In an important ruling, the Delhi High Court clarified that prior permission of the Court is not necessary under Section 124(1)(b)(ii) of the Trade Marks Act, 1999 (“Act”) for rectification of a registered trademark during the pendency of a suit.
“IPAB [Intellectual Property Appellate Board] has exclusive jurisdiction to consider and decide upon the merits of a plea of trademark registration invalidity – applying Section 47 and 57 of the Act- in the context of an infringement suit based on such registered trademark. Access to IPAB is not dependent on the civil court’s prima facie assessment of tenability of a plea of invalidity of trademark registration”, a Full Bench of the Court unanimously said after reviewing conflicting rulings from Delhi and Madras High Courts respectively.
The Court opined “Given the structure and phraseology of Section 124, the difference between clause (b) (i) and (ii) is the pendency of proceedings before IPAB. If the rectification plea is pending before the filing of the infringement suit, the court has no choice but to adjourn the suit and await the final disposal of the challenge before IPAB. If, on the other hand, no such plea is pending at the time of filing of the suit (for infringement) – the court has to examine. If urged in the written statement, the prima facie tenability of the invalidity plea; if it holds the plea to be tenable, it should adjourn the matter to enable the party to approach IPAB. In case it holds the plea to be not tenable, there is no obligation to adjourn the suit. There is another contingency, which flows from a plain reading of Section 124, which is that if the court grants time to the party to approach the IPAB, and it does not so approach the court within the time, it loses the right to argue that the suit is to be stayed”.
“…the statutorily created body of exclusive jurisdiction, i.e. the IPAB is not so constrained; rather, it has the duty and the jurisdiction to examine and deal with the merits of the plea of invalidity of the registration (of a trademark) based on all the materials placed before it. The IPAB is a judicial tribunal, which is unconstrained by the provisions of the Civil Procedure Code, and guided by principles of natural justice, but subject to provisions of the Act and the rules made there under, empowered to regulate its own procedure (Section 92(1))”, the Court added.
Below is the summarization of the Full Bench decision: –
- (a) IPAB has exclusive jurisdiction to consider and decide upon the merits of a plea of trademark registration invalidity – applying Section 47 and 57 of the Act- in the context of an infringement suit based on such registered trademark. Access to IPAB is not dependent on the civil court’s prima facie assessment of tenability of a plea of invalidity of trademark registration. In other words, Section 124 of the Trademarks Act does not control the choice of a litigant to seek rectification of a registered trademark.
(b) The decision in Astrazeneca UK Ltd. and Anr. v. Orchid Chemicals and Pharmceuticals Ltd. 2007 (34) PTC 469 (DB) (Del) and all other judgments which hold that the plea of rectification can be raised by a party to an infringement suit, only if the court trying the suit, rules it to be prima facie tenable and that if such finding is not recorded, the party cannot avail the remedy of rectification of a registered trademark, is accordingly overruled.
- This Court holds, by its majority judgment that the two situations whereby the infringement action is stayed, are when the rectification proceedings are instituted before the filing of the suit (Section 124 (1) (i)) and after the plea of invalidity is held to be prima facie tenable under Section 124 (1) (ii)). In the first situation, if such plea exists, before the filing of the suit, the Court has to stay the suit to await the decision of the IPAB. In the second situation, if there is no application for rectification before the IPAB when the suit is filed and a party to the infringement suit, wishes to challenge it after the filing of the suit, it may do so, but the court has to assesses the tenability of the invalidity plea- if it finds it prima facie tenable, then and then alone, would it stay the suit to enable the party to approach the IPAB within a time period. If the party does not avail of this, or approaches the IPAB after the period given, the court would proceed with the suit; the plea of invalidity is deemed abandoned in the infringement suit.