1. INTRODUCTION

In today's highly competitive commercial landscape, it is not uncommon for the trademark registration process initiated by one party to run simultaneously with the trademark infringement proceedings initiated against it by a competitor. If during the pendency of the infringement proceedings, the application for registration of mark is allowed, the adjudicating court usually adopts the procedure envisaged under Section 124 of the Trade Marks Act ("Act") which provides that the infringement proceeding shall be stayed and a specific issue regarding the validity of the registered trademark shall be framed by the court. However, before doing so, the court analyses if a defendant has the defense under Section 30(2)(e)1 of the Act- stating that its mark is duly registered, and no infringement has taken place.

Recently, the Delhi High Court ("High Court") confronted a complex and convoluted situation wherein an application under Section 124(1)(b) of the Act seeking a stay on the infringement proceedings was dismissed by the Court on the ground that Defendant did not raise its defense under Section 30(2)(e)2. At this juncture, an important question arose before the High Court – whether it can continue the infringement proceedings before ascertaining the legality of the registered trademark of the Defendant.

2. FACTUAL BACKGROUND

Nadeem Majid Oomerbhoy ("Plaintiff") holds the registration for the trademark 'POSTMAN' for its edible groundnut oil. In the year 2005, the Plaintiff filed a suit for trademark infringement against Sh. Gautam Tank ("Defendant") alleging that by using the mark 'SUPER POSTMAN' for its edible groundnut oil, the Defendant is infringing the registered trademark of the Plaintiff and sought an injunction against the same ("Suit"). Importantly, before the filing of the Suit in 2004, the Defendant had already filed an application seeking registration of its mark 'SUPER POSTMAN'. The said application remained pending with the trademark registry for around 19 (nineteen) years. Recently, during the pendency of the Suit, on February 13, 2023 the Defendant's mark was approved by the trademark registry.

Subsequent to this development, Plaintiff filed an application in the Suit under Section 124 of the Act seeking adjournment of the infringement proceedings for 3 (three) months and framing an issue regarding the validity of registration so granted to the Defendant ("Application"). This Application was dismissed by the High Court on the ground that it is contrary to the scheme of Section 124 of the Act as no defense under Section 30(2)(e) of the Act was taken by the Defendant. While observing that "a strange and unprecedented situation has arisen in the present case for which no ready solution appears to be available, either in statute or in precedent", the High Court appointed two amici curiae to provide assistance to the court. At this stage, 3 (three) important questions were raised before the Hon'ble High Court:

  1. Whether raising a defense under Section 30(2)(e) of the Act by a defendant is a condition precedent for a court to exercise its powers under Section 124 of the Act?

  2. If the first question is answered in the affirmative, whether a court can shut its eyes and continue with the infringement suit against the registered trademark holder without ascertaining the legality of the registration so granted in the first place?

  3. If Section 124 of the Act is not applicable in the present case, what shall be the appropriate remedy for the Plaintiff?

3. ORDER AND ANALYSIS

With the assistance from the amici curiae, the High Court elaborately dealt with each and every question, and the findings are discussed hereinbelow:

3.1. DEFENSE UNDER SECTION 30(2)(E) OF THE ACT IS A PRE-REQUISITE FOR PROCEEDING UNDER SECTION 124 OF THE ACT

With respect to the first issue, the High Court observed that Section 124 of the Act provides a specific framework that must be adhered to by the parties. From a bare perusal of the language of the Section 124 of the Act, it is evident that Clause (b) of Section 124 of the Act3 can only be invoked if a defendant raises a defense under Section 30(2)(e) of the Act, and post thereto, the court, after satisfying with the tenability of the defense, is required to adjourn a suit for next 3 (three) months and frame an issue on the validity of the registered trademark of a defendant.

The Hon'ble High Court, while placing reliance on the Hon'ble Apex Court's ruling in Singhara Singh v. State of U.P4, highlighted that when a statute requires a thing to be done in a particular manner, it must be done in that manner alone or not to be done at all. Since the entire machinery of adjournment of suit and framing of issue is premised on the defense by the Defendant under Section 30(2)(e) of the Act that its trademark has been duly registered and the Plaintiff's claim of infringement is bogus or fictitious in nature, the absence thereof will strictly bar the proceedings under Section 124 of the Act.

3.2. CONTINUATION OF INFRINGEMENT PROCEEDINGS AGAINST DEFENDANT WITHOUT RECORDING A FINDING ON THE VALIDITY OF ITS MARK WOULD BE CLEARLY ILLEGAL IN NATURE

After going through the written statement of the Defendant, the High Court observed that the Defendant has not taken the defense that its mark is duly registered, and no infringement has taken place. It was argued by Plaintiff that the High Court can continue with the adjudication of the Suit, ignoring the registration of Defendant's mark with the trademark registry. The High Court, while outrightly rejecting this argument, emphasized that it is a settled proposition of law that claim of infringement cannot be raised against a registered trademark holder, even if it is identical or similar to an existing trademark.

