate part. The (British) Patents and Designs Act, 1907, became the basis of the
Indian Patents and Designs Act, 1911. The patents provisions of the Indian Patents and
Designs Act, 1911, were repealed by the Patents Act, 1970, a post-Independence updating
and consolidation of the patents law. The design provisions of the Indian Patents and

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Designs Act, 1911, continue, with some consequential amendments, with the title as the
Designs Act, 1911. The new Designs Act, 2000 has been passed by the Parliament.

• Geographical Indication (GI)

Geographical Indicator is that part of industrial property that designates a nation or a
location within it as the nation or place of origin of that product. Such a name typically
carries a guarantee of quality and individuality, which is mostly due to the fact that it
originated in the specified geographical place, region, or nation. Signs that identify a
product’s exact geographic origin are known as geographic indicators. A GI identifies a
product’s origin, which could be a village or town, a region, or a nation, and identifies the
product’s unique traits. Since it is an exclusive privilege granted to a certain community,
all of the community’s members profit from its registration. All producers or traders
whose goods originate from that location and have defining traits may use it.
Geographical Indications are covered by Articles 22 to 24 of the WTO Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS), which was a component
of the Agreements that concluded the Uruguay Round of GATT negotiations. The
Geographical Indications of Goods (Registration and Protection) Act, 1999 was passed by
India as a WTO member. It was enacted in December 1999, and it became effective on
September 15, 2003. With this Act, geographical indicators for commodities in India are
to be registered and given additional protection.
Bordeaux wine, Darjeeling tea, Chanderi sarees, Kullu shawls, Tuscany olive oil,
Kanchipuram silk sarees, Alphanso Mango, Nagpur orange, and Kolhapuri (Chappal) are
well-known examples of GIs.

• Trade Secret
A trade secret is a method, practise, procedure, design, instrument, pattern, or collection
of information that is not widely known or easily discoverable and through which a
company might gain a competitive edge over rivals or clients. An enterprise may gain a
competitive edge from secret business information. Sales techniques, distribution
strategies, consumer profiles, marketing plans, client and supplier lists, production
procedures, and advertising strategies are all examples of trade secrets. A trade secret
can be preserved indefinitely, but there must be a significant amount of secrecy, making
it difficult to obtain the information unless inappropriate means are used.
NATIONAL INTELLECTUAL PROPERTY RIGHTS POLICY
The Indian government has provided the exclusive right of intellectual property to safeguard
the originality of inventors’ works. The simplest form of intellectual property is an intangible
work of human imagination. This intellectual property contains rights centred on copyright,
patents, trademarks, trade names, industrial designs, and merchandise. Maintaining
intellectual property rights is crucial for the quality, safety, and effectiveness of all
pharmaceutical products and services. For the certification and identification of products in
a large market, it serves as a standard authority and certification body. The privileges
granted to individuals over the works of their imaginations are known as intellectual property
rights.
Typically, they grant the creator a limited time, exclusive permission to utilise his or her
works. The term “intellectual property” refers to human inventions in the fields of art,

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literature, science, and industry. This application is crucial for protecting the inventor’s
invention and upholding the inventor’s work’s high standards of quality.
As a result of these changes, the government decided to create a roadmap for IPRs in the
nation. The National Intellectual Property Rights Policy was put into place to encourage
innovation, enhance the business climate, and make it easier to commercially utilise
intellectual property. The Policy is in accordance with India’s proclamation that this decade
is the “Decade of Innovation”.
On May 12th, 2016, the Union Cabinet approved the IPR Policy. It acknowledges India’s well-
established, TRIPS- compliant legal structure to protect IPRs and strives to balance her
development objectives by making use of the flexibilities offered by the global regime. The
Policy places a special emphasis on spreading knowledge about IPRs and emphasising their
value as a marketable financial asset and a tool for the economy.
IPR Policy focus on:
— Improving access to healthcare, food security, and environmental protection, among
other areas of critical social, economic, and technological importance.
— Fostering creativity and innovation and thereby promote entrepreneurship and enhance
socio-economic and cultural development.
The Policy outlines seven goals that are further defined with actions that must be taken by
the designated nodal Ministry or Department. The goals are briefly discussed below:-
• IPR Awareness- Outreach and Promotion – To create public awareness about the
economic, social and cultural benefits of IPRs among all sections of society.
• Generation of IPRs - To stimulate the generation of IPR.
• Legal and Legislative Framework - To have strong and effective IPR laws, which balance
the interests of rights owners with larger public interest.
• Administration and Management - To modernize and strengthen service oriented IPR
administration.
• Commercialization of IPR - Get value for IPRs through commercialization.
• Enforcement and Adjudication - To strengthen the enforcement and adjudicatory
mechanisms for combating IPR infringements.
• Human Capital Development - To strengthen and expand human resources, institutions
and capacities for teaching, training, research and skill building in IPRs.

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LAW RELATING TO PATENTS

REGULATORY FRAMEWORK
➢ Patents Act, 1970

➢ Patents Rules, 2003

The term ‘Patent’ acquired a statutory meaning in India under the Patents Act, 1970. The Act
and the Rules framed under it, i.e. the Patent Rules, 2003 regulate the subjects like the
grant, the operative period, the revocation, and infringement etc. of the Patents.

INTRODUCTION
A Patent is a statutory right for an invention granted for a limited period of time to the
patentee by the Government, in exchange of full disclosure of his invention for excluding
others, from making, using, selling, importing the patented product or process for producing
that product for those purposes without his consent. Patent is a monopoly grant and it enables
the inventor to control the output and within the limits set by demand, the price of the
patented products. Underlying economic and commercial justification for the patent system
is that it acts as a stimulus to investment in the Industrial innovation. Innovative technology
leads to the maintenance of and increase in nations stock of valuable, tradable and industrial
assets.

The law relating to patents contained in the Patents Act, 1970 .The Patents Act was enacted
by the Government of India in the year 1970 in pursuance of its powers under Entry 49 of
the List I of Schedule VII of the Constitution of India. List I contains the list of the items
in the Union List and Entry 49 reads, “Patents, inventions and designs; copyright; trade-marks
and merchandise marks.” The Act was notified on 19th September 1970. It has been amended
in the year 1995, 1999, 2002 and 2005. With increase in the technological progress of India,
the fundamental reasoning of the Act is that patents are given to promote innovations &
developments and to ensure that these creations got recognition commercially without delay;
and patents are conceded to empower patentee to commercially utilize the monopoly for the
importation of the patented product into the nation. The similar rationality is applicable in
compulsory licensing, certification cum registration of process patents for sustenance, or
medication, other products like pesticides came through synthetic procedures which, aside
from compound substances ordinarily incorporate things, for example, combinations, optical
glass, semi-transmitters, alloys, etc. It might, nonetheless, be noticed that items fundamental
for our economy, for example, agribusiness and cultivation items, nuclear vitality creations
and all organic products are not patentable. So, the Patents legislation was relied upon to
provide a sensible adjust amongst satisfactory & efficient security of patents from one
perspective and the innovation improvement, open intrigue and particular needs of the nation
on another.

PATENTS
Section 2(1) (m) of the Patents Act, 1970, defines the term patent as to mean a patent for
any invention granted under Patents Act.

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An invention is considered as new (novel), if it is not anticipated by prior publication in patent

and non-patent literature, i.e., an invention is novel if it has not been disclosed in the prior
art, where the prior art means everything that has been published, presented or otherwise
disclosed to the public before the date of filing/ priority date of complete specification. An
invention is considered as novel, if it has not been anticipated by prior use or prior public
knowledge in India.

Advantages of Patents
• Patentee have the complete rights to restrict outsider from making, operating, providing
accessibility to be bought, providing or putting in the product generated by him, without
his consent. He has absolute prerogative to utilize his invention and his rights that are
very much ensured under the Act.

• The patentee has a privilege to file the suit for encroachment of his patent and can ask
for remedies like, Injunction, compensation and a settlement of profit against the
individual who encroached his patent.

• Patentee can commercially exploit or pitch his creation to any skilled individual and
concede permit to him to abuse his item and in this way the patentee can likewise wins
benefit along these lines.

• The holder of the exclusive permit can also avail the rights given to the patentee and
can bring a suit if there should arise an occurrence of any encroachment of Patent.

• A patentee gets the privilege to make changes in or alterations of an invention depicted

or uncovered in the total determination of the primary innovation and get the particular
right of a patent by the substantial change or patent as a matter of addition/certain
adjustment.

• It may be noted that according to Section 2(1) (p) of the Patents Act, 1970, the term
patentee as to mean the person for the time being entered on the register as the grantee
or proprietor of the patent.

What can be Patented?

An invention relating either to a product or process that is new, involving inventive step and
capable of industrial application can be patented. However, it must not fall into the categories
of inventions that are non- patentable under sections 3 and 4 of the Act.

It may be noted that Section 2(1)(j) of the Act, defines invention as to mean a new product
or process involving an inventive step and capable of Industrial application.

Capable of industrial application, in relation to an invention, means that the invention is

capable of being made or used in an industry as defined under Section 2(1) (ac) of the Act.

Also, Section 2(1) (l) defines the term new invention as to mean any invention or technology
which has not been anticipated by publication in any document or used in the country or
elsewhere in the world before the date of filing of patent application with complete
specification, i.e. the subject matter has not fallen into public domain or that it does not form
part of the state of the art.

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As per legal regime of Intellectual Property Right, invention is something construed as new
substance or altogether new process having inventive stage/action and potential of industrial
usage & relevance. Inventive stage/step include certain aspects of action which are not
palpable & evident to the person experienced in the art. The real purpose of patent system
is stimulating new innovative practices & technological development to market for public
interest.

In Raj Prakash v. Mangat Ram Choudhary AIR 1978 Delhi 1, it was held that inventive creation,
as is notable, is to discover something or find something not found or found by anybody
previously. It isn’t essential that the invention ought to be anything confounded. The
fundamental thing is that the creator was first to embrace it. The main issue in this manner,
is that each basic creation is asserted, as in the form of novelty or new character, it will be
considered as an invention and the cases & specifications must be perused in that light.

What are not inventions?

The following are not inventions within the meaning of Section 3 of the Act:

a. an invention which is frivolous or which claims anything obviously contrary to well

established natural laws;

b. an invention the primary or intended use or commercial exploitation of which could be

contrary to public order or morality or which causes serious prejudice to human, animal
or plant life or health or to the environment;

c. the mere discovery of a scientific principle or the formulation of an abstract theory or

discovery of any living thing or non-living substances occurring in nature;

d. the mere discovery of a new form of a known substance which does not result in the
enhancement of the known efficacy of that substance or the mere discovery of any
property or mere new use for a known substance or of the mere use of a known process,
machine or apparatus unless such known process results in a new product or employs at
least one new reactant;

Explanation to clause (d) clarifies that salts, esters, polymorphs, metabolites, pure form,
particle size, isomers, mixtures of isomers, complexes, combinations and other
derivatives of known substance shall be considered to be the same substance, unless
they differ significantly in properties with regard to efficacy.

e. a substance obtained by a mere admixture resulting only in the aggregation of the

properties of the components thereof or a process for producing such substance;

f. the mere arrangement or re-arrangement or duplication of known devices each

functioning independently of one another in a known way;

g. a method of agriculture or horticulture;

h. any process for the medicinal, surgical, curative, prophylactic diagnostic, therapeutic or
other treatment of human beings or any process for a similar treatment of animals to
render them free of disease or to increase their economic value or that of their
products;

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i. plants and animals in whole or any part thereof other than micro-organisms but including
seeds, varieties and species and essentially biological processes for production or
propagation of plants and animals;

j. a mathematical or business method or a computer programme per se or algorithms;

k. a literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever
including cinematographic works and television productions;

l. a mere scheme or rule or method of performing mental act or method of playing game;
m. a presentation of information;
n. topography of integrated circuits;
o. an invention which in effect, is traditional knowledge or which is an aggregation or
duplication of known properties of traditionally known component or components;

Section 4 prohibits the grant of patent in respect of an invention relating to atomic

energy falling within Sub- section (1) of Section 20 of the Atomic Energy Act, 1962.

What are the Criteria of Patentability?

An invention is patentable subject matter if it meets the following criteria –

• It should be novel.

• It should have inventive step or it must be non-obvious.

• It should be capable of Industrial application.

• It should not attract the provisions of section 3 and 4 of the Patents Act, 1970.

It may be noted that Section 2(1)(ja) of the Act defines the term inventive step as to mean
a feature of an invention that involves technical advance as compared to the existing
knowledge or having economic significance or both that makes the invention not obvious to a
person skilled in the art.

Persons Entitled to make Application for Patent

Section 6 of the Act provides that an application for a patent for an invention may be made
by any of the following persons, that is to say:

a. by any person claiming to be the true and first inventor of the invention;
b. by any person being the assignee of the person claiming to be the true and first inventor
in respect of the right to make such an application;

c. by the legal representative of any deceased person who immediately before his death
was entitled to make such an application.

The application may be made by one of the persons either alone or jointly with any other
person.

It may be noted that Section 2(1) (a) of the Act defines the term assignee as to include the
legal representative of a deceased assignee, and references to the assignee of any person
include references to the assignee of the legal representative or assignee of that person.

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Form of Application and Provisional & Complete Specification

The Specification is a techno-legal document containing scientific and technical disclosure
and claims for the invention which is the basis of rights of a patent. The Specification, thus,
forms a crucial part of the patent application.

Section 7 dealing with form of application requires every application for a patent to be made
for one invention only. Where the application is made by virtue of an assignment of the right
to apply for a patent for the invention, there shall be furnished with the application proof of
the right to make the application.

Every international application under the Patent Cooperation Treaty (PCT) for a patent, as
may be filed designating India shall be deemed to be an application under the Act, if a
corresponding application has also been filed before Controller in India. The filing date of
such application and its complete specification processed by patent office as designated
office or elected office shall be the international filing date accorded under the PCT.

What is the Patent Cooperation Treaty (PCT)?

The PCT is an international treaty with more than 150 Contracting States which are bound
with certain formal requirements set out in the Treaty and Regulations. The PCT makes it
possible to seek patent protection for an invention simultaneously in a large number of
countries by filing a single international patent application instead of filing several separate
national or regional patent applications however, granting of patents remains under the
control of the national or regional patent offices after the corresponding national phase
application has been filed and the national phase application is assessed as per patent law of
that jurisdiction.

Section 7(4) provides that every such application, not being a convention application or an
application filed under PCT designating India, shall be accompanied by a provisional or a
complete specification.

Section 9 stipulates that where an application for a patent (not being a convention application
or an application filed under PCT designating India) is accompanied by a provisional
specification, a complete specification shall be filed within twelve months from the date of
filing of the application, and if the complete specification is not so filed, the application shall
be deemed to be abandoned. Where two or more applications in the name of the same
applicant are accompanied by provisional specifications in respect of inventions which are
cognate or of which one is a modification of another and the Controller is of opinion that the
whole of such inventions are such as to constitute a single invention and may properly be
included in one patent, he may allow one complete specification to be filed in respect of all
such provisional specifications. However, the period of twelve months shall be reckoned from
the date of filing of the earliest provisional specification.

Where an application for a patent (not being a convention application or an application filed
under PCT designating India) is accompanied by a specification purporting to be a complete
specification, the Controller may, if the applicant so requests at any time within twelve
months from the date of filing of the application, direct that such specification shall be
treated as a provisional specification and proceed with the application accordingly. Where a
complete specification has been filed in pursuance of an application for a patent accompanied

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by a provisional specification or by a specification treated by virtue of a direction under sub-

section (3) as a provisional specification, the Controller may, if the applicant so requests at
any time before the grant of patent, cancel the provisional specification and post-date the
application to the date of filing of the complete specification.

When should an Application for a Patent be Filed?

An application for a patent can be filed at the earliest possible date and should not be delayed.
An application filed with provisional specification, disclosing the essence of the nature of the
invention helps to register the priority of the invention. Delay in filing an application may
entail some risks such as:

i. some other inventor might file a patent application on the said invention and
ii. there may be either an inadvertent publication of the invention by the inventor
himself/herself or by others independently of him/her.

Contents of Specifications
Section 10 dealing with contents of Specifications provides that every specification,
whether provisional or complete, shall describe the invention and begin with a title
sufficiently indicating the subject matter to which the invention relates.

Every complete specification is required to -

a. fully and particularly describe the invention and its operation or use and the method by
which it is to be performed;

b. disclose the best method of performing the invention which is known to the applicant
and for which he is entitled to claim protection;

c. end with a claim or claims defining the scope of the invention for which protection is
claimed; and

d. be accompanied by an abstract to provide technical information on the invention.

However, the Controller may amend the abstract for providing better information to third
parties and if the applicant mentions a biological material in the specification which may not
be described in such a way as to satisfy clauses (a) and (b) above and if such material is not
available to the public, the application shall be completed by depositing the material to an
International Depository Authority under the Budapest Treaty and by fulfilling the following
conditions, namely:

(i) the deposit of the material shall be made not later than the date of filing the patent
application in India and a reference thereof shall be made in the specification within
the prescribed period;

(ii) all the available characteristics of the material required for it to be correctly
identified or indicated are included in the specification including the name, address of
the depository institution and the date and number of the deposit of the material at
the institution;

(iii) access to the material is available in the depository institution only after the date of
the application for patent in India or if a priority is claimed after the date of the
priority;

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(iv) disclose the source and geographical origin of the biological material in the
specification, when used in an invention.

In case of an international application designating India the title, description, drawings,

abstracts and claims filed with the application shall be taken as the complete specification
for the purposes of the Act.

The claim or claims of a complete specification shall relate to a single invention, or to a group
of inventions linked so as to form a single inventive concept, shall be clear and succinct and
shall be fairly based on the matter disclosed in the specification.

Any kind of innovation/invention is patented for making monetary profit and that it can be
identified further when it got the status of exclusivity in a commercial market. A feature
of exclusivity or monopoly is attained when description in patent specification is clear on the
part of being novel. Patentee can rightfully exploit his monopoly either by utilizing
marketable strategies over patented product or by licensing the same to a different person.
A patentee also has privilege to assign the invention to third person by way of deed. Special
thing about patented invention is that its monetary value can increase with passage of time.
Right of licensing is also one of the acceptable way to commercially exploit patented
invention and prevent it from any possible kind of unauthorized usage and patent holder can
retain exclusive commercial right.

How a Patent Specification is prepared?

A patent specification can be prepared by the applicant himself or his registered and
authorized agent. The patent specification generally comprises of the title of the invention
indicating its technical field, prior art, draw backs in the prior art, the solution provided by
the inventor to obviate the drawbacks of the prior art, a concise but sufficient description
of the invention and its usefulness, drawings (if any) and details of best method of its
working. The complete specification must contain atleast one claim or statement of claims
defining the scope of the invention for which protection is sought for.

Publication of Applications
Section 11A(1) provides that save as provided otherwise, no application for patents shall
ordinarily be open to public for such period as may be prescribed. Sub-section (2) entitles
an applicant to request the Controller, in the prescribed manner, to publish his application
at any time before the expiry of the period prescribed under sub-section (1) and subject to
the provisions of sub-section (3). The Controller on receipt of such request shall publish such
application as soon as possible. Every application for patent shall be published on expiry of
the period specified in sub-section (1) except those applications in which secrecy direction
is imposed under section 35; or application has been abandoned under section 9(1); or
application has been withdrawn three months prior to the period specified under sub-section
(1).

The publication of every application shall include the particulars of the date of application,
number of application, name and address of the applicant identifying the application and an
abstract. Upon publication of an application for a patent, the depository institution shall
make the biological material mentioned in the specification available to the public. The patent
office may, on payment of prescribed fee make the specification and drawings, if any, of

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such application available to the public.

Section 11A(7) provides that on or from the date of publication of the application for patent
and until the date of grant of a patent in respect of such application, the applicant shall have
the like privileges and rights as if a patent for invention had been granted on the date of
publication of application. However, the applicant shall have no right to institute any
proceedings for infringement until the patent has been granted. Additionally, the rights of
a patentee in respect of applications made under Section 5(2) before January 1,2005 shall
accrue from the date of grant of patent. Moreover, after the patent is granted in respect
of applications made under Section 5(2), the patent holder shall only be entitled to receive
reasonable royalty from such enterprises which have made significant investment and were
producing and marketing concerned product prior to January 1, 2005 and which continue to
manufacture the product covered by the patent on the date of grant of the patent and no
infringement proceedings shall be instituted against such enterprises.

When is an Application for Patent Published?

Every application for patent is published after expiry of 18 months from the date of its
filing or priority date whichever is earlier. However, following applications are not published.

A. Application in which secrecy direction is imposed.

B. Application which has been abandoned u/s 9(1) and i.e. when a provisional application
has been filed and the complete application has not been filed with 12 months from
the filing of the provisional application.

C. Application which has been withdrawn 3 months prior to 18 months.

Request for Examination

Section 11B provides that no application for a patent shall be examined unless the applicant
or any other interested person makes a request in the prescribed manner for such
examination within the prescribed period. In case of an application in respect of a claim for
a patent filed under Section 5(2) before January1, 2005, a request for examination shall be
made in the prescribed manner for such examination within the prescribed period, by the
applicant or any other interested person.

In case the applicant or any other interested person does not make a request for examination
of the application for a patent within the specified period, the application shall be treated
as withdrawn by the applicant. However the applicant may, at any time after filing the
application but before the grant of the patent, withdraw the application by making a request
in the prescribed manner; and in a case secrecy direction has been issued under Section 35,
the request for examination may be made within the prescribed period from the date of
revocation of the secrecy direction.

Examination of Application
Section 12 dealing with examination of application provides that when the request for
examination has been filed in respect of an application for a patent in the prescribed manner
under Section 11B (1) or (3), the application and specification and other documents related
thereto shall be referred at the earliest by the Controller to an examiner for making a
report to him in respect of the following matters, namely:

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a. whether the application and the specification and other documents relating thereto are
in accordance with the requirements of the Act and of any rules made thereunder;

b. whether there is any lawful ground of objection to the grant of the patent in pursuance
of the application;

c. the result of investigations made under Section 13; and

d. any other matter which may be prescribed.
The examiner to whom the application and the specification and other documents relating
thereto are referred shall ordinarily make the report to the Controller within the prescribed
period.

Search for Anticipation by Previous Publication and by Prior Claim

Section 13 dealing with search for anticipation by previous publication and by prior claim
provides that the examiner to whom the application for a patent is referred shall make
investigation for the purpose of ascertaining whether the invention so far as claimed in any
claim of the complete specification:

a. has been anticipated by publication before the date of filing of the applicant’s complete
specification in any specification filed in pursuance of an application for a patent made
in India and dated on or after the 1st day of January, 1912;

b. is claimed in any claim of any other complete specification published on or after the
date of filing of the applicant’s complete specification, being a specification filed in
pursuance of an application for a patent made in India and dated before or claiming the
priority date earlier than that date.

The examiner shall, in addition, make such investigation for the purpose of ascertaining
whether the invention so far as claimed in any claim of the complete specification has been
anticipated by publication in India or elsewhere in any document other than those mentioned
in Section 13(1) before the date of filing of the applicant’s complete specification. In case a
complete specification has been amended before the grant of a patent, the amended
specification shall be examined and investigated in the like manner as the original
specification.

Consideration of the Report of Examiner by Controller

Section 14 provides that in case the report of the examiner is adverse to the applicant and
requires any amendment of the application, specification or other documents, the Controller
shall, before proceeding to dispose of the application, communicate the gist of obligations
to the applicant as expeditiously as possible and afford him an opportunity of hearing.

Power of Controller to Refuse or Require Amended Application in Certain

matters
Section 15 empowers the Controller to refuse the application or to require the application,
specification or other documents to be amended, if he is satisfied that the application or
any specification or any other document filed in pursuance thereof does not comply with the
provisions of the Act and the rules made thereunder

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Power of Controller to make Orders Respecting Dating of Application and

Cases of Anticipation
Section 17 provides that at any time after the filing of an application and before the grant
of the patent, the Controller may at the request of the applicant direct that the application
shall be post-dated to such date as may be specified in the request and proceed with the
application accordingly. However, no application shall be post-dated to a date later than six
months from the date on which it was actually made or would be deemed to have been made.
Where an application or specification (including drawings) or any other document is required
to be amended under Section 15, the application or specification or other document shall, if
the Controller so directs, be deemed to have been made on the date on which the
requirement is complied with or where the application or specification or other document is
returned to the applicant, the date on which it is refiled after complying with the
requirement.

Section 18 says that where it appears to the Controller that the invention so far as claimed
in any claim of the complete specification has been anticipated, he may refuse the application
unless the applicant:

a. shows to the satisfaction of the Controller that the priority date of the claim of his
complete specification is not later than the date on which the relevant document was
published; or

b. amends his complete specification to the satisfaction of the Controller.

If it appears to the Controller that the invention is claimed in a claim of any other complete
specification, he may, direct that a reference to that other specification be inserted in the
applicant’s complete specification unless the applicant shows to the satisfaction of the
Controller that the priority date of his claim is not later than the priority date of the claim
of the said other specification; or the complete specification has been amended to his
satisfaction.

Similar provision also applies in the case where it appears to the Controller that the invention
so far claimed in any claim of the applicant’s complete specification has been claimed in other
complete specification referred to in section 13(1)(a) and that such other complete
specification was published on or before the priority date of the applicant’s claim.

Potential Infringement
Patent infringement is the violation of the exclusive rights of the patent holder. The Patents
Act 1970, does not specifically define activities or situations that constitute patent
infringement. Section 48 of the Patents Act gives the patent holder/ patentee an ‘exclusive
right’ to exclude any third- party from making, using, offering, selling, manufacturing etc.
the patented invention/ product/ process, during the valid term of the patent. This
essentially creates monopolistic rights over the patented invention/ product/ process. Thus,
any activity which violates such a monopoly can be considered a patent infringement. In cases
of patent infringement, the patent holder has the right to sue the infringing party to get
relief and compensation for the damage caused. Sections 104-114 of the Act provide certain
guidelines relating to patent infringement.

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Section 19 provides that if in consequence of the investigations it appears to the Controller

that an invention in respect of which an application for a patent has been made cannot be
performed without substantial risk of infringement of a claim of any other patent, he may
direct that a reference to that other patent, be inserted in the applicant’s complete
specification by way of notice to the public within such time as may be prescribed, unless

a. the applicant shows to the satisfaction of the Controller that there are reasonable
grounds for contesting the validity of the said claim of the other patent; or

b. the complete specification is amended to the satisfaction of the Controller.

The reference shall be inserted in the following form, namely:

“Reference has been directed, in pursuance of Section 19(2) of the Patents Act, 1970 to
Patent No. ………”.

Where after a reference to another patent has been inserted in a complete specification in
pursuance of a direction under Section 19(1):

a. that other patent is revoked or otherwise ceases to be in force; or

b. the specification of that other patent is amended by the deletion of the relevant claim;
or

c. it is found, in proceedings before the court or the Controller, that the relevant claim
of that other patent is invalid or is not infringed by any working of the applicant’s
invention, the Controller may, on the application of the applicant delete the reference
to that other patent.

Substitution of Applicants
Section 20 says that if the Controller is satisfied, on a claim made in prescribed manner at
any time before a patent has been granted that by virtue of any assignment or agreement in
writing made by the applicant or one of the applicants for the patent or by operation of law,
the claimant would, if the patent were then granted, be entitled thereto or to the interest
of the applicant therein, or to an undivided share of the patent or of that interest, the
Controller may direct that the application shall proceed in the name of the claimant or in the
names of the claimants and the applicant or the other joint applicant or applicants,
accordingly as the case may be. No such direction shall however, be given by virtue of any
assignment or agreement made by one of the two or more joint applicants for a patent except
with the consent of the other joint applicant or applicants. Further, no such direction shall
be given by virtue of any assignment or agreement for the assignment of the benefit of an
invention unless:

a. the invention is identified therein by reference to the number of the applications for
the patent; or

b. there is produced to the Controller an acknowledgement by the person by whom the

assignment or agreement was made that the assignment or agreement relates to the
invention in respect of which that application is made; or

c. the rights of the claimant in respect of the invention have been finally established by
the decision of court; or

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d. the Controller gives directions for enabling the application to proceed or for regulating
the manner in which it should be proceeded with under sub-section (5).

Where one of the two or more joint applicants for a patent dies at any time before the
patent has been granted, the Controller may upon a request made by the survivor or survivors
and with the consent of the legal representative of the deceased direct that the application
shall proceed in the name of the survivor or survivors alone.

If any dispute arises between joint applicants for a patent whether or in what manner the
application should be proceeded with, the Controller may upon an application made by any of
the parties, and after giving to all parties concerned an opportunity of being heard, give such
directions as he thinks fit for enabling the application to proceed in the name of one or more
of the parties alone or for regulating the manner in which it should be proceeded with.

Time for Putting Application in Order for Grant

Section 21 of the Act provides that an application for a patent shall be deemed to have been
abandoned unless, the applicant has complied within the prescribed period with all the
requirements imposed on him by or under the Act, whether in connection with the complete
specification or otherwise in relation to the application from the date on which the first
statement of objections to the application or complete specification or other documents
related thereto is forwarded to the applicant by the Controller.

Explanation to section 21(1) clarifies that where the application for a patent or any
specification or, in the case of a convention application or an application filed under the PCT
designating India any document filed as part of the application has been returned to the
applicant by the Controller in the course of the proceedings, the applicant shall not be
deemed to have complied with such requirements unless and until he has re-filed it or the
applicant proves to the satisfaction of the Controller that for the reasons beyond his control
such document could not be re-filed.

Sub-section (2) of Section 21 provides that if at the expiration of the period as prescribed
under sub-section (1) an appeal to the High Court is pending in respect of the application for
the patent for the main invention; or in the case of an application for a patent of addition,
an appeal to the High Court is pending in respect of either that application or the application
for the main invention, the time within which the requirements of the Controller shall be
complied with shall, on an application made by the applicant before the expiration of the
period as prescribed under sub-section (1), be extended until such date as the High Court
may determine. In case, the time within which the appeal mentioned in sub-section (2) may
be instituted has not expired, the Controller may extend the period as prescribed under
sub-section (1), to such further period as he may determine. However, in case of an appeal
filed during the said further period, and the High Court has granted any extension of time
for complying with the requirements of the Controller, then the requirements may be
complied with within the time granted by the Court.

OPPOSITION TO THE PATENT

Section 25 of the Act deals with opposition to grant of patent and provides that where an
application for a patent has been published but a patent has not been granted, any person
may, in writing, represent by way of opposition to the Controller against the grant of patent

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on the following grounds and the Controller on request of such person shall hear him and
dispose of the representation in the prescribed manner and specified time:

a. that the applicant for the patent or the person under or through whom he claims,
wrongfully obtained the invention or any part thereof from him or from a person under
or through whom he claims;

b. that the invention so far as claimed in any claim of the complete specification has been
published before the priority date of the claim —

(i) in any specification filed in pursuance of an application for a patent made in India
on or after the 1st day of January, 1912; or

(ii) in India or elsewhere, in any other document.

Provided that the ground specified in sub-clause (ii) shall not be available where such
publication does not constitute an anticipation of the invention by virtue of sub-section
(2) or sub-section (3) of section 29;

c. that the invention so far as claimed in any claim of the complete specification is claimed
in a claim of a complete specification published on or after the priority date of the
applicant’s claim and filed in pursuance of an application for a patent in India, being a
claim of which the priority date is earlier than that of the applicant’s claim;

d. that the invention so far as claimed in any claim of the complete specification was
publicly known or publicly used in India before the priority date of that claim.

Explanation — For the purposes of this clause, an invention relating to a process for
which a patent is claimed shall be deemed to have been publicly known or publicly used
in India before the priority date of the claim if a product made by that process had
already been imported into India before that date except where such importation has
been for the purpose of reasonable trial or experiment only;

e. that the invention so far as claimed in any claim of the complete specification is obvious
and clearly does not involve any inventive step, having regard to the matter published
as mentioned in clause (b) or having regard to what was used in India before the priority
date of the applicant’s claim;

f. that the subject of any claim of the complete specification is not an invention within
the meaning of this Act, or is not patentable under this Act;

g. that the complete specification does not sufficiently and clearly describe the invention
or the method by which it is to be performed;

h. that the applicant has failed to disclose to the Controller the information required by
section 8 or has furnished the information which in any material particular was false to
his knowledge;

i. that in the case of convention application, the application was not made within twelve
months from the date of the first application for protection for the invention made in
a convention country by the applicant or a person from whom he derives title;

j. that the complete specification does not disclose or wrongly mention the source of
geographical origin of biological material used for the invention;

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k. that the invention so far as claimed in any claim of the complete specification is
anticipated having regard to the knowledge, oral or otherwise, available within any local
or indigenous community in India or elsewhere.

Section 25(2) entitles any interested person to give notice of opposition, to the Controller
in the prescribed manner at any time after the grant of patent but before the expiry of a
period of one year from the date of publication of grant of a patent, on any of the following
grounds only :-

a. that the patentee or the person under or through whom he claims, wrongfully obtained
the invention or any part thereof from him or from a person under or through whom he
claims;

b. that the invention so far as claimed in any claim of the complete specification has been
published before the priority date of the claim in any specification filed in pursuance
of an application for a patent made in India on or after the 1st day of January, 1912;
or in India or elsewhere, in any other document. However, the ground that the invention
so far claimed in any claim of complete specification has been published before the
priority date of the claim in India or elsewhere in any other document shall not be
available where such publication does not constitute an anticipation of the invention by
virtue of section 29(2) or (3);

c. that the invention so far as claimed in any claim of the complete specification is claimed
in a claim of a complete specification published on or after the priority date of the
claim of the patentee and filed in pursuance of an application for a patent in India,
being a claim of which the priority date is earlier than that of the claim of the patentee;

d. that the invention so far as claimed in any claim of the complete specification was
publicly known or publicly used in India before the priority date of that claim;

It may be noted that an invention relating to a process for which a patent is granted
shall be deemed to have been publicly known or publicly used in India before the priority
date of the claim if a product made by that process had already been imported into
India before that date except where such importation has been for the purpose of
reasonable trial or experiment only;

e. that the invention so far as claimed in any claim of the complete specification is obvious
and clearly does not involve any inventive step, having regard to the matter published
as mentioned in clause (b) or having regard to what was used in India before the priority
date of the claim;

f. that the subject of any claim of the complete specification is not an invention within
the meaning of this Act, or is not patentable under this Act;

g. that the complete specification does not sufficiently and clearly describe the invention
or the method by which it is to be performed;

h. that the patentee has failed to disclose to the Controller the information required by
section 8 or has furnished the information which in any material particular was false to
his knowledge;

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i. that in the case of a patent granted on convention application, the application for patent
was not made within twelve months from the date of the first application for protection
for the invention made in a convention country or in India by the patentee or a person
from whom he derives title;

j. that the complete specification does not disclose or wrongly mentions the source and
geographical origin of biological material used for the invention;

k. that the invention so far as claimed in any claim of the complete specification was
anticipated having regard to the knowledge, oral or otherwise, available within any local
or indigenous community in India or elsewhere.

Constitution of Opposition Board and its proceeding

Section 25(3) provides that where any such notice of opposition is duly given under sub-
section (2), the Controller shall notify the patentee and constitute a Board by order in
writing to be known as the Opposition Board consisting of such officers as he may determine
and refer such notice of opposition alongwith the documents to that Board for examination
and submission of its recommendation. Every Opposition Board is required to conduct the
examination in accordance with the prescribed procedure. Sub-section (4) provides that the
Controller shall on receipt of the recommendation of the Opposition Board and after giving
the patentee and the opponent an opportunity of being heard, order either to maintain or
amend or revoke the patent. However, the Controller while passing the order shall not take
into account any personal document or secret trial or secret use in case the opposition is
based on the grounds mentioned under sub-section (2)(d) & (e). In case the Controller issues
an order under sub-section (4) that the patent shall be maintained subject to amendment of
the specification or any other document, the patent shall stand amended accordingly.

Controller to Treat Application as Application of Opponent

Section 26 of the Act provides that where in any opposition proceeding the Controller finds
that the invention, so far as claimed in any claim of the complete specification, was obtained
from the opponent in the manner set out in section 25(2)(a) and revokes the patent on that
ground, he may, on request by such opponent made in the prescribed manner, direct that the
patent shall stand amended in the name of the opponent; or a part of an invention described
in the complete specification was so obtained from the opponent, he may pass an order
requiring that the specification be amended by the exclusion of that part of the invention.

Where an opponent has, before the date of the order of the Controller requiring the
amendment of a complete specification referred to in section 26(1)(b), filed an application
for a patent for an invention which included the whole or a part of the invention held to have
been obtained from him and such application is pending, the Controller may treat such
application and specification in so far as they relate to the invention held to have been
obtained from him, as having been filed, for the purposes of the priority dates of claims of
the complete specification, on the date on which the corresponding document was or deemed
to have been filed by the patentee in the earlier application but for all other purposes the
application of the opponent shall be proceeded with as an application for a patent

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RESIDENTS NOT TO APPLY FOR PATENTS OUTSIDE INDIA WITHOUT

PRIOR PERMISSION
Section 39 of the Act provides that no person resident in India shall, except under the
authority of a written permit sought in the prescribed manner and granted by or on behalf
of the Controller, make or cause to be made any application outside India for the grant of a
patent for an invention unless an application for a patent for the same invention has been
made in India, not less than six weeks before the application outside India and either no
direction has been given under of section 35(1) in relation to the application in India, or all
such directions have been revoked.

Sub-section (2) obliges the Controller to dispose of every such application within the
prescribed period. However, if the invention is relevant for defence purpose or atomic
energy, the Controller shall not grant permit without the prior consent of the Central
Government. Sub-section (3) clarifies that the provisions of section 39 shall not apply in
relation to an invention for which an application for protection has first been filed in a
country outside India by a person resident outside India.

GRANT OF PATENTS
Section 43 dealing with grant of patents provides that where an application for a patent has
been found to be in order for grant of the patent and either the application has not been
refused by the Controller by virtue of any power vested in him by the Act; or the application
has not been found to be in contravention of any of the provisions of the Act, the patent
shall be granted as expeditiously as possible to the applicant or, in the case of a joint
application, to the applicants jointly, with the seal of the patent office and the date on which
the patent is granted shall be entered in the register. The Controller has been put under
obligation to publish the fact that the patent has been granted and thereupon the
application, specification and other documents related thereto shall be open for public
inspection.

Grant of Patents Subject to Conditions

Section 47 dealing with grant of patents subject to conditions provides that the grant of a
patent shall be subject to the conditions that:

1. any machine, apparatus or other article in respect of which the patent is granted or
any article made by using a process in respect of which the patent is granted, may be
imported or made by or on behalf of the Government for the purpose merely of its own
use;

2. any process in respect of which the patent is granted may be used by or on behalf of
the Government for the purpose merely of its own use;

3. any machine, apparatus or other article in respect of which the patent is granted or
any article made by the use of the process in respect of which the patent is granted,
may be made or used, and any process in respect of which the patent is granted may be
used by any person, for the purpose merely of experiment or research including the
imparting of instructions to pupils; and

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4. in the case of a patent in respect of any medicine or drug, the medicine or drug may be
imported by the Government for the purpose merely of its own use or for distribution
in any dispensary, hospital or other medical institution maintained by or on behalf of
the Government or any other dispensary, hospital or other medical institution which
the Central Government may, having regard to the public service that such dispensary,
hospital or medical institution renders, specify in this behalf by notification in the
Official Gazette.

Rights of Patentees
Section 48 provides that subject to the other provisions contained in the Patents Act and
the conditions specified in section 47, a patent granted under the Act shall confer upon the
patentee:

a. where the subject matter of the patent is a product, the exclusive right to prevent
third parties, who do not have his consent, from the act of making, using, offering for
sale, selling or importing for those purposes that product in India;

b. where the subject matter of the patent is a process, the exclusive right to prevent
third parties, who do not have his consent, from the act of using that process, and from
the act of using, offering for sale, selling or importing for those purposes the product
obtained directly by that process in India.

What are the Rights of a Patentee once the Patent is Granted?

A patentee enjoys the exclusive right to make and use the patented invention. The
patentee also has the right to assign the patent, grant licences, or otherwise deal with
the patent, for any consideration. These rights, created by statute, are circumscribed
by various conditions and limitations as prescribed under the Patents Act, 1970.

