S.Y.

Bcom

Business Law -II Sem. IV (2021-22)

Contents

1) Syllabus

2) Question Paper Pattern

3) Contents of Memorandum of Association (all clauses)

4) Module –II The Companies Act, 2013 (Part II) (with 2017 & 2019

Amendment)ICAI IPCC Syllabus Material for May 2020

5) Dissolution of Firm

6) Rights and Liabilities of a partner on dissolution

7) Terms of Patents and Term of Patents of Addition

8) Rights and limitations on Patentee

9) Meaning of copyright

10) Features of Trade Mark Act, 1999

11) Types of Trade Marks

12) Case Studies for Q.6-(10 Marks)

 S.Y.Bcom
Syllabus
Business Law -II Sem. IV (2021-22)

Module –I Companies Act, 2013 (Part-I) (with 2017 & 2019 & 2020 Amendment)

Definition and Features of company }

Lifting or Piercing the corporate veil }
(Gilford Motor Co. Ltd. v. Horne along with Jones v. Lipman) }
Holding and Subsidiary Company }
Charitable Company }
Promoter }
Preliminary/Pre-incorporation Contract }Manan
One Person Company }
Government Company }
Procedure for Incorporation/Registration of company }
and effect of registration }
Contents of Memorandum of Association (all clauses)-------------------------}Notes
Alteration of Memorandum-Registered Office, Name, Objects, }
Share Capital }
Alteration of Articles }
Doctrine of Ultra-vires }
Doctrine of Constructive Notice of Memorandum and Articles }
Doctrine of Indoor Management/Turquand Rule }Manan
Prospectus Definition and Contents of Prospectus }
Red Herring Prospectus }
Shelf Prospectus }
Misstatement in prospectus }

Module –II Companies Act, 2013 (Part II) (with 2017 & 2019 & 2020 Amendment)

ICAI IPCC Syllabus Material for May 2020

Allotment of Securities by company (S.39)- ICAI-3.19-3.20-(1) to (5)
Private Placement of Securities (S.42)-ICAI-3.28-3.30-(1) to (11)
Kind of Share Capital (S. 43)-ICAI-4.4-4.5-(a)-(b) and Explanation (i) to (iii)
Voting Rights (S. 47)-ICAI-4.8-4.9-(i) to (iii)
Variation of Shareholder's Rights (S. 48) –ICAI-4.10-4.11-(1) to (5)
Issue of Shares at Premium (S. 52)-ICAI-4.13-4.14
Issue of Sweat Equity Shares (S. 54)-ICAI-4.15
Issue and Redemption of preference shares (S.55)-ICAI-4.16-4.19
Transfer and Transmission of Securities (S.56)-ICAI-4.19-4.22
Issue of Bonus Shares (S.63)-ICAI-4.30-4.31-(1) to (3)
Buy back of Securities (S. 68-70)-ICAI-4.37-4.41
Issue of Debentures/Manner in which a company may issue debentures (S.71)-ICAI-4.41-
4.43
Prohibition on acceptance of deposits from public-(S.73)-ICAI-5.5-5.7-(1) to (5)
Module –III Indian Partnership Act, 1932 and LLP Act, 2008

Indian Partnership Act, 1932

Definition and essential elements of partnership (Cox v. Hickman) }

Formation, Who may be partners and Who are not partners and Firm Name}
Types of Partnership }
Difference between Partnership and Registered Company }
Difference between Partnership and Joint Hindu Family Firm }
Difference between Partnership and Co-ownership }
Property of the firm }
Rights and Duties & liabilities of partners }All from
Implied Authority of Partners }Manan
Act of a Firm }
Holding out }
Public Notice }
Minor’s Position in Partnership }
Dissolution of Firm --------------------------------------------------------- }Notes
Rights and Liabilities of a partner on dissolution ----------------------- }Notes

Limited Liability Partnership Act, 2008

Characteristics/Salient Features of LLP Act }

Definitions:-Body Corporate, Business & LLP Agreement }
Nature of LLP (S.3 to S.5) }
Designated Partners (S. 6 to S. 10) }
Incorporation of LLP }
Extent of Liability of LLP & Partner (S.27 & S.28) }
Holding out (S.29) }All from
Unlimited liability in case of fraud (S.30) }Manan
Whistle Blowing (S.31) }
Conversion into LLP (S.55 to S.58) }
Winding up and Dissolution of LLP (S.63 to S.65) }
Difference between LLP and Partnership }

Module –IV Intellectual Property Rights

Nature of Intellectual Property-Manan

(Basic Concepts, Nature of Intellectual Property, Enforcement of Rights and Remedies
against Infringement, Paris Convention, Berne Convention, Universal Copyright Convention,
Patent Co-operation Treaty)

The Patents Act, 1970

What is a Patent, Patent-A form of Property, Legal Provisions Regulating Patents-Manan
Principles Underlying Patent Law in India-Manan
Advantages of Patent to Inventor-Manan
Terms of Patents and Term of Patents of Addition-Notes
Procedure for obtaining patents-Manan
Opposition for grant of patent-Manan
Rights and limitations on Patentee-Notes
Infringement of Patent Rights and Remedies-Manan
(Bajaj Auto Ltd. v. TVS Motor Co. Ltd. 2008 (36) PTC 417 (Mad.)
Bayer Corporation & Ors v. Union of India & Ors 162 (2009) DLT 371)

The Copyright Act, 1957

Meaning of copyright- Notes
Qualification for Copyright Subsistence-Manan
Author and Ownership of Copyright-Manan
Term of Copyright-Manan
Infringement of Copyright & Remedies-Manan
(R. G. Anand v. Delux Films & Ors AIR 1978 SC 1613
Indian Performing Rights Society v. Eastern Indian Motion Pictures Ltd. AIR 1977 SC
1443)

The Trade Marks Act, 1999

What is a Trade Mark and Statutory Definition of Trade Mark-Manan
Features of Trade Mark Act, 1999-Notes
Types of Trade Marks-Notes
(Service, Certification, Collective, Well-known)
Absolute & Relative grounds for refusal of registration-Manan
Filing of Trade Mark Registration in India-Manan
Grant of Trade Mark and Protection-Manan
Infringement Trade Mark and its remedies-Manan
Passing Off-Characteristics, Suit, Applicability of Law, difference between Infringement
Action and Passing Off -Manan
(The Coca-Cola Company v. Bisleri International Pvt. Ltd. (Manu/DE/2698/2009)
Cadila Health Care v. Cadila Pharmaceutical Ltd. 2001 (21) PTC 541 SC)
 S.Y.Bcom

Offline Exam. Question Paper Pattern

Business Law -II Sem. IV (2021-22)

Time: 1hour 40 minutes Marks: 50

Note: Attempt any FOUR questions from Q2 to Q6.

