deed of assignment under indian law

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what is Patent Assignment Deed and its Advantages

It’s an agreement between Assignor and Assignee which explains the rights and conditions related to patent assigned property which means intellectual property of Assignor who is holding monopoly power towards that property. Under Indian law, its mandatory to register Patent Assignment Deed under Section 68 of the Patents Act, 1970 which giving Assignee absolute rights from date of execution of deed.

Kind of assignment deed:

Legal assignment – in this Assignee may enter his name as patent owner.
Equitable assignment – in this certain share is given to another person. Equitable Assignee can’t enter his name as owner but can register as having interest in the patent.
Mortgage – in this patent right is partially or wholly transferred to obtain money. On repayment of money, mortgagor becomes entitle to register his name as owner.

Illustration:

A is the Assignor who got grant of patent for his invented product from Government of India willing to assign that to B’s company for loyalty in terms of share of 30% from every year earnings. And further it mentions the rights and duty of Assignor and Assignee under the legal agreement. This helps parties get relief in case of breach of contractual obligations.

Who is Assignor and Assignee?

Assignor is the person who is willing to transfer the title of patent and Assignee is the person who is willing to receive the title, interest and such other rights of patent from the Assignor by giving the required consideration.

What is the advantage of Patent Assignment Deed?

It helps parties to understand their rights and duties with respect to the said Patent.
Since all the provisions are written and mutually agreed upon by the parties it minimizes ambiguity. More so in case of any dispute arising between the parties it shall be resolved according to the dispute redressal clauses mentioned in the Deed.
Formation of assignment deed gives legality and enforceability to the transfer of any Intellectual Property.
An Assignment Deed is a prima facie evidence of contractual relationship between Assignor and Assignee.

What are general rights and duties of Assignor and Assignee under this deed?

Assignor need an absolute title against the patented goods for transferring such rights to Assignee.
Deed need to comply with all the essentials of contract in order to execute legally. If it violates public policy or does not have a lawful consideration, then such contract is void ab initio.
Assignor can transfer his intellectual rights fully or conditionally to Assignee for the consideration. Consideration could be of monetary value forming a large sum or shared percentage from income or stocks exchange of the concerned parties.
Assignee will get the monopoly right as Assignor assigns the patented goods. Henceforth, the Assignee steps into the shoes of the Assignor and by the virtue of the deed acquires an absolute right to use and enjoy the patented goods.
Assignee has the right to get indemnified against any intervention/inconvenience caused while he is exercising his rights.
Assignee can sue for damages caused to him by Assignor’s action, it maybe mistakes or voluntary negligence/disturbance or fraudulent activity in the deed.
Assignee is obligated to pay the consideration mentioned if he fails to do so within a stipulated period of time. Assignor can bring a legal action for the recovery of consideration but cannot terminate the title already transferred.
Assignee shall pay renewal and such other charges after the assignment. Prior to the assignment the Assignor needs to ensure that the title is free from any encumbrances.

Can the Assignment Deed be Terminated/Amended?

This amendment mostly happens in equitable assignment deed. The deed must be registered before the Controller of Patent and in case of infringement or mutual consciousness the parties may mutually agree to amend any provision of the deed.
Termination of the deed is unlikely as it’s irrevocable and permanent in nature. As assignment being transfer of title in a patent which is permanent. It may be terminated in case of mortgage assignment deed.

Akshay is a Language Enthusiast & an HNLU alumnus. He believes in simplicity & takes legal literacy very close to his heart.

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Subcontracting v. Assignment

Contributor.

The performance of a contract may require third party involvement towards the fulfilment of obligations under a contract. In certain specific circumstances, the contracting parties may decide to "sub-contract" or "assign" their rights and obligations to a third party depending upon the nature of the contract.

In common parlance, sub-contracting and assignment are used interchangeably, however, a significant difference lies between the two when one examines the terms from a legal stand point. This post aims to discuss the concept of Sub-Contracting and Assignment and explains the key difference between the two concepts.

Sub-Contracting

Sub-contracting refers to the delegation of certain duties and obligations by contracting parties to a third party, i.e. a sub-contractor who aids in the performance of the contract. According to the Black's Law Dictionary, a sub-contract is "where a person has contracted for the performance of certain work and he, in turn, engages a third party to perform the whole or part of that which is included in the original contract, his agreement with such third person is called a subcontract and such person is called a subcontractor ." 1 A subcontractor could be a company, self-employed professionals or an agency undertaking to fulfil obligations under a contract.

Sub-contracting is generally undertaken in complex projects where the contract has a prolonged life cycle or multiple components for completion of a project, for instance, infrastructure contracts, construction contracts, renewable energy contracts or certain information technology-related contracts. However, the rights and duties of the sub-contractor under the sub-contracting agreement are relatively similar to that of the principal contractor in the main agreement.

Furthermore, while drafting a contract, one must ensure to incorporate a clause on sub-contracting which clearly spells out that parties to the contract shall sub-contract the rights and obligations only after seeking prior written consent from the other party. The sub-contracting arrangement maybe two-fold, depending upon the nature of the main contract:

Primarily, the basic idea behind delegation of the obligations to a sub-contractor is to ensure greater flexibility in the performance of the contract. However, it is imperative to enter into a sub-contractor's agreement that specifies all the details of the work to be performed by the subcontractor, including optimum time required to accomplish the task, payment of charges to the subcontractor, termination of the agreement, etc.

While subcontracting is time-saving and cost efficient, it may result into legal issues between the contracting parties. For instance, issues may arise with respect to the payment conditions where the payment to sub-contractor is contingent upon or linked to the principal contractor receiving its payment from the employer. Further, the courts in India have always upheld the principle of privity of contract between employer and the principal contractor on the one hand and between the principal contractor and sub-contractor(s) on the other. The Supreme Court of India in the case of Zonal General Manager, Ircon International Ltd. v. Vinay Heavy Equipments 2 upheld that in the absence of a back-to-back covenant in the main contract, " the distinct and sole liability of the middle-contractor is presumed and that the rules in relation to privity of contract will mean that the jural relationship between the employer and the main contractor on the one hand and between the sub-contractor and the main contractor on the other will be quite distinct and separate" . Therefore, in order to avoid ambiguities and future legal squabbles, careful consideration must be given while drafting specific terms and obligation that will pass down the contractual chain.

Assignment of contract refers to an act of transferring contractual rights and liabilities under the contract to a third party with other party's concurrence. Section 37 of the India Contract Act, 1872 ("Contract Act") enables the contracting parties to dispense with the performance of a contract by way of an assignment. While the principle of assignment is well recognized under Indian law, it derives its origin from the English law.

Assignment of rights is a "complete transfer of rights to receive benefits" accruing to one party under a contract. Performance of a contract may be assigned as long as the contracting parties provide their consent towards the assignment. However, the act of assignment needs to be looked at from the perspective of the contracting parties. Essentially, there are three parties involved, namely, the assignor, assignee and obligor.

An important principle affecting assignments is that the burden or liability under a contract cannot be assigned. Essentially, the moot question that often arises is with respect to assignment of "rights" vis à vis assignment of "obligations". The Supreme Court in the case of Khardah Company Ltd. v. Raymon & Co. (India) Private Limited 3 categorically distinguished between assignment of "rights" and "obligations". The court upheld that, " an assignment of a contract might result by transfer either of the rights or of the obligations thereunder. But there is a well-recognised distinction between these two classes of assignments. As a rule, obligations under a contract cannot be assigned except with the consent of the promisee, and when such consent is given, it is really a novation resulting in substitution of liabilities. On the other hand rights under a contract are assignable unless the contract is personal in its nature (or) the rights are incapable of assignment either under the law or under an agreement between the parties" . Primarily, the court clarified that obtaining prior consent to assign "obligations" under a contract would be considered as novation as it will result into substitution of liabilities and obligations to the assignee. Moreover, introduction of a new party into an existing contract will result into novation of a contract i.e. creation of a new contract between original party and new party. As the courts have interpreted that transfer of obligations can be undertaken through novation, the assignment clause in a contract must clearly deal with novation, if the intention is to transfer obligations.

Furthermore, the Supreme Court, in the case of Gopalbhai Manusudhan 4 , reaffirmed that whenever there is a case of assignment or even the transfer of the obligations, it must be acclaimed that there is the presence of the consent of the parties. Without the consent of the parties, the assignment will be not considered valid. In addition to upholding the legal point, this ruling also indicates that before establishing a commercial contract, the parties must consider the different complications of contracts, such as the objective of the contract and the presence of an assignability clause in the agreement.

