India: Stay Of Proceeding In A Trademark Infringement Suit

Last Updated: 21 November 2012
Article by Kamakhya Srivastava

Trademark battles on the Indian turf has already generated an impressive precedent of case laws but the fight over the letter mark "FT" between The Financial Times UK and Bennett Coleman & Co. Ltd (BCCL) is a story of its own. Since the institution of the suit, the parties have relentlessly been on a warpath. Lately, a judgment in the instant case has raised some finer points of trademark jurisprudence in India.

An application was filed by BCCL for stay of proceeding, under section 124 of the Trade Marks Act 1999, questioning the validity of the registration of the mark FT held by Financial Times. BCCL contended that a prima facie consideration of the mark holds the same to be of a non-distinctive nature and also that the material on record is negligible to show that the letter mark `FT' has any inherent or acquired distinctiveness.

The Indian trademark law provides for stay of proceeding in a suit for infringement of a trademark in cases where the defendant pleads for invalidity of the plaintiff's mark or the plaintiff pleads the invalidity of the defendant's mark against the defendant's defence of the exercise of the right to use an identical or nearly resembling trademark given by registration under the Act.

The court, in order to stay the proceedings in the infringement suit, is required to see whether any proceedings for rectification of the register in relation to the plaintiff's or defendant's trademark are pending before the Registrar or the Appellate Board. In case of a pending rectification proceeding, the suit is stayed till the final disposal of such proceedings. When there is no rectification proceeding pending and the court is satisfied that the plea of invalidity of the plaintiff or defendant's mark is prima facie tenable, the suit is adjourned for a period of three months from the date of the framing of issues in order to apply for the rectification of the register.

BCCL contended that the inexonerable operation of sec 124 is such that when an application for rectification is moved before the Appellate Board, the Court at best has to be satisfied that the said request is prima facie tenable and if so proceed to stay the suit, to which the Court factored in the considerable delay by BCCL in filing rectification proceedings and preferring an application for stay of the suit under sec 124 of the Act after pleading invalidity in their written statement in the suit. Furthermore the Court also emphasized that it is conscious that a blanket acceptance of the BCCL's plea of prima facie tenability of the argument that letter marks are inherently incapable of distinctiveness may colour the Appellate Board's view and hence lead to unforeseen results.

Finally the Court dismissed BCCL's application as unmerited and held that the reasoning sought to in the instant case cannot be invoked under all circumstances because sec 124 does empower prima facie examination of tenability, but the pleas taken in the suit and the materials supporting the case does not make it an appropriate case where a prima facie view that the defence (non-distinctiveness of the letter mark) is tenable can be taken resulting in stay of the suit.

The Court made a very significant observation that while exercising the jurisdiction under prima facie examination of tenability of the plea of invalidity of a mark, a fine distinction has to be kept in mind between the nature of "tenability" of such a plea, while considering a temporary injunction motion, and one for the stay of suit.

The instant case, although fraught with delays of an extraordinary nature on the part of the defendant, brings forth the nuance of the trademark law in a very succinct manner. The registration of the mark under the Act, in all legal proceedings is an evidence of prima facie presumption of validity. Thus a plea of invalidity of the registered trademark in an infringement suit allows for rectification proceeding to be instituted and disposed before deciding on the issue of identical or deceptive similar trademarks likely to cause confusion on the part of public, which is likely to have an association with the registered mark. The Court in the instant case observes that the plea of invalidity is tested on different threshold levels while being examined during hearing of an application for interim injunction under civil procedure code and the stay of proceeding under sec 124 of the Act. Although the Court has stopped short of elucidating on the fine distinction between the two threshold levels, it seems that that the threshold for prima facie examination of tenability of the plea of invalidity of a mark in an application under sec 124 of the Act is at a higher level as against the threshold for the same in a motion for interim injunction. This is presumably due to the inherent nature of the provisions under which the applications are preferred. In an application for interim injunction, the determination of the prima facie case involves a composite appreciation of the facts and circumstances with respect to the plea of infringement and invalidity of the mark, whereas the stay of proceeding under sec 124 of the Act is specific to the case where only validity of the mark is questioned. Thus a high threshold becomes imperative to examine the prima facie tenability of the plea of invalidity.

The "tenability" of a validity challenge is a significant part of almost all the trademark litigations where issues with respect to rectification of the register, are pleaded by either of the parties. Thus, in order to bring a case within the purview of such "tenability", an applicant must show, with respect to registration of a trademark, either –

  1. An entry duly registered has been removed from the register or omitted there from for no valid reason; or
  2. An entry has been entered in the register although the mark has not been registered; or
  3. An entry is wrongly remaining in the list although there is already an order of removal or rectification; or
  4. A particular entry has been registered, but there is some error or defect in that entry thereby making it as one which is not the exact one, which was granted registration.

In conclusion, while the text of Section 124 undoubtedly indicates that the Court has to be satisfied that the non-registrability of a mark is prima facie tenable, at the same time, the Court's approach has to be circumspect since any determination about prima facie tenability would impinge on the marks of the rectification proceedings itself.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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