Q1. Answer the question in short (2 marks each) 10

Compulsory (From Module 1 to 4)

Q2. Answer the following in brief from Module 1 (No option) 10

Q3. Answer the following in brief from Module 2 (No option) 10

Q4. Answer the following in brief from Module 3 (No option) 10

Q5. Answer the following in brief from Module 4 (No option) 10

Q6. Case Studies (No option) 10

a) 05 marks
b) 05 marks
 S.Y.Bcom
Business Law -II Sem. IV (2021-22)
Case Studies (Q.6-10 Marks)

1) Salomon v. Salomon & Co.

2) Daimler Co. Ltd. v. Continental Tyre & Rubber Co. Ltd.

3) Gilford Motor Co. Ltd. v. Horne

4) Ashbury Railway Carriages and Iron Co. Ltd. v. Riche

5) Royal British Bank v. Turquand

6) Cox v. Hickman

7) Bajaj Auto Ltd. v. TVS Motor Co. Ltd. 2008(36) PTC 417 (Mad.)

8) Bayer Corporation & Ors v. Union of India & Ors 162 (2009) DLT 371

9) R. G. Anand v. Delux Films & Ors AIR 1978 SC 1613

10) Indian Performing Rights Society v. Eastern Indian Motion Pictures Ltd.

AIR 1977 SC 1443

11) The Coca-Cola Company v. Bisleri International Pvt. Ltd.

(Manu/DE/2698/2009)

12) Cadila Health Care v. Cadila Pharmaceutical Ltd. 2001(21) PTC 541 SC
1) Salomon v. Salomon & Co.
Background
Aron Salomon was a successful leather merchant who specialized in manufacturing leather
boots. For many years he ran his business as a sole proprietor. By 1892, his sons had become
interested in taking part in the business. Salomon decided to incorporate his business as
a Limited Liability Company, Salomon & Co. Ltd.
At the time the legal requirement for incorporation was that at least seven persons subscribe as
members of a company i.e. as shareholders. The shareholders were Mr. Salomon, his wife,
daughter and four sons. Two of his sons became directors; Mr. Salomon himself was managing
director. Mr. Salomon owned 20,001 of the company’s 20,007 shares – the remaining six were
shared individually between the other six shareholders. Mr. Salomon sold his business to the new
corporation for almost £39,000, of which £10,000 was a debt to him. He was thus simultaneously
the company’s principal shareholder and its principal creditor.
When the company went into liquidation, the liquidator argued that the debentures used by Mr.
Salomon as security for the debt were invalid, on the grounds of fraud. The judge, Vaughan
Williams J. accepted this argument, ruling that since Mr. Salomon had created the company
solely to transfer his business to it, the company was in reality his agent and he as principal was
liable for debts to unsecured creditors.
The appeal
The Court of Appeal also ruled against Mr. Salomon, though on the grounds that Mr. Salomon
had abused the privileges of incorporation and limited liability, which the Legislature had
intended only to confer on “independent bona fide shareholders, who had a mind and will of
their own and were not mere puppets”. The lord justices of appeal variously described the
company as a myth and a fiction and said that the incorporation of the business by Mr. Salomon
had been a mere scheme to enable him to carry on as before but with limited liability.
The Lords
The House of Lords unanimously overturned this decision, rejecting the arguments from agency
and fraud. They held that there was nothing in the Act about whether the subscribers (i.e. the
shareholders) should be independent of the majority shareholder. The company was duly
constituted in law and it was not the function of judges to read into the statute limitations they
themselves considered expedient. The 1862 Act created limited liability companies as legal
persons separate and distinct from the shareholders. Lord Halsbury stated that the statute “enacts
nothing as to the extent or degree of interest which may be held by each of the seven
[shareholders] or as to the proportion of interest or influence possessed by one or the majority
over the others.” Lord Halsbury remarked that – even if he were to accept the proposition that
judges were at liberty to insert words to manifest the intention they wished to impute to the
Legislature – he was unable to discover what affirmative proposition the Court of Appeal’s logic
suggested. He considered that identifying such an affirmative proposition represented an
“insuperable difficulty” for anyone putting forward the argument propounded by the lord justices
of appeal. Lord Herschell noted the potentially “far reaching” implications of the Court of
Appeal’s logic and that in recent years many companies had been set up in which one or more of
the seven shareholders were “disinterested persons” who did not wield any influence over the
management of the company. Anyone dealing with such a company was aware of its nature as
such, and could by consulting the register of shareholders become aware of the breakdown of
share ownership among the shareholders. Lord Macnaghten asked what was wrong with Mr.
Salomon taking advantage of the provisions set out in the statute, as he was perfectly legitimately
entitled to do. It was not the function of judges to read limitations into a statute on the basis of
their own personal view that, if the laws of the land allowed such a thing, they were “in a most
lamentable state”, as Malins V-C had stated in an earlier case in point, In Re Baglan Hall
Colliery Co., which had likewise been overturned by the House of Lords.

Post-Salomon developments
In the decades since Salomon’s case, various exceptional circumstances have been delineated,
both by legislatures and the judiciary, in England and elsewhere (including Ireland) when courts
can legitimately disregard a company’s separate legal personality, such as where crime or fraud
has been committed.

2) Daimler Co Ltd v Continental Tyre and Rubber Co (GB) Ltd

Daimler Co Ltd v Continental Tyre and Rubber Co (Great Britain) Ltd [1916] 2 AC 307 is a UK
company law case, concerning the concept of "control" and enemy character of a company. It is
usually discussed in the context of lifting the corporate veil, however it is merely an example of
where the corporate veil is not in issue as a matter of company law, since the decision turns on
correct interpretation of a statute.

Facts
All except one of Continental Tyre and Rubber Co Ltd’s shares were held by German residents
and all directors were German residents. The secretary was English. Continental Tyre and
Rubber Co Ltd supplied tyres to Daimler, but Daimler was concerned that making payment
might contravene a common law offence of trading with the enemy as well as a proclamation
issued under s 1(2) Trading with the Enemy Act 1914. Daimler brought the action to determine if
payment could be made, given that it was the First World War.
Judgment
At first instance, Scrutton J approved the decision of the master, that the contracts were valid, for
summary judgment without proceeding to trial.

