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Terissa   17 May 2017

Intellectual property rights ownership

eg: if a design is registered by a company in Calcutta. later on the company is acquired by another company in Bangalore. the company in Bangalore hypothecates the Intellectual Property of the company in Calcutta whose ownership was transferred to the company in Bangalore.If the bank charges which company bears it, is it the company in Calcutta or the company in Bangalore.

please do answer


 3 Replies

ajay amitabh suman (ADVOCATE)     06 June 2017

What kind of Charge it is

Archit Agarwal   07 September 2017

Answer to this question will depend upon the Guarantee given by the holding company or not. But as the Bangalore company hypothecates the property of Calcutta company then it will be implied that Bangalore company already have given the Guarantee of the Bank charges. 

In that case, the liability of the Bank charges will be born by the Holding Company i.e Bangalore company.

If my assumption is wrong and somehow Bangalore company didn't give any Guarantee for the Bank Charges than Calcutta company will be liable to pay the Bank Charges to get back there Intellectual Property

But as per the Provision of Indian Contract Act, Calcutta Company can recover the amount from Bangalore company because if Bangalore company didn't given any guarantee then they have no right to pledge their asset without their consent.

As the matter of fact, Bangalore company owns the Calcutta company but the property is under the name of Calcutta company. So they need have consent before hypothecates the property of Calcutta. 

Furthermore, If Bangalore company contracted with Calcutta company to pledge their property and will not give any guarantee for the debts. The liability will upon the Calcutta company. 

There is 1 more possibility in this case If Bangalore company merged the Calcutta company and name that company with the same Bangalore company's name then liability will be upon the Bangalore company. as the case may be it depends upon the ownership transferred to the new name or not. 

But as the matter of fact the property is hypothecated then it is implied that the property is already transferred. 

In a nut shell, Bangalore company will be liable for the Bank charges. Until or unless they made a contract from the Calcutta company. 

To see the procedure of transferring the IP then refer sec 77 of Design Act. 

To read about Intellectual Property Assignment 

Kapil Gupta (Advocate)     25 February 2018

The company in Bangalore will be charged as well because all the liabilities will be shifted to the company in Bangalore withe immediate transfer of the ownership of brand.

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