SSrana Newsletter 2021 Issues 07

April 21, 2021
Start-up Registeration

Patent Discounted Cost for MSMEs and Start-Ups India.

fssai - Start-ups IndiaThe Indian Government has always been providing benefits and support to the Micro, Small, and Medium Enterprise or MSMEs. There are a numerous advantages of obtaining MSME registration in India, which can only be availed by an enterprise if the same has registered as an MSME under MSMED Act.

Benefits of Patent Search India.

The gamingA patent is a legal document that gives exclusive rights to the inventor to restrict others from copying, manufacturing, selling, or importing your invention without the inventor’s permission. Patent searching is a valuable process when it comes to patenting an invention as it saves lots of time and money of the applicants/inventors if performed before filing an application.

PAKISTAN: DOMAIN NAME RECOVERY PROCESS AND POLICY.

The justiceThe operation, maintenance and technical administration of internet domain name space for Pakistan’s country-code top-level domain ‘.pk’ is undertaken by the Pakistan Network Information Centre (PKNIC).[1]

TRADEMARK INFRINGEMENT- NIKE v. MSCHF- SATAN SHOES CASE.

trademark InfringementMultinational sportswear giant Nike earned a restraining order in its favour in a lawsuit against a Brooklyn based art collective, MSCHF on April 2, 2021[1]. Just a week later, Nike and MSCHF entered into a settlement agreement, wherein MSCHF nodded on Nike’s Conditions. Nike in the lawsuit had claimed trade mark infringement stating that the Defendant did not take any prior permission or authorization before launching the product.


Patent Discounted Cost for MSMEs and Start-Ups India.

The fssai

By Lucy Rana and Saroj Kumari

Introduction

The Indian Government has always been providing benefits and support to the Micro, Small, and Medium Enterprise or MSMEs. There are a numerous advantages of obtaining MSME registration in India, which can only be availed by an enterprise if the same has registered as an MSME under MSMED Act.[1]

Also read Benefits of MSME Registration in India

The Micro, Small and Medium Enterprises Development Act, 2006[2], classifies the MSMEs on the basis of investment in:

(i) plant and machinery, for enterprises engaged in the manufacturing or production of goods, and

(ii) equipment, for enterprises providing services.

However, the MSME Development Act, 2006 was redefined by virtue of The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2018 by the Minister of State, which uniformly classifies the industries based on their annual turnover irrespective of their kind i.e. manufacturing or service-providing enterprises[3]. The below illustrates the changes in the classification of MSMEs:

 

micre enterprise

Table 1: Classification of enterprises as micro, small and medium enterprises (in Rs)[4]

Importance of MSME Registration and Intellectual property (IP)

Manufacturing and service industries both can obtain the MSME registration under MSMED Act. Although MSME registration is not compulsory but can be voluntarily registered in order to avail various benefits, incentives, or support by the Central or State government.

Intellectual property has assumed substantial special importance in the road to success for startups and MSMEs in India, as IP enhances the competitiveness of evolving new technologies and provides a path for bringing the technology to the market. A survey found that patents granted to MSMEs are expected to be between 2.8 per cent to 23.4 per cent of all the patents granted to Indian residents by the IPO. Out of which 7.3 per cent of pharmaceutical MSMEs have been successful in obtaining patents. Regarding filing of patents, MSMEs engaged in pharmaceutical products are on the rise that is about 16 per cent of such MSMEs are engaged in the patent filing. Also, it can be seen that 61 per cent of pharmaceutical MSMEs are having trademarks and only 16 per cent are active in patenting[5]. Hence, IPR awareness and importance of IPR protection requires greater attention and understanding by the MSME sector in India.

IPR Awareness amongst MSMEs and Startups

To upgrade the awareness of IPR in the MSME several programmes have been announced such as National Manufacturing Competitiveness Programme (NMCP) which aims at “Building Awareness on Intellectual Property Rights (IPR)” for the MSME. The main activity and funding limits proposed under said scheme cover the following broad areas of interventions[6]:

 Activity Chart

Funding support for MSMEs and Start-Ups[7]