Therefore, the judicial trend in India has time and again reiterated and laid down that rights under contract can be assigned unless (a) the contract is personal in nature i.e. requires personal engagement of a specific person or (b) the rights are incapable of assignment either under law or under an agreement between the parties. In the case of Robinson v. Davison 5 , the defendant's wife pledged to perform piano at a concert on a specific date. Due to "her illness", she was unable to fulfil her obligation, which was to play the piano at an event. The contract in this instance was ruled to be solely dependent on the defendant's wife's good health and personal talent, and the defendant's wife's illness led the contract to be void. Further, the court ruled that the defendant could not be held liable for damages as a result of the contract's non-performance. The wife could not assign her right/obligation to a third party because the contract was founded on the "promisor's expertise" in the aforesaid case.

While assignment is a boiler plate clause, it requires careful consideration on a case-to-case basis. For instance, in real estate transactions, a buyer would insist on retaining the right to assign the "agreement to sell" in favour of a nominee (a company, affiliate or any other third party), in order to facilitate final conveyance in favour of the intended buyer. Similarly, in lending transactions, a borrower will be prohibited from assigning rights under the contract, however, the lender will retain absolute and free right to assign/sell loan portfolios to other lenders or securitisation company.

The apex court has time and again reiterated that the best policy is to unequivocally state the intent with respect to assignment in the agreement to avoid litigation in the future. The contracting parties must expressly specify the rights and obligations stemming from assignment under a contract. Any agreed limitation on such an assignment must be expressly laid down in the contract to avoid adverse consequences.

For a person drafting a contract, it is important to understand these subtle differences, between sub-contracting and assignment. While "sub-contracting" is delegating or outsourcing the liabilities and obligations, "assignment" is literally transferring the obligations. It will be not fallacious to say that an "assignment" transfers the entire legal obligation to perform to the party assigned the obligation whereas, subcontracting leaves the primary responsibility to perform the obligation with the contracting party.

1.Black's Law Dictionary 4th ed. (St. Paul: West, 1951).

2. 2006 SCC OnLine Mad 1107

3. MANU/SC/0428/1962

4. Kapilaben & Ors. v Ashok Kumar Jayantilal Seth through POA Gopalbhai Manusudhan 2019 (10) SCJ 269

5. (1871) LR 6 Ex 269

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

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Assignment of Contract

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

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

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

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

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

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

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

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

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

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

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

References:

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

Assignment of Debts under the Insolvency and Bankruptcy Code

[ Aayush Mitruka is a lawyer based in Delhi]

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

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

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

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

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

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

[Emphasis supplied]

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

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

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

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

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

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

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

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

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

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

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

– Aayush Mitruka

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

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

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

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

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

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07 August 2014

Registration of license / assignment deed under the Patents Act - Mandatory or not?

A license agreement or an assignment deed is an agreement between a right holder and the licensee and/or assignee wherein the right holder permits the licensee and/or assignee to use rights owned by the right holder in exchange for a consideration, whether in the form of a one-time settlement or a periodic royalty.Generally an agreement may be in writing or oral but Section 68 the Patents Act, 1970 (the Act) mandates that the license/assignment agreement shall not be valid unless the same is in writing embodying all the terms and conditions governing the rights and obligations of the parties and are duly executed. Further Section 69 of the Act embodies the procedure for registration of an assignment or license agreement. The questions that arise for discussion are - what is the importance of the registration of a document under Section 69 of the Act and what are the consequences that follow if such registration is not obtained. This issue was adjudicated by the Delhi High Court by order dated 16th April, 2014 in Sergi Transformer Explosion Prevention Technologies Pvt. Ltd . v. Kumar Pratap Anil & Ors. [I.A. No. 16042/2010 in CS (OS) No. 1610/2010].

Factual background

The Plaintiff, Sergi Transformer Technologies Pvt. Ltd. (Sergi Transformer) filed a suit seeking permanent injunction against the Defendants and Mr. Phillipe Magnier (proforma defendant-the patentee) from infringing the Indian Patent No. 189089 (the suit patent) in respect of a “Method and Device for Preventing / Protecting Electrical Transformer against Explosion and Fire”. Sergi Transformer claimed to be the exclusive licensee of the above-mentioned patent by virtue of a license agreement dated 1st August, 2006. Further, it was also averred in the plaint that Sergi Transformer had initiated the process of registration of the license agreement with the Patent Office in Kolkata on 15th March, 2010. During the pendency of said suit, the Defendants filed an application under Order VII Rule 11 read with Section 151 of the Civil Procedure Code, 1908 (CPC) to dismiss the above-mentioned suit on the ground that the suit was not maintainable as the license agreement forming the basis of the said suit was not registered with the Patent office. The primary ground raised by the Defendants was that the license agreement relied upon by the Plaintiff was not a valid legal document as it has not been duly executed and it was a back-dated document that had been created to file the said suit. More importantly it was argued that although the license agreement was signed on 1st August, 2006, with effect from 1st January, 2006; it was not until 15th March 2010, that Sergi Transformer took steps to register the license as required under the Act. Sergi Transformer argued that the non-registration of a license deed does not render it void and it had written to the Controller of Patents under Section 69 of the Act to have the same registered. It was further argued that there is no bar under the provisions of Sections 109 and 69 of the Act to bring the suit against infringement and that post-amendment of the Act there is no time stipulation for filing the application before the patent office for registration of the license deed.

Delhi High Court on the application under Order 7 Rule 11 CPC

The Delhi High Court, relying on judgment of Supreme Court in Liverpool & London S.P. & I Assn Ltd . v. M.V. Sea Success [(2004) 9 SCC 512], observed that at the stage of considering an application under Order 7 Rule 11 of the CPC, the court has to only examine the plaint averments and the list of documents filed along with the suit. The Court thus held that other pleas advanced by parties including pleadings in the written statement have no relevancy in deciding such an application.

Delhi High Court on registration of licenses under the Act

On perusing Sections 68 and 69 of the Act prior to and after the amendment in 2005, the Court observed that the un-amended Section 68 states that, a license or assignment agreement shall have effect from the date of execution, only on registration and an application for such registration has to be filed with the Controller within six months from the date of execution of document. In contrast, post-amendment under Section 69(5) of the Act, the validity of the license or assignment agreement as evidence is to be considered only after the document is registered in the office of the Controller, unless the Controller or the Court direct otherwise with reasons recorded in writing. Further under Section 69 of the Act there is no time prescribed for filing such an application for registration. The Court emphasized on a conjoint reading of Sections 68, 69, 109 and 110 of the Act. Although there exists no bar to file a suit for infringement by the exclusive licensee even if the license agreement is not registered under the Act, in light of the wordings “unless the Controller or the Court....directs otherwise” under Section 69(5) of the Act, the Court clarified that the only case where an un-registered license or assignment agreement shall be admitted in evidence of the title of any person to a patent is if the Controller or the Court specifically directs in this regard in writing. In the instant case, though the Plaintiff had filed the license agreement before the patent office for registration, the Controller had not passed any specific order. Hence, the Court held that unless the agreement is registered or the court passes any such order, the license agreement is not to be considered in evidence by the Court. With respect to the averments on the illegality of the license agreement of Sergi Transformer, the Court held that these issues would be considered by the Patent Office when it decides on Sergi Transformer's application to register the agreement. Although the Court declined to dismiss the suit on the basis of lack of registration of Sergi Transformer's license agreement, the Court directed the Patent Office to decide on the registration of Sergi Transformer's license agreement within 6 months from the date of the order. Further, the Court also directed that all pending applications and suit proceedings in relation to the instant subject matter stand adjourned till the Patent Office passes an order on the registration of Sergi Transformer's agreement.

In the light of the above judgment, it seems that the courts are hesitant to grant any relief whether interim or final, pending registration of the patent license or assignment agreement under the Act. Thus, while it is mandatory to register the license or assignment agreement with the Patent Office, given the huge backlog of applications pending in the patent office for registration of licenses, the practice of staying proceedings pending the determination of registration of the license agreement is a matter of concern for a patentee/licensee. [ The author is an Associate, IPR Practice, Lakshmikumaran & Sridharan, New Delhi ]

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Assignment of Intellectual Property Rights in India

Assignment of copyright

Assignment of copyright has to be in writing and signed by the assignor or by his duly authorised agent. Copyright consists of a bundle of different rights in the same work, which can be assigned either as a whole to one party or separately to different parties.

