India: Challenge To The Validity Of Trademark: A Fresh Perspective

Last Updated: 27 March 2015

Article by Himanshu Sharma and Anirudh Banga1

INTRODUCTION:

Registration of trademark provides the rights to the proprietor to take action against the misuse of his trademark. The registration of trademark under Trademark Act, 1999 is held to be valid in all legal proceedings under section 31. The same section came into the observation of the Hon'ble Bombay High Court in a recent Judgment in Lupin ltd and Anr vs Johnson & Johnson and Anr2 wherein court dealt in detail regarding the validity of the trademarks challenged by the de-fendant at the interlocutory stage of the proceedings. Although the law regarding the validity of a registered trademark is dealt with in a number of cases but the observation of the Court in the instant case is quite refreshing as it interpreted the section with a fresh perspective. The observation made by the court might not be final law on this section but the same has provided a new dimension which would be considered by the superior court before coming to a conclusion.

CASE FACTS:

In the present case the Plaintiff i.e Lupin Ltd and the Defendants i.e. Johnson & Johnson are en-gaged in the business of manufacturing, marketing and selling of pharmaceutical products. The Plaintiff Company is an Indian company registered under the Companies Act 1956 and has its registered office in Mumbai. The plaintiff claims international presence in almost 70 countries. The De-fendant Company has its registered office in New Jersey, USA. The Plaintiff has filed the present suit for infringement in respect of registered trademark "LUCYNTA", registered in class 5 of the fourth schedule under the Trade Marks Act, 1999, w.e.f 2012. The Plaintiff claims that they had conceived and adopted the mark in or around June 2010 and applied for registration of the same on 20th august 2010. The plaintiff took official search of the trade marks register in the trade marks registry on 18th October 2010 and found no conflicting mark on the register of trademarks or pending application. On 28th march 2011 the examiner issued a no conflict report to the plaintiff following which on 8th august 2011 the trademark was advertised in the trademark journal, and thereafter was accordingly registered on 9th march 2012.

On 12th July the Plaintiff received summons from the Hon'ble Delhi High Court, of the suit filed by Johnson and Johnson alleging passing off by plaintiff, by using the mark "LUCYNTA".

ISSUES:

  1. Whether the court can go into the question of validity of the registration of the plaintiff's trade mark at an interlocutory stage when the defendant takes up the defense of invalidity of the registration of the plaintiff's trade mark in an infringement suit.
  2. Whether the court should grant relief to the plaintiff, in the form of interim orders, when the validity of the registration of the trademark of the plaintiff is itself in question.
  3. Can a party maintain a suit for passing off against another party, whereby the latter party is the registered proprietor of the trademark, and the former party is the prior user of the trademark.

It is contended by the plaintiff that the application for registration of the mark "LUCYNTA" made by Johnson & Johnson in India was made on 2 September 2011, which is subsequent in time to the application made by the plaintiff. The plaintiff already got the trademark "LUCYNTA" registered in its name, by the time the defendant applied. Hence the defendant has committed trademark infringement.

It is contended by the defendant that they were the inventor of a new drug "TAPENDOL", and coined and adopted a distinctive trademark viz., "NUCYNTA" in respect thereof. Further it was contented that the defendant had extensively used the same in the international market since 2008. That prior to the plaintiff's registration the defendant had also obtained registration of the aforementioned mark in various countries. That the plaintiff had therefore fraudulently adopted a deceptively similar trademark "LUCYNTA", that too in respect of the same drug and with such a fraudulent adoption had proceeded to registration. Additionally defendant put forward that the present suit has been filed by the plaintiff as retaliation to the earlier suit filed by the defendant in the Delhi High Court and the adoption of the mark "LUCYNTA" was ex facie fraudulent and the suit filed by the plaintiff, male fide.

DECISION OF THE COURT:

The court held that in case where the registration of trademark is ex facie illegal, fraudlent or shocks the conscience of the court, the court is not powerless to refuse to grant an injunction, but for establishing these grounds, a very high threshold of Prima Facie proof is required. It is; therefore, open to the court to go into the question of validity of registration of plaintiff's trade mark for this limited purpose, to arrive at a Prima Facie finding. The Court has also noted that in order to establish the above grounds, a very high threshold of Prima Facie proof would be required.

The judgment by the Hon'ble Bombay High Court in this case is a very profound example that the High Court doesn't blindly follow the precedent set by the superior benches, but applies its own mind to the issue at hand and has had the courage to go against the established precedent and reinforce its decision by strong points of reasoning as well as case laws. Furthermore, the court has not resorted to simply applying the law, as it is, to the facts of the case and thereby giving the judgment solely on the basis of what the statute says. But it has divulged into understanding the intention with which the legislature chose the words, it did, while drafting the relative provisions of the statute.

OBSERVATION OF AUTHOR

The court in the aforementioned case has been asked to decide on the major issue of "Whether a court can go into the validity of the registration of a trademark, while the plaintiff has filed a suit for seeking interim orders". In addressing the major issue of the civil court, going into the validity of the registration of a trademark, the court cited the various precedents by other single judge as well as division benches, both in favour of and against the proposition.