  • Conducting awareness/sensitisation programmes on IPR (Applicants – MSME organisations and expert agencies)
  • Conducting pilot studies for selected clusters/groups of industries (Applicants – MSME organisations, competent agencies and expert agencies)
  • Funding support for conducting interactive seminars/workshops (Applicants – MSME organisations and expert agencies)
  • Funding support for conducting specialised training on IPR (Applicants – Expert agencies)
  • Funding support in the form of Grant on Patent/GI Registration (Applicants – MSME units and MSME organisations)
  • Funding support for setting up IP Facilitation Centre (IPFC) for MSME (Applicants – MSME organisations and IPR facilitating agencies)
  • Funding support for organising interaction with international agencies (Applicants – MSME organisations and IPR facilitating agencies)
  • Government assistance of Rs.1 lakh per awareness programme
  • Government assistance of Rs.2.5 lakh per pilot study
  • Government assistance of Rs.2 lakh per programme of interactive seminar
  • Government assistance of Rs.6 lakh per short term training programme and Rs.45 lakh per long term training programme For registered Indian MSMEs, one time financial support limited up to Rs.25,000 on grant of domestic patent and Rs.2 lakh for foreign patent; for registering under Geographical Indications of Goods Act, one time financial support limited up to Rs.1 lakh
  • A total financial support by Government up to Rs.65 lakh each for establishing IPFCs which will include one-time grant of Rs.45 lakh and Rs.18 lakh as recurring expenses for 3 years, and Rs.2 lakh as miscellaneous charges.
  • Financial support by Government up to Rs.5 lakh and Rs.7.50 per event for domestic interventions and international exchange programme respectively.

 Following are the advantages of MSME registration in India:

  • Subsidy on Patent Registration
  • Tender preference to MSME
  • 100% tax exemption for innovation startups
  • Loans without collaterals
  • Government Schemes to reimburse the money spent on patent[8]

Scheme for facilitating Startups Intellectual Property Protection (SIPP)

Government to endure facilitation cost: Under this scheme, the Central Government shall bear the entire fees of the facilitators for any number of patents, trademarks or designs that a Startup may file, and the Startups shall bear the cost of only the statutory fees payable.

Discounted Official fee for Patent Filing by MSMEs and Start-Ups in India**

The siepet

**Please note that the above fees does not include the professional fee
  • Support International Patent Protection In Electronics And IT (SIPEIT)

Expenses incurred in International Patent Protection will be reimbursed (total reimbursement will not exceed Rs 15 Lakhs or 50% of the total expenses, whichever is less) will be in installments and will be reimbursed as listed below:

Applications filed directly in a foreign country after satisfying the requirements of Section 39:

  • 25% of the expenses incurred in Filing for a patent application in respect of foreign geography will be reimbursed.
  • 75% of the expenses incurred after filing up to grant will be reimbursed after the grant of the patent.

Applications filed in a foreign country within 12 months of filing a patent application in India:

  • 25% of the expenses incurred in the Filing of patent applications in respective foreign geography will be reimbursed.
  • 75% of the expenses incurred after filing up to grant will be reimbursed after the grant of the patent.

Hence, the government is making endeavors and bringing about changes in the regulatory framework to protect ideas, technological innovation and business strategies developed by MSMEs and such industries are showing significant growth with support from the Indian Government. Hence, considering the various advantages and incentives being conferred by the Government in the event of patent filing, the MSMEs and Start-Ups shall actively protect and safeguard their Intellectual property rights in India.

[1] https://www.fundstiger.com/benefits-msme-registration/

[2] https://legislative.gov.in/sites/default/files/A2006-27.pdf

[3] https://prsindia.org/billtrack/the-micro-small-and-medium-enterprises-development-amendment-bill-2018

[4] Ibid

[5] https://www.wipo.int/edocs/pubdocs/en/wipo_natstudy_sme_india.pdf

[6] https://msme.gov.in/sites/default/files/Revised%20IPR%20Guidelines_5.pdf

[7]  https://my.msme.gov.in/MyMsmeMob/MsmeScheme/Pages/ssub_3.html

[8] https://my.msme.gov.in/mymsme/Reg/COM_Ipgr.aspx.

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Importance Of IPR for Start-ups

Benefits of MSME Registration in India


Benefits of Patent Search India.

A gaming

A patent is a legal document that gives exclusive rights to the inventor to restrict others from copying, manufacturing, selling, or importing your invention without the inventor’s permission. Patent searching is a valuable process when it comes to patenting an invention as it saves lots of time and money of the applicants/inventors if performed before filing an application.