· The deed of assignment must specify the `rights assigned’, the duration and territorial extent of assignment, and the royalty payable, if any. When duration of assignment is not specified, it is presumed to be for five years and when territorial extent is not specified, it is presumed to extend within India. (Section 19, Copyright Act, 1957)

· An assignment of a Copyright is exempted from Stamp Duty. (Article 25 of Schedule I of the Bombay Stamp Act, 1958).

The above provisions apply both to registered and unregistered copyright. Apart from the above requirements, in case of registered copyright, the following additional steps also have to be taken.

Registered Copyright

Assignee has to make an application for registration of changes in the particulars of copyright entered in the Register of Copyrights in Form V under Rule 16 of Copyright Rules, 1958 to be delivered by hand or registered post. Attested copies of the deeds of assignments should be enclosed with the application.

Assignment of Design

One can obtain copyright protection on a design either under the Copyright Act, 1957 or Designs Act, 2000. A design which is registrable under the Designs Act but not registered, ceases to have copyright protection after 50 copies have been made of the same using an industrial process. (Section 15 Copyright Act)

Once registered, on subsequent assignment of the design it will be necessary to apply for entry of subsequent ownership under Rule 33 of Designs Rules, 2001. Such application shall be made to the Controller in Form 11. The instrument of assignment has to be presented in original or notarised copy. (Rule 37, Design Rules, 2001)

· The document assigning the right on design has to be in writing and the agreement between the parties concerned should be reduced to the form of an instrument embodying all the terms and conditions governing their rights and obligations. Any contravention of this requirement will render the instrument invalid. (Design Manual) (Possibly based on Copyright Act)

· Upon entry of its particulars in the register of designs, the instrument shall be effective from the date of its execution.

· An application for registration of title shall be filed within six months from the date of execution of the instrument. This period is extendable by a maximum of six months.

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Assignment of Trademark

Registered Trademark

Assignment of trademark can be made by making a request on Form TM-23 or 24 depending on whether it is made by assignee alone or conjointly with the registered proprietor, along with the deed of assignment. (Rule 68 of Trademark Rules, 2002)

An application under Rule 68 has to contain full particulars of the instrument, if any, under which the applicant claims to be entitled to the trade mark and such instrument or a duly certified copy thereof has to be produced at the Trade Marks Registry for inspection at the time of application. The Registrar may require and retain an attested copy of any instrument produced for inspection in proof of title.

Unregistered Trademark

An unregistered trade mark may be assigned or transmitted with or without the goodwill of the business concerned. (Section 39 Trademark Act, 1999)

Assignment of Patents

An assignment of a patent has to be made in writing and the agreement between the parties concerned is required to be reduced to the form of a document embodying all the terms and conditions governing their rights and obligations, which must be duly executed. (Section 68, Patents Act, 1970).

Two copies of the assignment instrument certified to be true copies by the applicant or his agent along with an application in Form 16 and the Controller of Patents may call for such other proof of title or written consent as he may require. (Rule 91, Patent Rules, 2003).

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India – The Effects Of Assignment Deed On A Copyright.

June 9, 2020 by Conventus Law

9 June 2020

Introduction

This article examines the case Super Cassettes Industries Ltd. Vs M/S Shreya Broadcasting Pvt. Ltd where the plaintiff is Super Cassettes Industries Ltd, commonly known as T-Series, an Indian company involved in the business of audio-visual products including songs, films, music videos, etc. The plaintiff had acquired copyright through assignments on products it had not originally produced. The defendants had allegedly broadcasted plaintiff’s copyright work without obtaining a valid license for the same; thus, giving rise to the present dispute. This case deals with two major issues in copyright law:

1. Whether a suit by an assignee mandates inclusion of the assignor or the original creator of the copyright work as a defendant, and

2. Whether punitive damages should be granted in case of copyright violation?

In the present case, one of the main issues framed by the court was whether owner of the copyright is a necessary party in the suit lodged by the plaintiff. The defendants argued that the present suit is not maintainable as the plaintiff has failed to bring the original creator of the copyright as a party to the suit. The plaintiff argued that they are the owners of the copyright as the deed of assignment was executed between the plaintiff and the former owner of the copyright which vested the assignee (plaintiff) with ownership rights over the copyright. Hence there is no need to bring the original creator as a defendant party to the suit. The court believed that the proceedings regarding infringement of copyright instituted by an exclusive licensee come under the purview of the said provision. The Court in its decision in the case of ESPN Star Sports v. Global Broadcast News Limited and Ors, created an absolute standard. It prescribed that in each civil suit for infringement of a copyright filed by an exclusive licensee, unless the court has directed otherwise, the owner of the disputed copyright has to be made a party as a defendant and where this provision is not complied with the suit shall not be maintainable. However, in the present case the plaintiff is the owner of the copyright and according to the assignment deed has all the ownership rights over the copyright, therefore there is no mandatory requirement to implead the former owner of the copyright as a defendant to the suit.

Since the assignment deed of the plaintiff was original and it clearly vested the exclusive right to authorize any communication to the public at large of its copyright work, via broadcasting or telecommunication, etc., the defendants could not dispute the claim.

Punitive damages are not per se meant to compensate the plaintiff for a specific loss, rather punitive damages are meant to punish and to deter similar wrongful or repugnant conduct, although the plaintiff is the one who ends up receiving punitive damages from the defendant. So punitive damages require intentional misconduct or gross negligence. In other words, it requires a defendant to act with recklessness, malice, or deceit. In the case of Microsoft Corporation Vs. Ms. K. Mayuri & Ors, the Court held that “the practice of granting exemplary damages needs to be strengthened particularly in those cases where flagrant infringement is found. In a case where the plaintiff proves such actual loss, he would be entitled to the same. However, even without such proof, in case of flagrant infringement, the court has the complete discretion to make such award of damages as may seem appropriate to the circumstances, so that it acts as a deterrent.

It was further held that the damage to the image/reputation of a company is immeasurable. Yet, it is essential to measure the damages caused. Such judicious use of power is not to be interrupted by any mandate that the onus of proof is upon the plaintiff to show some particular benefit which has accrued to the defendant or that the plaintiff must satisfy the court by leading evidence that he has suffered actual loss.

Can punitive damages be awarded against a copyright violation?

In the case of Time Incorporated v Lokesh Srivastava and Anr, the court granted punitive damages even after plaintiff’s failure to prove compensatory damages. Moreover, these damages were granted in an ex-parte decision by a single judge. As is clear from the judgment, the court looked at this case as an opportunity to punish infringers of intellectual property and hence arrived at the decision to grant punitive damages. In this case, the single judge was relying upon the case of Mathias v. Accor Economy Lodging Inc which is not even remotely related to the subject matter of intellectual property.

The court evaluated its decisions in the case of Hindustan Unilever Limited v. Reckitt Benckiser wherein it was held that the reputation of a corporate is an asset holding a positive value to it. It is the very reason why companies invest money in advertisements to build a brand in the market which would be attractive and permanently seal its name in the public memory. Any damage to this image would be immeasurable. The Court relied upon several judgments wherein grant of punitive damages for violation of intellectual property rights had been granted. In Rookes v. Barnard, the House of Lords laid down categories of cases where punitive/exemplary damages can be allowed. The categories made in the said case were upheld in the later decision of Cassell & Co. Ltd. v Broome with a few clarifications. These categories and clarifications entailed that punitive damages should be granted after due assessment of the facts of the case and that the total figure to be awarded would not suffice for punitive damages caused to the plaintiff. The judges should necessarily follow a step by step reasoning for granting punitive damages to the plaintiff. The point of conflict still arises that ad hoc judge centric award for damages will be granted, without measuring the actual loss suffered by the plaintiff, if the test in Rooke’s case is not followed. Only if the plaintiff is able to prove that the damages are not limited to the punitive loss, the court shall grant punitive damages.

In the present matter the plaintiff with evidence had proved that the copyrighted work was broadcasted for 500 minutes on defendant’s channel, this led to grant of compensatory damages for that loss, however the plaintiffs failed to justify the need of granting punitive damages.