The High Court further observed that Section 29 of the Act clearly states that infringement can only take place by a person who is "not the holder of a registered trademark". Similarly, Section 30(2)(e) of the Act unambiguously states that the use of a mark that is duly registered would not amount to infringement. Additionally, Section 23(1) of the Act provides that the date of registration of the mark shall be the date on which the Application for registration was filed, and in the present case, the Application was filed by the Defendant in 2004, thereby, its mark shall be deemed to be registered even before the filing of the Suit.

The High Court also relied upon the decision of Hon'ble Apex Court in S. Syed Mohideen v. P. Sulochana Bai5 wherein it was held that when two persons are registered owners of two identical or similar trademarks, one cannot claim infringement or exclusivity against the other as both are legally conferred with the concurrent right to enjoy the same.

Thus, in light of the aforesaid statutory mandate, the High Court held that any finding on the infringement of Plaintiff's trademark by a registered trademark holder (in this case the Defendant) would be per se illegal and alien to the scheme of this Act and the settled law. As per the High Court, the only recourse available in this case was to first ascertain the validity of the Defendant's trademark, and the issue of infringement would arise only if the registration is held to be invalid.

3.3. INVOCATION OF SUO MOTO POWER UNDER SECTION 57 OF THE ACT: AN EFFICACIOUS AND PLAUSIBLE WAY-OU

As discussed in the foregoing paragraphs, it was imperative for the High Court to adjudicate the legality of Defendant's trademark before rendering any finding on the aspect of infringement. Since the High Court had already decided to not proceed under Section 124 of the Act, owing to the non-compliance with its mandatory requirement, it confronted a unique situation as to how the Plaintiff shall be provided a necessary opportunity to question the legality of Defendant's trademark.

Considering the peculiar factual scenario of the case, the High Court accepted the recommendation of the amici curiae to exercise its suo-moto powers under Section 57(4)6 of the Act to examine the legality of Defendant's trademark. The suo-moto power now enables the High Court7 to remove or cancel the registration with the objective of maintaining purity of the trademark register. This power is completely independent of an application under Section 124 of the Act.

The High Court also placed reliance on the decision rendered by the Hon'ble Apex Court in Jagatjit Industries Ltd. v. Intellectual Property Appellate Board8 wherein the importance of undertaking a suo-moto exercise by the trademarks registrar in order to regularly remove or delete the invalid marks from the register was discussed in detail. This exercise gains utmost significance, especially since there is no other legislative recourse available for raising an objection against the validity of the registered trademarks.

4. CONCLUSION

Undoubtedly, the High Court has adopted an equity-oriented approach to ensure that plaintiffs in such cases are not rendered remediless and provided with a much-needed solution to examine the legality of a defendant's mark, in cases where the requirements of Section 124 of the Act are not fulfilled. The High Court further reaffirmed the legal position that the issue of infringement cannot be raised against a registered trademark holder, irrespective of the usage of an identical or similar mark. In a nutshell, it can be said that the High Court has propounded an alternative route with an objective to ensure that the infringement suit shall not be rendered nugatory.

Footnotes

1. Section 30(2)(e) of the Act: A registered trade mark is not infringed where— the use of a registered trade mark, being one of two or more trademarks registered under this Act which are identical or nearly resemble each other, in exercise of the right to the use of that trade mark given by registration under this Act.

2. Order dated September 11, 2023 in Nadeem Majid Oomerbhoy Vs Sh. Gautam Tank and Ors. CS(Comm) 361/2018, I.A. 4575/2005 & I.A. 16151/2023.

3. Section 124 of the Act: Stay of proceedings where the validity of registration of the trade mark is questioned, etc.—
(1) Where in any suit for infringement of a trade mark—
(a) the defendant pleads that registration of the plaintiff's trade mark is invalid; or
(b) the defendant raises a defence under clause (e) of sub-section (2) of section 30 and the plaintiff pleads the invalidity of registration of the defendant's trade mark, the court trying the suit, shall,—
(i) if any proceedings for rectification of the register in relation to the plaintiff's or defendant's trade mark are pending before the Registrar or the Appellate Board, stay the suit pending the final disposal of such proceedings;
(ii) if no such proceedings are pending and the court is satisfied that the plea regarding the invalidity of the registration of the plaintiff's or defendant's trade mark is prima facie tenable, raise an issue regarding the same and adjourn the case for a period of three months from the date of the framing of the issue in order to enable the party concerned to apply to the Appellate Board for rectification of the register.

4. AIR 1964 SC 358.

5. (2016) 2 SCC 683.

6. Section 57(4) of the Act: The tribunal, of its own motion, may, after giving notice in the prescribed manner to the parties concerned and after giving them an opportunity of being heard, make any order referred to in sub-section (1) or sub-section (2).

7. With the enactment of the Tribunals Reforms Act, 2021 the power exercised by the Intellectual Property Appellate Board (IPAB) to decide rectification petitions is now exercised by the High Court.

8. (2016) 4 SCC 381.

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