In order to maintain the novelty and inventive step of the invention it is imperative to conduct a prior art search related to the invention.

In almost every country around the globe, the eligibility criteria for patenting are that the invention must be new or novel, non-obvious, and have industrial applicability. To fulfill this criterion patent searching is performed by the experts.

This search examines the novelty of the invention and ensures that it is not prior art. The International Patent Offices such as EPO, USPTO, WIPO and also INDIA conduct the prior art search for the filed application during the examination procedure. If the examiner finds any similarities in the prior art then they provide objections against the invention. The applicant then has to explicate the novelty and inventive step in response to the objections.

Further, in order to avoid any substantive objections by the Examiner in the application, the best method is to conduct a prior art search of the invention/technology before filing a patent application.

Scope of Patentability Search

Scope of the patent search[1] depends on the requirement of a client or a business, such as:-

  • to protect from infringing third party patent,
  • to keep an eye on the developing technologies,
  • also, when a company is planning for a new product,
  • to lookout for mergers & acquisitions,
  • to increase licensing and other monetizing opportunities,
  • for normal business purpose,
  • to know about your competitors,
  • to know the most active inventors & applicants.

Importance of Patentability Search during prosecution

In the process of patenting an Invention, at the stage of Patent Examination, Controller, or where applicable Registrar, shall take into account the results of search reports in relation to the application and further proceed with the process of granting of a patent.

So spending a lot of money on preparing and filing an application when there is availability to find prior art that will prevent the patent from any type of rejection. For this reason, inventors and businesses choose to begin the process of patenting by paying for patent search, and the expense on a patent application is saved if knock-out prior-art is located. If no critical blockages are located in patent search then it leads to a stronger patent application.

Patent Search: Steps to be followed

1. Broad approach

Here, a search is done around the technology to cover a broad range of patents in that technology. Starting with keywords and classes on different available databases. Keywords used are generic, if it results in too many hits then a combination of keywords and classification is performed. Broad classes are used as it covers maximum patent in that technology. Google Patents gives a good start to search, followed by databases covering worldwide patents and then on individual country databases.

2. Narrow approach

Here the search is limited by title, abstract, or claim. Further combination of words and classification is performed. Search can also be restricted by inventor, applicant, date, legal status as per the requirement of the project.

A search is considered good when both the approaches are performed, this leads to obtain relevant results.

The scope of the search depends on a case-by-case basis, for example: types of documents (patents or non-patent literatures), jurisdiction, time period to be covered, whether claims and/or full specification needs to be searched, whether the search needs to cover a feature individually and/or in combination with other components of the system. Comprehensiveness of the search is based on business requirements, client demand, or budget limitations. Budget can also be a key factor in the selection of these resources. In addition, resources and databases used in each type of search vary significantly based on the technology to be searched and business objective.

Database and Search Engine Consideration

In India, INPASS, introduced in the year 2015, is the Indian Patent Advance Search System. Google Patents, Uspto, Patentscope, Espacenet, Auspat, J-Platpat, Kipris, Cipo, Sipo, Fpo, Lens- these are the free internet search engines available to all for performing a patent search in their respective country or covering all the countries where applicable. Derwent, Orbit are paid databases for the search purpose, producing relevant results covering all the countries. For Non-patent literature: Google Scholar, Science Direct, ACM Digital Library, IEEE are taken into account for searching research articles, scientific journals, magazines, conference papers.

Prior Art Search- India

Where a prior art is anything disclosed to the public or anywhere in the world by publication in the tangible form or oral disclosure, or by use of any other way, prior to the filing date, or where applicable the priority date of the application of patent. These prior arts include patents, scientific papers, journal article,

Even though above mentioned freely available search engines allow anybody to conduct a search, but a professional or technically skilled person shall be given the task for more focused search. Due to the availability of a vast amount of literature on the internet, an unskilled person cannot do justice to the search. Professionals (at S.S. Rana & Co.) understand the scope of the invention and can perform comprehensive searches in patent and non-patent literature, providing a precise and focused search report that provides  clarity to the inventor and counseling to the management. A professional person knows the importance of claims and could make out the extent of similarity of one’s invention with the existing prior art.

