In the case of Financial Times Ltd. v Bennett Coleman & Co. Ltd. an application was made under Section 124 by Bennett Coleman & Co. Ltd (Defendants No. 1 and 2) who sought for the stay of the proceedings.
Relying upon the case of Puma Stationer Pvt. Ltd. and Anr. v Hindustan Pencils Ltd; where the court had held that when an application for rectification under Section 124 is moved before the Board, Court should proceed to stay the suit, only when it is satisfied that the request is prima facie tenable. The defendants contended that prima facie Financial Times Ltd's (the Plaintiff) letter mark 'FT' applied for in1987, in respect of which the present infringement action had been filed, was not distinctive. Further, they argued that the Courts enquiry should have stopped and concluded at the point of time when the application had been made by the Plaintiff.
It was contended by the Plaintiff that Section 124(1) (ii) is essentially discretionary and that the Court had to first conclude an appraisal of the materials on record, that the plea of non - registrability was, prima facie, tenable. Further, they argued that the suit was a composite one claiming infringement as well as alleged passing off. Lastly, it was argued that the Defendants had lost their credibility since they had applied for an identical mark 'FT' with the Trade Mark Registry.
After careful consideration of the submissions, the Court observed, that all that it is required to do in a situation where a rectification proceeding is pending, as on the date of the suit, is, to stay it in the event when it is satisfied that, the Defendant's plea of the invalidity of the Plaintiff's trade mark is a prima facie tenable plea. In regard to Section 124 (1)(b)(i) if the rectification proceedings are pending as on the date of the suit, the court has no option but to stay the suit.
It was held that even though the Defendants No.1 and 2 pleaded invalidity of the mark, they had chosen to approach the court for stay only after 3 years of filing the application for rectification. Further, the Defendants had not stated why they had sought for rectification only after five years of filing the written statement. The court furthermore explained that it was conscious that a blanket acceptance of the Defendant's plea of prima facie tenability of the argument that the letter marks is incapable of distinctiveness would lead to unforeseen results. This would invariably colour the competent Tribunal's view and tilt the proceedings unfairly in favour of the Defendant/Applicant.
In conclusion, the Court stated that while exercising the jurisdiction of Section 124, a fine distinction has to be kept in mind between the nature of "tenability" of such a plea, while considering a temporary injunction motion on the one hand , and for stay of suit on the other. The Court further opined that this was not an appropriate case where a prima facie view that the defence is tenable could be taken resulting in stay of the suit. The Court also could not help noticing that the Defendants No.1 and 2 had claimed distinctiveness of the letter mark 'FT' and had applied for its registration, almost concurrently with the filing of the present application. Therefore, the application was held to be unmerited.
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