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Introduction to Trademark Registration in India

In today’s competitive market, building a strong brand identity is vital for success. It is in this context that trademarks become a critical asset to distinguish a business’ products or services from others, ensuring they stand out and are instantly recognizable to a consumer. Consequently, protection of the trademark through trademark registration in India is a crucial step for businesses aiming to protect their brand identity and establish legal ownership over their logos, names, and symbols – all of which constitute intellectual property of the business. As a result, whether it’s a logo, name, slogan, or unique design, registering a trademark provides legal protection against infringement of intellectual property and legitimizes the brand’s ownership of such intellectual property.

In India, the process of registering a trademark is governed by the Trade Marks Act, 1999, and is overseen by the Trade Marks Registry. The Trade Marks Registry was established in 1940, and was followed by the passing of the Trademark Act in 1999. The Head Office of the Trade Marks Registry is located in Mumbai and regional offices in Ahmedabad, Chennai, Delhi, and Kolkata.

A registered trademark offers exclusive rights of use to the owner, preventing unauthorized use of the mark by others and providing a legal mechanism to pursue recourse against infringement. Additionally, registration helps avoid potential legal conflicts or claim of the mark by a third party, and protects the business from unfair competition.

The answer to question – How to Register Trademark in India? is relatively straightforward, but it requires careful attention to detail to ensure compliance with legal requirements. It involves several steps, including a trademark search, filing the application, examination, publication, and ultimately the issuance of the registration certificate. Throughout this process, it is crucial to ensure that the trademark is distinct, does not conflict with existing marks, and is used in a way that is representative of the business’ activities.

What is Trademark Registration?

Trademark registration is a legal process that grants exclusive rights to a brand or business to use a specific mark, symbol, logo, name, or design to distinguish its products or services from others in the market. A registered trademark becomes an integral part of a company’s intellectual property portfolio, offering both legal protection and a competitive edge.

In India, trademarks are governed by the Trade Marks Act, 1999, which provides the framework for registering, protecting, and enforcing trademark rights. 

Definition of a Trademark

A trademark is a distinct sign, symbol, word, or combination of these elements that represents a brand and differentiates its offerings from others. Trademarks are not just limited to logos or names; they can include slogans, colors, sounds, or even packaging styles that uniquely identify a product or service. In India, trademarks are protected under the Trade Marks Act, 1999, offering exclusive rights to the owner.

For example:

• The golden arches of McDonald’s are a globally recognized logo trademark.
• The tagline “Just Do It” is an example of a registered “wordmark” by Nike.

Trademarks are classified into 45 trademark classes, which group various goods and services to streamline the registration process. Businesses must choose the relevant class that aligns with their offerings during registration.

Intellectual Property Rights Symbols and Their Significance: ™, ℠, ®

Understanding the symbols associated with trademarks is crucial for businesses and consumers alike:

1. ™ (Trademark):
   • This symbol indicates that the mark is being used as a trademark, but it is not yet registered.
   • It signifies intent to protect the brand and discourages misuse.
2. ℠ (Service Mark):
   • Used for service-based businesses to highlight unregistered marks.
   • Common in industries like hospitality, consulting, and IT services.
3. ® (Registered Trademark):
   • Denotes that the trademark is officially registered with the government.
   • Provides legal protection and exclusive rights to use the mark in its registered category.

Using the correct symbol helps businesses communicate their trademark status while deterring infringement and ensuring legal enforceability.

Importance of Trademark Registration

Trademark registration is essential for businesses looking to secure their brand identity. It ensures legal protection and provides exclusive rights to the owner to use the mark for their goods or services. Key reasons why trademark registration is important include:

1. Brand Protection: Prevents competitors from using similar names, logos, or designs that could mislead customers.
2. Legal Recognition: Grants official ownership under Indian law, ensuring your rights are safeguarded.
3. Customer Trust: A trademark adds credibility to your brand, making it easier for customers to identify and trust your products or services.
4. Asset Creation: Registered trademarks are intangible assets that can be licensed, franchised, or sold for business growth.
5. Global Reach: Trademark registration in India can facilitate international trademark recognition, helping businesses expand globally.

Benefits of Registering a Trademark in India

The benefits of trademark registration extend beyond legal protection. Here are the key advantages:

1. Exclusive Rights: Registration provides exclusive rights to the owner, ensuring the trademark cannot be legally used by others in the registered class.
2. Competitive Edge: A trademark helps establish a distinct identity in the market, giving your business a competitive advantage.
3. Prevention of Infringement: Protects against unauthorized use of your brand name, logo, or design.
4. Market Goodwill: Builds trust and goodwill with customers, enhancing brand loyalty.
5. Ease of Business Expansion: A registered trademark facilitates licensing or franchising, opening doors for business growth.
6. Strong Legal Position: In the event of disputes, a registered trademark provides a strong legal standing.

Brief Overview of the Trademark Registration Process in India

The procedure for trademark registration in India is systematic and straightforward. Here’s a quick overview:

1. Trademark Search: Conduct a trademark registration search to ensure the desired trademark is unique and not already registered.
2. Application Filing: Submit the trademark application online or offline with all required documents, including ID proofs, business registration details, and the logo (if applicable).
3. Examination and Review: Authorities review the application and may raise objections, which must be addressed within the stipulated time.
4. Publication: The trademark is published in the Trademark Journal, allowing for public objections.
5. Approval and Registration: If no objections are raised or resolved satisfactorily, the trademark is approved and the trademark registration certificate is issued.

Registering a trademark not only provides legal protection but also secures your brand’s future, ensuring long-term growth and recognition in the market.

Types of Trademarks in India

Trademarks in India are categorized into general and specific types, each serving different purposes to protect distinct aspects of a brand’s identity.

General Trademarks

1. Generic Mark: Refers to common terms or names that describe a product or service. These marks are not eligible for registration as they lack uniqueness (e.g., “Milk” for dairy products).
2. Suggestive Mark: Indicates the nature or quality of the goods or services indirectly, requiring imagination to connect with the product (e.g., “Netflix” suggests internet-based flicks).
3. Descriptive Mark: Describes the product or service but must acquire distinctiveness to qualify for registration (e.g., “Best Rice”).
4. Arbitrary Mark: Uses common words in an unrelated context, making them distinctive (e.g., “Apple” for electronics).
5. Fanciful Mark: Invented words with no prior meaning, offering the highest level of protection (e.g., “Google”).

Specific Trademarks

1. Service Mark: Identifies and protects services rather than goods (e.g., logos of consulting firms).
2. Certification Mark: Indicates that the product meets established standards (e.g., ISI mark).
3. Collective Mark: Used by a group of entities to signify membership or collective ownership (e.g., “CA” for Chartered Accountants).
4. Trade Dress: Protects the visual appearance or packaging of a product, such as color schemes or layouts (e.g., Coca-Cola bottle shape).
5. Sound Mark: Protects unique sounds associated with a brand (e.g., the Nokia tune).

Other types include Pattern Marks, Position Marks, and Hologram Marks, which add further layers of protection to unique brand elements.

Who can Apply for Trademark?

Anyone can apply for trademark registration, including individuals, companies, and LLPs. The person listed as the applicant in the trademark registration form will be recognized as the trademark owner once the registration is complete. This process allows businesses and individuals to protect their brand identity under trademark law.

Procedure for Online Trademark Registration in India

Trademark registration in India involves a detailed and systematic process that ensures legal protection for your brand. Below is a step-by-step guide to the procedure:

Step 1: Choose a Unique Trademark and Conduct a Trademark Registration Search

• Begin by selecting a unique and distinctive trademark that effectively represents your brand. It could be a logo, wordmark, slogan, or even a combination of elements.
• Ensure your trademark aligns with your business’s trademark class. There are 45 classes under which trademarks can be registered:
  • Classes 1-34 cover goods.
  • Classes 35-45 cover services.
• Conduct a trademark registration search using the Controller General of Patents, Designs, and Trademarks’ online database. This ensures your chosen mark isn’t already in use or similar to an existing trademark, avoiding potential objections or rejections.

Step 2: Prepare and Submit the Application (Online/Offline)

• Application Form: File Form TM-A, which allows registration for one or multiple classes.
• Required Documents:
  • Business Registration Proof (e.g., GST certificate or incorporation document).
  • Identity and address proof of the applicant (e.g., PAN, Aadhaar).
  • A clear digital image of the trademark (dimensions: 9 cm x 5 cm).
  • Proof of claim, if the mark has been used previously in another country.
  • Power of Attorney, if an agent is filing on your behalf.
• Filing Options:
  • Manual Filing: Submit the form at the nearest Trademark Registry Office (Delhi, Mumbai, Kolkata, Chennai, or Ahmedabad).
    • Acknowledgment takes 15-20 days.
  • Online Filing: Faster and efficient, with instant acknowledgment via the IP India portal (https://ipindia.gov.in/).

• Government Fees for Trademark Registration (as on date):
  • ₹4,500 (e-filing) or ₹5,000 (manual filing) for individuals, startups, and small businesses.
  • ₹9,000 (e-filing) or ₹10,000 (manual filing) for others.

Step 3: Verification of Application and Documents

• The Registrar of Trademarks examines the application to ensure compliance with the Trademark Act of 1999 and relevant guidelines.
• If any issues arise, such as incomplete information or similarity with an existing mark, the Registrar raises an objection and sends a notice to the applicant.
• Applicants must respond to objections within the stipulated timeframe, providing justifications or additional documentation.

Step 4: Trademark Journal Publication and Opposition

• Once cleared, the trademark is published in the Indian Trademark Journal, inviting public feedback.
• Opposition Period:
  • Third parties have four months to file an opposition if they believe the trademark conflicts with their rights.
  • If opposition arises, both parties present their evidence, and the Registrar conducts a hearing to resolve the matter.

Step 5: Approval and Issuance of Trademark Registration Certificate

• If there are no objections or oppositions (or they are resolved), the Registrar approves the trademark.
• A Trademark Registration Certificate is issued, officially granting the applicant the right to use the ® symbol alongside their trademark.

Additional Points to Note

• The entire trademark registration process in India can take 6 months to 2 years, depending on the objections or oppositions.
• During the registration process, you can use the ™ symbol to indicate a pending trademark application. Once the certificate is issued, switch to the ® symbol, denoting a registered trademark.

By following this step-by-step guide, businesses can protect their brand, build trust, and enjoy exclusive rights to their trademark in India. Ensure proper documentation and legal assistance for a smoother registration process.

Documents Required for Trademark Registration in India

To successfully register a trademark in India, specific documents must be submitted. These documents establish the applicant’s identity, business details, and trademark uniqueness. Here’s a concise list with key details:

1. Business Registration Proof

• Sole Proprietorship: GST Certificate or Business Registration Certificate.
• Partnership Firm: Partnership Deed or Registration Certificate.
• Company/LLP: Incorporation Certificate and Company PAN card.

2. Identity and Address Proof

• Individuals/Sole Proprietors: PAN Card, Aadhaar Card, or Passport.
• Companies/LLPs: Identity proof of directors/partners and registered office address proof.

3. Trademark Representation

• A clear digital image of the trademark (logo, wordmark, or slogan) with dimensions of 9 cm x 5 cm.

4. Power of Attorney (Form TM-48)

• A signed Power of Attorney authorizing an agent or attorney to file the trademark application.

5. Proof of Prior Usage (If Applicable)

• Evidence such as invoices, advertisements, or product labels showing prior use of the trademark.

6. Udyog Aadhaar or MSME Certificate

• Required for startups, small businesses, and individuals to avail reduced trademark registration fees.

7. Class-Specific Details

• Declaration of the class of goods or services (from 45 available trademark classes).

8. Address Proof of Business

• Recent utility bills, lease agreements, or ownership documents as proof of the business location.

By ensuring all these documents for trademark registration are complete and accurate, applicants can avoid delays and simplify the registration process. Proper documentation is key to protecting your brand identity in India.

Costs and Fees for Trademark Registration in India

Understanding of the costs involved in trademark registration in India is needed for businesses and individuals planning to protect their intellectual property. Here’s a detailed breakdown:

1. Government Fees for Trademark Registration (as on date)

• Individuals, Startups, and Small Enterprises:
  • ₹4,500 for e-filing.
  • ₹5,000 for physical filing.
• Others (Companies, LLPs, etc.):
  • ₹9,000 for e-filing.
  • ₹10,000 for physical filing.

2. Additional Costs for Professional Services

• Hiring a trademark attorney or agent may involve additional charges depending on the complexity of the application and services provided.

3. Factors Affecting Trademark Registration Costs

• Number of Classes: Registering under multiple trademark classes increases the fees.
• Type of Trademark: Filing for a collective trademark or series mark incurs higher costs.
• Opposition Proceedings: If objections are raised, handling opposition can add to the expenses.

Planning your trademark registration carefully can help you manage costs effectively while ensuring maximum protection for your brand.

How to Check Trademark Registration Status

After filing your application, it’s essential to monitor its status regularly to avoid delays. Here’s how you can do it:

1. Online Methods to Check Trademark Status

• Visit the official website of the Controller General of Patents, Designs, and Trademarks.
• Navigate to the “Trademark Status” option or visit https://tmrsearch.ipindia.gov.in/eregister/eregister.aspx .
• Enter your application number or trademark details.
• View the current status, including examination, opposition, or registration updates.

2. Common Reasons for Delays

• Incomplete Documentation: Missing or incorrect documents can lead to processing delays.
• Objections or Oppositions: Objections raised by the Trademark Office or third-party oppositions require resolution, prolonging the process.
• Backlog at Trademark Office: High volume of applications can slow down the approval process.

3. Resolving Delays

• Ensure that all documents are complete and accurate during submission.
• Respond promptly to objections or opposition notices.
• Seek professional assistance to expedite the process.

By staying informed about the trademark registration status and addressing issues proactively, you can secure your trademark efficiently and avoid unnecessary complications.

Common Grounds for Refusal of Trademark Registration in India

When applying for trademark registration in India, the application may be refused based on certain grounds. It’s essential to understand these absolute grounds for refusal to avoid issues during the process.

1. Absolute Grounds for Refusal

These are the reasons that may lead to the rejection of a trademark application even if no other parties oppose it. They include:

• Lack of Distinctiveness: A trademark must be unique and capable of distinguishing the goods or services of one entity from another. Generic or descriptive marks are often refused.
• Deceptive or Misleading Marks: Trademarks that mislead consumers about the nature or quality of the goods or services are not eligible for registration.
• Conflict with Public Order or Morality: Trademarks that go against public morality or religious beliefs can be refused.
• Confusion with Existing Trademarks: Trademarks that are too similar to an already registered mark or a pending application will be rejected.

2. Examples of Trademarks That May Be Rejected

• Descriptive Marks: For example, “Sweet Cake” for a bakery.
• Generic Terms: Words like “Apple” for computer-related products or “Coffee” for coffee-related services.
• Marks That Resemble Flags, Emblems, or National Symbols: Trademarks that resemble state or national flags or symbols.

By understanding these grounds, applicants can avoid common mistakes and improve their chances of approval.

Renewing a Trademark in India

Once your trademark is registered, it remains valid for a specific period. However, it must be renewed to continue enjoying protection under the law.

1. Validity Period of a Trademark

In India, a trademark is valid for 10 years from the date of registration. After this period, the trademark owner must renew the registration to maintain its exclusive rights.

2. Procedure and Timeline for Trademark Renewal

• Filing for Renewal: The application for renewal must be filed before the expiration of the 10-year validity period. It can be done within 6 months before or after the expiration date.
• Online Filing: The process can be done through the official website of the Controller General of Patents, Designs, and Trademarks. You need to fill out the appropriate form (Form TM-R) and pay the renewal fees.
• Timeline: The renewal process is typically completed within 1–2 months, depending on the workload of the Trademark Office.

3. Costs Involved in Trademark Renewal

• The renewal fees for individuals, startups, and small businesses are typically ₹4,500 for e-filing and ₹5,000 for physical filing.
• For companies, LLPs, and other organizations, the renewal fees are ₹9,000 for e-filing and ₹10,000 for physical filing.

By renewing your trademark on time, you ensure continued protection and exclusive rights to your brand name and logo in India. Regular renewal is key to maintaining the integrity of your intellectual property and protecting your business identity.

Hence, trademark registration in India is essential for businesses aiming to protect their intellectual property and strengthen their brand presence. Registering a trademark provides exclusive rights to your brand name, logo, or symbol, preventing unauthorized use and offering legal protection. The trademark registration process is simple, starting with a trademark search, followed by filing an application and addressing any objections or oppositions. Renewing your trademark ensures ongoing protection and secures your brand’s identity for years to come. With trademark registration in India, businesses, whether startups or established companies, can build trust, create valuable assets, and safeguard their brand in the competitive market.

Frequently Asked Questions (FAQs) on Trademark Registration in India

1. Is trademark registration mandatory in India?
No, trademark registration is not mandatory in India. However, registering your trademark provides several benefits, such as legal protection, exclusive rights to use the mark, and the ability to take legal action in case of infringement. It also prevents others from using a similar mark and adds value to your brand by enhancing its credibility.

2. Who can apply for trademark registration in India?
Any individual, business entity, or legal entity claiming to be the proprietor of the trademark can apply for registration. The application can be filed either on a “used” or “proposed to be used” basis. Trademark applications can be filed online through the official IP India portal or at one of the regional trademark offices located in Delhi, Mumbai, Ahmedabad, Kolkata, or Chennai.

3. What are the benefits of trademark registration in India?
Trademark registration offers exclusive rights to use the trademark for the registered goods or services. It protects your brand from unauthorized use, provides legal backing in case of infringement, and allows you to use the ™ and ® symbols. It also enhances brand recognition and helps in building a trustworthy reputation in the market.

