INDIA JURIS

Advocates & Corporate Legal Consultants

Trademark & Patent Attorneys

A Full Service Law Firm

Tel:+91-120- 6567067 / 4120997  Fax: +91-120-2776538 / 4120998

Areas of Practice  -  Corporate  Commercial  M&A  JV  Takeovers  Foreign Investments   Litigation   Arbitration   Patent   Trade Mark  Design  Copyright    INDUSTRIES  -  IT  Telecommunications  Biotechnology  Infrastructure   Automobile   Real Estate   Shipping   Banking   Finance       OFFICES   New Delhi    Mumbai   New York

 Contents 

*    Carbon Credits -  CDM Executive Board  to approve first biofuels project

Intellectual Property

        Suit for seeking permanent injunction over the use of product logo/trade mark

Chennai - chennai@indiajuris.com       Mumbai -   mumbai@indiajuris.com      New York - newyork@indiajuris.com

If you do not wish to receive e-newsletter, type 'REMOVE & the E-mail Address to be removed' in the subject and resend it to us.

CDM Executive Board to approve first biofuels project  TOP

A UN expert panel has recommended the clean development mechanism (CDM) executive board approve a methodology  on 11th October 2007 that seeks to claim carbon credits for the production of biodiesel from plant oil.

The Methodology Panel of the CDM said methodology number NM0228, which outlines procedures for the allocation of certified emission reductions for the production of biofuel from plant oil in Brazil could generate significant profits for biofuel producers as it effectively opens the door for growers to claim certified emission reduction (CER) credits for the emissions of carbon dioxide they have abated in fossil fuel combustion in the transport sector.

The EU, the US and large developing countries are all proposing targets to boost the consumption of biofuels, but so far the CDM executive board, which issues CERs to emission reduction projects under the Kyoto protocol, has refused to approve plans to finance the production of plant oil for fuel.

Two of the main issues that have blocked approval of methodologies and successful registration of emission reduction projects have been concerns that increased biofuel use will lead to deforestation and that its sale to countries with mandatory targets could lead to counting the same emission reduction twice.

To avoid the twin issues of double counting and deforestation, the methodology states biofuels producers will have to identify exactly the type of land and consumer in each project. The CDM EB will make hold its 35th meeting next week from 15-19 October.   TOP

Global tele-companies who have so far not entered the India telecom market can do so through the 3G route. The department of telecom (DoT) has decided that any player, including foreign operators, will be eligible to bid for third generation spectrum when these frequencies are auctioned by the government.

The DoT move marks a change from sector regulator Trai’s (Telcom Regulatory Authority of India) recommendation that only existing operators, new applicants, cellular operator and foreign firms be allowed to bid for 3G spectrum during the auction. At present, all telecom services in India are offered on 2G (second generation radio frequencies). Since 3G spectrum can be used both for voice and high-speed data applications, any new player who wins the bid for 3G spectrum can also enter the traditional voice and SMS market. Besides this there could be other option than an auction for allocation of 3G spectrum which is standard allocation procedure.

Rejecting Trai’s recommendations, the DoT is also learnt to have decided that one of the slots will be reserved for BSNL. This implies, if only four players can be accommodated, and one slot be reserved for PSU tele-companies, all existing operators and global giants will have to bid for just three slots.

SEBI (Securities & Exchange Board of India) has proposed restrictions on participatory note (PN)—an Offshore Derivative Instrument (ODI) used by foreign investors to play the Indian stock market. These are investors who are either not willing to get registered with SEBI or are barred from doing so. The capital market regulator has suggested that PNs should not be issued to these overseas investors for trading in Indian equity derivatives like Nifty futures. PNs are issued by foreign institutional investors (FIIs) and their sub-accounts for investing in stocks as well as derivatives. Significantly, SEBI has also proposed certain limits on PN issuance for buying stocks in the spot market.

As derivatives allow an investor to take positions by paying a slice of the total exposure, a rush of foreign money in this segment could make the market unstable. According to SEBI, “FIIs and their sub-accounts shall not issue/renew ODIs with underlying as derivatives with immediate effect. They are required to wind up the current position over 18 months, during which period SEBI will review the position from time to time.”

The proposal will be considered by the SEBI board on October 25. SEBI has also proposed that there should be no further issuance of ODIs by sub-accounts of FIIs. Significantly, even PNs issued to buy stocks (and not derivatives) will have restrictions. SEBI has proposed if the notional value of PNs outstanding (excluding derivatives) is less than 40% of the FII’s total assets under custody in India, then it can issue further ODIs at the incremental rate of 5% till the 40% limit is reached. However, such ODIs would be for cash market purchase and not derivatives.

    ICurrently, EEFC accounts are permitted to be maintained in the form of non-interest bearing current accounts. It will now be possible for account holders to maintain outstanding balances to the extent of US $ 1 million in the form of term deposits up to one year maturing on or before 31st October 2008. The rate of interest may be determined by the banks themselves.

      In view of the recent global and domestic developments and with a view to give an opportunity to small and medium enterprises to manage the challenges in the global markets, it has been decided by RBI, in consultation with Government of India, to permit all exporters to earn interest on EEFC accounts to the extent of outstanding balances of US $ 1 million per exporter. This is a purely temporary measure and valid upto October 31, 2008.

The finance ministry is in favour of allowing foreign companies to invest directly in commodity brokerages. The government is mulling over a proposal to permit FDI in these brokerages. At present, foreign companies can enter the Indian commodities market only through their outfits or joint ventures in the equity markets.  

Most commodity broking firms are owned by stock broking companies in which 100% FDI is permitted. However, the ministry has not given its views on the quantum of FDI to be allowed. In commodity exchanges, foreign companies cannot have controlling stake. FDI is limited to 49%, with FII and companies allowed 26% each. If the same logic is extended to brokerages, there should be no problem. But if they are allowed to own controlling stake or completely own brokerages, then it may not be so desirable.

The government has been reluctant to allow foreign commodity brokerages into the market directly because it fears that could change the market dynamics. If a large brokerage trades on its own account, it could well corner a commodity or affect price discovery in India’s still illiquid market. Moreover, the impact would be felt by small producers and traders in the spot market as well since the futures and spot market are now fairly well-aligned.

While foreign investment up to 49% in commixes may be round the corner with the department of industrial policy and promotion preparing a Cabinet note on overall FDI review, FDI into broking firms may not happen simultaneously. This is because consultations on the issue are not over yet.

Respondents filed an appeal challenging the grant of temporary injunction restraining them from using the logo "I am what I am" along with their trade mark. The trial court, upon consideration of the pleadings and the documents produced, held that the trademark of the plaintiff under which it carried on business was "Gomzi" and not "I am what I am".

Hon`ble Karnataka High Court under the  bench of  Dr. Arijit Pasayat & S.H. Kapadia, considering all of the facts and arguments, held that the appellant has taken a positive stand that the logo was intellectual property and therefore without any further material, grant of injunction was warranted.

The appeal in Supreme Court of India was disposed off accordingly, without any order as to costs.

TOP