PRELUDE
The ghosts of Data Infosys (Full Bench Judgment of Delhi High Court)[2] and B. Mohamed Yousuff (a Division Bench Judgment of Madras High Court)[3], which the Supreme Court had buried deep down in the Patel Field Marshal case[4], have recently been exhumed, albeit temporarily, by a single judge of the Delhi High Court in Anubhav Jain Vs. Satish Kumar Jain & Ors.[5](referred to as Anubhav Jain’s case in the present write up)
The single judge has ruled that a party to an ongoing infringement action is not required to seek permission from the Court before submitting a petition to have a registered mark belonging to the opposing party in the Suit cancelled. According to the single judge's ruling the rights to seek cancellation of a mark granted by Sections 57 and 124(ii) of the Trade Marks Act, 1999 (the 1999 Act) are independent rights that are both available for invocation by an interested party.
Even though the Petitioner (Defendant in the infringement Suit) did not raise the issue of the validity of the Plaintiff's mark in the ongoing Suit, the Judge surprisingly permitted the Petitioner to maintain its rectification petition, which was submitted after the Respondent's infringement Suit.
By issuing the aforementioned ruling, the single Judge has given interpretation of S. 124 of the 1999 Act new twist by upholding the precedent established by Data Infosys and Md. Yousuff, both of which the Supreme Court overturned back in 2018.
To put it another way, the Single Judge disregarded the Section 124 requirement that the party seeking to correct the register first obtain the Civil Court's (where the infringement suit is pending) prima facie satisfaction on the tenability of the plea regarding the invalidity of the opposite party's trademarks registration and raising an issue regarding the same.
If I examine the judgement, I can see that the Ld. Single Judge erred on both counts. First, under the provisions of the CPC, if a Defendant has not pleaded the invalidity of the Plaintiff's registered trademark in its written statement filed in the suit, it may be assumed that it has abandoned the plea, and as a result, it was not permitted to file a rectification petition under S. 57 of the 1999 Act contesting the validity of the Plaintiff's mark.
Second, the Supreme Court's decision in Patel Field Marshal is unequivocal. It specifically states that a Defendant who pleaded the registration of the Plaintiff's trademark as being invalid in its written Statement submitted in response to the Plaintiff's infringement lawsuit is not permitted to maintain or submit a rectification petition without first following the procedure outlined in Section 124 of the Act.
Alternatively, if a party to an infringement lawsuit has not raised a defence of the invalidity of the opposing party's registered mark or if raised but have not satisfied the court about the plea of invalidity of the mark, or have failed to file S.57 application after the issue is framed within the time granted or extended, then they are not permitted to file a petition under Section 57 of the 1999 Act.
As I mentioned above, the aforementioned propositions are clear from the Supreme Court's decision in Patel Field Marshal. Surprisingly, the Single Judge relies on Patel Field Marshal. The Single Judge decided in favour of the Petitioner and overturned the Respondent's challenge to the maintainability of the rectification petition by applying an odd interpretation of the Patel Field Marshal.
Unfortunately for the Respondent—who was enjoying an interim order, and an appeal against that order was pending before the Division Bench[6]—the Single judge by a later order[7] allowed the Respondent to continue to use the registered trade mark but suspended the registration of the mark and directed the Registrar to decide the objection of the Petitioner afresh.
To the dismay of the Respondent, the Single judge prohibited the Respondent from asserting any rights in relation to the registration in any ongoing legal procedures, resulting in a foregone conclusion regarding the outcome of the ongoing appeal. Fortunately, the Single Judge's Order has been stayed by the Division Bench's decision of February 17th.
A STORM IN A GLASS OF SHIKANJI
Facts In Anubhav Jain’s Case
Before dealing with the above judgment, I must state the facts, involved in the case, which are as follows: -
In September 2021, Satish Kumar Jain (Respondent No.1 in the rectification petition), had filed a Civil Suit being CS (Comm) 171/2021 before the Commercial Court, Karkardooma, against Anubhav Jain alleging that the manner in which Petitioner, Anubhav Jain, was using the mark “JAIN SHIKANJI” was same as his registered mark “JAIN SHIKANJI”.