4. How long does it take to register a trademark in India?
Trademark registration in India typically takes between 8-15 months. This duration may vary depending on the complexity of the case and whether any objections or oppositions are raised during the process. If there are no complications, registration is usually completed within this time frame.

5. What documents are required for trademark registration in India?
Key documents required include a clear representation of the trademark (logo or wordmark), proof of business registration, identity and address proof (e.g., PAN, Aadhaar), and relevant certificates (for startups or small enterprises). If filing through an agent, a Power of Attorney may also be required.

6. How much does trademark registration cost in India?
The trademark registration fee varies based on the type of applicant. For individuals, startups, and small enterprises, the fee is ₹4,500 for e-filing and ₹5,000 for physical filing. For others, the fee is ₹9,000 for e-filing and ₹10,000 for physical filing. Additional professional fees may apply if you choose to hire legal assistance.

7. Where do I apply for trademark registration in India?
Trademark registration applications can be submitted online through the official IP India website or filed at one of the regional trademark offices in Delhi, Mumbai, Ahmedabad, Kolkata, or Chennai. E-filing provides instant acknowledgment, while physical filing may take 15-20 days to receive acknowledgment.

8. Why should I register my trademark if it’s not mandatory?
Although not mandatory, trademark registration offers several advantages, including legal protection, exclusive rights to your mark, and the ability to use the ® symbol. It also boosts your brand’s credibility and safeguards your intellectual property against infringement.

9. What is the typical timeline for trademark registration in India?
Trademark registration generally takes 8-15 months in uncomplicated cases. However, if objections or oppositions arise, the process may take longer due to the need to resolve these issues.

10. How can I check the status of my trademark registration application?
You can easily check the status of your trademark registration online through the IP India website. It will provide updates on the status of your application, including any objections or progress on its approval.

11. What are common reasons for the refusal of trademark registration?
Trademarks may be refused on absolute grounds if they are too generic, descriptive, offensive, or conflict with an already registered trademark. Marks that lack distinctiveness or mislead the public may also face rejection by the authorities.

12. How do I renew my trademark in India?
Trademark registration in India is valid for 10 years. To renew your trademark, you need to file a renewal application before the expiry date and pay the renewal fee. Renewing your trademark on time ensures continued protection of your intellectual property rights.

In today’s competitive business landscape, protecting intellectual property is crucial for building a strong brand and maintaining a competitive edge. Trademark registration is one of the most effective ways to safeguard your brand’s identity, ensuring that it remains unique and protected from infringement. In India, where the economy is booming with startups, small businesses, and large corporations alike, understanding the importance of trademark registration is paramount.

What is a Trademark?

A trademark is a unique symbol, word, phrase, logo, design, or combination thereof that identifies and distinguishes the goods or services of one entity from others. It is a vital aspect of branding and helps create a distinct identity in the minds of consumers.

For instance, iconic logos like the golden arches of McDonald’s or the swoosh of Nike are registered trademarks that symbolize their respective brands globally. Similarly, Indian brands like Tata, Reliance, and Flipkart rely heavily on trademarks to maintain their market dominance and consumer trust.

Why is Trademark Registration Important in India?

1. Legal Protection Against Infringement

Trademark registration provides legal protection under the Trademarks Act, 1999. If another business attempts to use your registered trademark without authorization, you can take legal action against them. This protection ensures that your brand’s identity remains intact and safeguarded.

2. Exclusive Rights

A registered trademark grants the owner exclusive rights to use the trademark for the goods or services it represents. It also prevents competitors from using similar marks that could confuse consumers.

3. Brand Recognition and Goodwill

A trademark acts as an asset that enhances brand recognition and builds consumer trust. Over time, a strong trademark becomes synonymous with quality and reliability, which contributes to long-term goodwill.

4. Market Differentiation

In a saturated market, a trademark helps distinguish your products or services from those of competitors. It establishes your brand’s unique identity and strengthens customer loyalty.

5. Asset Creation

A registered trademark is an intangible asset that can be sold, licensed, or franchised. This adds financial value to your business, making it an attractive proposition for investors or partners.

6. Global Expansion

Trademark registration in India can serve as the foundation for international trademark registration under treaties like the Madrid Protocol. This is especially important for businesses planning to expand globally.

Consequences of Not Registering a Trademark

Failure to register a trademark can expose your business to several risks:

• Risk of Infringement: Without registration, proving ownership of a trademark becomes challenging.
• Brand Dilution: Competitors might use similar marks, leading to loss of distinctiveness and consumer trust.
• Limited Legal Remedies: Unregistered trademarks are harder to defend in court.
• Missed Opportunities: A lack of trademark protection can hinder global expansion plans.

Steps to Register a Trademark in India

1. Trademark Search: Conduct a thorough search to ensure that the trademark is unique and not already registered by someone else.
2. Application Filing: Submit a trademark application with the necessary details, including the logo, class of goods or services, and owner details.
3. Examination: The Trademark Registry examines the application to ensure compliance with legal requirements.
4. Publication: The trademark is published in the Trademark Journal to invite objections, if any.
5. Registration Certificate: If no objections are raised, or if objections are resolved, the trademark is registered, and a certificate is issued.

Costs and Duration

Trademark registration in India is a cost-effective process. The official fees depend on the nature of the applicant, with reduced fees for startups, individuals, and small businesses. The registration process typically takes 12-18 months, but the protection is valid for 10 years and can be renewed indefinitely.

Key Industries Benefiting from Trademark Registration

1. E-commerce and Retail: Trademarks protect brand identity in a highly competitive digital marketplace.
2. Pharmaceuticals: Ensures safety and trust by preventing counterfeit products.
3. Technology Startups: Safeguards innovations and unique business models.
4. Food and Beverage: Builds trust and loyalty through distinctive branding.

Conclusion

Trademark registration is not just a legal formality but a strategic move to protect and enhance your brand’s value. In a thriving economy like India, securing a trademark ensures that your brand stands out, builds trust, and enjoys long-term growth.

Investing in trademark registration today is a step toward safeguarding your business’s future. Don’t wait for competitors to claim what’s rightfully yours. Secure your brand’s identity and take it to new heights with the power of trademarks. If you’re ready to register your trademark or need expert guidance, reach out to Treelife for a consultation today.

Introduction to Trademarks

A trademark is a unique term, symbol, logo, design, phrase, or a combination of these elements that distinguishes a business’s products or services from those of its competitors in the market. Trademarks can take the form of text, graphics, or symbols and are commonly used on company letterheads, service banners, publicity brochures, and product packaging. By creating a distinct identity, trademarks play a vital role in building customer trust, enhancing brand recognition, and establishing a competitive edge.

As a form of intellectual property, a trademark grants its owner the exclusive rights to use the registered term, symbol, or design. No other individual, company, or organization can legally use the trademark without the owner’s consent. If unauthorized use occurs, the trademark owner can take legal action under the Trade Marks Act of 1999.

Registering your trademark as per trademark classification not only safeguards your brand identity but also prevents third parties from using it without authorization. It is a straightforward process in India, allowing businesses to protect their intellectual property and ensure their products or services stand out in the market.

Trademarks are categorized into various classes based on the goods or services they represent. Understanding the classification system is crucial to ensure proper protection. In this article, we will explore the legal framework for trademarks, the classification system, and the online tools available to identify the correct trademark class for your registration.

Background of Trademarks in India

The Trade Marks Registry, established in 1940, administers trademark regulations under the Trademarks Act of 1999 in India. This Act aims to protect trademarks, regulate their use, and prevent infringement. Registering a trademark is essential for businesses to safeguard their name, reputation, and goodwill, as well as to strengthen brand identity and build customer trust. Trademarks can be in the form of graphics, symbols, text, or a combination, commonly used on letterheads, service banners, brochures, and product packaging to stand out in the market.

The Trade Marks Registry has offices in Mumbai, Ahmedabad, Chennai, Delhi, and Kolkata to handle trademark applications. To apply for protection, businesses must classify their products or services under the NICE Classification (10th edition), a global system that ensures clarity in trademark registration.

The importance of trademark classification was emphasized in the Nandhini Deluxe v. Karnataka Co-operative Milk Producers Federation Ltd. (2018) case, where the Supreme Court clarified that visually distinct trademarks for unrelated goods or services are not “deceptively similar” and may be registered, even if they fall under the same class.

What is a Trademark Class?

Trademark classes are the categories into which goods and services are classified under the NICE Classification (NCL), an internationally recognized system created by the World Intellectual Property Organization (WIPO). This classification system is essential for businesses seeking trademark registration, as it ensures that each trademark application accurately reflects the nature of the goods or services it represents.

Types of Trademark Classes

The NICE Classification divides goods and services into 45 distinct trademark classes:

• Goods: Classes 1 to 34.
  Goods type trademark classes, numbered 1 to 34, categorize products based on their nature. ¹ This classification system helps businesses protect their brands by ensuring clear identification and preventing confusion in the marketplace.
• Services: Classes 35 to 45.
  Trademark classes 35-45 are dedicated to services, ranging from advertising and business management to education, healthcare, and legal services.

Each class represents a specific category of goods or services. For example: Class 13 for Firearms and explosives. Class 36 for Financial and insurance services.

How to Choose the Right Trademark Class?

When filing a trademark application, the applicant must carefully select the correct class that corresponds to the goods or services their business offers. This choice is crucial for avoiding potential trademark infringement and conducting effective trademark searches. During the trademark registration process, specifying the trademark classes or categories of products and services for which the trademark will be used is essential. It defines the mark and determines its usage in the industry, acting as an identifier for the mark. Choosing the right category and classification for a trade name is highly beneficial. The applicant can also apply for protection of the same mark under multiple classes if applicable.

Services are typically identified from the alphabetical list provided, using the divisions of operations indicated in the headers and their explanatory notes. For instance, rental facilities are categorized in the same class as the rented items.

Multiple Classes for Comprehensive Protection

Applicants can file for trademark protection under multiple classes if their goods or services span across different categories. For example, a business dealing in both clothing (Class 25) and retail services (Class 35) should register under both classes to ensure complete coverage.

Importance of Trademark Classification

The significance of a trademark class search to safeguarding a business’ intellectual property and brand cannot be overstated. In 2018, the Hon’ble Supreme Court highlighted the significance of categorizing trademarks under different classes in a landmark case involving the popular dairy brand “Nandhini Deluxe”¹ in Karnataka. The court observed that two visually distinct and different marks cannot be called deceptively similar, especially when they are used for different goods and services. The Court also concluded that there is no provision of law that expressly prohibits the registration of a trademark which is similar to an existing trademark used for dissimilar goods, even when they fall under the same class.

Benefits of Classification

• Preventing Conflicts: Using a trademark class search makes it easier to find already-registered trademarks that could clash with your intended mark. This averts any legal conflicts and expensive lawsuits.
• Registration Success: You increase the likelihood of a successful registration by classifying your trademark correctly. The possibility of being rejected by the trademark office is reduced with an appropriate categorization.
• Protection of Brand Identity: You may operate with confidence knowing that your brand is protected within your industry by registering it in the correct class.
• Market Expansion: When your company develops, you may use a well-classified trademark to launch additional goods and services under the same way.

Trademark Classification List

The trademark class list consists of two types :-  

1. Trademark Classification for Goods 
2. Trademark Classification for Services

1. Trademark Classification for Goods

This trademark registration class of goods contains 34 classes.

• If a final product does not belong in any other class, the trademark is categorized according to its function and purpose. 
• Products with several uses can be categorized into various types based on those uses. 
• The categories list is classified according to the mode of transportation or the raw materials if the functions are not covered by other divisions. 
• Based on the substance they are composed of, semi-finished goods and raw materials are categorised. 
• When a product is composed of many components, it is categorized according to the substance that predominates.

2. Trademark Classification for Services

This trademark registration class of services contains 10 classes.

• The trademark class for services is divided into branches of activity. The same categorization applies to rental services. 
• Services connected to advice or consultations are categorized according to the advice, consultation, or information’s subject.

Search Trademark Classes in India

List of Trademark Classes of Goods in India (1-34 Classes)

Trademark Class	Description
Trademark Class 1	Chemicals used in industry, science, and photography.
Trademark Class 2	Paints, varnishes, lacquers, and preservatives against rust.
Trademark Class 3	Cleaning, polishing, scouring, and abrasive preparations.
Trademark Class 4	Industrial oils, greases, and fuels (including motor fuels).
Trademark Class 5	Pharmaceuticals and other preparations for medical use.
Trademark Class 6	Common metals and their alloys, metal building materials.
Trademark Class 7	Machines, machine tools, and motors (except vehicles).
Trademark Class 8	Hand tools and implements, cutlery, and razors.
Trademark Class 9	Scientific, photographic, and measuring instruments.
Trademark Class 10	Medical and veterinary apparatus and instruments.
Trademark Class 11	Apparatus for lighting, heating, and cooking.
Trademark Class 12	Vehicles and parts thereof.
Trademark Class 13	Firearms and explosives.
Trademark Class 14	Precious metals and jewelry.
Trademark Class 15	Musical instruments.
Trademark Class 16	Paper, stationery, and printed materials.
Trademark Class 17	Rubber, gutta-percha, and plastics in extruded form.
Trademark Class 18	Leather and imitation leather goods.
Trademark Class 19	Non-metallic building materials.
Trademark Class 20	Furniture and furnishings.
Trademark Class 21	Household utensils and containers.
Trademark Class 22	Ropes, string, nets, and tarpaulins.
Trademark Class 23	Yarns and threads for textile use.
Trademark Class 24	Textiles and textile goods.
Trademark Class 25	Clothing, footwear, and headgear.
Trademark Class 26	Lace, embroidery, and decorative textiles.
Trademark Class 27	Carpets, rugs, mats, and floor coverings.
Trademark Class 28	Toys, games, and sporting goods.
Trademark Class 29	Meat, fish, poultry, and other food products.
Trademark Class 30	Coffee, tea, spices, and other food products.
Trademark Class 31	Agricultural, horticultural, and forestry products.
Trademark Class 32	Beers, mineral waters, and soft drinks.
Trademark Class 33	Alcoholic beverages (excluding beers).
Trademark Class 34	Tobacco, smokers’ articles, and related products.

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List of Trademark Classes of Services in India (35-45 Classes)

Trademark Class	Description
Trademark Class 35	Business management, advertising, and consulting services.
Trademark Class 36	Financial, banking, and insurance services.
Trademark Class 37	Construction and repair services.
Trademark Class 38	Telecommunications services.
Trademark Class 39	Transport, packaging, and storage services.
Trademark Class 40	Treatment of materials and manufacturing services.
Trademark Class 41	Education, training, and entertainment services.
Trademark Class 42	Scientific and technological services, including IT.
Trademark Class 43	Food, drink, and temporary accommodation services.
Trademark Class 44	Medical, beauty, and agricultural services.
Trademark Class 45	Legal services, security services, and social services.

Online Tools available for Classifying Trademarks

Classifying products and services accurately is a crucial step in the trademark registration process in India. Several reliable online tools are available to simplify the trademark categories listing process:

1. NICE Classification Tool: Developed by the World Intellectual Property Organization (WIPO), this tool provides a comprehensive guide to the classification of goods and services under the NICE system.
2. TMclass Tool: Offered by the European Union Intellectual Property Office (EUIPO), TMclass helps users determine the appropriate trademark class for their goods or services with ease.

Trademark classification is vital for the Trademark Registry to understand the scope of the trademark, its market segment, and the target audience it aims to address. It establishes the trademark’s value in the competitive market and serves as a unique identifier for the registrant.

Conclusion

Trademark classification is a foundational step in the trademark registration process, ensuring that a business’s intellectual property is accurately categorized and effectively protected. By adhering to the NICE classification system, businesses can prevent conflicts, enhance brand identity, and expand their market presence with confidence. Proper classification streamlines the registration process, minimizes legal risks, and safeguards brand equity. As trademarks play a pivotal role in defining a company’s market presence, leveraging expert guidance for classification is vital for long-term success.

FAQs on Trademark Classification in India

1. What is trademark classification, and why is it important?

Trademark classification is a system that organizes goods and services into 45 specific categories under the NICE classification. It is essential for ensuring accurate registration, avoiding conflicts, and securing protection for a business’s intellectual property in its relevant industry.

2. How are goods and services categorized under trademark classification?

Goods fall under the first 34 classes, and services fall under classes 35 to 45. The classification is based on the function, purpose, or material of the goods and the activity or purpose of the services.

3. Why is trademark classification essential during the registration process?

Proper classification:

• Helps prevent conflicts by identifying existing trademarks that may clash with the new mark.
• Ensures the trademark application is correctly filed, reducing the likelihood of rejection.
• Protects brand identity by categorizing trademarks accurately within their industry.

4. Can a trademark be registered under multiple classes?

Yes, businesses can register their trademark under multiple classes if their goods or services span across different categories. This ensures comprehensive protection.

5. What tools are available for trademark classification in India?

The following online tools are helpful:

• NICE Classification Tool by the World Intellectual Property Organization (WIPO).
• TMclass Tool by the European Union Intellectual Property Office.

6. How does trademark classification help prevent legal conflicts?

By conducting a trademark class search, businesses can identify existing trademarks in the same category and avoid conflicts, reducing the risk of legal disputes and costly lawsuits.

7. What is the significance of the NICE classification system?

The NICE classification, created by the World Intellectual Property Organization (WIPO), standardizes the categorization of goods and services worldwide. It streamlines trademark registration processes and ensures consistency.

8. What are the benefits of correct trademark classification?

• Prevention of Conflicts: Avoids disputes by identifying existing trademarks in the same class.
• Enhanced Brand Identity: Safeguards the brand within its industry.
• Streamlined Registration: Increases the likelihood of successful trademark registration.
• Market Expansion: Facilitates the introduction of new products and services under the same brand.

9. What happens if someone infringes my registered trademark?

• You can take legal action to stop the infringement and seek damages.
• Registration makes legal enforcement easier and more effective.

