Case Law Details
Facts: ABB Limited (applicant), an Indian company, has various business divisions such as power products and systems, automation systems, process automation and robotics systems. The appellant is a part of the ABB Group, which is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact.
As per the ABB Group’s Research & Development (R &D) Policy, all basic R & D for the ABB Group is coordinated and directed through ABB Research Ltd., Zurich (ABB Zurich). ABB entities, who wish to participate in the basic R & D, enter into a Cost Contribution Agreement (CCA) with ABB Zurich. As per the CCA, the entire costs or the basic R & D are shared between the ABB entities participating in the CCA, based on an allocation key. The participating ABB entities are allowed a royalty-free unlimited access to the research results including any intellectual property rights (IPRs) generated from the basic R & D under the CCA, which are legally owned by ABB Zurich.
The operative contract research activities under the CCA are performed within the ABB Group through Corporate Research Centres (CRC) in various countries and such CRCs are remunerated on a cost plus basis by ABB Zurich. Further, a coordination fee is payable by each participating ABB entity to ABB Zurich for its role as administrator and coordinating agency under the CCA. None of the personnel of ABB Zurich are required to visit India for rendering any work. Any fee received by ABB Zurich from licensing any IPR generated under the CCA to any entity including ABB entities, is used to reduce the overall costs of the basic R & D. The ABB entities participating in the CCA are ‘economic owners’ of the result results including any IPRs generated under the CCA. The CRCs do not have any rights to the research results or the IPR, and act only as contract research units for the ABB Group.
The applicant is interested in directly participating in basic R & D activities of the ABB Group and accordingly, it proposes to enter into a CCA with ABB Zurich.
The proposed CCA provides in the preamble that the parties wish to participate the funding of corporate R & D in the ABB Group in order to make optimum use of the available resources and to increase efficiency and reduce cost.
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