In the Suit, the Trial Court in November 2022 allowed Respondent No.1’s application under Order 39 Rules 1 & 2 of the CPC and passed an interlocutory order of injunction against Anubhav Jain. The challenge to the above decision is pending before the Division Bench but there is no interlocutory order in the appeal.
While proceedings emanating from the above Suit stood thus, Anubhav Jain (the Defendant in the Civil Suit) filed a Section 57 Petition[8] before the Delhi High Court seeking cancellation of the registration of Respondent’s registered mark.
Satish Jain raised a preliminary objection to the maintainability of the rectification petition, predicated on Section 124 of the Trademarks Act. The predecessor of the Single Judge, directed that the objection would be taken up and decided in the first instance.
Anubhav Jain’s plea in the rectification Petition
Anubhav Jain argued before the Ld. Single Judge that for Section 124 (1) (a) to apply, it would be necessary for the Defendant to have pleaded in the Plaintiff’s infringement Suit regarding the invalidity of Plaintiff’s registered trademark and since he as the Defendant has not taken such plea, the pre-condition for Section 124 would not apply and therefore it can maintain the rectification petition.
Satish Jain’s contentions
According to Satish Jain, who cited the Patel Field Marshal Agencies case, if a lawsuit for trademark infringement is ongoing and the defendant asserts in its written statement that the plaintiff's registered mark is invalid, the defendant cannot file a Section 57 application without first following the procedures outlined in Section 124 of the Act, i.e., requesting leave from the court after demonstrating prima facie that the plaintiff's mark is invalid.
SINGLE JUDGE’S FINDING: GHOSTS OF DATA INFOSYS AND MD. YOUSUFF RESURFACED
The Ld. Single Judge held that:
a) since Anubhav Jain, the Defendant, did not raise any plea of invalidity in its written statement in the Respondent No.1’s Suit, the prerequisite under Section 124 (1) (a), i.e., the Defendant must plead that registration of Plaintiff’s trademark is invalid, is absent and therefore Section 124 would not apply in the present case at all.
b) that even if the Defendant would have raised a plea of invalidity in the Respondent No.1’s Suit then also Section 124 cannot possibly be read in a manner as to defeat the right of the Petitioner to defend the independent right and invoke Section 57 of the Act. That is an independent right, independently conferred by Section 57 of the Trade Marks Act.
The Ld. Single Judge while reaching to the above conclusions referred to certain paras of Patel Field Marshal, particularly para 30 of the judgment, and held that this para clearly indicates that the right conferred on the Defendant in an infringement Suit under S.124, to move the High Court, under Section 57 of the Act, is an independent right, independent of other rights available under the Trade Marks Act for the same purpose, and therefore, it must be treated as available in addition to the right conferred by Section 57.
The position that emerges, as per the Single Judge, is that while the right under Section 57 remains available but if an infringement Suit is filed by the Opposite Party and the Defendant pleads invalidity of the Plaintiff’s mark, the Defendant would acquire an independent right under Clause (2) of Section 124 of the Act to move the High Court for rectification of the Register.
The Single Judge further held that the decision of the Supreme Court in Patel Field Marshal does not in any manner take away the Defendants right to independently invoke Section 57.
It also held that the Supreme Court in Patel Field Marshal was not concerned with the right available to a person under Section 57 and as such the judgment cannot be said to be an authority on the point that once an infringement Suit is filed against the Defendant, the Defendant loses its right to seek cancellation of the Plaintiff’s trademark under Section 57 of the 1999 Act.