Term of Patent
According to Section 53 of the Act, the term of every patent which has not expired and has
not ceased to have effect, on the date of such commencement shall be twenty years from
the date of filing of the application for the patent.

The term of patent in case of International applications filed under the Patent Cooperation
Treaty designating India, shall be twenty years from the international filing date accorded
under the Patent Cooperation Treaty.

A patent shall cease to have effect notwithstanding anything therein or in the Act on the
expiration of the period prescribed for the payment of any renewal fee, if that fee is not
paid within the prescribed period or within such extended period as may be prescribed.

Notwithstanding anything contained in any other law for the time being in force, on cessation
of the patent right due to non-payment of renewal fee or on the expiry of the term of
patent, the subject matter covered by the said patent shall not be entitled to any protection.

What is the Term of a Patent in the Indian System?

The term of every patent granted is 20 years from the date of filing of application. However,
for application filed under national phase under Patent Cooperation Treaty (PCT), the term
of patent will be 20 years from the international filing date accorded under PCT.

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PATENTS OF ADDITION
Section 54, 55 and 56 deals with patents of addition. Section 54 provides that where an
application is made for a patent in respect of any improvement in or modification of an
invention described or disclosed in the complete specification, namely the main invention and
the applicant also applies or has applied for a patent for that invention or is the patentee in
respect thereof, the Controller may, if the applicant so requests, grant the patent for the
improvement or modification as a patent of addition. Where an invention being an
improvement in or modification of another invention, is the subject of an independent patent
and the patentee in respect of that patent is also the patentee in respect of the patent for
the main invention, the Controller may, if the patentee so requests, revoke the patent for
the improvement or modification and grant to the patentee a patent of addition in respect
thereof, bearing the same date of the patent so revoked. However a patent shall not be
granted as a patent of addition unless the date of filing of the application is the same as or
later than the date of filing of the application in respect of the main invention. A patent of
addition shall not be granted before the grant of the patent for the main invention.

Section 55 deals with term of patents of addition and provides that a patent of addition is
granted for a term equal to that of the patent for the main invention or so much thereof as
has not expired and remains in force during that term or until the previous cessor of the
patent for the main invention and no longer. No renewal fees is payable in respect of a patent
of addition, but if any such patent becomes an independent patent the same fees shall
thereafter be payable upon the same dates, as if the patent had been originally granted as
an independent patent.

Section 56 which deals with validity of patents of addition provides that the grant of a
patent of addition shall not be refused and a patent granted as a patent of addition shall not
be revoked or invalidated, on the ground only that the invention claimed in the complete
specification does not involve any inventive step having regard to any publication or use of
the main invention described in the complete specification relating thereto; or any
improvement in or modification of the main invention described in the complete specification
of a patent of addition to the patent for the main invention or of an application for such a
patent of addition, and the validity of a patent of addition shall not be questioned on the
ground that the invention ought to have been the subject of an independent patent. In this
context, it is clarified that in determining the novelty of the invention claimed in the
complete specification filed in pursuance of an application for a patent of addition regard
shall be had also to the complete specification in which the main invention is described.

A patent of addition application cannot be rejected on the grounds that the disclosure in
the primary application or patent lacked innovative step. However, the disclosure in the main
application or patent may be used as evidence of innovation against the patent addition
application.

In the matter of Ravi Kamal Bali v/s Kala Tech and others the Bombay High Court on 12th
February, 2008 dismissed the defendant‘s arguments that Patent of addition can only be
granted if it has an inventive step over the main application.

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RESTORATION OF LAPSED PATENTS

Section 60 provides that where a patent has ceased to have effect by reason of failure to
pay any renewal fee within the period prescribed under section 53 or within period as may
be allowed under section 142(4), the patentee or his legal representative and where the
patent was held by two or more persons jointly, then with the leave of the Controller one or
more of them without joining the others, may within eighteen months from the date on which
the patent ceased to have effect, make an application for the restoration of the patent.

Procedure for disposal of applications for restoration of lapsed patents

Section 61 provides that if, after hearing the applicant in cases where the applicant so
desires or the Controller thinks fit, the Controller is prima facie satisfied that the failure
to pay the renewal fee was unintentional and that there has been no undue delay in the
making of the application, he shall publish the application in the prescribed manner; and
within the prescribed period, any person interested may give notice to the Controller of
opposition thereto on either or both of the following grounds that –

a. the failure to pay the renewal fee was not unintentional; or

b. there has been undue delay in the making of the application.

If notice of opposition is given within the prescribed period aforesaid, the Controller shall
notify the applicant, and shall give to him and to the opponent an opportunity to be heard
before deciding the case. If no notice of opposition is given within the prescribed period
aforesaid or if in the case of opposition, the decision of the Controller is in favour of the
applicant, the Controller shall, upon payment of any unpaid renewal fee and such additional
fee as may be prescribed, restore the patent and any patent of addition specified in the
application which has ceased to have effect on the cesser of that patent. The Controller
may, if he thinks fit as a condition of restoring the patent, require that an entry shall be
made in the register of any document or matter which has to be entered in the register but
which has not been so entered.

Rights of patentees of lapsed patents which have been restored

Section 62 provides that where a patent is restored, the rights of the patentee shall be
subject to such conditions as may be prescribed and to such other conditions as the Controller
thinks fit to impose for the protection or compensation of persons who may have begun to
avail themselves of, or have taken definite steps by contract or otherwise to avail themselves
of, the patented invention between the date when the patent ceased to have effect and the
date of the publication of the application for restoration of the patent. No suit or other
proceeding shall be commenced or prosecuted in respect of an infringement of a patent
committed between the date on which the patent ceased to have effect and the date of the
publication of the application for restoration of the patent.

SURRENDER AND REVOCATION OF PATENTS

Section 63 entitles the patentee to offer to surrender his patent, at any time by giving notice
to the Controller. Where such an offer is made, the Controller shall publish the offer in the
prescribed manner and also notify every person other than the patentee whose name appears
in the register as having an interest in the patent. Any person interested may, within the
prescribed period after such publication, give notice of opposition to the Controller and where
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such notice in given the Controller shall notify the patentee. If the Controller is satisfied
after hearing the patentee and any opponent, if desirous of being heard, that the patent may
properly be surrendered, he may accept the offer and by order revoke the patent.

Grounds for Revocation of Patents

Section 64 deals with revocation of patents. A patent may be revoked on any of the following
grounds:

• where an invention as claimed in a valid claim of earlier priority date which is included in
the complete specification of another patent granted in India;

• where the patent application was filed by a person who is not entitled under the
provisions of the Act and was granted a patent on such application;

• where the patent was wrongfully obtained and the rights of the petitioner or any person
under/through whom he claims, were contravened;

• when the subject of a claim of the complete specification is not an invention within the
meaning of the Act;

• where the invention that is being claimed is not new having regard to what was publicly
known or used in India before the priority date of the claim and also having regard to
what was published in any of the documents, whether in India or elsewhere;

• where the invention that is claimed is obvious and lacks any inventive step, having regard
to what was publicly known, used or published in India, before the priority date of the
claim;

• where the invention is not useful;

• where the invention and the method by which it is to be performed is not sufficiently
and fairly described by the complete specification. In other words, the description of
the method or the instructions for the working of the invention as specified in the
complete specification are insufficient to enable a person of average skill and knowledge
of the art to which the invention relates, to operate or work the invention or where the
best method of performing the invention which is known to the applicant is not disclosed;

• where the scope of any claim is not defined properly or based on the matter which his
not disclosed in the specification;

• where a false suggestion or representation was made to obtain the patent;

• where the subject of any claim of the complete specification is not patentable under the
Act;

• the invention that is being claimed was secretly used in India before the priority date
of the claim;

• where the information required under Section 8 has not been disclosed by the applicant
of the patent to the Controller or the information that has been furnished is false to
his knowledge;

• where any direction of secrecy passed under Section 35 has been contravened by the
applicant or made an application in contravention of Section 39 for the grant of a patent
outside India;

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• where the permission to amend the complete specification under Section 57 or 58 was
obtained by fraud;

• the complete specification does not disclose or mentions the wrong source or
geographical origin of biological material used for the invention;

• the invention was anticipated having regard to the knowledge which was available within
any local or indigenous community within India or elsewhere.

However, where the invention claimed is not new, obvious or lacks any inventive step, having
regard to what was publicly known or used in India or published in India or elsewhere, before
the priority date of the claim:

• a personal document, secret trial or secret use shall not be taken into account;

• where the patent is for a process or for a product that is made by a process which is
claimed, the importation of the product which is made abroad by that process into India
will constitute knowledge or use in India of the invention, on the date of importation.
Except where the product has been imported for the purpose of reasonable trial or
experiment only.

Furthermore, on a petition of the Central Government, the High Court may revoke a patent if
it is satisfied that the patentee has failed to comply with the request of the Central
Government, without any reasonable cause to make, use or exercise the invention which has
been granted a patent for the Government’s purpose, within the meaning of Section 99 of the
Act. The petition for revocation of a patent should be notified to all persons mentioned in the
register who are proprietors of that patent or have a share or interest in the patent.

Section 65 deals with revocation of patent and amendment of complete specification on

directions of the Government in cases relating to atomic energy and section 66 deals with
revocation of patents in public interest. Section 65 provides that where at any time after
grant of a patent, the Central Government is satisfied that a patent is for an invention relating
to atomic energy for which no patent can be granted under sub-section (1) of section 20 of
the Atomic Energy Act, 1962, it may direct the Controller to revoke the patent, and thereupon
the Controller, after giving notice, to the patentee and every other person whose name has
been entered in the register as having an interest in the patent, and after giving them an
opportunity of being heard, may revoke the patent. Sub-section 2 empowers the Controller
allow the patentee to amend the complete specification in such manner as he considers
necessary instead of revoking the patent.

WORKING OF PATENTED INVENTIONS – GENERAL PRINCIPLES

Section 83 dealing with general principles applicable to working of patented invention provides
that in exercising the powers conferred for working of patents and compulsory licences,
regard shall be had to the following general considerations, namely:

a. that patents are granted to encourage inventions and to secure that the inventions are
worked in India on a commercial scale and to the fullest extent that is reasonably
practicable without undue delay;

b. that they are not granted merely to enable patentees to enjoy a monopoly for the
importation of the patented article;

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It may be noted that Section 2(1) (o) of the Act defines the term patented article and
patented process as to mean respectively an article or process in respect of which a
patent is in force;
c. that the protection and enforcement of patent rights contribute to the promotion of
technological innovation and to the transfer and dissemination of technology, to the
mutual advantage of producers and users of technological knowledge and in a manner
conducive to social and economic welfare, and to a balance of rights and obligations;

d. that patents granted do not impede protection of public health and nutrition and should
act as instrument to promote public interest specially in sectors of vital importance for
socio-economic and technological development of India;

e. that patents granted do not in any way prohibit Central Government in taking measures
to protect public health;

f. that the patent right is not abused by the patentee or person deriving title or interest
on patent from the patentee, and the patentee or a person deriving title or interest on
patent from the patentee does not resort to practices which unreasonably restrain
trade or adversely affect the international transfer of technology; and

g. that patents are granted to make the benefit of the patented invention available at
reasonably affordable prices to the public.

COMPULSORY LICENCES
Compulsory licenses are authorizations given to a third-party by the Controller General to
make, use or sell a particular product or use a particular process which has been patented,
without the need of the permission of the patent owner. This concept is recognised at both
national as well as international levels, with express mention in both (Indian) Patent Act, 1970
and TRIPS Agreement. There are certain pre-requisite conditions, given under sections 84-
92, which need to be fulfilled if a compulsory license is to be granted in favour of someone.

Section 84 provides that at any time after the expiration of three years from the date of
the grant of a patent, any person interested may make an application to the Controller for
grant of compulsory licence on patent on any of the following grounds, namely:

a. that the reasonable requirements of the public with respect to the patented invention
have not been satisfied, or

b. that the patented invention is not available to the public at a reasonably affordable
price, or

c. that the patented invention is not worked in the territory of India.

An application for compulsory licence may be made by any person notwithstanding that he is
already the holder of a licence under the patent and no person shall be estopped from alleging
that the reasonable requirements of the public with respect to the patented invention are
not satisfied or that the patented invention is not worked in the territory of India or that
the patented invention is not available to the public at a reasonably affordable price by reason
of any admission made by him, whether in such a licence or otherwise or by reason of his
having accepted such a licence.

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Sub-section (3) requires every application for compulsory licence to contain a statement
setting out the nature of the applicant’s interest together with such particulars as may be
prescribed and the facts upon which the application is based. The Controller on being satisfied
that the reasonable requirements of the public with respect to the patented invention have
not been satisfied or the patented invention is not worked in the territory of India or the
patented invention is not available to the public at a reasonably affordable price, may grant a
licence upon such terms as he may deem fit.

In considering the application of compulsory licence, the Controller is required to take into
account —

i. the nature of the invention, the time which has elapsed since the sealing of the patent
and the measures already taken by the patentee or any licencee to make full use of the
invention;

ii. the ability of the applicant to work the invention to the public advantage;

iii. the capacity of the applicant to undertake the risk in providing capital and working the
invention, if the application were granted;

iv. as to whether the applicant has made efforts to obtain a licence from the patentee on
reasonable terms and conditions and such efforts have not been successful within a
reasonable period as the Controller may deem fit.

It may be noted that above stated point (i) to (iv) shall not be applicable in case of national
emergency or other circumstances of extreme urgency or in case of public non-commercial
use or on establishment of a ground of anti-competitive practices adopted by the patentee.

However, the Controller is under no obligation to take into account matters subsequent to the
making of the application. It has been clarified that the reasonable period shall be construed
as a period not ordinarily exceeding a period of six months. In this context, it has been
clarified that, the reasonable requirements of the public shall be deemed not to have been
satisfied if —

a. by reason of the refusal of the patentee to grant a licence or licences on reasonable

terms -

i. an existing trade or industry or the development thereof or the establishment of

any new trade or industry in India or the trade or industry in India or the trade or
industry of any person or class of persons trading or manufacturing in India is
prejudiced; or

ii. the demand for the patented article has not been met to an adequate extent or on
reasonable terms; or

iii. a market for export of the patented article manufactured in India is not being
supplied or developed; or

iv. the establishment or development of commercial activities in India is prejudiced;

or

b. by reason of conditions imposed by the patentee upon the grant of licences under the
patent or upon the purchase, hire or use of the patented article or process, the
manufacture, use or sale of materials not protected by the patent, or the establishment

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or development of any trade or industry in India, is prejudiced; or

c. the patentee imposes a condition upon the grant of licences under the patent to provide
exclusive grant back, prevention to challenges to the validity of patent or coercive
package licensing; or

d. the patented invention is not being worked in the territory of India on a commercial
scale to an adequate extent or is not being so worked to the fullest extent that is
reasonably practicable; or

e. the working of the patented invention in the territory of India on a commercial scale is
being prevented or hindered by the importation from abroad of the patented article by:

i. the patentee or persons claiming under him; or

ii. persons directly or indirectly purchasing from him; or

iii. other persons against whom the patentee is not taking or has not taken proceedings
for infringement.

Revocation of Patents by the Controller for Non-Working

Section 85 deals with revocation of patents by Controller for non-working and provides that
where, in respect of a patent, a compulsory licence has been granted, the Central Government
or any person interested may, after the expiration of two years from the date of the order
granting the first compulsory licence, apply to the Controller for an order revoking the patent
on the ground that the patented invention has not been worked in the territory of India or
reasonable requirements of the public with respect to the patented invention has not been
satisfied or the patented invention is not available to the public at a reasonably affordable
price.

Every application for revocation should contain prescribed particulars, the facts upon which
the application is based, and, in the case of an application other than by the Central
Government, should also set out the nature of the applicant’s interest. The Controller, if
satisfied that the reasonable requirements of the public with respect to the patented
invention has not been satisfied or patented invention has not been worked in the territory
of India or is not available to the public at a reasonably affordable price, may make an order
revoking the patent. The controller has however been put under obligation to ordinarily decide
such application within one year of its presentation.

Procedure for Dealing with Applications

Section 87 provides that where the Controller is satisfied, upon consideration of an
application for compulsory licence or revocation of patent, that a prima facie case has been
made out for the making of an order, he shall direct the applicant to serve copies of the
application upon the patentee and any other person appearing from the register to be
interested in the patent in respect of which the application is made, and shall publish the
application in the Official Journal.

The patentee or any other person desiring to oppose the application may, within prescribed
time or within such further time as the Controller may on application allow, give to the
Controller notice of opposition. Any such notice of opposition should contain a statement
setting out the grounds on which the application is opposed. Where any such notice of

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opposition is duly given, the Controller shall notify the applicant, and shall give to the applicant
and the opponent an opportunity to be heard before deciding the case.

Powers of Controller in granting compulsory licences

Section 88 provides that where the Controller is satisfied that the manufacture, use or sale
of materials not protected by the patent is prejudiced by reason of conditions imposed by
the patentee upon the grant of licences under the patent, or upon the purchase, hire or use
of the patented article or process, he may order the grant of licences under the patent to
such customers of the applicant as he thinks fit as well as to the applicant. Where an
application for compulsory licence is made under Section 84 by a person being the holder of
a licence under the patent, the Controller may, if he makes an order for the grant of a licence
to the applicant, order the existing licence to be cancelled, or may, if he thinks fit, instead
of making an order for the grant of a licence to the applicant, order the existing licence to
be amended.

Where two or more patents are held by the same patentee and an applicant for a compulsory
licence establishes that the reasonable requirements of the public have not been satisfied
with respect to only some of the said patents, then, if the Controller is satisfied that the
applicant cannot efficiently or satisfactorily work the licence granted to him under those
patents without infringing the other patents held by the patentee and if those patents involve
important technical advancement or considerable economic significance in relation to the
other patents, he may, by order, direct the grant of a licence in respect of the other patents
also to enable the licencee to work the patent or patents in regard to which a licence is
granted under Section 84.

Where the terms and conditions of a licence have been settled by the Controller, the licencee
may, at any time after he has worked the invention on a commercial scale for a period of not
less than twelve months, make an application to the Controller for the revision of the terms
and conditions on the ground that the terms and conditions settled have proved to be more
onerous than originally expected and that in consequence thereof the licencee is unable to
work the invention except at a loss. However no such application shall be entertained a second
time by the Controller.

Termination of compulsory licence

Section 94 provides that on an application made by the patentee or any other person deriving
title or interest in the patent, a compulsory licence may be terminated by the Controller,
provided the circumstances that give rise to the grant thereof no longer exist and such
circumstances are unlikely to recur. In this regard the holder of the compulsory licence has
been entitled to object to such termination.

International Arrangements
Section 133 to 139 deal with international arrangements. Section 133 deals with convention
countries; section 134 deals with notification as to countries not providing for reciprocity;
section 135 provides for convention applications; section 136 contains special provisions
relating to convention applications; section 137 provides for multiple priorities; section 138
deals with supplementary provisions as to convention applications; and section 139 provides
for application of other provisions of the Act to convention applications.

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In terms of Section 133 a convention country is that country, which is a signatory or party or
a group of countries, union of countries or intergovernmental organizations which are
signatories or parties to an international, regional or bi-lateral treaty, convention or
arrangement to which India is also a signatory or party and which affords to the applicants
for patents in India or to citizens of India similar privileges as are granted to their own
citizens or citizens to their member countries in respect of the grant of patents and
protection of patent rights. Section 134 provides that where any country notified by the
Central Government as Convention Country does not accord to citizens of India the same
rights in respect of the grant of patents and the protection of patent rights as it accords to
its own nationals, no national of such country shall be entitled either solely or jointly with any
other person:

a. to apply for the grant of a patent or be registered as the proprietor of a patent;

b. to be registered as the assignee of the proprietor of a patent; or

c. to apply for a licence or hold any licence under a patent granted under the Act.

Section 135(1) provides that where a person has made an application for a patent in respect
of an invention in a convention country (basic application) and that person or legal
representative or assignee of that person makes an application under the Act for a patent
within twelve months after the date on which the basic application was made, the priority
date of a claim of the complete specification being a claim based on matter disclosed in the
basic application, is the date of making of the basic application.

The explanation to Section 135(1) clarifies that where applications have been made for similar
protection in respect of an invention in two or more convention countries, the period of twelve
months shall be reckoned from the date on which the earlier or earliest of the said
applications was made.

In case of an application filed under the Patent Cooperation Treaty designating India and
claiming priority from a previously filed application in India, the provisions of sub-sections (1)
and (2) shall apply as if the previously filed application were the basic application. However, a
request for examination under section 11B shall be made only for one of the applications filed
in India.

Section 136 containing special provisions relating to convention applications requires every
convention application to be accompanied by a complete specification; and specify the date on
which and the convention country in which the application for protection, or as the case may
be, the first of such application was made; and to state that no application for protection in
respect of the invention had been made in a convention country before that date by the
applicant or by any person from whom he derives title.

A complete specification filed with a convention application may include claims in respect of
developments of, or additions to, the invention in respect of which the application for
protection was made in a convention country, being developments or additions in respect of
which the applicant would be entitled under the provisions of Section 6 to make a separate
application for a patent. Sub-section (3) prohibits a convention application to be post-dated
to a date later than the date on which the application could have been made under the Act.

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Section 138 requires the applicant of a convention application to furnish, in addition to the
complete specification, copies of the specifications or corresponding documents filed or
deposited by the applicant in the patent office of the convention country and verified to the
satisfaction of the Controller within the prescribed period from the date of communication
by the Controller. If any such specification or other document is in a foreign language, a
translation into English of the specification or document verified by affidavit or otherwise
to the satisfaction of the Controller are required to be furnished.

Patent Agent
The work relating to drafting of specifications, making of application for a patent, subsequent
correspondence with the Patent office on the objections raised, representing the applicant’s
case at the hearings, filing opposition and defending application against opposition is
entrusted to a qualified Patent Agent. Sections 125-132 of the Patents Act, 1970 read with
the Patents Rules deal with the Patent Agents.

Patent Office and Its Establishment

The Controller General of Patents, Designs and Trade Marks appointed under Section 3(1) of
the Trade Marks Act, 1999 shall be the Controller of Patents for the purposes of this Act.

For the purposes of Patents Act, there shall be an office which shall be known as the patent
office. The Central Government may, by notification in the Official Gazette, specify the name
of the Patent Office.

Appeals to High Court

Section 117A(1) states that save as otherwise expressly provided in sub-section (2), no appeal
shall lie from any decision, order or direction made or issued under this Act by the Central
Government, or from any act or order of the Controller for the purpose of giving effect to
any such decision, order or direction.

According to Section 117A (2) an appeal shall lie to the High Court from any decision, order
or direction of the Controller of Central Government.

Every appeal under this section shall be in the prescribed form and shall be verified in such
manner as may be prescribed and shall be accompanied by a copy of the decision, order or
direction appealed against and by such fees as may be prescribe.

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LAW RELATING TO TRADE MARKS

REGULATORY FRAMEWORK
• Trade Marks Act, 1999
• Trade Marks Rules, 2017

Trade Marks Act, 1999 is an Act to amend and consolidate the law relating to trade marks,
to provide for registration and better protection of trade marks for goods and services and
for the prevention of the use of fraudulent marks. It extends to the whole of India.

What are the Sources of Trademark Laws?

• The national statues i.e., the Trade Marks Act, 1999 and rules made thereunder.
• International Multilateral Convention.
• National Bilateral Treaty.
• Regional Treaty.
• Decision/Rulings of the Courts.
• Office Practice reduced in Manuals and Guidelines.
• Text Books written by Academician and Professional Experts.

INTRODUCTION
A trademark is a sign capable of distinguishing the goods or services of one enterprise from
those of other enterprises. Trademarks are protected by intellectual property rights. A
trade mark is a visual symbol which may be a word signature, name, device, label, numerals or
combination of colours used by one undertaking on goods or services or other articles of
commerce to distinguish it from other similar goods or services originating from a different
undertaking. Trademark is a symbol that allows a purchaser to identify goods or services that
have been proved satisfactory and not to buy goods or services that have not been
satisfactory.

Trademarks help promote economic efficiency. If trademarks are not allowed to be

registered with the manufacturers it may eventually take away the incentive of trademark
owning manufacturers to make investments in quality control. There would thus be no healthy
competition among the manufacturers leading to the loss of vitality of the economy. If we do
not have a system of having trademark a manufacturer would get nothing by improving his
product’s quality. And consumers would not be in a position to identify high or low-quality
products. In such a situation a manufacturer who reduce the price by reducing quality may
pocket the benefit of the market. The consequence would be attempts to produce inferior
quality products rather than competition to produce better-quality products.

In view of developments in trading and commercial practices, increasing globalisation of trade

and industry, the need to encourage investment flows and transfer of technology, need for
simplification and harmonization of trade mark management systems and to give effect to
important judicial decisions, a new Trade Marks Act, 1999 have been enacted to provide for
registration of trade mark for goods as well as services including prohibition to the
registration of imitation of well-known trademarks, and expansion of grounds for refusal of
registration.

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A Trade Mark distinguishes the goods of one manufacturer or trader from similar goods of
others and therefore, it seeks to protect the interest of the consumer as well as the trader.
A trade mark may consist of a device depicting the picture of animals, human beings etc.,
words, letters, numerals, signatures or any combination thereof. Since a trade mark indicates
relationship in the course of trade, between trader and goods, it serves as a useful medium
of advertisement for the goods and their quality.

The current law of Trade Marks contained in the Trade Marks Act, 1999 is in harmony with
two major international treaties on the subject, namely The Paris Convention for Protection
of Industrial Property and TRIPS Agreement to both of which India is a signatory.

DEFINITIONS AND INTERPRETATIONS

Following are some of the important terms defined in the Trade Marks Act

Trade Mark
The term trade mark has been defined under Section 2(1)(zb) of the Act as to mean a mark
capable of being represented graphically and which is capable of distinguishing the goods or
services of one person from those of others and may include shape of goods, their packaging
and combination of colours; and

i. in relation to Chapter XII (other than section 107), a registered trade mark or a mark
used in relation to goods or services for the purpose of indicating or so as to indicate a
connection in the course of trade between the goods or services, as the case may be,
and some person having the right as proprietor to use the mark; and
ii. in relation to other provisions of this Act, a mark used or proposed to be used in relation
to goods or services for the purpose of indicating or so to indicate a connection in the
course of trade between the goods or services, as the case may be, and some person
having the right, either as proprietor or by way of permitted user, to use the mark
whether with or without any indication of the identity of that person, and includes a
certification trade mark or collective mark.

What is a Trademark?

A trademark (popularly known as brand name) in layman’s language is a visual symbol which may
be a word signature, name, device, label, numerals or combination of colours used by one
undertaking on goods or services or other articles of commerce to distinguish it from other
similar goods or services originating from a different undertaking.

Certification Trade Mark

Section 2(1)(e) defines the term certification trade mark as to mean a mark capable of
distinguishing the goods or services in connection with which it is used in the course of trade
which are certified by the proprietor of the mark in respect of origin, material, mode of
manufacture of goods or performance of services, quality, accuracy or other characteristics
from goods or services not so certified and registerable as such in respect of those goods or
services in the name, as proprietor of the certification trade mark, of that person.

Collective Mark
As per Section 2(1)(g) of the Act, Collective mark means a trade mark distinguishing the goods
or services of members of an association of persons (not being a partnership within the

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meaning of the Indian Partnership Act, 1932 which is the proprietor of the mark from those
of others.

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Well Known Trade Mark

In terms of Section 2(1)(zg), a well-known trade mark in relation to any goods or services
means a mark which has become so to the substantial segment of the public which uses such
goods or services such that the use of such mark in relation to other goods or services would
be likely to be taken as indicating a connection in the course of trade or rendering of services
between those goods or services and a person using the mark in relation to the first-
mentioned goods or services.

With coming up of the Trade Mark Rules 2017, a new procedure has been created that allows
the Registrar to proclaim a particular trademark as “well known”. According to the new rule,
a trademark owner can file an application in form TM-M with a request made to the Registrar
for declaring the mark to be “well-known”. A well-known trade mark has been vouchsafed with
extraordinary protection and safeguards against passing off and infringement of such
trademarks. Well-known trademarks are recognised in India on the basis of their reputation,
nationally, internationally and the cross-borders. Unlike other trademarks whose goodwill and
reputation is limited to a certain specified geographical area and to a certain range of
products, well-known trademarks have its goodwill and reputation protected across the nation
and across categories of goods and services. It is law that restricts the Trade Mark Registry
to allow and register any mark as a trademark which is deceptively similar to any of the well-
known trademark

For Example: Google has been registered as a well-known trademark of Alphabet Inc., which
thereby means only Alphabet Inc. can register the term ‘Google’ for any category of goods
and services. Even if the service is not related to the Internet industry, no other company
but Alphabet Inc. can register ‘Google’ as its trademark.

Mark
The term mark under Section 2(1)(m) has been defined to include a device, brand, heading,
label, ticket, name, signature, word, letter, numeral, shape of goods, packaging or combination
of colours or any combination thereof.

Assignment
According to Section 2(1) (b) of the Act, assignment means an assignment in writing by act of
the parties concerned

Deceptively Similar
According to Section 2(1) (h) of the Act a mark shall be deemed to be deceptively similar to
another mark if it so nearly resembles that other mark as to be likely to deceive or cause
confusion.

Package
In terms of clause (q) of Section 2(1) the term package include any case, box, container,
covering, folder, receptacle, vessel, casket, bottle, wrapper, label, band, ticket, reel, frame,
capsule, cap, lid, stopper and cork.

Permitted Use
Section 2(1)(r) defines the term permitted use, in relation to a registered trade mark, as to
mean the use of trade mark-
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(i) by a registered user of the trade mark in relation to goods or services -

a) with which he is connected in the course of trade; and
b) in respect of which the trade mark remains registered for the time being; and
c) for which he is registered as registered user; and
d) which complies with any conditions or limitations to which the registration of
registered user is subject; or
(ii) by a person other than the registered proprietor and registered user in relation to
goods or services
a) with which he is connected in the course of trade; and
b) in respect of which the trade mark remains registered for the time being; and
c) by consent of such registered proprietor in a written agreement; and
d) which complies with any conditions or limitations to which such user is subject and
to which the registration of the trade mark is subject.
Service
The term service under clause (z) of sub-section (1) of Section (2) has been defined as to
mean service of any description which is made available to potential users and includes the
provision of services in connection with business of any industrial or commercial matters such
as banking, communication, education, financing, insurance, chit funds, real estate, transport,
storage, material treatment, processing, supply of electrical or other energy, boarding,
lodging, entertainment, amusement, construction, repair, conveying of news or information
and advertising.

Who can Apply for a Trademark and How?

Any person, claiming to be the proprietor of a trademark used or proposed to be used by him,
may apply in writing in prescribed manner for registration. The application should contain the
trademark, the goods/ services, name and address of applicant and agent (if any) with power
of attorney, the period of use of the mark.

The applications can be submitted personally at the Front Office Counter of the respective
office or can be sent by post. These can also be filed on line through the e-filing gateway
available at the official website.

What are different types of Trademarks that may be Registered in India?

➢ Any name (including personal or surname of the applicant or predecessor in business or

the signature of the person), which is not unusual for trade to adopt as a mark.
➢ An invented word or any arbitrary dictionary word or words, not being directly
descriptive of the character or quality of the goods/service.
➢ Letters or numerals or any combination thereof.
➢ The right to proprietorship of a trademark may be acquired by either registration under
the Act or by use in relation to particular goods or service.
➢ Devices, including fancy devices or symbols.
➢ Monograms.
➢ Combination of colors or even a single color in combination with a word or device.
➢ Shape of goods or their packaging.
➢ Marks constituting a three dimensional sign.
➢ Sound marks when represented in conventional notation or described in words by being
graphically represented.

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Procedure for Registration

Section 18 deals with the procedure for making an application for registration. Any person
claiming to be the Proprietor of a trademark used or proposed to be used by him, who is
desirous of registering it, shall apply in writing to the Registrar in the prescribed manner for
the registration of his trademark. Sub-section (2) of Section 18 allows registration in several
classes of goods or services by means of a single application. However, the fee payable is to
be calculated on the basis of the number of classes in which registration is sought.

Section 23 places obligation on the Registrar to register the trade mark where the procedure
for registration of a trade mark has been completed viz., the application has been accepted
and either the application has not been opposed or the opposition has been dismissed.

Processing of TM Application in Trade Mark Registry

At present processing of Trade Mark application is done completely through TM electronic
processing System and filing of application is allowed in hybrid mode, i.e. online as well as
offline. Currently online filing has reached around 98%. Moreover, all applications received
offline get digitized at its initial stage and movement of the file is done through complete
electronic mode thereafter.

A brief description of stage wise processing in Trade Mark Registration is as follows -

A. Pre-Examination Processing:
(i) Filing of application: A Trade Mark Application may be filed online or offline.
After digitization of offline applications, both online and offline applications are
merged and proceed further for processing through the Trade Mark system.
(ii) VIENNA Codification: If applied mark consists of figurative elements,
codification of the figurative elements is done as per VIENNA Agreement and
then application moves for examination. Trade Marks applied as word per se
directly proceed for examination. It is expected that all applications which may
require VIENNA Codification or otherwise should be processed expeditiously and
serially as per priority based on the date of filing of application.
B. Examination of Applications:
It may be noted that allotment of applications for the examination is done by the
automated system serially on the basis of the date of filing. Examination in Trade Mark
Registration is done in two stages, first examination report is prepared by an Examiner
and then the application and examination report is forwarded to Examination Controller
for approval. Examination Controller evaluates the examination report, and if found
proper, approves it and thereafter the examination report is issued to applicant.
However, if some deficiency is noted by the Controller, the examination report is
reverted/referred back to the concerned Examiner with suggestions for
resubmission/re-examination.

At this stage, application may be accepted or an objection may be raised as per provisions
of the Trade Mark Act. In case it is accepted, it will be published in Trade Mark Journal,
else examination report will be issued to the applicant containing office objections which
needs to be replied by the applicant within 30 days from the date of receipt of
examination report.

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It is expected that examination should be done expeditiously and serially as per priority
based on the date of filing of application or if any compliances are required,
expeditiously and serially as per priority based the date of last compliance, if any.
C. Post Examination Processing:
(i) Consideration of Reply: After receipt of examination report, applicant needs to
submit his reply to the office objections within one month time and if he fails to do
so, the application is abandoned for want of reply.
a. If reply is submitted within the prescribed period, the same is considered by
the authorized officers for the purpose. Here also, the application is allotted
to the authorized officers through the Trade Mark system serially on the
basis of the date of filing of the response to the examination report. At this
stage, the authorized officer may accept application and the same is to be
published in the Trade Mark Journal. In other cases, where the office
objections cannot be waived or found not met, a hearing opportunity is offered
to the applicants in all those cases where a decision can adversely affect the
interest of the applicant, a hearing opportunity is given as per law.
b. It is expected that if reply is submitted against the office objections, the
same should be considered by the authorized officers expeditiously and
serially as per priority based the date of filing of response to the examination
report.
(ii) Show-cause hearing: In case the objection/s raised by the office are not met after
consideration of reply to the examination report, the application moves for show
cause hearing. In show cause hearing, the hearing notices are issued serially to the
applicant/ agent through the system and allotment of the cases to the Hearing
officers is also done by the TM system automatically.

The scheduling of applications for hearing should also be done serially based on the date
of consideration of reply by the authorized officer.

D. Post Advertisement Processing:

After the acceptance of the mark, trademark is published in Trade Mark Journal. If no
opposition is filed within four months from the date of publication of the trademark,
the published trademark becomes eligible for registration.

The issuance of registration certificate is done through automated Trade Mark system.
The certificate gets automatically issued if no opposition is filed within the prescribed
period or where the application has not already been withdrawn by the Registrar of
Trade Marks at the request of the applicant.

The Trade Mark once registered is valid for 10 years. The same can be renewed after
every 10 years for an indefinite period by paying the prescribed fee on the prescribed
form.

E. Opposition:

If the trademark is opposed by any third party after the publication, the same needs to
be disposed of as per rules after giving proper hearing opportunity to both the parties.
If the opposition is dismissed, the trade mark proceeds for registration and registration
certificate is issued to the applicant. In case opposition is allowed, the application gets
refused as per law.

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It is expected that if any application is opposed, the same should be disposed serially
based on the compliance or non-compliance by the party (i.e. Applicant or Opponent) as
per provisions of the Trade Marks Act and Rules.

Procedure for disposal of the Rectification proceedings shall be similar to the opposition
procedure subject to the provisions of the Trade Marks Act and Rules.

F. Post Registration Trade Mark Management

It is possible for the registered proprietor to record the post registration changes
pertaining to proprietor name, address, address for service, assignment or registered
user, etc. in the Register of Trade Marks by filing a request on the prescribed form,
with the prescribed fee. In case the concerned officer examining the request raises
some objections and requires some compliance on part of the applicant, the same should
be processed ordinarily within 30 days from the date of compliance by the applicant. It
is also a practice of Registry to send one month notice to previous registered proprietor
in case any change in proprietorship by way of assignment or transmission is filed by the
applicant. In this case, the request can be processed only after expiry of one month
notice period as mentioned above.

It is expected that the post registration request shall be examined and processed
serially based on the date of filing of the request and date of compliance of the
requirements, if any.

The renewal requests received by the Registry are processed through an automated TM
system serially based on the date of filing of the request.

What are the Benefits of Registering a Trademark?

The registration of a trademark confers upon the owner the exclusive right to the use the
trademark in relation to the goods or services in respect of which the mark is registered and
to indicate so by using the symbol (R), and seek the relief of infringement in appropriate
courts in the country. The exclusive right is however subject to any conditions entered on the
register such as limitation of area of use etc. Also, where two or more persons have registered
identical or nearly similar marks due to special circumstances, such exclusive right does not
operate against each other.

Absolute Grounds for Refusal of Registration

Section 9(1) of the Act containing provisions relating to absolute grounds for refusal for
registration prohibit the registration of those trademarks

a. which are devoid of any distinctive character, that is to say, not capable of distinguishing
the goods or services of one person from those of another person;
b. which consist exclusively of marks or indications which may serve in trade to designate
the kind, quality, quantity, intended purpose, values, geographical origin or the time of
production of the goods or rendering of the service or other characteristics of the
goods or service;
c. which consist exclusively of marks or indications which have become customary in the
current language or in the bona fide and established practices of the trade, shall not be
registered: Provided that a trade mark shall not be refused registration if before the
date of application for registration it has acquired a distinctive character as a result of
the use made of it or is a well-known trade mark.
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However, a trademark shall not be refused registration, if the mark has in fact acquired a
distinctive character as a result of use or is a well-known trade mark before the date of
application. In short, a trade mark which has been demonstrated to be distinctive in the
market place shall be regarded as distinctive in law as well and be registerable.

According to Section 9(2) the following trademark shall not be registered:

1. If the trademark tends to deceive the public or cause any confusion;

2. In any instance if the trademark hurts any religious sentiment of any demographic
section of Indian citizens;
3. It comprises or contains scandalous or obscene matter;
4. Its use is prohibited under the Emblems and Names (Prevention of Improper Use) Act,
1950.

Section 9(3) prohibits registration of a mark, if it consists exclusively of shape of goods

which result from the nature of the goods themselves or which is necessary to obtain a
technical result or which gives substantial value to the goods. It is, however, explained that
the nature of goods or services in relation to which the Trade Mark is used or proposed to
be used shall not be a ground for refusal of registration.

Limitation as to Colour
Section 10 provides that a trade mark may be limited wholly or in part to any combination of
colours and any such limitation shall be taken into consideration by the Registrar or the High
Court, as the case may be having to decide on the distinctive character of the trade mark.

So far as a trade mark is registered without limitation of colour, it shall be deemed to be

registered for all colours.

Relative Grounds for Refusal of Registration

Section 11(1) stipulates that a trade mark shall not be registered if, because of–

a. its identity with an earlier trade mark and similarity of goods or services covered by the
trade mark; or
b. its similarity to an earlier trade mark and the identity or similarity of the goods or
services covered by the trade mark, there exists a likelihood of confusion on the part
of the public, which includes the likelihood of association with the earlier trade mark.