Court of Appeal
Lord Reading CJ, Cozens-Hardy LJ, Phillimore LJ, Pickford LJ and Kennedy LJ, affirmed the
decision too, holding there would be no offence.[1] They held the company did not change its
character because of the outbreak of war. The say it, "remains an English company regardless of
the residence of its shareholders or directors either before or after the declaration of war." Mr
Gore-Browne argued, for Daimler Co Ltd, that the technicality should be swept aside in time of
war. But Lord Reading CJ replied that the fact of incorporation was not just a ‘technicality’. The
company, he said,
“ is a living thing with a separate existence which cannot be swept aside as a technicality. It
is not a mere name or mask or cloak or device to conceal the identity of persons and it is not
suggested that the company was formed for any dishonest or fraudulent purpose. It is a legal
body clothed with the form prescribed by the legislature…’ ”
He relied on Janson v Driefontein Consolidated Mines, where Lord Macnaghten, Lord Brampton
and Lord Lindley, holding that a foreign corporation does not become British because its means
all are.

Buckley LJ delivered a dissenting judgment, would have held that though the company is a legal
person existing apart from its corporators, that it still had enemy character.
“ The artificial legal person called the corporation has no physical existence. It exists only
in contemplation of law. It has neither body, parts, nor passions. It cannot wear weapons nor
serve in the wars. It can be neither loyal nor disloyal. It cannot compass treason. It can be neither
friend nor enemy. Apart from its corporators it can have neither thoughts, wishes, nor intentions,
for it has no mind other than the minds of the corporators. These considerations seem to me
essential to bear in mind in determining the present case. ”
House of Lords
The House of Lords unanimously reversed the decisions below, saying the secretary was
authorised to commence no action. It held the company was capable of acquiring enemy
character.[2]
Lord Parker said,
“ I do not think, however, that it is a necessary corollary of this reasoning [Salomon] to say
that the character of its corporators must be irrelevant to the character of the company; and this is
crucial, for the rule against trading with the enemy depends upon enemy character. ”
Just like a natural person can have enemy character though born in the UK, so can a legal person.
“ I think that the analogy is to be found in control, an idea which, if not very familiar in
law, is of capital importance and is very well understood in commerce and finance. The acts of a
company’s organs, its directors, managers, secretary, and so forth, functioning within the scope
of their authority, are the company’s acts and may invest it definitely with enemy character… it
must at least be prima facie relevant… Certainly I have found no authority to the contrary.
”
The Earl of Halsbury LC, Lord Atkinson, Viscount Mersey, Lord Kinnear and Lord Sumner
concurred. Lord Shaw and Lord Parmoor concurred in the result but dissented on this point.
3) Gilford Motor Co Ltd v Horne [1933] Ch 935
Gilford Motor Co Ltd v Horne [1933] Ch 935 is a UK company law case concerning piercing the
corporate veil. It gives an example of when courts will treat shareholders and a company as one,
in a situation where a company is used as an instrument of fraud.Facts
Mr EB Horne was formerly a managing director of the Gilford Motor Co Ltd. His employment
contract stipulated (clause 9) not to solicit customers of the company if he were to leave
employment of Gilford Motor Co. Mr. Horne was fired, thereafter he set up his own business and
undercut Gilford Motor Co's prices. He received legal advice saying that he was probably acting
in breach of contract. So he set up a company, JM Horne & Co Ltd, in which his wife and a
friend called Mr Howard were the sole shareholders and directors. They took over Horne’s
business and continued it. Mr. Horne sent out fliers saying,
“Spares and service for all models of Gilford vehicles. 170 Hornsey Lane, Highgate, N.
6.Opposite Crouch End Lane... No connection with any other firm. ”
The company had no such agreement with Gilford Motor about not competing, however Gilford
Motor brought an action alleging that the company was used as an instrument of fraud to conceal
Mr Horne's illegitimate actions.
Held
High Court
Farwell J held that the covenant that Mr Horne would not compete was broken. ‘I cannot help
feeling quite convinced that at any rate one of the reasons for the creation of that company was
the fear of Mr Horne that he might commit breaches of the covenant in carrying on the
business…’ But because the covenant was too wide and against public policy (restraint of trade?)
he refused to enforce it. Gilford Motor appealed.
Court of Appeal
Lord Hanworth MR granted an injunction, so that Horne was forced to stop competing through
the company.
“I am quite satisfied that this company was formed as a device, a stratagem, in order to mask the
effect carrying on of a business of Mr EB Horne. The purpose of it was to enable him, under
what is a cloak or sham, to engage in business which, on consideration of the agreement…
”
Lawrence LJ and Romer LJ concurred.
4) Ashbury Railway Carriage and Iron Co Ltd v Riche (1875) LR 7 HL 653 is a UK
company law case, which concerned the objects clause of a company.
Its importance has been diminished as a result of the Companies Act 2006 s 31, which allows for
unlimited objects for which a company may be run. Furthermore, any limits a company does
have in its objects clause has no effect whatsoever for people outside a company (s 39 CA 2006),
except as a general issue of authority of the company's agents.
Facts
Incorporated under the Companies Act,1869, the Ashbury Railway Carriage and Iron Company
Ltd’s memorandum, clause 3, said its objects were ‘to make and sell, or lend on hire, railway-
carriages…’ and clause 4 said activities beyond needed a special resolution. But the company
agreed to give Riche and his brother a loan to build a railway in Belgium. Later, the company
refused the agreement. Riche sued, and the company pleaded the action was ultra vires.
Judgment
Exchequer Court
The judges of the exchequer chamber being equally divided, the decision of the court below was
affirmed.
Blackburn J said,
“ "thought it was at common law an incident to a corporation that its capacity should be
limited by the instrument creating it, I should agree that the capacity of a company incorporated
under the act of 1862 was limited to the object in the memorandum of association. But if I am
right in the opinion which I have already expressed, that the general power of contracting is an
incident to a corporation which it requires an indication of intention in the legislature to take
away, I see no such indication here. If the question was whether the legislature had conferred on
a corporation, created under this act, capacity to enter into contracts beyond the provisions of the
deed, there could be only one answer. The legislature did not confer such capacity. But if the
question be, as I apprehend it is, whether the legislature have indicated an intention to take away
the power of contracting which at common law would be incident to a body corporate, and not
merely to limit the authority of the managing body and the majority of the shareholders to bind
the minority, but also to prohibit and make illegal contracts made by the body corporate, in such
a manner that they would be binding on the body if incorporated at common law, I think the
answer should be the other way." ”
House of Lords
The House of Lords, agreeing with the three dissentient judges in the Exchequer Chamber,
pronounced the effect of the Companies Act to be the opposite of that indicated by Mr Justice
Blackburn. It held that if a company pursues objects beyond the scope of the memorandum of
association, the company's actions are ultra vires. Lord Cairns LC said,
“ It was the intention of the legislature, not implied, but actually expressed, that the
corporations, should not enter, having regard to this memorandum of association, into a contract
of this description. The contract in my judgment could not have been ratified by the unanimous
assent of the whole corporation.
5) Royal British Bank v Turquand
Royal British Bank v Turquand (1856) 6 E&B 327 is a UK company law case that held people
transacting with companies are entitled to assume that internal company rules are complied with,
even if they are not. This "indoor management rule" or the "Rule in Turquand's Case" is
applicable in most of the common law world. It originally mitigated the harshness of the
constructive notice doctrine, and in the UK it is now supplemented by the Companies Act 2006
sections 39-41.