In the case of M/s Maxheal pharmaceuticals vs. Shalina Laboratories Pvt. Ltd3 the single judge bench clearly held that at the stage of considering of an application for interlocutory orders, it is not permissible for this court to go into the question of validity of the mark and as long as the mark remains on the register (even wrongly), the proprietor thereof is entitled for an order of in-junction. Opposing this, the court further cited 2 judgments namely M/s J.K. Sons vs. M/s Parksons Games & Sports4 decided by the division bench and the decision of the Full bench in the case of Abdul Cadur Allibhoy vs. Mahomedally Hyderally5 . Furthermore referring to the single judge decision in the case of Hindustan Embroidery Mills Pvt. Ltd. vs. K. Ravindra and Co6 ., the judge observed that it is not the practice of the court to consider the validity of the registration of the mark on a motion for interlocutory injunction, thus quoting Kerly on trademark for his decision. The court however after considering the precedents still felt the need to reconsider the view held in M/s Maxheal Pharmaceuticals vs. Shalina Laboratories Pvt. Ltd. (supra).

The court while addressing the main proposition, entertained the minor propositions, namely; whether a prior user of a trademark would have an action of passing off against a registered pro-prietor of a trademark. Citing the Landmark judgment of the Apex court viz., N.R. Dongre vs. Whirlpool7 , wherein the Delhi High Court , division bench held that in light of the section 27(2), 28(1), 30(1)(d) of the trademarks act 1999, that registration of the trademark doesn't provide a defense to the proceedings for passing off. Thus confirming, the viewpoint of section 27(2) of the trade and merchandise marks act, that a prior user of a trademark can maintain an action for passing off against any subsequent user, inclusive of a registered user. The Supreme Court concurred with the view of the division Bench of the Delhi High Court. Similar observations were made by the Apex Court in the cases of Milmento Oftho Industries and others vs. Allergan Inc8 . Now coming to the main question, the court cited the case of Delhi High Court in the case of Lo-wenbrau AG vs. Jagpin Breweries Ltd9 ; the single judge in the 14th Para stated that while deciding whether the injunction should be granted, or not, a tentative view needs to be taken w.r.t. the question of validity of registration.

Furthermore it was correctly held that the registration was only Prima Facie proof and not conclusive. Prima Facie evidence only means that on the face of it, the registration would be proof of its validity, but, not being conclusive, the court is well within its rights to look into the validity of the said trademark; however the burden of proof imposed, is very heavy in such matters. The Division Bench of the Delhi High Court in the case of Marico Limited vs. Agro Tech Foods Limited10 held that the single judge was entitled to look into the validity of the registration of the trademarks.

In the opinion of the author the same is justified as while considering the plea of interim in-junction, the court has to go into the balance of convenience, and in doing so it has to go into the validity of the registration. Thus the view of the division bench of the Delhi High Court is absolutely correct. Furthermore it is the duty of the court to see that when a plaintiff comes to a court seeking relief of any sort, the court has to look into the fact that the plaintiff, comes to the court with clean hands. A plaintiff who himself has committed a wrong is not entitled to a remedy, as stated by the maxim "Ex turpi causa non oritur actio". Thus in the present case the Hon'ble Bombay High Court, single judge felt the need for more clarity on the topic and hence referred the matter to a bigger bench for comments.

Now the fact remains that under the 1958 Act, the High Court had the power to adjudicate upon infringement as well as rectification proceedings, thus the question of Prima Facie evidence never arose, as both had to be adjudged by the High Court. However, the 1999 Act made the IPAB, as the appropriate forum for rectification proceedings and the Civil Courts for other infringement proceedings thus limiting the validity checking power of the civil courts. However what the High Court can now do is, under section 124, if it is satisfied that the plea of invalidity of the trademark is Prima Facie tenable then it can order a stay of proceedings for 3 months giving time to the IPAB to adjudicate upon the rectification proceedings. On careful perusal of section 28 and 31 of the 1999 Act, we'll find the terms "if valid" and "Prima Facie", respectively. The existence of such words clearly projects the intent of the legislature while drafting the law, i.e. its will to give some power to the civil court to go into the validity of the registration.

The court held in Para 29 that the first rule of interpretation of statutes, that is, if the words are precise and clear then nothing more is required to give effect to their natural meaning. When the plain reading leads to absurdity, it is only then that the other modes of interpretation are referred to. Thus applying this principle over here we see that the words "Prima Facie" u/s 31, means that the trademark is valid on the face of it and not conclusively, thus leaving a window for the defendants to exploit. Similarly the presence of the words "if valid" u/s 28, gives permission to the plain-tiff to go to court seeking interim orders.

CONCLUSION:

Although the present judgment will certainly be challenged in the superior court but then also the view taken by the court is appraisable. The present judgment is an example of well thought out and reasoned judgment wherein the court has gone into the details of the Trademark Act and shown light to the unscathed corners of the law. This well thought out judgment is an example that the IP law in India is in stage of transformation and will certainly lead to the development of law in near future in quest of bringing the Indian Law at par with the foreign law.

Footnotes

1. Student of AMITY Law School IV year

2. 2015 (61) PTC 1 [BOM] [FB]

3. Appeal no 88/2005 in Notice of Motion no. 2638/2004 in suit no. 2663/2004

4. CDJ 2011 BHC 317

5. 1901 (3) Bom.L.R. 220

6. (1974) 74 Bom LR, 146

7. 1996 PTC (16) 476

8. 2004 (28) PTC 585 (SC)

9. 157 (2009) DLT 791

10. 2010 (44) PTC 736 (del

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