Section 11 (2) states that a trade mark which (a) is identical with or similar to an earlier trade
mark; and (b) is to be registered for goods or services which are not similar to those for
which the earlier trade mark is registered in the name of a different proprietor, shall not be
registered if or to the extent the earlier trade mark is a well- known trade mark in India and
the use of the later mark without due cause would take unfair advantage of or be detrimental
to the distinctive character or repute of the earlier trade mark.

Section 11 (3) provides that a trade mark shall not be registered if, or to the extent that, its
use in India is liable to be prevented—

a. by virtue of any law in particular the law of passing off protecting an unregistered trade
mark used in the course of trade; or
b. by virtue of law of copyright.

Section 11(4) states that nothing in this section shall prevent the registration of a trade mark
where the proprietor of the earlier trade mark or other earlier right consents to the

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registration, and in such case the Registrar may register the mark under special
circumstances under section 12.

Earlier Trade Mark means–

a. a registered trade mark or an application under section 18 bearing an earlier date of
filing or an international registration referred to in section 36E or convention application
referred to in section 154 which has a date of application earlier than that of the trade
mark in question, taking account, where appropriate, of the priorities claimed in respect
of the trade marks.
b. a trade mark which, on the date of the application for registration of the trade mark in
question, or where appropriate, of the priority claimed in respect of the application, was
entitled to protection as a well-known trade mark.

As per Section 11 (6) of the Act, the Registrar shall, while determining whether a trade mark
is a well-known trade mark, take into account any fact which he considers relevant for
determining a trade mark as a well-known trade mark including–

a. the knowledge or recognition of that trade mark in the relevant section of the public
including knowledge in India obtained as a result of promotion of the trade mark;
b. the duration, extent and geographical area of any use of that trade mark;
c. the duration, extent and geographical area of any promotion of the trade mark, including
advertising or publicity and presentation, at fairs or exhibition of the goods or services
to which the trade mark applies;
d. the duration and geographical area of any registration of or any application for
registration of that trade mark under this Act to the extent that they reflect the use
or recognition of the trade mark;
e. the record of successful enforcement of the rights in that trade mark, in particular the
extent to which the trade mark has been recognised as a well-known trade mark by any
court or Registrar under that record.

Section 11(7) provides that the Registrar shall, while determining as to whether a trade mark
is known or recognised in a relevant section of the public for the purposes of sub-section (6),
take into account–

(i) the number of actual or potential consumers of the goods or services;

(ii) the number of persons involved in the channels of distribution of the goods or services;
(iii) the business circles dealing with the goods or services; to which that trade mark applies.

Where a trade mark has been determined to be well known in at least one relevant section of
the public in India by any court or Registrar, the Registrar shall consider that trade mark as
a well-known trade mark for registration under this Act.

The Registrar shall not require as a condition, for determining whether a trade mark is a well-
known trade mark, any of the following, namely: –

(i) that the trade mark has been used in India;

(ii) that the trade mark has been registered;
(iii) that the application for registration of the trade mark has been filed in India;
(iv) that the trade mark–
(a) is well-known in; or
(b) has been registered in; or

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(c)
in respect of which an application for registration has been filed in, any
jurisdiction other than India, or
(v) that the trade mark is well-known to the public at large in India.

While considering an application for registration of a trade mark and opposition filed in
respect thereof, the Registrar shall—

➢ protect a well-known trade mark against the identical or similar trademarks;

➢ take into consideration the bad faith involved either of the applicant or the opponent
affecting the right relating to the trade mark

Where a trade mark has been registered in good faith disclosing the material information to
the Registrar or where right to a trade mark has been acquired through use in good faith
before the commencement of this Act, then, nothing in this Act shall prejudice the validity
of the registration of that trade mark or right to use that trade mark on the ground that
such trade mark is identical with or similar to a well-known trade mark.

Prohibition of Registration of Names of Chemical Elements or International Non-

Proprietary Names
Section 13 states that no word (a) which is the commonly used and accepted name of any
single chemical element or any single chemical compound (as distinguished from a mixture) in
respect of a chemical substance or preparation, or (b) which is declared by the World Health
Organisation and notified in the prescribed manner by the Registrar from time to time, as an
international non-proprietary name or which is deceptively similar to such name, shall be
registered as a trade mark and any such registration shall be deemed for the purpose of
section 57 to be an entry made in the register without sufficient cause or an entry wrongly
remaining on the register, as the circumstances may require.

Use of Names and Representations of Living Persons or Persons Recently Dead

Where an application is made for the registration of a trade mark which falsely suggests a
connection with any living person, or a person whose death took place within twenty years
prior to the date of application for registration of the trade mark, the Registrar may, before
he proceeds with the application, require the applicant to furnish him with the consent in
writing of such living person or, as the case may be, of the legal representative of the
deceased person to the connection appearing on the trade mark, and may refuse to proceed
with the application unless the applicant furnishes the Registrar with such consent.

Withdrawal of Acceptance
Section 19 provides that where, after the acceptance of an application for registration of a
trade mark but before its registration, the Registrar is satisfied–

(a) that the application has been accepted in error; or

(b) that in the circumstances of the case the trade mark should not be registered or should
be registered subject to conditions or limitations or to conditions additional to or
different from the conditions or limitations subject to which the application has been
accepted, the Registrar may, after hearing the applicant if he so desires, withdraw the
acceptance and proceed as if the application had not been accepted.

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Advertisement of Application
According to Section 20, once the Registrar for registration has accepted the application, he
shall get the application advertised in the prescribed manner after acceptance. However, the
application shall be advertised before acceptance if the application is related to a trademark
to which Section 9(1) and Section 11(1) & (2) apply or in any other case as it seems expedient
to the Registrar. The purpose of advertisement is to give information to the public at large
in respect of the trademark advertised and afford an opportunity to oppose the registration
of the mark on given grounds. So the advertisement must be complete in all respects and
otherwise the very purpose of advertisement will be frustrated. If there is incomplete or
incorrect information in the advertisement, it would amount to misrepresentation, which
deprives a prospective opponent of the opportunity to get full information and of filing an
effective opposition.

Registration
Section 23 states that subject to the provisions of section 19, when an application for
registration of a trade mark has been accepted and either: -

(a) the application has not been opposed and the time for notice of opposition has expired;
or
(b) the application has been opposed and the opposition has been decided in favour of the
applicant, the Registrar shall, unless the Central Government otherwise directs, register
the said trade mark within eighteen months of the filing of the application and the trade
mark when registered shall be registered as of the date of the making of the said
application and that date shall, subject to the provisions of section 154, be deemed to
be the date of registration.

On the registration of a trade mark, the Registrar shall issue to the applicant a certificate
in the prescribed form of the registration thereof, sealed with the seal of the Trade Marks
Registry.

Where registration of a trade mark is not completed within twelve months from the date of
the application by reason of default on the part of the applicant, the Registrar may, after
giving notice to the applicant in the prescribed manner, treat the application as abandoned
unless it is completed within the time specified in that behalf in the notice.

The Registrar may amend the register or a certificate of registration for the purpose of
correcting a clerical error or an obvious mistake.

Duration, Renewal, Removal and Restoration of Registration

Section 25 of the Act deals with duration, renewal of registration, for removal and
restoration of registration. It allows registration of a trademark for a period of 10 years. In
keeping with the generally accepted international practice and to reduce the work-load of the
Trade Marks Office, Section 25 allows renewal of registration for successive periods of 10
years, from the date of the original registration or the last renewal. With a view to facilitate
renewal of registration, Section 25(4) provides for restoration of removed trade marks on
payment of renewal fee.

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Can a Registered Trademark be Removed from the Register?

It can be removed on application to the Registrar on prescribed form on the ground that the
mark is wrongly remaining on the register. The Registrar also can suo moto issue Notice for
removal of a registered trademark.

Infringement of Registered Trade Marks

A person shall be deemed to have infringed a registered trade mark, if he uses a mark which
is identical with or similar to the registered trade mark, and is used in relation to goods or
services which are not similar to those for which trademark is registered; and the registered
trade mark has a reputation in India and the use of the mark without due cause would take
unfair advantage of or is detrimental to the distinctive character or repute of the registered
trade mark.

Section 29 dealing with infringement of trademarks, explicitly enumerates the grounds which
constitute infringement of a trademark. Section 29(1) provides that a registered trade mark
is infringed by a person who, not being a registered proprietor or a person using by way of
permitted use, uses in the course of trade, a mark which is identical with, or deceptively
similar to, the trade mark in relation to goods or services in respect of which the trade mark
is registered and in such manner as to render the use of the mark likely to be taken as being
used as a trade mark.

As per section 29(2) of the Act, a registered trade mark is infringed by a person who, not
being a registered proprietor or a person using by way of permitted use, uses in the course
of trade, a mark which because of—

(a) its identity with the registered trade mark and the similarity of the goods or services
covered by such registered trade mark; or
(b) its similarity to the registered trade mark and the identity or similarity of the goods or
services covered by such registered trade mark; or
(c) its identity with the registered trade mark and the identity of the goods or services
covered by such registered trade mark, is likely to cause confusion on the part of the
public, or is likely to have an association with the registered trade mark.

Section 29(3) states that in any case falling under section 29(2)(c), the court shall presume
that it is likely to cause confusion on the part of the public.

Section 29(4) provides that a registered trade mark is infringed by a person who, not being
a registered proprietor or a person using by way of permitted use, uses in the course of trade,
a mark which—

(a) is identical with or similar to the registered trade mark; and

(b) is used in relation to goods or services which are not similar to those for which the trade
mark is registered; and
(c) the registered trade mark has a reputation in India and the use of the mark without due
cause takes unfair advantage of or is detrimental to, the distinctive character or repute
of the registered trade mark.

According to Section 29(5) of the Ac, a registered trade mark is infringed by a person if he
uses such registered trade mark, as his trade name or part of his trade name, or name of his
business concern or part of the name, of his business concern dealing in goods or services in
respect of which the trade mark is registered.
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Section 29(6) provides that a person uses a registered mark, if, in particular, he:-

(a) affixes it to goods or the packaging thereof;

(b) offers or exposes goods for sale, puts them on the market, or stocks them for those
purposes under the registered trade mark, or offers or supplies services under the
registered trade mark;
(c) imports or exports goods under the mark; or
(d) uses the registered trade mark on business papers or in advertising.

Section 29(7) states that a registered trade mark is infringed by a person who applies such
registered trade mark to a material intended to be used for labeling or packaging goods, as a
business paper, or for advertising goods or services, provided such person, when he applied
the mark, knew or had reason to believe that the application of the mark was not duly
authorised by the proprietor or a licensee.

As per Section 29(8) a registered trade mark is infringed by any advertising of that trade
mark if such advertising: -

(a) takes unfair advantage of and is contrary to honest practices in industrial or commercial
matters; or
(b) is detrimental to its distinctive character; or
(c) is against the reputation of the trade mark.

Section 29(9) provides that where the distinctive elements of a registered trade mark
consist of or include words, the trade mark may be infringed by the spoken use of those words
as well as by their visual representation and reference in this section to the use of a mark
shall be construed accordingly.

Limits on Effect of Registered Trade Mark

Section 30 enumerates certain acts which do not constitute infringement. This section
explicitly states that nothing in section 29 shall be construed as preventing the use of a
registered trade mark by any person for the purposes of identifying goods or services as
those of the proprietor provided the use—

(a) is in accordance with honest practices in industrial or commercial matters, and

(b) is not such as to take unfair advantage of or be detrimental to the distinctive character
or repute of the trade mark.

Section 30(2) states that a registered trade mark is not infringed where—

(a) the use in relation to goods or services indicates the kind, quality, quantity, intended
purpose, value, geographical origin, the time of production of goods or of rendering of
services or other characteristics of goods or services;
(b) a trade mark is registered subject to any conditions or limitations, the use of the trade
mark in any manner in relation to goods to be sold or otherwise traded in, in any place,
or in relation to goods to be exported to any market or in relation to services for use or
available for acceptance in any place or country outside India or in any other
circumstances, to which, having regard to those conditions or limitations, the
registration does not extend;
(c) the use by a person of a trade mark—
i. in relation to goods connected in the course of trade with the proprietor or a
registered user of the trade mark if, as to those goods or a bulk of which they

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form part, the registered proprietor or the registered user conforming to the
permitted use has applied the trade mark and has not subsequently removed or
obliterated it, or has at any time expressly or impliedly consented to the use of the
trade mark; or
ii. in relation to services to which the proprietor of such mark or of a registered user
conforming to the permitted use has applied the mark, where the purpose and
effect of the use of the mark is to indicate, in accordance with the fact, that those
services have been performed by the proprietor or a registered user of the mark;
(d) the use of a trade mark by a person in relation to goods adapted to form part of, or to
be accessory to, other goods or services in relation to which the trade mark has been
used without infringement of the right given by registration under this Act or might for
the time being be so used, if the use of the trade mark is reasonably necessary in order
to indicate that the goods or services are so adapted, and neither the purpose nor the
effect of the use of the trade mark is to indicate, otherwise than in accordance with
the fact, a connection in the course of trade between any person and the goods or
services, as the case may be;
(e) the use of a registered trade mark, being one of two or more trademarks registered
under this Act which are identical or nearly resemble each other, in exercise of the
right to the use of that trade mark given by registration under this Act.

As per Section 30(3) of the Act, where the goods bearing a registered trade mark are lawfully
acquired by a person, the sale of the goods in the market or otherwise dealing in those goods
by that person or by a person claiming under or through him is not infringement of a trade
mark by reason only of—

(a) the registered trade mark having been assigned by the registered proprietor to some
other person, after the acquisition of those goods; or
(b) the goods having been put on the market under the registered trade mark by the
proprietor or with his consent.

Section 30 (3) shall not apply where there exists legitimate reasons for the proprietor to
oppose further dealings in the goods in particular, where the condition of the goods, has been
changed or impaired after they have been put on the market.

PASSING OFF
Black’s Law Dictionary defines passing off as “the act or an instance falsely representing one’s
own product as that of another in an attempt to deceive potential buyers. Passing off is
actionable in tort under the law of unfair competition. It may be actionable as trademark
infringement”.

With the tremendous growth in trade and commerce, the competitors or other traders tend
to imitate the well- known or reputed trademarks by imitating colour scheme or get up or
packaging with a view to pass off such goods as goods of the genuine owner. In cases of
registered trademarks, the owner can move the court under this Act for the infringement
whereas in cases of the unregistered trademarks, the Act recognizes the Common Law
remedy of passing off. The tort of passing off is based upon the principle that “no man is
entitled to represent his goods as being the goods of another man; and no man is required to
use any mark, sign or symbol, device or means, whereby without making a direct representation

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himself to a purchaser who purchases from him, he enables such purchaser to tell a lie or to
make a false representation to somebody else who is the ultimate purchaser.”

The plaintiff, in an action of passing off, has to establish that his business or goods has
acquired the reputation and that his mark has become distinctive of his goods among the
public at large. He has to establish that there is likely hood of deception or confusion in the
minds of the public. He, however, does not have to establish the fraudulent intention on the
part of the defendant. Thirdly, he has to establish that confusion is likely to cause damage
or injury to the reputation, goodwill and fair name of the plaintiff. He need not prove the
actual loss or damage in an action of passing off.

In the case of Mahendra and Mahendra Paper Mills Ltd. vs. Mahindra and Mahindra Ltd. [AIR
2002 SC 117] Supreme Court broadly stated, in an action for passing off on the basis of
unregistered trade mark generally for deciding the question of deceptive similarity the
following factors are to be considered—

➢ The nature of the marks i.e. whether the marks are word marks or labels marks or
composite marks i.e. both words and label works.
➢ The degree of resembleness between the marks, phonetically similar and hence similar
in idea.
➢ The nature of the goods in respect of which they are used as trademarks.
➢ The similarity in nature, character and performance of the goods of the rival traders.
➢ Class of purchasers who are likely to buy the goods bearing the marks they require, on
their education and intelligence and a degree of care they are likely to exercise in
purchasing and /or using the goods.
➢ The mode of purchasing the goods or placing orders for the goods.
➢ Any other surrounding circumstances which may be relevant in the extant of
dissimilarity between the competing marks.
➢ Weightage to be given to each of the aforesaid factors depending upon facts of each
case and the same weightage cannot be given to each factor in every case.

Registration to be Prima Facie Evidence of Validity

Section 31 of the Act stipulates that in all legal proceedings relating to trade mark registered
under the Act, the original registration and all subsequent assignments and transmission
thereof shall be prima facie evidence of its validity. However, as per Section 34 the
proprietor or a registered user of a registered trademark is not entitled to interfere with
or restrain the use by any person of a trademark identical with or nearly resembling it in
relation to goods or services in relation to which that person or a predecessor in title of his
has continuously used that trade mark from a prior date.

Therefore, in case of unregistered marks, the owner of the trade mark may lodge a case
against passing off action in case his trademark is used by some other person. It has been
held by the courts in various cases and the ownership of a trademark is decided by its usage
in commercial transactions.

The Supreme Court in Uniply Industries Ltd. vs. Unicorn Plywood Pvt. Ltd. and Others
observed that:

i. for inherently distinctive marks ownership is governed by priority of use for such marks.
The first user of sale of goods/services is the owner who is senior to others.

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ii. These marks are given legal protection against infringement immediately upon adoption
and use in trade.
iii. Some courts indicate that even prior sales of goods – though small in size with the mark
– are sufficient to establish priority, the test being to determine continuous prior user
and the volume of sale or the degree of familiarity of the public with the mark.

Therefore, the proprietorship of the trademark is decided by the date of usage of the mark
by a person in business transactions.

Assignment and Transmission

Section 37 entitles the registered proprietor of a trademark to assign the trade mark and
to give effectual receipts for any consideration for such assignment. Section 38 deals with
the assignability and transmissibility of a registered trade mark with or without goodwill of
the business either in respect of all goods or services or part thereof. Section 39 provides
that unregistered trade mark may be assigned or transmitted with or without the goodwill of
the business concerned.

Section 40 contains restriction on assignments or transmissions of trade mark where multiple

exclusive rights would be created in more than one person in relation to same goods or
services; same description of goods or services; goods or services or description of goods or
services which are associated with each other, which would be likely to deceive or cause
confusion. Nevertheless, such assignment is not deemed to be invalid, if having regard to the
limitations imposed, the goods are to be sold in different markets - either within India or
through exports.

Section 42 stipulates conditions for assignment of a trade mark without goodwill of business.
Such an assignment shall not take effect unless the assignor obtains directions of the
Registrar and advertises the assignment in accordance with the directions of the Registrar
and as per the prescribed manner.

Section 43 deals with the assignability and transmissibility of certification trade marks and
provides that the assignment of certification trade mark can only be done only with the
consent of the Registrar. Section 44 states that associated trademarks shall be assignable
and transmissible only as a whole but they will be treated as separate trade marks for all
other purposes. Section 45 deals with the procedure for registration of assignment and
transmission and provides that where the validity of an assignment is in dispute between the
parties, the Registrar may refuse to register the assignment or transmission unless the rights
of parties are determined by the competent court.

Proposed Use of Trade Mark by Company to be Formed

Section 46 empowers the Registrar to allow registration of a trademark, if he is satisfied
that–

i. a company is about to be formed and registered under the Companies Act and that the
applicant intends to assign the trademark to that company with a view to use thereof in
relation to those goods and services by the company; or
ii. the proprietor intends it to be used by a person, as a registered user after the
registration of trademark.

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Removal of Trade Mark for Non-use

Section 47 deals with removal of a trade mark from the register on the ground of non-use
and provides that a trade mark which is not used within five years of its registration, becomes
liable for removal either completely or in respect of those goods or services for which the
mark has not been used. The five years period starts from the date on which the trade mark
is actually entered on the register. However, Section 47(3) protects a mark from being
removed from the register on ground of non-use if such non-use is shown to have been due to
special circumstances in the trade which may include restriction imposed by any law or
regulation on the use of trade mark in India.

Registered User
Section 48 deals with registered users. Section 49 provides for registration as registered
user. Section 50 deals with the power of the Registrar to vary or cancel registration as
registered user on the ground that the registered user has used the trade mark otherwise
than in accordance with the agreement or in such a way as to cause or likely to cause confusion,
or deception or the proprietor/registered user misrepresented or has failed to disclose any
material facts for such registration or the stipulation in the agreement regarding the quality
of goods is not enforced or the circumstances have changed since the date of registration,
etc. However, Registrar has been put under obligation to give reasonable opportunity of
hearing before cancellation of registration.

In view of the simplification of the procedure for registration of registered user and to
ascertain whether the registered user agreement is in force, Section 51 empowers the
Registrar to require the proprietor to confirm at any time during the continuation of
registration as registered user, whether the agreement, on the basis of which registered
user was registered is still in force, and if such confirmation is not received within a period
of one month, the Registrar shall remove the entry thereof from the Register in the
prescribed manner. Section 52 recognises the right of registered user to take proceedings
against infringement. Section 54 provides that the registered user will not have a right of
assignment or transmission. However, it is clarified that where an individual registered user
enters into partnership or remains in a reconstituted firm, the use of the mark by the firm
would not amount to assignment or transmission.

Collective Marks
Collective Marks means a trades mark distinguish the goods or services of members of an
association of person not being a partnership within the meaning of the Indian Partnership
Act, 1932 which is the proprietor of the mark from those of others.

Sections 61 to 68 contain provisions relating to the registration of Collective trade marks.

These sections provide for registration of a collective mark which belongs to a group or
association of persons and the use thereof is reserved for members of the group or
association of persons. Collective marks serve to distinguish characteristic features of the
products or services offered by those enterprises. It may be owned by an association which
may not use the collective mark but whose members may use the same. The association
ensures compliance of certain quality standards by its members, who may use the collective
mark if they comply with the prescribed requirements concerning its use. The primary

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function of a collective mark is to indicate a trade connection with the Association or

Organisation.

Certification Trade Marks

Certification trade mark as to mean a mark capable of distinguishing the goods or services in
connection with which it is used in the course of trade which are certified by the proprietor
of the mark in respect of origin, material, mode of manufacture of goods or performance of
services, quality, accuracy or other characteristics from goods or services not so certified
and registerable as such in respect of those goods or services in the name, as proprietor of
the certification trade mark, of that person.

Sections 69 to 78 deal with registration of certification trade mark. The purpose of

certification trade mark is to show that the goods on which the mark is used have been
certified by some competent person in respect of certain characteristics of the goods such
as origin, mode of manufacture, quality, etc. The proprietor of a certification trade mark does
not himself deal in the goods. A certification trade mark may be used in addition to the users
own trade mark on his goods. Central Government empower the final authority for registration
of certification trade mark to the Registrar.

Appointment of Registrar and Trade Mark Registry

Section 3 provides for appointment of the Registrar and other officers and Section 4
empowers the Registrar to withdraw any matter pending before an officer and deal with such
matter himself or transfer it to another officer with reasons for such transfer to be
recorded therein. Section 5 deals with the establishment of the Trade Marks Registry and
branch offices and provides that the Trade Marks Registry established under the Trade and
Merchandise Marks Act, 1958 shall continue to be the Trade Marks Registry for the purposes
of this Act.

Register of Trade Marks

Section 6 contains provisions relating to maintenance of a single Register of Trade Marks at
Head Office including therein particulars of registered trademarks and other prescribed
particulars, except notice of trust. A copy of the Register is to be kept at each branch office.
Sub-section (2) allows the maintenance of records in computer floppies or diskettes or in any
other electronic form subject to the prescribed safeguards.

What does the Register of Trademark Contain?

The register of trademark currently maintained in electronic form contains inter alia the
trademark the class and goods/ services in respect of which it is registered including
particulars affecting the scope of registration of rights conferred; the address of the
proprietors; particulars of trade or other description of the proprietor; the convention
application date (if applicable); where a trademark has been registered with the consent of
proprietor of an earlier mark or earlier rights, that fact.

Classification of Goods and Services and Publication of Index

Section 7 empowers the Registrar to classify goods and services according to international
classification of goods and services and to determine any question related thereto. Section 8
requires the Registrar to publish an alphabetical index of classification of goods and services.

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According to Rule 20 of the Trade Marks Rules, 2017, classification of goods and service for
the purpose of registration of trademark, the goods and services shall be classified as per
current edition of “the International Classification of goods and services (NICE
classification)” published by the World Intellectual Property Organization (WIPO). The
Registrar shall publish a class wise and an alphabetical index of such goods and services,
including goods and services of Indian origin.

Trade Mark Agent

Section 145 deals with agents and provide that Where, by or under the Trade Marks Act, any
act, other than the making of an affidavit, is required to be done before the Registrar by any
person, the act may, subject to the rules made in this behalf, be done instead of by that
person himself, by a person duly authorised in the prescribed manner, who is–

(a) a legal practitioner, or

(b) a person registered in the prescribed manner as a trade marks agent, or
(c) a person in the sole and regular employment of the principal.

Qualifications for Registration

Rule 144 of the Trade Marks Rule states that subject to the provisions of Rule 145, a person
shall be qualified to be registered as a trademarks agent if he—

(i) is a citizen of India,

(ii) is not less than 21 years of age;
(iii) is a graduate of any university in India or possesses an equivalent qualification and has
passed the examination prescribed in rule 148 or is an Advocate within the meaning of
the Advocates Act, 1961 or is a member of the Institute of Company Secretaries of
India;
(iv) is considered by the Registrar as a fit and proper person to be registered as a trademark
agent

Manner of Making Application for Trademarks Agent

All applications under the provisions of Part IV of the Trade Marks Rules, 2017 shall be made
in duplicate and shall be sent to or submitted at that office of the Trade Marks Registry
within whose territorial limits the principal place of business of the applicant is situate.

Application for Registration as a Trademarks Agent

Every person desiring to be registered as a trademarks agent shall make an application in
Form TM-G. The applicant shall furnish such further information bearing on his application as
may be required of him at any time by the Registrar.

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LAW RELATING TO COPYRIGHT

REGULATORY FRAMEWORK
• The Copyright Act, 1957
• The Copyright Rules, 2013

The Copyright Act, 1957 protects original literary, dramatic, musical and artistic works and
cinematograph films and sound recordings from unauthorized uses. Under Article 9.2 of the
TRIPS Agreements, copyright protects the expressions and not the ideas. There is no
copyright protection for ideas, procedures, and methods of operation or mathematical
concepts as such.

INTRODUCTION
Copyright is a well recognised form of property right which had its roots in the common law
system and subsequently came to be governed by the national laws in each country. Copyright
as the name suggests arose as an exclusive right of the author to copy the literature produced
by him and stop others from doing so. There are well-known instances of legal intervention to
punish a person for copying literary or aesthetic output of another even before the concept
of copyright took shape. The concept of idea was originally concerned with the field of
literature and arts. In view of technological advancements in recent times, copyright
protection has been expanded considerably. Today, copyright law has extended protection
not only to literary, dramatic, musical and artistic works but also sound recordings, films,
broadcasts, cable programmes and typographical arrangements of publications. Computer
programs have also been brought within the purview of copyright law.

Copyright deals with the rights of intellectual creators in their creation. The copyright law
deals with the particular forms of creativity, concerned primarily with mass communication.
It is also concerned with virtually all forms and methods of public communication, not only
printed publications but also with such matters as sound, and television broadcasting, films
for public exhibition etc. and even computerised systems for the storage and retrieval of
information.

In India, the law relating to copyright is governed by the Copyright Act, 1957 which has been
amended in 1983, 1984, 1985, 1991, 1992, 1994, 1999 and 2012 and 2021. The copyright law
aims to endorse exclusive forms of artistic works at the same time safeguarding the rights
of its inventor. The scope of the law extends as far as literary, music, software, graphics,
choreography, movies and likewise is concerned. These categories are further sub-
categorised into books, documentaries, painting, articles and likewise, which aim in promoting
work and not ideas. It is to be noted that the work of the creator is protected by the
copyright law irrespective of its content or quality. Although the registration of the work is
not a mandate, nevertheless it is always advisable to register the work the moment it is put
to force.

What is Copyright?
Copyright (or author’s right) is a legal term used to describe the rights that creators have
over their literary and artistic works. Works covered by copyright range from books, music,

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paintings, sculpture, and films, to computer programs, databases, advertisements, maps, and
technical drawings.

The object of copyright is to protect and reward the general advantages i.e. the authors’
labour on the created work. This helps the writers to constantly produce and carry out more
plays. It is important to note that in a given work, copyright law protects the “type of material
communication,” not the individual concepts, ideas, techniques or details. That is the reason
why work has to be set in a physical form to be covered by copyright. A few examples of
works being tangibly set to include stories written on paper and initial canvas paintings. The
forms of work protected by copyright laws include, among other items, song lyrics, books,
playbacks, images, computer programs, and emails. Though, you can’t copyright stuff like
ideas, titles, names, details etc. Publishing is important for businesses because it only gives
the author of the work exclusive rights to replicate their works, create derivative works,
distribute and sell any copies of the work, show and publicly perform copyrighted works. You
may grant certain rights as a package or separately. This also helps owners to produce income
if any other individual opts for reproducing the job.

Why should Copyright be Protected?

Copyright ensures certain minimum safeguards of the rights of authors over their creations,
thereby protecting and rewarding creativity. Creativity being the keystone of progress, no
civilized society can afford to ignore the basic requirement of encouraging the same.
Economic and social development of a society is dependent on creativity. The protection
provided by copyright to the efforts of writers, artists, designers, dramatists, musicians,
architects and producers of sound recordings, cinematograph films and computer software,
creates an atmosphere conducive to creativity, which induces them to create more and
motivates others to create.

The Copyright Act provides an economic right to the author to reproduce the work, to issue
copies, to perform or communicate it to the public, to make any cinematograph film or sound
recording or to make any adaptation or translation of the work. The Act also provides a right
to claim authorship of the work; an integrity right- right to protect one’s honor and reputation
and a general right- right to not have a work falsely attributed to oneself. These moral rights
remain with the author even after assignment of the copyright.

It may be noted that:

“Adaptation” means -

(i) in relation to a dramatic work, the conversion of the work into a non-dramatic work;
(ii) in relation to a literary work or an artistic work, the conversion of the work into a
dramatic work by way of performance in public or otherwise;
(iii) in relation to a literary or dramatic work, any abridgement of the work or any version
of the work in which the story or action is conveyed wholly or mainly by means of
pictures in a form suitable for reproduction in a book, or in a newspaper, magazine or
similar periodical;
(iv) in relation to a musical work, any arrangement or transcription of the work; and
(v) in relation to any work, any use of such work involving its re-arrangement or alteration.

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“Communication to the public” means making any work or performance available for being
seen or heard or otherwise enjoyed by the public directly or by any means of display or
diffusion other than by issuing physical copies of it, whether simultaneously or at places and
times chosen individually, regardless of whether any member of the public actually sees, hears
or otherwise enjoys the work or performance so made available. However, communication
through satellite or cable or any other means of simultaneous communication to more than
one household or place of residence including residential rooms of any hotel or hostel shall be
deemed to be communication to the public.

“Sound recording” means a recording of sounds from which such sounds may be produced
regardless of the medium on which such recording is made or the method by which the sounds
are produced.

“Author” means -

(i) in relation to a literary or dramatic work, the author of the work;

(ii) in relation to a musical work, the composer;
(iii) in relation to an artistic work other than a photograph, the artist;
(iv) in relation to a photograph, the person taking the photograph;
(v) in relation to a cinematograph or sound recording the producer; and
(vi) in relation to any literary, dramatic, musical or artistic work which is computer-
generated, the person who causes the work to be created;

Works in which Copyright Subsists

Section 13(1) of the Act provides that copyright shall subsist throughout India in the
following classes of works, that is to say —

(a) original literary, dramatic, musical and artistic works;

(b) cinematograph films; and
(c) sound recording.

Section 13 (2) states that copyright shall not subsist in any work specified in sub-section (1),
other than a work to which the provisions of Section 40 (deals with power to extend copyright
to foreign works) or section 41 (deals with provisions as to works of certain international
organisations) apply, unless—

(i) in the case of a published work, the work is first published in India, or where the work
is first published outside India, the author is at the date of such publication, or in a
case where the author was dead at that date, was at the time of his death, a citizen
of India;
(ii) in the case of an unpublished work other than a work of architecture, the author is
at the date of making of the work a citizen of India or domiciled in India; and
(iii) in the case of a work of architecture the work is located in India.

It may be noted that in the case of a work of joint authorship, the conditions conferring
copyright specified in this sub-section shall be satisfied by all the authors of the work.

According to Section 13 (3) Copyright shall not subsist—

a. in any cinematograph film if a substantial part of the film is an infringement of the

copyright in any other work;

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b. in any sound recording made in respect of a literary, dramatic or musical work, if in

making the sound recording, copyright in such work has been infringed.

The copyright in a cinematograph film or a record shall not affect the separate copyright in
any work in respect of which or a substantial part of which, the film, or, as the case may be,
the sound recording is made.

In the case of a work of architecture, copyright shall subsist only in the artistic character
and design and shall not extend to processes or methods of construction.

It may be noted that ‘work’ means any of the following works, namely: -

• a literary, dramatic, musical or artistic work;

• a cinematograph film;
• a sound recording.

MEANING OF COPYRIGHT
Copyright is an intellectual property right that law gives to a creator of literary, dramatic,
musical, and artistic work and a producer of cinematograph films and sound recordings. It also
applies to architectural works and computer program/software. It can be understood as a
bundle of rights that include the right of reproduction, communication, adaptation, and
translation of the work. Copyright ensures protection to the rights of authors over their
creations and in turn aims at rewarding creativity.

Section 14 of the Act defines the term Copyright as to mean the exclusive right to do or
authorise the doing of the following acts in respect of a work or any substantial part thereof,
namely:

a) Copyright in the case of a Literary, Dramatic or Musical Work, not being a

Computer Programme
i. to reproduce the work in any material form including the storing of it in any
medium by electronic means;
ii. to issue copies of the work to the public not being copies already in circulation;
iii. to perform the work in public, or communicate it to the public;
iv. to make any cinematograph film or sound recording in respect of the work;
v. to make any translation of the work;
vi. to make any adaptation of the work;
vii. to do, in relation to a translation or an adaptation of the work, any of the acts
specified in relation to the work in sub-clauses (i) to (vi).
b) Copyright in the case of a Computer Programme
i. to do any of the acts specified in specified in respect of a literary, dramatic
or musical work;
ii. to sell or give on commercial rental or offer for sale or for commercial rental
any copy of the computer programmer:

Provided that such commercial rental does not apply in respect of computer
programmes where the programme itself is not the essential object of the
rental.

c) Copyright in the case of an Artistic Work

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To reproduce the work in any material form including—

i. the storing of it in any medium by electronic or other means; or

ii. depiction in three-dimensions of a two-dimensional work; or
iii. depiction in two-dimensions of a three-dimensional work.
d) Copyright in the case of a Cinematograph Film
i. to make a copy of the film, including—
a) a photograph of any image forming part thereof; or
b) storing of it in any medium by electronic or other means.

ii. to sell or give on commercial rental or offer for sale or for such rental, any
copy of the film.
iii. to communicate the film to the public.
e) Copyright in the case of a Sound Recording
i. to make any other sound recording embodying it including storing of it in any
medium by electronic or other means;
ii. to sell or give on commercial rental or offer for sale or for such rental, any
copy of the sound recording;
iii. to communicate the sound recording to the public.
It may be noted that a copy which has been sold once shall be deemed to be a copy
already in circulation.

It may be noted that “commercial rental” does not include the rental, lease or lending of a
lawfully acquired copy of a computer programme, sound recording, visual recording or
cinematograph film for non-profit purposes by a non-profit library or non-profit educational
institution.

However, a “non-profit library or nonprofit educational institution” means a library or

educational institution which receives grants from the Government or exempted from
payment of tax under the Income-Tax Act, 1961.

In the case of Gramophone Company of India Ltd. vs. Super Cassette Industries Ltd. 2010
(Del) - Infringement of original literary, dramatic and musical works. Whether action of the
Defendant in using its sound recording to produce a cinematograph film constitutes
infringement of the Plaintiffs copyright in the original literary, dramatic and musical works.
Copyright conferred on the owner of a copyright in a sound recording by virtue of Section
14(e) does not specifically include the right to make a cinematograph film embodying the
sound recording. It gives the owner exclusive right to make any other sound recording
embodying it. Right to utilise the literary, dramatic or musical work to make a cinematograph
film is specifically conferred on the owner of the copyright in the literary, dramatic or musical
work by virtue of Section 14(a)(iv) of the Act. Without the specific permission of the owners
of the copyright in the musical, dramatic, or literary works from which the sound recording
was made, the owner of the copyright in a sound recording cannot proceed with incorporating
the sound recording or version recording in a cinematograph film.

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TERM OF COPYRIGHT
Copyright ensures certain minimum safeguards of the rights of authors over their creations,
thereby protecting and rewarding creativity. Creativity being the keystone of progress, no
civilized society can afford to ignore the basic requirement of encouraging the same.
Economic and social development of a society is dependent on creativity. The protection
provided by copyright to the efforts of writers, artists, designers, dramatists, musicians,
architects and producers of sound recordings, cinematograph films and computer software,
creates an atmosphere conducive to creativity, which induces them to create more and
motivates others to create.

Sections 22-29 deal with Term of Copyright in respect of Published Literary, Dramatic,
Musical and Artistic Works; Anonymous and Pseudonymous; Posthumous, Photographs,
Cinematograph Films, Sound Recording, Government Works, Works of PSUs and Works of
International Organisations.

Term of Copyright Number of Years

Term of Copyright in Published Copyright shall subsist in any literary, dramatic, musical
Literary, Dramatic, Musical and or artistic work published within the lifetime of the
Artistic Works author until sixty years from the beginning of the
calendar year next following the year in which the
author dies.

In the case of a work of joint authorship, be construed

as a reference to the author who dies last.

Term of Copyright in Anonymous In the case of literary, dramatic, musical or artistic

and Pseudonymous Works work (other than a photograph), which is published
anonymously or pseudonymously, copyright shall subsist
until sixty years from the beginning of the calendar year
next following the year in which the work is first
published.

Provided that where the identity of the author is

disclosed before the expiry of the said period,
copyright shall subsist until sixty years from the
beginning of the calendar year next following the year
in which the author dies.

Term of Copyright in Posthumous In the case of a literary, dramatic or musical work or an

Work engraving, in which copyright subsists at the date of the
death of the author or, in the case of any such work of
joint authorship, at or immediately before the date of
the death of the author who dies last, but which, or any
adaptation of which, has not been published before that
date, copyright shall subsist until sixty years from the
beginning of the calendar year next following the year
in which the work is first published or, where an

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adaptation of the work is published in any earlier year,

from the beginning of the calendar year next following
that year.

A literary, dramatic or musical work or an adaptation of

any such work shall be deemed to have been published,
if it has been performed in public or if any sound
recordings made in respect of the work have been sold
to the public or have been offered for sale to the public.

Term of Copyright in In the case of a cinematograph film, copyright shall

Cinematograph Films subsists until sixty years from the beginning of the
calendar year next following the year in which the film
is published.

Term of Copyright in Sound In the case a sound recording copyright shall subsist
Recording until sixty years from the beginning of the calendar year
next following the year in which the sound recording is
published.

Term of Copyright Government In the case of Government work, where Government is

Works the first owner of the copyright therein, copyright shall
subsist until sixty years from the beginning of the
calendar year next following the year in which the work
is first published.

Term of Copyright in Works Of In the case of a work, where a public undertaking is the
Public Undertakings first owner of the copyright therein, copyright shall
subsist until sixty years from the beginning of the
calendar year next following the year in which the work
is first published.

Term of Copyright in Works of In the case of a work of an international organisation to

International Organizations which the provisions of section 41 apply, copyright shall
subsist until sixty years from the beginning of the
calendar year next following the year in which the work
is first published.

It may be noted that:

The © symbol stands for copyright
ASSIGNMENT OF COPYRIGHT
Section 18 of the Copyright Act provides that the owner of the copyright in an existing work
or the prospective owner of the copyright in a future work may assign to any person the
copyright either wholly or partially and either generally or subject to limitations and either
for the whole term of the copyright or any part thereof.

