UPAID SYSTEMS LIMITED Vs. DIRECTOR OF INCOME TAX

JUDGEMENT

(1.) THE applicant is a company incorporated under the laws of British Virgin Islands. It was previously known as 'In touch Technologies Holdings Limited' , the predecessor of which in turn was 'In Touch Technology Limited'. The applicant is engaged in the business of providing and enabling Electronic Payment Services via mobile and fixed line telecom and other telecom services networks. Over the years, the applicant has been conceiving, designing and developing Software Technology relating to payment processing platforms and services. In the year 1966, a new framework for an advanced intelligent processing platform was conceived of. In order to exploit that invention commercially, appropriate software had to be designed and developed. After developing the design, the applicant outsourced the development of software to Satyam Enterprise Solutions Limited. On 29.5.1997, a Memorandum of Understanding was entered into in that behalf with Satyam Enterprise Solutions Limited. Satyam Enterprise Solutions Limited subsequently merged with its parent Satyam Computer Services Ltd. The obligations under the MOU with the applicant were taken over by the parent Satyam Computer Services Limited under the scheme of amalgamation. The Memorandum of Understanding provided that Satyam would develop certain Operation Support Systems software which included, inter alia, products that came to be known as 'Call Manager' and 'Net Manager'.

(2.) ON 11.9.1998 as Assignment Agreement effective from 1.1.1998 was executed between the parties whereunder Satyam, after receiving good and valuable consideration, assigned to the predecessor of the applicant in perpetuity all worldwide right, title and interest in the software and Intellectual Property Rights and Copyright over the software developed. The Assignment Agreement also assigned to the applicant the right to seek patent protection for inventions and to own all patent applications and letters patent or similar legal protection for such inventions in all countries throughout the world. The Assignment Agreement was executed in the United States of America and the governing law was the law of the United States. On 15.9.1998, the applicant filed a provisional patent application with the United States Patent and Trademark Office in respect of 'Call Manager' and 'Net Manager.' Satyam, along with the Assignment Agreement had also provided assignment letters from its employees who had worked on the innovations sought to be patented. These letters were also relied on by the applicant before the Patent Authority.

(3.) THERE were some omissions in the application filed before the Patent Authority. These omissions were rectified by Satyam at the request of the applicant and a combined declaration was filed with the Patent Authority. Being satisfied, the Patent Authority granted ' Patent 947' to the applicant on 20.11.2001. Other subsidiary applications in respect of inventive work predicated in part upon '947 Patent' were also filed by the applicant before the Patent Authority. The entirety of the patent portfolio of the applicant, according to it, is either wholly or partially dependent upon '947 Patent'.