Intellectual Property, FDI and Joint Venture in India
IP & Joint Venture
Clauses concerning IP are considered as deemed as essential in a joint venture agreement as protection of IP, transferring of an IP right, protection to trademarks or tradenames are significant. Some recently formed JV companies in India are Tata Starbucks, Tata SIA Airlines, Bajaj Finserv Limited etc.
Parties consistently cite the loss of background IP rights as a major risk in JV collaborations, and dealing with IP that is generated in the course of a JV or collaboration can also present particular problems, particularly if it is to be used or owned jointly by more than one party.
In view thereof it is essential to conduct an IP Audit before establishing a JV.
FDI and Joint Venture in India
Foreign direct investment (FDI) is an investment made by a company or individual in one country in business in another country. It not only involves monetary transfer of funds, it also involves acquisition of ownership or controlling interest in a foreign company by the investing company. The two entry routes for foreign direct investment in India are: Automatic Route and the Government Route.
Under the Automatic Route, the non-resident investor or the Indian company does not require any approval from Government of India for the investment.
FDI in activities not covered under the automatic route requires prior approval of the Government which are considered by the Foreign Investment Promotion Board (FIPB), Department of Economic Affairs, Ministry of Finance.
The Indian company having received FDI either under the Automatic route or the Government route is required to comply with provisions of the FDI policy including reporting the FDI to the Reserve Bank.
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To know more about Commercial Contracts & Agreements in India, read below: