In a fresh twist to the Daiichi-Ranbaxy saga, the Delhi High Court on October 29 directed (pdf) to auction the “Fortis” trademark to recover a part of the INR 4900 crore owed to Daiichi by the judgement debtors in the aftermath of the 2016 arbitral award (originally, as reported here, INR 3500 crores were awarded to Daiichi). The arbitral tribunal had held that the Ranbaxy promoters, Malvinder Singh and Shivinder Singh, had fraudulently misrepresented and concealed material facts about the then ongoing United States Food and Drug Administration (“FDA”) and Department of Justice (“DOJ”) investigations over drug safety while selling their shares in Ranbaxy to Daiichi in 2008. Interested readers can read Prof. Basheer’s and Prashant’s posts on this deal here and here, and can read Katherine Eban’s book (excerpt linked here) to know more about the Ranbaxy scandal). The Singh Brothers were also the promoters of Fortis Healthcare.
The Delhi High Court order judgement notes that the auction of the “Fortis” trademark will raise an amount in the range of INR 191.5 crores, however it denied the request to undertake valuation of the “Fortis” trademark since it might delay the process realization of the amount and relied on the auction to determine inherently optimum price of the mark. The Court did keep it open for the judgement debtor to themselves conduct a valuation if they’d like.
Though the judgement is very straightforward and short (perhaps because the judgement debtors did not object/ present any counter views against auctioning off the trademark), it still serves as a great example vis a vis leveraging IP for realization of debts and moves away from the conservative approach of the Supreme Court in the 2018 Canara Bank decision (discussed here by Bharat Harne).