Conclusion

There is no mechanism for calculating punitive damages to be rewarded to a plaintiff in intellectual property disputes. There are cases where punitive damages are granted in favor of the successful plaintiffs but without proper process for valuation of the same. This entails the infringer paying the punitive damages without any valuation provided by the court. There should be a legally defined method to assess punitive damages and these parameters should be uniform. As discussed above, there have been cases where the courts have rewarded punitive damages even after plaintiff’s inability to prove even general damages suffered out of alleged infringement. In intellectual property matters it is inevitable to speculate into loss that could have been made to the reputation of a plaintiff owing to infringement of intellectual property rights. There is still a desperate need for introducing a uniform and statutory method to evaluate exemplary damages that may be awarded in such cases. Rewarding punitive damages without proper assessment of the same to punish the infringer is antithetical to the aim of the damages remedy as the motive of civil remedies is not to punish the wrongdoer but to restore the plaintiff in its original position.

Article was 1st published in Axfait

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Simran Bhullar , LexOrbis

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Intellectual Property

Assignment Agreements and Indian IP laws

Assignment can be defined as transferring the title and rights associated with a particular property from one person to another. The individual who transfers the title is called the transferor/assignor, and the person who receives the title is called the transferee/assignee. The result of an assignment is the transfer of all interest present in a particular property to the transferee.

Assignment in the context of intellectual property is the transfer of all the intellectual property rights held by a registered user (or creator, only in cases of copyrightable works) to another party. Assignment agreements are usually in writing and are duly signed by the assignee and the assignor.

The Indian Contracts Act of 1872 provides the general essentials that make a contract valid. These apply to assignment agreements as well. These essentials include the competency of parties to enter into a contract, legal consideration, promise and acceptance, and a lawful object. In addition to those mandates, assignment agreements about Intellectual Property have several other requirements to be fulfilled. Those requirements vary according to the type of intellectual property , i.e., artistic work, trademark, invention, design, etc.

Assignment of Copyrights

The bundle of economic and moral rights is called copyright . Economic rights consist of the right to distribute, reproduce, transform, translate, perform, private copying, etc. These rights can either be wholly or partially assigned according to the parties will. Section 18 and 19 of the Copyrights Act, 1957 refers to the assignment. The work that is to be assigned has to be in existence. The authors of musical/literary work cannot assign their right to receive a royalty to any other party except their legal heirs. The Copyrights Act 1957 mandates the assignment to be made through a written and signed document.

These agreements should consist of the work and the rights assigned, the duration and territorial extent of assignment, the amount of royalty payable to the party or their legal heir, and revision/extension/termination on mutually agreed upon terms. In the absence of details present in the agreement, the default term of the contract will be five years, and the default territorial extent will be limited to India.

The assignment must be recorded in the register in case of registered work.

Assignment of Trademark

Assignment of the trademark could concern certain goods/services or fully, with/without goodwill or any combination thereof. Assignment of trademarks is specified in Section 37-43 of the Trademarks Act, 1999. The agreement has to be in written form and duly signed by the parties involved, and the agreement should specify whether the goodwill is to be transferred along with the trademark.

An application to register the change in ownership of the title of trademark has to be made through From TM-P along with a duly certified copy of the original document and the instrument or deed used for the transfer of rights.

Assignment of Geographical Indications

Geographical indications (GI) are different from trademarks; they belong to a particular association or group of people who produce certain goods in a specific geographical area with special characteristics or quality. The usage of such a mark indicates the presence of such quality or characteristic that is a specialty to that territory. As GIs are public property, they cannot be subject to assignment, transmission, licensing, pledging, mortgaging, or any such types of agreements as mentioned in Section 24 of the Geographical Indications of Goods Act, 1999. The GI could be subject to succession, but it is possible only when the production of such a product remains within the territory mentioned.

Assignment of Patent rights

Assignment of patents has to be done through a written instrument. Section 68-70 of the Patents Act 1970 covers the assignment of patents. This instrument should specify all the terms and conditions governing the rights transferred and obligations imposed. Assignment of patents can be informed of legal assignment, equitable assignment, or mortgages. This ownership transfer must be registered in the register through a Form 16 application made to the Controller, along with two copies of the deed agreement document duly certified.

Assignment of Designs

The assignment of designs is regulated by the Manual of Designs Practice and Procedure. Sec 30 of the Designs Act, 2000 provides the information related to the assignment of Designs and the procedure of doing the same. This agreement must be in writing and contain all details regarding the transferred rights and the obligation imposed. This assignment has to be duly signed by both parties involved. It has to be registered on the application filing through Form 10 within six months from the date of execution of the assignment/instrument. Further extension of 6 months is also available. It has to accompany copies of the original transfer deed/instrument or copies duly certified.

For more information, please get in touch with Intepat .

Deed of Assignment or Deed of Novation: Key Differences and Legal Implications of Novation and Assignment Contracts

FACT-CHECKED

Close-up of two people exchanging pens and reviewing a document with a laptop in the background.

Introduction

Novation and assignment stand out as pivotal processes for the transfer of contractual rights and obligations. These legal concepts allow a party to the contract to adapt to changing circumstances, ensuring that business arrangements remain relevant and effective. This article explores the nuances of novation and assignment, shedding light on their distinct legal implications, procedures, and practical applications. Whether you’re a business owner navigating the transfer of service contracts, or an individual looking to understand your rights and responsibilities in a contractual relationship, or a key stakeholder in a construction contract, this guide will equip you with the essential knowledge to navigate these complex legal processes.

What is a Deed of Novation?

Novation is a legal process that allows a new party to a contract to take the place of an original party in a contract, thereby transferring both the responsibilities and benefits under the contract to a third party. In common law, transferring contractual obligations through novation requires the agreement of all original parties involved in the contract, as well as the new party. This is because novation effectively terminates the original contract and establishes a new one.

A novation clause typically specifies that a contract cannot be novated without the written consent of the current parties. The inclusion of such a clause aims to preclude the possibility of novation based on verbal consent or inferred from the actions of a continuing party. Nevertheless, courts will assess the actual events that transpired, and a novation clause may not always be enforceable. It’s possible for a novation clause to allow for future novation by one party acting alone to a party of their choosing. Courts will enforce a novation carried out in this manner if it is sanctioned by the correct interpretation of the original contract.

Novation is frequently encountered in business and contract law, offering a means for parties to transfer their contractual rights and duties to another, which can be useful if the original party cannot meet their obligations or wishes to transfer their contract rights. For novation to occur, there must be unanimous consent for the substitution of the new party for the original one, necessitating a three-way agreement among the original party, the new party, and the remaining contract party. Moreover, the novation agreement must be documented in writing and signed by all involved parties. Understanding novation is essential in the realms of contracts and business dealings, as it provides a way for parties to delegate their contractual rights and responsibilities while freeing themselves from the original agreement.

What is a Deed of Assignment?

A deed of assignment is a legal document that facilitates the transfer of a specific right or benefit from one party (the assignor) to another (the assignee). This process allows the assignee to step into the assignor’s position, taking over both the rights and obligations under the original contract. In construction, this might occur when a main contractor assigns rights under a subcontract to the employer, allowing the employer to enforce specific subcontractor duties directly if the contractor fails.

Key aspects of an assignment include:

Continuation of the Original Contract: The initial agreement remains valid and enforceable, despite the transfer of rights or benefits.
Assumption of Rights and Obligations: The assignee assumes the role of the assignor, adopting all associated rights and responsibilities as outlined in the original contract.
Requirement for Written Form: The assignment must be documented in writing, signed by the assignor, and officially communicated to the obligor (the party obligated under the contract).
Subject to Terms and Law: The ability to assign rights or benefits is governed by the specific terms of the contract and relevant legal statutes.

At common law, parties generally have the right to assign their contractual rights without needing consent from the other party involved in the contract. However, this does not apply if the rights are inherently personal or if the contract includes an assignment clause that restricts or modifies this general right. Many contracts contain a provision requiring the consent of the other party for an assignment to occur, ensuring that rights are not transferred without the other party’s knowledge.

Once an assignment of rights is made, the assignee gains the right to benefit from the contract and can initiate legal proceedings to enforce these rights. This enforcement can be done either independently or alongside the assignor, depending on whether the assignment is legal or equitable. It’s important to note that while rights under the contract can be assigned, the contractual obligations or burdens cannot be transferred in this manner. Therefore, the assignor remains liable for any obligations under the contract that are not yet fulfilled at the time of the assignment.