However, in case of the assignment of copyright in any future work, the assignment shall take
effect only when the work comes into existence. No such assignment shall be applied to any
medium or mode of exploitation of the work which did not exist or was not in commercial use
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at the time when the assignment was made, unless the assignment specifically referred to
such medium or mode of exploitation of the work.

However, the author of the literary or musical work included in a cinematograph film shall not
assign or waive the right to receive royalties to be shared on an equal basis with the assignee
of copyright for the utilization of such work in any form other than for the communication to
the public of the work along with the cinematograph film in a cinema hall, except to the legal
heirs of the authors or to a copy right society for collection and distribution and any
agreement to contrary shall be void.

The author of the literary or musical work included in the sound recording but not forming
part of any cinematograph film shall not assign or waive the right to receive royalties to be
shared on an equal basis with the assignee of copyright for any utilization of such work except
to the legal heirs of the authors or to a collecting society for collection and distribution and
any assignment to the contrary shall be void. It may be noted that assignee in respects the
assignment of the copyright in any future work includes the legal representatives of the
assignee, if the assignee dies before the work comes into existence.

In Video Master vs. Nishi Production 1998(3) Bom. CR 782, judgement dated 21 October,
1997, Hon’ble Bombay High Court considered the issue whether assignment of video rights
would include the right of satellite broadcast as well. The Court agreed with the defendant’s
arguments that there were several public communication channels, including video TV, satellite
broadcasting, and terrestrial television broadcasting. The film’s owner owned independent
copyright in each of those formats, and he could assign it to various people. As a result, the
video copyright granted to the plaintiff would exclude the satellite broadcast copyright of
the film, which was a separate entitlement of the owner of the film.

Mode of Assignment
Section 19 of the Act provides that an assignment of the copyright in any work should be in
writing signed by the assignor or by his duly authorised agent. The assignment of copyright
in any work required to identify such work, and also specify the rights assigned; the duration;
territorial extent of such assignment; the amount of royalty and any other consideration
payable to the author or his legal heirs during the currency of the assignment and the
assignment subject to revision, extension or termination on terms mutually agreed upon by
the parties.

Where the assignee does not exercise the rights assigned to him under any of the other sub-
sections of this section within a period of one year from the date of assignment, the
assignment in respect of such rights shall be deemed to have lapsed after the expiry of the
said period unless otherwise specified in the assignment.

The assignment of copyright in any work contrary to the terms and conditions of the rights
already assigned to a copyright society in which the author of the work is a member is void.
The Assignment of copyright in any work to make a cinematograph film does not affect the
right of the author of the work to claim an equal share of royalties and consideration payable
in case of utilization of the work in any form other than for the communication to the public
of the work, along with the cinematograph film in a cinema hall.

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In the case of K.A. Venugopala Setty vs. Dr. Suryakanta V. Kamath 1992 (12) PTC 55 (DB)
(Kar) Assignment setup by the defendant is an oral assignment. Under the provisions
contained in section 19 of the Act, assignment of copyright must be in writing and signed by
the author or his duly authorized agent stating in clear terms about the right proposed to be
assigned as well as the size of the work. Hence, an oral assignment is invalid and it is
impermissible in law.

The Hon’ble Court ruled that Section 19A of the Act, which deals with copyright disputes,
will only be applicable when a copyright assignment is made in compliance with Section 19 of
the Act, which means it is in written and signed by the assignor or his properly authorised
agent. Therefore, provision 19A cannot be considered to apply in the current instance and
preclude the lawsuit because there isn’t an assignment in writing as required by section 19 of
the Act.

Disputes with respect to Assignment of Copyright

Section 19A(1) provides that if an assignee fails to make sufficient exercise of the rights
assigned to him, and such failure is not attributable to any act or omission of the assignor,
then, the Commercial Court may, on receipt of a complaint from the assignor and after holding
such inquiry as it may deem necessary, revoke such assignment.

According to Section 19A(2) If any dispute arises with respect to the assignment of any
copyright, the Commercial Court may, on receipt of a complaint from the aggrieved party and
after holding such inquiry as it considers necessary, pass such order as it may deem fit
including an order for the recovery of any royalty payable:

It may be noted that Commercial Court for the purposes of any State, means a Commercial
Court constituted under section 3, or the Commercial Division of a High Court constituted
section 4, of the Commercial Courts Act, 2015.

Provided that the Commercial Court shall not pass any order under this sub-section to revoke
the assignment unless it is satisfied that the terms of assignment are harsh to the assignor
in case the assignor is also the author:

Provided further that, pending the disposal of an application for revocation of assignment
under this sub- section, the Commercial Court may pass such order, as it deems fit regarding
implementation of the terms and conditions of assignment including any consideration to be
paid for the enjoyment of the rights assigned:—

Provided also that, no order of revocation of assignment under this sub-section, shall be made
within a period of five years from the date of such assignment.

Every complaint received under Section 19A(2) shall be dealt with by the Commercial Court
as far as possible and efforts shall be made to pass the final order in the matter within a
period of six months from the date of receipt of the complaint and any delay in compliance
of the same, the Commercial Court shall record the reasons thereof.

LICENCES
Chapter VI containing Sections 30-32B deal with licences. Section 30 deals with licences by
owners of copyright; Section 30A contains provisions regarding application of Sections 19 and
19A; section 31 provides for compulsory licence in works withheld from public; Section 31A
deals with compulsory licences in unpublished Indian works; Section 31B deals with Compulsory
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Licence for the benefit of disabled; Section 31C deals with statutory licence for cover
versions; Section 31D deals with statutory licence for broadcasting of literary and musical
works and sound recording; Section 32 deals with licences to produce and publish translations;
Section 32A provides for licence to reproduce and publish works for certain purposes; and
Section 32B deals with termination of licences

Licences by Owners of Copyright

The author or the copyright owner has exclusive rights in his creative work and he alone has
right to grant license with respect to such work. Section 30 of the Act empowers the owner
of the copyright in any existing work or the prospective owner of the copyright in any future
work to grant any interest in the right by licence in writing by him or by his duly authorised
agent. However, in the case of a licence relating to copyright in any future work, the licence
shall take effect only when the work comes into existence.

Explanation to this section clarifies that where a person to whom a licence relating to
copyright in any future work is granted, dies before the work comes into existence, his legal
representatives shall, in the absence of any provision to the contrary in the licence, be
entitled to the benefit of the licence.

Compulsory Licence in Works withheld From Public

According to Section 31 of the Act, if at any time during the term of copyright in any work]
which has been published or performed in public, a complaint is made to the Commercial Court
that the owner of copyright in the work—

(a) has refused to republish or allow the republication of the work or has refused to allow
the performance in public of the work, and by reason of such refusal the work is
withheld from the public; or
(b) has refused to allow communication to the public by broadcast of such work or in the
case of a sound recording the work recorded in such sound recording, on terms which
the complainant considers reasonable;

the Commercial Court, after giving to the owner of the copyright in the work a reasonable
opportunity of being heard and after holding such inquiry as it may deem necessary, may, if
it is satisfied that the grounds for such refusal are not reasonable, direct the Registrar of
Copyrights to grant to the complainant a licence to republish the work, perform the work in
public or communicate the work to the public by broadcast, as the case may be, subject to
payment to the owner of the copyright of such compensation and subject to such other terms
and conditions as the Commercial Court may determine; and thereupon the Registrar of
Copyrights shall grant the licence to such person or persons who, in the opinion of the
Commercial Court, is or are qualified to do so in accordance with the directions of the
Commercial Court, on payment of such fee as may be prescribed.

Compulsory Licence in Unpublished or Published Works

Section 31A provides that where, in the case of any unpublished work or any work published
or communicated to the public and the work is withheld from the public in India, the author
is dead or unknown or cannot be traced, or the owner of the copyright in such work cannot be
found, any person may apply to the Commercial Court for a licence to publish or communicate
to the public such work or a translation thereof in any language.

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Before making an application, the applicant shall publish his proposal in one issue of a daily
newspaper in the English language having circulation in the major part of the country and
where the application is for the publication of a translation in any language, also in one issue
of any daily newspaper in that language.

Every such application shall be made in such form as may be prescribed and shall be
accompanied with a copy of the advertisement issued above and such fee as may be
prescribed.

Where an application is made to the Commercial Court under this section, it may after holding
such inquiry as may be prescribed, direct the Registrar of Copyrights to grant to the applicant
a licence to publish the work or a translation thereof in the language mentioned in the
application subject to the payment of such royalty and subject to such other terms and
conditions as the Commercial Court may determine, and thereupon the Registrar of Copyrights
shall grant the licence to the applicant in accordance with the direction of the Commercial
Court.

Where a licence is granted under this section, the Registrar of Copyrights may, by order,
direct the applicant to deposit the amount of the royalty determined by the Commercial Court
in the public account of India or in any other account specified by the Commercial Court so
as to enable the owner of the copyright or, as the case may be, his heirs, executors or the
legal representatives to claim such royalty at any time.

If the original author is dead, the Central Government may, if it considers that the publication
of the work is desirable in the national interest, require the heirs, executors or legal
representatives of the author to publish such work within such period as may be specified by
it.

Where any work is not published within the period specified by the Central Government
Commercial Court may, on an application made by any person for permission to publish the
work and after hearing the parties concerned, permit such publication on payment of such
royalty as the Commercial Court may, in the circumstances of such case, determine in the
prescribed manner.

Statutory Licence for Broadcasting of Literary and Musical Works and Sound
Recording
According to Section 31D of the Act, any broadcasting organisation desirous of
communicating to the public by way of a broadcast or by way of performance of a literary or
musical work and sound recording which has already been published may do so, subject to the
provisions of this section.

The broadcasting organisation shall give prior notice, in such manner as may be prescribed, of
its intention to broadcast the work stating the duration and territorial coverage of the
broadcast, and shall pay to the owner of rights in each work royalties in the manner and at
the rate fixed by the Commercial Court.

The rates of royalties for radio broadcasting shall be different from television broadcasting
and the Commercial Court shall fix separate rates for radio broadcasting and television
broadcasting.

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In fixing the manner and the rate of royalty the Commercial Court may require the
broadcasting organisation to pay an advance to the owners of rights.

The names of the authors of the principal performers of the work shall, except in case of the
broadcasting organisation communicating such work by way of performance, be announced
with the broadcast.

No fresh alteration to any literary or musical work, which is not technically necessary for the
purpose of broadcasting, other than shortening the work for convenience of broadcast, shall
be made without the consent of the owners of rights.

The broadcasting organisation shall—

(a) maintain such records and books of account, and render to the owners of rights such
reports and accounts; and
(b) allow the owner of rights or his duly authorised agent or representative to inspect all
records and books of account relating to such broadcast, in such manner as may be
prescribed

Termination of Licence
Section 32B of the Act deals with termination of licences and provides that if at any time
after the granting of a licence, the owner of the copyright in the work or any person
authorised by him publishes a translation of such work in the same language and which is
substantially the same in content at a price reasonably related to the price normally charged
in India for the translation of works of the same standard on the same or similar subject, the
licence so granted shall be terminated. However, such termination shall take effect only after
the expiry of a period of three months from the date of service of a notice in the prescribed
manner on the person holding such licence by the owner of the right of translation intimating
the publication of the translation.

COPYRIGHT SOCIETY
A copyright society is a registered collective administration society under Section 33 of the
Copyright Act, 1957. Such a society is formed by authors and other owners. A copyright
society can issue or grant licences in respect of any work for which it is authorised to by the
authors or owners of the work.

The Copyright Society is a legal body that protects or safeguards the interest of the owner
in the product in which copyright subsists. Copyright societies give assurance to the creative
author of the commercial management of their works. It can also be described as a registered
collective administration society for the management and protection of copyright.

Registration of Copyright Society

Section 33(1) prohibits any person or association of persons to commence or, carry on the
business of issuing or granting licences in respect of any work in which copyright subsists on
respect or in respect of any other rights conferred by the Act. However, owner of copyright
in his individual capacity, continue to have the right to grant licences in respect of his own
works consistent with his obligations as a member of the registered copyright society. The
business of issuing or granting license in respect of literary, dramatic, musical and artistic

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works incorporated in a cinematograph films or sound recordings shall be carried out only
through a copyright society duly registered under the Act.

Sub section (3) of Section 33 provides that Central Government registers association of
persons as a copyright society after taking into account the following factors:

⚫ in the interests of the authors and other owners of rights;

⚫ the interest and convenience of the public and in particular of the groups of persons who
are most likely to seek licences in respect of the relevant rights; and
⚫ the ability and professional competence of the applicants.

As per Section 33(3A) registration granted to a copyright society under sub-section (3)
mentioned above shall be for a period of five years and may be renewed from time to time
before the end of every five years on a request in the prescribed form and the Central
Government may renew the registration after considering the report of Registrar of
Copyrights on the working of the copyright society. However, the renewal of the registration
of a copyright society shall be subject to the continued collective control of the copyright
society being shared with the authors of works in their capacity as owners of copyright or of
the right to receive royalty.

Central Government if satisfied that a copyright society is being managed in a manner

detrimental to the interests of “authors and other owners of right” concerned, cancel the
registration of such society after such inquiry as may be prescribed. It also states that the
copyright society duly registered under the act can only conduct the business of
issuing/granting licenses to the copyrighted work i.e. literary, dramatic, musical, or artistic
works incorporated in cinematograph films or sound recordings.

Administration of Rights of Owner by Copyright Society

Section 34 of the Act empowers a copyright society to accept exclusive authorisation from
an author and other owners of right to administer any right in any work by issue of licences
or collection of licence fees or both. Such authorization can be withdrawn by an author and
other owners of right.

Copyright society is competent to enter into agreement with any foreign society or
organisation administering rights corresponding to rights under the Indian Copyright Act to
entrust to such foreign society or organisation the administration in any foreign country of
rights administered by the said copyright society in India, or for administering in India the
rights administered in a foreign country by such foreign society or organisation.

Copyright Society empower to—

• issue licences under section 30 in respect of any rights under this Act;
• collect fees in pursuance of such licences;
• distribute such fees among author and other owners of right after making deductions
for its own expenses;
• perform any other functions consistent which the provisions of section 35.
Control Over the Copyright Society by the Author and Other Owners of Right

As per Section 35 every copyright society is subject to the collective control of the owners
of rights it administers. It does not includes administered by a foreign society or
organisation.
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Every copyright society shall have a governing body with such number of persons elected from
among the members of the society consisting of equal number of authors and owners of work
for the purpose of the administration of the society. All members of copyrights society shall
enjoy equal membership rights and there shall be no discrimination between authors and
owners of rights in the distribution of royalties.

RIGHTS OF BROADCASTING ORGANISATION AND OF PERFORMERS

RIGHTS OF BROADCASTING ORGANISATION AND PERFORMERS
Chapter VIII of the Act containing Section 37-39A deals with rights of Broadcasting
Organisations and of Performers.

Broadcast Reproduction Right

Section 37 entitles every broadcasting organisation to have a special right to be known as
“broadcast reproduction right” in respect of its broadcasts.

The Broadcast reproduction right shall subsist until twenty-five years from the beginning of
the calendar year next following the year in which the broadcast is made.

A per Section 37(3) during the continuance of a broadcast reproduction right in relation to
the broadcast or any substantial part thereof -

⚫ re-broadcasts the broadcast; or

⚫ causes the broadcast to be heard or seen by the public on payment of any charges; or
⚫ makes any sound recording or visual recording of the broadcast; or
⚫ makes any reproduction of such sound recording or visual recording where such initial
recording was done without licence or, where it was licensed, for any purpose not
envisaged by such licence; or
⚫ sells or gives on commercial rental or offer for sale or for such rental, any such sound
recording or visual recording referred to in clause (c) or clause (d).

Performer’s Right
Section 38 provides that where any performer appears or engages in any performance, he
shall have a special right to be known as the “performer’s right” in relation to such
performance. The performer’s right subsist until fifty years from the beginning of the
calendar year next following the year in which the performance is made.

Exclusive Right of Performer

As per section 38A without prejudice to the rights conferred on authors, the performer’s
right which is an exclusive right subject to the provisions of the Act to do or authorise for
doing any of the following acts in respect of the performance or any substantial part thereof,
namely: —

(a) to make a sound recording or a visual recording of the performance, including—

i. reproduction of it in any material form including the storing of it in any medium by
electronic or any other means;
ii. issuance of copies of it to the public not being copies already in circulation;
iii. communication of it to the public;
iv. selling or giving it on commercial rental or offer for sale or for commercial rental
any copy of the recording;

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(b) to broadcast or communicate the performance to the public except where the
performance is already broadcast.

It may be noted that once a performer has, by written agreement, consented to the
incorporation of his performance in a cinematograph film he shall not, in the absence of any
contract to the contrary, object to the enjoyment by the producer of the film of the
performer’s right in the same film. However, the performer shall be entitled for royalties in
case of making of the performances for commercial use.

Moral Right of Performer

Section 38B of Act provides that the performer of a performance shall, independently of his
right after assignment, either wholly or partially of his right, have the right to claim to be
identified as the performer of his performance except where omission is dictated by the
manner of the use of the performance; and to restrain or claim damages in respect of any
distortion, mutilation or other modification of his performance that would be prejudicial to
his reputation.

What are the Moral Rights of an Author?

The author of a work has the right to claim authorship of the work and to restrain or claim
damages in respect of any distortion, mutilation, modification or other acts in relation to the
said work which is done before the expiration of the term of copyright if such distortion,
mutilation, modification or other act would be prejudicial to his honour or reputation. Moral
rights are available to the authors even after the economic rights are assigned.

REGISTRATION OF COPYRIGHT
Chapter X of the Copyright Act containing Sections 44- 50A deals with various aspects
of registration of copyright

The mechanism of registration of copyright has been contemplated under Section 44 of the
Act. It is evident from the provisions of the aforesaid section that registration of the work
under the Copyright Act is not compulsory and is not a condition precedent for maintaining a
suit for damages, if somebody infringes the copyright. Sections 44 and 45 of the Copyright
Act are only enabling provisions and do not affect the common law right to sue for
infringement of copyright. An action for infringement can be brought even if the registration
has not been done. The only effect of registration is that it is the prima facie evidence of
the particulars entered in the register.

Section 45 of the Act clearly mentions that the author or publisher of, or the owner of or
other person interested in the Copyright in, any Work may make an application in the
prescribed form accompanied by the prescribed fee to the registrar of Copyrights. The use
of word “may” clearly indicate that the author is at the discretionary liberty to apply for
registration of Copyrights.

An artistic work which is used or is capable of being used in relation to any goods or services,
the application shall include a statement to that effect and shall be accompanied by a
certificate from the Registrar of Trade Marks referred to in section 3 of the Trade Marks
Act, 1999 to the effect that no trade mark identical with or deceptively similar to such
artistic work has been registered under that Act in the name of, or that no application has
been made under that Act for such registration by, any person other than the applicant.

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On receipt of an application in respect of any work, the Registrar of Copyrights may, after
holding such inquiry as he may deem fit, enter the particulars of the work in the Register of
Copyrights.

Registrar of Copyrights Possess Certain Powers of Civil Courts

The Register of Copyrights is to be maintained by the Copyright Office to enter the names
or titles of works and the names and addresses of authors, publishers and owners of
copyright.

The Registrar of Copyrights shall have the powers of a civil court when trying a suit under
the Code of Civil Procedure, 1908, in respect of the following matters, namely, —

(a) summoning and enforcing the attendance of any person and examining him on oath;
(b) requiring the discovery and production of any document;
(c) receiving evidence on affidavits;
(d) issuing commissions for the examination of witnesses or documents;
(e) requisitioning any public record or copy thereof from any court or office
(f) any other matter which may be prescribed.

In Sanjay Soya Private Ltd. vs. Narayani Trading Company IA (L) 5011/2020 in COMP (L)
2/2020 the Bombay High Court ruled that no section of the Act requires registration of
copyright before requesting relief under the Act. Instead, it is up to the owner’s choice
whether to register copyright under the Act. The Convention and the TRIPS Agreement were
also cited by the court to buttress its ruling. Registration just establishes a presumption of
validity for information placed in the Copyright register. The word “may” is used in Section
45(1) of the Act, which deals with entries in the register of copyrights, and Section 51 states
that infringement is not limited to the registered Work. Protection should be “automatic” as
soon as the Work is created.

Procedure for Registration

The Copyright Office has been set up to provide registration facilities to all types of works
and is headed by a Registrar of Copyrights. The applications are also accepted by post. On-
line registration through “E-filing facility “has also been provided which facilitates the
applicants to file applications at the time and place chosen by them.

Chapter XIII of the Copyright Rules, 2013, as amended, sets out the procedure for the
registration of a work. The procedure for registration is as follows:

➢ application for registration is to be made on specified Form (Including Statement of

Particulars and Statement of Further Particulars);
➢ Separate applications should be made for registration of each work;
➢ Each application should be accompanied by the requisite fee prescribed in the second
schedule to the Rules;
➢ The applications should be signed by the applicant. The Power of Attorney signed by the
party and accepted by the advocate should also be enclosed, if applicable;
➢ The fee is to be paid either in the form of Demand Draft or Indian Postal Order or
through E payment Each and every column of the Statement of Particulars and
Statement of Further Particulars should be replied specifically.

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INFRINGEMENT OF COPYRIGHT
Copyright infringement refers to the unauthorized use of someone’s copyrighted work. Thus,
it is the use of someone’s copyrighted work without permission thereby infringing certain
rights of the copyright holder, such as the right to reproduce, distribute, display or perform
the protected work. Copyright protection gives exclusive rights to the owners of the work to
reproduce the work enabling them to derive financial benefits by exercising such rights. If
any person without authorisation from the owner exercises these rights in respect of the
work which has copyright protection it constitutes an infringement of the copyright. If the
reproduction of the work is carried out after the expiry of the copyright term it will not
amount to an infringement.

Section 51(a) of the Act contemplates situation in which a copyright shall be deemed to be
infringed. This Section says that a copyright is infringed when any person without a licence
granted by the owner of the copyright or the Registrar of Copyright or in contravention of
the conditions of a licence so granted or of any condition imposed by a competent authority:

• does anything, the exclusive right to do which is by this Act conferred upon the owner
of the copyright, or
• permits for profit any place to be used for the communication of the work to the public
where such communication constitutes an infringement of the copyright in the work,
unless he was not aware and had no reasonable ground for believing that such
communication to the public would be an infringement of copyright; or

Section 51(b) when any person (i) makes for sale or hire, or sells or lets for hire, or by way
of trade displays or offers for sale or hire, or (ii) distributes either for the purpose of trade
or to such an extent as to affect prejudicially the owner of the copyright, or (iii) by way of
trade exhibits in public, or (iv) imports into India, any infringing copies of the work.

It may be noted that Section 51(b) (iv) i.e., imports into India shall apply to the import of one
copy of any work for the private and domestic use of the importer.

Explanation: For the purposes of section 51, the reproduction of a literary, dramatic, musical
or artistic work in the form of a cinematograph film shall be deemed to be an “infringing
copy”.

It may be noted that “Infringing copy” means -

• in relation to a literary, dramatic, musical or artistic work, a reproduction thereof

otherwise than in the form of a cinematographic film;
• in relation to a cinematographic film, a copy of the film made on any medium by any means;
• in relation to a sound recording, any other recording embodying the same sound recording,
made by any means;
• in relation to a programme or performance in which such a broadcast reproduction right
or a performer’s right subsists under the provisions of this Act, the sound recording or
a cinematographic film of such programme or performance, if such reproduction, copy or
sound recording is made or imported in contravention of the provisions of this Act.

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Which are the Common Copyright Infringements?

The following are some of the commonly known acts involving infringement of copyright:

• Making infringing copies for sale or hire or selling or letting them for hire;
• Permitting any place for the performance of works in public where such performance
constitutes infringement of copyright;
• Distributing infringing copies for the purpose of trade or to such an extent so as to
affect prejudicially the interest of the owner of copyright;
• Public exhibition of infringing copies by way of trade; and
• Importation of infringing copies into India.

In the case of S.K. Dutt vs. Law Book Co. AIR 1954 All 570, the Honble Court held that in
infringement of copyright the onus of proof is on plaintiff to satisfy the court that the
defendant had infringed his copyright. The plaintiff having failed to establish any
infringement of his copyright, no question of granting any relief to the plaintiff could arise.
It may here be noted, however, that there was on behalf of the plaintiff, no evidence to
indicate what damage, if any, accrued to him, assuming that there was an infringement of his
copyright by the defendants.

Statutory Exceptions-Certain acts not to be Infringement of Copyright

Certain exceptions to infringement have been stipulated by the Copyright Act. The object of
these exceptions is to enable the reproduction of the work for certain public purposes, and
for encouragement of private study, research and promotion of education. The list of acts
which do not constitute infringement of copyright has been provided under Section 52 of the
Act. These includes:

(i) A fair dealing with any work, not being a computer programme, for the purposes of–
⚫ Private or personal use, including research;
⚫ criticism or review, whether of that work or of any other work;
⚫ reporting of current events and current affairs, including the reporting of a lecture
delivered in public.

It may be noted that storing of any work in any electronic medium including the
incidental storage of any computer programme which is not itself an infringing copy for
the said purposes, shall not constitute infringement of copyright.

(ii) The making of copies or adaptation of a computer programme by the lawful possessor of
a copy of such computer programme, from such copy in order to utilise the computer
programme for the purposes for which it was supplied; or to make back-up copies purely
as a temporary protection against loss, destruction or damage in order only to utilise the
computer programme for the purpose for which it was supplied.
(iii) the doing of any act necessary to obtain information essential for operating inter-
operability of an independently created computer programme with other programmes by
a lawful possessor of a computer programme provided that such information is not
otherwise readily available.

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(iv) the observation, study or test of functioning of the computer programme in order to
determine the ideas and principles which underline any elements of the programme while
performing such acts necessary for the functions for which the computer programme
was supplied.
(v) the making of copies or adaptation of the computer programme from a personally legally
obtained copy for non-commercial personal use.
(vi) the transient or incidental storage of a work or performance purely in the technical
process of electronic transmission or communication to the public.
(vii) transient or incidental storage of a work or performance for the purpose of providing
electronic links, access or integration, where such links, access or integration has not
been expressly prohibited by the right holder, unless the person responsible is aware or
has reasonable grounds for believing that such storage is of an infringing copy.

It may be noted that if the person responsible for the storage of the copy has received
a written complaint from the owner of copyright in the work, complaining that such
transient or incidental storage is an infringement, such person responsible for the
storage shall refrain from facilitating such access for a period of twenty-one days or
till he receives an order from the competent court refraining from facilitating access
and in case no such order is received before the expiry of such period of twenty-one
days, he may continue to provide the facility of such access.

(viii) the reproduction of any work for the purpose of a judicial proceeding or for the purpose
of a report of a judicial proceeding.

(ix) the reproduction or publication of any work prepared by the Secretariat of a Legislature
or, where the Legislature consists of two Houses, by the Secretariat of either House of
the Legislature, exclusively for the use of the members of that Legislature.
(x) the reproduction of any work in a certified copy made or supplied in accordance with any
law for the time being in force.
(xi) the reading or recitation in public of reasonable extracts from a published literacy or
dramatic work.
(xii) the publication in a collection, mainly composed of non-copyright matter, bona fide
intended for instructional use, and so described in the title and in any advertisement
issued by or on behalf of the publisher, of short passages from published literary or
dramatic works, not themselves published for such use in which copyright subsists.
However, not more than two such passages from works by the same author are published
by the same publisher during any period of five years.

In the case of a work of joint authorship, references in this clause to passages from
works shall include references to passages from works by any one or more of the authors
of those passages or by any one or more of those authors in collaboration with any other
person.

(xiii) the reproduction of any work—

⚫ by a teacher or a pupil in the course of instruction; or
⚫ as part of the questions to be answered in an examination; or
⚫ in answers to such questions.

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(xiv) the performance, in the course of the activities of an educational institution, of a

literary, dramatic or musical work by the staff and students of the institution, or of a
cinematograph film or a sound recording if the audience is limited to such staff and
students, the parents and guardians of the students and persons connected with the
activities of the institution or the communication to such an audience of a cinematograph
film or sound recording.
(xv) the causing of a recording to be heard in public by utilising it,-
⚫ in an enclosed room or hall meant for the common use of residents in any residential
premises (not being a hotel or similar commercial establishment) as part of the
amenities provided exclusively or mainly for residents therein; or
⚫ as part of the activities of a club or similar organisation which is not established or
conducted for profit;
⚫ as part of the activities of a club, society or other organisation which is not
established or conducted for profit.
(xvi) the performance of a literary, dramatic or musical work by an amateur club or society,
if the performance is given to a non-paying audience, or for the benefit of a religious
institution.
(xvii) the reproduction in a newspaper, magazine or other periodical of an article on current
economic, political, social or religious topics, unless the author of such article has
expressly reserved to himself the right of such reproduction.
(xviii) the storing of a work in any medium by electronic means by a non-commercial public
library, for preservation if the library already possesses a non-digital copy of the work.
(xix) the making of not more than three copies of a book (including a pamphlet, sheet of music,
map, chart or plan) by or under the direction of the person in charge of a non-commercial
public library for the use of the library if such book is not available for sale in India.
(xx) the reproduction, for the purpose of research or private study or with a view to
publication, of an unpublished literary, dramatic or musical work kept in a library, museum
or other institution to which the public has access.

However, where the identity of the author of any such work or, in the case of a work of
joint authorship, of any of the authors is known to the library, museum or other
institution, as the case may be, the provisions of this clause shall apply only if such
reproduction is made at a time more than sixty years from the date of the death of the
author or, in the case of a work of joint authorship, from the death of the author whose
identity is known or, if the identity of more authors than one is known from the death
of such of those authors who dies last.

(xxi) the reproduction or publication of-

⚫ any matter which has been published in any Official Gazette except an Act of a
Legislature;
⚫ any Act of a Legislature subject to the condition that such Act is reproduced or
published together with any commentary thereon or any other original matter;
⚫ the report of any committee, commission, council, board or other like body
appointed by the Government if such report has been laid on the Table of the
Legislature, unless the reproduction or publication of such report is prohibited by
the Government;

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⚫ any judgement or order of a court, tribunal or other judicial authority, unless the
reproduction or publication of such judgment or order is prohibited by the court,
the tribunal or other judicial authority, as the case may be.
(xxii) the production or publication of a translation in any Indian language of an Act of a
Legislature and of any rules or orders made thereunder-
⚫ if no translation of such Act or rules or orders in that language has previously been
produced or published by the Government; or
⚫ where a translation of such Act or rules or orders in that language has been
produced or published by the Government, if the translation is not available for
sale to the public;
⚫ however, such translation contains a statement at a prominent place to the effect
that the translation has not been authorised or accepted as authentic by the
Government.
(xxiii) the making or publishing of a painting, drawing, engraving or photograph of a work of
architecture or the display of a work of architecture.
(xxiv) the making or publishing of a painting, drawing, engraving or photograph of a sculpture,
or other artistic work failing under sub-clause (iii) of clause (c) of section 2, if such work
is permanently situate in a public place or any premises to which the public has access.
(xxv) the inclusion in a cinematograph film of-
⚫ any artistic work permanently situate in a public place or any premises to which the
public has access; or
⚫ any other artistic work, if such inclusion is only by way of background or is
otherwise incidental to the principal matters represented in the film.
(xxvi) the use by the author of an artistic work, where the author of such work is not the
owner of the copyright therein, of any mould, cast, sketch, plan, model or study made by
him for the purpose of the work. However, he does not thereby repeat or imitate the
main design of the work.
(xxvii) the making of a three-dimensional object from a two-dimensional artistic work, such as
a technical drawing, for the purposes of industrial application of any purely functional
part of a useful device.
(xxviii) the reconstruction of a building or structure in accordance with the architectural
drawings or plans by reference to which the building or structure was originally
constructed. However, the original construction was made with the consent or licence of
the owner of the copyright in such drawings and plans.
(xxix) in relation to a literary, “dramatic, artistic or” musical work recorded or reproduced in
any cinematograph film the exhibition of such film after the expiration of the term of
copyright therein. However, the provisions of sub-clause (ii) of clause (a), sub-clause (a)
of clause (b) and clauses (d), (f), (g), (m) and (p) shall not apply as respects any act unless
that act is accompanied by an acknowledgment-
⚫ identifying the work by its title or other description; and
⚫ unless the work is anonymous or the author of the work has previously agreed or
required that no acknowledgement of his name should be made, also identifying the
author.

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(xxx) the making of an ephemeral recording, by a broadcasting organisation using its own
facilities for its own broadcast by a broadcasting organisation of a work which it has the
right to broadcast; and the retention of such recording for archival purposes on the
ground of its exceptional documentary character.
(xxxi) the performance of a literary, dramatic or musical work or the communication to the
public of such work or of a sound recording in the course of any bona fide religious
ceremony or an official ceremony held by the Central Government or the State
Government or any local authority. However, religious ceremony including a marriage
procession and other social festivities associated with a marriage.
(xxxii) the adaptation, reproduction, issue of copies or communication to the public of any work
in any accessible format by any person to facilitate persons with disability to access to
works including sharing with any person with disability of such accessible format for
private or personal use, educational purpose or research; or any organisation working for
the benefit of the persons with disabilities in case the normal format prevents the
enjoyment of such works by such persons. However, the copies of the works in such
accessible format are made available to the persons with disabilities on a non-profit
basis but to recover only the cost of production and the organization shall ensure that
the copies of works in such accessible format are used only by persons with disabilities
and takes reasonable steps to prevent its entry into ordinary channels of business.

It may be noted that “any organization” includes and organization registered under
section 12A of the Income-tax Act, 1961 and working for the benefit of persons with
disability or recognized under Chapter X of the Persons with Disabilities (Equal
Opportunities, Protection or Rights and full Participation) Act, 1995 or receiving grants
from the government for facilitating access to persons with disabilities or an educational
institution or library or archives recognized by the Government.

(xxxiii) the importation of copies of any literary or artistic work, such as labels, company logos
or promotional or explanatory material, that is purely incidental to other goods or
products being imported lawfully.

In the Chancellor, Masters and Scholars of the University of Oxford and Ors. vs. Rameshwari
Photocopy Services and Ors. (16.09.2016 - DELHC) : CS(OS) 2439/2012, I.A. Nos.
14632/2012, 430 and 3455/2013, in this case, the plaintiffs instituted this suit for the relief
of permanent injunction restraining the two defendants from infringing the copyright of the
plaintiffs in their publications by photocopying, reproduction and distribution of copies of
plaintiffs’ publications on a large scale and circulating the same and by sale of unauthorised
compilations of substantial extracts from the plaintiffs’ publications by compiling them into
course packs/anthologies for sale. Court inter alia held that -

“Copyright, specially in literary works, is thus not an inevitable, divine, or natural right that
confers on authors the absolute ownership of their creations. It is designed rather to
stimulate activity and progress in the arts for the intellectual enrichment of the public.
Copyright is intended to increase and not to impede the harvest of knowledge. It is intended
to motivate the creative activity of authors and inventors in order to benefit the public….

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Applying the tests as aforesaid laid down by the Courts of:

i. integral part of continuous flow;

ii. connected relation;
iii. incidental;
iv. causal relationship;
v. during (in the course of time, as time goes by);
vi. while doing;
vii. continuous progress from one point to the next in time and space; and,
viii. in the path in which anything moves,

it has to be held that the words “in the course of instruction” within the meaning of Section
52(1)(i) supra would include reproduction of any work while the process of imparting
instruction by the teacher and receiving instruction by the pupil continues i.e. during the
entire academic session for which the pupil is under the tutelage of the teacher and that
imparting and receiving of instruction is not limited to personal interface between teacher
and pupil but is a process commencing from the teacher readying herself/himself for
imparting instruction, setting syllabus, prescribing text books, readings and ensuring, whether
by interface in classroom/ tutorials or otherwise by holding tests from time to time or
clarifying doubts of students, that the pupil stands instructed in what he/she has approached
the teacher to learn. Similarly the words “in the course of instruction”, even if the word
“instruction” have to be given the same meaning as ‘lecture’, have to include within their ambit
the prescription of syllabus the preparation of which both the teacher and the pupil are
required to do before the lecture and the studies which the pupils are to do post lecture and
so that the teachers can reproduce the work as part of the question and the pupils can answer
the questions by reproducing the work, in an examination. Resultantly, reproduction of any
copyrighted work by the teacher for the purpose of imparting instruction to the pupil as
prescribed in the syllabus during the academic year would be within the meaning of Section
52(1)(i) of the Act.

I thus conclude that the action of the defendant No. 2 University of making a master
photocopy of the relevant portions (prescribed in syllabus) of the books of the plaintiffs
purchased by the defendant No. 2 University and kept in its library and making further
photocopies out of the said master copy and distributing the same to the students does not
constitute infringement of copyright in the said books under the Copyright Act.”

Remedies against Infringement of Copyright

Section 54 defines the term “owner of copyright” shall include:

a. an exclusive licensee;
b. in the case of an anonymous or pseudonymous literary, dramatic, musical or artistic work,
the publisher of the work, until the identity of the author or, in the case of an anonymous
work of joint authorship, or a work of joint authorship published under names all of which
are pseudonyms, the identity of any of the authors, is disclosed publicly by the author
and the publisher or is otherwise establishment to the satisfaction of the Commercial
Court by that author or his legal representatives.

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Section 55 provides for the civil remedies for infringement of copyright and entitles the
owner of the copyright to all such remedies by way of injunction, damages, accounts and
otherwise as may be conferred by law for the infringement of copyright. Section 58 entitles
the owner of the copyright to initiate proceedings for the possession of infringing copies and
other materials related thereto. In this context, the section clarifies that all infringing
copies of any work in which copyright subsists and all plates used or intended to be used for
the production of such infringing copies shall be deemed to be the property of the owner of
the copyright.

The Copyright law in India provided for remedies to be made available to the author against
a copyright infringer. The Copyright Act, 1957 provides to an author both Civil, Criminal and
border enforcement remedies. They are:

⚫ Civil Remedies: provide for injunctions, damages, interpretation of accounts, delivery

and destruction of infringing copies and damages for conversion.
⚫ Criminal Remedies: provide for imprisonment, fines, seizures of infringing copies and
delivery of infringing copies to the owner.
⚫ Border Enforcement: also provides for prohibition of import and destruction of any
imported goods that infringe the copyright of a person with the assistance of the
customs authorities of India.

Protection of Right of Management Information

As per section 65B any person, who knowingly removes or alters any rights management
information without authority, or distributes, imports for distribution, broadcasts or
communicates to the public, without authority, copies of any work, or performance knowing
that electronic rights management information has been removed or altered without
authority, shall be punishable with imprisonment which may extend to two years and shall also
be liable to fine.

It may be noted that “Rights Management Information” means —

⚫ the title or other information identifying the work or performance;

⚫ the name of the author or performer;
⚫ the name and address of the owner of rights;
⚫ terms and conditions regarding the use of the rights; and
⚫ any number or code that represents the information referred to in sub-clauses (a) to
(d), but does not include any device or procedure intended to identify the user

OFFENCES & PENALTIES

Chapter XIII of the Act containing Sections 63-70 deal with offences and penalities. Section
63 deals with offences of infringement of copyright or other rights conferred by the
Copyright Act, 1957. This section makes, any person who knowingly infringes or abates the
infringement of the copyright in a work or any other right conferred under the Act (except
for resale share right in original copies), liable to imprisonment for a minimum period of six
months which may extend to three years and with minimum fine of fifty thousand rupees
which may extend upto rupees two lakhs. However, the court has been empowered to impose
a sentence less than six months or a fine less than fifty thousand, if the infringement had
not been made for gain in the course of trade or business. In such situations, the section

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requires the courts to mention adequate and special reasons in the judgement. Section 63
criminalises the infringement of copyright and other associated rights conferred by the
Copyright Act except for the right to resale share in original copies under section 53 A. It
prescribes imprisonment for a term not less than 6 months which may extend up to 3 years
and with a fine, not less than fifty thousand rupees which may extend to two lakh rupees.

According to section 63, any person who knowingly infringes or even abets the infringement
of the copyright in a work or any other rights conferred by the Copyright Act except the
right to resale share in original copies commits the offence of copyright.