10. Where can I find more information and resources on trademark registration?

• The Controller General of Patents, Designs and Trademarks website: https://ipindia.gov.in/
• Start-up India resources: https://www.startupindia.gov.in/
• Consult a trademark attorney for personalized guidance.

References:

1. [1]  Nandhini Deluxe v Karnataka Co-operative Milk Producer Federation Ltd. 2018 (9) SCC 183
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Introduction 

Financial transactions involving two parties with distinct national bases—the payer and the recipient—are referred to as cross border payments. These transactions can be conducted through various methods, such as bank transfers, credit card payments, e-wallets, and mobile payment systems, and encompass wholesale payments and retail payments.

What Are Cross-Border Payments in India?

Cross-border payments refer to financial transactions where money is transferred from one country to another. In the context of India, cross-border payments involve the movement of funds across international borders for trade, remittances, investments, or other financial activities. These payments play a crucial role in facilitating global commerce and economic integration, enabling businesses, individuals, and governments to settle debts, transfer funds, or make investments beyond their national boundaries.

Cross-border payments play an indispensable role in connecting businesses, governments, and individuals across the globe, enabling international trade, remittances, and financial cooperation. In India, the cross-border payments ecosystem has evolved significantly, influenced by regulatory changes, technological advancements, and global integration. This #TreelifeInsights article explores the current state of cross-border payments in India, the challenges faced, and the trends shaping the future of this critical sector.

Cross Border Payments Ecosystem

Types of Cross Border Payments in India

Simply put, cross-border transactions are transfers of assets or funds from one jurisdiction to another. Correspondent banks, payment aggregators act as intermediaries between the involved financial institutions. The cross-border payments ecosystem includes B2B, B2P, P2B and P2P merchants. Common methods of cross-border payments include wire transfers, International Money Orders, Credit card transactions. In India, such payments encompass wholesale (between financial institutions and large corporates) and retail (individual and business transactions like e-commerce payments or remittances) payments:

Wholesale Cross Border Payments

Wholesale cross-border payments in India refer to large-value financial transactions made between financial institutions, businesses, and corporations across international borders. These payments typically involve high-value transactions for international trade, investment, and financing. In India, wholesale cross-border payments are vital for settling large sums related to imports, exports, corporate mergers, and foreign investments.

Wholesale Cross Border Payments involve high-value transactions among financial institutions, corporates, and governments. These payments are critical for: (i) trade and commerce (including import and export); (ii) interbank settlements for foreign exchange and derivative trading; and (iii) government to government transactions, often tied to international aid or agreements. 

Retail Cross Border Payments

Retail cross-border payments in India refer to smaller financial transactions made by individuals or businesses for goods, services, or remittances across international borders. These payments typically involve lower amounts compared to wholesale payments and are commonly used for e-commerce purchases, international remittances, and payments for services like travel, education, and online subscriptions.

Retail Cross Border Payments cater to smaller-scale transactions and include: (i) remittances; (ii) person-to-business payments (for e-commerce, online services or overseas educational expenses); and (iii) business-to-business payments between SMEs and international suppliers or partners.

Benefits of Cross Border Payments in India

• Access to international markets: Reduces complexity related to international fund transfer, enabling accessibility on a real time basis 
• Cost savings: cross-border payment methods can be more cost effective than others, allowing businesses to save money on transaction fees, currency exchange rates, and other related costs
• Increased revenue and growth opportunities: By selling goods and services internationally, businesses can increase their revenue and tap into new growth opportunities.

Features of Cross-Border Payments in India

• Currency Exchange: Cross-border payments often require conversion of local currency (INR) into foreign currencies like USD, EUR, or GBP, making foreign exchange a critical aspect of these transactions.
• Regulatory Framework: The Reserve Bank of India (RBI) plays a pivotal role in regulating and overseeing cross-border payment systems in the country. These regulations ensure transparency, security, and compliance with international financial standards.
• Payment Systems: Platforms such as SWIFT, NEFT, and RTGS are commonly used for cross-border transactions. The introduction of Blockchain technology and Real-Time Gross Settlement (RTGS) systems is further streamlining these payments in India.

Key Roadblocks

• Regulatory compliances: Applicable laws, rules and procedures vary in every jurisdiction. As such, compliances may become challenging to follow. 
• Currency conversion risks: When conducting business in foreign currencies, companies are exposed to the risk of fluctuating exchange rates 
• Fraud and security risks: Lack of stringent laws to regulate banking institutions leads to organized criminals target vulnerabilities at certain banks in certain jurisdictions to use them to access wider networks.

RBI Guidelines on Cross Border Payments

India’s cross-border payment framework is heavily regulated by the Reserve Bank of India (RBI) to ensure transparency, compliance, and the safe movement of funds. This brings fintech platforms engaged in cross border payments within its ambit as well, and includes any Authorized Dealer (AD) banks, Payment Aggregators (PAs), and PAs-CB involved in the processing of cross-border payment transactions. 

The important guidelines include:

1. Payment Aggregators and Payment Gateways Regulation (2020)¹:
   • Payment aggregators (PAs) and gateways facilitating cross-border transactions must comply with stringent governance and net-worth criteria.
   • PAs must ensure robust security measures and grievance redressal mechanisms.
   • Latest Regulatory Update: Non-bank entities providing cross-border services must have a net worth of ₹25 crore by March 2026.

2. Liberalized Remittance Scheme (LRS):
   • Under the LRS, resident individuals can remit up to USD 250,000 annually for investments, travel, education, and gifting.
   • Facilitates individual access to global markets and services².

3. Foreign Exchange Management Act (FEMA):
   • FEMA governs the compliance of foreign exchange transactions, ensuring alignment with anti-money laundering (AML) and Know Your Customer (KYC) norms.
   • Supports smooth cross-border fund transfers under permissible categories.

4. Additional Measures:
   • Mandatory reporting of cross-border transactions through authorized dealer banks.
   • RBI approval required for startups and entities dealing with large-scale cross-border payments.

Indian Landscape for Cross Border Payments

India has witnessed a digital payments revolution. The ubiquitous Unified Payments Interface (UPI) has transformed domestic transactions, boasting transaction values reaching INR 200 lakh crore in FY 23-24³. Some notable achievements include:

1. Unified Payments Interface (UPI) Expansion:

• UPI-PayNow is a cross-border connection between India’s Unified Payments Interface (UPI) and Singapore’s PayNow that allows for real-time, cost-effective money transfers between the two countries. The UPI-PayNow collaboration with Singapore sets the stage for India’s digital payment system to gain global recognition⁴.
• Cross-border UPI integration is expected to reduce transaction costs and enable real-time remittances.

2. Real Time Payment Systems (RTPs):

• With transaction volumes projected to grow annually by 35.5%⁵, real-time systems are set to revolutionize cross-border payments, ensuring near-instant settlements.

3. FinTech Innovations:

• FinTech platforms are driving efficiency by offering competitive rates, lower transaction fees, and enhanced transparency⁶.
• Blockchain technology, used by companies like Ripple, is becoming a preferred tool for secure and cost-efficient transactions⁷.

4. RegTech Advancements: 

• Regulatory technology (RegTech) simplifies compliance by automating reporting and monitoring requirements for cross-border transactions⁸.

Benefits and Challenges to the Road Ahead

Benefits

Challenges

Access to Global Markets: Simplifies international trade by enabling seamless fund transfers. Cost Efficiency: Innovative payment solutions minimize transaction and currency conversion costs. Real-Time Transparency: Enhanced traceability and updates instill confidence among users. Financial Inclusion: Expands access to global banking services for individuals and SMEs.

Regulatory Complexity: Different jurisdictions impose diverse regulations, complicating compliance for businesses. Frequent updates to laws add to the burden on smaller players. Currency Volatility: Exchange rate fluctuations can erode transaction values, especially for high-volume transfers. Fraud and Security Risks: Vulnerabilities in the global payment ecosystem make cross-border transactions a target for cybercriminals. Infrastructure Gaps: Disparities in payment processing systems across countries can delay transaction settlement.

Future of Cross Border Payments

The future of India’s cross-border payment landscape hinges on leveraging cutting-edge technology and regulatory collaboration. Some promising developments include:

• Increased Collaboration: Partnerships like UPI-PayNow will set the blueprint for India’s integration with global real-time payment networks.
• Blockchain Adoption: Blockchain is likely to drive down costs and enhance transparency for high-value wholesale payments.
• Improved User Experience: With streamlined platforms and reduced costs, businesses and individuals will enjoy faster, simpler transactions.

What to Expect for Individuals and Businesses

• Faster and Cheaper Transactions: With advancements in technology and regulations, expect faster settlement times and potentially lower fees for cross-border payments.
• Greater Transparency: Improved traceability and real-time transaction updates will enhance transparency, giving users more control over their money.
• More Payment Options: A wider range of payment options, including mobile wallets and digital platforms, will cater to different user preferences.
  

Conclusion

India’s cross-border payment ecosystem is at a transformative juncture, with innovations in digital payments, blockchain, and RegTech paving the way for a more secure and efficient system. The RBI’s guidelines ensure compliance and transparency, while collaborations like UPI’s global integration promise to enhance India’s footprint in the global economy. While challenges remain, the combined efforts of the government, regulatory bodies, and innovative fintech companies promise a future of faster, more affordable, and user-friendly cross-border transactions. This will not only benefit businesses but also empower individuals to participate more actively in the global economy. All in all, India is poised to lead the next wave of cross-border payment innovations, empowering businesses and individuals to thrive in a connected world. 

Frequently Asked Questions for Cross Border Payments

1. What are cross-border payments, and why are they significant?

Cross-border payments refer to financial transactions between parties in different countries. They are crucial for international trade, remittances, and global financial cooperation, connecting businesses, governments, and individuals worldwide.

2. What are the primary types of cross-border payments?

• Wholesale Payments: High-value transactions between financial institutions, corporations, and governments, such as interbank settlements and international trade payments.
• Retail Payments: Smaller transactions including remittances, e-commerce payments, and person-to-business or business-to-business payments.

3. What are the benefits of cross-border payments?

• Access to global markets for businesses and individuals.
• Cost efficiency with competitive transaction fees and exchange rates.
• Increased revenue opportunities through international sales.
• Real-time transparency and enhanced trust among users.

4. What challenges are associated with cross-border payments?

• Regulatory Complexity: Diverse compliance requirements across jurisdictions.
• Currency Volatility: Risks due to fluctuating exchange rates.
• Fraud Risks: Vulnerabilities to cybercrime and inadequate security measures.
• Infrastructure Gaps: Inefficient systems in certain regions delaying settlements.

5. How does the RBI regulate cross-border payments in India?

The Reserve Bank of India (RBI) ensures compliance and security through:

• Payment Aggregators and Gateways Regulation (2020): Enforcing governance and security standards.
• Liberalized Remittance Scheme (LRS): Allowing individuals to remit up to USD 250,000 annually for investments, travel, and education.
• Foreign Exchange Management Act (FEMA): Regulating foreign exchange transactions and adhering to anti-money laundering (AML) norms.

6. How has UPI impacted cross-border payments in India?

UPI’s domestic success is now extending globally:

• UPI-PayNow Collaboration: Enables seamless, real-time, and low-cost transfers between India and Singapore.
• Global Expansion: Expected to reduce transaction costs and enhance the efficiency of cross-border payments.

7. What technological advancements are driving cross-border payments?

• Blockchain Technology: Ensures secure, cost-efficient transactions for wholesale payments.
• Real-Time Payment Systems (RTPs): Facilitates near-instant settlements.
• RegTech Innovations: Automates compliance and reporting for smoother operations.

8. What are the RBI guidelines for startups and businesses handling cross-border payments?

Startups and businesses must:

• Report all cross-border transactions via authorized dealer banks.
• Obtain RBI approval for large-scale cross-border payment activities.
• Ensure adherence to AML and KYC norms.
  

References:

1. [1] https://www.rbi.org.in/commonman/English/scripts/Notification.aspx?Id=724 
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2. [2] https://pib.gov.in/PressReleasePage.aspx?PRID=2057013 
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3. [3] https://pib.gov.in/PressReleasePage.aspx?PRID=2057013 
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4. [4] https://pib.gov.in/PressReleasePage.aspx?PRID=2057013 
   ↩︎
5. [5] https://www.fsb.org/uploads/P211024-1.pdf 
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6. [6] https://www.pwc.in/assets/pdfs/consulting/financial-services/fintech/point-of-view/pov-downloads/the-evolving-landscape-of-cross-border-payments.pdf 
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7. [7] https://ibsintelligence.com/blogs/fintech-revolutionises-cross-border-payments-fueling-indias-rise-in-global-trade/ 
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8. [8] https://www.pwc.in/assets/pdfs/cross-border-payment-aggregatorsregulations-and-business-use-cases.pdf 
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What is Market Size?

Simply put, market size refers to the total number of potential customers/buyers for a product or service and the revenue they may generate. The broad concept of “market sizing” is broken down further into the following sets in order to estimate what the total potential market is, vis-a-vis the realistic goals that the business can set by determining what is achievable and what can be potentially captured:

(i) TAM – Total Addressable Market 

(ii) SAM – Serviceable Available Market

(iii) SOM – Serviceable Obtainable Market

What is ‘Total Addressable Market’ (TAM)?

TAM represents the total demand or revenue opportunity available for a product or service, in a specific market. It refers to the total market size without any consideration for competition or market share. TAM is an estimation of the maximum potential for a particular product or service if there were no constraints or limitations.

Remember: TAM represents the total market size!

What is ‘Serviceable Available Market’ (SAM)?

SAM is a subset of the TAM and represents the portion of the total market that a business can realistically target and serve with its products or services. It takes into account factors such as geographical restrictions, customer segmentation, and the company’s ability to reach and effectively serve a specific segment of the market.

Remember: SAM represents the market that is within the reach of a business given its resources, capabilities, and strategy.

What is ‘Serviceable Obtainable Market’ (SOM)?

SOM represents a portion of the SAM that a business can realistically capture or obtain. It takes into account the company’s competitive landscape, market share goals, and its ability to effectively position and differentiate itself in the market – i.e., the unique selling point of this business.

Remember: SOM represents the market share or percentage of the SAM that a business can potentially capture.

How is Market Sizing Determined?

Market sizing can be determined using either: (i) Top Down Approach; or (ii) Bottom Up Approach:

(i) Top Down Approach

The Top Down Approach starts with the overall market size (TAM) and then progressively narrows it down to estimate the target market or the company’s potential market share. This method typically utilizes existing industry reports, market research data, and macroeconomic indicators to make assumptions and calculations.

Steps for Top Down Approach :

1. Identify Total Market Size (i.e. TAM) based on market research and publicly available information;
2. Determine the relevant segments and target customer base for Company’s products and service out of the total market (i.e. SAM); and
3. Estimate the percentage of serviceable market portion (SAM) that can be realistically captured and serviced (i.e. SOM).

When to adopt Top Down Approach: Useful and feasible when comprehensive and exhaustive industry data and market research reports are readily available.

(ii) Bottom Up Approach

When detailed market data or industry research reports are not readily or easily available, a Bottom Up Approach to market sizing can be followed. It is more granular in nature and starts with a data driven approach. A bottom up analysis is a reliable method because it relies on primary market research to calculate the TAM estimates. It typically uses existing data about current pricing and usage of a product.

Why to adopt Bottom Up Approach: The advantage of using a bottom up approach is that the company can explain why it selected certain customer segments and left out others. The company might be required to conduct its own market study and research for this purpose.

Formula and Examples: Calculation of TAM, SAM and SOM

Facts and Assumptions

Identify specific customer segments or target markets. Let’s consider three hypothetical segments – Segment A, Segment B, and Segment C:

Particulars	A	B	C
Number of potential customers	10,000	5,000	500
Estimated average revenue per customer	$500	$2,000	$10,000
Segment Market Size	$5,000,000	$10,000,000	$5,000,000
TAM	$20,000,000

Calculation of segment market size: number of potential customers x average revenue per customer

Total market size = market size of Segment A + market size of Segment B + market size of Segment C.

Calculation of SAM and SOM

SAM –  Represents the portion of TAM that a company can effectively target with its products of services.

SAM = TAM x (Market Penetration Percentage/100)

Market Penetration Percentage is the estimated percentage of the TAM that the business can realistically serve based on its resources and capabilities. 

SOM – Represents the portion of the SAM that a business can realistically capture or obtain.

SOM = SAM x (Market Share Percentage/100)

Market Share Percentage is the estimated percentage of the SAM that the business can capture based on its competitive advantage, brand strength and market positioning.

Illustration: Mepto’s Market Size Analysis

This illustrative analysis provides a clear roadmap for Mepto (online grocery delivery startup) to strategically plan its market entry, marketing initiatives, and growth strategies within the competitive landscape of online grocery shopping in India:

Particulars	%	Details
Target Cities – Major indian cities with high online shopping adoption		Mumbai, Delhi, Bangalore, Gurgaon, Noida and Hyderabad
Estimated Urban households		5 million
Average Monthly Household Spend on Groceries		INR 6,000
Average Annual Household Spend on Groceries		INR 72,000
Annual Market Potential – Mepto’s TAM	100%	INR 360 billion(5,000,000 x 72,000)
Online Shopping Penetration – Mepto’s SAM	50%	INR 180 billion(10% of INR 360 billion)
Realistic Market Share (due to competition from players like BigBasket, BlinkIt, Swiggy Instamart and other quick commerce startups) Mepto’s SOM	10%	INR 18 billion(10% of INR 180 billion)

Conclusion

Market sizing is fundamentally, an analytical exercise to: (i) firstly determine the total available market size (TAM); (ii) secondly determine the serviceable market that can be realistically targeted (SAM); and (iii) lastly determine the serviceable obtainable market that can be realistically captured (SOM), by a business. This is a critical exercise to determine the viability of a business venture, the potential revenue and the existing competition that would impact the portion of the market size a particular business is able to achieve.  