Key Differences Between Novation and Assignment Deeds


Transfer of rights or obligations	Transfers both the benefit and the burden of a contract to a third party.	Transfers only the benefit of a contract, not the burden.
Consent Required	Novation requires the consent of all parties (original parties and incoming party).	Consent from the original party is necessary; incoming party’s consent may not be required, depending on contract terms.
Nature of Contract	Creates a new contractual relationship; effectively, a new contract is entered into with another party.	Maintains the original contract, altering only the party to whom benefits flow.
Formalities	Typically effected through a tripartite agreement due to the need for all parties’ consent.	Can often be simpler; may not require a formal agreement, depending on the original contract’s terms.

Choosing Between Assignment and Novation in a Construction Contract

Choosing between a deed of novation and an assignment agreement depends on the specific circumstances and objectives of the parties involved in a contract. Both options serve to transfer rights and obligations but in fundamentally different ways, each with its own legal implications, risks, and benefits. Understanding these differences and considering various factors can help in making an informed decision that aligns with your goals.

Need a Deed of Novation or Assignment? Key Factors to Consider

The choice between assignment and novation in a construction project scenario, where, for instance, an employer wishes to engage a subcontractor directly due to loss of confidence in the main contractor, hinges on several factors. These are:

Nature of the Contract: The type of contract you’re dealing with (e.g., service, sales) can influence which option is more suitable. For instance, novation might be preferred for service contracts where obligations are personal and specific to the original parties.
Parties Involved: Consent is a key factor. Novation requires the agreement of all original and new parties, making it a viable option only when such consent is attainable. Assignment might be more feasible if obtaining consent from all parties poses a challenge.
Complexity of the Transaction: For transactions involving multiple parties and obligations, novation could be more appropriate as it ensures a clean transfer of all rights and obligations. Assignment might leave the original party with ongoing responsibilities.
Time and Cost: Consider the practical aspects, such as the time and financial cost associated with each option. Novation typically involves more complex legal processes and might be more time-consuming and costly than an assignment.

If the intention is merely to transfer the rights of the subcontractor’s work to the employer without altering the subcontractor’s obligations under a contract, an assignment might suffice. However, if the goal is to completely transfer the main contractor’s contractual role and obligations to the employer or another entity, novation would be necessary, ensuring that all parties consent to this new arrangement and the original contractor is released from their obligations.

The legal interpretations and court decisions highlight the importance of the document’s substance over its label. Even if a document is titled a “Deed of Assignment,” it could function as a novation if it transfers obligations and responsibilities and involves the consent of all parties. The key is to clearly understand and define the objective behind changing the contractual relationships and to use a deed — assignment or novation — that best achieves the desired legal and practical outcomes, ensuring the continuity and successful completion of the construction project.

Selecting the Right Assignment Clause for Your Contract – Helping You Make the Right Choice

Understanding the distinction between assignment deeds and novation deeds is crucial for anyone involved in contractual agreements. Novation offers a clean slate by transferring both rights and obligations to a new party, requiring the consent of all involved. Assignment, conversely, allows for the transfer of contractual benefits without altering the original contract’s obligations. Each method serves different strategic purposes, from simplifying transitions to preserving original contractual duties. The choice between novation and assignment hinges on specific legal, financial, and practical considerations unique to each situation. At PBL Law Group, we specialise in providing comprehensive legal advice and support in contract law. Our team is dedicated to helping clients understand their options and make informed decisions that align with their legal and business objectives. Let’s discuss!

Authored By Raea Khan

Director Lawyer, PBL Law Group

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Deed of Assignment (for Intellectual Property)

In the realm of intellectual property, a Deed of Assignment is a formal legal document used to transfer all rights, title, and interest in intellectual property from the assignor (original owner) to the assignee (new owner). This is crucial for the correct transfer of patents, copyrights, trademarks, and other IP rights. The deed typically requires specific legal formalities, sometimes notarization, to ensure it is legally enforceable.

To be legally effective a deed of assignment must contain:

Title of the Document : It should clearly be labeled as a "Deed of Assignment" to identify the nature of the document.
Date : The date on which the deed is executed should be clearly mentioned.
Parties Involved : Full names and addresses of both the assignor (the party transferring the rights) and the assignee (the party receiving the rights). This identifies the parties to the agreement.
Recitals : This section provides the background of the transaction. It typically includes details about the ownership of the assignor and the intention behind the assignment.
Definition and Interpretation : Any terms used within the deed that have specific meanings should be clearly defined in this section.
Description of the Property or Rights : A detailed description of the property or rights being assigned. For intellectual property, this would include details like patent numbers, trademark registrations , or descriptions of the copyrighted material.
Terms of Assignment : This should include the extent of the rights being transferred, any conditions or limitations on the assignment, and any obligations the assignor or assignee must fulfill as part of the agreement.
Warranties and Representations : The assignor typically makes certain warranties regarding their ownership of the property and the absence of encumbrances or third-party claims against it.
Governing Law : The deed should specify which jurisdiction's laws govern the interpretation and enforcement of the agreement.
Execution and Witnesses : The deed must be signed by both parties, and depending on jurisdictional requirements, it may also need to be witnessed and possibly notarized.
Schedules or Annexures : If there are detailed lists or descriptions (like a list of patent numbers or property descriptions), these are often attached as schedules to the main body of the deed.

Letter of Assignment (for Trademarks and Patents)

This is a less formal document compared to the Deed of Assignment and is often used to record the assignment of rights or licensing of intellectual property on a temporary or limited basis. While it can outline the terms of the assignment, it may not be sufficient for the full transfer of legal title of IP rights. It's more commonly used in situations like assigning the rights to use a copyrighted work or a trademark license.

For example, company X allows company Y to use their trademark for specific products in a specific country for a specific period.

At the same time, company X can use a Letter of Assignment to transfer a trademark to someone. In this case, it will be similar to the Deed of Assignment.

Intellectual Property Sales Agreement

An IP Sales Agreement is a detailed contract that stipulates the terms and conditions of the sale of intellectual property. It covers aspects such as the specific rights being sold, payment terms, warranties regarding the ownership and validity of the IP, and any limitations or conditions on the use of the IP. This document is essential in transactions involving the sale of IP assets.

However, clients usually prefer to keep this document confidential and prepare special deeds of assignment or letter of assignment for different countries.

IP Transfer Declaration

In the context of intellectual property, a Declaration is often used to assert ownership or the originality of an IP asset. For example, inventors may use declarations in patent applications to declare their invention is original, or authors may use it to assert copyright ownership. It's a formal statement, sometimes required by IP offices or courts.

When assigning a trademark, the Declaration can be a valid document to function as a proof of the transfer. For example, a director of company X declares that the company had sold its Intellectual Property to company Y.

Merger Document

When companies or entities with significant IP assets merge, an IP Merger Document is used. This document outlines how the intellectual property owned by the merging entities will be combined or managed. It includes details about the transfer, integration, or handling of patents, copyrights, trademarks, and any other intellectual property affected by the merger.

In all these cases, the precise drafting of documents is critical to ensure that IP rights are adequately protected and transferred. Legal advice is often necessary to navigate the complexities of intellectual property laws.

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Arbitration
Arbitration Clause In Original...

Arbitration Clause In Original Lease Deed Incorporated Into Deed Of Assignment When Deeds Are Interconnected And Consistent: Calcutta High Court

Rajesh kumar.

11 Sep 2024 9:30 AM GMT

Arbitration Clause In Original Lease Deed Incorporated Into Deed Of Assignment When Deeds Are Interconnected And Consistent: Calcutta High Court

The Calcutta High Court bench of Justice Ravi Krishan Kapur has held that if a deed of assignment is properly interpreted as being interconnected and related to the original lease deed containing an arbitration clause, then the parties intended for the arbitration clause to be included in the deed of assignment.

The bench held that interrelationship was not merely superficial but indicative of a deliberate and mutual intent between the parties to incorporate certain terms from the initial lease deed into the new agreement.

The arbitration clause, originally present in the initial lease deed, was a focal point of the dispute. By reading both documents together, the High Court found that the parties had unmistakably intended for the arbitration clause to be carried over into the deed of assignment.

Brief Facts:

Tata Communications Limited (Petitioner) owner of a plot of land located in Kolkata leased this plot to Respondent no. 2 under a lease deed for business purposes. Due to repeated breaches of obligations under the initial lease deed, the parties entered into a tripartite agreement, known as the deed of assignment, which involved Rudrapriya Constructions LLP (Respondent no. 1) continuing the business of event management, food court, and ceremonial functions. Disputes arose between the parties which made the Petitioner to terminate both agreements on 18 December 2023 primarily due to non-payment of lease rentals.