Facts
MrTurquand was the official manager (liquidator) of the insolvent Cameron's Coalbrook Steam,
Coal and Swansea and Loughor Railway Company. It was incorporated under the Joint Stock
Companies Act 1844. The company had given a bond for £2,000 to the Royal British Bank,
which secured the company's drawings on its current account. The bond was under the
company's seal, signed by two directors and the secretary. When the company was sued, it
alleged that under its registered deed of settlement (the articles of association), directors only had
power to borrow up to an amount authorised by a company resolution. A resolution had been
passed but not specifying how much the directors could borrow.

Judgment
Sir John Jervis CJ, for the Court of Exchequer Chamber ruled that the bond was valid, so the
Royal British Bank could enforce the terms. He said the bank was deemed to be aware that the
directors could borrow only up to the amount resolutions allowed. Articles of association were
registered with Companies House, so there was constructive notice. But the bank could not be
deemed to know which ordinary resolutions passed, because these were not registrable. The bond
was valid because there was no requirement to look into the company's internal workings. This is
the indoor management rule, that the company's indoor affairs are the company's problem. Jervis
CJ gave the judgment of the Court.
“I am of opinion that the judgment of the Court of Queen's Bench ought to be affirmed. I incline
to think that the question which has been principally argued both here and in that Court does not
necessarily arise, and need not be determined. My impression is (though I will not state it as a
fixed opinion) that the resolution set forth in the replication [332] goes far enough to satisfy the
requisites of the deed of settlement. The deed allows the directors to borrow on bond such sum or
sums of money as shall from time to time, by a resolution passed at a general meeting of the
Company, be authorized to be borrowed: and the replication shews a resolution, passed at a
general meeting, authorizing the directors to borrow on bond such sums for such periods and at
such rates of interest as they might deem expedient, in accordance with the deed of settlement
and the Act of Parliament; but the resolution does not otherwise define the amount to be
borrowed. That seems to me enough. If that be so, the other question does not arise. But whether
it be so or not we need not decide; for it seems to us that the plea, whether we consider it as a
confession and avoidance or a special Non est factum, does not raise any objection to this
advance as against the Company. We may now take for granted that the dealings with these
companies are not like dealings with other partnerships, and that the parties dealing with them
are bound to read the statute and the deed of settlement. But they are not bound to do more. And
the party here, on reading the deed of settlement, would find, not a prohibition from borrowing,
but a permission to do so on certain conditions. Finding that the authority might be made
complete by a resolution, he would have a right to infer the fact of a resolution authorizing that
which on the face of the document appeared to be legitimately done.

6) Cox v. Hickman
Facts

Benjamin Smith and Josiah Timmis Smith carried on business as iron workers and corn
merchants under the name of B Smith & Son. They owed a lot of money to the creditors and a
meeting took place, amongst whom were Cox and Wheatcroft. A deed of arrangement was
executed by more than six-sevenths in number and value of the creditors. The trusts were
enumerated and the lease was fixed at 21 years. They were to carry on business under the name
of “The Stanton Iron Company”. The deed also contained a clause which prevented them from
suing the Smiths for existing debts. Cox never acted as trustee, and Wheatcroft resigned after six
weeks after which no trustee was appointed.

The goods for the business were provided by Hickman who drew 3 bills of exchange, which the
business accepted but did not honour.

The suit was first tried in front of Lord Jervis who ruled in favour of the defendants. The action
was then taken to the Exchequer Chamber wherein three judges wanted to uphold the judgement
and the other three were for reversing it.

Issues

Whether there is a partnership between the traders who were in essence the creditors of the firm.
Contentions

The counsel for Wheatcroft contended that:

There was no action against the appellant, as if Hickman had heard that Cox and Wheatcroft
were the trustees, he would have realized that Cox had never been a trustee and Wheatcroft had
resigned.
The ownership of the partnership never changed and was still owned by the Smiths.
A qualified benefit derived from a trade does not make a person a partner in it. Here, unless the
profits are taken, there exists no partnership.
The counsel for Cox contended that:

The defendant can be held liable only if:

1.1 He put his name on the bill

1.2 Authorised someone else to put their name on the bill

1.3 Held himself to have given the authority

As to the first and third points he is not liable. As far as the second is concerned, the defendant
cannot be held liable unless an agency is proved.
It is up to the defendant to show that the plaintiff is a partner.
The counsel for Hickman contended that:

There was a contract of partnership under which business was to be carried out for the benefit of
creditors
The scheduled creditors are allowed to participate in the profits of the firm thereby making them
partners
Any one of the partners may bind all the others by the acceptance of the bills in the regular
course of business
Judgement

The deed gave special powers to the creditors. They were given the choice by majority regarding
whether or not the trade should be continued and making rules and regulations as to the carrying
out of that trade, which are the powers that partners have.

The creditors, however, did not carry out the business of the trade when they could have but let
the trustees do the same. By this act f theirs, they did not make themselves partners of the trade.
If they had carried out they business they could have made sure none of the trustees accepted the
bill of exchange as they would be the principals.

The deed in this case is merely an arrangement between the creditors and the Smiths, to repay the
creditors out of existing and future profits. This relationship between the creditors and debtors is
not enough to constitute a relationship between a principal and agent. Trustees are liable as they
are the agent by the contract but the creditors are not the principals of the trustees.
Held

The decision of the Court of Common Pleas was reversed and the defendant’s were not held
liable.

7) Bajaj Auto Ltd. v. TVS Motor Co. Ltd. 2008(36) PTC 417 (Mad.)