In the case of Jitendra Prasad Singh vs. State of Assam (2003) 26 PTC 486 GAU, the Hon’ble
Gauhati High Court held that the phrase “punishable with imprisonment for a term, which may
extend to three years” will mean that the imprisonment can be for a term as long as three
years, but the expression, “punishable with imprisonment for less than three years” will mean
that the imprisonment can be for a term less than three years. Therefore, offences under
Section 63 of the Act are non-bailable in nature, and as such an application for anticipatory
bail will be maintainable.

M/s Knit Pro International vs. the State of NCT of Delhi & Anr. (Criminal Appeal No. 807 of
2022) the Hon’ble Supreme Court of India Judgement dated May 20, 2022 inter alia observed
that thus, for the offence under Section 63 of the Copyright Act, the punishment provided
is imprisonment for a term which shall not be less than six months but which may extend to
three years and with fine. Therefore, the maximum punishment which can be imposed would
be three years. Therefore, the learned Magistrate may sentence the accused for a period of
three years also. In that view of the matter considering Part II of the First Schedule of the
Cr.P.C., if the offence is punishable with imprisonment for three years and onwards but not
more than seven years the offence is a cognizable offence. Only in a case where the offence
is punishable for imprisonment for less than three years or with fine only the offence can be
said to be non-cognizable. In view of the above clear position of law, the decision in the case
of Rakesh Kumar Paul (supra) relied upon by learned counsel appearing on behalf of respondent
no.2 shall not be applicable to the facts of the case on hand. The language of the provision in
Part II of First Schedule is very clear and there is no ambiguity whatsoever.

Under the circumstances the High Court has committed a grave error in holding that the
offence under Section 63 of the Copyright Act is a non-cognizable offence. Thereby the High
Court has committed a grave error in quashing and setting aside the criminal proceedings and
the FIR. Therefore, the impugned judgment and order passed by the High Court quashing and
setting aside the criminal proceedings/FIR under Section 63 of the Copyright Act deserves
to be quashed and set aside.

In view of the above discussion and for the reason stated above, it is observed and held that
offence under Section 63 of the Copyright Act is a cognizable and non-bailable offence.
Consequently, the impugned judgment and order passed by the High Court taking a contrary
view is hereby quashed and set aside and the criminal proceedings against respondent No.2
for the offence under Sections 63 & 64 of the Copyright Act now shall be proceeded further
in accordance with law and on its own merits treating the same as a cognizable and non-bailable
offence.

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Power of Police to Seize Infringing Copies

Section 64 of the Act empowers any Police Officer, not below the rank of a sub-inspector, to
seize without warrant, all copies of the work and all plates used for the purpose of making
infringing copies of the work, wherever they are found. However such Police Officer has to
satisfy himself before such seizure, that an offence under Section 63 in respect of the
infringement of copyright in any work has been, is being or is likely to be committed. Further,
such Police Officer has been put under obligation to produce before the Magistrate, as soon
as practicable, all copies and plates so seized. Any interested person may make an application
to Magistrate, with in fifteen days of such seizure, for restoring to him such copies and
plates. Section 65 makes liable, any person, who knowingly makes or has in his possession, any
plate for the purpose of making infringing copies of any work in which copyright subsists, to
imprisonment which may extend to two years and also fine.

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LAW RELATING TO GEOGRAPHICAL INDICATIONS OF GOODS

• Geographical Indications of Goods (Registration and Protection) Act, 1999
• The Geographical Indications of Goods (Registration and Protection) Rules, 2002

INTRODUCTION
Geographical Indications of Goods are that aspect of industrial property which refers to a
country or to a place situated therein as being the country or place of origin of that product.
Typically, such a name conveys an assurance of quality and distinctiveness which is essentially
attributable to the fact of its origin in that defined geographical locality, region or country.

Geographical Indications covered under Articles 22 to 24 of the WTO Trade Related Aspects
of Intellectual Property Rights (TRIPS) Agreement, which was part of the Agreements
concluding the Uruguay Round of GATT negotiations.

The object of the Geographical Indications of Goods (Registration and Protection) Act, 1999
is threefold:

Firstly, by specific law governing the geographical indications of goods in the country which
could adequately protect the interest of producers of such goods,

secondly, to exclude unauthorized persons from misusing geographical indications and to

protect consumers from deception and

thirdly, to promote goods bearing Indian geographical indications in the export market.

Examples of Indian Geographical Indications are: Darjeeling Tea, Kanchipuram Silk Saree,
Nagpur Orange, Kolhapuri Chappal, Bikaneri Bhujia, Agra Petha etc.

Geographical Indication
Geographical Indication in relation to goods means an indication which identifies such goods
as agricultural goods, natural goods or manufactured goods as originating, or manufactured in
the territory of a country, or a region or locality in that territory, where a given quality,
reputation or other characteristic of such goods is essentially attributable to its geographical
origin and in case where such goods are manufactured goods one of the activities of either
the production or of processing or preparation of the goods concerned takes place in such
territory, region or locality, as the case may be.

It may be noted that any name which is not the name of a country, region or locality of that
country shall also be considered as the geographical indication if it relates to a specific
geographical area and is used upon or in relation to particular goods originating from that
country, region or locality, as the case may be. [Section 2(e)]

It may be noted that:

• Goods means any agricultural, natural or manufactured goods or any goods of handicraft
or of industry and includes food stuff.

Indication
Indication includes any name, geographical or figurative representation or any combination of
them conveying or suggesting the geographical origin of goods to which it applies. [Section
2(g)]

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Prohibition of Registration of Certain Geographical Indications

Section 9 of the Act prohibits registration of certain geographical indications. They are as
follows: -

a) the use of which would be likely to deceive or cause confusion; or

b) the use of which would be contrary to any law for the time being in force; or
c) which comprises or contains scandalous or obscene matter; or
d) which comprises or contains any matter likely to hurt the religious sentiments of any
class or section of the citizens of India; or
e) which would otherwise be disentitled to protection in a court; or
f) which are determined to be generic names or indications of goods and are, therefore,
not or ceased to be protected in their country of origin, or which have fallen into disuse
in that country

shall not be registered as a geographical indication.

Registration of Geographical Indication

Section 8 of the Act provides that a geographical indication may be registered in respect of
any or all of the goods, comprised in such class of goods as may be classified by a region or
locality in that territory, as the case may be the Registrar and in respect of a definite
territory of a country.

Any question arising as to the class within which any goods fall or the definite area in respect
of which the geographical indication is to be registered or where any goods are not specified
in the alphabetical index of goods published shall be determined by the Registrar whose
decision in the matter shall be final.

Application for Registration

Under section 11

- any association of persons or

- producers or
- any organisation or authority established by or under any law for the time being in force
representing the interest of the producers of the concerned goods,

who are desirous of registering a geographical indication in relation to such goods shall apply
in writing to the Registrar for the registration of the Geographical Indication.

The application shall contain –

• A single application may be a statement as to how the geographical indication serves to

designate the goods as originating from the concerned territory of the country or region
or locality in the country, as the case may be, in respect of specific quality, reputation
or other characteristics of which are due exclusively or essentially to the geographical
environment, with its inherent natural and human factors, and the production, processing
or preparation of which takes place in such territory, region or locality, as the case may
be;
• the class of goods to which the geographical indication shall apply;
• the geographical map of the territory of the country or region or locality in the country
in which the goods originate or are being manufactured;
• the particulars regarding the appearance of the geographical indication as to whether it
is comprised of the words or figurative elements or both;
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Application maybe made for registration of a geographical indication for different classes of
goods and fee payable therefore shall be in respect of each such class of goods.

The Registrar may refuse the application or may accept it absolutely or subject to such
amendments, modification, conditions or limitations, if any, as he thinks fit. In the case of
refusal or conditional acceptance of application, the Registrar shall record in writing the
grounds for such refusal or conditional acceptance and the materials used by him in arriving
at his decision.

Registration
Section 16 provides that on the registration of a geographical indication, the Registrar shall
issue each to the applicant and the authorised users, if registered with the geographical
indication, a certificate sealed with the seal of the Geographical Indications Registry.

It may be noted that where registration of a geographical indication is not completed within
12 months from the date of the application by reason of default on the part of the applicant,
the Registrar may, after giving notice to the applicant in the prescribed manner treat the
application as abandoned unless it is completed within the time specified in that behalf in the
notice.

Step by Step Guide on Geographical Indication of Goods Registration Process

Step 1: Filing of application

Please check whether the indication comes within the scope of the definition of a
Geographical Indication.

The association of persons or producers or any organization or authority should represent

the interest of producers of the concerned goods and should file an affidavit how the
applicant claims to represent their interest.

• Application must be made in triplicate.

• The application shall be signed by the applicant or his agent and must be accompanied by
a statement of case.
• Details of the special characteristics and how those standards are maintained.
• Three certified copies of the map of the region to which the GI relates.
• Give details of all the applicant together with address.

Step 2 & 3: Preliminary Scrutiny and Examination

• The Examiner will scrutinize the application for any deficiencies.

• Content of statement of case is assessed by a consultative group of experts.
• Ascertain the correctness of particulars furnished.
• Thereafter an Examination Report would be issued.

Step 4: Show Cause Notice

• If the Registrar has any objection to the application, he will communicate such objection.
• The applicant must respond within 2 months or apply for a hearing.
• The decision will be duly communicated. If the applicant wishes to appeal, he may within
1 month make a request.
• The Registrar is also empowered to withdraw an application, if it is accepted in error,
after giving on opportunity of being heard.

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Step 5: Publication in the Geographical Indications Journal

• Every application, within 3 months of acceptance shall be published in the Geographical

Indications Journal.

Step 6: Opposition to Registration

• Any person can file a notice of opposition within 3 months opposing the GI application
published in the Journal.
• The registrar shall serve a copy of the notice on the applicant.
• Within 2 months the applicant shall sent a copy of the counter statement.
• If he does not do this he shall be deemed to have abandoned his application. Where the
counter- statement has been filed, the registrar shall serve a copy on the person giving
the notice of opposition.
• Thereafter, both sides will lead their respective evidences by way of affidavit and
supporting documents.
• A date for hearing of the case will be fixed thereafter.

Step 7: Registration

• Where an application for a GI has been accepted, the registrar shall register the
geographical indication. If registered the date of filing of the application shall be
deemed to be the date of registration.
• The registrar shall issue to the applicant a certificate with the seal of the Geographical
indications registry.

Step 8: Renewal

• A registered GI shall be valid for 10 years and can be renewed on payment of renewal
fee.

What is the benefit of registration of Geographical Indications?

• It confers legal protection to Geographical Indications in India.
• Prevents unauthorised use of a Registered Geographical Indication by others.
• It provides legal protection to Indian Geographical Indications which in turn boost
exports.
• It promotes economic prosperity of producers of goods produced in a geographical
territory.

Duration of registration
Section 18 of the Act deals with duration, renewal, removal and restoration of registration
of Geographical Indication. The registration of a geographical indication shall be for a period
of 10 years, but may be renewed from time to time in accordance with the provisions of this
section.

The registration of an authorised user shall be for a period of 10 years or for the period till
the date on which the registration of the geographical indication in respect of which the
authorised user is registered expires, whichever is earlier.

The Registrar shall, on application made in the prescribed manner, by the registered
proprietor or by the authorised user and within the prescribed period and subject to the
payment of the prescribed fee, renew the registration of the geographical indication or
authorised user, as the case may be, for a period of ten years from the date of expiration of
the original registration or of the last renewal of registration, as the case may be.
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Infringement of Unregistered Geographical Indication

As per section 20 of the Act a person shall not be entitled to institute any proceeding to
prevent, or to recover damages for, the infringement of an unregistered geographical
indication.

Infringement of Registered Geographical Indications

As per section 22 a registered geographical indication is infringed by a person who, not being
an authorized user thereof uses such geographical indication by any means in the designations
or presentation of goods that indicates or suggests that such goods originate in a geographical
area other than the true place of origin of such goods in a manner goods; or which misleads
the persons as to the geographical origin of such goods; or uses any geographical indication in
such manner which constitutes an act of unfair competition including passing off in respect
of registered geographical indication.

“Act of unfair competition’’ means any act of competition contrary to honest practices in
industrial or commercial matters. Following acts shall be deemed to be acts of unfair
competition:

- all acts of such a nature as to create confusion by any means whatsoever with the
establishment, the goods or the industrial or commercial activities, of a competitor;
- false allegations in the course of trade of such a nature as to discredit the
establishment, the goods or the industrial or commercial activities, of a competitor;
- geographical indications, the use of which in the course of trade is liable to mislead the
persons as to the nature, the manufacturing process, the characteristics, the suitability
for their purpose, or the quantity, of the goods.

When is a registered Geographical Indication said to be infringed?

• When an unauthorised user uses a geographical indication that indicates or suggests that
such goods originate in a geographical area other than the true place of origin of such
goods in a manner which mislead the public as to the geographical origin of such goods.
• When the use of geographical indication result in an unfair competition including passing
off in respect of registered geographical indication.
• When the use of another geographical indication results in false representation to the
public that goods originate in a territory in respect of which a registered geographical
indication relates.

Assignment or Transmission
Section 24 of the Act prohibits assignment or transmission of geographical indication. It
states that any right to a registered geographical indication shall not be the subject matter
of assignment, transmission, licensing, pledge, mortgage or any such other agreement.
However, on the death of an authorised user his right in a registered geographical indication
shall devolve on his successor in title under the law for the time being in force.

Prohibition of Registration of Geographical Indication as Trade mark

Section 25 of the Act provides that the Registrar of Trade Marks shall, suo-motu or at the
request of an interested party, refuse or invalidate the registration of a trade mark which
contains or consists of a geographical indication with respect to the goods or class or classes
of goods not originating in the territory of a country, or a region or locality in that territory

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which such geographical indication indicates, if use of such geographical indications in the
trade mark for such goods, is of such a nature as to confuse or mislead the persons as to the
true place of origin of such goods or class or classes of goods.

How a Geographical Indication is different from a Trade Mark?

• A trade mark is a sign which is used in the course of trade and it distinguishes goods or
services of one enterprise from those of other enterprises.
• Whereas a geographical indication is an indication used to identify goods having special
characteristics originating from a definite geographical territory.

In the case of Tea Board, India vs. ITC Limited plaintiff moved an interlocutory application
for temporary injunction for restraining the defendant from using or conducting or making
its business at the hotel by the name “DARJEELING LOUNGE”. Application stated that usage
of the word “DARJEELING” in the name and logo by defendants is passing off or attempting
to pass off its business or services so as to discredit the fame of Darjeeling tea as a
geographical indication and/ or to mislead persons.

Hon’ble Calcutta High Court inter alia observed that passing-off as in Section 20(2) of the
GI Act has to be seen in the light of what it implies in trade mark law. As to whether any
goods or services are passed off as some other goods or services would depend on a variety
of factors ranging from the nature of the marks, their resemblance, the nature of the goods
and services, the similarity of the character of the goods and services, the mode of accessing
the goods or services and other surrounding circumstances.

The word “Darjeeling” - as precious to tea as it may be as champagne to sparkling wines of

that province in France - cannot be exclusively claimed by the plaintiff by virtue of its
registration as a geographical indication or as a certification trade mark. Even for a case of
passing-off, the use of “Darjeeling” by a person other than the plaintiff can be complained of
if the word or the geographical indication has any nexus with the product with which it is
exclusively associated upon the registration. It is not necessary to consider whether a
“Darjeeling Tea Stall” selling only hot cups of tea can entitle the plaintiff to carry a complaint
in respect thereof or a “Darjeeling Tea House” selling all varieties of packaged tea can be
said to be in derogation of the plaintiff’s rights. The defendant’s “Darjeeling Lounge” is an
exclusive area within the confines of its hotel which is accessible only to its high-end
customers. The lounge is a place where such customers and accompanying visitors may
frequent, and even sip Darjeeling tea or any other beverage or drink, but there is scarcely
any likelihood of deception or confusion in the lounge being named “Darjeeling” for the
plaintiff to be granted to any order that it seeks.

As to the case of dilution, the name “Darjeeling” has been extensively used in trading and
commercial circles for decades before the GI Act was enacted. In a case of dilution by
blurring, it is the uniqueness of a mark which is protected even in a case where there is no
likelihood of confusion. But the word “Darjeeling” has been and continues to be so widely used
as a business name or for like purpose for so long that the plaintiff’s recent registration
would, prima facie, not entitle it to enjoy the kind of exclusivity that it asserts.

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OFFENCES, PENALTIES AND PROCEDURE

Meaning of Applying Geographical Indications

Section 37 of the Act provides that a person shall be deemed to apply a geographical
indication to goods who:

a) applies it to the goods themselves; or

b) applies it to any package in or with which the goods are sold, or exposed for sale, or had
in possession for sale or for any purpose of trade or manufacture; or
c) places, encloses or annexes any goods which are sold, or exposed for sale, or had in
possession for sale or for any purpose of trade or manufacture, in or with any package
or other thing to which a geographical indication has been applied; or
d) uses a geographical indication in any manner reasonably likely to lead to the belief that
the goods in connection with which it is used are designated or described by that
geographical indication; or
e) in relation to the goods uses a geographical indication in any sign, advertisement, invoice,
catalogue, business letter, business paper, price list or other commercial documents and
goods are delivered to a person in pursuance of a request or order made by reference
to the geographical indication as so used.

A geographical indication shall be deemed to be applied to goods whether it is woven in,

impressed on, or otherwise worked into, or annexed or affixed to, the goods or to any package
or other thing.

Falsifying and Falsely Applying Geographical Indications

Section 38 states that a person shall be deemed to falsify a geographical indication who,
either:

a) without the assent of the authorised user of the geographical indication makes that
geographical indication or deceptively similar geographical indication; or
b) falsifies any genuine geographical indication, whether by alteration, addition, or
otherwise.

A person shall be deemed to falsely apply to goods a geographical indication who, without the
assent of the authorised user of the geographical indication:

a. applies such geographical indication or a deceptively similar geographical indication to

goods or any package containing goods;
b. uses any package bearing a geographical indication which is identical with or deceptively
similar to the geographical indication of such authorised user, for the purpose of
packing, filling or wrapping therein any goods other than the genuine goods of the
authorised user of the geographical indication.

Any geographical indication falsified or falsely applied referred to as a false geographical

indication.

In any prosecution for falsifying a geographical indication or falsely applying a geographical

indication to goods, the burden of proving the assent of proprietor shall lie on the accused.

Penalty for Applying False Geographical Indications

According to Section 39 of the Act, any person who:

a. falsifies any geographical indication; or

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b. falsely applies to goods any geographical indication; or

c. makes, disposes of, or has in his possession, any die, block, machine, plate or other
instrument for the purpose of falsifying or of being used for falsifying, a geographical
indication; or
d. applies to any goods to which an indication of the country or place in which they were
made or produced or the name and the address of the manufacturer or person for whom
the goods are manufactured is required to be applied under section 71, a false indication
of such country, place, name or address; or
e. tampers with, alters or effaces an indication of origin which has been applied to any
goods to which it is required to be applied under section 71; or
f. causes any of the things above-mentioned in this section to be done, shall, unless he
proves that he acted, without intent to defraud,

be punishable with imprisonment for a term which shall not be less than 6 months but which
may extend to 3 years and with fine which shall not be less than Rs. 50,000 but which may
extend to Rs. 2,00,000.

It may be noted that the court may, for adequate and special reasons to be mentioned in the
judgment, impose a sentence of imprisonment for a term of less than 6 months or a fine of
less than Rs. 50,000.

Special Provisions Relating to Applications for Registration from Citizens of

Convention Countries
Section 84 empowers Central Government may by notification in the Official Gazette, declare
such country or group of countries or union of countries or Inter-Governmental Organisations
to be a convention country or convention countries for the purposes of the Act for the
fulfillment of a treaty, convention or arrangement with any country or a country which is a
member of a group of countries or union of countries or Inter- Governmental Organisations
outside India which affords to citizens of India similar privileges as granted to its own
citizens.

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LAW RELATING TO DESIGNS

INTRODUCTION
Industrial designs refer to creative activity which result in the ornamental or formal
appearance of a product and design right refers to a novel or original design that is accorded
to the proprietor of a validly registered design. Industrial designs are an element of
intellectual property.

Article 25 of the World Trade Organization TRIPS Agreement, obliges Members to provide
for the protection of independently created industrial designs that are new or original.

The objective 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.

The important purpose of design registration is to see that the artisan, creator, originator
of a design having aesthetic look is not deprived of his bonafide reward by others applying it
to their goods.

In the case of Bharat Glass Tube Limited vs. Gopal Glass Works Limited, Supreme Court
of India observed that:

The sole purpose of this Act is protection of the intellectual property right of the original
design for a period of 10 years or whatever further period extendable.

The object behind this enactment is to benefit the person for his research and labour put in
by him to evolve the new and original design. This is the sole aim of enacting this Act.

It has also laid down that if design is not new or original or published previously then such
design should not be registered. It further lays down that if it has been disclosed to the
public anywhere in India or in any other country by publication in tangible form or by use or
in any other way prior to the filing date, or where applicable, the priority date of the
application for registration then such design will not be registered or if it is found that it is
not significantly distinguishable from known designs or combination of known designs, then
such designs shall not be registered.

It also provides that registration can be cancelled under section 19 of the Act if proper
application is filed before the competent authority i.e., the Controller that the design has
been previously registered in India or published in India or in any other country prior to the
date of registration, or that the design is not a new or original design or that the design is
not registerable under this Act or that it is not a design as defined in section 2(d). The
Controller after hearing both the parties if satisfied that the design is not new or original or
that it has already been registered or if it is not registerable, cancel such registration and
aggrieved against that order, appeal shall lie to the High Court.

In the case of Escorts construction Equipment Ltd. vs. Action construction Equipment
Pvt. Ltd.,1999 Delhi High Court observed that the primary object the Act is to protect
shape and not the function or functional shape. The expression design doesn‘t include a
method or principle of construction or features of shape or configuration which is dictated
solely by the function which the article to be made in that shape or configuration has to
perform.

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DESIGN
As per section 2(d) Design means:

- only the features of shape, configuration, pattern or ornament or composition of lines

or colour or combination thereof applied to any article whether 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 or construction or anything which is in
substance a mere mechanical device, and
- does not include any trade mark, as defined in Trade and Merchandise Marks Act, 1958,
property mark or artistic works as defined under Section 2(c) of the Copyright Act,
1957.

An artistic work as defined under Section 2(c) of the Copyright Act, 1957 is not a subject
matter for registration which reads as follows:

“Artistic works” means: -

• A painting, a sculpture, a drawing (including a diagram, map, chart or plan) on engraving

or a photograph, whether or not such work possesses artistic quality;
• Any work of architecture; and
• Any other work of artistic craftsmanship.

A design or pattern covers the whole body or the goods and forms part and parcel or the
goods but a trade mark is apart from and different from the goods for denoting the goods
to be the manufacture or merchandise of a particular person. The copying of a design cannot,
therefore, be treated as counterfeiting a trade mark. [Narumal Khemchand vs. The Bombay
Co., Ltd., (1914)]

Article means any article of manufacture and any substance, artificial, or partly artificial and
partly natural; and includes any part of an article capable of being made and sold separately.

Proprietor of a New or Original Design

• Where the author of the design, for good consideration, executes the work for some
other person, means the person for whom the design is so executed;
• Where any person acquires the design or the right to apply the design to any article,
either exclusively of any other person or otherwise, means, in the respect and to the
extent in and to which the design or right has been so acquired, the person by whom the
design or right is so acquired; and
• In any other case, means the author of the design; and where the property in or the
right to apply, the design has devolved from the original proprietor upon any other
person, includes that other person. [Section 2(j)]

Prohibition of Registration of Certain Designs

A design which prohibited of registration under Section 4 of the Design Act, 2000 are as
follows:

• is not new or original; or

• has been disclosed to the public anywhere in India or in any other country by publication
in tangible form or by use or in any other way prior to the filing date, or where applicable,
the priority date of the application for registration; or

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• is not significantly distinguishable from known designs or combination of known designs;

or
• comprises or contains scandalous or obscene matter, shall not be registered.

In the matter of M/s Brighto Auto Industries vs. Shri Raj Chawla (1978 Delhi) it was
held by the Honorable Court that new is taken generally to mean as different to what has
gone before and original as something originating from the author. In the matter of novelty
the eye has to be the ultimate arbiter and the determination has to rest on the general ocular
impression. To secure recognition for its newness or originality it is imperative that a design
identical with or even materially similar to the relevant design should not have been published
or registered previously. A slight trivial or infinitesimal variation from a pre-existing design
will not qualify it for registration taking into account the nature involved the change
introduced should be substantial.

It is not necessary to justify registration that the whole of the design should be new, the
newness may be confined to only a part of it but that part must be a significant one and it
should be potent enough to impart to the whole design a distinct identity, unless the
registration sought for the said part alone.

Further it was held that it is the duty of the court to take special care that no design shall
be counted new or original, unless it is distinct from what previously existed by something
essentially new or original which is different from ordinary trade variants, which may have
lost, been common matters of test or choice in that trade.

Application for Registration of Designs (Section 5)

(1) The Controller may, on the application of any person claiming to be the proprietor of
any new or original design not previously published in any country and which is not
contrary to public order or morality, register the design under this Act.
(2) Every application shall be in the prescribed form (Form 1) and shall be accompanied
by the prescribed fee.
(3) A design may be registered in not more than one class, and, in case of doubt as to the
class in which a design ought to be registered, the Controller may decide the question.
(4) The Controller may, if he thinks fit, refuse to register any design presented to him
for registration; but any person aggrieved by any such refusal may appeal to the High
Court.
(5) An application which, owing to any default or neglect on the part of the applicant, has
not been completed so as to enable registration to be effected within the prescribed
time shall be deemed to be abandoned.
(6) A design when registered shall be registered as of the date of the application for
registration.

Registration to be in respect of Particular Article (Section 6)

(1) A design may be registered in respect of any or all of the articles comprised in a
prescribed class of articles.
(2) Any question arising as to the class within which any article falls shall be determined by
the Controller whose decision in the matter shall be final.
(3) Where a design has been registered in respect of any article comprised in a class of
article, the application of the proprietor of the design to register it in respect of some

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one or more other articles comprised in that class of articles shall not be refused, nor
shall the registration thereof invalidated —
a) on the ground of the design not being a new or original design, by reason only
that it was so previously registered; or
b) on the ground of the design having been previously published in India or in any
other country, by reason only that it has been applied to article in respect of
which it was previously registered.

It may be noted that such subsequent registration shall not extend the period of
copyright in the design beyond that arising from previous registration.

Essential requirements for the registration of ‘Design’ under the Act

➢ The design should be new or original, not previously published or used in any country
before the date of application for registration. The novelty may reside in the application
of a known shape or pattern to new subject matter.
➢ The design should relate to features of shape, configuration, pattern or ornamentation
applied or applicable to an article.
➢ The design should be applied or applicable to any article by any industrial process.
➢ The features of the design in the finished article should appeal to and are judged solely
by the eye. This implies that the design must appear and should be visible on the finished
article, for which it is meant.
➢ Any mode or principle of construction or operation or anything which is in substance a
mere mechanical device, would not be a registrable design.
➢ The design should not include any Trade Mark or property mark or artistic works as
defined under the Copyright Act, 1957.

Publication of Particulars of Registered Designs

Section 7 of the Act provides that the Controller shall, as soon as may be after the
registration of a design, cause publication of the prescribed particulars of the design to be
published in such manner as may be prescribed and thereafter the design shall be open to
public inspection.

Substitution of Applicant or Joint Claiming (Section 8)

a) Name of an applicant can be substituted or a joint claim can be made for an applied
design, if the following requirements are met:
i. The claim for substitution is made before the design has been registered; and
ii. Right of claimant shall be created only by:
• An assignment;
• Agreement in writing made by the applicant or one of the applicants; or
• Operation of law;
iii. The design under consideration shall be identified in the assignment or agreement
specifically by reference to the number of applications for registration; or
iv. The rights of the claimant in respect of the design have been finally established by
a Court.
b) A request for substitution of applicant shall be filed in Form-2 along with the required
fee. If the above said requirements are fulfilled and the Controller is satisfied that,
upon registration of design, the claimant would be entitled to any interest in the design
the Controller may direct that the application shall proceed:
i. in the names of the claimant(s); or

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ii.
in the names of the claimant(s) and the applicant or the other joint applicant(s), as
the case may be.
c) However, in case of joint applicants, the Controller shall not pass such direction without
with the consent of the other joint applicant(s);
d) In case, joint applicant(s) die(s) at any time before the design has been registered, a
request may be made for substitution by the survivor(s) and the Controller may direct
that the application shall proceed in the name of the survivors alone. However, no such
direction shall be issued without the consent of legal representative of the deceased;

Certificate of Registration
Under section 9 of the Design Act, the Controller grant a certificate of registration to the
proprietor of the design when it registered.

The Controller may, in case of loss of the original certificate, or in any other case in which he
deems it expedient, furnish one or more copies of the certificate.

Effect of Registration of Design

The registration of a design confers upon the registered proprietor ‘Copyright’ in the design
for the period of registration. ‘Copyright’ means the exclusive right to apply a design to the
article belonging to the class in which it is registered.

Register of Designs
Section 10 of the Act provides that there shall be kept at the patent office a book called the
register of designs, wherein shall be entered the names and addresses of proprietors of
registered designs, notifications of assignments and of transmissions of registered designs,
and such other matter as may be prescribed and such register may be maintained wholly or
partly on computer, floppies or diskettes, subject to such safeguards as may be prescribed.

The register of designs shall be prima facie evidence of any matter by this Act directed or
authorized to be entered therein.

Copyright on Registration
Section 11 provides that when a design is registered, the registered proprietor of the design
shall, subject to the provisions of this Act, have copyright in the design during 10 years from
the date of registration. However, before the expiration of the said 10 years, application for
the extension of the period of copyright is made to the Controller in the prescribed manner,
the Controller shall, on payment of the prescribed fee, extend the period of copyright for a
2nd period of 5 years from the expiration of the original period of ten years.

High Court of Delhi in the case of Microfibers Inc. vs. Girdhar and Co. and Anr. had
inter alia criteria observed the following guidelines:

a. The definition of artistic work has a very wide connotation as it is not circumscribed by
any limitation of the work possessing any artistic quality. Even an abstract work, such as
a few lines or curves arbitrarily drawn would qualify as an artistic work.
b. The rights to which a holder of an original artistic work is entitled are enumerated in
Section 14(c) of the Copyright Act.
c. It is the exclusive right of the holder of a Copyright in an original artistic work to
reproduce the work in any material form.

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d. The design protection in case of registered works under the Designs Act cannot be
extended to include the copyright protection to the works which were industrially
produced.
e. If the design is registered under the Designs Act, the design would lose its copyright
protection under the Copyright Act.

What is the duration of the registration of a design? Can it be extended?

The duration of the registration of a design is initially ten years from the date of registration,
but in cases where claim to priority has been allowed the duration is ten years from the
priority date. This initial period of registration may be extended by further period of 5 years
on an application made to the Controller before the expiry of the said initial period of ten
years.

Restoration of Lapsed Designs

Section 12 of the Act provides that where a design has ceased to have effect by reason of
failure to pay the fee for the extension of copyright, the proprietor of such design or his
legal representative and where the design was held by two or more persons jointly, then, with
the leave of the Controller one or more of them without joining the others, may, within one
year from the date on which the design ceased to have effect, make an application for the
restoration of the design in the prescribed manner on payment of such fee as may be
prescribed.

Can the Registration of a Design be cancelled?

According to Section 19 of the Act, the registration of a design may be cancelled at any time
after the registration of design on a petition for cancellation in prescribed form with fee to
the Controller of Designs on the following grounds:

➢ That the design has been previously registered in India; or

➢ That it has been published in India or elsewhere prior to date of registration; or
➢ The design is not new or original; or
➢ Design is not registrable; or
➢ It is not a design under Clause (d) of Section 2.

Piracy of Registered Design

During the existence of copyright in any design it shall not be lawful for any person, without
the license or written consent of the registered proprietor:

➢ for the purpose of sale to apply or cause to be applied, to any article in any class of
articles in which the design is registered, the design or any fraudulent or obvious
imitation thereof, or to do anything with a view to enable the design to be so applied;
➢ to import such article for the purposes of sale;

What is Piracy of a Design?

Piracy of a design means the application of a design or its imitation to any article belonging to
class of articles in which the design has been registered for the purpose of sale or importation
of such articles without the written consent of the registered proprietor. Publishing such
articles or exposing terms for sale with knowledge of the unauthorized application of the
design to them also involves piracy of the design.

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Appeal
An appeal lies to the High Court against an order passed by the Controller under the following
provisions:

i. an order under Section 5, refusing registration of a design;

ii. an order under Section 19, passed in a cancellation petition;
iii. an order under Section 31, passed in a rectification petition;
iv. an order under Section 35, refusing registration on the ground of public order or
morality.

Every appeal shall be made within three months of the date of the order of the Controller.
The date of such order is the date on which the order is dispatched.

In calculating the said period of three months, the time taken in granting a copy of the order
appealed against shall be excluded.

The High Court may, if it thinks fit, obtain the assistance of an expert in deciding such
appeals, and the decision of the High Court shall be final.

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LAW RELATING TO FUGITIVE ECONOMIC OFFENDERS

INTRODUCTION
There have been several instances of economic offenders fleeing the jurisdiction of Indian
courts anticipating the commencement of criminal proceedings or sometimes during the
pendency of such proceedings. The absence of such offenders from Indian courts has several
deleterious consequences, such as, it obstructs investigation in criminal cases, it wastes
precious time of courts and it undermines the rule of law in India. Further, most of such cases
of economic offences involve non-repayment of bank loans thereby worsening the financial
health of the banking sector in India. The existing civil and criminal provisions in law are
inadequate to deal with the severity of the problem.

In order to address the said problem and lay down measures to deter economic offenders
from evading the process of Indian law by remaining outside the jurisdiction of Indian courts,
Parliament enacted a legislation, namely, the Fugitive Economic Offenders Bill, 2018 to ensure
that fugitive economic offenders return to India to face the action in accordance with law.

Fugitive Economic Offenders Act, 2018 provides for measures to deter fugitive economic
offenders from evading the process of law in India by staying outside the jurisdiction of
Indian courts, to preserve the sanctity of the rule of law in India.

Salient Features of the Act

• Defines the term such as “Fugitive Economic Offender”, “Key Managerial Personnel”,
“Proceeds of Crime”.
• Provisions for attachment of the property of a fugitive economic offender and proceeds
of crime.
• Empowers Director relating to survey, search and seizure and search of persons.
• Confiscation of the property of a fugitive economic offender and proceeds of crime.
• Disentitlement of the fugitive economic offender from putting forward or defending
any civil claim.
• Appointment of an Administrator.
• Appeal to the High Court against the orders issued by the Special Court.

Fugitive Economic Offender

Any individual against whom a warrant for arrest in relation to a Scheduled Offence has been
issued by any Court in India, who –

(i) has left India so as to avoid criminal prosecution; or

(ii) being abroad, refuses to return to India to face criminal prosecution is a fugitive
economic offender.

It may be noted that Scheduled Offence means an offence specified in the Schedule
appended to the Fugitive Economic Offenders Act, 2018 if the total value involved in such
offence or offences is Rs. 100 crore or more.

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Procedure for Declaration of Fugitive Economic Offender

1) Where the Director appointed for the purposes of the Prevention of Money-laundering
Act, 2002 or any other officer not below the rank of Deputy Director authorised by the
Director, has reason to believe (the reasons for such belief to be recorded in writing), on
the basis of material in his possession, that any individual is a fugitive economic offender,
he may file an application in such form and prescribed manner in the Special Court that
such individual may be declared as a fugitive economic offender.
2) The application shall contain: -
a) reasons for the belief that an individual is a fugitive economic offender;
b) any information available as to the whereabouts of the fugitive economic offender;
c) a list of properties or the value of such properties believed to be the proceeds of
crime, including any such property outside India for which confiscation is sought;
d) a list of properties or benami properties owned by the individual in India or abroad
for which confiscation is sought; and
e) a list of persons who may have an interest in any of the properties listed under
clauses (c) and (d) above.

Proceeds of Crime means any property derived or obtained, directly or indirectly, by any
person as a result of criminal activity relating to a Scheduled Offence, or the value of
any such property, or where such property is taken or held outside the country, then the
property equivalent in value held within the country or abroad.

3) Where an application has been duly filed, the Special Court shall issue a notice to an
individual who is alleged to be a fugitive economic offender.
4) The notice shall also be issued to any other person who has any interest in the property
mentioned in the application.
5) A notice of Special Court shall—
(a) require the individual to appear at a specified place and time not less than six weeks
from the date of issue of such notice; and
(b) state that failure to appear on the specified place and time shall result in a
declaration of the individual as a fugitive economic offender and confiscation of
property under the Act.
6) A notice shall also be forwarded to such authority, as the Central Government may notify,
for effecting service in a contracting State. The authority shall make efforts to serve
the notice within a period of two weeks in such prescribed manner.

Contracting State means any country or place outside India in respect of which
arrangements have been made by the Central Government with the Government of such
country through a treaty or otherwise.

7) A notice may also be served to the individual alleged to be a fugitive economic offender
by electronic means to–
(a) his electronic mail address submitted in connection with an application for allotment
of Permanent Account Number under section 139A of the Income-tax Act, 1961;
(b) his electronic mail address submitted in connection with an application for
enrolment under section 3 of the Aadhaar ; or

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(c) any other electronic account as may be prescribed, belonging to the individual which
is accessed by him over the internet, subject to the satisfaction of the Special
Court that such account has been recently accessed by the individual and
constitutes a reasonable method for communication of the notice to the individual.
8) Where any individual to whom notice has been issued by the Special Court shall appears
in person at the place and time specified in the notice, the Special Court may terminate
the proceedings under the Act.
9) Where any individual to whom notice has been issued fails to appear at the place and time
specified in the notice, but enters appearance through counsel, the Special Court may in
its discretion give a period of one week to file a reply to the application.
10) Where any individual to whom notice has been issued fails to enter appearance either in
person or through counsel, and the Special Court is satisfied—
(a) that service of notice has been effected on such party; or
(b) that notice could not be served in spite of best efforts because such individual has
evaded service of notice, it may, after recording reasons in writing, proceed to hear
the application.

Declaration of Fugitive Economic Offender

1) After hearing the application, if the Special Court is satisfied that an individual is a
fugitive economic offender, it may, by an order, declare the individual as a fugitive
economic offender for reasons to be recorded in writing.
2) On a declaration, the Special Court may order that any of the following properties stand
confiscated to the Central Government—
(a) the proceeds of crime in India or abroad, whether or not such property is owned
by the fugitive economic offender; and
(b) any other property or benami property in India or abroad, owned by the fugitive
economic offender.
3) The confiscation order of the Special Court shall, to the extent possible, identify the
properties in India or abroad that constitute proceeds of crime which are to be
confiscated and in case such properties cannot be identified, quantify the value of the
proceeds of crime.
4) The confiscation order of the Special Court shall separately list any other property
owned by the fugitive economic offender in India which is to be confiscated.
5) Where the Special Court has made an order for confiscation of any property and such
property is in a contracting State, the Special Court may issue a letter of request to a
Court or authority in the contracting State for execution of such order.
6) Every letter of request to be transmitted to a contracting State shall be transmitted
in such form and manner as the Central Government may, by notification, specify in this
behalf.
7) The Special Court may, while making the confiscation order, exempt from confiscation
any property which is a proceed of crime in which any other person, other than the
fugitive economic offender, has an interest if it is satisfied that such interest was
acquired bona fide and without knowledge of the fact that the property was proceeds
of crime.

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8) All the rights and title in the confiscated property shall, from the date of the
confiscation order, vest in the Central Government, free from all encumbrances.
9) Where on the conclusion of the proceedings, the Special Court finds that the individual
is not a fugitive economic offender, the Special Court shall order release of property or
record attached or seized under this Act to the person entitled to receive it.
10) Where an order releasing the property has been made by the Special Court, the Director
or any other officer authorised by him in this behalf may withhold the release of any
such property or record for a period of ninety days from the date of receipt of such
order, if he is of the opinion that such property is relevant for the appeal proceedings
under the Act.

