Sectoral Updates
MHRD issues guidelines for deemed universities
The Ministry of Human Resource Development (MHRD) has issued guidelines to all deemed universities regarding the regulation of their fees, faculty performance and compulsory accreditation.
Other guidelines for deemed universities and other higher educational institutions recognised by UGC, is to have a website in which full and complete disclosure of information would be furnished about them. These websites would contain information relating to availability of infrastructure and physical assets, grants-in-aid provided by the central or state government and its utilisation and the admission criteria.
The ministry also seeks information regarding details of faculty positions in each of the schools and the nature of their employment and the academic curricula in respect of the courses offered, whether degree or diploma. MHRD has also sought information on all study centres and its locations opened by the universities and institutions to impart distance education, on these websites.
Registration to be made mandatory for clinical research organisations
To bring more transparency to clinical trials happening in India, the drug regulator has drafted guidelines for mandatory registration of clinical research organisations (CROs) in the country. A clinical research organisation is an entity that undertakes trials of drugs on humans on behalf of a pharmaceutical company.
The drug regulator had earlier made it mandatory for companies to register all clinical trials taking place in the country. The move is aimed at keeping a tab on organisations undertaking clinical trials, even as multinational pharmaceutical companies are looking to make India the hub for clinical research, given the easy accessibility to humans volunteering to take part in the drug trials at cheaper rates.
According to the proposed draft rules for registration of CROs, the drug regulator will give licenses for five years to each company. Comments on the draft guidelines have been sought within 45 days, after which they will be formalised. While the drug regulator has retained the powers to cancel licences issued to CROs, it has allowed the company to appeal within 90 days.
“These guidelines cover all organisations, individuals, institutions and companies that take the responsibility of the initiation or management or coordination of a clinical trial. It does not include clinical trial sites. An individual who both initiates and actually conducts, alone or with other associates, a clinical investigation and under whose immediate directions the test article is administered or dispensed or used involving a subject would be exempt,” the draft guidelines stated.
The guidelines make it mandatory for CROs to keep written records of trial-related duties and functions being carried out. They will also have to keep records of quality assurance and quality control according to the standard operative procedures designed for the purpose.
FIIs, NRIs can invest in Indian Depository Receipts
Foreign institutional investors (FIIs) and the non-resident Indians (NRIs) have been permitted to invest in Indian Depository Receipts (IDRs), according to the operational guidelines issued by the Reserve Bank of India.
FIIs, including the SEBI approved sub-accounts of the FIIs, registered with SEBI and NRIs, may invest, purchase, hold and transfer IDRs of eligible companies’ residents outside India and issue in the Indian capital market, subject to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000.
Further, NRIs have been allowed to invest in the IDRs out of funds held in their NRE/FCNR(B) account, maintained with an authorised dealer/authorised bank. Foreign companies can issue IDRs through a domestic depository. The RBI guideline will also permit residents in and outside India to purchase, possess, transfer and redeem IDRs issued by the foreign companies.
The Central Government had issued the companies’ IDR rules that are now being operationalised by SEBI and the RBI through issue of guidelines.
Last month, SEBI had brought out a circular modifying the listing agreement to bring down the regulatory cost of the IDR issuers from countries that are “signatories of multilateral memorandum of understanding (MMOU) of International Organisation of Securities Commissions (IOSCO)”.
In its circular, the RBI has said that IDRs cannot be redeemed into underlying equity shares before the expiry of one year from the date of issue. The RBI has also said that automatic fungibility of IDRs will not be allowed. The Standard Chartered Bank is awaiting approval from the RBI for an IDR issue.
The proceeds of the issue of IDRs shall be immediately repatriated outside India by the eligible companies issuing such IDRs. The IDRs issued shall be denominated in Indian rupees and the proceeds of the issue can be immediately repatriated outside India by the company. The Indian investors in IDRs will be regulated under the Foreign Exchange Management Regulations.
SEBI exempts MTN from open offer to Bharti shareholders
The proposed alliance between Bharti Airtel, India’s largest telecom company, and South African telecom giant MTN crossed the first hurdle after the Securities and Exchange Board of India (SEBI) exempted MTN from making the mandatory open offer to Bharti Airtel shareholders under the takeover code.
The takeover code requires a buyer to make an offer to buy 20 per cent of the shares of a listed target company,0 if it acquires more than 15 per cent of the shareholding. A SEBI order has said MTN was exempt from this requirement because it intended to acquire 25 per cent in Bharti Airtel through global depository receipts (GDRs). The regulator, however, said the open offer would be triggerred only once the GDRs are converted into local shares with voting rights.
The transaction between the Indian and South African firm involves a complex structure, under which both entities will pay cash and equity for stakes in each other in a $23-billion merger. If the deal materialises, it will be the largest M&A in India to date. Under the two-way transaction, Bharti Airtel will acquire 49 per cent in MTN. In addition to the 25 per cent GDR-routed 25 per cent stake in Bharti Airtel, MTN shareholders will buy another 11 per cent stake in the Indian company.
Bharti Airtel’s equity expansion will only be in the form of GDRs that will be listed on the Johannesburg Stock Exchange, which means MTN’s 36 per cent holding—25 per cent direct stake through MTN and the rest through its shareholders—will be in the form of GDRs.