The case of Bajaj vs. TVS Motors involves the controversy regarding the unauthorized
application of the patent of the DTSi. The case is very vital regarding not only the financial
stakes of the parties but also regarding the application of the doctrine of pith and marrow also
termed as Doctrine of Equivalents.

The case engages the questions of patent infringement by the defendant and the damages for the
same. Furthermore, the case throws light upon the argument regarding justification of the risks
issued by the defendant of the same case. This case was filed before the Madras High Court in
2007.The plaintiffs in (Bajaj Auto Ltd), along with the state of Maharashtra alleged the
defendants (T.V.S. Motor Company Ltd.) of infringement of the patents of the plaintiffs, which
apprehends the invention of the technology of advanced internal combustion engine.

The remedy sought by the plaintiffs is that of permanent injunction for obstructing the
defendants from:
A. using the technology or invention prescribed in the patents of the plaintiffs; and

B. obstructing them from marketing, selling offering for sale or exporting 2/3 wheelers
(including the proposed 125cc TVS FLAME motorcycle) that consists of the disputed internal
combustion engine or product that infringes the patent. Damages for infringement of the patent
were also claimed by the Plaintiffs.

The suit was under trail. The plaintiffs brought application before the same court seeking
temporary injunction against the defendant for the same relief, which was sought in the suit for
the permanent injunction. The application was filed for obstructing the infringement of the patent
till the pendency of the suit. The defendants in the case filed a suit in the court for preventing the
plaintiffs from issuing threats that the plaintiffs are infringing the defendants’ patent, through
various intermediaries to and thus interfering with the launch of their product (TVS FLAME) by
the plaintiffs. The suit was pending before the court. So, the defendants filed an application for
preventing the defendants, till the suit is pending, from issuing threats and thereby interfering
with the launch of their product under section 108 and 106 of the Patents Act, 1970.

The tests were evolved by the Supreme Court and the interim injunction was granted in favour of
the applicant. The Supreme Court of India by this landmark judgment has directed all the courts
in India for speedy trial and disposal of intellectual property related cases in the courts in India.
In a nearly two-year-old dispute involving two companies, which have been locked in a patent
dispute over the use of a twin-spark plug engine technology, the Supreme Court observed that
suits relating to the matters of patents, trademarks and copyrights are pending for years and years
and litigation is mainly fought between the parties about the temporary injunction. The Supreme
Court directed that hearing in the intellectual property matters should proceed on day to day
basis and the final judgment should be given normally within four months from the date of the
filing of the suit. The Supreme Court further directed to all the courts and tribunals in the country
to punctually and faithfully carry out the aforesaid orders
8) Bayer Corporation & Ors v. Union of India & Ors
Introduction
In this case the appellants had approached the court to issue directions to Director Controller
General of India (DCGI) to retrainthem from giving license relating to manufacture of a drug to
any other company and to the respondents to prevent them frommanufacturing and selling that
drug because the appellants had a patent over it.Rejecting the appellant’s plea, this keenly
followed judgement had been delivered by the Delhi High Court denying the drugpatent linkage
mechanism which was followed in USA to be applicable in India.

Facts
The facts of the case are as follows:
Bayer Pharmaceuticals Limited had been granted patent over the drug “sorafenibtosylate”
which it transferred to Bayer HealthCare LLC, awholly owned subsidiary of Bayer Corporation
in India.
The Patent Officer granted Bayer HealthCare LLC, the patent regarding the said drug for a
period of 20 years on 3 March 2008 and DCGIgranted them permission to import the said drug
on 8 Jan 2008 to 31 Dec 2010.
In July 2008 the appellant came to know that DCGI was granting license relating to “soranib” to
Cipla which would act as a substitute for “sorafenibtosylate”
Appellant wrote to DCGI not to allow Cipla to hold a license in this respect.
They also prayed that Cipla shall be asked to produce an undertaking that soranib was not a
substitute for sorafenibtosylate and hence wasnot its imitation.
Bayer wrote to Cipla seeking a reply if they had filed an application with DCGI but did not
receive any reply.
Bayer then filed an inventive writ petition in Delhi High Court to issue directions to Director
Controller General of India (DCGI) to retrain themfrom giving license relating to manufacture of
a drug to Cipla and to Cipla to prevent them from manufacturing and selling soranib.

Issues raised
In deciding this matter following issues had been raised before the court:
Whether licence can be granted by DCGI for marketing of a drug to any other company on
which some company already has a patent.
Whether grant of such marketing approvals derogates provisions of Patent Act.
Whether linkage can be established between Patent Act and DCA. This issue had been made
based on a combined reading of Section 2 ofthe DCA and Sections 48 and 156 of the Patents
Act, 1970.
 Whether the term “spurious drugs” include any drug or formulation which infringes previously
granted patents. This issue was important to
be discussed because spuriousness of drug would amount to infringement of patent.
Judgement Delivered-
The court rejected the plea of appellants and laid down following landmark judgement:
First issue was decided in favour of respondents stating that such interpretation that DGCI
cannot allow marketing of a drug on which patenthas already been granted to someone is based
on incorrect reading of S. 156 of Patent Act.
DCGI can sufficiently allow the generic drugs to be marketed even though patent has already
by taken on it. By allowing this, DCGI is notabetting the infringement of patent but it is only
liable for not allowing spurious drugs to be marketed in order to prevent the patent infringement.
In fact S. 48 of the Act provides for a private right and negative right because of which even the
patent holder needs to seek permission from DCGI to import and market the drugs
Further, it was also observed that reading of S. 2 of DCA is based on misconception that DCGI
shall be liable to account for the provisionsof Patent Act.
Therefore, no linkage could be established between DCA and Patent Act.
If there could be any linkage made between the two acts, then various provisions of Patent Act
would become infructuous.