Power to Disallow Civil Claims

Notwithstanding anything contained in any other law for the time being in force,

a) on a declaration of an individual as a fugitive economic offender, any Court or tribunal in

India, in any civil proceeding before it, may, disallow such individual from putting forward
or defending any civil claim; and
b) any Court or tribunal in India in any civil proceeding before it, may, disallow any company
or limited liability partnership from putting forward or defending any civil claim, if an
individual filing the claim on behalf of the company or the limited liability partnership,
or any promoter or key managerial personnel or majority shareholder of the company or
an individual having a controlling interest in the limited liability partnership has been
declared as a fugitive economic offender.

It may be noted that:

“Key Managerial Personnel” shall have the same meaning as assigned to it under Section 2(51)
of the Companies Act, 2013.

“Company” means any body corporate and includes a firm, or other association of persons;

“Limited Liability Partnership” shall have the same meaning as assigned to it under Section
2(1)(n) of the Limited Liability Partnership Act, 2008.

Attachment of property
The Director or any other officer authorised by the Director, not below the rank of Deputy
Director, may, with the permission of the Special Court, attach any by an order in writing in
prescribed manner.

Director or any other officer, not below the rank of Deputy Director, authorised by the
Director, may, by an order in writing, at any time prior to the filing of the application to the
Special Court, attach any property—

• for which there is a reason to believe that the property is proceeds of crime, or is a
property or benami property owned by an individual who is a fugitive economic offender;
and
• which is being or is likely to be dealt with in a manner which may result in the property
being unavailable for confiscation.

Director or any other officer who provisionally attaches any property shall within a period of
thirty days from the date of such attachment, file an application before the Special Court.

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The attachment of any property shall continue for a period of one hundred and eighty days
from the date of order of attachment or such other period as may be extended by the Special
Court before the expiry of such period.

Power of Survey
Where a Director or any other officer authorised by the Director, on the basis of material
in his possession, has reason to believe (the reasons for such belief to be recorded in writing),
that an individual may be a fugitive economic offender, he may enter any place:

i. within the limits of the area assigned to him; or

ii. in respect of which he is authorised for the purposes of this section, by such other
authority, who is assigned the area within which such place is situated.

Where the Director or any other officer authorised by him, on the basis of material in his
possession, has reason to believe (the reasons for such belief to be recorded in writing) that
an individual may be a fugitive economic offender and it is necessary to enter any place, he
may request any proprietor, employee or any other person who may be present at that time,
to—

a) afford him the necessary facility to inspect such records as he may require and which
may be available at such place;
b) afford him the necessary facility to check or verify the proceeds of crime or any
transaction related to proceeds of crime which may be found therein; and
c) furnish such information as he may require as to any matter which may be useful for,
or relevant to any proceedings .

The Director, or any other officer acting under this section may:

i. place marks of identification on the records inspected by him and make or cause to be
made extracts or copies therefrom;
ii. make an inventory of any property checked or verified by him; and
iii. record the statement of any person present at the property which may be useful for,
or relevant to, any proceeding .

Search and Seizure

Where the Director or any other officer not below the rank of Deputy Director authorised
by him, on the basis of information in his possession, has reason to believe (the reason for
such belief to be recorded in writing) that any person:

i. may be declared as a fugitive economic offender;

ii. is in possession of any proceeds of crime;
iii. is in possession of any records which may relate to proceeds of crime; or
iv. is in possession of any property related to proceeds of crime, then, subject to any rules
made in this behalf, he may authorise any officer subordinate to him to–
a) enter and search any building, place, vessel, vehicle or aircraft where he has reason
to suspect that such records or proceeds of crime are kept;
b) break open the lock of any door, box, locker, safe, almirah or other receptacle for
exercising the powers conferred by clause (a) where the keys thereof are not
available;
c) seize any record or property found as a result of such search;

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d) place marks of identification on such record or property, if required or make or

cause to be made extracts or copies therefrom;
e) make a note or an inventory of such record or property; and
f) examine on oath any person, who is found to be in possession or control of any
record or property, in respect of all matters relevant for the purposes of any
investigation under this Act.

Where an authority, upon information obtained during survey, is satisfied that any evidence
shall be or is likely to be concealed or tampered with, he may, for reasons to be recorded in
writing, enter and search the building or place where such evidence is located and seize that
evidence.

Search of Persons
Notwithstanding anything contained in any other law for the time being in force—

a) if an authority, authorised in this behalf by the Central Government by general or special

order, has reason to believe (the reason for such belief to be recorded in writing) that
any person has secreted about his person or anything under his possession, ownership or
control, any record or proceeds of crime which may be useful for or relevant to any
proceedings under this Act, he may search that person and seize such record or property
which may be useful for or relevant to any proceedings under the Act;
b) where an authority is about to search any person, he shall, if such person so requires,
take such person within twenty-four hours to the nearest Gazetted Officer, superior in
rank to him, or a Magistrate;

It may be noted that the period of twenty-four hours shall exclude the time necessary
for the journey undertaken to take such person to the nearest Gazetted Officer,
superior in rank to him, or the Magistrate’s Court;

c) if the requisition under clause (b) is made, the authority shall not detain the person for
more than 24 hours prior to taking him before the Gazetted Officer, superior in rank
to him, or the Magistrate referred to in that clause: Provided that the period of twenty-
four hours shall exclude the time necessary for the journey from the place of detention
to the office of the Gazetted Officer, superior in rank to him, or the Magistrate’s Court;
d) the Gazetted Officer or the Magistrate before whom any such person is brought shall,
if he sees no reasonable ground for search, forthwith discharge such person but
otherwise shall direct that search be made;
e) before making the search , the authority shall call upon two or more persons to attend
and witness the search and the search shall be made in the presence of such persons;
f) the authority shall prepare a list of record or property seized in the course of the
search and obtain the signatures of the witnesses on the list;
g) no female shall be searched by anyone except a female; and
h) the authority shall record the statement of the person searched in respect of the
records or proceeds of crime found or seized in the course of the search.

Appeal
1) An appeal shall lie from any judgment or order, not being an interlocutory order, of a
Special Court to the High Court both on facts and on law.

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2) Every appeal shall be preferred within a period of thirty days from the date of the
judgment or order appealed from.
3) High Court may entertain an appeal after the expiry of the said period of thirty days,
if it is satisfied that the appellant had sufficient cause for not preferring the appeal
within the period of 30 days.
4) No appeal shall be entertained after the expiry of period of ninety days.

Bar of Jurisdiction
No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any
matter which the Special Court is empowered by or under the Act to determine and no
injunction shall be granted by any court or other authority in respect of any action taken or
to be taken in pursuance of any power conferred by or under the Act.

Overriding Effect
The provisions of Fugitive Economic Offender Act shall have effect, notwithstanding anything
inconsistent therewith contained in any other law for the time being in force.

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FOREIGN TRADE POLICY & PROCEDURE

INTRODUCTION
The FTP 2023 aims at process re-engineering and automation to facilitate ease of doing
business for exporters. It also focuses on emerging areas like dual use high end technology
items under SCOMET, facilitating e-commerce export, collaborating with States and
Districts for export promotion.

- New Policy introduces a one-time Amnesty* Scheme for exporters to close the old
pending authorizations and start afresh.

*Amnesty means a general pardon for offenses

- New Policy encourages recognition of new towns through “Towns of Export Excellence
Scheme” and exporters through “Status Holder Scheme”.
- New Policy facilitates exports by streamlining the popular Advance Authorization and
EPCG schemes, and enabling merchanting trade from India.

The Key Approach to the policy is based on these 4 pillars:

(i) Incentive to Remission,

(ii) Export promotion through collaboration - Exporters, States, Districts, Indian Missions,
(iii) Ease of doing business, reduction in transaction cost and e-initiatives and
(iv) Emerging Areas – E-Commerce Developing Districts as Export Hubs and streamlining
SCOMET policy.
KEY HIGHLIGHTS OF FTP 2023
1. Process Re-Engineering and Automation
- Greater faith is being reposed on exporters through automated IT systems with risk
management system for various approvals in the new FTP.
- The policy emphasizes export promotion and development, moving away from an incentive
regime to a regime which is facilitating, based on technology interface and principles of
collaboration.
- Considering the effectiveness of some of the ongoing schemes like Advance
Authorisation, EPCG etc. under FTP 2015-20, they will be continued along with
substantial process re-engineering and technology enablement for facilitating the
exporters.
- FTP 2023 codifies implementation mechanisms in a paperless, online environment,
building on earlier 'ease of doing business' initiatives. Reduction in fee structures and
IT-based schemes will make it easier for MSMEs and others to access export benefits.
2. Towns of Export Excellence
Four new towns, namely Faridabad, Mirzapur, Moradabad, and Varanasi, have been
designated as Towns of Export Excellence (TEE) in addition to the existing 39 towns. The
TEEs will have priority access to export promotion funds under the Market Access
Initiative (MAI) scheme. This addition is expected to boost the exports of handlooms,
handicrafts, and carpets.

3. Recognition of Exporters

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Exporter firms recognized with 'status' based on export performance will now be partners
in capacity building initiatives on a best-endeavour basis. Similar to the 'each one teach
one' initiative, 2-star and above status holders would be encouraged to provide trade-
related training based on a model curriculum to interested individuals. This will help India
build a skilled manpower pool capable of servicing a $5 Trillion economy before 2030.

4. Promoting export from the districts

The FTP aims at building partnerships with State governments and taking forward the
Districts as Export Hubs (DEH) initiative to promote exports at the district level and
accelerate the development of grassroots trade ecosystem. Efforts to identify export
worthy products & services and resolve concerns at the district level will be made through
an institutional mechanism – State Export Promotion Committee and District Export
Promotion Committee at the State and District level, respectively.

5. Streamlining SCOMET Policy

There is a wider outreach and understanding of SCOMET (Special Chemicals, Organisms,
Materials, Equipment and Technologies) among stakeholders, and the policy regime is being
made more robust to implement international treaties and agreements entered into by
India. A robust export control system in India would provide access of dual-use High end
goods and technologies to Indian exporters while facilitating exports of controlled
items/technologies under SCOMET from India.

6. Facilitating E-Commerce Exports

FTP 2023 outlines the intent and roadmap for establishing e-commerce hubs and related
elements such as payment reconciliation, book-keeping, returns policy, and export
entitlements. As a starting point, the consignment wise cap on E-Commerce exports
through courier has been raised from ₹5Lakh to ₹10 Lakh in the FTP 2023. Depending on
the feedback of exporters, this cap will be further revised or eventually removed.

Integration of Courier and Postal exports with ICEGATE will enable exporters to claim
benefits under FTP. The comprehensive e-commerce policy addressing the export/import
ecosystem would be elaborated soon, based on the recommendations of the working
committee on e-commerce exports and inter-ministerial deliberations.

7. Facilitation under Export Promotion of Capital Goods (EPCG) Scheme

The EPCG Scheme, which allows import of capital goods at zero Customs duty for export
production, is being further rationalized. Some key changes being added are:

• Prime Minister Mega Integrated Textile Region and Apparel Parks (PM MITRA)
scheme has been added as an additional scheme eligible to claim benefits under CSP
(Common Service Provider) Scheme of Export Promotion Capital Goods Scheme
(EPCG).
• Dairy sector to be exempted from maintaining Average Export Obligation – to support
dairy sector to upgrade the technology.
• Battery Electric Vehicles (BEV) of all types, Vertical Farming equipment, Wastewater
Treatment and Recycling, Rainwater harvesting system and Rainwater Filters, and
Green Hydrogen are added to Green Technology products – will now be eligible for
reduced Export Obligation requirement under EPCG Scheme.

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8. Facilitation under Advance authorization Scheme

Advance authorisation Scheme accessed by DTA units provides duty-free import of raw
materials for manufacturing export items and is placed at a similar footing to EOU and
SEZ Scheme. However, the DTA unit has the flexibility to work both for domestic as well
as export production. Based on interactions with industry and Export Promotion councils,
certain facilitation provisions have been added in the present FTP such as:

• Special Advance Authorisation Scheme extended to export of Apparel and Clothing

sector on self-declaration basis to facilitate prompt execution of export orders.
• Benefits of Self-Ratification Scheme for fixation of Input-Output Norms extended
to 2 star and above status holders in addition to Authorised Economic Operators at
present.
9. Merchanting trade
Merchanting trade involves shipment of goods from one foreign country to another foreign
country without touching Indian ports, involving an Indian intermediary. This will be
subject to compliance with RBI guidelines, and won’t be applicable for goods/items
classified in the CITES and SCOMET list. In course of time, this will allow Indian
entrepreneurs to convert certain places like GIFT city etc. into major merchanting hubs
as seen in places like Dubai, Singapore and Hong Kong.

10. Amnesty Scheme

Finally, the government is strongly committed to reducing litigation and fostering trust-
based relationships to help alleviate the issues faced by exporters. In line with "Vivaad se
Vishwaas" initiative, which sought to settle tax disputes amicably, the government is
introducing a special one-time Amnesty Scheme under the FTP 2023 to address default
on Export Obligations.

This scheme is intended to provide relief to exporters who have been unable to meet their
obligations under EPCG and Advance Authorizations, and who are burdened by high duty
and interest costs associated with pending cases. All pending cases of the default in
meeting Export Obligation (EO) of authorizations mentioned can be regularized on
payment of all customs duties that were exempted in proportion to unfulfilled Export
Obligation.

The interest payable is capped at 100% of these exempted duties under this scheme.
However, no interest is payable on the portion of Additional Customs Duty and Special
Additional Customs Duty and this is likely to provide relief to exporters as interest burden
will come down substantially. It is hoped that this amnesty will give these exporters a
fresh start and an opportunity to come into compliance.

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LEGAL FRAMEWORK AND TRADE FACILITATION

Legal Basis of Foreign Trade Policy
The Foreign Trade Policy (FTP) 2023 is notified by Central Government, in exercise of powers
conferred under Section 5 of the Foreign Trade (Development & Regulation) Act, 1992 [FT
(D&R) Act], as amended.

Duration of FTP
The Foreign Trade Policy (FTP) 2023 incorporating provisions relating to export and import
of goods and services, shall come into force with effect from 1st April, 2023 and shall continue
to be in operation unless otherwise specified or amended. All exports and imports made up to
31.03.2023 shall, accordingly, be governed by the relevant FTP, unless otherwise specified.

Amendment to FTP
Central Government, in exercise of powers conferred by Section 3 and Section 5 of FT (D&R)
Act, 1992, as amended from time to time, reserves the right to make any amendment to the
FTP, by means of notification, in public interest.

Hand Book of Procedures (HBP) and Appendices & Aayat Niryat Forms (ANF)
Director General of Foreign Trade (DGFT) may, by means of a Public Notice, notify Hand Book
of Procedures, including Appendices and Aayat Niryat Forms or amendment thereto, if any,
laying down the procedure to be followed by an exporter or importer or by any
Licensing/Regional Authority or by any other authority for purposes of implementing
provisions of FT (D&R) Act, the Rules and the Orders made there under and provisions of
FTP.

It may be noted that-

“Importer” means a person who imports or intends to import and holds an IEC number, unless
otherwise specifically exempted.

Specific provision to prevail over the general

Where a specific provision is spelt out in the FTP/Hand Book of Procedures (HBP), the same
shall prevail over the general provision.

Transitional Arrangements
(a) Any License/ Authorisation/ Certificate/ Scrip/ instrument bestowing financial or fiscal
benefit issued before commencement of FTP 2023 shall continue to be valid for the
purpose and duration for which it was issued, unless otherwise stipulated.
(b) Item wise Import/Export Policy is delineated in the ITC (HS) Schedule I and Schedule
II respectively. The importability/ exportability of a particular item is governed by the
policy as on the date of import/ export.

Bill of Lading and Shipping Bill are the key documents for deciding the date of import
and export respectively. In case of change of policy from ‘free’ to
‘restricted/prohibited/state trading’ or ‘otherwise regulated’, the import/export
already made before the date of such regulation/restriction will not be affected.

Further, the import/export on or after the date of such regulation/restriction will be

allowed for importer/ exporter who has a commitment through Irrevocable Commercial

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Letter of Credit (ICLC) before the date of imposition of such restriction/ regulation
and shall be limited to the balance quantity, value and period available in the ICLC. For
operational listing of such ICLC, the applicant shall have to register the ICLC with
jurisdictional RA against computerized receipt within 15 days of imposition of any such
restriction/ regulation.

It may be noted that –

“Free” as appearing in context of import/export policy for items means goods which do not
need any ‘Authorisation’/ License or permission for being imported into the country or
exported out.

ITC (HS) refers to Indian Trade Classification (Harmonized System) at 8 digits.

“Authorisation” means permission as included in Section 2(g) of the Act to import or export
as per provisions of FTP.

TRADE FACILITATION AND EASE OF DOING BUSINESS

National Committee on Trade Facilitation (NCTF)
India has ratified the World Trade Organization’s Trade Facilitation Agreement (TFA) in
April 2016. To facilitate coordination and implementation of the TFA provisions, an inter-
ministerial body i.e., National Committee on Trade Facilitation (NCTF) has been constituted.

National Trade Facilitation Action Plan aims to achieve: -

• Improvement in Ease of Doing Business through reduction in transaction cost and time
• Reduction in cargo release time
• A paperless regulatory environment
• A transparent and predictable legal regime
• Improved investment climate through better infrastructure

DGFT as a facilitator of exports/ imports

DGFT has a commitment to function as a facilitator of exports and imports. Focus is on good
governance, which depends on efficient, transparent and accountable delivery systems. In
order to facilitate international trade, DGFT consults various Export Promotion Councils as
well as Trade and Industry bodies from time to time.

Free passage of Export Consignment

Consignments of items meant for exports shall not be withheld/ delayed for any reason by
any agency of Central/ State Government. In case of any doubt, authorities concerned may
ask for an undertaking from exporter and release such consignment.

No seizure of export related Stock

No seizure shall be made by any agency so as to disrupt manufacturing activity and delivery
schedule of exports. In exceptional cases, concerned agency may seize the stock on the basis
of prima facie evidence of serious irregularity. However, such seizure should be lifted within
7 days unless the irregularities are substantiated.

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Export of perishable agricultural Products

To reduce transaction and handling costs, a single window system to facilitate export of
perishable agricultural produce is being facilitated through Agricultural and Processed Food
Products Export Development Authority (APEDA).

Niryat Bandhu - Hand Holding Scheme for new export/ import entrepreneurs
DGFT is implementing the Niryat Bandhu Scheme for mentoring new and potential exporter
on the intricacies (complicated part) of foreign trade through counseling, training and
outreach programmes including the ‘Districts as Export Hubs’ initiative with ‘industry
partners’, ‘knowledge partners’ and other stakeholders to create vibrant District-Product-
Market relevant knowledge ecosystem.

Issue of e-IEC (Electronic-Importer Exporter Code)

Importer Exporter Code (IEC) is mandatory for export/ import from/to India. DGFT issues
Importer Exporter Code in electronic form (e-IEC). For issuance of e-IEC, application can be
made on DGFT website (https://dgft.gov.in).

Online facility for e-RCMC/RC Related Processes

DGFT has created a common digital platform for application of issuance, renewal, amendment
and related processes pertaining to Registration Cum Membership Certificate (RCMC)/
Registration Certificate (RC) issued by Registering Authorities in electronic form.

Online facility for e-Certificate of Origin (e-CoO)

DGFT has created a common digital platform for issue of Preferential and Non-Preferential
Certificate of Origin (e-CoO) by designated agencies. The CoO Certificates are issued in an
online environment without any physical interface (https://coo.dgft.gov.in).

A unique number i.e. UDIN (Unique Document Identification Number) and a QR code is
endorsed on every e-CoO for validation and authentication by user agencies.

Online facility to file Quality Control and Trade Disputes (QCTD)

DGFT has created a common digital platform for handling Quality Control and Trade Disputes
cases where all jurisdictional Indian Mission abroad and Regional Authorities of DGFT have
been onboarded to work towards amicable resolution of disputes raised by Indian/Foreigner
Importer/Exporter in online environment.

Electronic record of export proceeds through eBRC & EDPMS

(a) e-BRC (Electronic Bank Realisation Certificate) has enabled DGFT to capture details of
realisation of export proceeds directly from the Banks through secured electronic mode.
This has facilitated the implementation of various export promotion schemes without
any physical interface with the stakeholders.
(b) RBI has also developed a comprehensive IT-based system called Export Data Processing
and Monitoring System (EDPMS) for monitoring of export of goods and software and
facilitating AD banks to report various returns through a single platform.

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IT Initiatives in DGFT
DGFT has undertaken a number of IT Initiatives to enable a paperless, contactless and
transparent environment for availing benefits under the export promotion schemes with a
view to improve the ease of doing business.

24 X 7 Helpdesk Facility
A dedicated 24 X 7 Helpdesk facility has been put in place to assist the exporters in filing
online applications on the DGFT portal and other matters pertaining to Foreign Trade Policy.

Trade Data and Statistics

Continuous efforts are being made for better collection, compilation and wider dissemination
of Trade Data and Statistics to help the policy makers, researchers, exporters and importers
to formulate their trade strategy. The trade statistics for merchandise trade is available at–

i. Department of Commerce’s portal,

ii. DGCI&S portal (Directorate General of Commercial Intelligence & Statistics) and
iii. NIRYAT Portal (National Import-Export Record for Yearly Analysis of Trade).

Trade Facilitation at Customs

CBIC has undertaken a number of initiatives to facilitate Trade. Some of these are as follows:

i. 24X7 Customs clearance in 20 sea ports and 17 Airports and extended clearance in
ICDs (Inland Container Depot) as per the needs of the Trade.
ii. Single Window in Customs
iii. E-Sanchit – Enabling Paperless clearance environment
iv. Pan-India Implementation of Faceless e-Assessment in imports.
v. TURANT Customs
vi. Implementation of electronic messages from Document Clearance to Cargo Movement
vii. Paperless Customs initiatives – Preparation and issuance of electronic documents.
viii. Contactless customs initiatives such as Turant Suvidha Kendras (TKSs).
ix. Release of ICE-DASH–Indian Customs EoDB Monitoring Dashboard
x. Direct Port Delivery (DPD) on imports and Direct Port Entry (DPE) on exports
xi. Compliance Information Portal (CIP)
xii. End to End automated and simplified procedure for Import of certain specified Goods
at Concessional Rate of Duty or for specified end use.
xiii. For detailed guidelines/procedures visit https://www.cbic. gov.in/ and
https://icegate.gov.in/

Towns of Export Excellence (TEE)

a. Objective: Development and growth of export production centres. A number of towns
have emerged as dynamic industrial clusters contributing handsomely to India’s exports.
It is necessary to grant recognition to these industrial clusters with a view to maximize
their potential and enable them to move up the value chain and also to tap new markets.
b. Selected towns producing goods of Rs. 750 Crore or more may be notified as TEE based
on potential for growth in exports. However, for TEE in Handloom, Handicraft,
Agriculture and Fisheries sector, threshold limit would be Rs. 150 Crore.

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Recognized associations of units will be provided financial assistance under MAI scheme,
on priority basis, for export promotion projects for marketing, capacity building and
technological services.

Duty Free Entitlements to Select Sectors

With a view to expand employment opportunities, certain special focus initiatives for Marine
Products and Sports Goods & Toys sectors are required. These sectors are being provided
the following duty-free entitlements (only basic customs duty is exempted) as per the
relevant Customs Notifications:

Marine Sector - Duty free import of specified specialized inputs/ chemicals and flavouring
oils not exceeding 1% of FOB value of seafood exports during the preceding financial year.

Sports Goods and Toys - Duty free import of specified inputs not exceeding 3% of FOB
value of sports goods exports during the preceding financial year.

STATUS HOLDER CERTIFICATION

The objective behind certifying certain exporter firms as “Status Holder” is to recognize
such exporter firms as business leaders who have excelled in international trade and have
successfully contributed to country’s foreign trade. Status Holders are expected to not only
contribute towards India’s exports but also provide guidance and handholding to new
entrepreneurs.

a. All exporters of goods, services and technology having an import-export code (IEC)
number, on the date of application, shall be eligible for recognition as a status holder
based on export performance. An applicant may be categorized as status holder on
achieving the threshold export performance in the current and preceding 3 financial
years.
However, for Gems & Jewellery Sector above export performance threshold during the
current and preceding 2 financial years shall be required.
The export performance shall be counted on the basis of FOB of export earnings in freely
convertible foreign currencies or in Indian Rupees.
b. For deemed export, FOR value of exports in Indian Rupees shall be converted in USD at
the exchange rate notified by CBIC, as applicable on 1st April of each Financial Year.
c. For granting status, an export performance would be necessary in all the three preceding
financial years (and in all the two preceding financial years for Gems & Jewellery Sector).

Status Holder Categories

Status Category Export Performance

Threshold in USD Million
One Star Export House 3
Two Star Export House 15
Three Star Export House 50
Four Star Export House 200
Five Star Export House 800

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Grant of Double Weightage

a. Double Weightage shall be available for grant of One Star Export House Status category
only. Such benefit of double weightage shall not be admissible for grant of status
recognition of other categories namely Two Star Export House, Three Star Export House,
Four Star export House and Five Star Export House. The exports by IEC holders under
the following categories shall be granted double weightage for calculation of export
performance for grant of status:
i. Micro and Small Enterprises as defined in Micro, Small & Medium Enterprises
Development (MSMED) Act, 2006
ii. Manufacturing units having ISO/BIS Certification
iii. Units located in North Eastern States including Sikkim, and Union Territories of
Jammu, Kashmir and Ladakh
iv. Export of fruits and vegetables.
b. A merchandise shipment/ service rendered can get double weightage only once in any one
of above categories.
Other Conditions for Grant of Status

Export of items under Export performance of one Exports made on re-export

Authorisation, including IEC holder shall not be basis shall not be counted for
SCOMET items, would be permitted to be transferred recognition.
included for calculation of to another IEC holder. Hence,
export performance. calculation of exports
performance based on
disclaimer shall not be
allowed.

Privileges of Status Holders

A Status Holder shall be eligible for privileges as under:

a. Authorisation and Customs Clearances for both imports and exports may be granted on
self-declaration basis;
b. Input-Output norms may be fixed on priority within 60 days by the Norms Committee;
Special scheme in respect of Input Output Norms to be notified by DGFT from time to
time, for specified status holder
c. Exemption from furnishing of Bank Guarantee for Schemes under FTP;
d. Exemption from compulsory negotiation of documents through banks. Remittance /
receipts, however, would be received through banking channels;
e. Two star and above Export houses shall be permitted to establish Export Warehouses
as per Department of Revenue guidelines.
f. The status holders would be entitled to preferential treatment and priority in handling
of their consignments by the concerned agencies.
g. Manufacturers who are also status holders (Three Star/Four Star/Five Star) will be
enabled to self-certify their manufactured goods as originating from India with a view
to qualify for preferential treatment under different preferential trading agreements.
h. Status holders shall be entitled to export freely exportable items (excluding Gems and
Jewellery, Articles of Gold and precious metals) on free of cost basis for export

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promotion subject to an annual limit of Rs. 1 Crore or 2% of average annual export

realization during preceding three licensing years, whichever is lower.
For export of pharma products by pharmaceutical companies, the annual limit would be
2% of the average annual export realisation during preceding three licensing years.
In case of supplies of pharmaceutical products, vaccines and lifesaving drugs to health
programmes of international agencies such as UN, WHO-PAHO and Government health
programmes, the annual limit shall be upto 8% of the average annual export realisation
during preceding three licensing years. Such free of cost supplies shall not be entitled
to Duty Drawback or any other export incentive under any export promotion scheme.

It may be noted that- “Manufacture” means to make, produce, fabricate, assemble, process
or bring into existence, by hand or by machine, a new product having a distinctive name,
character or use and shall include processes such as refrigeration, re-packing, polishing,
labeling, Re-conditioning repair, remaking, refurbishing, testing, calibration, re-engineering.

Manufacture, for the purpose of FTP, shall also include agriculture, aquaculture, animal
husbandry, floriculture, horticulture, pisciculture, poultry, sericulture, viticulture and mining.

“Manufacturer Exporter” means a person who exports goods manufactured by him or intends
to export such goods.

Skilling and Mentorship Obligations

a. To improve the trade ecosystem by enhancing the available skilling opportunities, Status
Holders are being made “partners” in providing mentoring and training in international
trade. Status Holders will endeavour to provide skill upgradation/ training in
international trade as detailed below:
Status Number of Trainees per year
Two Star Export House 5
Three Star Export House 10
Four Star Export House 20
Five Star Export House 50
b. A model training program of a minimum duration of 6 weeks would be put up in public
domain for guidance.
c. Detailed eligibility requirements, selection criteria, training curriculum etc. will be at
the discretion of the Status Holder.

Inter-Ministerial Committee for MSME Trade related grievances

An inter-ministerial committee to be set up to examine MSME trade related grievances which

have policy ramifications. This will expedite decision making with a ‘whole of government
approach’.

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GENERAL PROVISIONS REGARDING IMPORTS AND EXPORTS

Policy regarding import /Exports of goods
a. Exports and Imports shall be ‘Free’ except when regulated by way of ‘Prohibition’,
‘Restriction’ or ‘Exclusive trading through State Trading Enterprises (STEs)’ as laid down
in Indian Trade Classification (Harmonized System) [ITC (HS)] of Exports and Imports.
The list of ‘Prohibited’, ‘Restricted’, and STE items can be viewed under ‘Regulatory
Updates’ at https://dgft. gov.in
b. Further, there are some items which are ‘Free’ for import/export, but subject to
conditions stipulated in other Acts or in law for the time being in force.

Indian Trade Classification (Harmonised System) [ITC (HS)] of Exports and Imports
a. ITC(HS) is a compilation of codes for all merchandise / goods for export/ import. Goods
are classified based on their group or sub-group at 2/4/6/8 digits.
b. ITC(HS) is aligned at 6-digit level with international Harmonized System goods
nomenclature maintained by World Customs Organization (http://www.wcoomd. org).
However, India maintains national Harmonized System of goods at 8-digit level notified
under First Schedule of the Customs Tariff Act, 1975.
c. The import/export policies for all goods are indicated against each item as per its ITC
(HS). Schedule 1 of ITC (HS) lays down the Import Policy regime while Schedule II of
ITC(HS) lays down the Export Policy regime.

Compliance of Imports with Domestic Laws

a. Domestic Laws/ Rules/ Orders/ Regulations/ technical specifications/
environmental/safety and health norms applicable to domestically produced goods shall
apply, mutatis mutandis, to imports, unless specifically exempted.
b. However, goods to be utilized/ consumed in manufacture of export products may be
exempted by DGFT from domestic standards/ quality specifications.

Authority to specify Procedures

DGFT may, specify Procedures to be followed by an exporter or importer or by any
licensing/Regional Authority (RA) or by any other authority for purposes of implementation
of the provisions of FT (D&R) Act, the Rules and the Orders made there under and the FTP.
Such procedures, or amendments if any, shall be published by means of a Public Notice.

Importer-Exporter Code (IEC)

An IEC is a 10-character alpha-numeric number allotted to an entity (firm/company/LLP etc.)
and is mandatory for undertaking any export/import activities. With a view to maintain the
unique identity of an entity, consequent upon introduction / implementation of GST, IEC shall
be same as Permanent Account Number (PAN) and shall be separately issued by DGFT based
on an online application.

(a) No export or import of goods shall be made by any person without obtaining an IEC
unless specifically exempted. For export of services or technology, IEC shall be
necessary on the date of rendering services for availing benefits under the Foreign
Trade Policy.

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(b) Application process for IEC and updation in IEC is completely online and IEC can be
generated by the applicant as per the procedure detailed in the Handbook of Procedures.
(c) An IEC holder has to ensure that details in its IEC is updated electronically every year,
during the April-June period. In cases where there are no changes in IEC details same
also needs to be confirmed online.
(d) An IEC shall be de-activated, if it is not updated within the prescribed period. An IEC
so de-activated may be activated, on its successful updation. This would however be
without prejudice to any other action taken for violation of any other provisions of the
FTP.
(e) An IEC may also be flagged for scrutiny. IEC holder(s) are required to ensure that any
risks flagged by the system are timely addressed; failing which the IEC shall be de-
activated.

It may be noted that –

“Person” means both natural and legal and includes an individual, firm, society, company,
corporation or any other legal person including the DGFT officials.

Mandatory documents for export/ import of goods from/into India

a. Mandatory documents required for export of goods from India:

i. Bill of Lading/ Airway Bill/ Lorry Receipt/ Railway Receipt/Postal Receipt
ii. Commercial Invoice cum Packing List*
iii. Shipping Bill/Bill of Export/ Postal Bill of Export
b. Mandatory documents required for import of goods into India
i. Bill of Lading/Airway Bill/Lorry Receipt/ Railway Receipt/Postal Receipt in form
CN-22 or CN 23 as the case may be.
ii. Commercial Invoice cum Packing List**
iii. Bill of Entry

[Note: *(i) As per CBIC Circulars issued under the Customs Act, 1962 (ii) **Separate
Commercial Invoice and Packing List would also be accepted.]

c. For export or import of specific goods or category of goods, which are subject to any
restrictions/ policy conditions or require NOC or product specific compliances under any
statute, the regulatory authority concerned may notify additional documents for
purposes of export or import.
d. In specific cases of export or import, the regulatory authority concerned may
electronically or in writing seek additional documents or information, as deemed
necessary to ensure legal compliance.

Principles of Restrictions
DGFT may, through a Notification, impose ‘Prohibition’ or ‘Restriction’:

a) on export of foodstuffs or other essential products for preventing or relieving critical

shortages;
b) on imports and exports necessary for the application of standards or regulations for the
classification, grading or marketing of commodities in international trade;
c) on imports of fisheries product, imported in any form, for enforcement of governmental
measures to restrict production of the domestic product or for certain other purposes;

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d) on import to safeguard country’s external financial position and to ensure a level of

reserves;
e) on imports to promote establishment of a particular industry;
f) for preventing sudden increases in imports from causing serious injury to domestic
producers or to relieve producers who have suffered such injury;
g) for protection of public morals or to maintain public order;
h) for protection of human, animal or plant life or health;
i) relating to the importations or exportations of gold or silver;
j) necessary to secure compliance with laws and regulations including those relating to the
protection of patents, trademarks and copyrights, and the prevention of deceptive
practices;
k) relating to the products of prison labour;
l) for the protection of national treasures of artistic, historic or archaeological value;
m) for the conservation of exhaustible natural resources;
n) for ensuring essential quantities for the domestic processing industry;
o) essential to the acquisition or distribution of products in general or local short supply;
p) for the protection of country’s essential security interests:
i. relating to fissionable materials or the materials from which they are derived;
ii. relating to the traffic in arms, ammunition and implements of war;
iii. taken in time of war or other emergency in international relations; or
q) in pursuance of country’s obligations under the United Nations Charter for the
maintenance of international peace and security.

Export/Import of Restricted Goods/ Services

Any goods /service, the export or import of which is ‘Restricted’ may be exported or imported
only in accordance with an Authorisation / Permission or in accordance with the Procedures
prescribed in a Notification / Public Notice issued in this regard.

Actual User Condition

Goods which are importable freely without any ‘Restriction’ may be imported by any person.
However, if such imports require an Authorisation, Actual User alone may import such good(s)
unless Actual User condition is specifically dispensed with by DGFT.

It may be noted that –

“Actual User” is a person (either natural & legal) who is authorized to use imported goods in
his/ its own premise which has a definitive postal address.

(a) “Actual User (Industrial)” is a person (either natural & legal) who utilizes imported goods
for manufacturing in his own industrial unit or manufacturing for his own use in another
unit including a jobbing unit which has a definitive postal address.
(b) “Actual User (Non-Industrial)” is a person (either natural & legal) who utilizes the
imported goods for his own use in:
1. any commercial establishment, carrying on any business, trade or profession, which
has a definitive postal address; or
2. any laboratory, Scientific or Research and Development(R&D) institution, university
or other educational institution or hospital which has a definitive postal address; or
3. Any service industry which has a definitive postal address.
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“Jobbing” means processing or working upon of raw materials or semi-finished goods supplied
to job worker, so as to complete a part of process resulting in manufacture or finishing of an
article or any operation which is essential for aforesaid process.

Terms and Conditions of an Authorisation

Every Authorisation shall include either all or some of the following terms and conditions, in
addition to such other conditions as may be specified:

→ Description, quantity and value of goods;

→ Actual User condition;
→ Export Obligation;
→ Minimum Value addition to be achieved;
→ Minimum export/import price;
→ Bank guarantee/ Legal undertaking / Bond with Customs Authority/RA.
→ Validity period of import/export as specified in Handbook of Procedures.

Clearance of Goods from Customs against Authorisation

Goods already imported / shipped / arrived, in advance, but not cleared from Customs may
also be cleared against an Authorisation issued subsequently.

However, such goods already imported/shipped/arrived, in advance are first warehoused

against Bill of Entry for Warehousing and then cleared for home consumption against an
Authorisation issued subsequently. This facility will however be not available to ‘Restricted’
items or items traded through STEs, unless specifically allowed by DGFT.

Authorisation - not a Right

No person can claim an Authorisation as a right and DGFT or RA shall have power to refuse
to grant or renew the same in accordance with provisions of FT (D&R) Act, Rules made there
under and FTP.

Penal action and placing of an entity in Denied Entity List (DEL)

a) If an Authorisation holder violates any condition of such Authorisation or fails to fulfill
export obligation or fails to deposit the requisite amount within the period specified in
demand notice issued by Department of Revenue and /or DGFT, he shall be liable for
action in accordance with FT (D&R) Act, the Rules and Orders made there under, FTP and
any other law for time being in force.
b) With a view to raising ethical standards and for ease of doing business, DGFT has provided
for self-certification system under various schemes. In such cases, applicants shall
undertake self-certification with sufficient care and caution in filling up information/
particulars. Any information/particulars subsequently found untrue/incorrect will be
liable for action under FT (D&R) Act, 1992 and Rules therein in addition to penal action
under any other Act/Order.
c) A firm may be placed under Denied Entity List (DEL), by the concerned RA. On issuance
of such an order, for reasons to be recorded in writing, a firm may be refused grant or
renewal of a licence, authorisation, certificate, scrip or any instrument bestowing
financial or fiscal benefits. If a firm is placed under DEL, all new licences, authorisations,
scrips, certificates, instruments etc. will be blocked from printing/ issue/renewal.

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d) DEL orders may be placed in abeyance, for reasons to be recorded in writing by the
concerned RA. DEL order can be placed in abeyance, for a period not more than 60 days
at a time.
e) A firm’s name can be removed from DEL, by the concerned RA for reasons to be recorded
in writing, if the firm completes Export Obligation/ pays penalty/ fulfils requirement of
Demand Notice(s) issued by the RA/submits documents required by the RA.

It may be noted that-

“Export Obligation” means obligation to export product or products covered by Authorisation

or permission in terms of quantity, value or both, as may be prescribed or specified by
Regional or competent authority.

Firm/company under adjudication proceeding before the National Company Law

Tribunal (NCLT)
Any firm/company coming under the adjudication proceeding before the National Company
Law Tribunal (NCLT) shall inform the concerned Regional Authority (RA) and NCLT of any
outstanding export obligations/liabilities under any of the schemes under FTP. The total
outstanding duty saved amount/dues along with interest, and any penalty imposed under FT
(D&R) Act, or any other dues, shall be counted as part of the dues to the government against
the said firm/company.

PROHIBITIONS ON TRADE (COUNTRY, ORGANISATIONS, GROUPS,

INDIVIDUALS ETC. AND PRODUCT SPECIFIC)
Prohibition on Import and Export of ‘Arms and related material’ from / to Iraq
Notwithstanding the policy on Arms and related materials, the import/export of Arms and
related material from/to Iraq is ‘Prohibited’.

However, export of Arms and related material to Government of Iraq shall be permitted
subject to ‘No Objection Certificate’ from the Department of Defence Production.

Prohibition on Trade with the Islamic State in Iraq and the Levant [ISIL, also known as
Daesh], Al Nusrah Front [ANF] and other individuals, groups, undertakings and entities
associated with Al Qaida.

In compliance with United Nations Security Council Resolution No. 2199 [2015], trade in oil
and refined oil products, modular refineries and related materials, besides items of cultural
(including antiquities), scientific and religious importance is prohibited with the Islamic State
in Iraq and the Levant [ISIL], Al Nusrah Front [ANF] and other individuals, groups,
undertakings and entities associated, directly or indirectly, with Al Qaida.