On 15 February 2024, the Petitioner issued a notice under Section 21 of the Arbitration and Conciliation Act invoking the arbitration clause specified in the initial lease deed and the deed of assignment. The Respondents did not respond to this notice. Feeling aggrieved, the Petitioner approached the High Court under Section 11 of the Arbitration Act for appointment of an arbitrator.

In response to the application, Respondent no. 1 raised an objection and argued that the deed of assignment does not contain an arbitration clause since it was not explicitly incorporated.

The Petitioner contended that, when reading the deed of assignment in conjunction with the initial lease deed, it is evident that the arbitration clause in Clause 19.3 of the initial lease deed should be considered incorporated into the deed of assignment. The Petitioner argued that the mutual intention of the parties was to resolve disputes through arbitration, and the deed of assignment is not an independent document but should be viewed as interconnected with the initial lease deed.

Clause 19.3 of the initial lease deed provides as follows:

“19.3: Dispute resolution- (a) Any dispute arising out of or in connection with this Lease Deed (including a dispute regarding the existence, validity or termination of this Lease Deed or the consequences of its nullity) shall be sought to be resolved and settled amicably between the parties, within 15 (Fifteen) Business Days of written notice of such dispute arising, failing which it shall be referred to and finally resolved by arbitration under the Arbitration and Conciliation Act, 1996 …………..”

Observations by the High Court:

The issue before the High Court was whether an arbitration clause from an initial lease deed could be incorporated into a subsequent deed of assignment by reference. The initial lease deed contained a detailed arbitration clause, outlined in Clause 19.3, which provided a mechanism for dispute resolution. This included the appointment of an arbitrator, the conduct of proceedings in English, and the specification that the arbitration would take place in Kolkata. The clause also specified that the arbitration award would be final and binding, and that the costs would be borne equally by the parties.

The deed of assignment, which was executed subsequent to the initial lease deed, contained provisions that confirmed the terms and conditions of the initial lease deed would apply to the assignment, except for the revised terms specifically recorded in the deed of assignment. Notably, the deed of assignment referenced the initial lease deed but did not explicitly incorporate the arbitration clause from the initial lease deed.

The High Court examined Section 7(5) of the Arbitration Act which addresses the incorporation of an arbitration clause from one document into another by reference.

According to Section 7(5), a reference in a contract to a document containing an arbitration clause can constitute an arbitration agreement if the reference is such that it makes the arbitration clause part of the contract. The High Court noted that for incorporation by reference to be effective, the reference must be clear and indicate an intention to include the arbitration clause in the contract. Additionally, the arbitration clause must be suitable for resolving disputes under the new contract and should not contradict its terms.

The High Court that there is need for a clear and specific reference to incorporate an arbitration clause from another document. It reiterated that a general reference to another document does not automatically incorporate its arbitration clause. Instead, there must be a deliberate intent to adopt the arbitration clause which must reflect the parties' mutual agreement to subject their disputes to arbitration as stipulated in the referenced document.

The High Court further highlighted that the intention to incorporate the arbitration clause should be determined through the principles of construction, evaluating whether the reference to the initial lease deed was meant to include its entire content, including the arbitration clause, into the deed of assignment.

It noted that Recital D of the deed of assignment explicitly stated that the assignment was based on mutual discussions and was made with reference to the terms of the initial lease deed as well as the modified terms of the assignment deed. Clause 1.1 of the deed of assignment confirmed that the terms and conditions of the initial lease deed, except for those specifically revised, would apply to the deed of assignment. This included the arbitration clause.

Clause 13 of the deed of assignment made modifications to certain sub-clauses of Clause 19 of the initial lease deed but left the arbitration clause unchanged. The High Court observed that, when reading both the initial lease deed and the deed of assignment together, it was clear that the entirety of Clause 19 including the arbitration clause was incorporated into the deed of assignment. The High Court reasoned that the parties intended to retain the arbitration clause as part of the new agreement given that other sub-clauses of Clause 19 remained unaffected.

The High Court further reasoned that the incorporation of the arbitration clause was consistent with the parties' commercial intent and the nature of the documents. Both the initial lease deed and the deed of assignment were interconnected, and the arbitration clause was not inconsistent with the new terms. The High Court rejected any contention that the arbitration clause should be excluded from the deed of assignment and held that the intention of the parties at the time of executing the deed of assignment was to retain the arbitration clause.

Additionally, the High Court dismissed arguments from the Respondents that the incorporation of the arbitration clause was not valid. It distinguished the present case from previous decisions noting that those cases either involved different factual circumstances or did not address the specific issue of inter-linked documents incorporating arbitration clauses. The High Court found that the deed of assignment, by incorporating the initial lease deed, included the arbitration clause by clear intent and mutual agreement.

The bench held that:

“On a proper construction of the deed of assignment which is inter-connected and inter-related with the initial lease deed, the parties obviously intended the arbitration clause to be incorporated in the deed of assignment. This is the only imputed mutual intention of the parties which can be arrived at on a combined reading of both the documents. Both documents are commercial documents and require to be read together. The parties were dealing at arm's length. It is not possible to severe the two documents. It is true that the rationale behind seeking a specific reference necessary to incorporate an arbitration clause is that the parties are precluded from bringing a dispute before Court, an arbitration agreement has to be a written agreement and an arbitration agreement is of a different nature from other clauses as it constitutes a self- contained collateral contract. Nevertheless, the above construction is so obvious that the parties must have not only formed an intent of the same but are deemed to have agreed to specifically have incorporated the arbitration agreement when executing the deed of assignment.”

Consequently, the High Court allowed the application. It ordered that Justice Indira Banerjee (Retired), Supreme Court of India, be appointed as the Nominee Arbitrator, provided she communicated her consent within three weeks.

Case Title: Tata Communications Limited Vs Rudrapriya Constructions LLP and Anr.

Case Number: AP/77/2024

Advocate for the Petitioner: Mr. Dhruba Ghosh, Senior Advocate Mr. Altamas Alim, Advocate Mr. A. Goyal, Advocate

Advocate for the Respondent: Mr. Sarvapriya Mukherjee, Advocate Mr. Rachit Lakhmani, Advocate Mr. L. R. Mondal, Advocate

Date of Judgment: 5.09.2024

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Judgments 21493

... deed of assignment taken by him was fraudulent and without consideration . The learned Judge held on the first issue that by virtue of the deed of assignment , which the appellant had taken from...., as to whether the deed of assignment is fraudulent and without consideration . If Najubhai had been alive, a notice would have been issued to him under O. XXI, r. 16, and he could have contested the...apply for execution unless there is a separate deed of transfer of the decree. But the present deed of assignment , which is a registered document and for which the appellant has paid a consideration ...

...learned counsel appearing for the petitioner reiterated the contentions raised in the petition and submitted that the learned arbitrator ought not to have relied on the Assignment deed produced by the petitioner and the ...therefore, it is not a valid document and the consideration was left blank in the Assignment deed and that was latter filled up by the first respondent without the knowledge and consent of the petitioner and the as...action arose and also passed the award without properly appreciating the assignment deed , which is inadmissible in evidence and which is inchoate and erred in holding that the petitioner has no locus...

... assignment claimed by Saurabh was incomplete and consequently the assignment was terminated as it was without consideration ; Raghuvar did not receive any amount, as stated in the Assignment Deed . ...and extracted it. On the face of it the deed records that the assignment was for a consideration of Rs. 1,00,000/-. It was further noticed that on 13.05.2010 the Trademark office allowed the relevant...said that it filed Civil Suit No. 19/2011 before the Court of Additional District and Sessions Judge No. 1, Jaipur City, Jaipur challenging the Deed of Assignment by seeking interim orders restraining...

...transfer the ownership rights of shares but only the right attached thereto. Moreover, respondent No. 2 has evidently not paid any amount to the petitioner in respect of execution of assignment deed and, therefore, the execution of ...agreement to sell; no consideration amount was mentioned in the assignment deed , the respondents by interpolation filled up consideration amounting to Rs. 11,92,500 which was not even adequate; since no ...careful perusal of assignment deed (at page 87) would make it clear that the consideration amount was left blank as the consideration was to be paid on actual transfer of shares and execution of the...

