What are "Well-known Trademarks" and "Associated Trademarks"?

Well-known trademark in relation to any goods or services, means a mark which has become so to the substantial segment of the public which uses such goods or receives such services that the use of such mark in relation to other goods or services would be likely to be taken as indicating a connection in the course of trade or rendering of services between those goods or services and a person using the mark in relation to the first-mentioned goods or services.

Associated Trademarks means trademarks deemed to be, or required to be, registered as associated trademarks under this Act.

How is "Trademark" defined?

Trademark means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of other and may include shape of goods, their packaging and combination of colours; and

(i) in relation to Chapter XII (other than section 107), a registered trade mark or a mark used in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right as proprietor to use the mark and

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

How is the Trademarks Act 1999 different from the Trade and Merchandising Marks Act 1958?

Enactment of the Trademarks Act 1999 is a big step forward from the Trade and Merchandise Marks Act 1958 and the Trademark Act 1940. The newly enacted Act has some features not present in the 1958 Act and these are:-

(i)Registration of service marks, collective marks and certification trademarks.

(ii)Increasing the period of registration and renewal from 7 years to 10 years.

(iii)Allowing filing of single application for registration in more than one class.

(iv)Enhanced punishment for offences related to trademarks.

(v)Exhaustive definitions for terms frequently used.

(vi)Simplified procedure for registration of registered users and enlarged scope of permitted use. (vii)Constitution of an Appellate Board for speedy disposal of appeals and rectification applications which at present lie before High Court.

Companies Act_Practical Problems_31

Mr. X was appointed as the Managing Director of XYZ Ltd. w.e.f. 1st October, 2006. The company made an application to the Central Government for approval, as the remuneration proposed to be paid to Mr. X was beyond the limits laid down in Schedule XIII to the Companies Act, 1956. The company started paying remuneration from the date of appointment and continued to do so till 31st March, 2007. The Central Government did not approve the remuneration as proposed by the company and restricted the same to a lower amount. On scrutiny of the accounts, it was noticed that the company, till 31st March, 2007 has paid to Mr. X, a total of Rs. 1.20 Lakhs in excess of the remuneration sanctioned by the Central Government, Explain with reference to the provisions of the Act whether Mr. X can keep the excess remuneration ? Draft a resolution for waiver of recovery of the excess remuneration so paid by the company.

Mr. Weldon was appointed as a non-executive director. He was paid monthly remuneration awaiting the approval of the Central Government. However, the remuneration sanctioned by the Central Government was lesser than the remuneration actually paid to Mr. Weldon. As per section 309, Mr. Weldon cannot keep remuneration drawn by him which is in excess of the remuneration sanctioned by the Central Government Accordingly, he shall refund to the company Rs. 1,20,000. Until such refund is made, he shall hold it in trust for the company. Further, the company cannot waive the recovery of excess remuneration.

However, if on an application made to the Central Government, the Central Government permits the waiver of recovery of such excess remuneration, the company may waive the recovery of excess remuneration, and then Mr. Weldon shall have a right to retain the excess remuneration drawn by him.

Waiver of recovery of excess remuneration
Passing Authority - General Meeting
Nature of the Resolution - Ordinary Resolution

RESOLVED that pursuant to the provisions of section 309 and other applicable provisions, if any, and subject to the approval of the Central Government, consent of the company be and is hereby given for waiving the recovery of an amount of Rs, 1,20,000 paid to Mr. Weldon, the director of the company, during the period 1st October, 2002 to 31st March, 2003, being in excess of the remuneration sanctioned by the Central Government vide Letter No. ................ dated ..................

RESOLVED FURTHER that an application be made to the Central Government and the company secretary be and is hereby authorised to take the necessary steps in this regard."

Companies Act_Practical Problems_30

M/s ABC Ltd. had power under its memorandum to sell its undertaking to another company having similar objects. The Articles of the company contained a provision by which directors were empowered to sell or otherwise deal with the property of the company. The Shareholders passed an ordinary resolution for the sale of its assets on certain terms and required the directors to carry out the sale. The Directors refused to comply with the wishes of the shareholders where upon it was contended on behalf of the shareholders that they were the principal and directors being their agents were bound to give effect to their decision. Based on the above facts, decide the following issues, having regard to the Provisions of the Companies Act, 1956 and case laws.

(i) Whether the contention of shareholders against the non-compliance of their wishes by the directors is tenable.
(ii) Can shareholders usurp the powers which by the articles are vested in the directors by passing a resolution in the general meeting?

(i) The Board is the supreme body having the management of the company. The Board has the absolute power to do all things except those that are expressly required to be done by the company in general meeting. The shareholders cannot interfere in the day to day management of the company. The shareholders cannot supersede or usurp the Board's powers, or instruct it as to how it shall exercise its powers.

Also, as per Sec. 293, the power to sell, lease or otherwise dispose of any undertaking of the company is vested with the Board, though the Board can exercise such power only with the consent of the shareholders in general meeting. Thus, it is evident that a direction by the shareholders does not make it obligatory for the Board to exercise such power.

If in the opinion of the Board, it is not in the best interest of the company to sell its assets, the Board is not bound to do so, notwithstanding the fact that the company in general meeting has resolved that the assets should be sold [Pothen v Hindustan Trading Corpn. (P) Ltd.].

Thus, the contention of the shareholders is not tenable.
(ii) The powers of management are vested in the Board of directors; the Board alone can exercise such powers Even a unanimous resolution of the shareholders will not enable the shareholders to exercise the powers of the Board. The shareholders cannot interfere in the day to day management of the company. Thus, the shareholders cannot usurp the powers vested in directors.

Sarbanes Oxley Act- Sec 802

This section is listed within Title VIII of the act (Corporate and Criminal Fraud Accountability), and pertains to 'Criminal Penalties for Altering Documents'.

This section imposes penalties of fines and/or up to 20 years imprisonment for altering, destroying, mutilating, concealing, falsifying records, documents or tangible objects with the intent to obstruct, impede or influence a legal investigation. This section also imposes penalties of fines and/or imprisonment up to 10 years on any accountant who knowingly and wilfully violates the requirements of maintenance of all audit or review papers for a period of 5 years

Sarbanes Oxley Act - Sec 409

This section is listed within Title IV of the act (Enhanced Financial Disclosures), and pertains to 'Real Time Issuer Disclosures'.

Issuers are required to disclose to the public, on an urgent basis, information on material changes in their financial condition or operations. These disclosures are to be presented in terms that are easy to understand supported by trend and qualitative information of graphic presentations as appropriate.