Prohibition on direct or indirect import and export from/to DPRK

Direct or Indirect export and import of items, whether or not originating in Democratic
People’s Republic of Korea (DPRK) to/from DPRK.

Direct or Indirect Export/Import to/ from Iran

a. Direct or indirect export to Iran or import from Iran of any item, material, equipment,
goods and technology mentioned in the following documents would be permitted subject
to the provisions contained in United Nations Security Council Resolution 2231 (2015):

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i. Items listed in IAEA Documents as updated by the UNSC and IAEA from time to
time.
ii. Items listed in UN Security Council document as updated by the Security Council
from time to time.
b. All the UN Security Council Resolutions/Documents and IAEA Documents referred to
above are available on the UN Security Council website.

Prohibition on Import of Charcoal from Somalia

Direct or indirect import of charcoal is prohibited from Somalia, irrespective of whether or
not such charcoal has originated in Somalia. Importers of Charcoal shall submit a declaration
to Customs that the consignment has not originated in Somalia.

IMPORT / EXPORT THROUGH STATE TRADING ENTERPRISES

State Trading Enterprises (STEs)

a. State Trading Enterprises (STEs) are governmental and non-governmental enterprises,

including marketing boards, which deal with goods for export and /or import. Any good,
import or export of which is governed through exclusive or special privilege granted to
State Trading Enterprise (STE), may be imported or exported by the concerned STE as
per conditions specified in ITC (HS).
b. Such STE(s) shall make any such purchases or sales involving imports or exports solely
in accordance with commercial considerations, including price, quality, availability,
marketability, transportation and other conditions of purchase or sale in a non-
discriminatory manner and shall afford enterprises of other countries adequate
opportunity, in accordance with customary business practices, to compete for
participation in such purchases or sales.
c. DGFT may, however, grant an authorisation to any other entity to import or export any
of the goods notified for exclusive trading through STEs.

It may be noted that-

State Trading Enterprises (STEs), for the purpose of this FTP, are those entities which are
granted exclusive right/privileges for export and /or import.

TRADE WITH SPECIFIC COUNTRIES

Trade with Neighbouring Countries

DGFT may issue instructions or frame schemes as may be required to promote and regulate
trade and strengthen economic ties with neighbouring countries.

Transit Facility

Transit of goods through India from/ or to countries adjacent to India shall be enabled and
regulated in accordance with strategic and economic interests of India as well as the bilateral
treaties between India and those countries. Such arrangements will be subject to conditions
and restrictions as may be specified by DGFT in accordance with International Conventions/
Treaties/Agreements.

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Trade with Russia under Debt-Repayment Agreement

In case of trade with Russia under Debt Repayment Agreement, DGFT may issue instructions
or frame schemes as may be required, and anything contained in FTP, in so far as it is
inconsistent with such instructions or schemes, shall not apply.

IMPORT OF SPECIFIC CATEGORIES OF GOODS

Import of Samples
No Authorisation shall be required for Import of bonafide technical and trade samples of
items “restricted” in ITC (HS) except defence/security items, seeds, bees and new drugs.

Import of Gifts
Import of goods, including those purchased from e-commerce portals, through post or
courier, where Customs clearance is sought as gifts, is prohibited except for life saving
drugs/ medicines and Rakhi (but not gifts related to Rakhi).

Import through Passenger Baggage

a) Bona-fide household goods and personal effects may be imported as part of passenger
baggage as per limits, terms and conditions thereof in Baggage Rules notified by Ministry
of Finance.
b) Samples of such items that are otherwise freely importable under FTP may also be
imported as part of passenger baggage without an Authorisation subject to Baggage
Rules as notified by Customs from time to time.
c) Exporters coming from abroad are also allowed to import drawings, patterns, labels,
price tags, buttons, belts, trimming and embellishments required for export, as part of
their passenger baggage, without an authorization subject to value limit as laid down in
FTP or as per the relevant Customs notification(s) in this regard.
d) Any item(s) including Samples or Prototypes of items whose import policy is “restricted”
or “prohibited” or is canalised through STEs are not permitted as part of passenger
baggage except with a valid authorization/ permission issued by DGFT.

Re – import of goods repaired abroad

Capital goods, equipment, components, parts and accessories, whether imported or indigenous,
except those restricted under ITC (HS) may be sent abroad for repairs, testing, quality
improvement or upgradation or standardization of technology and re-imported without an
Authorisation.

It may be noted that –

“Capital Goods” means any plant, machinery, equipment or accessories required for
manufacture or production, either directly or indirectly, of goods or for rendering services,
including those required for replacement, modernisation, technological up-gradation or
expansion. It includes packaging machinery and equipment, refrigeration equipment, power
generating sets, machine tools, equipment and instruments for testing, research and
development, quality and pollution control.

Capital goods may be for use in manufacturing, mining, agriculture, aquaculture, animal
husbandry, floriculture, horticulture, pisciculture, poultry, sericulture and viticulture as well
as for use in services sector.

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Import of goods used in projects abroad

Project contractors after completion of projects abroad, may import without an
Authorisation, goods including capital goods used in the project, provided they have been used
for at least one year.

Import of Prototypes
Import of new / second hand prototypes / second hand samples may be allowed on payment
of duty without an Authorisation to an Actual User (industrial) engaged in production of or
having industrial license / letter of intent for research in item for which prototype is sought
for product development or research, as the case may be, upon a self-declaration to that
effect, to the satisfaction of Customs authorities.

IMPORT POLICY FOR SECOND HAND GOODS

Second Hand Goods

Sl. Categories of Second-Hand Import Policy Conditions, if any

No. Goods
I. Second Hand Capital Goods
I(a) a. Desktop Computers; Restricted Importable against Authorisation
b. Refurbished/re-conditioned
spares of re-furbished parts
of Personal Computers/
Laptops;
c. Air Conditioners;
d. Diesel generating sets

I(b) All electronics and IT Goods Restricted a. Importable against an

notified under the Electronics and authorization subject to
IT Goods (Requirements of conditions laid down under
Compulsory Registration) Order,
Electronics and IT Goods
2012 as amended from time to
(Requirements of Compulsory
time
Registration) Order, 2012 as
amended from time to time.
b. Import of
unregistered/noncompliant
notified products as in CRO,
2012 as amended from time to
time is “Prohibited”

I(c) Refurbished / re-conditioned Free Subject to production of

spares of Capital Goods Chartered Engineer certificate
to the effect that such spares
have at least 80% residual life of
original spare
I(d) All other second-hand capital Free
goods {other than (a) (b) & (c)
above}

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II. Second Hand Goods other than Restricted Importable against Authorisation
capital goods
III. Second Hand Goods imported for Free Subject to condition that waste
the purpose of generated during the repair /
repair/refurbishing / refurbishing of imported items is
reconditioning or re-engineering treated as per domestic Laws/
Rules/ Orders/ Regulations/
technical specifications/
Environmental / safety and
health norms and the imported
item is re-exported back as per
the Customs Notification.
IMPORT POLICY FOR METALLIC WASTE AND SCRAPS
a. Import of any form of metallic waste, scrap will be subject to the condition that it will
not contain hazardous, toxic waste, radioactive contaminated waste/scrap containing
radioactive material, any types of arms, ammunition, mines, shells, live or used cartridge
or any other explosive material in any form either used or otherwise.
b. The types of metallic waste and scrap which can be imported freely, and the Procedures
of import in the shredded form; un-shredded, compressed and loose form is laid down in
Handbook of Procedures.

Removal of Scrap/Waste from SEZ

A SEZ unit/Developer/ Co-developer may be allowed to dispose of in DTA any waste or scrap,
including any form of metallic waste and scrap, generated during manufacturing or processing
activity, without an Authorisation, on payment of applicable Customs Duty. It may be noted
that –

“Developer” means a person or body of persons, company, firm and such other private or
government undertaking, who develops, builds, designs, organises, promotes, finances,
operates, maintains or manages a part or whole of infrastructure and other facilities in SEZ
as approved by Central Government and also includes a co- developer.

OTHER PROVISIONS RELATED TO IMPORTS

Import under Lease Financing
No specific permission of DGFT is required for import of lease financed Capital Goods.

Execution of Legal Undertaking (LUT) / Bank Guarantee (BG)

a. Wherever any duty-free import is allowed or where otherwise specifically stated,
importer shall execute, Legal Undertaking (LUT) / Bank Guarantee (BG) / Bond with the
Customs Authority, as prescribed, before clearance of goods.
b. In case of indigenous sourcing, Authorisation holder shall furnish LUT/BG/Bond to the
RA concerned before sourcing material from indigenous supplier/ nominated agency as
prescribed in Handbook of Procedures.

Private/Public Bonded Warehouses for Imports

a. Private/ Public bonded warehouses may be set up in DTA as per rules, regulations and
notifications issued under the Customs Act, 1962. Any person may import goods except

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prohibited items, arms and ammunition, hazardous waste and chemicals and warehouse
them in such bonded warehouses.
b. Such goods may be cleared for home consumption in accordance with provisions of FTP
and against Authorisation, wherever required. Customs duty as applicable shall be paid
at the time of clearance of such goods.
c. The clearance of the warehoused goods shall be as per the provisions of the Customs
Act, 1962.

It may be noted that –

“Domestic Tariff Area (DTA)” means area within India which is outside SEZs and EOU/
EHTP/ STP/BTP.

“EOU” means Export Oriented Unit for which a letter of permit has been issued by
Development Commissioner.

Special provision for Hides, Skins and semi-finished goods

Hides, Skins and semi-finished leather may be imported in the Public/ Private Bonded
warehouse for the purpose of DTA sale and the unsold items thereof can be re-exported
from such bonded warehouses on payment of the applicable rate of export duty.

Sale on High Seas

Sale of goods on high seas for import into India may be made subject to FTP or any other law
in force.

Merchanting Trade
Merchanting trade involving shipment of goods from one foreign country to another foreign
country without touching Indian ports, involving an Indian intermediary is allowed subject to
compliance with RBI guidelines, except for goods/items in the CITES and SCOMET list.

It may be noted that- “SCOMET” is the nomenclature for dual use items of Special Chemicals,
Organisms, Materials, Equipment and Technologies (SCOMET). Export of dual-use items and
technologies under India’s FTP is regulated. It is either prohibited or is permitted under an
Authorisation.

EXPORTS
Free Exports
All goods may be exported without any restriction except to the extent that such exports
are regulated by ITC(HS) or any other provision of FTP or any other law for the time being
in force. DGFT may, however, specify through a Public Notice such terms and conditions
according to which any goods, not included in ITC(HS), may be exported without an
Authorisation.

Benefits for Supporting Manufacturers

For any benefit to accrue to the supporting manufacturer, the names of both supporting
manufacturer as well as the merchant exporter must figure in the concerned export
documents, especially in Tax Invoice / Shipping Bill / Bill of Export/ Airway Bill.

It may be noted that –

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“Merchant Exporter” means a person engaged in trading activity and exporting or in tending
to export goods.

(a) “Supporting Manufacturer” is one who manufactures goods/products or any

part/accessories/components of a good/ product for a merchant exporter or a
manufacturer exporter under a specific Authorisation.
(b) “Supporting Manufacturer” for the EPCG Scheme shall be one in whose premises/
factory Capital Goods imported/ procured under EPCG Authorisation is installed.

Third Party Exports

Third party exports (except Deemed Export) as defined in Chapter 11 shall be allowed under
FTP. In such cases, export documents such as shipping bill shall indicate name of both
manufacturing exporter/manufacturer and third-party exporter(s). E-Bank Realization
Certificate (e-BRC) or export Realizations from RBI’s EDPMS wherever available in DGFT IT
Systems, Export Order and Invoice should be in the name of third-party exporter.

It may be noted that –

“Third-party exports” means exports made by an exporter or manufacturer on behalf of

another exporter(s). In such cases, export documents such as shipping bills shall indicate
names of both manufacturer exporter/manufacturer and third party exporter(s). Bank
Realisation Certificate (BRC), Self-Declaration Form (SDF), export order and invoice should
be in the name of third party exporter.

EXPORTS OF SPECIFIC CATEGORIES

Export of Samples
a. Exports of bonafide trade and technical samples of freely exportable item shall be
allowed without any limit.
b. The procedure for Export of Samples and Free of charge goods shall be governed by
provisions given in Handbook of Procedures.

Export of Gifts
Goods including edible items, of value not exceeding Rs.5, 00,000/- in a licensing year, may be
exported as a gift. However, items mentioned as restricted for exports in ITC (HS) shall not
be exported as a gift, without an Authorisation.

It may be noted that-

“Licensing Year” means period beginning on the 1st April of a year and ending on the 31st
March of the following year.

Export of Passenger Baggage

a. Bona-fide personal baggage may be exported either along with passenger or, if
unaccompanied, within one year before or after passenger’s departure from India.
However, items mentioned as restricted in ITC (HS) shall require an Authorisation.
Government of India officials proceeding abroad on official postings shall, however, be
permitted to carry along with their personal baggage, food items (free, restricted or
prohibited) strictly for their personal consumption. The Provisions of the Para shall be
subject to Baggage Rules issued under Customs Act, 1962.

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b. Samples of such items that are otherwise freely exportable under FTP may also be
exported as part of passenger baggage without an Authorisation.

Import for Export

I. .
(a) Goods imported, in accordance with FTP, may be exported in same or substantially the
same form without an Authorisation provided that item to be imported or exported is
not in the restricted for import or export in ITC(HS) Schedules.
(b) Goods, including capital goods (both new and second hand), may be imported for export
provided:
i. Importer clears goods under Customs Bond;
ii. Goods are freely exportable, i.e., are not “Restricted” or “Prohibited” or subject to
“exclusive trading through State Trading Enterprises” or any conditionality or
requirement as may be required under Schedule 2 of the Export Policy of the ITC
(HS);
iii. Export is against freely convertible currency.
(c) Goods in (b) above will include ‘Restricted’ goods for import (except ‘Prohibited’ items).
(d) Capital goods, which are freely importable and freely exportable, may be imported for
export on execution of LUT/BG with the Customs Authority.
(e) Notwithstanding the above, goods which are freely importable may be re-exported
except items as in the Prohibited or SCOMET List of exports, in same or substantially
same form even though such goods are under “Restricted list” for export, subject to
the following conditions:
(i) Goods are not of Indian Origin;
(ii) Goods imported shall be kept in bonded warehouse under supervision of Customs;
(iii) Goods to be exported have never been cleared for home consumption;
(iv) Export of goods shall be subjected to Section 69 of Customs Act, 1962.
II.
(a) Goods imported against payment in freely convertible currency would be permitted for
export only against payment in freely convertible currency, unless otherwise notified
by DGFT.
(b) Export of such goods to the notified countries (presently only Iran) would be permitted
against payment in Indian Rupees, subject to minimum 15% value addition.
(c) However, re-export of food, medicine and medical equipment will not be subject to
minimum value addition requirement for export to Iran.
(d) Exports under this dispensation, as at I (e) and II (a), (b) and (c) above shall not be
eligible for any export incentives.

Export of Replacement Goods

Goods or parts thereof on being exported and found defective/damaged or otherwise unfit
for use may be imported for replacement free of charge by the exporter in accordance with
the relevant Customs Notification, and such goods shall be allowed for export by Customs
authorities, provided that replacement goods are not under the restricted or SCOMET items
for exports in ITC(HS). If the export item is ‘Restricted’ or under SCOMET list, the exporter
shall require an Authorisation for export of such replacement goods.

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Export of Repaired Goods

Goods or parts thereof, except restricted under ITC (HS), on being exported and found
defective, damaged or otherwise unfit for use may be imported for repair and subsequent re-
export. Such goods shall be allowed clearance without an Authorisation and in accordance with
the relevant customs notification. To that extent the exporter shall return the benefits
/incentive availed on the returned goods. If the item is ‘restricted’ for import, the exporter
shall require an import license. However, re-export of such defective parts/ spares by the
Companies/firms and Original Equipment Manufacturers shall not be mandatory if they are
imported exclusively for undertaking root cause analysis, testing and evaluation purpose.

Export of Spares
Warranty spares (whether indigenous or imported) of plant, equipment, machinery,
automobiles or any other goods [except those restricted under ITC (HS)] may be exported
along with main equipment or subsequently but within contracted warranty period of such
goods, subject to approval of RBI.

It may be noted that-

“Spares” means a part or a sub-assembly or assembly for substitution that is ready to replace
an identical or similar part or sub- assembly or assembly. Spares include a component or an
accessory.

Re-export of imported Goods found defective and unsuitable for use

Imported goods found defective after Customs clearance, or not found as per specifications
or requirements may be re-exported back as per Customs Act, 1962.

Private Bonded Warehouses for Exports

a. Private bonded warehouses exclusively for exports may be set up in DTA as per terms
and conditions of notifications issued by Department of Revenue.
b. Such warehouses shall be entitled to procure goods from domestic manufacturers for
manufacturing and other operations in accordance with Section 65 of the Customs Act,
1962.

QUALITY COMPLAINTS AND TRADE DISPUTES

Objective
Exporters need to project a good image of the country abroad to promote exports.
Maintaining an enduring relationship with foreign buyers is of utmost importance, and
complaints or trade disputes, whenever they arise, need to be settled amicably as soon as
possible. Importers too may have grievances as well. In an endeavour to resolve such
complaints or trade disputes and to create confidence in the business environment of the
country, a mechanism is being laid down to address such complaints and disputes in an amicable
way.

Complaints/Disputes between two or more Indian entities are not covered under this
mechanism. Similarly, complaints/disputes between two or more foreign entities are also not
covered.

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Quality Complaints/ Trade disputes

The following type of complaints may be considered:

a) Complaints received from foreign buyers in respect of quality of goods or services or

technology supplied by exporters from India;
b) Complaints of importers against foreign suppliers in respect of quality of the goods or
services or technology supplied; and
c) Complaints of unethical commercial dealings categorized mainly as non-supply/ partial
supply of goods or services or technology after confirmation of order; supplying goods
or services or technology other than the ones as agreed upon; non- payment; non-
adherence to delivery schedules, etc.

Obligation on the part of importer/ exporter

a) Rule 11 of the Foreign Trade (Regulation) Rules, 1993, requires that on the importation
into, or exportation out of, any customs ports of any goods or services or technology,
whether liable to duty or not, the owner of such goods or services or technology shall in
the Bill of Entry or the Shipping Bill or any other documents prescribed under the
Customs Act, 1962, state the value, quality and description of such goods or services or
technology to the best of his knowledge and belief and in case of exportation of goods
or services or technology, certify that the quality and specification of the goods or
services or technology as stated in those documents, are in accordance with the terms
of the export contract entered into with the buyer or consignee in pursuance of which
the goods or services or technology are being exported and shall subscribe a declaration
of the truth of such statement at the foot of such Bill of Entry or Shipping Bill or any
other documents. Violation of this provision renders the exporter liable for penal action;
b) Certain export commodities have been notified for Compulsory Quality Control & Pre-
shipment Inspection prior to their export. Penal action can be taken under the Export
(Quality Control & Inspection) Act, 1963, against exporters who do not conform to these
standards and/ or provisions of the Act as laid down for such products.

Provisions in FT (D&R) Act, 1992, as amended & FT (Regulation) Rules, 1993, as

amended for necessary action against erring exporters/ importers
Action against erring exporters/importers can be taken under the Foreign Trade
(Development and Regulation) Act, 1992, as amended and under Foreign Trade (Regulation)
Rules, 1993, as amended, as follows: -

(a) DGFT or any other officer authorized by him to suspend or cancel the Importer
Exporter Code Number for the reasons as given therein;
(b) DGFT or an officer authorised by him to refuse to grant or renew a license, certificate,
scrip or any other instrument bestowing financial or fiscal benefit granted under the
Act;
(c) DGFT or the officer authorized by him to suspend or cancel any License, certificate,
scrip or any instrument bestowing financial or fiscal benefit granted under the Act;
(d) Imposition of fiscal penalty in cases where a person makes or abets or attempts to make
any import or export in contravention of any provision of the Act, any Rules or Orders
made there under or the Foreign Trade Policy.

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Mechanism for handling of Complaints/ Disputes

a) Committee on Quality complaints and Trade Disputes (CQCTD):
To deal effectively with the increasing number of complaints and disputes, a ‘Committee
on Quality Complaints and Trade Disputes’ (CQCTD) will be constituted in the Regional
Authorities (RAs) of DGFT. Names of RAs, where CQCTD has been constituted and
jurisdiction of CQCTD is given in Chapter 8 of the Handbook of Procedures.
b) Composition of the CQCTD
The CQCTD would be constituted under the Chairpersonship of the Head of Office.
c) Functions of CQCTD
The Committee (CQCTD) will be responsible for enquiring and investigating into all
Quality related complaints and other trade related complaints falling under the
jurisdiction of the respective RAs. It will take prompt and effective steps to redress
and resolve the grievances of the importers/ exporters and overseas buyers/ sellers
preferably within 3 months of receipt of the complaint. Wherever required, the
Committee (CQCTD) may take the assistance of the Export Promotion
Councils/FIEO/Commodity Boards or any other agency as considered appropriate for
settlement of these disputes.
CQCTD will hold its meetings at regular intervals and at least 4 in a year given the pendency
of complaints/disputes.

Proceedings under CQCTD

CQCTD proceedings are conciliatory in nature and the aggrieved party, whether the foreign
entity or the Indian entity, is free to pursue any legal recourse against the other erring party.

Corrective Measures
a) The Committee at RA level can authorize the Export Inspection Agency or any technical
authority to assess whether there has been any technical failure of not meeting the
standards, manufacturing/ design defects, etc. for which complaints have been received;
b) Initially, efforts will be made to settle the complaint/ dispute amicably. In case the
matter is not settled amicably, action may be taken against the erring Indian entity in
terms of the Foreign Trade (Development & Regulation) Act, 1992, as amended, and the
Foreign Trade (Regulation) Rules, 1993, as amended;
c) Complaints against foreign entities would be taken up for settlement by the respective
‘Foreign Trade Division’ in the Department of Commerce, Vanijya Bhavan, New Delhi
through Indian Missions abroad. Indian Missions Abroad will take up the complaints
against the foreign entities with authorities concerned;
d) In case, the Indian Missions abroad are satisfied about the malafide of any foreign
entity, they shall send such information to DGFT for circulation amongst the
EPCs/Commodity Boards, ECGC and other regulatory authorities.

Case Officer

A Case Officer will be assigned for monitoring purposes in the designated Regional
Authorities for resolving complaints and trade disputes in a time bound manner.

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Nodal Officer

DGFT would appoint an officer, not below the rank of Joint Director General, in the
Headquarters, to function as the ‘Nodal Officer’ for monitoring the trade disputes and
coordinating with Regional Authorities of DGFT, Foreign Trade Divisions of Department of
Commerce, Indian Missions and other agencies.

PROMOTING CROSS BORDER TRADE IN DIGITAL ECONOMY

Objective
The objective of this chapter is to provide a framework for cross-border trade of goods and
services from India in the digital economy and the promotion of e-Commerce and other
emerging channels of exports from India.

It may be noted that –

“e-commerce” means buying and selling of goods through the internet on an e-commerce
platform, the payment for which shall be done through international credit or debit cards, or
other authorised electronic payment channels and as specified by the Reserve Bank of India
from time to time.

E-Commerce Exports of Goods

Export of goods where selling is through the internet on an e-Commerce platform, the
payment for which shall be done through international credit or debit cards, or other
authorised electronic payment channels and as specified by the RBI from time to time.

E-Commerce Exports of Services

Exports of services where selling is through the internet on an e-Commerce platform, the
payment for which shall be done through international credit or debit cards, or other
authorised electronic payment channels and as specified by the RBI from time to time.

E-Commerce Platform
E-Commerce platform is an electronic platform, including a web-portal, that enables the
commercial process of buying and selling through the internet.

E-Commerce Export Logistics Provider

Any service provider who provides logistics services towards exports of goods or services for
e-Commerce Exports.

Export through Courier Service/Post

Exports through a registered courier service/Foreign Post Office is permitted as per
Notification(s) issued under Customs Act, 1962. However, exportability of such items shall
be regulated in accordance with FTP/Export Policy in ITC(HS) as notified. The value limit for
exports through courier service shall be Rs. 10,00,000 per consignment.

Import through courier service/Post

i. Imports through a registered courier service or Post are permitted as per Notification(s)
issued under the Customs Act, 1962. However, importability of such items shall be
regulated in accordance with FTP and the ITC(HS) based Import Policy as notified.

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ii. Exports by courier mode of precious Metal Jewellery through E-commerce and re-import
of such export shipments returned by the buyer shall be allowed as per the
Notification(s) issued and procedures prescribed under the Customs Act, 1962.

SCOMET: SPECIAL CHEMICALS, ORGANISMS, MATERIALS, EQUIPMENT

AND TECHNOLOGIES
Objective
The general provisions governing the export of dual use items, munitions and nuclear related
items, including software and technology viz. SCOMET, are dealt with in this Chapter.

Brief Background
India is a signatory to international conventions on disarmament and non-proliferation, viz.
the Chemical Weapons Convention (CWC) and Biological and Toxin Weapons Convention (BWC).
The United Nations Security Council Resolution 1540 obliges all countries to prohibit access
of weapons and mass destruction and their delivery systems to non-state actors (in particular
for terrorist purposes); and prescribed measures and controls on weapons of mass
destruction, their delivery systems and related materials, equipment and technology.

India is also a member of the major multilateral export control regimes, viz. the Missile
Technology Control Regime (MTCR), Wassenaar Arrangement (WA) and Australia Group (AG);
and has harmonized its guidelines and control lists with that of the Nuclear Suppliers Group
(NSG). In consonance with the guidelines and control lists of these international conventions
and obligations as well as multilateral export control regimes, India has regulated the exports
of dual use items, nuclear related items, including software and technology.

In respect of controls on export of specified goods, services and technology, the Weapons
of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act,
2005 shall apply to exports, transfers, re-transfers, brought in transit, trans-shipment of,
and brokering in specified goods, technology or services.

SCOMET List
Export of dual-use items, including software and technologies, having potential civilian /
industrial applications as well as use in weapons of mass destruction is regulated. It is either
prohibited or is permitted under an Authorization unless specifically exempted.

SCOMET is an acronym for Special Chemicals, Organisms, Materials, Equipment and

Technologies. Accordingly, the SCOMET list is our National Export Control List of dual use
items munitions and nuclear related items, including software and technology and is aligned to
the control lists of the all the multilateral export control regimes and conventions.

Classification of SCOMET categories and Licensing jurisdiction

The SCOMET List is divided into nine categories of items from Category 0 to Category 8.
However, Category 7 is presently ‘Reserved’ and has not been populated. The broad
classification of different categories under SCOMET List and their jurisdictional licensing
authorities are tabulated as under:

CIN: Commodity Identification Note of SCOMET List

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Different types of export authorizations for SCOMET items

1. Direct export to ultimate end user: Export to the ultimate end users abroad after due
verification process;
2. Export for repeat orders of same SCOMET items: Repeat export of items of same
technical specifications which have earlier been allowed for export to the same
countries/entities after due verification process;
3. Export for Stock and Sale purpose: Export of items initially to the stockist abroad and
then from the stockist to the ultimate end users in the same country or approved
countries;
4. Export of spare parts under SCOMET under Stock and Sale: Export of spare parts
along with main item/ equipment under stock and sale;
5. Export for/after repair / replacement of defective SCOMET items: Export
authorizations for repair/ replacement of imported items on being found defective and
export authorization after repair of indigenous/third party items imported for repair;
6. Temporary export of SCOMET items: Export authorization for demo/ display/
exhibition/ tenders abroad or for return abroad after demo/ display/ exhibition/
tenders etc. in India;
7. Export of imported items to the same foreign entity or to its OEM: Export of
imported items to its foreign supplier or its OEM on obsolescence of technology, dead on
arrival, cancellation of order, calibration, testing, etc.;
8. Global Authorization for Intra-Company Transfers (GAICT) of SCOMET Items
including Software/ Technology : Only one time authorization will be required, for
export and/or re-export of SCOMET items including software and technology, where the
export is an Intra-company transfer from the Indian parent company (applicant
exporter) to its foreign subsidiary company or from the Indian subsidiary of foreign
company (applicant exporter) to its foreign parent/another subsidiary of foreign parent
company and; based on a Master Service Agreement / Contract between the Indian
parent company/Indian subsidiary of foreign company and foreign subsidiary of Indian
company/foreign parent company of Indian subsidiary for carrying out certain services
but not limited to design, encryption, research, development, delivery, validation,
calibration, testing, related services, etc. in specified countries for the one time validity
of 3 years subject to the post export reporting of all the exports done under the
authorisation.

Issue, amendment and revalidation of SCOMET authorizations

Export authorization for SCOMET items will be issued centrally by the DGFT (HQrs).
Amendments, including revalidation, etc. on such authorization will also be done by the DGFT
(HQrs) only.

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SCHEMES FOR EXPORTERS OF GEMS AND JEWELLERY

Import of Input
Exporters of Gems and Jewellery can import / procure duty free input for manufacture of
export product.

Items of Export
i. “Gold jewellery, including partly processed jewellery, and articles including medallions
and coins (excluding legal tender coins), whether plain or studded, containing gold of 8
carats and above up to a maximum limit of 22 carats, Gold religious idols (only gods and
goddess) of 8 carats and above (up to 24 carats) subject to the following conditions:
a. Exports would be subject to 100% examination by the Approved Government
Valuer.
b. Foreign remittance has to be realized within a period of 3 months from the date
of export.
c. Exporters must submit confirmed export order before effecting export.
d. Distinction must be made between a religious idol and simply moulded gold
article/idol.
e. Exports may be allowed only be actual manufactures of such idols.
ii. Silver jewellery including partly processed jewellery, silverware, silver strips and
articles including medallions and coins (excluding legal tender coins and any engineering
goods) containing more than 50% silver by weight;
iii. Platinum jewellery including partly processed jewellery and articles including medallions
and coins (excluding legal tender coins and any engineering goods) containing more than
50% platinum by weight.

Schemes
The schemes are as follows:

- Advance Procurement/ Replenishment of Precious Metals from Nominated Agencies

- Replenishment Authorisation for Gems from Regional Authority
- Replenishment Authorisation for Consumables

“Consumables” means any item, which participates in or is required for a manufacturing

process, but does not necessarily form part of end-product. Items, which are
substantially or totally consumed during a manufacturing process, will be deemed to be
consumables.

- Advance Authorisation for Precious Metals

1. Advance Authorisation shall be granted on pre-import basis with ‘Actual User’
condition for duty free import of:
a. Gold of fineness not less than 0.995 and mountings, sockets, frames and
findings of 8 carats and above;
b. Silver of fineness not less than 0.995 and mountings, sockets, frames and
findings containing more than 50% silver by weight;
c. Platinum of fineness not less than 0.900 and mountings, sockets, frames and
findings containing more than 50% platinum by weight.

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2. Advance Authorisation Scheme is not available where the item of export is ‘Gold
Medallions and Coins’ or ‘Gold jewellery/articles manufactured by fully mechanized
process’.

Value Addition
Minimum Value Addition norms for gems and jewellery sector are given in Handbook of
Procedures. It would be calculated as under:

VA = A – B ÷ B x 100, where

A = FOB value of the export realised/ FOR value of supply received.

B = Value of inputs (including domestically procured) such as gold/silver/platinum content

in export product plus admissible wastage along with value of other items such as
gemstone etc. Wherever gold has been obtained on loan basis, value shall also include
interest paid in free foreign exchange to foreign supplier.

DFIA not available

Duty Free Import Authorisation scheme shall not be available for Gems and Jewellery sector.

Nominated Agencies
i. Exporters may obtain gold / silver / platinum from Nominated Agency.
ii. Nominated Agencies are The Handicraft and Handlooms Exports Corporation of India
Ltd, MSTC Ltd., and Diamond India Limited.
iii. Reserve Bank of India can authorize any bank as Nominated Agency.
iv. Procedure for import of precious metal by Nominated Agencies shall be as per the
provisions laid down in HBP.
v. A bank authorised by RBI is allowed export of gold scrap for refining and import
standard gold bars as per RBI guidelines.

Import of Diamonds for Certification / Grading & Re-export

Following agencies are permitted to import diamonds to their laboratories without any import
duty, for the purpose of certification / grading reports, with a condition that the same should
be re-exported with the certification/grading reports, as per the procedure laid down in Hand
Book of Procedures:

(1) Gemological Institute of America (GIA), Mumbai, Maharashtra.

(2) Indian Diamond Institute, Surat, Gujarat, India.
(3) De Beers India Private Ltd., Surat, Gujarat, India.
(4) HRD Diamond Institute Private Limited, Mumbai, Maharashtra, India
(5) International Gemological Institute (India) Pvt. Ltd., Bandra Kurla Complex, Mumbai,
(6) Gemological Science International (GSI) Pvt. Ltd., Mumbai, Maharashtra, India.

Export of Cut & Polished Diamonds with Re-import Facility at Zero Duty

An exporter (with annual export turnover of Rs 5 crores for each of the last three years) or
the authorized offices/ agencies in India of laboratories mentioned under Hand Book of
Procedures may export cut & polished diamonds (each of 0.25 carat or above) to any of the
agencies/laboratories mentioned under Handbook of Procedures with re-import facility at
zero duty within 3 months from the date of export.

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Export against Supply by Foreign Buyer

(i) Where export orders are placed on nominated agencies / status holder / exporters of
3 years standing having an annual average turnover of Rs. 5 crores during preceding 3
financial years, foreign buyer may supply in advance and free of charge, gold/silver/
platinum, alloys, findings and mountings of gold / silver / platinum for manufacture and
export.
(ii) Such supplies can also be in advance and may involve semi- finished jewellery including
findings / mountings / components for repairs / re-make and export subject to minimum
value addition as prescribed under Handbook of Procedures.
(iii) Exports may be made by nominated agencies directly or through their associates or by
status holder / exporter. Import and Export of findings shall be on net to net basis.

It may be noted that –

“Component” means one of the parts of a sub-assembly or assembly of which a manufactured

product is made up and into which it may be resolved. A component includes an accessory or
attachment to another component.

Export Promotion Tours/ Export of Branded Jewellery

(i) Nominated Agencies and their associates, with approval of Department of Commerce
and with approval of Gem & Jewellery Export Promotion Council (GJEPC), may export
gold / silver / platinum jewellery and articles thereof for exhibitions abroad.
(ii) Personal carriage of gold / silver / platinum jewellery, precious, semi-precious stones,
beads and articles and export of branded jewellery is also permitted, subject to
conditions as in Handbook of Procedures.

Export by Post
Export of jewellery through Foreign Post Office including via Speed Post is allowed. The
jewellery parcel shall not exceed 20 kgs by weight.

Private / Public Bonded Warehouse

Private / Public Bonded Warehouses may be set up in SEZ/ DTA for import and re-export of
cut and polished diamonds, cut and polished coloured gemstones, uncut & unset precious &
semi- precious stones, subject to achievement of minimum value addition of 5% by DTA units.

Diamond & Jewellery Dollar Accounts

1. Firms and companies dealing in purchase / sale of rough or cut and polished diamonds /
precious metal jewellery plain, minakari and / or studded with / without diamond and /
or other stones with a track record of at least 3 years in import or export of diamonds
/ coloured gemstones / diamond and coloured gemstones studded jewellery / plain gold
jewellery and having an average annual turnover of Rs. 3 crore or above during preceding
three licensing years may also carry out their business through designated Diamond
Dollar Accounts (DDA).
2. Dollars in such accounts available from bank finance and / or export proceeds shall be
used only for:
a) Import / purchase of rough diamonds from overseas/ local sources;
b) Purchase of cut and polished diamonds, coloured gemstones and plain gold jewellery
from local sources;
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c) Import / purchase of gold from overseas / nominated agencies and repayment of

dollar loans from the bank; and
d) Transfer to Rupee Account of exporter.
3. A non DDA holder is also permitted to supply cut and polished diamonds to DDA holder,
receive payment in dollars and convert the same into Rupees within 7 days. Cut and
polished diamonds and coloured gemstones so supplied by non-DDA holder will also be
counted towards discharge of his export obligation and/ or entitle him to replenishment
Authorisation.

Re-import of rejected Jewellery

Gems & Jewellery exporters shall be allowed to re-import rejected precious metal jewellery.

EXPORT PROMOTION COUNCILS

Recognition of EPCs to function as Registering Authority for issue of RCMC
a) Export Promotion Councils (EPCs) are organizations of exporters, set up with the objective
to promote and develop Indian exports. Each Council is responsible for promotion of a
particular group of products/ projects/services.
b) EPCs are also eligible to function as Registering Authorities to issue Registration-cum-
Membership Certificate (RCMC) to its members.

Registration-cum-Membership Certificate (RCMC)

a) Any person, applying for an Authorisation to import/ export under the FTP (except items
listed as ‘Restricted’ items in ITC (HS)) or applying for any other benefit or concession
under FTP, shall be required to provide, the RCMC granted by competent authority unless
specifically exempted under FTP.
b) Certificate of Registration as Exporter of Spices (CRES) issued by Spices Board and
Certificate of Registration as Exporter of Coir & Coir products issued by the Coir Board
shall be treated as Registration-Cum- Membership Certificate (RCMC) for the purposes
under this Policy.

“Registration-Cum-Membership Certificate” (RCMC) means certificate of registration and

membership granted by an Export Promotion Council/ Commodity Board/ Development
Authority or other competent authority as prescribed in FTP or HBP.

Interpretation of Policy
(a) The decision of DGFT shall be final and binding on all matters relating to interpretation
of Policy, or provision in Handbook of Procedures, Appendices and Aayat Niryat Forms
or classification of any item for import / export in the ITC (HS).
(b) A Policy Interpretation Committee (PIC) may be constituted to aid and advice DGFT.
The composition of the PIC would be as follows:
(i) DGFT: Chairman
(ii) All Additional DGFTs in Headquarters: Members
(iii) All Joint DGFTs in Headquarters looking after Policy matters: Members (iv)
Joint DGFT (PRC/PIC): Member Secretary
(iv) Any other person / representative of the concerned Ministry / Department, to
be co-opted by the Chairman.

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Exemption from Policy/Procedures

DGFT may in public interest pass such orders or grant such exemption, relaxation or relief,
as he may deem fit and proper, on grounds of genuine hardship and adverse impact on trade
to any person or class or category of persons from any provision of FTP or any Procedures.
While granting such exemption, DGFT may impose such conditions as he may deem fit after
consulting the Committees as under:

S. No. Description Committee

1. Fixation/modification of product norms under all Norms Committees
schemes
2. Nexus with Capital Goods (CG) and benefits under EPCG Committee
EPCG Schemes
3. All other issues Policy Relaxation Committee
(PRC)
“NC” means the Norms Committee in the Directorate General of Foreign Trade for approval
of adhoc input –output norms in cases where SION does not exist and recommend SION to
be notified in DGFT.

Personal Hearing by DGFT for Grievance Redressal

a. If an importer/exporter is aggrieved by any decision taken by Policy Relaxation Committee

(PRC), or a decision/order by any authority in the DGFT, a specific request for Personal
Hearing (PH) has to be made to DGFT. DGFT may consider request for relaxation after
consulting concerned Norms Committee, EPCG Committee or Policy Relaxation Committee
(PRC) and the decision conveyed in pursuance to the personal hearing shall be final and
binding.
b. The opportunity for Personal Hearing will not apply to a decision/order made in any
proceeding, including an adjudication proceeding, whether at the original stage or at the
appellate stage, under the relevant provisions of FT (D&R) Act, 1992, as amended from
time to time.

DEVELOPING DISTRICTS AS EXPORT HUBS

Objective

To galvanise districts of the country to become export hubs by:

- identifying products and services with export potential in the district,

- addressing bottlenecks for exporting these products/services,
- supporting local exporters/ manufacturers to scale and find potential buyers outside
India with the aim of promoting exports,
- manufacturing & services industry in the District.

This is intended to bring greater level of awareness and commitment regarding exports at
the district level, build capacity to create new exporters and identify new markets for the
focused products and services. This will also empower MSMEs, farmers and small scale
industries to get benefit of export opportunities in the overseas markets. This decentralised
and focused approach will shift the focus on district led export growth for self-sufficiency
and self- reliance by providing global platform to products and services from the districts.