Conclusion

In order to get a technology patented, it is not beneficial to just file a patent without even knowing whether the invention fulfills all the criteria of patentability or not. This method is not favorable for business purposes as it only ends in costing more money and resulting in the rejection of the filed patents. Patent searching also helps in finding out the competitors already existing in the market and can provide better a perspective to work around the already granted inventions. Patent search also provides the opportunity to include some unique and novel features to the invention/products to be launched in the market by comparing the already existing products.

Thus, in order to gain a competitive edge, inventors should always prefer conducting a prior art search from a skilled professional person to provide useful insights and broaden the future business perspective.

[1] https://www.sciencedirect.com/science/article/pii/S017221901630103X

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PAKISTAN: DOMAIN NAME RECOVERY PROCESS AND POLICY

DOMAIN NAME RECOVERY

By Lucy Rana and Sanjana Kala

Introduction

The operation, maintenance and technical administration of internet domain name space for Pakistan’s country-code top-level domain ‘.pk’ is undertaken by the Pakistan Network Information Centre (PKNIC).[1]

PKNIC being cognizant of the need for such assistance attempted to initiate such a service but due to deficiency of technological and legal expertise in this field, PKNIC entered into an understanding with the Domain Name Dispute Resolution Center (DNDRC) for the provision of DNDRC’s service to .pk ccTLD users.[2] In this regard, the Hong Kong International Arbitration Center (HKIAC) played a key role in the establishment of the DNDRC in Pakistan for .pk ccTLDs.

Disputes over the right to use a particular domain name in Pakistan may be settled either through the usual legal channels (i.e. courts) or through the DNDRC.[3] The DNDRC is the sole provider of dispute resolution services or domain name recovery services for ‘.pk’ domain names in Pakistan which are carried out in accordance with the PKNIC Internet Domain Registration Policy, the ICANN Uniform Domain Name Dispute Resolution Policy and accompanying rules, and the DNDRC Supplemental Rules. It adopts mandatory, final and binding arbitration as the method to resolve disputes with respect to .pk domain names.

Pakistan Domain Name Recovery: Process

The dispute resolution process in this regard has been enumerated below[4]:

A step1[1]

A party files a domain name Complaint with the DNDRC in accordance with the appropriate policy and Supplemental Rules. A copy is sent to the disputed domain name’s registrant as well as registrar.

A step2

Once the Complaint is filed, DNDRC reviews it for administrative compliance. The Complainant has to bring the Complaint into compliance with the rules or the Complaint will be dismissed.

A step3

Once the Complaint has been processed and accepted by DNDRC, the administrative proceedings are commenced, after which the Respondent has to file a written response with DNDRC in accordance with the appropriate policy and Supplemental Rules.

A step4

If the Respondent does not provide a written response, the deciding panel will only consider the Complainant’s submissions.

A step5

Each party may submit one additional submission following DNDRC’s acceptance of the response.

A step6

Arbitrator is appointed to examine the case, and issue the Decision

A step7

The panel reviews the Complaint and the Response, and has the discretion to review any additional submissions from the parties.

A step8

The panel issues a decision. The decision is published by DNDRC and communicated to the parties, the registrar, and the appropriate Internet body (such as PKNIC or ICANN)

Timeline for Domain Name Dispute Resolution

The timeline for the dispute resolution process under DNDRCs Supplementary Rules[1] has been enumerated below:

  1. Filling of Complaint by the Complainant.
  2. The Complainant shall rectify any deficiencies identified by the Office of the Center within five (5) days.
  3. The Office of the Center shall forward the Complaint to the Respondent(s) within three (3) days.
  4. The administrative proceedings will be deemed to have commenced on the date on which the Office of the Center forwards the Complaint to the Respondent(s).
  5. From the date of commencement of the administrative proceedings, the Respondent shall submit a Response within seven (7) days and provide the Complainant the copy of the same.
  6. The Panel shall forward its decision to the Office of the Center within fourteen (14) days of its appointment.
  7. The Office of the Center shall within three (3) days of its receipt of a decision from the Panelist forwards copies by email of the decision to the Parties, PKNIC and if deemed appropriate by PKNIC, the concerned Registrar(s).

