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Advocates & Corporate Legal Consultants |
May 2007 | |
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Trademark & Patent Attorneys |
New Delhi | |
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This E-Newsletter has been published by India Juris, full service Indian law firm with special expertise in Business, Corporate & IP laws, on requests from clients and associates worldwide with an object to keep them abreast of latest legal & business developments in India. |
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Contents |
| Corporate & Commercial laws |
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* Overseas Investment by Venture Capital Funds in Offshore units |
| * Liberalization - Reimbursement of pre-incorporation expenses |
| * Liberalization - Remittance towards donation by Corporates |
| * Liberalization - External Commercial Borrowings |
| * Liberalization - Remittances for consultancy services |
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Intellectual Property laws |
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* Wockhardt puts patent law to test, moves HC for exclusivity |
| * Ranbaxy’s US launch of lipitor drug only in 2010 |
| Corporate & Commercial laws |
| Overseas Investment by Venture Capital Funds (VCFs) |
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RBI has permitted vide notification dated 30th April 2007 Indian Venture Capital Funds (VCFs), registered with SEBI, to invest in equity and equity-linked instruments of off-shore venture capital undertakings, subject to an overall limit of USD 500 million. Allocations of limits to individual VCFs will be made by SEBI, subject to such terms and conditions as SEBI may deem necessary. Accordingly, Domestic Venture Capital Funds registered with SEBI, desirous of making investments in off-shore Venture Capital Funds may approach SEBI for prior approval in this regard. No separate permission from the Reserve Bank is necessary for such VCFs |
| Liberalization - Reimbursement of pre-incorporation expenses |
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Till now prior approval of the Reserve Bank was required for drawing foreign exchange for remittance exceeding USD 100,000 by an entity in India by way of reimbursement of pre-incorporation expenses. Now vide notification dated 30th April 2007 RBI has permitted to allow remittance of foreign exchange towards reimbursement of pre-incorporation expenses incurred in India up to 5 per cent of the investment brought into India or USD 100,000, whichever is higher, on the basis of certification from statutory auditors |
| Liberalization - Remittance towards donation by Corporates |
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Till now, remittance of
donation exceeding USD 5000 per remitter / donor per annum required prior
approval of RBI. Further, Indian corporates with proven track record
desiring to contribute funds from their foreign exchange earnings for
setting up chairs in educational institutions outside India and similar
such purposes were required to obtain prior approval of Reserve Bank, but
now vide notification dated 30 April 2007 RBI has permitted Banks to make
remittances on account of donations by corporates for specified purposes
as under : The existing facility for remittance up to USD 5000 per remitter / per donor per financial year towards donations by Indian corporates would continue. |
| Liberalization - External Commercial Borrowings (ECB) |
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With a view to providing greater flexibility to the corporates in managing their liquidity and interest costs dynamically, the existing limit for prepayment of ECB has been enhanced from USD 300 million to USD 400 million. Accordingly, AD Category - I banks may allow prepayment of ECB up to USD 400 million, without prior approval of the Reserve Bank subject to compliance with the minimum average maturity period as applicable to the loan |
| Liberalization - Remittances for consultancy services |
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Up to now prior approval of the Reserve Bank was required for remittance exceeding USD 1,000,000 per project, for any consultancy service procured from outside India. RBI vide notification dated 30th April 2007 has raised the limit for remittance for consultancy service procured from outside India by Indian companies executing infrastructure projects from USD 1 million per project up to USD 10 million per project. For this purpose, infrastructure sector is defined as (i) power, (ii) telecommunication, (iii) railways, (iv) road including bridges, (v) sea port and airport, (vi) industrial parks, and (vii) urban infrastructure (water supply, sanitation and sewage projects). In all other cases, the existing limit of USD 1 million, per project, for any consultancy service procured from outside India, will continue. |
Intellectual Property Laws |
| Wockhardt puts patent law to test, moves HC for exclusivity |
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Wockhardt has filed a case
with the Bombay High Court after the Indian patent office rejected its
application for a new version of nadifloxacin — a topical antibiotic sold
under the brand name Nadoxin. The case will reopen the debate on the value
of incremental innovation — meaning new forms, derivatives and new drug
delivery systems of existing molecules — as companies seek further clarity
on the definition of patentibility in India. After pre-grant oppositions were filed against Wockhardt application last year, Wockhardt was refused a patent for Nadoxin. Wockhardt is now appealing against the Indian patent office’s decision by taking this case to the high court. Nadoxin was launched by Wockhardt in 2002. In December 2003, the drug was granted exclusive marketing rights (EMR) on the premise that it was the only quinolone — a family of antibiotics — preparation that could be used for topical application. The EMR were granted for five years, or till it was made redundant by a product patent. Since the new patent Act came into effect in 2005, Wockhardt had made an application seeking a patent for the drug. If granted, it would have enabled the company to retain its exclusivity in this market. Last year, Cipla had filed a pre-grant opposition to Wockhardt’s patent application for Nadoxin, claiming that similar drugs already existed in the market. Subsequently, the Indian patent office denied Wockhardt a patent for its antibiotic on the grounds of ‘prior art’ — Wockhardt’s so-called innovation was information already in the public domain |
| Ranbaxy’s US launch of lipitor drug only in 2010 |
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WITH the US Supreme Court rejecting an appeal by Ranbaxy to launch
a generic drug of Lipitor in the US before its patent expires in 2010,
Ranbaxy’s last hope for an early launch of atorvastatin — the generic
version of Pfizer’s blockbuster drug Lipitor – in the US appears to have
squashed. Last year, a federal court ruled a verdict against Ranbaxy, in the 893 patent, and had given the company two months time to appeal against the adverse decision in the Supreme Court. The US Supreme Court declined to intervene in Ranbaxy’s appeal against the federal court’s verdict, which had uphold Pfizer’s exclusive market rights for Lipitor in the US.
Ranbaxy can launch its atorvastatin by on March 2010.
However, Pfizer has approached the US Patent and Trademark office to
re-examine its patent for Lipitor in an attempt to claim patent protection
till 2011. A decision in this matter is pending. A favourable verdict for
Pfizer may mean that Ranbaxy’s launch date will be pushed back to 2011.
Anti-cholesterol drug Lipitor is the world’s largest selling drug
with sales worth about $13 billion last year. In the US, Lipitor’s market
size is about $8.5 billion (two-third of its global sales). Ranbaxy’s
launch of the atorvastatin is crucial in the company’s plan to generate
nearly $2 billion in sales over the next five to six years. In 2003, US-based world’s largest drug-maker Pfizer had sued Ranbaxy for alleged patent infringement over the latter’s plans to launch generic drug of Lipitor. In 2005, a court in the US held Pfizer’s two patents valid. But following an appeal and subsequent favourable verdict in one of the patents last year, Ranbaxy can now launch atorvastatin by 2010. Ranbaxy has locked horns with the Pfizer in 17 countries over patent infringement of Lipitor |
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