It is crucial that businesses understand the fundamentals of market sizing in order to effectively market their products and services.

Frequently Asked Questions on Market Size

1. What is market size, and why is it important?

Market size refers to the total number of potential customers and the revenue they might generate for a product or service. It’s vital for businesses to understand their target audience, estimate potential revenue, and set achievable growth goals.

2. What do TAM, SAM, and SOM stand for, and how do they differ?

• TAM (Total Addressable Market): Represents the total market demand for a product or service without any limitations.
• SAM (Serviceable Available Market): The portion of TAM that a business can realistically target based on its resources and strategy.
• SOM (Serviceable Obtainable Market): The share of SAM that a business can capture, considering its competitive positioning and market dynamics.

3. How is the Total Addressable Market (TAM) calculated?

TAM is calculated by multiplying the total number of potential customers by the average revenue per customer. It estimates the overall revenue opportunity for a market.

4. What is the significance of SAM in market sizing?

SAM helps businesses identify the realistic portion of the market they can target, factoring in geographical restrictions, customer segmentation, and operational capabilities.

5. What methods can be used for market sizing?

• Top-Down Approach: Starts with the overall market size (TAM) and narrows it down to SAM and SOM using market reports and existing data.
• Bottom-Up Approach: Builds estimates from primary data, focusing on detailed insights about customer segments and pricing.

6. Which approach—Top-Down or Bottom-Up—is better for market sizing?

• Use the Top-Down Approach when comprehensive industry data is available.
• Opt for the Bottom-Up Approach when detailed market research is needed, as it provides granular insights and data-driven estimates.

7. How is the Serviceable Obtainable Market (SOM) determined?

SOM is calculated by applying a company’s market share percentage to the SAM. This calculation considers competitive factors, brand strength, and the business’s positioning.

8. Can you provide an example of TAM, SAM, and SOM calculation?

Consider a grocery delivery startup targeting urban households:

• TAM: Total households × annual spend on groceries.
• SAM: TAM × online shopping penetration percentage.
• SOM: SAM × expected market share percentage.

9. Why is market sizing critical for businesses?

Market sizing helps in:

Assessing competition and identifying target customer segments.

Evaluating the feasibility of a business venture.

Understanding potential revenue opportunities.

Introduction to Trademark Registration in India

In today’s competitive market, building a strong brand identity is vital for success. It is in this context that trademarks become a critical asset to distinguish a business’ products or services from others, ensuring they stand out and are instantly recognizable to a consumer. Consequently, protection of the trademark through trademark registration in India is a crucial step for businesses aiming to protect their brand identity and establish legal ownership over their logos, names, and symbols – all of which constitute intellectual property of the business. As a result, whether it’s a logo, name, slogan, or unique design, registering a trademark provides legal protection against infringement of intellectual property and legitimizes the brand’s ownership of such intellectual property.

In India, the process of registering a trademark is governed by the Trade Marks Act, 1999, and is overseen by the Trade Marks Registry. The Trade Marks Registry was established in 1940, and was followed by the passing of the Trademark Act in 1999. The Head Office of the Trade Marks Registry is located in Mumbai and regional offices in Ahmedabad, Chennai, Delhi, and Kolkata.

A registered trademark offers exclusive rights of use to the owner, preventing unauthorized use of the mark by others and providing a legal mechanism to pursue recourse against infringement. Additionally, registration helps avoid potential legal conflicts or claim of the mark by a third party, and protects the business from unfair competition.

The answer to question – How to Register Trademark in India? is relatively straightforward, but it requires careful attention to detail to ensure compliance with legal requirements. It involves several steps, including a trademark search, filing the application, examination, publication, and ultimately the issuance of the registration certificate. Throughout this process, it is crucial to ensure that the trademark is distinct, does not conflict with existing marks, and is used in a way that is representative of the business’ activities.

What is Trademark Registration?

Trademark registration is a legal process that grants exclusive rights to a brand or business to use a specific mark, symbol, logo, name, or design to distinguish its products or services from others in the market. A registered trademark becomes an integral part of a company’s intellectual property portfolio, offering both legal protection and a competitive edge.

In India, trademarks are governed by the Trade Marks Act, 1999, which provides the framework for registering, protecting, and enforcing trademark rights. 

Definition of a Trademark

A trademark is a distinct sign, symbol, word, or combination of these elements that represents a brand and differentiates its offerings from others. Trademarks are not just limited to logos or names; they can include slogans, colors, sounds, or even packaging styles that uniquely identify a product or service. In India, trademarks are protected under the Trade Marks Act, 1999, offering exclusive rights to the owner.

For example:

• The golden arches of McDonald’s are a globally recognized logo trademark.
• The tagline “Just Do It” is an example of a registered “wordmark” by Nike.

Trademarks are classified into 45 trademark classes, which group various goods and services to streamline the registration process. Businesses must choose the relevant class that aligns with their offerings during registration.

Intellectual Property Rights Symbols and Their Significance: ™, ℠, ®

Understanding the symbols associated with trademarks is crucial for businesses and consumers alike:

1. ™ (Trademark):
   • This symbol indicates that the mark is being used as a trademark, but it is not yet registered.
   • It signifies intent to protect the brand and discourages misuse.
2. ℠ (Service Mark):
   • Used for service-based businesses to highlight unregistered marks.
   • Common in industries like hospitality, consulting, and IT services.
3. ® (Registered Trademark):
   • Denotes that the trademark is officially registered with the government.
   • Provides legal protection and exclusive rights to use the mark in its registered category.

Using the correct symbol helps businesses communicate their trademark status while deterring infringement and ensuring legal enforceability.

Importance of Trademark Registration

Trademark registration is essential for businesses looking to secure their brand identity. It ensures legal protection and provides exclusive rights to the owner to use the mark for their goods or services. Key reasons why trademark registration is important include:

1. Brand Protection: Prevents competitors from using similar names, logos, or designs that could mislead customers.
2. Legal Recognition: Grants official ownership under Indian law, ensuring your rights are safeguarded.
3. Customer Trust: A trademark adds credibility to your brand, making it easier for customers to identify and trust your products or services.
4. Asset Creation: Registered trademarks are intangible assets that can be licensed, franchised, or sold for business growth.
5. Global Reach: Trademark registration in India can facilitate international trademark recognition, helping businesses expand globally.

Benefits of Registering a Trademark in India

The benefits of trademark registration extend beyond legal protection. Here are the key advantages:

1. Exclusive Rights: Registration provides exclusive rights to the owner, ensuring the trademark cannot be legally used by others in the registered class.
2. Competitive Edge: A trademark helps establish a distinct identity in the market, giving your business a competitive advantage.
3. Prevention of Infringement: Protects against unauthorized use of your brand name, logo, or design.
4. Market Goodwill: Builds trust and goodwill with customers, enhancing brand loyalty.
5. Ease of Business Expansion: A registered trademark facilitates licensing or franchising, opening doors for business growth.
6. Strong Legal Position: In the event of disputes, a registered trademark provides a strong legal standing.

Brief Overview of the Trademark Registration Process in India

The procedure for trademark registration in India is systematic and straightforward. Here’s a quick overview:

1. Trademark Search: Conduct a trademark registration search to ensure the desired trademark is unique and not already registered.
2. Application Filing: Submit the trademark application online or offline with all required documents, including ID proofs, business registration details, and the logo (if applicable).
3. Examination and Review: Authorities review the application and may raise objections, which must be addressed within the stipulated time.
4. Publication: The trademark is published in the Trademark Journal, allowing for public objections.
5. Approval and Registration: If no objections are raised or resolved satisfactorily, the trademark is approved and the trademark registration certificate is issued.

Registering a trademark not only provides legal protection but also secures your brand’s future, ensuring long-term growth and recognition in the market.

Types of Trademarks in India

Trademarks in India are categorized into general and specific types, each serving different purposes to protect distinct aspects of a brand’s identity.

General Trademarks

1. Generic Mark: Refers to common terms or names that describe a product or service. These marks are not eligible for registration as they lack uniqueness (e.g., “Milk” for dairy products).
2. Suggestive Mark: Indicates the nature or quality of the goods or services indirectly, requiring imagination to connect with the product (e.g., “Netflix” suggests internet-based flicks).
3. Descriptive Mark: Describes the product or service but must acquire distinctiveness to qualify for registration (e.g., “Best Rice”).
4. Arbitrary Mark: Uses common words in an unrelated context, making them distinctive (e.g., “Apple” for electronics).
5. Fanciful Mark: Invented words with no prior meaning, offering the highest level of protection (e.g., “Google”).

Specific Trademarks

1. Service Mark: Identifies and protects services rather than goods (e.g., logos of consulting firms).
2. Certification Mark: Indicates that the product meets established standards (e.g., ISI mark).
3. Collective Mark: Used by a group of entities to signify membership or collective ownership (e.g., “CA” for Chartered Accountants).
4. Trade Dress: Protects the visual appearance or packaging of a product, such as color schemes or layouts (e.g., Coca-Cola bottle shape).
5. Sound Mark: Protects unique sounds associated with a brand (e.g., the Nokia tune).

Other types include Pattern Marks, Position Marks, and Hologram Marks, which add further layers of protection to unique brand elements.

Who can Apply for Trademark?

Anyone can apply for trademark registration, including individuals, companies, and LLPs. The person listed as the applicant in the trademark registration form will be recognized as the trademark owner once the registration is complete. This process allows businesses and individuals to protect their brand identity under trademark law.

Procedure for Online Trademark Registration in India

Trademark registration in India involves a detailed and systematic process that ensures legal protection for your brand. Below is a step-by-step guide to the procedure:

Step 1: Choose a Unique Trademark and Conduct a Trademark Registration Search

• Begin by selecting a unique and distinctive trademark that effectively represents your brand. It could be a logo, wordmark, slogan, or even a combination of elements.
• Ensure your trademark aligns with your business’s trademark class. There are 45 classes under which trademarks can be registered:
  • Classes 1-34 cover goods.
  • Classes 35-45 cover services.
• Conduct a trademark registration search using the Controller General of Patents, Designs, and Trademarks’ online database. This ensures your chosen mark isn’t already in use or similar to an existing trademark, avoiding potential objections or rejections.

Step 2: Prepare and Submit the Application (Online/Offline)

• Application Form: File Form TM-A, which allows registration for one or multiple classes.
• Required Documents:
  • Business Registration Proof (e.g., GST certificate or incorporation document).
  • Identity and address proof of the applicant (e.g., PAN, Aadhaar).
  • A clear digital image of the trademark (dimensions: 9 cm x 5 cm).
  • Proof of claim, if the mark has been used previously in another country.
  • Power of Attorney, if an agent is filing on your behalf.
• Filing Options:
  • Manual Filing: Submit the form at the nearest Trademark Registry Office (Delhi, Mumbai, Kolkata, Chennai, or Ahmedabad).
    • Acknowledgment takes 15-20 days.
  • Online Filing: Faster and efficient, with instant acknowledgment via the IP India portal (https://ipindia.gov.in/).

• Government Fees for Trademark Registration (as on date):
  • ₹4,500 (e-filing) or ₹5,000 (manual filing) for individuals, startups, and small businesses.
  • ₹9,000 (e-filing) or ₹10,000 (manual filing) for others.

Step 3: Verification of Application and Documents

• The Registrar of Trademarks examines the application to ensure compliance with the Trademark Act of 1999 and relevant guidelines.
• If any issues arise, such as incomplete information or similarity with an existing mark, the Registrar raises an objection and sends a notice to the applicant.
• Applicants must respond to objections within the stipulated timeframe, providing justifications or additional documentation.

Step 4: Trademark Journal Publication and Opposition

• Once cleared, the trademark is published in the Indian Trademark Journal, inviting public feedback.
• Opposition Period:
  • Third parties have four months to file an opposition if they believe the trademark conflicts with their rights.
  • If opposition arises, both parties present their evidence, and the Registrar conducts a hearing to resolve the matter.

Step 5: Approval and Issuance of Trademark Registration Certificate

• If there are no objections or oppositions (or they are resolved), the Registrar approves the trademark.
• A Trademark Registration Certificate is issued, officially granting the applicant the right to use the ® symbol alongside their trademark.

Additional Points to Note

• The entire trademark registration process in India can take 6 months to 2 years, depending on the objections or oppositions.
• During the registration process, you can use the ™ symbol to indicate a pending trademark application. Once the certificate is issued, switch to the ® symbol, denoting a registered trademark.

By following this step-by-step guide, businesses can protect their brand, build trust, and enjoy exclusive rights to their trademark in India. Ensure proper documentation and legal assistance for a smoother registration process.

Documents Required for Trademark Registration in India

To successfully register a trademark in India, specific documents must be submitted. These documents establish the applicant’s identity, business details, and trademark uniqueness. Here’s a concise list with key details:

1. Business Registration Proof

• Sole Proprietorship: GST Certificate or Business Registration Certificate.
• Partnership Firm: Partnership Deed or Registration Certificate.
• Company/LLP: Incorporation Certificate and Company PAN card.

2. Identity and Address Proof

• Individuals/Sole Proprietors: PAN Card, Aadhaar Card, or Passport.
• Companies/LLPs: Identity proof of directors/partners and registered office address proof.

3. Trademark Representation

• A clear digital image of the trademark (logo, wordmark, or slogan) with dimensions of 9 cm x 5 cm.

4. Power of Attorney (Form TM-48)

• A signed Power of Attorney authorizing an agent or attorney to file the trademark application.

5. Proof of Prior Usage (If Applicable)

• Evidence such as invoices, advertisements, or product labels showing prior use of the trademark.

6. Udyog Aadhaar or MSME Certificate

• Required for startups, small businesses, and individuals to avail reduced trademark registration fees.

7. Class-Specific Details

• Declaration of the class of goods or services (from 45 available trademark classes).

8. Address Proof of Business

• Recent utility bills, lease agreements, or ownership documents as proof of the business location.

By ensuring all these documents for trademark registration are complete and accurate, applicants can avoid delays and simplify the registration process. Proper documentation is key to protecting your brand identity in India.

Costs and Fees for Trademark Registration in India

Understanding of the costs involved in trademark registration in India is needed for businesses and individuals planning to protect their intellectual property. Here’s a detailed breakdown:

1. Government Fees for Trademark Registration (as on date)

• Individuals, Startups, and Small Enterprises:
  • ₹4,500 for e-filing.
  • ₹5,000 for physical filing.
• Others (Companies, LLPs, etc.):
  • ₹9,000 for e-filing.
  • ₹10,000 for physical filing.

2. Additional Costs for Professional Services

• Hiring a trademark attorney or agent may involve additional charges depending on the complexity of the application and services provided.

3. Factors Affecting Trademark Registration Costs

• Number of Classes: Registering under multiple trademark classes increases the fees.
• Type of Trademark: Filing for a collective trademark or series mark incurs higher costs.
• Opposition Proceedings: If objections are raised, handling opposition can add to the expenses.

Planning your trademark registration carefully can help you manage costs effectively while ensuring maximum protection for your brand.

How to Check Trademark Registration Status

After filing your application, it’s essential to monitor its status regularly to avoid delays. Here’s how you can do it:

1. Online Methods to Check Trademark Status

• Visit the official website of the Controller General of Patents, Designs, and Trademarks.
• Navigate to the “Trademark Status” option or visit https://tmrsearch.ipindia.gov.in/eregister/eregister.aspx .
• Enter your application number or trademark details.
• View the current status, including examination, opposition, or registration updates.

2. Common Reasons for Delays

• Incomplete Documentation: Missing or incorrect documents can lead to processing delays.
• Objections or Oppositions: Objections raised by the Trademark Office or third-party oppositions require resolution, prolonging the process.
• Backlog at Trademark Office: High volume of applications can slow down the approval process.

3. Resolving Delays

• Ensure that all documents are complete and accurate during submission.
• Respond promptly to objections or opposition notices.
• Seek professional assistance to expedite the process.

By staying informed about the trademark registration status and addressing issues proactively, you can secure your trademark efficiently and avoid unnecessary complications.

Common Grounds for Refusal of Trademark Registration in India

When applying for trademark registration in India, the application may be refused based on certain grounds. It’s essential to understand these absolute grounds for refusal to avoid issues during the process.

1. Absolute Grounds for Refusal

These are the reasons that may lead to the rejection of a trademark application even if no other parties oppose it. They include:

• Lack of Distinctiveness: A trademark must be unique and capable of distinguishing the goods or services of one entity from another. Generic or descriptive marks are often refused.
• Deceptive or Misleading Marks: Trademarks that mislead consumers about the nature or quality of the goods or services are not eligible for registration.
• Conflict with Public Order or Morality: Trademarks that go against public morality or religious beliefs can be refused.
• Confusion with Existing Trademarks: Trademarks that are too similar to an already registered mark or a pending application will be rejected.

2. Examples of Trademarks That May Be Rejected

• Descriptive Marks: For example, “Sweet Cake” for a bakery.
• Generic Terms: Words like “Apple” for computer-related products or “Coffee” for coffee-related services.
• Marks That Resemble Flags, Emblems, or National Symbols: Trademarks that resemble state or national flags or symbols.

By understanding these grounds, applicants can avoid common mistakes and improve their chances of approval.

Renewing a Trademark in India

Once your trademark is registered, it remains valid for a specific period. However, it must be renewed to continue enjoying protection under the law.

1. Validity Period of a Trademark

In India, a trademark is valid for 10 years from the date of registration. After this period, the trademark owner must renew the registration to maintain its exclusive rights.

2. Procedure and Timeline for Trademark Renewal

• Filing for Renewal: The application for renewal must be filed before the expiration of the 10-year validity period. It can be done within 6 months before or after the expiration date.
• Online Filing: The process can be done through the official website of the Controller General of Patents, Designs, and Trademarks. You need to fill out the appropriate form (Form TM-R) and pay the renewal fees.
• Timeline: The renewal process is typically completed within 1–2 months, depending on the workload of the Trademark Office.

