JULY 21, 2002
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Nasscom Does Some Brain Racking
Slowdown or not, NASSCOM is still eyeing Indian software revenues of $77 billion by 2008. Just what will make it happen? To get a strategy together, it got some top minds to meet in Hyderabad at the India it and ITEs Strategy Summit 2002. A report on what came of it.


Q&A With Ashraf Dimitri
The CEO of Oasis Technology, a key provider of e-payments software, tries to win over converts to a new system.

More Net Specials
Business Today,  July 7, 2002
 
 
Basmati, Neem, Turmeric... And Global Counsel
Indian companies at international courts? It's happening, as global business calls for global justice. Better to be prepared than scared.

Just over a decade ago, the US brandished something called 'Special 301', and had Indians scurrying for cover from American legislative hegemony. The smarter ones, of course, decided to find out more about 'intellectual property rights' (IPRs).

It's been a long time since then. Justice is still justice, a universal issue. IPRs still matter, as do other rights. And the long arm of international law is getting longer. The difference is, Indians are ready to get up there and fight their cases. Overseas.

On March 28, 1995, Suman K. Das and Hari Har P. Cohly were granted a US Patent on the 'use of turmeric for wound healing'. On October 28, 1996, India's own Centre for Scientific and Industrial Research (CSIR) challenged the patent at the US Patent and Trademark Office (USPTO), citing 32 references (even in Sanskrit) to demonstrate that the applicant's claim was not anything new to which somebody could lay exclusive claim. The patent was revoked.

Granted, it was a small victory. Fulminations against 'biopiracy' and 'theft of India's biodiversity' still haven't died down either, but the interesting thing is this. India's whiners and US-phobes seem to be giving way to globally-aware lawyers and case-makers.

It's a matter of adjusting to reality. As businesses globalise and interests cross borders, international lawsuits involving Indian companies are set to multiply. The question is: are they equipped for this?

CHECK LIST

» Check the significance of the claim
» Undertake a detailed cost-benefit analysis
» File a claim at the appropriate time
» Carefully choose the arbitrator
» Check for the involvement of foreign laws
» Weigh the chances of a successful outcome
» Identify a team of effective Indian and foreign lawyers
» Calculate the costs involved in terms of legal fees and expenses
» Get the objective right. Consider the importance of obtaining an interlocutory injunction.
» Apply to the court having jurisdiction over the subject matter for interim preservatory measure, unless the contract/applicable laws bar it.

What They Need: Money

There's never enough of it. Especially to fight a court case in dollars. ''As with any decision, litigation must be preceded by serious cost-benefit analysis,'' says Amar Gupta, a senior litigator with J. Sagar Associates. And the costs involved could make anybody doing business in rupees balk. LML's 1998 arbitration case against Piaggio, for instance, cost the Kanpur-based company $7 million.

Remember, Indian-qualified lawyers can't practice law in foreign jurisdictions without admission to the bar there. International arbitration (which doesn't involve gavel-thumping law courts) tends to be cheaper, but only because of speedy dispute resolution. This is a dollar-drain too, since most foreign parties (joint venture partners, for example) insist on arbitration in a third country. And there too, even if Indian robes are welcome, experience suggests that hiring foreign lawyers gives the case a better hearing.

That's expensive. Fees of senior lawyers typically hover around $450 per hour in the US or £435 in an arbitration court in the UK. Add to this all the other costs, including travel and the like. That's still not the end of it. If you file an application to obtain expert opinion, you pay for it. If you file an application for an adjournment, you pay for it. And if you lose, you pay for the other party as well.

Of course, it works both ways. In 2000, Dr Reddy's Laboratories (drl) won a case against Merck, and the court had the latter reimburse its expert opinion expenses.

What They Don't Have: Time

Time is the other major problem that Indian companies face. Unlike most managed processes, no deadline can be set for a lawsuit. In the mid-1990s, a patent application was filed claiming the anti-fungal properties of neem oil at the European Patent Office (EPO). It was only after considerable effort by various Indian interest groups over five years that the patent was rejected, on the grounds that its use was already known in India.

It takes patience and time. Many managers think of overseas cases as a waste of effort. Just eking out the time to put a strategy together can be painful, and without a case strategy, it's little point having a go at litigation.

According to Pallavi Shroff, Partner, Amarchand Mangaldas, the biggest mistake a company can make is to treat the case as a marginal issue till the very last hour. ''There are many players on the scene,'' she explains, ''so you need to anticipate all your options and be sure of what you want to achieve.'' The world over, competitive practices extend to the deployment of legal weapons as well. So, expect trouble even if you run an angelic business. It's no good, for instance, waking up only after an anti-dumping suit has been lodged against your business at the US Department of Commerce.

In panic, unprepared Indian companies often run straight to an overseas law firm, which leaves Indian law firms grinding their teeth. ''Eighty per cent of the clerical work can be done here in India,'' says Shroff. ''This actually speeds up the process and is far more economical for the client.'' Harvansh P. Chawla, Advocate, K.R. Chawla & Co, strengthens the case for hiring Indian firms. ''Finding a set of lawyers who are honest and loyal to the client is very difficult,'' he says. ''You need to find the right combination of available time and relevant experience.''

What Could Work: Alliances

Thankfully, Indian law firms have begun coordinating their efforts with overseas firms, to optimise cost and time for Indian clients. The idea is to work together on an effective cross-border strategy, exchanging information and sharing work.

Take a recent IPR-related case, for example. Texas-based Rice Tec Inc had applied to the UK TradeMark Registry for the use of 'Texmati' as its exclusive trademark for long-grain aromatic rices. India's Agricultural and Processed Food Exports Authority (APEDA) found the trademark violative of the collective rights of 'Basmati', a name the global consumer associates with rice from the Indian subcontinent, and hired Kumaran & Sagar to fight its case. It won, thanks to ''a successful collaborative effort between our firm, and the UK lawyers from Linklaters,'' says Rajendra Kumar, partner, Kumaran & Sagar.

This is not to imply that getting justice overseas is simply a matter of engaging the right lawyers. Unfortunately, the credibility of Indian businesses remains low in the international arena, and some foreign jurors probably club India with those benighted parts of the world where any mention of the 'rule of law' evokes laughter more than anything else.

Indeed, tales of discriminatory treatment account for much of the lawphobia that still persists in India. But this could change. The West is discovering that globalisation will work only if it's seen to be an unbiased process, and Indians are beginning to appreciate laws framed by people in distant lands.

 

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