"Registration of Trademark During Pendency of the Suit for Passing Off is not Deterrent in Amending the Pleadings Later"

It is a well settled law, as given in various decisions of the court, in situations where trademark was registered during pendency of the suit for passing off, subsequent amendment in the plaint was allowed by the courts and the parties were permitted to incorporate the claim of infringement of trademark in the plaint. It is also well settled that while considering the issue of amendment in the written statement to be allowed or not, the court does not go into the merit of the matter nor it decided whether or not the claim made therein is bona fide or not.

The abovementioned law was brought for deliberation in the Delhi High Court in the case Vatika Resorts Pvt. Ltd v Vatika Grand.2009 (40) PTC111 (Del). Vatika Resorts the plaintiff filed a suit for permanent injunction restraining passing off, damages, rendition of accounts etc against the Vatika Grand the defendant in 2002. However, in the current plaint, it was stated that during pendency of the suit, the trademark Vatika was registered in favour of Vatika Township Pvt. Ltd and by virtue of the amendment made in the trademark when the application was pending, the said trademark was registered in the name of Vatika Landbase Ltd. and the said name was changed to Vatika Ltd which became the registered proprietor of the trademark Vatika. Vatika Ltd. then assigned the said trademark to the Vatika Resorts by way of an Assignment Deed alongwith goodwill and necessary request on the required form. It was contended by Vatika Resorts that since valuable statutory rights came to be vested in Vatika Resorts, which they did not have at the time of institution of the suit, they should be allowed to amend the plaint. However Vatika Grand averred that they were the prior users of the trademark Vatika and their proprietary rights were being undermined by Vatika Resorts by adopting a back door entry approach on the basis of assignment deed executed in its favour by one of its sister concerns.

Although the court agreed that amendment could not be allowed which would have the effect of substituting one cause of action for another or changing the subject matter of the suit, and deprive the other party of a legal right accrued by lapse of time, however, amendments could be allowed in pleadings when it was necessary for the purpose of determining the real question of controversy in the suit. The court also accepted that while considering the amendment, the merit of the case was immaterial.

The Court elaborated upon Order VI Rule 17 of the Civil Procedure Code, under which amendments were to be allowed on satisfaction of the two conditions- a) of not working injustice to the other side b) of being necessary for the purpose of determining the real question in controversy. Also, under the said rule, the court could not decide the falsity or correctness of the amendment sought to be made. The main consideration for the court was whether such amendment was necessary for just and final determination of the controversy between the parties or not.

The Court therefore rejected the plea of Vatika Grand relating to any defense it had raised on merits of the case since the court could decide that at the present stage of the suit. The plea of Vatika Grand that the registration of Vatika Resorts was obtained by Vatika Resorts through the sister concern in order to defeat their rights did not stand since the rights of the Vatika Grand were protected under Section 33 of the Trade & Merchandise Marks Act, 1958 on account of it being the earlier user of the mark in question. Also, even if the amendment was allowed, there was to be no change in the nature of the matter as cause of action in infringement and passing off actions were substantially the same in law. Hence the amendment sought by Vatika Resorts was allowed on account of it not causing any prejudice to Vatika Grand; the court hence agreed that the amendment was necessary for the purpose of determining the real matter in the controversy between the parties.

© Lex Orbis 2009

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