3. Costs Involved in Trademark Renewal

• The renewal fees for individuals, startups, and small businesses are typically ₹4,500 for e-filing and ₹5,000 for physical filing.
• For companies, LLPs, and other organizations, the renewal fees are ₹9,000 for e-filing and ₹10,000 for physical filing.

By renewing your trademark on time, you ensure continued protection and exclusive rights to your brand name and logo in India. Regular renewal is key to maintaining the integrity of your intellectual property and protecting your business identity.

Hence, trademark registration in India is essential for businesses aiming to protect their intellectual property and strengthen their brand presence. Registering a trademark provides exclusive rights to your brand name, logo, or symbol, preventing unauthorized use and offering legal protection. The trademark registration process is simple, starting with a trademark search, followed by filing an application and addressing any objections or oppositions. Renewing your trademark ensures ongoing protection and secures your brand’s identity for years to come. With trademark registration in India, businesses, whether startups or established companies, can build trust, create valuable assets, and safeguard their brand in the competitive market.

Frequently Asked Questions (FAQs) on Trademark Registration in India

1. Is trademark registration mandatory in India?
No, trademark registration is not mandatory in India. However, registering your trademark provides several benefits, such as legal protection, exclusive rights to use the mark, and the ability to take legal action in case of infringement. It also prevents others from using a similar mark and adds value to your brand by enhancing its credibility.

2. Who can apply for trademark registration in India?
Any individual, business entity, or legal entity claiming to be the proprietor of the trademark can apply for registration. The application can be filed either on a “used” or “proposed to be used” basis. Trademark applications can be filed online through the official IP India portal or at one of the regional trademark offices located in Delhi, Mumbai, Ahmedabad, Kolkata, or Chennai.

3. What are the benefits of trademark registration in India?
Trademark registration offers exclusive rights to use the trademark for the registered goods or services. It protects your brand from unauthorized use, provides legal backing in case of infringement, and allows you to use the ™ and ® symbols. It also enhances brand recognition and helps in building a trustworthy reputation in the market.

4. How long does it take to register a trademark in India?
Trademark registration in India typically takes between 8-15 months. This duration may vary depending on the complexity of the case and whether any objections or oppositions are raised during the process. If there are no complications, registration is usually completed within this time frame.

5. What documents are required for trademark registration in India?
Key documents required include a clear representation of the trademark (logo or wordmark), proof of business registration, identity and address proof (e.g., PAN, Aadhaar), and relevant certificates (for startups or small enterprises). If filing through an agent, a Power of Attorney may also be required.

6. How much does trademark registration cost in India?
The trademark registration fee varies based on the type of applicant. For individuals, startups, and small enterprises, the fee is ₹4,500 for e-filing and ₹5,000 for physical filing. For others, the fee is ₹9,000 for e-filing and ₹10,000 for physical filing. Additional professional fees may apply if you choose to hire legal assistance.

7. Where do I apply for trademark registration in India?
Trademark registration applications can be submitted online through the official IP India website or filed at one of the regional trademark offices in Delhi, Mumbai, Ahmedabad, Kolkata, or Chennai. E-filing provides instant acknowledgment, while physical filing may take 15-20 days to receive acknowledgment.

8. Why should I register my trademark if it’s not mandatory?
Although not mandatory, trademark registration offers several advantages, including legal protection, exclusive rights to your mark, and the ability to use the ® symbol. It also boosts your brand’s credibility and safeguards your intellectual property against infringement.

9. What is the typical timeline for trademark registration in India?
Trademark registration generally takes 8-15 months in uncomplicated cases. However, if objections or oppositions arise, the process may take longer due to the need to resolve these issues.

10. How can I check the status of my trademark registration application?
You can easily check the status of your trademark registration online through the IP India website. It will provide updates on the status of your application, including any objections or progress on its approval.

11. What are common reasons for the refusal of trademark registration?
Trademarks may be refused on absolute grounds if they are too generic, descriptive, offensive, or conflict with an already registered trademark. Marks that lack distinctiveness or mislead the public may also face rejection by the authorities.

12. How do I renew my trademark in India?
Trademark registration in India is valid for 10 years. To renew your trademark, you need to file a renewal application before the expiry date and pay the renewal fee. Renewing your trademark on time ensures continued protection of your intellectual property rights.

In today’s competitive business landscape, protecting intellectual property is crucial for building a strong brand and maintaining a competitive edge. Trademark registration is one of the most effective ways to safeguard your brand’s identity, ensuring that it remains unique and protected from infringement. In India, where the economy is booming with startups, small businesses, and large corporations alike, understanding the importance of trademark registration is paramount.

What is a Trademark?

A trademark is a unique symbol, word, phrase, logo, design, or combination thereof that identifies and distinguishes the goods or services of one entity from others. It is a vital aspect of branding and helps create a distinct identity in the minds of consumers.

For instance, iconic logos like the golden arches of McDonald’s or the swoosh of Nike are registered trademarks that symbolize their respective brands globally. Similarly, Indian brands like Tata, Reliance, and Flipkart rely heavily on trademarks to maintain their market dominance and consumer trust.

Why is Trademark Registration Important in India?

1. Legal Protection Against Infringement

Trademark registration provides legal protection under the Trademarks Act, 1999. If another business attempts to use your registered trademark without authorization, you can take legal action against them. This protection ensures that your brand’s identity remains intact and safeguarded.

2. Exclusive Rights

A registered trademark grants the owner exclusive rights to use the trademark for the goods or services it represents. It also prevents competitors from using similar marks that could confuse consumers.

3. Brand Recognition and Goodwill

A trademark acts as an asset that enhances brand recognition and builds consumer trust. Over time, a strong trademark becomes synonymous with quality and reliability, which contributes to long-term goodwill.

4. Market Differentiation

In a saturated market, a trademark helps distinguish your products or services from those of competitors. It establishes your brand’s unique identity and strengthens customer loyalty.

5. Asset Creation

A registered trademark is an intangible asset that can be sold, licensed, or franchised. This adds financial value to your business, making it an attractive proposition for investors or partners.

6. Global Expansion

Trademark registration in India can serve as the foundation for international trademark registration under treaties like the Madrid Protocol. This is especially important for businesses planning to expand globally.

Consequences of Not Registering a Trademark

Failure to register a trademark can expose your business to several risks:

• Risk of Infringement: Without registration, proving ownership of a trademark becomes challenging.
• Brand Dilution: Competitors might use similar marks, leading to loss of distinctiveness and consumer trust.
• Limited Legal Remedies: Unregistered trademarks are harder to defend in court.
• Missed Opportunities: A lack of trademark protection can hinder global expansion plans.

Steps to Register a Trademark in India

1. Trademark Search: Conduct a thorough search to ensure that the trademark is unique and not already registered by someone else.
2. Application Filing: Submit a trademark application with the necessary details, including the logo, class of goods or services, and owner details.
3. Examination: The Trademark Registry examines the application to ensure compliance with legal requirements.
4. Publication: The trademark is published in the Trademark Journal to invite objections, if any.
5. Registration Certificate: If no objections are raised, or if objections are resolved, the trademark is registered, and a certificate is issued.

Costs and Duration

Trademark registration in India is a cost-effective process. The official fees depend on the nature of the applicant, with reduced fees for startups, individuals, and small businesses. The registration process typically takes 12-18 months, but the protection is valid for 10 years and can be renewed indefinitely.

Key Industries Benefiting from Trademark Registration

1. E-commerce and Retail: Trademarks protect brand identity in a highly competitive digital marketplace.
2. Pharmaceuticals: Ensures safety and trust by preventing counterfeit products.
3. Technology Startups: Safeguards innovations and unique business models.
4. Food and Beverage: Builds trust and loyalty through distinctive branding.

Conclusion

Trademark registration is not just a legal formality but a strategic move to protect and enhance your brand’s value. In a thriving economy like India, securing a trademark ensures that your brand stands out, builds trust, and enjoys long-term growth.

Investing in trademark registration today is a step toward safeguarding your business’s future. Don’t wait for competitors to claim what’s rightfully yours. Secure your brand’s identity and take it to new heights with the power of trademarks. If you’re ready to register your trademark or need expert guidance, reach out to Treelife for a consultation today.

Introduction to Trademarks

A trademark is a unique term, symbol, logo, design, phrase, or a combination of these elements that distinguishes a business’s products or services from those of its competitors in the market. Trademarks can take the form of text, graphics, or symbols and are commonly used on company letterheads, service banners, publicity brochures, and product packaging. By creating a distinct identity, trademarks play a vital role in building customer trust, enhancing brand recognition, and establishing a competitive edge.

As a form of intellectual property, a trademark grants its owner the exclusive rights to use the registered term, symbol, or design. No other individual, company, or organization can legally use the trademark without the owner’s consent. If unauthorized use occurs, the trademark owner can take legal action under the Trade Marks Act of 1999.

Registering your trademark as per trademark classification not only safeguards your brand identity but also prevents third parties from using it without authorization. It is a straightforward process in India, allowing businesses to protect their intellectual property and ensure their products or services stand out in the market.

Trademarks are categorized into various classes based on the goods or services they represent. Understanding the classification system is crucial to ensure proper protection. In this article, we will explore the legal framework for trademarks, the classification system, and the online tools available to identify the correct trademark class for your registration.

Background of Trademarks in India

The Trade Marks Registry, established in 1940, administers trademark regulations under the Trademarks Act of 1999 in India. This Act aims to protect trademarks, regulate their use, and prevent infringement. Registering a trademark is essential for businesses to safeguard their name, reputation, and goodwill, as well as to strengthen brand identity and build customer trust. Trademarks can be in the form of graphics, symbols, text, or a combination, commonly used on letterheads, service banners, brochures, and product packaging to stand out in the market.

The Trade Marks Registry has offices in Mumbai, Ahmedabad, Chennai, Delhi, and Kolkata to handle trademark applications. To apply for protection, businesses must classify their products or services under the NICE Classification (10th edition), a global system that ensures clarity in trademark registration.

The importance of trademark classification was emphasized in the Nandhini Deluxe v. Karnataka Co-operative Milk Producers Federation Ltd. (2018) case, where the Supreme Court clarified that visually distinct trademarks for unrelated goods or services are not “deceptively similar” and may be registered, even if they fall under the same class.

What is a Trademark Class?

Trademark classes are the categories into which goods and services are classified under the NICE Classification (NCL), an internationally recognized system created by the World Intellectual Property Organization (WIPO). This classification system is essential for businesses seeking trademark registration, as it ensures that each trademark application accurately reflects the nature of the goods or services it represents.

Types of Trademark Classes

The NICE Classification divides goods and services into 45 distinct trademark classes:

• Goods: Classes 1 to 34.
  Goods type trademark classes, numbered 1 to 34, categorize products based on their nature. ¹ This classification system helps businesses protect their brands by ensuring clear identification and preventing confusion in the marketplace.
• Services: Classes 35 to 45.
  Trademark classes 35-45 are dedicated to services, ranging from advertising and business management to education, healthcare, and legal services.

Each class represents a specific category of goods or services. For example: Class 13 for Firearms and explosives. Class 36 for Financial and insurance services.

How to Choose the Right Trademark Class?

When filing a trademark application, the applicant must carefully select the correct class that corresponds to the goods or services their business offers. This choice is crucial for avoiding potential trademark infringement and conducting effective trademark searches. During the trademark registration process, specifying the trademark classes or categories of products and services for which the trademark will be used is essential. It defines the mark and determines its usage in the industry, acting as an identifier for the mark. Choosing the right category and classification for a trade name is highly beneficial. The applicant can also apply for protection of the same mark under multiple classes if applicable.

Services are typically identified from the alphabetical list provided, using the divisions of operations indicated in the headers and their explanatory notes. For instance, rental facilities are categorized in the same class as the rented items.

Multiple Classes for Comprehensive Protection

Applicants can file for trademark protection under multiple classes if their goods or services span across different categories. For example, a business dealing in both clothing (Class 25) and retail services (Class 35) should register under both classes to ensure complete coverage.

Importance of Trademark Classification

The significance of a trademark class search to safeguarding a business’ intellectual property and brand cannot be overstated. In 2018, the Hon’ble Supreme Court highlighted the significance of categorizing trademarks under different classes in a landmark case involving the popular dairy brand “Nandhini Deluxe”¹ in Karnataka. The court observed that two visually distinct and different marks cannot be called deceptively similar, especially when they are used for different goods and services. The Court also concluded that there is no provision of law that expressly prohibits the registration of a trademark which is similar to an existing trademark used for dissimilar goods, even when they fall under the same class.

Benefits of Classification

• Preventing Conflicts: Using a trademark class search makes it easier to find already-registered trademarks that could clash with your intended mark. This averts any legal conflicts and expensive lawsuits.
• Registration Success: You increase the likelihood of a successful registration by classifying your trademark correctly. The possibility of being rejected by the trademark office is reduced with an appropriate categorization.
• Protection of Brand Identity: You may operate with confidence knowing that your brand is protected within your industry by registering it in the correct class.
• Market Expansion: When your company develops, you may use a well-classified trademark to launch additional goods and services under the same way.

Trademark Classification List

The trademark class list consists of two types :-  

1. Trademark Classification for Goods 
2. Trademark Classification for Services

1. Trademark Classification for Goods

This trademark registration class of goods contains 34 classes.

• If a final product does not belong in any other class, the trademark is categorized according to its function and purpose. 
• Products with several uses can be categorized into various types based on those uses. 
• The categories list is classified according to the mode of transportation or the raw materials if the functions are not covered by other divisions. 
• Based on the substance they are composed of, semi-finished goods and raw materials are categorised. 
• When a product is composed of many components, it is categorized according to the substance that predominates.

2. Trademark Classification for Services

This trademark registration class of services contains 10 classes.

• The trademark class for services is divided into branches of activity. The same categorization applies to rental services. 
• Services connected to advice or consultations are categorized according to the advice, consultation, or information’s subject.

Search Trademark Classes in India

List of Trademark Classes of Goods in India (1-34 Classes)

Trademark Class	Description
Trademark Class 1	Chemicals used in industry, science, and photography.
Trademark Class 2	Paints, varnishes, lacquers, and preservatives against rust.
Trademark Class 3	Cleaning, polishing, scouring, and abrasive preparations.
Trademark Class 4	Industrial oils, greases, and fuels (including motor fuels).
Trademark Class 5	Pharmaceuticals and other preparations for medical use.
Trademark Class 6	Common metals and their alloys, metal building materials.
Trademark Class 7	Machines, machine tools, and motors (except vehicles).
Trademark Class 8	Hand tools and implements, cutlery, and razors.
Trademark Class 9	Scientific, photographic, and measuring instruments.
Trademark Class 10	Medical and veterinary apparatus and instruments.
Trademark Class 11	Apparatus for lighting, heating, and cooking.
Trademark Class 12	Vehicles and parts thereof.
Trademark Class 13	Firearms and explosives.
Trademark Class 14	Precious metals and jewelry.
Trademark Class 15	Musical instruments.
Trademark Class 16	Paper, stationery, and printed materials.
Trademark Class 17	Rubber, gutta-percha, and plastics in extruded form.
Trademark Class 18	Leather and imitation leather goods.
Trademark Class 19	Non-metallic building materials.
Trademark Class 20	Furniture and furnishings.
Trademark Class 21	Household utensils and containers.
Trademark Class 22	Ropes, string, nets, and tarpaulins.
Trademark Class 23	Yarns and threads for textile use.
Trademark Class 24	Textiles and textile goods.
Trademark Class 25	Clothing, footwear, and headgear.
Trademark Class 26	Lace, embroidery, and decorative textiles.
Trademark Class 27	Carpets, rugs, mats, and floor coverings.
Trademark Class 28	Toys, games, and sporting goods.
Trademark Class 29	Meat, fish, poultry, and other food products.
Trademark Class 30	Coffee, tea, spices, and other food products.
Trademark Class 31	Agricultural, horticultural, and forestry products.
Trademark Class 32	Beers, mineral waters, and soft drinks.
Trademark Class 33	Alcoholic beverages (excluding beers).
Trademark Class 34	Tobacco, smokers’ articles, and related products.

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List of Trademark Classes of Services in India (35-45 Classes)

Trademark Class	Description
Trademark Class 35	Business management, advertising, and consulting services.
Trademark Class 36	Financial, banking, and insurance services.
Trademark Class 37	Construction and repair services.
Trademark Class 38	Telecommunications services.
Trademark Class 39	Transport, packaging, and storage services.
Trademark Class 40	Treatment of materials and manufacturing services.
Trademark Class 41	Education, training, and entertainment services.
Trademark Class 42	Scientific and technological services, including IT.
Trademark Class 43	Food, drink, and temporary accommodation services.
Trademark Class 44	Medical, beauty, and agricultural services.
Trademark Class 45	Legal services, security services, and social services.

Online Tools available for Classifying Trademarks

Classifying products and services accurately is a crucial step in the trademark registration process in India. Several reliable online tools are available to simplify the trademark categories listing process:

1. NICE Classification Tool: Developed by the World Intellectual Property Organization (WIPO), this tool provides a comprehensive guide to the classification of goods and services under the NICE system.
2. TMclass Tool: Offered by the European Union Intellectual Property Office (EUIPO), TMclass helps users determine the appropriate trademark class for their goods or services with ease.

Trademark classification is vital for the Trademark Registry to understand the scope of the trademark, its market segment, and the target audience it aims to address. It establishes the trademark’s value in the competitive market and serves as a unique identifier for the registrant.

