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CS Professional · Intellectual Property Rights - Law and Practice · Layout-Designs of Integrated Circuits

Kavya Traders imported a lot of electronic devices containing chips with a registered layout-design, with no knowledge or reasonable ground to know of the registration. Later it received notice of the registration. It still holds stock on hand and ordered before the notice. What is its position under the Act?

Kavya may continue dealing with the stock already on hand or ordered before notice, but it must pay the proprietor a royalty. The royalty is settled by negotiation or determined by the Appellate Board, having regard to the benefit Kavya derived.

  1. AIt must immediately destroy all stock, as selling it is infringement
  2. BIt may continue to deal with that stock on hand or ordered, but must pay the proprietor a royalty fixed by negotiation or by the Appellate BoardCorrect
  3. CIt may continue to sell the stock free of any payment
  4. DIt may continue only if the Registrar grants written permission

Explanation

Section 18(5) protects an innocent dealer. After receiving notice, the person may continue to deal with stock on hand or ordered before the notice, but is liable to pay the proprietor a royalty determined by negotiation or by the Appellate Board. Option C is wrong because royalty is payable.

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