The parliament while enacting DCA never intended to place patent superintendence, or policing
powers, with Drug agencies.
Enacting any provision to establish linkage between the two acts would be like overstepping the
law making bounds of the courts. Theparliament has intentionally avoided establishing any such
relation and so it would not be right for the court to do so.
Hence it was held that DCGI is not obligated to enforce patents granted under Patent Act.
The issue of ‘spurious drug ’ was also decided in the favour of the respondents. Hence Cipla
was not held to be spurious drug.
The court while deciding on this issue stated that spuriousness means an attempt to deception
and imitation and to represent themselves assomeone else. Providing a substitute does not suffice
the meaning of this term.
The court thus rejected the contentions of the appellants and also ordered them to pay 6.75 lakh
as a substantial sum to deter any suchapplications to be made in future.
The court further observed that drug patent linkage mechanism as followed by USA cannot be
made applicable in India looking forward tothe India’s policy relating to public health.
The problem in patent linkage in India is that it would block entry of generic medicines in the
market. This basically affects the poor andmarginalized sections of the society who cannot afford
very costly medications.
Patented medicines are generally very costly and con not reach all the needy people in the
society. Therefore, it is necessary that genericmedicine substitutes shall be made available in the
market so that they can be sold at a lower cost and the benefit of better medical facilitiescan be
availed by all including the poor and marginalized people of the society.
This exception was allowed to be given to generic medicines in pursuance of the ‘Bolar
Exception”, which was recognized by the HWA,following the ruling in the case of Roche vs.
Bolar Pharmaceuticals
The Controller of Patent has exclusive authority to determine patent standards in India.
 It was further opined by the court that market approval of drugs does not amount to
infringement of Patents.

9) R. G. Anand v. Delux Films &Ors AIR 1978 SC 1613

The appellant, R. G. Anand, an architect by profession and also a playwright, dramatist and
producer of several stage plays, wrote and produced a play called ‘Hum Hindustani’ in 1953. It
ran successfully and was re-staged in 1954, 1955 and in 1956. Aware of the interest of the
plaintiff in filming the play in view of its increasing popularity, the second defendant, Mr.
Mohan Sehgal, contacted plaintiff.

In January, 1955, plaintiff met the second and third defendants and had detailed discussions
about the play and its plot and the desirability of filming it. However, after this discussion, the
plaintiff received no further communication from the second defendant. In May, 1955, the
defendants started to make the film ‘New Delhi’, which, the plaintiff gathered, was based on his
play, “Hum Hindustani’. The defendant, however, assured him that it was not so. In September,
1956, the movie was released and after viewing it, the plaintiff filed a suit for infringement of his
copyright in his play ‘Hum Hindustani’. His claims included damages, account of profits and a
permanent injunction against the defendants restraining them from exhibiting the movie.

Appellant filed a suit at the District Court and the learned trial judge held, in his wisdom, that the
movie ‘New Delhi’ made by the defendants does not infringe the copyright of the plaintiff. On
appeal, the Delhi High Court upheld the judgment of the district court. An appeal against the
judgment of the Delhi High Court was filed at the Supreme Court.

Whether the production, distribution and exhibition of the film ‘New Delhi’ made by the
defendants are in infringement of the plaintiff’s copyright in the play, ‘Hum Hindustani’?

Unless there is any substantial resemblance between the original work and the alleged copy, the
play and the movie here respectively, in terms of scenes, incidents and treatment, and similarity
between the two is so much that a reasonable man would consider the ‘copy’ to be more or less
an imitation of the original, an infringement of copyright cannot be said to have taken place.

It was argued by Anand that Delux Films and the other defendants were fully aware of the theme
of his play and its intricacies. He had had detailed discussions with them about the same. There
were various similarities between the play and the movie made by Delux Films in terms of the
main theme of provincialism, characterization and situations. Anand pleaded that he was the
owner of the copyright in the play ‘Hum Hindustani’ and that his copyright in the play had been
violated. The Delhi High court recognized the copyright of the plaintiff under the Copyright Act
of 1911.

Delux Films and others, on the other hand, asserted that the movie was not substantially similar
to the play in terms of the themes it dealt with and there were lot of differences in terms of
characterization and treatment.

The court held that the film produced by the defendants cannot be said to be a substantial copy of
the play and the defendants cannot be held to have committed an act of piracy because of
differences in story, theme, characterization and climaxes. Moreover, copyright cannot be
acquired in an idea; the idea being provincialism in this case. A copyright offers protection only
to the expression of an idea and not the idea itself. The allegation by Anand that the defendants
violated his copyright by copying his idea was held invalid.

The plaintiff could not prove that the defendant had committed a colorable imitation of his play.
Where similarities between the copyrighted work and the copy are so many and the similarities
between the two works are not coincidental, a reasonable inference of colorable imitation can be
drawn. The court held that a case for infringement may be made out only when such
infringement may be identifiable by a reasonable man; and, in this case, the court observed, that
no prudent person could get an impression that the film appears to be a copy of the original play.
The Supreme Court did not find any violation of copyright and dismissed the appeal.

The fundamental principles established in the case with regard to infringement of copyright in
case of substantial similarity still hold good.

10) Indian Performing Rights Society v. Eastern Indian Motion Pictures Ltd. AIR 1977
SC 1443

This is a dispute that broke out in a matter involving rights over Indian literary and music works
for which the copyright subsides in India. Parties to the dispute where the Indian performing
right society and the cinematograph exhibitors association of India.
IPRS incorporated on 23/08/1969 in the state of Maharashtra governed by copyright Act 1957
has the authority for issuing licenses for performance in public of all existing future Indian
literary and musical works for which the copyright subsides in India and is a company limited by
guarantee for the purpose of granting license for all present and future Indian musical works to
be performed in public.
IPRS claimed that it is entitled to a royalty in case the literary work used in cinematograph films
is broadcasted on radio stations as they claimed themselves to be assignees of the literary works
and laid down a tariff for the same.
The association of cinematograph exhibitors opposed to the same saying that IPRS has
absolutely no rights over these works and that the production house was the real owner of
copyrights over the literary work in question since composer loses his rights under the contract
of service between production houses especially when there is a consideration involved.
An appeal was preferred as the objectors were dissatisfied with the high court decision which
allowed claim made by the cinematographers association and further laid down that assignment
of future work has no effect.