Conclusion

Trademark classification is a foundational step in the trademark registration process, ensuring that a business’s intellectual property is accurately categorized and effectively protected. By adhering to the NICE classification system, businesses can prevent conflicts, enhance brand identity, and expand their market presence with confidence. Proper classification streamlines the registration process, minimizes legal risks, and safeguards brand equity. As trademarks play a pivotal role in defining a company’s market presence, leveraging expert guidance for classification is vital for long-term success.

FAQs on Trademark Classification in India

1. What is trademark classification, and why is it important?

Trademark classification is a system that organizes goods and services into 45 specific categories under the NICE classification. It is essential for ensuring accurate registration, avoiding conflicts, and securing protection for a business’s intellectual property in its relevant industry.

2. How are goods and services categorized under trademark classification?

Goods fall under the first 34 classes, and services fall under classes 35 to 45. The classification is based on the function, purpose, or material of the goods and the activity or purpose of the services.

3. Why is trademark classification essential during the registration process?

Proper classification:

• Helps prevent conflicts by identifying existing trademarks that may clash with the new mark.
• Ensures the trademark application is correctly filed, reducing the likelihood of rejection.
• Protects brand identity by categorizing trademarks accurately within their industry.

4. Can a trademark be registered under multiple classes?

Yes, businesses can register their trademark under multiple classes if their goods or services span across different categories. This ensures comprehensive protection.

5. What tools are available for trademark classification in India?

The following online tools are helpful:

• NICE Classification Tool by the World Intellectual Property Organization (WIPO).
• TMclass Tool by the European Union Intellectual Property Office.

6. How does trademark classification help prevent legal conflicts?

By conducting a trademark class search, businesses can identify existing trademarks in the same category and avoid conflicts, reducing the risk of legal disputes and costly lawsuits.

7. What is the significance of the NICE classification system?

The NICE classification, created by the World Intellectual Property Organization (WIPO), standardizes the categorization of goods and services worldwide. It streamlines trademark registration processes and ensures consistency.

8. What are the benefits of correct trademark classification?

• Prevention of Conflicts: Avoids disputes by identifying existing trademarks in the same class.
• Enhanced Brand Identity: Safeguards the brand within its industry.
• Streamlined Registration: Increases the likelihood of successful trademark registration.
• Market Expansion: Facilitates the introduction of new products and services under the same brand.

9. What happens if someone infringes my registered trademark?

• You can take legal action to stop the infringement and seek damages.
• Registration makes legal enforcement easier and more effective.

10. Where can I find more information and resources on trademark registration?

• The Controller General of Patents, Designs and Trademarks website: https://ipindia.gov.in/
• Start-up India resources: https://www.startupindia.gov.in/
• Consult a trademark attorney for personalized guidance.

References:

1. [1]  Nandhini Deluxe v Karnataka Co-operative Milk Producer Federation Ltd. 2018 (9) SCC 183
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Introduction

In the dynamic world of corporate finance, the buyback of shares has emerged as a significant tool for companies to optimize their capital structure and reward shareholders. Simply put, a buyback of shares happens when a company repurchases its own shares from the market or its shareholders, usually at a higher price than issue. This action reduces the number of outstanding shares, effectively consolidating ownership and potentially enhancing shareholder value. Consequently, buyback of shares is subject to strict legal frameworks.

The concept of buyback of shares plays a pivotal role in India’s evolving corporate landscape, where businesses increasingly use this mechanism as an exit strategy to strengthen investor confidence and showcase financial stability. Whether you’re an investor keen on maximizing returns or a company exploring strategic financial moves, understanding the meaning and relevance of buybacks is crucial.

What is Buyback of Shares?

Definition and Meaning

A buyback of shares is a corporate action whereby a company reacquires its own outstanding shares from the market or existing shareholders. This reduces the number of shares available in the market, thereby increasing the proportional ownership of remaining shareholders and often boosting key financial metrics like Earnings Per Share (EPS).

Example:
Imagine a company has 1,000 outstanding shares, and its total profit is ₹1,00,000. The Earnings Per Share (EPS) would be ₹100 (₹1,00,000 ÷ 1,000 shares). If the company repurchases 200 shares through a buyback, the outstanding shares are reduced to 800. The EPS now becomes ₹125 (₹1,00,000 ÷ 800 shares), which enhances the value for the remaining shareholders.

Importance of Buyback of Shares for Companies and Investors

In India, buybacks have gained prominence due to their dual benefits:

For Companies

1. Enhanced Financial Ratios:
   A buyback increases EPS by reducing the number of shares in circulation, which can improve the perception of the company’s profitability.
2. Efficient Use of Surplus Cash:
   Companies with excess reserves often prefer buybacks over dividends, as it avoids tax on dividends and optimizes shareholder returns.
3. Signaling Confidence:
   By repurchasing its shares, a company conveys that its stock is undervalued, boosting market confidence and stabilizing share prices during volatility.
4. Capital Structure Optimization:
   Companies use it to optimize their capital structure under the regulatory framework of the Companies Act, 2013, and SEBI guidelines.

For Investors

1. Opportunity for Higher Returns:
   Shareholders participating in a buyback often receive a premium over the prevailing market price, providing an attractive exit option.
2. Ownership Consolidation:
   Fewer shares outstanding mean that each share represents a larger ownership stake in the company, benefiting long-term investors.
3. Tax Benefits:
   Shareholders may find buybacks more tax-efficient compared to receiving dividends, especially in jurisdictions with high dividend taxes.
4. Market Perception:
   A buyback of equity shares is often perceived as a positive move, signaling that the company is confident about its future prospects.

The primary reasons behind a buyback include:

• Reducing the number of outstanding shares to increase Earnings Per Share (EPS).
• Signaling confidence in the company’s intrinsic value.
• Utilizing surplus cash in a tax-efficient manner.
• Providing investors with an exit mechanism (especially when no other exit options are consummated).

Buybacks are commonly executed in the Indian securities market, including by corporate giants like Infosys Ltd., Tata Consultancy Services Ltd., and Wipro Ltd., emphasizing their importance in today’s financial ecosystem. The buyback of shares in India is a confidence-building measure for all stakeholders involved. This is not just a tactical financial decision; it is also a tool for strengthening a company’s relationship with its investors. From improving financial ratios to boosting shareholder value, the buyback of shares meaning extends beyond just repurchasing shares it reflects a company’s commitment to optimizing its capital structure and instilling market confidence.

Reasons for Buyback of Shares 

The buyback of shares has become a popular financial strategy for companies seeking to strengthen their market position and enhance shareholder value. Here are the key reasons for buyback of shares and the strategic benefits they offer:

1. Efficient Use of Surplus Cash

One of the primary reasons for buyback of shares is to utilize surplus cash reserves effectively. Instead of letting idle cash accumulate, companies use buybacks as a way to reinvest in their own stock. This helps optimize their capital structure and deliver returns to shareholders. This strategy is derived from limitations prescribed under the Indian law as to the source of funds for the buyback of securities by a company.

Example: If a company has significant cash reserves but limited high-yield investment opportunities, a share buyback is a strategic way to deploy that excess cash.

Benefits of Buyback of Shares:

• Avoids inefficient use of capital.

2. Boosting Earnings Per Share (EPS)

Reducing the number of outstanding shares through a buyback directly impacts a company’s EPS. A higher EPS often attracts investors by signaling improved profitability and financial health.

Example: A company earning ₹10,00,000 annually with 1,00,000 shares outstanding, results in an EPS of ₹10. If the company buys back 20,000 shares, the EPS increases to ₹12.5 (₹10,00,000 ÷ 80,000 shares).

Benefits:

• Enhances shareholder value.
• Improves valuation metrics like Price-to-Earnings (P/E) ratio.

3. Indicating Stock Undervaluation

A buyback often signals that the company believes its stock is undervalued in the market. By repurchasing shares, the company reinforces confidence in its intrinsic value, which can help stabilize or boost stock prices.

Strategic Decision: This move not only supports the share price during market downturns but also builds investor trust.

4. Strengthening Market Perception

Buybacks are seen as a positive indicator of a company’s financial strength, particularly in case of public listed companies. Investors interpret this move as a vote of confidence from the management about the company’s future growth and profitability.

Benefits:

• Improves investor sentiment.
• Attracts long-term investors.

5. Adjusting Capital Structure

Companies often aim to maintain an optimal balance between equity and debt. A buyback helps reduce equity capital, leading to better leverage ratios and overall financial efficiency.

Strategic Financial Decision: By reducing equity, companies can enhance returns on equity (ROE) and improve their capital structure for sustainable growth.

6. Preventing Hostile Takeovers

In some cases, public listed companies use buybacks as a defensive strategy to reduce the number of shares available in the market. This limits the potential for hostile takeovers by external entities. Buyback can also be offered as an exit strategy for investors in order to ensure that the share capital is brought back into the company, and not sold to a third party buyer – especially when such a move would be strategically advantageous for the company.

Example: By repurchasing shares, the company consolidates ownership and control, strengthening its position against unwanted acquisitions.

Types of Buyback of Shares

The buyback of shares can be executed in different ways, depending on the company’s objectives and regulatory requirements. Under law, buyback can be executed through: (i) open market; (ii) tender offers; (iii) odd lots; and (iv) purchase of ESOP or sweat equity options. Of these, the most commonly used methods are Open Market Buybacks and Tender Offer Buybacks. Each has its own procedures, advantages, and implications for companies and shareholders. Let’s explore these types and compare them to understand their strategic significance.

1. Open Market Buybacks

In an open market buyback, a company repurchases its shares directly from the stock exchange. The process is gradual, with the company buying shares over a specified period, depending on market conditions and availability.

How They Work:

• The company announces a buyback plan specifying the maximum price and the total number of shares it intends to repurchase.
• Shares are bought back at prevailing market prices.
• The process can extend over several months to achieve the desired share quantity.

Key Features:

• Flexible and cost-efficient.
• Shareholders are not obligated to sell their shares.

Example: A company like TCS or Infosys may execute an open market buyback to boost shareholder value and stabilize stock prices over time.

Critical Conditions for Buyback of Shares:

• Must comply with SEBI regulations for listed companies.
• A maximum of 25% of the total paid-up capital and free reserves can be used for buybacks in a financial year.

2. Tender Offer Buybacks

In a tender offer buyback, the company offers to buy shares directly from its existing shareholders at a specified price, which is usually at a premium to the market price.

How They Work:

• The company issues a public offer, inviting shareholders to tender (sell) their shares.
• Shareholders can choose to accept or reject the offer.
• Once the buyback is completed, the tendered shares are canceled, reducing the total outstanding shares.

Advantages of Tender Offers:

• Offers a premium price, making it attractive to shareholders.
• Ensures a quicker and more predictable process compared to open market buybacks.

Example: Wipro conducted a tender offer buyback, providing shareholders with a lucrative exit option while optimizing its capital structure.

Critical Conditions for Buyback of Shares:

• Companies must ensure that the buyback price is fair and justifiable.
• Shareholders holding equity in dematerialized form must tender shares electronically.

Comparison: Open Market Buybacks vs. Tender Offer Buybacks

Aspect	Open Market Buybacks	Tender Offer Buybacks
Execution Method	Shares purchased gradually via stock market.	Shares purchased directly from shareholders.
Price Offered	Market price at the time of purchase.	Premium price fixed by the company.
Timeframe	Extended period, often months.	Limited duration, usually a few weeks.
Shareholder Participation	Voluntary, no obligation to sell.	Voluntary, but a direct invitation.
Cost Efficiency	Cost-effective due to market-driven pricing.	Higher cost due to premium pricing.

Legal Framework and Procedure for Buyback of Shares in India

The buyback of shares in India is governed by a well-defined regulatory framework to ensure transparency, fairness, and compliance. The key regulations include provisions under the Companies Act, 2013 and guidelines from the Securities and Exchange Board of India (SEBI). Here’s a detailed overview of the legal framework and the step-by-step process for buybacks in India.

Legal Framework: Companies Act, 2013 and SEBI Regulations

1. Companies Act, 2013
   • Section 68 of the Companies Act, 2013 primarily governs the buyback of shares by a company, read with Rule 17 of the Share Capital and Debenture Rules, 2014. 
   • Companies can buy back shares out of:
     • Free reserves;
     • Securities premium account; or
     • Proceeds of any earlier issue of shares. No proceeds from an earlier issue of shares / securities of the same kind that are sought to be bought back can be used.
   • The buyback must not exceed 25% of the total paid-up share capital in a financial year.
   • The company is required to follow certain corporate processes in this regard, including obtaining approval of the buyback by the board of directors and/or the shareholders (as may be required). 
   • Company cannot make a buyback offer for a period of one year from the date of the closure of the preceding offer of buy-back.
   • For a period of 6 months, no fresh issue of shares is allowed.
   • Post buyback the debt equity ratio cannot exceed 2:1.
2. SEBI Regulations
   • SEBI (Buyback of Securities) Regulations, 2018 govern buybacks for listed companies.
   • Companies must file a public announcement with SEBI before initiating a buyback.
   • The buyback price must be justified, and adequate disclosures must be made to protect investor interests.

Step-by-Step Process for Buybacks in India

1. Board Approval

• The Board of Directors discusses and approves the buyback proposal.
• For buybacks exceeding 10% of paid-up capital and free reserves, shareholder approval is required through a special resolution.
• The buyback should be completed within a period of 1 year from the date of such resolution passed.

2. Public Announcement

• In case of a public listed company, the company makes a public announcement detailing:
  • The buyback price.
  • The number of shares to be repurchased.
  • The timeline and reasons for the buyback.

3. Filing with SEBI

• Listed companies file the offer document with SEBI within five working days of the public announcement.

4. Appointment of Intermediaries

• In case of a listed company, a merchant banker shall be appointed to oversee the buyback process and ensure compliance with SEBI regulations.

5. Execution of Buyback

• Open Market Buyback:
  • The company purchases shares through stock exchanges at prevailing market prices.
• Tender Offer Buyback:
  • Shareholders tender their shares electronically through their broker.

6. Completion and Reporting

• After completing the buyback, the company extinguishes the repurchased shares.
• A compliance certificate is submitted to SEBI within seven days of the buyback closure.

7. Filing with ROC/MCA

• Through the buyback process, the company will also be required to file certain forms with the Registrar of Companies (under Ministry of Corporate Affairs) including Form SH-8 (where a special resolution has been passed), Form SH-9 (declarations by the directors including managing director), Form SH-10 (statutory register), Form SH-11 (return of buyback) and a compliance certificate in Form SH-15.

How to Apply for Buyback of Shares Online

For shareholders looking to participate in a buyback of shares of a public listed company, this can be pursued online:

1. Check Buyback Details:
   • Review the company’s public announcement to understand the buyback price, eligibility criteria, and timeline.
2. Tender Shares via Broker:
   • Log in to your trading account.
   • Navigate to the corporate actions section.
   • Select the buyback offer and enter the number of shares you wish to tender.
3. Confirmation and Settlement:
   • After submitting your application, you will receive a confirmation.
   • If accepted, the buyback amount will be credited to your bank account within the stipulated timeline.

Taxability and Financial Implications of Buyback of Shares

Understanding the tax on buyback of shares is crucial for both companies and investors, as it impacts the overall financial outcome of the transaction. The tax implications for buybacks differ depending on whether the shares are listed or unlisted. Under the Income Tax Act, 1961, share buybacks historically attracted company-level buyback taxation, exempting shareholders from buyback tax liability. However, effective October 1, 2024, the regime has shifted the buyback taxation regime to the proceeds in the hands of shareholders.

1. Tax on Buyback of Shares for Companies

• Previous Regime:

• Companies were liable to pay a buyback tax under Section 115QA at an effective rate of 23.296%, including surcharge and cess.
• Shareholders were exempt from tax on buyback proceeds under Section 10(34A).
• Current Regime (Post-October 2024):

• The buyback tax under Section 115QA has been abolished.
• Companies must now deduct Tax Deducted at Source (TDS) on buyback proceeds: (i) 10% TDS for resident shareholders; and (ii) TDS at applicable rates under Section 195 for non-residents, considering relevant DTAA benefits.

• Example: If a company buys back shares worth ₹10 lakh from a resident shareholder, it must deduct ₹1 lakh (10% TDS) before disbursing the amount.

2. Tax on Buyback of Shares for Investors

• Tax Treatment for Shareholders:

• The proceeds are now treated as deemed dividend under Section 2(22)(f) and taxed under “Income from Other Sources.”
• Tax rates applicable to the shareholder’s income slab apply to the buyback proceeds.
• No Deductions Allowed:
• As per Section 57, shareholders cannot claim deductions for any expenses incurred in relation to the buyback.

• Example: If a shareholder in the 30% tax slab receives ₹10 lakh in buyback proceeds, they will pay ₹3 lakh as tax.

3. Capital Gain on Buyback of Shares

While buybacks now fall under the “deemed dividend” category, their impact on capital gains is significant:

• Capital Loss Recognition:

• Shareholders can declare the original cost of the bought-back shares as a capital loss since the consideration for capital gains computation is deemed NIL.
• This loss can be carried forward for 8 assessment years and set off against future capital gains.
• Financial Implications:
• Shareholders with a substantial cost base may face capital losses, impacting their overall tax position in future years.

• Example: If a shareholder purchased shares for ₹5 lakh and sold them back under buyback, they could recognize a ₹5 lakh capital loss to offset against future gains.

Financial Implications

1. For Companies:
   • Eliminating the buyback tax reduces the immediate tax burden but increases compliance due to TDS requirements.
2. For Shareholders:
   • Taxing proceeds as deemed dividends may result in higher tax liabilities, particularly for those in higher income brackets.
   • The introduction of capital loss provisions adds complexity but can be leveraged for long-term tax planning.

The tax on buyback of shares plays a significant role in determining the financial viability of a buyback for companies and its attractiveness to investors. 