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District Export Promotion Committees - Institutional Mechanism at District Level

Every district has products and services which are being exported, and can be further
promoted, along with new products / services, to increase production, grow exports, generate
economic activity and achieve the goal of Atma Nirbhar Bharat, Vocal for local and Make in
India.
Products/services with export potential in each District have to be identified and
institutional mechanism in the form of District Export Promotion Committees (DEPCs) at the
district level is to be created to provide support for export promotion and address the
bottlenecks for export growth in the Districts.

Each District shall constitute a District Export Promotion Committee (DEPC) chaired by
Collector/DM/DC of the District and co-chaired by designated DGFT Regional Authority with
various other stakeholders as its members.

The primary function of the DEPC will be to prepare and implement district specific Export
Action Plans in collaboration with all the relevant stakeholders at the Central, State and the
District level.

DGFT Regional Authorities will be engaging with all the relevant State and Central agencies
to take forward this initiative in each district.

District Export Action Plans for Each District

The District Export Action Plan (DEAP) may be prepared for each district. 2-3 high potential
products/services from the districts may be prioritised and comprehensive plan for their
export growth may be prepared. It may include the support required by the local industry in
boosting their manufacturing and exports with impetus on supporting the industry from the
production stage to the exporting stage. The DEAPs may also include specific quantifiable
targets to be achieved in the short term and long term. These plans may outline the
interventions that are required to promote the export of identified products and services
from the district.

State/UT Export Promotion Committees

To synergise the efforts of the Department of Commerce/ DGFT and the State/UT
governments in promotion of exports from the State, each State shall constitute a State
Export Promotion Committee (SEPC) headed by Chief Secretary of the State. The designated
Regional Authority of DGFT shall be the co-convener of the committee.

Online Monitoring of District Export Action Plans

DGFT would develop an online monitoring portal that may be accessed on the DGFT website
to enable the States/ DGFT RAs to upload all information related to the products/services
with export potential of every District. The portal may also help in monitoring the progress
of District Export Action Plan and DEPC meetings in all the Districts. Each DGFT
Jurisdictional RA to be primarily responsible for updating the information/progress made in
implementing Export Action Plan for each District under their Jurisdiction. The information
and reports may also be available in public domain for the benefit of the exporters.

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Export Promotion Activities in Districts

Support in the form of product/sector specific training and development needs of local
industries, dissemination of information through outreach activities including buyer-seller
meets, trade fairs, workshops etc. may be provided in each District. The training and
development need of District industries may be identified and trainings may be coordinated
with other departments. DGFT RAs through DEPCs may facilitate such buyer-seller meets,
exhibitions, trade fairs etc. in the District to encourage the industries to showcase their
products/services to the world.

Implementation of District Export Action Plans

The District Export Action Plan notified by the District Export Promotion Committee in each
District may include clear identification of products (goods and services) with export
potential in the District, institutional/other responsibilities, specifics of policy, regulatory
and operational reform, and infrastructure/utilities/logistics interventions required across
the entire chain from producer/farm to the export destination, to cover aspects like
production, productivity/ competitiveness, improvements required in design, tie up of
producers with exporters, testing, certification, packaging, transportation through cold chain
or otherwise, import export regulatory formalities, fulfilment of destination countries
standards etc. It may also include Identifying bottlenecks/Issues in GI production,
registration, marketing and its exports. The plan may also include the support required by the
local industry in boosting their manufacturing and exports with impetus on supporting the
industry from the production stage to the exporting stage.

Once the plan is formally adopted by the DEPC of each District, the plan may be implemented
by the DEPC by identifying the projects/activities required to be done to promote export
growth from the Districts.

DUTY EXEMPTION / REMISSION SCHEMES

Objective
Schemes under this Chapter enable duty free import of inputs for export production,
including replenishment of inputs or duty remission.

Schemes
1. Duty Exemption Schemes - The Duty Exemption schemes consist of the following:
• Advance Authorisation (AA) (which will include Advance Authorisation for Annual
Requirement).
• Duty Free Import Authorisation (DFIA).
2. Duty Remission Scheme- Duty Drawback (DBK) Scheme, administered by Department
of Revenue.
3. Scheme for Rebate on State and Central Taxes and Levies (RoSCTL), as notified by
the Ministry of Textiles.
4. Schemes for Remission of Duties and Taxes on Exported Products (RoDTEP) notified
by Department of Commerce and administered by Department of Revenue.

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ADVANCE AUTHORISATION
(a) Advance Authorisation is issued to allow duty free import of input, which is physically
incorporated in export product (making normal allowance for wastage). In addition, fuel,
oil, catalyst which is consumed / utilized in the process of production of export product,
may also be allowed.
(b) Advance Authorisation is issued for inputs in relation to resultant product, on the
following basis:
(i) As per Standard Input Output Norms (SION) notified;
OR
(ii) On the basis of self-declaration.
OR
(iii) Applicant-specific prior fixation of norm by the Norms Committee.
OR
(iv) On the basis of Self Ratification Scheme.

Special Advance Authorisation Scheme for export of Articles of Apparel and

Clothing accessories
Duty free import of fabric under ‘Special Advance Authorisation Scheme for export of
Articles of Apparel and Clothing Accessories’ shall be allowed, subject to the following terms
and conditions:

a. The authorisation shall be issued based on Standard Input Output Norms (SION) or
prior fixation of norms by Norms Committee.
b. The authorisation may also be issued on the basis of self-declaration. In such cases,
adhoc-norms shall be fixed within stipulated time period of 90 days.
c. Authorisation, and the fabric imported, shall be subject to actual user condition. The
same shall be non-transferable even after completion of export obligation.
d. The fabric imported shall be subject to pre-import condition and it shall be physically
incorporated in the export product (making normal allowance for wastage). Only Physical
exports shall fulfill the export obligation.

Eligible Applicant / Export /Supply

a. Advance Authorisation can be issued either to a manufacturer exporter or merchant
exporter tied to supporting manufacturer.
b. Advance Authorisation for pharmaceutical products manufactured through Non-
Infringing (NI) process shall be issued to manufacturer exporter only.
c. Advance Authorisation shall be issued for:
i. Physical export (including export to SEZ)
ii. Intermediate supply; and/or
iii. Supply of ‘stores’ on board of foreign going vessel / aircraft, subject to
condition that there is specific Standard Input Output Norms in respect of
item supplied.

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Self-Ratification Scheme
→ Where there is no SION/valid Adhoc Norms for an export product or where SION has
been notified but exporter intends to use additional inputs in the manufacturing process,
eligible exporter can apply for an Advance Authorisation under this scheme on self-
declaration and self-ratification basis. The expression “additional inputs” refers not to
additionality in terms of quantity/value of an input specified in a norm, but to another
additional input.

Say, if the inputs specified in the norm are X1 and X2 only, then input Y would represent
an additional input. RA may issue Advance Authorisations and such cases need not be
referred to Norms Committees for ratification of norms. Application under this scheme
shall be made along with a Certificate from Chartered Engineer in the prescribed
format.

→ A Certificate from a Chartered Engineer who has been not been penalised in the last
five years under FT(D&R) Act 1992, Customs Act 1962, Central Excise Act 1944, GST
Acts and allied acts and rules made there under shall only be accepted for grant of
Authorisation under this scheme.
→ An exporter (manufacturer or merchant), who holds AEO Certificate under Common
Accreditation Programme of CBEC is eligible to opt for this scheme.
→ A status holder who is a manufacturer cum actual user and holds valid 2-star or above
status and who has already submitted its application for grant of AEO on CBIC’s AEO
portal is also eligible to apply for this scheme subject to following conditions: -
a) Status holder submits copy of numbered and dated acknowledgement of its
application for grant of AEO.
b) Status holder undertakes to the DGFT that –
2. Their application for grant of AEO certification has not yet been rejected;
3. There is no case of infringement of Customs and allied laws against the
status holder in the current year and last three FYs.
4. Status holder has not been issued show cause notice by Customs or GST
authorities in the current year and last three FYs.
5. Status holder has positive net current assets.
6. There are no insolvency, bankruptcy or liquidation proceedings taken against
the status holder in the current year and last three FYs.
c) The DGFT may deny authorisation under this scheme to two star and above status
holder based on its risk management principles.
d) Status holder shall be audited by the DGFT.
→ The scheme shall not be available for the following inputs:
A. All vegetable / edible oils and all types of oilseeds;
B. All types of cereals;
C. Horn, hoof and any other organ of animal;
D. Wild animal products, organs and waste thereof;
E. Honey;
F. All items with basic customs duty of 30% or more;
G. All types of fruits/ nuts/ vegetables;
H. Vitamins;
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I. Biotechnology items and related products;

J. Waste/Scrap of all types; and
K. Second hand goods.
→ Inputs imported shall be subject to pre import condition and they shall be physically
incorporated in the export product (making normal allowance for wastage).
→ Concerned Norms Committee may conduct audit of the manufacturer. The frequency and
manner of audit shall be prescribed by DGFT in Handbook of Procedures. The
manufacturer shall be required to provide the necessary facility to verify the books of
account/other documents as required, give information and assistance for timely
completion of the audit. Non-availability of production and consumption documents/data
shall be treated as misdeclaration and indulgence in fraudulent activities and shall be
penalised under FT (D&R) Act, as amended and rules made there under.
→ Concerned Norms Committee may initiate special audit, considering the nature and
complexity of the case and revenue of government, if he is of the opinion at any stage
of scrutiny/enquiry/investigation that the norms have not been claimed correctly or the
excess benefit has been availed. Special audit can be conducted even if the
manufacturer has already been audited before.
→ If the audit results in detection of mis-declaration and/ or instances of claiming of
inputs which are not used in manufacturing process or excess quantity of inputs than
consumed, demand and recovery actions will be initiated in addition to initiation of action
against the authorisation holder, manufacturer and Chartered Engineer in terms of
Foreign Trade Development and Regulation Act 1992 and/or Customs Act 1962, as
amended and rules made there under.
→ In cases where Chartered Engineer has not exercised due diligence or has willfully
become party to mis-declaration action will be initiated under against such person under
FT(D&R) Act 1992, as amended and rules made there under. In addition, such cases shall
also be referred to ‘The Institute of Engineers India’ for taking action as warranted
under the bylaws of the institute
→ All the provisions applicable for Advance Authorisation Scheme shall be applicable to
this scheme also in so far they are not inconsistent with this scheme.

Advance Authorisation for Annual Requirement and Eligibility Condition

a. Advance Authorisation for Annual Requirement shall only be issued for items notified in
Standard Input Output Norms (SION). And it shall not be available in case of adhoc
norms.
b. Exporters having past export performance (in at least preceding two financial years)
shall be entitled for Advance Authorisation for Annual requirement.
c. Entitlement in terms of CIF value of imports shall be upto 300% of the FOB value of
physical export and / or FOR value of deemed export in preceding financial year or Rs.
1 Crore, whichever is higher.

Value Addition
Value Addition for the purpose of this Chapter shall be: -

VA = A-B÷ B x 100, where

A = FOB value of export realized/FOR value of supply received.

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B = CIF value of inputs covered by Authorisation.

Minimum Value Addition

(i) Minimum value addition required to be achieved under Advance Authorisation is 15%.
(ii) Export Products where value addition could be less than 15% are given in Appendix
4D.
(iii) Minimum value addition for Gems & Jewellery Sector is given in Handbook of
Procedures.
(iv) In case of Tea, minimum value addition shall be 50%.
(v) In case of spices, minimum value addition shall be 25%.

Ineligible categories of import on Self Declaration basis:

a. Import of following products shall not be permissible on self-declaration basis:
→ All vegetable / edible oils and all types of oilseeds;
→ All types of cereals;
→ All Spices other than light black pepper (light berries) having a basic customs duty
of more than 30%;
→ All types of fruits/ vegetables having a basic customs duty of more than 30%;
→ Horn, Hoof and any other organ of animal;
→ Honey;
→ Rough Marble Blocks/Slabs;
→ Rough Granite;
→ Vitamins except for use in pharmaceutical industry; and
→ All items with a basic custom duty of more than 30%.
b. For export of perfumes, perfumery compounds and various feed ingredients containing
vitamins, no Authorisation shall be issued by Regional Authority.
c. Where export and/or import of biotechnology items and related products are involved,
Authorisation shall be issued by Regional Authority only on submission of a “No Objection
Certificate” from Department of Biotechnology.

Currency for Realisation of Export Proceeds

a. Export proceeds shall be realized in freely convertible currency or in Indian Rupees.

b. Export to SEZ Units shall be taken into account for discharge of export obligation
provided payment is realised from Foreign Currency Account of the SEZ unit.
c. Export to SEZ Developers / Co-developers can also be taken into account for discharge
of export obligation even if payment is realised in Indian Rupees.
d. Authorisation holder needs to file Bill of Export for export to SEZ unit/ developer / co-
developer in accordance with the procedures given in SEZ Rules, 2006.

DUTY FREE IMPORT AUTHORISATION SCHEME (DFIA)

DFIA Scheme
2. DFIA is issued to allow duty free import of inputs. In addition, import of oil and catalyst
which is consumed/ utilised in the process of production of export product, may also be
allowed.
3. Import of Tyre under DFIA scheme is not allowed.

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Duties Exempted
i. DFIA shall be exempted only from payment of Basic Customs Duty (BCD).
ii. Drawback as per rate determined and fixed by Customs authority shall be available for duty
paid inputs, whether imported or indigenous, used in the export product.

Eligibility
i. DFIA shall be issued on post export basis for products for which SION have been notified.
ii. Merchant Exporter shall be required to mention name and address of supporting
manufacturer of the export product on the export document.
iii. Application is to be filed with concerned Regional Authority before effecting export under
Duty Free Import Authorisation.
iv. No Duty Free Import Authorisation shall be issued for an input which is subjected to pre-
import condition or where SION prescribes ‘Actual User’ condition.

Minimum Value Addition

Minimum value addition of 20% shall be required to be achieved.

Validity &Transferability of DFIA

b. Applicant shall file online application to Regional Authority concerned before starting export
under DFIA.
c. Export shall be completed within 12 months from the date of online filing of application and
generation of file number.
d. While doing export/supply, applicant shall indicate file number on the export /supply
documents viz. Shipping Bill / Bill of Export / Tax invoice for supply prescribed under GST
rules.
e. Separate DFIA shall be issued for each SION.
f. Exports under DFIA shall be made from any port.
g. Regional Authority shall issue transferable DFIA with a validity of 12 months from the date
of issue. No further revalidation shall be granted by Regional Authority.

Sensitive Items under Duty Free Import Authorisation

i. In respect of following inputs, exporter shall be required to provide declaration with regard
to technical characteristics, quality and specification in Shipping Bill: “Alloy steel including
Stainless Steel, Copper Alloy, Synthetic Rubber, Perfumes / Essential Oil/ Aromatic
Chemicals, Relevant Fabrics, Marble, Articles made of Paper and Paper Board, Insecticides,
Citric Acid, Lining Material”.
ii. While issuing Duty Free Import Authorisation, Regional Authority shall mention technical
characteristics, quality and specification in respect of above inputs in the Authorisation.

SCHEME FOR REMISSION OF DUTIES AND TAXES ON EXPORTED

PRODUCTS
Scheme Objective and Operating Principles

➢ The Scheme’s objective is to refund, currently unrefunded:

a. Duties/ taxes / levies, at the Central, State and local level, borne on the exported
product, including prior stage cumulative indirect taxes on goods and services used
in the production of the exported product and
b. Such indirect Duties/ taxes / levies in respect of distribution of exported product.

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➢ The rebate under the Scheme shall not be available in respect of duties and taxes already
exempted or remitted or credited.
➢ The determination of ceiling rates under the Scheme will be done by a Committee in the
Department of Revenue/Drawback Division with suitable representation of the
DoC/DGFT, line ministries and experts, on the sectors prioritized by Department of
Commerce and Department of Revenue.
➢ The overall budget/outlay for the RoDTEP Scheme would be finalized by the Ministry of
Finance in consultation with Department of Commerce (DoC), taking into account all
relevant factors.
➢ The Scheme will operate in a Budgetary framework for each financial year and necessary
calibrations and revisions shall be made to the Scheme benefits, as and when required, so
that the projected remissions for each financial year are managed within the approved
Budget of the Scheme.
➢ Under the Scheme, a rebate would be granted to eligible exporters at a notified rate as
a percentage of FOB value with a value cap per unit of the exported product, wherever
required, on export of items which are categorized under the notified 8 digit HS Code.
However, for certain export items, a fixed quantum of rebate amount per unit may also
be notified.
➢ The rebate allowed is subject to the receipt of sale proceeds within time allowed under
the Foreign Exchange Management Act, 1999 failing which such rebate shall be deemed
never to have been allowed. The rebate would not be dependent on the realization of
export proceeds at the time of issue of rebate.
➢ Mechanism of Issuance of Rebate: Scheme would be implemented through end to end
digitization of issuance of rebate amount in the form of a transferable duty
credit/electronic scrip (e-scrip), which will be maintained in an electronic ledger by the
Central Board of Indirect Taxes & Customs (CBIC). Necessary rules and procedure
regarding grant of RoDTEP claim under the Scheme and implementation issues including
manner of application, time period for application and other matters including export
realization, export documentation, sampling procedures, record keeping etc. would be
notified by the CBIC, Department of Revenue on an IT enabled platform with a view to
end to end digitization. Necessary provisions for recovery of rebate amount where
foreign exchange is not realized, suspension/withholding of RoDTEP in case of frauds and
misuse, as well as imposition of penalty will also be built suitably by CBIC.
➢ The Scheme will take effect for exports from 1st January 2021.

Ineligible Supplies/ Items/Categories under the Scheme

The following categories of exports/ exporters shall not be eligible for rebate under RoDTEP
Scheme:

1. Exports through trans-shipment, meaning thereby exports that are originating in third
country but trans-shipped through India.
2. Export products which are subject to Minimum export price or export duty.
3. Products which are restricted for export under Export Policy.
4. Products which are prohibited for export under Export Policy.
5. Deemed Exports.
6. Supplies of products manufactured by DTA units to SEZ/FTWZ units.

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7. Products manufactured in EHTP and BTP.

8. Products manufactured or exported in discharge of export obligation against an Advance
Authorisation or Duty Free Import Authorization or Special Advance Authorisation
issued under a duty exemption scheme of relevant Foreign Trade Policy.
9. Products manufactured or exported by a unit licensed as 100% EOU in terms of the
provisions of the FTP.
10. Products manufactured or exported by any of the units situated in Free Trade Zones or
Export Processing Zones or Special Economic Zones.

Nature of Rebate
The e-scrips would be used only for payment of duty of Customs leviable under the First
Schedule to the Customs Tariff Act, 1975 viz. Basic Customs Duty.

Monitoring, Audit and Risk Management System

For the purposes of audit and verification, the exporter would be required to keep records
substantiating claims made under the Scheme. A monitoring and audit mechanism with an IT
based Risk Management System (RMS) would be put in place by the CBIC, Department of
Revenue to physically verify the records of the exporters on sample basis.

For a broad level monitoring, an Output Outcome framework will be maintained and monitored
at regular intervals.

Residual Issues
Residual issues related to the Scheme arising subsequently shall be considered by an Inter-
Ministerial Committee, named as “RODTEP Policy Committee (RPC)” chaired by DGFT, whose
decisions would be binding.

EXPORT PROMOTION CAPITAL GOODS (EPCG) SCHEME

Objective
The objective of the EPCG Scheme is to facilitate import of capital goods for producing
quality goods and services and enhance India’s manufacturing competitiveness.

EPCG Scheme
1. EPCG Scheme allows import of capital goods for pre-production, production and post-
production at zero customs duty. Capital goods imported under EPCG Authorisation for
physical exports are also exempt from IGST and Compensation Cess, leviable thereon
under Customs Tariff Act, 1975. Capital goods for the purpose of the EPCG scheme shall
include:
a. Capital Goods including in CKD/SKD condition thereof;
b. Computer systems and software which are a part of the Capital Goods being imported;
c. Spares, moulds, dies, jigs, fixtures, tools & refractories; and
d. Catalysts for initial charge plus one subsequent charge.
2. Import under EPCG Scheme shall be subject to an Export Obligation (EO) equivalent to 6
times of duties, taxes and cess saved on capital goods, to be fulfilled in 6 years reckoned
from date of issue of Authorisation.
3. Authorisation shall be valid for import for 24 months from the date of issue of
Authorisation. Revalidation of EPCG Authorisation shall not be permitted.

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4. Import of items which are restricted for import shall be permitted under EPCG Scheme
only after approval from Exim Facilitation Committee (EFC) at DGFT Headquarters.
5. If the goods proposed to be exported under EPCG Authorisation are restricted for
export, the EPCG Authorisation shall be issued only after approval for issuance of Export
Authorisation from Exim Facilitation Committee (EFC) at DGFT Headquarters.

Coverage
a. EPCG scheme covers manufacturer exporters with or without supporting manufacturer(s),
merchant exporters tied to supporting manufacturer(s) and service providers.
Name of supporting manufacturer(s) shall be endorsed on the EPCG Authorisation before
installation of the capital goods in the factory / premises of the supporting
manufacturer(s).
In case of any change in supporting manufacturer(s), the RA shall intimate such change
to jurisdictional Customs Authority of existing as well as changed supporting
manufacturer(s) and the Customs at port of registration of Authorisation.
b. Export Promotion Capital Goods (EPCG) Scheme also covers a service provider who is
certified as a Common Service Provider (CSP) by the DGFT - HQs, Department of
Commerce in a Town of Export Excellence or Prime Minister Mega Integrated Textile
Region and Apparel Parks (PM MITRA) subject to provisions of Foreign Trade
Policy/Handbook of Procedures with the following conditions:
i. Common utility services like providing Electricity, Water, Gas, Sanitation, Sewerage,
Telecommunication, Transportation etc. shall not considered for benefit of CSP;
ii. Export by users of the common service shall be counted towards fulfilment of EO of
the CSP;
iii. Such export will not count towards fulfilment of specific export obligation in respect
of other EPCG Authorisations of the user;
iv. Authorisation holder shall be required to submit Bank Guarantee (BG) which shall be
equivalent to the duty saved, and
v. Capital goods shall be installed within a Town of Export Excellence or PM MITRA.

It may be noted that-

“Service Provider” means a person providing:

(i) Supply of a ‘service’ from India to any other country; (Mode1- Cross border trade)
(ii) Supply of a ‘service’ from India to service consumer(s)of any other country in
India; (Mode 2-Consumption abroad)
(iii) Supply of a ‘service’ from India through commercial presence in any other country.
(Mode 3 –Commercial Presence.)
(iv) Supply of a ‘service’ from India through the presence of natural persons in any
other country (Mode 4- Presence of natural persons.)

Actual User Condition

Imported capital goods shall be subject to Actual User condition till export obligation is
completed and Export Obligation Discharge Certificate (EODC) is granted.

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Export obligation

Following conditions shall apply to the fulfilment of Export obligation: -

(a) Export obligation shall be fulfilled by the Authorisation holder through export of goods
which are manufactured by him or his supporting manufacturer / services rendered by
him, for which the EPCG authorisation has been granted.
(b) For export of goods, EPCG Authorisation holder may export either directly or through
third party(ies).
(c) EO under the scheme shall be, over and above, the average level of exports achieved by
the applicant in the preceding three licensing years for the same and similar products
within the overall EO period including extended period, if any;
(d) Exports under Advance Authorisation, DFIA, Duty Drawback, RoSCTL and RoDTEP
Schemes would also be eligible for fulfilment of EO under EPCG Scheme.
(e) Export obligation may be fulfilled both by physical exports as well as deemed exports.
(f) Exports made from DTA units shall only be counted for calculation and/or fulfilment of
EO.
(g) Export proceeds realized in Indian Rupees are also counted towards fulfillment of
export obligation.
(h) Extension of EO period shall be permitted as prescribed in Handbook of Procedures.

Calculation of Export Obligation

In case of direct imports, EO shall be reckoned with reference to actual duty /Taxes/Cess
saved amount. In case of domestic sourcing, EO shall be reckoned with reference to notional
Customs duty /Taxes/Cess saved on FOR value.

Incentive for early EO fulfillment

With a view to accelerating exports, in cases where Authorisation holder has fulfilled 75% or
more of specific export obligation and 100% of Average Export Obligation till date, if any, in
half or less than half the original export obligation period specified, remaining export
obligation shall be condoned and the Authorisation redeemed by RA concerned.

Reduced EO for North East Region and UTs of Jammu & Kashmir and Ladakh
For manufacturing units located in Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram,
Nagaland, Sikkim, Tripura, Jammu & Kashmir and Ladakh, specific EO shall be 25% of the EO.

Exemption from maintenance of average export obligation

(a) In case of export of goods relating to the following, the EPCG Authorisation holder shall
not be required to maintain average export obligation.
(i) Handicrafts, (ii) Handlooms, (iii) Industries covered under Khadi and Village
Industries Commission (KVIC) (iv) Agriculture (v) Aquaculture (including Fisheries),
Pisciculture, (vi) Animal husbandry and Dairying, (vii) Floriculture & Horticulture, (viii)
Poultry, (ix) Viticulture, (x) Sericulture, (xi) Carpets, (xii) Coir, and (xiii) Jute
(b) However, this exemption from maintenance of average export obligation shall not be
allowed for import of fishing trawlers, boats, ships and other similar items.
(c) Goods, excepting tools imported under EPCG scheme by sectors specified in sub-
paragraph (a) above, shall not be allowed to be transferred for a period of 5 years from
date of imports even in cases where export obligation has been fulfilled.

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DEEMED EXPORTS
Objective
To provide a level-playing field to domestic manufacturers and to promote Make in India, in
certain specified cases, as may be decided by the Government from time to time.

Deemed Exports
(i) “Deemed Exports” for the purpose of this FTP refer to those transactions in which
goods supplied do not leave country, and payment for such supplies is received either
in Indian rupees or in free foreign exchange. Supply of some specified goods shall be
regarded as “Deemed Exports” provided goods are manufactured in India.
(ii) “Deemed Exports” for the purpose of GST would include only the supplies notified
under CGST/SGST Act, on the recommendations of the GST Council.

Categories of Supply
Supply of goods under following categories (a) to (c) by a manufacturer and under categories
(d) to (g) by main / sub-contractors shall be regarded as ‘Deemed Exports’:

A. Supply by manufacturer:
a) Supply of goods against Advance Authorisation / Advance Authorisation for
annual requirement / DFIA.
b) Supply of goods to EOU / STP / EHTP / BTP.
c) Supply of capital goods against EPCG Authorisation.
B. Supply by main / sub-contractor(s):
d)
i. Supply of goods to projects financed by multilateral or bilateral Agencies /
Funds as notified by Department of Economic Affairs (DEA), MoF.
ii. Supply and installation of goods and equipment (single responsibility of turnkey
contracts) to projects financed by multilateral or bilateral Agencies/Funds as
notified by Department of Economic Affairs (DEA), MoF.
iii. Supplies covered in this paragraph shall be under International Competitive
Bidding (ICB) in accordance with procedures of those Agencies / Funds.
e)
i. Supply of goods to any project or for any purpose in respect of which the
Ministry of Finance permits import of such goods at zero basic customs duty
subject to conditions mentioned therein. Benefits of deemed exports shall be
available only if the supply is made under procedure of ICB.
ii. Supply of goods required for setting up of any mega power project shall be
eligible for deemed export benefits provided such mega power project conforms
to the threshold generation capacity specified in the above said Notification.
iii. For mega power projects, ICB condition would not be mandatory if the requisite
quantum of power has been tied up through tariff based competitive bidding or
if the project has been awarded through tariff based competitive bidding.
f) Supply of goods to United Nations or International organization for their official
use or supplied to the projects financed by the said United Nations or an

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International organization approved by Government of India under United

Nations (Privileges and Immunities Act), 1947.
g) Supply of goods to nuclear power projects.

Common conditions for deemed export benefits

(i) Supplies shall be made directly to entities. Third party supply shall not be eligible for
benefits/exemption.
(ii) In all cases, supplies shall be made directly to the designated Projects / Agencies/
Units/ Advance Authorisation/ EPCG Authorisation holder.
(iii) Supply of domestically manufactured goods by an Indian Subcontractor to any Indian
or foreign main contractor, directly at the designated project’s/ Agency’s site, shall
also be eligible for deemed export benefit provided name of sub- contractor is
indicated either originally or subsequently in the main contract.

Benefits on specified supplies

(i) Deemed export benefits shall be available for supplies of “Cement”
(ii) Deemed export benefit shall be available on supply of “Steel”:
(iii) Deemed export benefit shall be available on supply of “Fuel” provided supplies are
made to:
a) EOUs.
b) Advance Authorisation holder / Annual Advance Authorisation holder.

Liability of Interest
Incomplete/deficient application is liable to be rejected. However, simple interest @ 6% per
annum will be payable on delay in refund of duty drawback and terminal excise duty under the
scheme, provided the claim is not settled within 30 days from the date of issue of final
Approval Letter by RA.

Risk Management and Internal Audit mechanism

(a) A Risk Management system shall be in operation, wherein every month, Computer
system in DGFT headquarters, on random basis, will select 10% of cases, for each RA,
where benefit(s) under this Chapter has/have already been granted. Such cases shall
be scrutinized by an internal Audit team, headed by a Joint DGFT, in the office of
respective Zonal Addl. DGFT. The team will be responsible to audit claims of not only
for its own office but also the claims of all RAs falling under the jurisdiction of the
Zone.
(b) The respective RA may also, either on the basis of report from Internal Audit/
External Audit Agency (ies) or suo-motu, re-assess any case, where any erroneous/ in-
eligible payment has been made/claimed. RA will take necessary action for recovery of
payment along with interest at the rate of 15% per annum on the recoverable amount.

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EXPORT ORIENTED UNITS (EOUS), ELECTRONICS HARDWARE

TECHNOLOGY PARKS (EHTPS), SOFTWARE TECHNOLOGY PARKS (STPS)
AND BIO-TECHNOLOGY PARKS (BTPS)
Introduction and Objective

(a) Units undertaking to export their entire production of goods and services(except
permissible sales in DTA), may be set up under the Export Oriented Unit (EOU) Scheme,
Electronics Hardware Technology Park (EHTP) Scheme, Software Technology Park(STP)
Scheme or Bio-Technology Park (BTP) Scheme for manufacture of goods, including
repair, re-making, reconditioning, reengineering, rendering of services, development of
software, agriculture including agro-processing, aquaculture, animal husbandry, bio-
technology, floriculture, horticulture, pisciculture, viticulture, poultry and sericulture.
Trading units are not covered under these schemes.
(b) Objectives of these schemes are to promote exports, enhance foreign exchange
earnings, attract investment for export production and employment generation.

Export and Import of Goods

(a) An EOU / EHTP / STP / BTP unit may export all kinds of goods and services except items
that are prohibited in ITC (HS). However export of gold jewellery, including partly
processed jewellery, whether plain or studded, and articles, containing gold of 8 carats
and above up to a maximum limit of 22 carats only shall be permitted.
(b) Export of Special Chemicals, Organisms, Materials, Equipment and Technologies
(SCOMET) shall be subject to fulfillment of conditions contained in FTP.
(c) Procurement and supply of export promotion material like brochure/literature,
pamphlets, hoardings, catalogues, posters etc. upto a maximum value limit of 1.5% of FOB
value of previous year’s exports shall also be allowed.
(d)
i. An EOU / EHTP/ STP/ BTP unit may import and / or procure, from DTA or bonded
warehouses in DTA / international exhibition held in India, all types of goods, including
capital goods, required for its activities, provided they are not prohibited items of
import in the ITC (HS) subject to conditions given at para (ii) & (iii) below. Any
permission required for import under any other law shall be applicable. Units shall also
be permitted to import goods including capital goods required for approved activity,
free of cost or on loan / lease from clients. Import of capital goods will be on a self-
certification basis. Goods imported by a unit shall be with actual user condition and
shall be utilized for export production.
ii. The imports and/ or procurement from bonded warehouse in DTA or from
international exhibition held in India shall be without payment of duty of customs
leviable thereon under the First Schedule to the Customs Tariff Act, 1975 and
additional duty, if any.
iii. The procurement of goods covered under GST from DTA would be on payment of
applicable GST and compensation cess.
(e) An EOU engaged in agriculture, animal husbandry, aquaculture, floriculture, horticulture,
pisciculture, viticulture, poultry or sericulture may be permitted to remove specified
goods in connection with its activities for use outside the premises of the unit.

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(f) EOU/EHTP/STP/BTP units, other than service units, may export to Russian Federation
in Indian Rupees against repayment of State Credit/ Escrow Rupee Account of buyer
subject to RBI clearance, if any.
(g) Procurement and export of spares / components, upto 5% of FOB value of exports, may
be allowed to same consignee / buyer of the export article.

Second hand Capital Goods

Second hand capital goods, without any age limit, may also be imported with or without
payment of duty/taxes.

Leasing of Capital Goods

a. An EOU / EHTP/STP/BTP unit may, on the basis of a firm contract between parties,
source capital goods from a domestic / foreign leasing company with or without payment
of duties/taxes, in such a case, EOU / EHTP/STP/BTP unit and domestic / foreign
leasing company shall jointly file documents to enable import/ procurement of capital
goods.
b. An EOU/ EHTP/STP/BTP unit may sell capital goods and lease back the same from a Non
Banking Financial Company (NBFC), subject to the following conditions:
i. The unit should obtain permission from the jurisdictional Deputy/Assistant
Commissioner of Customs for entering into transaction of ‘Sale and Lease Back of
Assets’, and submit full details of the goods to be sold and leased back and the details
of NBFC;
ii. The goods sold and leased back shall not be removed from the unit’s premises;
iii. The unit should be NFE positive at the time when it enters into sale and lease back
transaction with NBFC;

Net Foreign Exchange Earnings

EOU/EHTP/STP/BTP unit shall be a positive net foreign exchange earner.

NFE Earnings shall be calculated cumulatively in blocks of 5 years, starting from

commencement of production. Whenever a unit is unable to achieve NFE due to prohibition /
restriction imposed on export of any product mentioned in LoP, the 5 years block period for
calculation of NFE earnings may be suitably extended by BoA. Further, wherever a unit is
unable to achieve NFE due to adverse market condition or any grounds of genuine hardship
having adverse impact on functioning of the unit, the 5 years block period for calculation of
NFE earnings may be extended by BoA for a period of upto 1 year, on a case to case basis.

Applications & Approvals/Letter of Permission / Letter of Intent and Legal

Undertaking
a.
i. Application for setting up an EOU shall be considered by Unit Approval Committee
(UAC)/ Board of Approval (BoA) as the case may be.
ii. In case of units under EHTP / STP schemes, necessary approval / permission under
relevant paras of this Chapter shall be granted by officer designated by Ministry
of Electronics & Information Technology, instead of DC, and by Inter- Ministerial
Standing Committee (IMSC) instead of BOA.

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iii. Bio-Technology Parks (BTP) would be notified by DGFT on recommendations of

Department of Biotechnology. In case of units in BTP, necessary approval /
permission under relevant provisions of this chapter will be granted by designated
officer of Department of Biotechnology.
iv. On approval, a Letter of Permission (LoP) / Letter of Intent (LoI) shall be issued
by DC / Designated officer to EOU/EHTP/STP/BTP unit.
b. LoP / LoI issued to EOU/EHTP/STP/BTP units by concerned authority would be
construed as an Authorisation for all purposes.
c. Unit shall execute an LUT with DC concerned.

Investment Criteria
Only projects having a minimum investment of Rs. 1 Crore in plant & machinery shall be
considered for establishment as EOUs. However, this shall not apply to existing units, units
in EHTP / STP/ BTP, and EOUs in Handicrafts/Agriculture/Floriculture/Aquaculture/Animal
Husbandry/Information Technology, Services, Brass Hardware and Handmade jewellery
sectors. BoA may allow establishment of EOUs with a lower investment criteria.

Other Entitlements

Other entitlements of EOU/EHTP/STP/BTP units are as under:

(a) Exemption from industrial licensing for manufacture of items reserved for micro and
small enterprises.
(b) Export proceeds will be realized within 9 months.
(c) Units will be allowed to retain 100% of its export earnings in the EEFC account.
(d) Unit will not be required to furnish bank guarantee at the time of import or going for
job work in DTA, where:
i. the unit has turnover of Rs. 5 crore or above; and
ii. the unit is in existence for at least three years; and
iii. the unit has achieved positive NFE / export obligation wherever applicable; and
has not been issued a show cause notice or a confirmed demand, during the
preceding 3 years, on grounds other than procedural violations, under the penal
provision of the Customs Act, CGST/ SGST/UTGST//IGST Acts, the Central
Excise Act, the Foreign Trade (Development & Regulation) Act, 1992, the Foreign
Exchange Management Act, the Finance Act, 1994 covering Service Tax or any
allied Acts or the rules made thereunder, on account of fraud / collusion / willful
mis-statement / suppression of facts or contravention of any of the provisions
thereof.
(e) Unit will also not be required to furnish bank guarantee at the time of import or going
for job work in DTA, if it has achieved necessary certification as an Authorised
Economic Operator (AEO) and has not been issued a show cause notice or a confirmed
demand, during the preceding 3 years, on grounds other than procedural violations,
under the penal provision of the Foreign Trade (Development & Regulation) Act, 1992
and the Foreign Exchange Management Act.
(f) 100% FDI investment permitted through automatic route similar to SEZ units.

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Exit from the Scheme

(a) With approval of DC/Designated officer of EHTP/ STP/BTP, an EOU/EHTP/STP/BTP
unit may opt out of scheme. Such exit shall be subject to payment of applicable Excise
and Customs duties and on payment of applicable IGST/ CGST/ SGST/ UTGST and
compensation cess, if any, and industrial policy in force.
(b) If unit has not achieved obligations, it shall also be liable to penalty at the time of exit.
(c) In the event of a gems and jewellery unit ceasing its operation, gold and other precious
metals, alloys, gems and other materials available for manufacture of jewellery, shall be
handed over to an agency nominated by DoC, at price to be determined by that agency.
(d) An EOU / EHTP / STP / BTP unit may also be permitted by DC to exit from the scheme
at any time on payment of applicable duties and taxes and compensation cess on capital
goods under the prevailing EPCG Scheme for DTA Units. This will be subject to
fulfillment of positive NFE criteria under EOU scheme, eligibility criteria under EPCG
scheme and standard conditions indicated in HBP.
(e) Unit proposing to exit out of the scheme shall intimate DC of EOU/Designated officer
of EHTP/STP/BTP and Customs authorities in writing.
(f) An EOU / EHTP / STP / BTP unit may also be permitted by DC to exit under Advance
Authorisation as one time option. This will be subject to fulfillment of positive NFE
criteria.

Conversion
(a) Existing DTA units may also apply for conversion into an EOU / EHTP / STP/ BTP unit.
(b) Existing EHTP / STP units may also apply for conversion / merger to EOU unit and vice-
versa. In such cases, units will avail exemptions in duties and taxes as applicable.
(c) Applications for conversion into an EOU / EHTP / STP / BTP unit from existing DTA
units, having an investment of Rs. 50 crores and above in plant and machinery or
exporting Rs. 50 crores and above annually, shall be placed before BOA for a decision.

Monitoring of NFE

Performance of EOU/EHTP/STP/ BTP units shall be monitored by Units Approval Committee

as per guidelines in HBP.

Export through Exhibitions/ Export Promotion Tours/ Showrooms Abroad /Duty Free
Shops
EOU / EHTP / STP / BTP are permitted to:

(i) Export goods for holding/participating in Exhibitions abroad with permission of DC

/Designated officer.
(ii) Personal carriage of gold / silver / platinum jewellery, precious, semi-precious stones,
beads and articles.
(iii) Export goods for display / sale in permitted shops set up abroad.
(iv) Display / sell in permitted shops set up abroad, or in showrooms of their distributors
/ agents.
(v) Set up showrooms / retail outlets at International Airports.

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Export /Import by Post/ Courier

Goods including free samples, may be exported/imported by air freight or through foreign
post office or through courier, as per Customs procedure.

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