Issue:
1. Whether an existing or a future right of music composer /lyricist is capable of assignment
2. Whether the producer of the film can be the copyright owner by means of engaging the
composer.
Holding:
1. Yes. Copyright relating to existing and future work can be assigned. The assignment would
take effect only when the work comes into existence.
2. Yes. The cinematograph film producer becomes the first owner of the copyright in case he
commissions a composer of music, a lyricist, for reward or for a consideration to compose music
to be incorporated in the cinematograph film as the composer is employed under a contract of
service.
The Rule of Law:
Issue no: 1
Section 30 of the copyright act 1957 states that assignment of work is possible by means of
issuing a license duly signed by the composer or his assignee; and
In case of a license relating to future work; the assignment shall take effect after the work comes
into existence.
Issue no: 2
Section 17(c) of copyrights act 1957 lays down that the proprietor becomes the absolute owner in
cases of contract of service for valuable consideration unless there is an agreement contrary to it.
Analysis:
Issue no: 1
A composer can assign rights over future work. The assignment takes effect once the
composition comes into existence. Section 30 of the copyright act 1957 lays down that
assignment of work is possible by means of issuing a license in favor of the prospective owner of
the copyright. The rights can be transferred by means of a document duly signed by the owner or
the assignee. Present and future works of a composer can be assigned; however, the assignment
comes into effect only after the work in question comes into existence.
Once an agreement is entered into between the production house and the composer for
incorporating the composer’s composition; composer loses his rights over the composition and
the production house becomes the owner of the copyright. The agreement can be a present as
well as a future one. In either case, IPRS cannot claim royalty as it has absolutely no rights over
it. However, it is different in case of lack of any agreement.
Issue no: 2
The court held that the composer loses his right over the composition automatically when he
enters into an agreement with a cinematograph producer to compose songs to be incorporated in
the film for consideration. Section 17(c) of the copyright act lays down that the producer shall be
the owner of the composition in case of consideration and that the composition automatically
becomes a part of the cinematograph film and the composer loses his rights over it completely
and works falling under such category cannot be assigned further. IPRS cannot claim royalty as
the production house has the right over the composition the moment it comes into existence.
Here there is a contract of service between the composer and production house. In this case, the
producer of the cinematograph film becomes the absolute owner and the authority cannot be
questioned.

11) The Coca-Cola Company v. Bisleri International Pvt. Ltd. (Manu/DE/2698/2009)

Introduction
The parties to this case contended on infringement of trademark within and outside the
jurisdiction where the brand trades.
It throws into the limelight on the jurisdictional boundary of trademark and what amounts to an
infringement if one should go beyond such boundary. From the decision of the court, one can
deduce that the proprietor of a trademark has both local and international intellectual property
rights over his or her name.
The Delhi High Court argued that for an infringement to exist there must be a threat of such
existence to the aggrieved party. The court will consider such existence and rule on it.
The Facts of the Case
The Plaintiff is the Coca-Cola Company which owns the largest brand of soft drinks in over 200
countries.
The company grants licenses to the franchise to operate, bottle and sell their brands. The
Defendant, on the other hand, was a subsidiary in a group of industries and on 18 September
1993 through a Master Agreement sold to the Plaintiff its IPR on varying products such as
Limca, Citra, Gold spot, Thums up, and MAAZA.
The IPR included the trademark, know-how, formulation rights, and goodwill.
• By 12 November 1993, the Plaintiff and the Defendant signed a Deed of Assignment
assigning and transferring the trademark in MAAZA to the Coco-cola company for a
consideration of One Million US Dollars.
• The Deed of Assignment assigned the Goodwill for a consideration of $50,000 USD.
• The Know-how was transferred for a consideration of $1,000,000 USD.
• A Confidentiality, Non-use and Non-compete Agreement was signed with the Plaintiff,
Defendant, Mr. Ramesh Chauhan, his wife and both (the owners of the secret formulae base for
MAAZA) for a consideration of $1,000,000 USD.
• The Agreement on License with Bisleri formerly called Golden Agro Products Pvt. Ltd
was also signed.
• An Agreement on relinquishment and compensation of franchise rights was also signed.
• Finally, in October 1994, the License Agreement for the total and permanent transfer of
all IPR to the Plaintiff forever was executed by all parties.
The Plaintiff thereafter filed to register the Trademark on MAAZA in March 2008 in Turkey.
The Defendants became aware on 7 September 2008 and initiated a legal action to repudiate the
Agreement.
The defendants relied on the notion that the Agreement signed was for use of MAAZA only in
India and not for export purposes. The defendant also intended to start using the MAAZA
trademark which they have licensed forever to the Plaintiff in India.
The Plaintiff subsequently filed a lawsuit.

Issues Raised-
The plaintiff and the Defendant raised the following issues:
• The Plaintiff sued for a permanent injunction to refrain the Defendant and other related
parties from infringing on the trademark.
• The Plaintiff asked for damages for passing off by the defendants.
• The Plaintiff contended that the Defendant ignored the terms of the Deed of Assignment
pertaining to total transfer and assignment of IPR, trademarks, know-how, and formulae to the
plaintiff.
• The Plaintiff argued that they have the sole and exclusive usage rights to the trademark to
the exclusion of others within and outside India.
• The Defendant, on the other hand, contended that the Plaintiff was only authorized to use
the trademarks, IPR, know-how, and formulation in India and not outside India.
Judgment Delivered-
The Court held the arguments on those sides and decided as follows.
First, a Deed of Assignment is a legal and binding Agreement between parties to a contract. The
terms of the contract can only be repudiated or canceled if the parties act contrary to what is
stipulated.
Hence, the aggrieved party can sue for damages. In the instance, the defendant signed to convey,
transfer and assign all IPR and its related rights pertaining to the MAAZA trademark to the
plaintiff. These rights are absolute and as such the defendant has no claim or no right to cancel or
repudiate the contract.
The day the defendant signed the Agreement was the day he transferred the entirety of his rights
to the exclusion of every other to the Plaintiff.
Second, the Plaintiff in forever owning the trademark can decide on what to do with it however
they want. They must not inform the defendant either will they obtain permission to make use of
the trademark.
Third, the Plaintiff has the right to register the trademark conveyed on them within and outside
India. In the eyes of the law, they are the assigned proprietor of the trademark, know-how,
formulation, goodwill, etc. The defendant has no standing in law to register the trademark in
another country or repudiate the Agreement.
Fourth, the defendant signed confidentiality and a Non-compete Agreement which meant that
they cannot use, sell, offer, assign, or convey the formulae, trademark, etc. to another person.
They are bound by the Agreement to cease and desist from carrying out any action which may
infringe on the trademark. As such, by offering it to another person, they were infringing on the
trademark and also passing off.
The actions of the defendant pertaining to the trademark are covered by section 26 of the
Trademark Act, 1999.
In the end, the Plaintiff, Coca-Cola won the case against Bisleri and the court awarded a
temporary injunction against the defendant.
Conclusion-
Trademark is one of the various aspects of Intellectual Property. It covers brands, names,
business related concepts, etc. the law adduced that an infringer of this IP must be a person who
creates a similar name or identical concept of another brand or name to deceive people into
believing or thinking they are the same.
Passing Off is simply portraying a name or brand as what it is not.
From this case, it can be seen that the Trademark is a global phenomenon and protects the
proprietor across boundaries.
Also, it does not matter that the name was assigned in one country and registered in another,
once there is an assignment conferring and assigning the rights in its entirety, it can be registered
anywhere.
12) Cadila Health Care v. Cadila Pharmaceutical Ltd. 2001(21) PTC 541 SC
Appellant and Respondent were Pharmaceutical companies who had taken over the assets and
business of erstwhile Cadila Group after its restructuring under Section 391 & 394 of the
Companies Act.

