Joint Venture Agreement 

Trademark is nothing but the unique identification of your brand name. Brand name provides you a unique identify among your rivals. The Trademarks Act, 1999 mentions the joint venture agreement in Trademark registration process. Order 39 of Rule 1&2 mentions the joint venture agreement. Joint venture agreement is nothing but an agreement between two parties to use their product resources to performing specific tasks to improve their brand identity. The plaintiff is giving permission to use the same mark in contemplation of having majority control of the defendant company but later on abandoning the offer of taking over majority control and abandoning the joint venture. There is no jurisdiction for refusal to subscribe to additional share capital to the defendant from the plaintiff’s shares. Plaintiff is a person who is the first person to taken an action before the court. Defendant is a person who is found by the court as a accused.

Real time example of Joint Venture agreement

It is evident from the plaintiff’s stand, both in the Goa suit and its first petition here, that the permission that it gave to the second defendant to use “Putzmeister” as part of its name was not out of any compulsion under any agreement. In a sense it is a stand-alone permission, though the relationship between the parties cannot be lost sight of. There is no doubt that the plaintiff allowed the second defendant the use of its trademark “Putzmeister” as part of its corporate name as the second defendant was to be the joint venture company which was to come ultimately under the control of the plaintiff. Yet is was the plaintiff which spurned the Indian promoters’ (and the second defendant’s) offer to subscribe to additional shares in the joint venture company and it was also the plaintiff’s unilateral decision to disgorge its shareholding in such company. It is understandable that the permission was given in contemplation of the joint venture progressing and the plaintiff coming in majority control of the joint venture company. But as it stands today, the plaintiff appears to have relinquished its right to control of the joint venture company and there is a prima facie finding of the violation of Press Note No.1 of the 2005 series by the plaintiff in abandoning the joint venture. The plaintiff’s writ petition challenging such finding has been dismissed by the Delhi High Court. There has been no attempt by the plaintiff to explain its conduct qua the joint venture. The plaintiff does not allege that the Indian promoters had made it too hot for the plaintiff to remain on Board. The plaintiff does not seek to justify its refusal to subscribe to the further shares in the joint venture company or ascribe any ill motive to the Indian promoters. Such aspect of the matter has been completely glossed over by the plaintiff; as if the same is utterly irrelevant in the context of the plaintiff’s assertion of a statutory right.

It may have been different if the plaintiff had been eased out of the second defendant company after having authorized it to use the mark “Putzmeister” as part of its corporate name. But the plaintiff brings nothing to bear on its volte face within a period of less than six months in the first half of 2005. The second defendant already has a part of the plaintiff in its original name at the time of its incorporation. The plaintiff desired that the joint venture vehicle carry in its name the entirety of the word mark that was then pending registration in India. It was a big give and reflected the quality of the relationship between the plaintiff and its Indian partners at the time. Within a month of the plaintiff’s permission, the second defendant increased its authorized capital in obvious contemplation of a further issue of shares therein. The plaintiff has pointed to no dissent on its part when the Indian promoters informed the plaintiff that the subscription in the further shares would come about in the beginning of April, 2005 or even when the plaintiff was invited to subscribe to further shares ij the second defendant. Yet, over the next two months the plaintiff floated an altogether different Indian subsidiary and virtually abandoned the joint venture of which the second defendant was born. There may have been good reason for the plaintiff doing as it did, but it was for the plaintiff to being the reasons to the fore. The plaintiff seeks an equitable relief at an interlocutory stage; it has to dispel doubts as to its bona fides and demonstrate that it did not act unfairly in the lead-up to the institution of the suit.

Clause 18 of the second joint venture agreement did not oblige the plaintiff to allow the joint venture company to use the mark “Putzmeister” as part of its corporate name; such clause only provided that the plaintiff would allow and authorize the joint venture vehicle (then known as Puts Pumps (India) Pvt. Ltd) to use the trademark of the plaintiff on all products manufactured in India under such agreement. Clause 18.1 of such agreement that gave the Indian entity such rights and contained the rider that it would be entitled to use the plaintiff’s logo and trademark “for a period of two years from the date on which the PM shareholding in the PPI stands reduced below 26% of the issued shares” would, therefore, not be applicable since – on the plaintiff’s showing at paragraph 11 of the Goa plaint and at paragraph 29 of the petition relating to GA No.3930 of 2007 – the right to use the trademark “Putzmeister” as part of its corporate name was obtained by the second defendant otherwise than under the second joint venture agreement. The right conferred on the second defendant under clause 18 of the second venture agreement came with a condition that such right would be extinguished upon the expiry of two years of the plaintiff’s shareholding in the joint venture company dropping below 26 per cent of its paid up capital. The plaintiff’s permission to the second defendant to use the mark “Putzmeister” as part of its corporate name did not come with any express condition.

On a combined effect of these factors operating against the plaintiff, the plaintiff would not be entitled to any more order than the order subsisting in its favor. The order dated September 28, 2007 as modified and continued by the order dated October 8, 2007 is confirmed. In view of the defendants not seriously opposing the injunction in respect of the “PM” logo and the injunction restraining the first defendant from using the word mark “Putzmeister” in any matter or form, such injunction will continue. The second defendant will, however, be free to use “Putzmeister” as part of its corporate name without seeking to suggest any continued association with the plaintiff. Hope this article clears all your doubts on joint venture agreement.

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