Jio uses LTE or Long Term Evolution technology to provide high-speed internet access with high definition voice quality. Jio is pioneer in India when it comes to telecom technology innovations, and has been instrumental in creating a strong patent portfolio. A profitable business strategy is based upon innovative products and services along with meaningful patent protection for such innovations. Over the span of last few years, the changing landscape of patent registration in India specifically regarding software patents has resulted in an evolving patent regime resulting in more effective patent portfolios that are built to withstand challenges and deliver results. With a view to achieve such goals, patent attorneys work closely with innovators using extensive legal knowledge, industry experience, and cutting edge technology expertise to meet these challenges. Patent attorneys understand that to effectively navigate a growing patent landscape, it is crucial to anticipate changes and prepare all work product with a futuristic approach. An effective engagement with patent lawyer helps in handling various stages of the patent process, including, patent prosecution, patent drafting, patent opinions and searching, patent invalidation, and patent litigation.
Among various patents filed by Jio with the Indian Patent Office, one of the interesting patents is titled as “system and method of natural language processing”, which discloses a natural language dialog system capable of determining a correct meaning of the words detected by the speech recognition, thereby leading to better chat experience for the users. The application number of this patent is 201921011067. In recent months, Jio has received funds from multiple new investors in return of allotting minority equity stakes in the shareholding.
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The extensively typical authorities for PE investors in the Indian context are the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Competition Commission of India (CCI), and Foreign Investment Promotion Board (FIPB).
This corporate deal falls within the ambit of the Companies Act. The Ministry of Corporate Affairs notified S.230 of the Companies Act, 2013, and some amendments to the Companies (Compromises, Arrangements, and Amalgamation) Rules, 2020 (“M&A Rules”) that govern this type of minority stake. The Amendments dictate that a ‘Takeover Offer’ can possess a ‘Compromise’ or ‘Arrangement’ as per S.230 and while ‘takeover offer’ has not been interpreted in the Act, the Amendments exhibit that it pertains to the acquisition of shares carried by the Minority Shareholders. Taking the current example in question the company expanded Rs.4,546.80cr from TPG against 0.93% share sale and Rs.1,894.50cr against 0.39% to L Catterton, another PE firm. This corporation particularly funds fashion retail enterprises and aids Jio Platforms’ policy of morphing from the telecom industry to a tech-empire that additionally sells products for daily use.
The list of investors in Jio includes Facebook, KKR, Vista Equity Partners, Abu Dhabi Investment Authority, Mubadala and General Atlantic and if we look at S.230(11) and its proviso, listed companies have to follow the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 for takeover offers. The Regulations contemplates a compulsory offer to be brought about to public shareholders for the accession of shares, voting freedoms, or jurisdiction in some conditions. All 10 agreements are liable to authorized clearances and particularly Facebook is plausible to endure rigid scrutiny for its interests over net neutrality.
Other procedural laws that govern such transactions include:
(1) The Majority Shareholders proposing a takeover offer gives birth to filing an application with the NCLT for authorizing the takeover. The offer must be ratified by the NCLT as part of S.230.
(2) A statement of the Registered Valuer mandatorily must encompass some parameters about the valuation facets of the target business, which has to be introduced. The report must lay down the outstanding price spent by any individual for the accession of the target company’s stakes in the recent 12mos.
(3) The Majority shareholder must possess or open a bank account and deposit one-half of net appreciations of the takeover offer in the account.
Another reflection is the CCI permission for investments in Indian businesses whose aid or turnover price traverses the prescribed limits and where no legal immunity is accessible. An application pursuing CCI permission must be formulated in 30 days from a binding commitment being enforced, or from the transmission of the goal to attain to a Government authority where no consensus has been reached. To illustrate an example, in 2014, the CCI exacted a fine of Rs. 3cr on Tesco. Tesco postponed filing the notice with the CCI nearly 73dys after its transmission to the additional controllers.