...contrary to normal human conduct that without payment of consideration the deed of assignment dated 3-12-1989 had been executed and notarized. He submitted that in the allegations set up in the...future, in consideration of Rs. 18,000/- (Rs. Eighteen Thousand only) paid by the assignee to the assignors.” (Underlining mine)But then the executants of the deed of assignment , the...representatives of Sudarshan Soni HUF and even though the consideration recorded in the deed of assignment was Rs. 18,000/-, the whole of the outstanding debt inclusive of due interest thereon was to be paid to...

...licence in favour of the petitioners for business of dealer in seeds under the name and style M/s. Annapurna Beej Bhandar on consideration of deed of assignment dated 01.9.2009 executed by the father of the...petitioners are seeking the above-noted relief on the basis of a deed of assignment dated September 1, 2009 executed by their father. Questioning the validity of the deed of assignment their father has...defendants the Civil Court has passed an interim order dated February 4, 2011 restraining the defendants in the suit from using the deed of assignment for obtaining any licence from any authority till...

...?(2) If Article 23 applies in this case, what is the consideration for the Assignment Deed ?”All the Judges unanimously held that the...learned Chief Justice and Naik, J., opined that “the consideration for the Assignment Deed is the total amount which was payable to the Assignor Tulsidas under the agreements between him and the persons to... consideration is as mentioned in the Deed of Assignment itself i.e no consideration ”.7. All the Judges unanimously came to the conclusion that the consideration ...

...wife of his lawyer Shri Ram Singh Saluja, Advocate, and partly in favour of others, in the teeth of the restraint order of the trial court. On the basis of the assignment deed , the assignees made an...interpretation of paragraphs 13 and 14 of the settlement deed . The other was in treating the assignment as non est because of the clear prohibition of the trial court to the parties from alienating or...transferring in any manner any part of the property involved in the suit. Having heard learned counsel for the parties at great length and having examined the settlement deed as also the assignment ...

... consideration . Hence, this writ petition. 3. On 19.10.2022, this Court directed the learned Addditional Government Pleader to get instructions with regard to registration of the subject Assignment ...of India praying to issue a Writ of Mandamus, directing the 1strespondent to release the Original Registered Assignment Deed dated 29.03.2022 to the petitioner. For Petitioner : Mr.Srinath...Original Registered Assignment Deed dated 29.03.2022 to the petitioner. 2.The learned counsel for the petitioner vehemently contended that petitioner company assigned the secured asset viz., account of...

...stamp duty paid on assignment deed is not raised in the reply hence opposed. The question pertaining to payment of stamp duty on assignment deed is concern this is purely question of law, such a plea can be raised ...the Act. Accordingly, the stamp duty payable on assignment of debt is 8%. on total consideration . As per Kerala Stamp Act 1959, the assignment deed annexure A3 ought to have been executed on the stamp.... However, the Assignment Agreement produced is truncated and incomplete as well as the-Financial Creditor who is acting as a trustee has failed to bring into the record the relevant trust deed . The...

... assignment deed (sale- deed ) dated February 18, 1963 is a sham transaction and without consideration and that it was executed with an intention to defeat the claim of the creditors. The assignment ..., according to us, is material. It is as follows:—“Whether the sale in favour of the plaintiff is sham and without consideration and has been made to defeat the claim of defendant No. 1's creditors?”The...case of the plaintiff is that the compensation amount of Rs. 14,712.39 was assigned to him by registered sale- deed ( assignment - deed ) dated Feb. 18, 1963. After assignment , defendant No. 1 ceased to have...

.... Engineering, M/s. Jaipan Appliances Ltd., Daman etc. to use the brand Jaipan without any consideration the assignment of deed of Jaipan brand was not genuine. He, therefore, held that based on these facts.... The consideration for the assignment deed was paid after two months in December, 1997. The appellants were having a bank account which up to December showed a deposit of cash of Rs. 1,001/- only. There...benefit of Notification 1/93 solely on the grounds that the transfer of brand name under the deed of assignment was not genuine. Once the assignment is there then we cannot go into the consideration paid...

...by the Court. On the basis of the assignment deed , the assignees made an application under Order XXII Rule 10 CPC for impleadment as parties to the final decree proceedings. It was contended on their...that the assignors and the assignees had knowledge of the order of the injunction passed by the Court. On those facts, this Court held that the deed of assignment was not capable of conveying any...:“4. As said before, the assignment is by means of a registered deed . The assignment had taken place after the passing of the preliminary decree in which Pritam Singh has been allotted...

..., the Assignment Deed was terminated without consideration . No amount was received by the defendant No.3 as mentioned in the Assignment Deed . The defendant No.3 has already filed Civil Suit No.19/... consideration for the assignment was never paid by the plaintiff. Since the plaintiff did not stop using trademark, despite of termination of assignment deed , left with no option the defendant No.3 filed...trademark or any identical trademark after the above assignment . The Deed of Assignment executed by defendant No.3 speaks for itself that consideration agreed upon between the parties to the Deed of...

...other debts had been transferred by the plaintiffs to the applicants by a deed of assignment dated 7th February, 1949 which was confirmed by the Custodian of Evacuee Property, Bombay, and order them...respondent Company by the document under consideration and the latter cannot claim to be transferees of the decree by an assignment in writing as contemplated by Order 21 Rule 16...Savla thereupon without having obtained, amicably or by execution of his decree, an actual assignment of the mortgage decree sought to execute that decree. It was held that although Savla had a legal...

...together with all the securities through an assignment deed . On 11-1-2007, the borrower, the respondent Company assigned to Kotak Mahindra Bank the debt due towards it from one Ravishankar Industries Pvt...complainant Company. It is pertinent to mention here that the fact of the alleged assignment deed came to the notice of the complainant Company only on 17-1-2007 when Kotak Mahindra Bank handed over a...appellants were not the employees of State Bank of Travancore when the alleged deed of assignment was entered into between State Bank of Travancore and Kotak Mahindra Bank. He further contended that...

... assignment deed NOS. 3210 and 3294 of 1995 in favour of defendants 3 and 4. Defendants 3 and 4 also resisted the suit on various grounds including that they are bona fide purchasers for valid consideration without ...3.40 Ares covered by Ext.A1, agreement for sale.(v) In case it is found that the one cent covered by Ext.B1, assignment deed No. 3210 of 1995 forms part of the 3.40 Ares covered by Ext.A1, agreement for sale, the que...first appellate court was of the view that the 3 defendant is a bona fide purchaser of the one cent covered by assignment deed No. 3210 of 1995 for valid consideration unaware of existence of Ext.A1...

...assigned his rights under Exhibit A-1 to Varghese for Rs 10,000. The deed of assignment is Exhibit A-24. Varghese paid Rs 7500 in cash and cheques, to Chettiar with a promissory note for balance of Rs...2500. The assignment deed refers to the sale deed obtained by Mathew. It states that the legal representatives of Sait have sold the estate to Mathew who was fully aware of the agreement for sale...Varghese armed with the deed of assignment Exhibit A-24 along with Chettiar instituted OS No. 41 of 1966 for specific performance of the agreement Exhibit A-1. The suit was instituted against Mathew and...

...Respondents 1 and 2. Respondent 1, in order to repay the dues of the Bank, signed an assignment deed dated 8-10-2003 with the Chief Manager, Basavanagudi Branch, Bangalore for assignment of the trade...:“Now this deed of assignment of trade mark “Eenadu” witnesseth as follows:1. The assignor hereby grants, transfers and assigns upon the assignee... assignment (the abovesaid ten years).7. The period of assignment granted under this deed shall come to an end on the expiry of the period of ten years from the date...

...7600 was not paid as a part of the consideration of the deed of assignment but under a different and collateral agreement executed by the defendant in favour of the plaintiff for a sum of Rs 20,000...registered assignment deed dated October 31, 1957 executed by the latter in favour of the former purporting to transfer the decree in OS No. 88 of 1949 on the file of Court of Subordinate Judge, Kakinada...granted a decree for cancellation of the assignment deed aforesaid on the plaintiff's paying Rs 13,000 to the defendant. Under the decree defendant was required to deliver possession of the suit...

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Importance of Assignment Agreements under Intellectual Property Laws in India

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

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

Received 20 August 2009, revised 29 October 2009

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

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

Assignment Agreements

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

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

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

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

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

Essential Requirements of an Assignment Agreement

Requirements under the indian contract act, 1872.

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

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

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

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

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

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

Requirements under the Indian Stamp Act, 1899

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

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

Assignment of Intellectual Property

Assignment of copyrights.