Advantages and Disadvantages of Buyback of Shares

Advantages of Buyback of Shares

1. Increase in Shareholder Value
   • A buyback reduces the total number of outstanding shares, boosting key financial metrics like Earnings Per Share (EPS).
   • This leads to higher valuations and returns for long-term investors.
2. Signal of Undervalued Stock
   • Companies repurchase shares to signal that their stock is undervalued, restoring investor confidence and stabilizing prices.
3. Efficient Use of Surplus Funds
   • Instead of letting idle cash accumulate, companies use buybacks to optimize their capital structure and reward shareholders.

Key Benefits:
The advantages of buyback of shares include enhanced shareholder returns, improved financial ratios, and positive market perception.

Disadvantages of Buyback of Shares

1. Misallocation of Funds
   • Companies may prioritize buybacks over investing in growth opportunities, potentially harming long-term profitability.
2. Impact on Liquidity
   • Large buybacks can strain a company’s cash reserves, reducing financial flexibility in times of need.
3. Short-Term Focus
   • Buybacks may artificially inflate stock prices, prioritizing short-term gains over sustainable growth.

Key Concerns:
The disadvantages of buyback of shares revolve around potential financial strain, taxation liability on shareholders and missed investment opportunities.

Dividend vs. Share Buyback: Key Differences Explained

Dividends and share buybacks are two common methods companies use to return value to their shareholders, but they have distinct characteristics. Dividends involve the direct distribution of a company’s profits to all shareholders, typically on a regular basis, and are taxed at multiple levels. In contrast, share buybacks occur when a company repurchases its own shares, reducing the number of outstanding shares, which can potentially increase the earnings per share (EPS) and the stock price. While dividends offer immediate income to shareholders, buybacks are seen as a signal of undervalued stock and efficient capital use. The tax treatment of buybacks is more favorable, as they are subject to a single tax on the company’s earnings, unlike dividends, which face taxes at both the corporate and shareholder levels.

Aspect	Dividend	Share Buyback
Definition	A portion of a company’s earnings distributed to all shareholders.	A company repurchases its own shares from shareholders.
Beneficiaries	All existing shareholders.	Shareholders who choose to sell their shares back to the company.
Effect on Share Count	The total number of outstanding shares remains unchanged.	The total number of outstanding shares decreases.
Frequency	Often periodic (e.g., annual, quarterly) or special in nature.	Typically irregular and less common in markets like India.
Tax Treatment	Taxed at multiple levels (e.g., corporate tax, dividend tax for high earners).	Taxed through a buyback tax paid by the company (20% in India), with no further tax for shareholders.
Signal to Market	Indicates stable profits and cash flow.	Can signal undervalued stock or efficient use of surplus cash.
Types	Various types (e.g., regular, special, one-time).	No distinct types; generally a single mechanism.
Impact on Shareholder Value	Provides immediate income to shareholders.	Increases earnings per share (EPS) and potentially share price over time.

Wrapping things up, the buyback of shares in India is a vital corporate strategy that allows companies to repurchase their own shares from shareholders, offering various advantages like boosting earnings per share (EPS) and signaling confidence in the company’s valuation. The process involves adhering to legal frameworks such as the Companies Act, 2013, and SEBI regulations. Buybacks can be carried out through open market purchases or tender offers, with both having distinct implications for companies and investors. The tax treatment of buybacks in India is relatively favorable, with capital gains tax applicable on the sale of shares, making it a tax-efficient alternative to dividends. Understanding the reasons, types, legal requirements, and taxability of buybacks is essential for investors and companies to leverage this tool effectively in their financial strategies

Frequently Asked Questions (FAQs) on the Buyback of shares in India

1. What is a buyback of shares in India?

A buyback of shares in India refers to the process where a company repurchases its own shares from the existing shareholders, typically through the open market or a tender offer. This can help improve the company’s financial structure, enhance shareholder value, or use excess cash.

2. Why do companies buy back their shares?

Companies buy back shares to increase the value of remaining shares, improve financial ratios like earnings per share (EPS), return surplus cash to shareholders, or signal confidence in the company’s future performance.

3. How does a buyback of shares affect shareholders?

Shareholders may benefit from a buyback if the company repurchases shares at a premium, leading to an increase in the stock’s market value. However, if a shareholder’s shares are bought back, they will no longer hold those shares.

4. What are the different types of buyback of shares in India?

In India, buybacks can be conducted through:

• Open Market Buyback: Shares are purchased from the open market.
• Tender Offer Buyback: Shareholders are invited to offer their shares back to the company at a fixed price.
• Book Building Buyback: A price range is set, and shareholders can offer their shares within that range.

5. What are the tax implications of a buyback of shares in India?

Effective October 1, 2024, the Finance Act, 2024, abolished the buyback tax under Section 115QA. Instead, the proceeds received by shareholders during a buyback are taxed as deemed dividends under Section 2(22)(f) and taxed in the hands of shareholders under “Income from Other Sources”.

6. What are the advantages of a share buyback for a company?

A share buyback offers several advantages, including a reduction in the number of outstanding shares, an increase in earnings per share (EPS), enhanced shareholder value, and improved market perception of the company.

7. Can a company buy back its shares at any time?

A company can buy back shares only during specific windows or as per regulatory approvals. It must comply with the Companies Act, 2013 and/or guidelines from the Securities and Exchange Board of India (SEBI; as applicable) regarding the timing, method, and amount of buyback.

Introduction

One of the most discussed media and entertainment industry developments since early 2023 is the merger of the media assets of Reliance Industries’ (“RIL”; including JioCinema) with Disney India’s (“Disney”; including Disney+Hotstar)¹. The deal has continued to make headlines, with the latest being a series of developments in an enterprising case of ‘cybersquatting’ on the “JioHotstar.com” domain². In this #TreelifeInsights piece, we break down the core legal issues surrounding this JioHotstar dispute: what cybersquatting is, why it is considered an infringement of intellectual property rights, and what the legal ramifications of the developer’s actions are.  

Timeline

1. 2022 – Disney loses digital streaming rights for Indian Premier League to RIL’s Viacom18. Disney sees loss of subscriber revenue.
2. February 2024 – Disney and Viacom18 sign contracts; Viacom18 and Star India to be integrated into a JV reportedly valued at INR 70,352 crores (post money).
3. August 2024 – Competition Commission of India and NCLT approve the USD 8.5 billion merger.
4. October 2024 – Anonymous Delhi-based app developer reveals registration of “Jiohotstar.com” domain name; offers to sell to RIL in exchange for higher education funding. RIL responds threatening legal action. 
5. October 26, 2024 – Reports emerge that domain name has been sold to a UAE-based sibling duo involved in social work.
6. November 11, 2024 – UAE siblings reveal their refusal of sale of domain name; offers to legally transfer to RIL for free.

Legal Backdrop: Intellectual Property Rights

In order to better understand the implications of this ‘cybersquatting’, it is critical to recognise the intellectual property rights (‘IPR’) in question:

• Intellectual Property Rights (‘IPR’): legal right of ownership over the creation, invention, design, etc. of intangible property resulting from human creativity. A critical element to the protection of IPR is restraining other persons from using the protected material without the prior permission of the owner.
• Trademarks: a form of intellectual property referring to names, signs, or words that are a distinctive identifier for a particular brand in the market, protected in Indian law by Trade Marks Act 1999. 
• Domain names included in IPR: in today’s digital world, a web address that helps customers easily find the business/organization online – a domain – is also considered a brand that should be registered as a trademark to prevent misuse.
• Value: trademarks are a great marketing tool that make the brand recognizable to the consumers, and directly correlates to an increase in the financial resources of the business. 
• Consequences: breach of IPR can lead to monetary loss, reputational damage, operational disruptions or even loss of market access for a business. Infringement therefore attracts significant criminal and civil liability, as a means to dissuade unauthorized use and protect such IPR owners.

In this regard, the positions adopted by RIL and the developer are briefly set out below: 

What is Cybersquatting?

‘Cybersquatting’ or digital squatting refers to the action of individuals who register domain names closely resembling established brands, often with the intent to sell for profit or otherwise leverage for personal gain. Cybersquatting can take the following forms:

• Typo squatting/URL hijacking: Domains are purchased with a typographical error in the name of a well-known brand, with the intent to divert the target audience when they misspell a domain name. This could occur with an error as simple as “gooogle.com” instead of “google.com”.
• Identity Theft: Existing brand’s website is copied with the intent to confuse the target consumer. 
• Name Jacking: Impersonation of a celebrity/famous public figure on the internet (includes creating fake websites/accounts on social media claiming to be such public figure). 
• ‘Reverse’ Cybersquatting: False claim of ownership over a trademark/domain name and accusing the domain owner of cybersquatting. 

Cybersquatting can be used as a form of extortion, an attempt to take over business from a rival, or even to mislead/scam consumers, but there is no law in India that specifically addresses such acts of cybersquatting. Since domains are considered ‘trademarks’ under the law, use of a similar or identical domain would render an individual liable for trademark infringement³, in addition to any other liabilities that may be applicable from the perspective of consumer protection laws.   

Legal Treatment of Cybersquatting

Cybersquatting rose as an issue as more and more businesses began to realize the value of their online presence in the market. As the digital age unfolded, the Internet Corporation of Assigned Names and Numbers (ICANN) was founded in 1998 as a non-profit corporation based out of the United States with global participation. In 1999, the ICANN adopted the Uniform Domain Name Dispute Resolution Policy (UDRP) to set out parameters in which top level domain disputes are resolved through arbitration. It is important to note that the remedies available under UDRP are only cancellation or transfer of the disputed domain name and do not envisage monetary compensation for any loss suffered. This was ratified in India through the .IN Domain Name Dispute Resolution Policy (INDRP) which is available to all domains registered with .in or .bharat.

Procedure under ICANN/UDRP

1. File a Complaint: Approach a provider organization like the World Intellectual Property Organization (WIPO), Asian Domain Name Dispute Resolution Centre (ADNDRC), or the Arab Center for Dispute Resolution (ACDR). Complaints must demonstrate certain key elements.
2. Submissions: The respondent is notified of the complaint and UDRP proceedings initiated. Respondents are given 20 days to submit a response to the complaint defending their actions.
3. Ruling: A panel with 1 or 3 members is appointed to review the submissions and evaluate the complaint. The panel renders a decision within 14 days of the response submission deadline.
4. Implementation and Judicial Recourse: 10 day period is given to the losing party to seek judicial relief in the competent courts. The Registrar of ICANN will implement the panel’s decision on expiry of this period. Either party can seek to challenge the decision in a court of competent relief. The panel’s decision remains binding until overturned by a court order. 

Key Elements to a Successful Complaint of Cybersquatting

• Identical or Confusingly Similar Domain Name: The disputed domain name should be identical or confusingly similar to an established trademark or service mark to which the complainant has legal right of ownership;
• Lack of Legitimate Interest: The registrant of the domain name (i.e., the alleged squatter) should have no legitimate interest or right in the domain name; and 
• Bad Faith: The disputed domain name should be registered and being used in bad faith. 

Factors influencing the UNDRP Panel Review

• Disrupt Competitors: Intent of registrant was to disrupt the business of a competitor; 
• Sale/Transfer to Owner: Intent is to resell, transfer, rent or otherwise give right of use to the owner of the trademark; 
• Disrupt Reflection of Trademark: Intent is to disrupt the owner from reflecting their trademark in a corresponding domain name and whether a pattern of such conduct is observed by the domain name owner;
• Commercial Gain through Confusion: Intent is to attract internet users to the registrant’s website for commercial gain by capitalizing on the likelihood of confusion with the complainant’s trademark.

Remedies under Indian Law

As held by the Honorable Supreme Court of India, disputes on domain names are legally protected to the extent possible under the laws relating to passing off even if the operation of the Indian Trade Marks Act, 1999 is not extraterritorial (i.e., capable of application abroad). Thus, complainants of cybersquatting can pursue the standard reliefs available under the Trade Mark Act, 1999:

• Remedy for Infringement: Available only when the trademark is registered; 
• Remedy for Passing Off: Available even without registration of the trademark.

Notable Examples of Cybersquatting in India

With the evolution of the digital age, India has seen some notable judicial precedents that have shaped how cybersquatting is legally addressed:

Disputing Parties	Issue	Outcome of Dispute
Plaintiff: Yahoo!, Inc. v Defendant: Akash Arora4 Notable for: considered the first case of cybersquatting in India.	Defendant was using the domain name “YahooIndia.com” for internet-related services, with similar content and color scheme to “Yahoo.com”. As the registered owner of the “Yahoo.com” trademark, the plaintiffs sought restraining the defendant from using any deceptively similar trademark/ domain name.	The Court observed the degree of similarity of marks was vital for a passing off claim, and that in this case there is every possibility of the likelihood of confusion and deception being caused, leading a consumer to believe the two domains belong to the same owner, the plaintiffs.
Plaintiff: Aqua Minerals Limited v Defendants: Mr. Pramod Borse & Anr.5 Notable for: infringement of plaintiff’s registered trademark “Bisleri”.	Defendants registered the domain “www.bisleri.com” in their name and faced action for infringement of trademark claimed by the plaintiff, owner of registered trademark “Bisleri”.	The conduct of the defendants in quoting an exorbitant amount to sell the domain name to the trademark owner was held to be evidence of bad faith, and the defendants were held to have infringed the trademark. The plaintiff was allowed to seek transfer of the domain to their name.
Plaintiff: Sbicards.comvDefendants: Domain Active Property Ltd.6 Notable for: international dispute with an Australian entity.	The defendants had registered the domain name “sbicards.com” with the intent to sell for profit to the State Bank of India subsidiary at a later date.	Acknowledging the defendants’ business of purchase and sale of domain names through its website, WIPO ordered transfer of the domain to the plaintiffs.
Plaintiff: Kalyan Jewellers India Ltd.v Defendants: Antony Adams & Ors.7 Notable for: infringement of plaintiff’s registered trademarks “Kalyan”, “Kalyan Jewelers”.	Defendants registered the domain “www.kalyanjewlers.com” in their name and faced action for infringement of trademark claimed by the plaintiff, owner of registered trademark “Kalyan” and “Kalyan Jewelers”.	Initially advised by the WIPO to establish bad faith, the plaintiff filed a suit before Madras High Court, which held that there was an infringement of registered trademarks and restrained the defendant from using the same.
Plaintiff: Bundl Technologies Private LimitedvDefendants: Aanit Awattam alias Aanit Gupta & Ors.8 Notable for: infringement of Swiggy trademark	Plaintiff alleged infringement of registered trademark Swiggy, where the defendants were deceptively collecting money from consumers under the false pretext of bringing them on board the Swiggy Instamart platform.	Finding an infringement of trademark, GoDaddy.com LLC, a defendant, was additionally restrained from registering any domain with “Swiggy” in the name, but this was recalled by the Bombay High Court on the grounds that disallowing such registration would amount to a global temporary injunction, instead directing GoDaddy to inform the plaintiff where any application for such registration of domain name was received.

The JioHotstar Case

The registration of the domain name “JioHotstar” by the unnamed developer amounts to a textbook case of cybersquatting, for which relief can be pursued by RIL and/or Star Television Productions Limited (respectively, the registered owners of “Jio” and “Hotstar” trademarks), either under Trade Marks Act, 1999 or through ICANN/UDRP, relying on the following factors: 

• Confusing Similarity: The domain name is confusingly similar to the registered trademarks owned by RIL and Star respectively. Though the formal transfer of trademark has not happened, RIL can still rely solely on the Jio trademark to claim similarity of the mark⁹. A joint application can also be filed by RIL and Star, as this domain registration would amount to infringement of two separate registered marks; 
• Lack of Legitimate Interest: The message posted by the developer on the domain webpage makes it clear that there is no legitimate interest in the domain name to be held by the developer. There is no common reference in public to him by the brand name “JioHotstar” and his clear intent to sell the name for profit evidences a lack of legitimate interest; 
• Bad Faith Registration: The transparent intent of the developer to sell the name to profit from the merger and fund his education (i.e., personal gain) evidences a bad faith registration. This is further bolstered by his statement recalling the rebranding of music platform Saavn to ‘JioSaavn’ post the acquisition by RIL’s Jio, which motivated the application for and registration of the domain name¹⁰. Bad faith is also recognised within the UDRP itself, when the purpose of the domain name registration is to gain valuable consideration in excess of documented out of pocket costs related directly to the domain name¹¹.

Conclusion

Given the intent behind such domain registrations arousing JioHotstar controversy, cybersquatting typically targets established, reputed brands. In fact, the domain name “JioSaavn.com” was itself the subject of a domain name  dispute for cybersquatting in 2018¹². Though the merger had swiftly navigated regulatory challenges including conditional approval from the Competition Commission of India and clearances from the National Company Law Tribunal and the Ministry of Information and Broadcasting, the domain registration in an unrelated third party’s name serves to showcase the impact that issues such as cybersquatting can have on large scale mergers and acquisitions. The “noble” intent of the developer to use this registration to fund his education aside, the intent is still to leverage the registration for personal gain, thereby satisfying the conditions under law to establish bad faith registration and consequently, cybersquatting that amounts to an infringement of IPR. Interestingly, the domain registration has seemingly been transferred and the webpage now reflects the social service mission of two children in the UAE¹³. Given the now cross border nature of the dispute and the fact that Trade Marks Act, 1999 cannot be applied extraterritorially, the recourse available to RIL and/or Star to gain ownership of this domain would now be through the UDRP and prescribed dispute resolution mechanisms thereunder. However, in light of latest reports that the UAE siblings have offered to legally transfer the registration to RIL for free, it remains to be seen how this dispute will unfold.

NOTE: 

Recently, the domain “Jiostar.com” went live with a teaser message, “coming soon,” sparking speculation that it could be the official platform for Reliance Industries’ streaming services following the Reliance-Disney merger. While there is no official confirmation, many believe this new domain may replace or supplement “JioHotstar.com” in the wake of the cybersquatting issue.

