India: Stay Trademark Infringement Suit In Case Of Rectification Proceeding – Supreme Court

Last Updated: 9 April 2018
Article by S.S. Rana & Co. Advocates
Most Read Contributor in India, September 2018

The Supreme Court of India, recently in a remarkable judgement clarified the ambiguity regarding the question of rectification of a trademark if an infringement suit is pending.

Brief Background

  • P.M. Diesels Ltd, (hereinafter referred to as the 'Respondent') is the registered proprietor of three trademarks, the common feature of which are the words 'Field Marshal'. The first registration certificate was issued on October 16, 1964, and the second and third registration certificates were issued on October 4, 1968.
  • In 1982, Patel Field Marshal (hereinafter referred to as the 'Appellants') applied for registration of the trade mark 'Marshal' for their use. Knowing about the similarity between the marks, the Respondents served a notice to the Appellants on July 23, 1982, asking them to stop using the impugned mark 'Marshal'.
  • In 1989, a suit was filed by the Respondent for infringement of the impugned trade mark by the Appellants praying for perpetual injunction. An Interlocutory Application for a temporary injunction was also filed.
  • The Appellants in the above mentioned suit defended themselves by questioning the validity of the registration of the Respondent's trade mark "Field Marshal" and claimed that the same was liable to be rectified in the Trade Mark Register.
  • In the said suit the Single Judge Bench of Delhi High Court dismissed the Respondent's application for interim injunction on the ground that the High Court did not have jurisdiction, both, pecuniary and territorial, over the subject matter. However, in appeal, the Division Bench reversed the decision of the Single Judge and directed for consideration of the Interlocutory Application for interim injunction on the merits and granted a temporary injunction in favor of the Respondent.
  • Thus, the present Appeal.

Issue

Where a suit for infringement is pending wherein the issue of validity of the registration of the trade mark in question has been raised either by the Plaintiff or the Defendant and no issue on the said question of validity has been framed in the suit or if framed has not been pursued by the concerned party in the suit by filing an application to the High Court for rectification under Sections 111 read with Section 107 of the Trade and Merchandise Marks Act, 1958, whether recourse to the remedy of rectification under Sections 46 and 56 of the 1958 Act would still be available to contest the validity of the registration of the Trade mark?

Appellant's Contentions

  • The Appellants relied heavily on Section 107 and 111 of the Trade and Merchandise Marks Act, 1958 (hereinafter referred to as the '1958 Act'). They contended that the 1958 Act for the purpose of this issue has 2 types of rights:
    • Owner of a registered trademark (Section 28 and 29 of the 1958 Act); and
    • The person aggrieved by such registration (Section 46 and 56 of the 1958 Act). Both these rights are independent of each other.
  • The Plaintiff submitted that the only pre-requisite of Section 107 and 111 of 1958 Act is that the individual filing an application should belong to second type i.e. the person aggrieved.
  • Discussing the judgement in the case of National Bell Co. vs. Metal Goods Mfg. Co. (P) Ltd., the Plaintiffs stated that the validity of the conclusiveness of the trademark can be raised in a rectification application and infringement suit, both.
  • To support their contention they focused on the judgements given by Madras High Court in B. Mohamed Yousuff v. Prabha Singh Jaswant Singh and Others and by the Delhi High Court in Data Infosys Limited and Others v. Infosys Technologies Limited.

Respondent's Contentions

  • It was contended regarding Section 111 of the 1958 Act, that once the Civil Court is satisfied with regard to the prima facie tenability of the issue of invalidity of the registration of a trade mark that may be raised before it by any party to an infringement suit, the said question has to be decided in a rectification proceeding and not in the infringement suit. The suit will remain stayed and the final decision of the statutory authority in the rectification proceeding will govern the parties to the suit.
  • Further, it stated that the rights in Section 46 and 26 of 1958 Act, do exist mutually with Section 107 and 111 of 1958 Act. They function independently and their mutual existence would lead to contradictory decisions on the same point.
  • They took a different view and submitted that the plea of invalidity of trademark in Section 111 of the 1958 Act, do urge to decide the plea distinctly in the rectification proceeding under Section 46 and 56 of the 1958 Act.
  • They objected to the judgements used by the Appellants as they were of the view that the ratio of the said judgments are not in consonance with the true purport and effect of the legislative scheme.

Court's Decision and Analysis

  • The Court took into consideration Sections 46, 56, 107 and 111 of Trademark Act, 1958, corresponding to Sections 47, 57, 124 and 125 of the 1999 Act.
  • Discussing the scheme of the trademark law for the purpose of the issue in this case two contrary judgements were referred in detail:
    • The Delhi High Court in the case of Astrazeneca UK Ltd. and Anr. v. Orchid Chemicals, took the view was that while cases falling in the Section 124 (1) of the Trademarks Act, 1999 the Civil Court dealing with infringement suit would be obliged to adjourn the proceedings and await the outcome of the rectification proceedings; and
    • The Madras High Court in B. Mohamed Yousuff v. Prabha Singh Jaswant Singh and Others, took the contrary view and held that Section 124 (i) and (ii) operate at two different levels and in two different situations. The Court held that both the sub clauses focus their field of operation only with regard to the stay of suit of infringement and the same does not deal with the discretion of the court to permit or not to permit the rectification the filing of the rectification application. The High Court was of the view that Section 124 (i) and (ii) does not disclose that the provision of 1999 Act mandates a party to just obtain permission/ leave of the court to file a rectification application, which is a statutory right, vested by the Act and cannot be curtailed by any other provisions of the Act.
    • The Supreme Court also considered the full bench judgement of the Delhi High Court, wherein it took the view that the provisions of Section 124 (3) of the Act should be interpreted to mean that if rectification proceedings are not filed within the period stipulated under Section 124 (3) of the 1999 Act, or any extended period, the issue of invalidity of the registered trademark would not survive to be decided and the said plea would be deemed to have been abandoned.
  • Therefore, after the discussion, the Court held that: "all questions with regard to the validity of a Trade Mark is required to be decided by the Registrar or the High Court or the IPAB and not by the Civil Court. The decisions will bind the Civil Court. In a case where the issue of invalidity is raised or arises independent of a suit, the prescribed statutory authority will be the sole authority to deal with the matter. However, in a situation where a suit is pending (whether instituted before or after the filing of a rectification application) the exercise of jurisdiction by the prescribed statutory authority is contingent on a finding of the Civil Court as regards the prima facie tenability of the plea of invalidity."
  • Therefore, it meant that it is important to first resolve the root cause of any matter i.e. issue of invalidity and a decision on the same would bind the parties before the Civil Court. Only in the situation wherein the decision is against the party raising it or the party abandoning it, the suit will go on to decide on other issues in the suit.

For further information please contact at S.S Rana & Co. email: info@ssrana.in or call at (+91- 11 4012 3000). Our website can be accessed at www.ssrana.in

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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