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

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

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

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

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

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

Assignment of Patents

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

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

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

Legal Assignments

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

Equitable Assignments

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

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

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

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

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

Assignment of Trademark

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

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

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

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

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

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

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

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

Assignment of Geographical Indications

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

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

Assignment of Designs

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

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

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

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

Assignment of the Semiconductor Integrated Circuits Layout Design

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

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

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

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

Assignment of Plant Varieties

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

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

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

Assignment of Biological Resources

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

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

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

Recordal Procedure with respect to Transfer of Trademark under Madrid System

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Assignment of contract
As per the common law, the assignment was done by the way of three kinds of transactions: ... Under Indian property laws, a deed is required for the assignment. And this deed must be duly stamped. However, stamp duty is extremely high in India. Also, it is a subject that falls in the concurrent list. So when it is legislated on by both centre ...
PDF Assignment of Rights and Its Practical Relevance in Financial
per the existing laws in India, such transfer of contractual rights cannot occur without it being brought into writing. Section 130 of the Transfer of Property Act, 1882 implies that every actionable claim may ... one has to do so by way of a deed of assignment as provided under the property laws. To give effect to this instrument, it has to be ...
PDF Intellectual property right assignments Q&A: India
No income tax is chargeable in India on an assignment of IP rights if the assignor is a foreign corporation or individual. IP rights are intangible assets under Indian tax law. The situs of an IP right is deemed to be the situs of the owner of the right. Therefore, a transfer of IP rights owned by a foreign national will not be regarded as a
what is Patent Assignment Deed and its Advantages
Under Indian law, its mandatory to register Patent Assignment Deed under Section 68 of the Patents Act, 1970 which giving Assignee absolute rights from date of execution of deed. Kind of assignment deed: Legal assignment - in this Assignee may enter his name as patent owner. Equitable assignment - in this certain share is given to another ...
Subcontracting v. Assignment
Section 37 of the India Contract Act, 1872 ("Contract Act") enables the contracting parties to dispense with the performance of a contract by way of an assignment. While the principle of assignment is well recognized under Indian law, it derives its origin from the English law.
Assignment of Contract
Assignment of contract refers to transferring contractual rights and liabilities under the contract to the third party with or without the other party's concurrence. For instance, X owes Y Rs. 1,000, and Y owes Z the same amount. In this case, Y is under obligation to pay Rs. One thousand to Z and has the right to receive Rs. 1,000 from Z.
PDF Importance of Assignment Agreements under Intellectual Property Laws in
An assignment agreement is an intellectual property (IP) transaction that deals with the ownership and disposition of intellectual property rights as well as with the control over the use of or access to intellectual property. This paper attempts to briefly explain assignment agreements in general terms as well as the essential requirements for ...
Assignment of Debts under the Insolvency and Bankruptcy Code
Further, to be valid, an assignment agreement must satisfy the requirements under the Indian Contract Act, 1872 (Act). Accordingly, an assignment agreement can be declared void under section 23 of the Act if the object of the assignment agreement is (a) of such a nature that, if permitted, it would defeat the provisions of any law; or (b ...
registration of license assignment deed under the patents act
A license agreement or an assignment deed is an agreement between a right holder and the licensee and/or assignee wherein the right holder permits the licensee and/or assignee to use rights owned by the right holder in exchange for a consideration, whether in the form of a one-time settlement or a periodic royalty.Generally an agreement may be in writing or oral but Section 68 the Patents Act ...
Assignment of Intellectual Property Rights in India
Assignment of Patents. An assignment of a patent has to be made in writing and the agreement between the parties concerned is required to be reduced to the form of a document embodying all the terms and conditions governing their rights and obligations, which must be duly executed. (Section 68, Patents Act, 1970).
India
The defendants had allegedly broadcasted plaintiff's copyright work without obtaining a valid license for the same; thus, giving rise to the present dispute. This case deals with two major issues in copyright law: 1. Whether a suit by an assignee mandates inclusion of the assignor or the original creator of the copyright work as a defendant ...
PDF Law of Assignment of Receivables
A contract is a bunch of mutual rights and obligations. Assignment of a contract would mean assignee steps in the shoes of the assignor and assumes all the rights and obligations of the assignor. For example: X enters into a contract of sale with Y where X is the seller. The contract would obviously provides for rights and obligations of either ...
deed+of+assignment
...assigned his rights under Exhibit A-1 to Varghese for Rs 10,000. The deed of assignment is Exhibit A-24. Varghese paid Rs 7500 in cash and cheques, to Chettiar with a promissory note for balance of Rs...2500. The assignment deed refers to the sale deed obtained by Mathew. It states that the legal representatives of Sait have sold the estate to Mathew who was fully aware of the agreement for ...
Assignment Agreements and Indian IP laws
Assignment in the context of intellectual property is the transfer of all the intellectual property rights held by a registered user (or creator, only in cases of copyrightable works) to another party. Assignment agreements are usually in writing and are duly signed by the assignee and the assignor. The Indian Contracts Act of 1872 provides the ...
assignment+deed+sarfaesi
The petitioner entered into an Assignment Deed dated 28.03.2013 at Chennai with City Union Bank Ltd., under which the City Union Bank has assigned loans together with rights, title...Manufacturing India Pvt. Ltd., which is a borrower and the Assignment Deed was entered into under Section 5(1)(b) of the SARFAESI Act.3.
Assignment or Novation: Key Differences and Legal Implications
A deed of assignment is a legal document that facilitates the transfer of a specific right or benefit from one party (the assignor) to another (the assignee). This process allows the assignee to step into the assignor's position, taking over both the rights and obligations under the original contract.
Deed of Assignment: Everything You Need to Know
4 min. In the realm of intellectual property, a Deed of Assignment is a formal legal document used to transfer all rights, title, and interest in intellectual property from the assignor (original owner) to the assignee (new owner). This is crucial for the correct transfer of patents, copyrights, trademarks, and other IP rights.
Arbitration Clause In Original Lease Deed Incorporated Into Deed Of
The Petitioner contended that, when reading the deed of assignment in conjunction with the initial lease deed, it is evident that the arbitration clause in Clause 19.3 of the initial lease deed ...
assignment+deed+without+consideration
United States, 23 Cl.Ct. 635, 645 (Ct.Cl. 1991), citing Restatement (Second) of Contracts § 332 (1) cmt. b (1981). A voluntary, written assignment of a chose in action is irrevocable once the instrument is signed and delivered; consequently, it cannot later be set aside by the assignor for lack of consideration.
Institutes of Chernogolovka
The largest of all the scientific institutions of the center is the Institute of Chemical Physics in Chernogolovka, where fundamental problems of chemical physics are studied: kinetics and mechanisms of chemical and biological processes; processes of combustion, explosion, and polymerization; and mechanisms of elementary reactions involving high energy particles.
Importance of Assignment Agreements under Intellectual Property Laws in
This paper attempts to briefly explain assignment agreements in general terms as well as the essential requirements for assignment agreements under the Indian Contract Act, 1872, and the Indian Stamp Act, 1899. It discusses in detail the sections pertaining to assignment agreements in the legislations on Intellectual Property Law in India.
About Landau Institute
About Landau Institute. L.D. Landau Institute for Theoretical Physics of Russian Academy of Sciences was founded in 1964. It is located in the town of Chernogolovka, Moscow region where one of the RAS research centers.
Chernogolovka Map
Chernogolovka is a town in Moscow Oblast, Russia. Center of the town is located some 43 km northeast of the Moscow city limit and 59 km from Red Square. Its population in 2018 was 21,342. Photo: A.Savin, CC BY-SA 3.0. Photo: Svetlov Artem, CC BY 3.0. Ukraine is facing shortages in its brave fight to survive.
Chernogolovka
Dialing code (s) +7 49652. OKTMO ID. 46781000001. Website. www.chernogolovka.net. Chernogolovka (Russian: Черноголо́вка) is a town in Moscow Oblast, Russia. Center of the town is located some 43 km (27 miles) northeast of the Moscow city limit and 59 km (37 miles) from Red Square. Its population in 2018 was 21,342.

what is Patent Assignment Deed and its Advantages

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Deed of Assignment (for Intellectual Property)

To be legally effective a deed of assignment must contain:

Letter of Assignment (for Trademarks and Patents)

Intellectual Property Sales Agreement

IP Transfer Declaration

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Arbitration Clause In Original Lease Deed Incorporated Into Deed Of Assignment When Deeds Are Interconnected And Consistent: Calcutta High Court

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