Bharti Airtel had approached the market regulator to grant the South African firm an exemption from making an open offer in India following the deal. SEBI, however, did not exempt the company from making disclosures under the SEBI Regulations, saying MTN would have to comply with those requirements.
Financial Times’ Facsimile title approved amidst trade marks dispute
The Foreign Investment Promotion Board (FIPB) and Registrar of Newspapers in India have granted rights to Financial Times India Pvt. Ltd., the Indian unit of Pearson Plc. to the title ‘Financial Times Facsimile’ on the grounds that the facsimile edition has to be an exact replica of the original edition. Financial Times India will not be allowed to include any local news or advertising in the facsimile paper, which is not part of the original edition. A final clearance from the Ministry of Information and Broadcasting is required before the paper can hit the stands.
The title ‘Financial Times’ is presently owned in India by Bennett, Coleman & Co. Ltd., the publisher of India’s leading national and business daily, Times of India and Economic Times. Financial Times India has approached the Intellectual Property Appellate Board to obtain rights over the same.
Ice cream brand Vadilal restrained from using ‘American Dry Fruits’ trade name for their products
MH Foods, owner of the trademark in the brand name ‘American Dry Fruits’, had filed a lawsuit against Vadilal Industries Ltd. to prevent them from using the trademark for its range of ice creams.
Gujarat High Court recognised that MH Food had obtained proprietary rights over the word ‘American Dry Fruits’ to be used as trade-name. It held that MH Foods had established its goodwill in the brand since it has been selling dry fruits, sweets and namkeens under the said trade name, since 1932. Hence, the Court found Vadilal’s argument that they dealt in different line of products baseless.
IPAB denies patent to Novartis’ Glivec
The Intellectual Property Appellate Board (IPAB) has ruled that Novartis’ patent application covering Glivec (beta crystalline version of Imatinib Mesylate) is not patentable, since it fails to satisfy the requirements under section 3(d) of the Indian Patents Act. This section requires that in order to be patentable, a pharmaceutical derivative must demonstrate significantly enhanced “efficacy” over and above the prior known molecule. The IPAB held that while the claim covering the beta crystalline (BC) version of IM (Imatinib Mesylate) is both novel and inventive, it fails the test under section 3(d), which requires a demonstration of “significantly enhanced efficacy”.
The IPAB has held that the only kind of efficacy that would satisfy section 3(d) is therapeutic efficacy. Novartis’ BC version may possess improved bioavailability, thermodynamic stability, improved flow properties and lower hygroscopicity, but this does not amount to an increase in “therapeutic efficacy”. Section 3(d) embodies a high level of scrutiny and owing to this, patents granted in other countries may not be granted to India.
In perhaps what will turn out to be the most controversial part of its decision, the IPAB notes that any patent granted over Gleevec is likely to cause “public disorder”. It elucidates by stating that since Gleevec costs Rs 120,000 per month per patient, it is far too high a price for the common man. Therefore, any patent granted to support such a high monopoly price would be against public order and can be denied a patent under section 3(b). This section notes in pertinent part that patents cannot be granted to “an invention the primary or intended use or commercial exploitation of which could be contrary to public order or morality or which causes serious prejudice to human, animal or plant life or health or to the environment”.
India licensee to UNITAID’S proposed patent pool for drug
Representatives from UNITAID met the Indian generic drug makers and researchers, amongst other stakeholders to discuss implementation of proposed plans of establishing a patent pool for drugs. The proposed pool for generic medicines calls for voluntary participation of patent-holders. Establishment of this pool would allow generic drug companies to access patent of a particular drug, on the payment of royalty to the patent-holders.
Indian drug manufacturers being large suppliers of inexpensive medicines, particularly in the AIDS segment, are likely to be licensees of the patent pool proposed by UNITAID.
BCCI against South African firm KBJ’s claim over IPL brands
Board of Controller for Cricket in India (BCCI) which promotes the Indian Premier League (IPL) opposed South African firm KBJ Asset Holding’s attempt to register trademarks such as Rajasthan Royals, Deccan Chargers, Knight Rider and other IPL teams in its name, not just for cricket related things but for other sports like rugby and soccer as well.
It is essential for IPL to protect its brand in all cricket-playing nations. One of the IPL teams, Rajasthan Royals, has already filed a case against KJB, claiming damages and attorney costs in addition to an order of injunction.
Proposal for an Intellectual Depository Authority
India does not have an indigenous Intellectual Depository Authority (IDA) for depositing Genetically Modified (GM) seeds. Though the Microbial Type Culture Collection Centre at the Institute of Microbial Technology, Chandigarh has been recognised as an IDA for the deposition of micro-organisms, local firms in India are depositing GM seeds in the IDA in other countries. The committee headed by the Special Environment Secretary, Mr. B.S. Parsheera, recently decided to establish an IDA facility at Delhi-based National Bureau of Plant Genetic Resources for deposition of biological materials for patent purpose. Proposed IDA in addition to being a cost-effective substitute for the local firms, will also help in easy accessibility to the GM seed samples within the country.
Rajesh Sivaswamy is a Senior Partner and co-founder of King Stubb and Kasiva. He graduated from the B. A., LL. B. Programme of the University Law College, Bangalore, and went on to pursue his Masters in corporate commercial laws from the National Law School of India University, Bangalore. He teaches corporate commercial laws across several law schools in India in the capacity of a guest speaker. He can be reached at rajesh@ksandk.com