 Landmark Case

In DNDRC’s landmark case of Standard Chartered PLC v. Hosting Campus Domain (case no. C2007- 0001[2]), it laid down the following four heads under which cases are to be analyzed, under the PKNIC – Internet Domain Registration Policy and the UDRP:

  1. Illegality, unlawfulness or otherwise invalidity of the Application & Registration (a criteria in terms of the PKNIC – Internet Domain Registration Policy June 20, 2006 version 4.1 in addition to the criteria of the UDRP);
  2. Identical or confusing similarity to a trademark or service mark in which the Complainant has rights (a UDRP criteria);
  3. Legitimate interest in Domain Name (a UDRP criteria);
  4. Registration and use in bad faith (a UDRP criteria).

Pros and Cons

The DNDRC takes into consideration complaints against domain names with ‘.pk’ ccTLDs which are either a result of cyber-squatting or by habitual infringer of intellectual property rights. The remedy for the right owner is either resorting to filing a civil suit in a court of law or filing a complaint before the DNDRC. Further, if the Complainant is successful in establishing its case against the unlawful domain, the domain is consequently transferred to the Complainant. Some of the benefits of the DNDRC have been mentioned below:

  1. Given that no formal hearings are required to be undertaken by the Arbitrator, the procedure before the DNDRC is largely convenient;
  2. The DNDRC process is usually decided within 4-6 months which is comparatively a speedy remedy when compared to proceedings before a court of law;
  3. The costs involved in a dispute before the DNDRC are far lower as compared to a legal proceeding in a court of law.

Statistics

It is an easy to approach, efficacious and result oriented forum which has resolved a number of disputes regarding use of infringing .pk domains.

specific-relief
Total number of cases (as available on the DNDRC’s website) 51
Cases Decided in favour of Complainant 51
Cases Decided in favour of Respondent 0

From the data available on the DNDRC’s website, it appears that 100% of disputes under the DNDRC have been decided in the right holder’s favor. The complete list and details pertaining to each case are available at the Center’s website here.[3]

[1] http://www.dndrc.com/dispute_resolution/supplementary_rules.shtml

[2] http://www.dndrc.com/cases_resolved/pdf/c2007-0001.pdf

[3] http://www.dndrc.com/cases_resolved/

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Procedure For Filing a Complaint- Domain Name Dispute

 


TRADEMARK INFRINGEMENT- NIKE v. MSCHF- SATAN SHOES CASE.

The trademark

By Lucy Rana and Priya Adlakha

Multinational sportswear giant Nike earned a restraining order in its favour in a lawsuit against a Brooklyn based art collective, MSCHF on April 2, 2021[1]. Just a week later, Nike and MSCHF entered into a settlement agreement, wherein MSCHF nodded on Nike’s Conditions. Nike in the lawsuit had claimed trade mark infringement stating that the Defendant did not take any prior permission or authorization before launching the product. To point a fact, although it appears like a simple infringement case but a lot of controversy is attached to it. Let’s explore why!

TRADEMARK INFRINGEMENT- NIKE v. MSCHF

Brands often come up with innovative ideas to lure customers into purchasing their products. Some confine to simple methods while others take a gutsy step forward.  A few weeks ago, MSCHF in collaboration with the rapper Lil Nas X came up with a modified version of Nike Air Max 97s shoes. Much to everyone’s surprise, 666 pairs of shoes were sold out within a minute. The spotlight being that the bubble cushioned shoes contained 2.03 fluid ounces of red ink along with a drop of human blood in it. Additionally, the much expensive trainers featured an inverted cross and a bronze pentagram with the word “Luke 10:18” referencing a bible verse that simply translates to “Satan falling from heaven”.

This bold move received mixed reactions. Whilst the modern-day change-makers supported the launch, the traditionalists took it as an ethical blow. ‘Satan shoes’ were a follow up launch of MSCHF’s ‘Jesus Shoes’ that on the contrary had holy water in the sole.

Nike’s Contentions

The Trade Mark infringement lawsuit[2] was filed before the US District Court for the Eastern District of New York wherein Nike alleged:

  • MSCHF’s ‘Satan Shoes’ launch implied an authorization or permission from Nike owing to representation of their trademarked ‘swoosh’ symbol.
  • There is an apparent confusion and deception as regards to the origination of ‘Satan shoes’.
  • This resulted in a serious blow to Nike’s well established goodwill with angered customers calling Nike against the release and boycotting its original products.
  • The use of Nike’s Trade Mark resulted in dilution, thereby inflicting losses both monetarily and in terms of Nike’s
  • MSCHF through launch of its customized shoes attempted to capitalize on Nike’s invaluable goodwill and reputation.

Nike’s Prayer

  • A permanent injunction order pertaining to manufacturing, transporting, promoting, advertising, publicizing, distributing or selling of Satan shoes bearing Nike’s well-established ‘Swoosh’ trade mark.
  • An order to deliver all the products in controversy “to Nike for destruction” thereof.
  • An order of damages suffered by Nike during trial proceedings.
  • An order of profits collected by MSCHF on sale of ‘Satan Shoes’
  • Statutory and additional damages including costs, expenses and attorney fees.

TRADE MARK INFRINGEMENT: UNITED STATES OF AMERICA

[3]The Lanham Act of 1946 is a federal statute governing Trade Mark law in the United States of America. Following are the requisite statutory provisions envisaging regulations as regards to Trade Mark infringement in the country:

Trademark Infringement
Section What it provides for
§ 32 (15 U.S.C. § 1114) Remedies; infringement; innocent infringers 1.      Anyone who without obtaining prior consent of the registrant-

·         Reproduce, counterfeit, copy or imitate a registered mark for the purpose of sale, offering for sale, distribution or advertisement of respective goods and services in a way that it is likely to cause confusion/ deception.

·          Reproduce, counterfeit, copy or imitate a registered mark and apply it to labels, signs, prints, packages, wrappers, receptacles or advertisements in commerce to promote confusion/ deception.

Shall be liable for a civil action and the Registrant shall have the right to exhaust a number of remedies.

§ 43 (15 U.S.C. § 1125). False designations of origin; false description or representation 1.      Any person who makes use of any word, term, name, symbol or device or any combination or false designation of origin or description or misleading representation of fact such that it:

·         has likelihood to cause confusion /mistake/ deception as to affiliation/ connection/ association with another person

·         misrepresents the nature/ characteristics/ qualities/ geographical origin of another person’s goods, services or any commercial activity thereof

Shall be sued by any other person who has a reason to believe that rights of his/ her shall be affected by such an act.

REMEDIES
§ 34 (15 U.S.C. § 1116) Injunctions; enforcement; notice of filing suit given Director § 35 (15 U.S.C. § 1117)

 Recovery of profits, damages, and costs

36 (15 U.S.C. § 1118) Destruction of infringing articles
Injunctive Relief

(The defendant may be required to submit a report representing his/ her compliance with the injunctive order both to the Court and the plaintiff)

 

In case of a violation under Section 1125, the plaintiff shall be entitled to:

·         Profits accrued to defendant from sales

·         Damages sustained to plaintiff (not exceeding three times the actual damages)

·         Costs of proceedings (Attorney fees in exceptional circumstances)

·         Order for destruction of all labels, signs, prints, packages, wrappers, receptacles and advertisement bearing the impugned mark.

 

·         Additionally, in case of willful violation through reproduction, counterfeiting, copy and wrongful imitation, an order of delivery off and destruction shall be passed by the Court.

Recent Developments

  • On April 02, 2021, the Federal Judge sided with Nike and issued a temporary injunction order against MSCHF restraining them from manufacturing or marketing their controversial ‘Satan Shoes’ bearing Nike’s Trade Marks.
  • On April 9, 2021, Nike initiated a settlement E-mail in favour of MSCHF, to which MSCHF agreed. The terms of settlement included full refund of original retail price of ‘Satan Shoes’ together with shipping costs to the purchasers. Additionally, MSCHF shook hands on recalling each pair of ‘Satan Shoes’ and putting a stop on further manufacturing and circulation of the same.

Conclusion

Innovation and creativity bear no end. They are the roadways to profits and better goodwill. Nevertheless, a limitation must be set up to keep the doors of imagination within ethical barriers, to ensure the greater good of both the customers and the brands. The Nike-MSCHF case is a perfect example creating a diversion between the traditionalists and the progressivists as regards to modern-day acceptability norms.

[1] https://www.abc4.com/wp-content/uploads/sites/4/2021/03/NIKE-vs-MSCHF.pdf

[2] ibid

[3] https://www.uspto.gov/sites/default/files/documents/tmlaw.pdf

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For more information please contact us at : info@ssrana.com