One of the conditions in the scheme of restructuring of the Cadila Group was that both the
Appellant and the Respondent got the right to use the name “Cadila” as a corporate name.

The Appellant manufactured a drug under the brand name “FALCIGO” which contained
Artesunate for the treatment of cerebral malaria, commonly known as Falcipharum.
On August 20, 1996 the Appellant applied to the Trade Marks Registry, Ahmedabad for
registration of the mark “FALCIGO” in Part-A, Class-5 of the Trade and Merchandise Marks
Act.

On October 7, 1996, the Drugs Controller General (India) granted permission to the Appellant to
market the said drug under the trade mark of “FALCIGO” all over India.
On April 10, 1997, Respondent Company was granted permission from the Drugs Controller
General (India) to manufacture and import from abroad a drug containing Mefloquine
Hydrochloride.

The Appellant claimed that it was in April 1998 when it came to their notice that the drug
manufactured by the Respondents was also used for the treatment of Falcipharum Malaria and
was sold under the trade mark of “FALCITAB”.
The Appellant then filed a suit in the District Court at Vododra, Gujarat seeking injunction
against the Respondent from using the trade mark “FALCITAB”.

The interim injunction application made by the Appellant was dismissed.

Subsequently, an appeal was filed by the Appellant in the. Hon’bl High Court reached the
conclusion that it could not be said that there was a likelihood of confusion cause to an unwary
customer in respect of the disputed marks.

The Appellant then approached the Hon’ble Supreme Court against the order of the Hon’ble
High Court.

Case of the Appellant:

• It was claimed by the Appellant that the drug manufactured by the Respondent Company would
be passed off as Appellant’s drug “FALCIGO” for the treatment of the same disease in view of
confusing similarity and deception in the names

• It was submitted on behalf of the Appellant that although the possibility of confusion in a drug
being sold across the counter may be higher but the fact that a drug is sold under prescription or
only to physicians cannot by itself be considered a sufficient protection against confusion. The
physicians and pharmacists are trained people yet they are not infallible and in medicines, there
can be no provisions for mistake since even a possibility of mistake may prove to be fatal.

Case of the Respondent:

• Word “Falci”, which is the prefix of the mark was taken from the name of the disease
Falcipharum Malaria. It is a common practice in pharmaceutical trade to use part of the word of
the disease as a trade mark to indicate to the doctors and chemists that a particular product/drug
is meant for a particular disease.
• It was also the case of the Respondent that admittedly the two products in question were
Schedule L drugs which can be sold only to the hospitals and clinics with the result that there
could not even be a remote chance of confusion and deception.

Court’s Observations:

The Hon’ble Supreme Court in its judgement refused to interfere with the order appealed against
and examined the principles that are to be kept in mind while dealing with an action for
infringement or passing off especially in cases of medicinal products.

The well-settled principles of law applicable to such cases are:

• The real question to decide in such cases is to see as to how a purchaser, who must be looked
upon as an average man of ordinary intelligence, would react to a particular trade mark, what
association he would form by looking at the trade mark, and in what respect he would connect
the trade mark with the goods which he would be purchasing.

• It is apparent that confusion or mistake in filling a prescription for either product could produce
harmful effects. Under such circumstances, it is necessary for obvious reasons, to avoid
confusion or mistake in the dispensing of the pharmaceuticals.

• Physicians are not immune from confusion or mistake. Furthermore it is common knowledge
that many prescriptions are telephoned to the pharmacists and others are handwritten, and
frequently handwriting is not unmistakably legible. These facts enhance the chances of confusion
or mistake by the pharmacists in filling the prescription if the marks appear too much alike when
handwritten or sound too much alike when pronounced.”

• The drugs have a marked difference in the compositions with completely different side effect.
The test should be applied strictly as the possibility of harm resulting from any kind of confusion
by the consumer can have unpleasant if not disastrous results.

• The courts need to be particularly vigilant where the defendants drug, of which passing off is
alleged, is meant for curing the same ailment as the plaintiffs medicine but the compositions are
different. The confusion is more likely in such cases and the incorrect intake of medicine may
even result in loss of life or other serious health problems.

• As far as present case is concerned, although both the drugs are sold under prescription but this
fact alone is not sufficient to prevent confusion which is otherwise likely to occur. In view of the
varying infrastructure for supervision of physicians and pharmacists of medical profession in our
country due to linguistic, urban, semi-urban and rural divide across the country and with high
degree of possibility of even accidental negligence, strict measures to prevent any confusion
arising from similarity of marks among medicines are required to be taken.

• Keeping in view the provisions of Section 17-B of the Drugs and Cosmetics Act, 1940 which
inter alia indicates that an imitation or resemblance of another drug in a manner likely to deceive
being regarded as a spurious drug it is but proper that before granting permission to manufacture
a drug under a brand name the authority under that Act is satisfied that there will be no confusion
or deception in the market. The authorities should consider requiring such an applicant to submit
an official search report from the Trade Mark office pertaining to the trade mark in question
which will enable the drug authority to arrive at a correct conclusion.

Moreover in deciding whether a particular trade mark is likely to deceive or cause confusion that
duty is not discharged by arriving at the result by merely comparing it with the trade mark which
is already registered and whose proprietor is offering opposition to the registration of the mark.

The Hon’ble Supreme Court also laid down some factors for deciding the question of deceptive
similarity. However, it suggested that weightage to be given to each of these factors should
depend upon the facts and circumstances of each case. The factors are enumerated below:

a) The nature of the marks i.e. whether the marks are word marks or label marks or composite
marks, i.e. both words and label works.

b) The degree of resembleness between the marks, phonetically similar and hence similar in idea.

c) The nature of the goods in respect of which they are used as trademarks.

d) The similarity in the nature, character and performance of the goods of the rival traders.

e) The class of purchasers who are likely to buy the goods bearing the marks they require, on
their education and intelligence and a degree of care they are likely to exercise in purchasing
and/or using the goods.

f) The mode of purchasing the goods or placing orders for the goods; and

g) Any other surrounding circumstances which may be relevant in the extent of dissimilarity
between the competing marks.