FAQs on the JioHotstar Cybersquatting Case

1. What is cybersquatting?
Cybersquatting, also known as domain squatting, is the act of registering, selling, or using a domain name with the intent of profiting from the trademark of another person or business. Typically, cybersquatters aim to sell the domain to the rightful trademark owner or use it to redirect traffic for personal gain.

2. What does cybersquatting mean in the context of domain names?
In domain name cybersquatting, individuals register domains that closely resemble well-known brands, trademarks, or business names. This practice is intended to leverage the established brand’s reputation, either for financial gain or to redirect web traffic.

3. Are there examples of cybersquatting in India?
Yes, cybersquatting cases in India include notable legal battles such as Yahoo! v. Akash Arora, where the defendant registered the domain “YahooIndia.com,” and Bisleri v. Mr. Pramod Borse, involving the domain “Bisleri.com.” The recent JioHotstar domain row is another example, highlighting cybersquatting practices and legal implications.

4. What happened in the JioHotstar domain case?
An anonymous app developer registered “JioHotstar.com” shortly after news of the Reliance-Disney merger. The developer initially intended to sell the domain to Reliance Industries to fund his education, which led to claims of cybersquatting and trademark infringement.

5. Why is the JioHotstar domain considered a case of cybersquatting?
The JioHotstar domain is deemed cybersquatting because it combines two well-known trademarks, “Jio” and “Hotstar,” for potential personal gain, evidenced by the developer’s offer to sell the domain to Reliance. This action reflects typical cybersquatting behavior under both Indian law and international dispute resolution standards.

6. How does Indian law address cybersquatting?
Although India lacks specific cybersquatting laws, such cases can be pursued under the Trade Marks Act, 1999. The Act offers remedies for trademark infringement and passing off, both of which can apply in cybersquatting disputes.

7. What legal recourse is available for cybersquatting cases in India?
Victims of cybersquatting can file a complaint under the Uniform Domain Name Dispute Resolution Policy (UDRP) through ICANN or under the .IN Domain Name Dispute Resolution Policy (INDRP) if the domain is registered with .in. In addition, they may pursue action under the Trade Marks Act, 1999, for trademark infringement or passing off.

8. Why is the JioHotstar domain case significant?
The JioHotstar domain row is a high-profile example of cybersquatting involving established brands. This case underscores the importance of protecting trademarks in India, particularly in the context of large mergers and acquisitions, as well as the challenges of cross-border cybersquatting disputes.

9. What are the steps to resolve a cybersquatting dispute under the UDRP?
To resolve a cybersquatting case, a complainant files a complaint with an organization like WIPO. The process includes notifying the domain owner, reviewing submissions, and having a panel render a decision. Remedies include transferring or canceling the domain but not monetary compensation.

10. How did the JioHotstar domain row end?
Initially, the domain was offered for sale by the developer, but later it was transferred to two UAE-based siblings. Given the now cross border nature of the dispute and the fact that Trade Marks Act, 1999 cannot be applied extraterritorially, the recourse available to RIL and/or Star to gain ownership of this domain would now be through the UDRP and prescribed dispute resolution mechanisms thereunder. However, in light of latest reports that the UAE siblings have offered to legally transfer the registration to RIL for free, it remains to be seen how this dispute will unfold.

References:

1. [1] https://economictimes.indiatimes.com/industry/media/entertainment/media/reliance-disney-media-giant-may-be-born-in-november/articleshow/114477261.cms?from=mdr
   ↩︎
2. [2] https://www.business-standard.com/companies/news/delhi-techie-snags-jiohotstar-domain-asks-reliance-to-fund-cambridge-dream-124102400446_1.html
   ↩︎
3. [3] Under Section 29 of the Trade Marks Act, 1999.
   ↩︎
4. [4] 1999 ALR 620
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5. [5] 2001 SCC OnLine Del 444
   ↩︎
6. [6] WIPO Case No. D2005 0271
   ↩︎
7. [7] C.S. No. 335 of 2020
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8. [8] IA (Lodging) No. 38837 of 2022 in IA (Lodging) no. 26556 of 2022 in Commercial IP Suit (Lodging) No. 26549 of 2022
   ↩︎
9. [9] This argument has been successfully put forth by Decathlon SAS in previous UDRP case, where the domain name “decathlon-nike.com” was ordered to be transferred to Decathlon trademark owner despite a lack of consent from Nike, as there was no provision in the policy or rules requiring a third party consent [Decathlon SAS v Nadia Michalski Case No. D2014-1996, available here: https://www.wipo.int/amc/en/domains/search/text.jsp?case=D2014-1996].
   ↩︎
10. [10] https://economictimes.indiatimes.com/news/new-updates/cant-stand-against-reliance-app-maker-who-demanded-rs-1-crore-for-jiohotstar-com-domain-name-seeks-legal-help/articleshow/114543044.cms?from=mdr
    ↩︎
11.  [11] Paragraph 4(b)(i) of the UDRP (accessible here: https://www.icann.org/resources/pages/policy-2024-02-21-en)
    ↩︎
12.  [12] WIPO Case No. D2018-1481 
    ↩︎
13. [13] https://www.hindustantimes.com/entertainment/web-series/techies-message-asking-reliance-1-crore-for-jiohotstar-domain-mysteriously-vanishes-uae-siblings-now-own-the-website-101729919899425.html
    ↩︎

IFSCA listing regulations requires debt securities to adhere to international standards/principles to be labelled as “𝐠𝐫𝐞𝐞𝐧”, “𝐬𝐨𝐜𝐢𝐚𝐥”, “𝐬𝐮𝐬𝐭𝐚𝐢𝐧𝐚𝐛𝐢𝐥𝐢𝐭𝐲” 𝐚𝐧𝐝 “𝐬𝐮𝐬𝐭𝐚𝐢𝐧𝐚𝐛𝐢𝐥𝐢𝐭𝐲-𝐥𝐢𝐧𝐤𝐞𝐝” 𝐛𝐨𝐧𝐝.

As of September 30, 2024, the IFSC exchanges boasted a listing of approximately USD 14 billion in ESG-labelled debt securities, a significant chunk of the total USD 64 billion debt listings in a short period. This rapid growth highlights the growing appetite for sustainable investments among global investors.

Certain investors, particularly institutional ones like pension funds and socially responsible investment (SRI) funds, explicitly state in their investment mandates that they can only invest in ESG-labeled securities. To encourage and promote ESG funds, the IFSCA has waived fund filing fees for the first 10 ESG funds registered at GIFT-IFSC, to incentivise fund managers to launch ESG-focused funds.

However, this rapid growth also comes with a significant risk of “greenwashing” where companies or funds exaggerate or falsely claim their environmental and sustainability efforts.

𝐖𝐡𝐚𝐭 𝐢𝐬 “𝐆𝐫𝐞𝐞𝐧𝐰𝐚𝐬𝐡𝐢𝐧𝐠”?

However, with this rapid growth comes a significant risk: greenwashing. Greenwashing occurs when companies or funds exaggerate or fabricate their environmental and sustainability efforts to project a greener image and attract investors. It’s essentially a deceptive marketing tactic that undermines the true purpose of sustainable investing.

IFSCA’s Consultation Paper: Mitigating Greenwashing

Recognizing the threat of greenwashing, the IFSCA has released a consultation paper seeking public comment on a draft circular titled “Principles to Mitigate the Risk of Greenwashing in ESG labelled debt securities in the IFSC.” This circular outlines principles that companies and funds issuing ESG-labelled debt securities on the IFSC platform must adhere to.

Refer link for consultation paper: https://ifsca.gov.in/ReportPublication?MId=8kS3KLrLjxk= 

Karnataka, a state in India known for its vibrant tech industry, has recently unveiled its Global Capability Centres (GCC) Policy 2024-2029. This ambitious policy aims to solidify Karnataka’s position as a leading hub for GCCs in India and propel the state’s tech ecosystem to even greater heights.

What are Global Capability Centres (GCCs)?

For those unfamiliar with the term, GCCs are specialized facilities established by companies to handle various strategic functions. These functions can encompass a wide range of areas, including:

• Information Technology (IT) services
• Customer support
• Research and development (R&D)
• Analytics

By setting up GCCs, companies can streamline operations, reduce costs, and tap into a pool of talented professionals. This allows them to achieve their global objectives more efficiently.

Why is Karnataka a Major Hub for GCCs?

India is a powerhouse for GCCs, boasting over 1,300 such centers. Karnataka takes the lead in this domain, housing nearly 30% of India’s GCCs and employing a staggering 35% of the workforce in this sector. Several factors contribute to Karnataka’s attractiveness for GCCs:

• Vast Talent Pool: Karnataka is home to some of India’s premier educational institutions, churning out a steady stream of highly skilled graduates in engineering, technology, and other relevant fields.
• Cost-Effectiveness:India offers a significant cost advantage for setting up and operating GCCs, compared to other global locations.

Key Highlights of Karnataka’s GCC Policy 2024-2029

The recently unveiled GCC Policy outlines a series of ambitious goals and initiatives aimed at propelling Karnataka to the forefront of the global GCC landscape. Here are some of the key highlights:

• Establishment of 500 New GCCs: The policy sets a target of establishing 500 new GCCs in Karnataka by 2029. This aggressive target signifies the government’s commitment to significantly expanding the state’s GCC footprint.
• Generating $50 Billion in Economic Output: The policy envisions generating a staggering $50 billion in economic output through GCCs by 2029. This substantial economic contribution will be a boon for Karnataka’s overall development.
• Creation of 3.5 Lakh Jobs: The policy aims to create 3.5 lakh (350,000) new jobs across Karnataka through the establishment and operation of new GCCs. This significant job creation will provide immense opportunities for the state’s workforce.
• Centre of Excellence for AI in Bengaluru: Recognizing the growing importance of Artificial Intelligence (AI), the policy proposes establishing a Centre of Excellence for AI in Bengaluru. This center will focus on driving research, development, and innovation in the field of AI, fostering a robust AI ecosystem in Karnataka.
• AI Skilling Council: The policy acknowledges the need to equip the workforce with the necessary skills to thrive in the AI-driven future. To address this, the policy proposes the creation of an AI Skilling Council. This council will be responsible for developing and delivering AI-related training programs, ensuring Karnataka’s workforce is well-prepared for the jobs of tomorrow.
• INR 100 Crore Innovation Fund: The policy establishes an INR 100 crore (approximately $12.3 million) Innovation Fund. This fund will support joint research initiatives between academia and GCCs, fostering a collaborative environment that fuels innovation and technological advancements.

The GCC Policy has a clear and ambitious goal: for Karnataka to capture 50% of India’s GCC market share by 2029. Read more about the policy here.

In recent years, a significant number of Indian startups have chosen to incorporate their businesses outside India, primarily in locations like Delaware, Singapore  and other global locations. This trend, known as “flipping,” offered advantages like easier access to foreign capital and tax benefits. However, the tide is starting to turn. We’re witnessing a growing phenomenon of “reverse flipping,” where these startups are now shifting their bases back to India.

This shift back home is driven by several factors, including a booming Indian market, attractive stock market valuations, and a desire to be closer to their target audience – Indian customers. To further incentivize this homecoming, the Ministry of Corporate Affairs (MCA) has recently introduced a significant policy change.

MCA Streamlines Cross-border Mergers for Reverse Flipping

The MCA has amended the Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016, to streamline the process of cross-border mergers. This move makes it easier for foreign holding companies to merge with their wholly-owned Indian subsidiaries, facilitating a smooth transition for startups seeking to return to their roots.

Key Takeaways of the Amended Rules

Here’s a breakdown of the key benefits for startups considering a reverse flip through this streamlined process:

• Fast-Track Mergers: The Indian subsidiary can file an application under Section 233 read with Rule 25 of the Act. This rule governs “fast-track mergers,” which receive deemed approval if the Central Government doesn’t provide a response within 60 days.
• RBI Approval: Both the foreign holding company and the Indian subsidiary need prior approval from the Reserve Bank of India (RBI) for the merger.
• Compliance with Section 233: The Indian subsidiary, acting as the transferee company, must comply with Section 233 of the Companies Act, which outlines the requirements for fast-track mergers.
• No NCLT Clearance Required: This streamlined process eliminates the need for clearance from the National Company Law Tribunal (NCLT), further reducing time and complexity.

The Road Ahead

The MCA’s move represents a significant positive step for Indian startups looking to return home. This policy change, coupled with a thriving domestic market, is likely to accelerate the trend of reverse flipping. This not only benefits returning companies but also strengthens the overall Indian startup ecosystem, fostering innovation and entrepreneurial growth within the country.

 Prime Minister Narendra Modi’s recent launch of the IFSCA’s Single Window IT System (SWIT) marks a significant milestone for businesses looking to set up operations in India’s International Financial Services Centre (IFSC) at GIFT City. This unified digital platform promises to revolutionize the ease of doing business in this burgeoning financial hub.

What is the IFSC and Why is SWIT Important?

The International Financial Services Centres Authority (IFSCA) was established to develop a world-class financial center in India. Located in Gujarat’s GIFT City, the IFSC aims to attract international financial institutions and businesses by offering a global standard regulatory environment. However, setting up operations in the IFSC previously involved navigating a complex web of approvals from various regulatory bodies, including IFSCA itself, the SEZ authorities, the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), and the Insurance Regulatory and Development Authority of India (IRDAI). This process could be time-consuming and cumbersome for businesses.  

SWIT: Streamlining the Application Process

The SWIT platform addresses this challenge by creating a one-stop solution for all approvals required for setting up a business in GIFT IFSC. Here’s how SWIT simplifies the process:

• Single Application Form: Businesses no longer need to submit separate applications to various authorities. SWIT provides a unified form that captures all the necessary information.
• Integrated Approvals: SWIT integrates with relevant regulatory bodies – RBI, SEBI, and IRDAI – for obtaining No Objection Certificates (NOCs) seamlessly.
• SEZ Approval Integration: The platform connects with the SEZ Online System for obtaining approvals from the SEZ authorities managing GIFT City.
• GST Registration: SWIT facilitates easy registration with the Goods and Services Tax (GST) authorities.
• Real-time Validation: The system verifies PAN, Director Identification Number (DIN), and Company Identification Number (CIN) in real-time, ensuring data accuracy.
• Integrated Payment Gateway: Applicants can make payments for various fees and charges directly through the platform.
• Digital Signature Certificate (DSC) Module: The platform enables users to obtain and manage DSCs, a crucial requirement for online submissions.

Benefits of SWIT for Businesses

The introduction of SWIT offers several advantages for businesses considering the IFSC:

• Reduced Time and Cost: By consolidating the application process into a single platform, SWIT significantly reduces the time and cost involved in obtaining approvals. 
• Enhanced Transparency: SWIT provides a transparent and user-friendly interface that allows businesses to track the progress of their applications in real-time. 
• Improved Ease of Doing Business: This makes GIFT City a more attractive proposition for global investors and businesses.

Looking Ahead: The Future of GIFT City

The launch of SWIT is a significant step forward in positioning GIFT City as a leading international financial center. By streamlining the application process and promoting ease of doing business, SWIT paves the way for increased investment and growth in the IFSC. This, in turn, will contribute to India’s ambition of becoming a global financial hub.

In recent years, the global investment landscape has shifted dramatically, with sustainability becoming a central theme in financial markets. As nations and corporations commit to net-zero emissions, innovative financial instruments are emerging to facilitate this transition. One of the most promising of these instruments is Sovereign Green Bonds (SGrBs). Recently, the International Financial Services Centres Authority (IFSCA) in India introduced a scheme for trading and settlement of SGrBs in the Gujarat International Finance Tec-City International Financial Services Centre  (GIFT IFSC), marking a significant step towards attracting foreign investment into the country’s green infrastructure projects.

Understanding Sovereign Green Bonds

SGrBs are debt instruments issued by a government to raise funds specifically for projects that have positive environmental or climate benefits. The proceeds from these bonds are earmarked for green initiatives, such as renewable energy projects, energy efficiency improvements, and sustainable infrastructure development. As global awareness of climate change grows, SGrBs are gaining traction as a viable investment option for those seeking to align their portfolios with sustainable development goals.

The Role of IFSCA

The IFSCA’s initiative to facilitate SGrBs in the GIFT IFSC is a strategic move that aligns with India’s commitment to achieving net-zero emissions by 2070. The GIFT IFSC has been designed as a global financial hub, offering a regulatory environment that supports international business and financial services. By introducing SGrBs, the IFSCA aims to create a robust platform for sustainable finance in India.

Key Features of the IFSCA’s SGrB Scheme

1. Eligible Investors

The IFSCA’s scheme allows a diverse range of investors to participate in the SGrB market. Eligible investors include:

• Non-residents investors from jurisdictions deemed low-risk can invest in these bonds.
• Foreign Banks’ International Banking Units (IBUs): These entities, which do not have a physical presence or business operations in India, can also invest in SGrBs. 

2. Trading and Settlement Platforms: The IFSCA has established electronic platforms through IFSC Exchanges for the trading of SGrBs in primary markets. Moreover, secondary market trading will be facilitated through Over-the-Counter (OTC) markets. 

3. Enhancing Global Capital Inflows: One of the primary objectives of introducing SGrBs in the GIFT IFSC is to enhance global capital inflows into India. With the global community increasingly prioritizing sustainable investment opportunities, India stands to benefit significantly from the influx of foreign capital. The availability of SGrBs provides a unique opportunity for investors looking to contribute to environmental sustainability while achieving financial returns.

The IFSCA’s introduction of SGrBs in the GIFT IFSC is a forward-thinking initiative that aligns with global sustainability goals. By facilitating access for non-resident investors and creating robust trading platforms, India is positioning itself as a leader in sustainable finance. As the world moves toward a greener future, the role of SGrBs will become increasingly important. For investors, these bonds not only represent a chance to achieve financial returns but also to make a meaningful impact on the environment.