It is the view of the Ld. Single Judge that there is no clause in Section 57 of the 1999 Act which makes it subject to any other provision in the Act nor does one find in Section 124 of the Act any nonobstante clause which would accord it pre-eminence over other provisions in the Trade Mark Act.
In view of the above discussion, the Ld. Single Judge disallowed the objection of the Respondents regarding the maintainability of the rectification petition.
The Ld. Single Judge while deciding the above matter also referred to Article 141 of the Constitution and stated that the judgments of the Supreme Court are not to be read as Euclid’s theorems but are to be understood in the background of the facts in which they were rendered.
Following the Single Judge's lead, I believe it is important to learn how the Supreme Court resolved the Patel Field Marshal case before making any comments about the Anubhav Jain judgment. Knowing the history of the Patel Field Marshal's case will make it clear whether the Ld. Single Judge erred in holding that the Defendant could straightaway file a petition under Section 57 of the Act even though he had not raised the defence of invalidity in the suit and without first complying with the requirements of Section 124 (b)(ii) of the 1999 Act.
BACKGROUND LEADING TO THE SUPREME COURT’S DECISION IN PATEL FIELD MARSHAL
Before taking up the decision of the Supreme Court, let’s see the facts which culminated into the proceedings before the Supreme Court.
Marshaling The Necessary Facts
It all started in the year 1982 when Appellant, Patel Field Marshal Agencies (PFM) applied for registration of the trademark “MARSHAL” for their use. P.M. Diesels (PMD), the Respondent, having come to know about the application of PFM served cease and desist notice dated 23.07.1982 asking PFM to stop using the mark “MARSHAL”.
Proceedings Before The Delhi High Court
PMD, thereafter, instituted a Suit before the Delhi High Court (Suit No.1612 of 1989) for amongst other things infringement of trademark and for perpetual injunction to restrain PFM from using the trade styles Patel Field Marshal Agencies and Patel Field Marshal Industries.
PFM, the Defendants in the Suit, contested the validity of PMD’s registration of the trademark “Field Marshal” and claimed that the same was liable to be rectified in the Trademark Register. In the Suit, the Delhi High Court framed an issue to the said effect.
The Delhi High Court by its order dated 20.09.1995 dismissed PMD’s interlocutory application for interim injunction on the ground that the High Court did not have pecuniary and territorial jurisdiction over the subject matter. In Appeal, the Division Bench by its order dated 10.03.1998 reversed the decision of the Single Judge and directed the Single Judge to decide the interim injunction application on merits.
PFM filed an SLP against the above order of the Division Bench. During the pendency of the above SLP, in view of the remand order of the Division Bench, the Single Judge of the High Court granted temporary injunction in favour of PMD on 07.07.1999. By a subsequent order dated 20.08.2008, however, a Ld. Single Judge of the High Court ordered for return of the plaint for presentation before the competent court in the State of Gujarat by holding that the Delhi High Court had no jurisdiction.
This order of the Single Judge was challenged by PMD before the Division Bench. The Division Bench by its order dated 24.10.2008 while holding that in the facts of the case the Single Judge could not have rejected the plaint, however, as PMD had no objection to carry on the proceeding in Gujarat, the Bench allowed return of the plaint to be filed in Rajkot, Gujarat.
Thereafter, this case was transferred from the Delhi High Court to Rajkot and the proceedings came to be numbered as Civil Suit No.1 of 2009.
PFM once again filed an SLP challenging the aforesaid order of Division Bench by SLP No.185 of 2009.
Rectification Proceeding Before The Gujrat High Court
While PMD’s infringement Suit was still pending adjudication in the Delhi High Court, PFM initiated parallel proceedings before the High Court of Gujarat in the year 1997, seeking rectification of the registration of the trademarks granted to PMD by filing three rectification applications bearing R.A. Nos. 1 – 3 of 1997 under Sections 46-56 of the Trade Mark Act, 1958 (1958 Act).
Judgment of the Single Judge in Gujrat High Court
A Single Judge of the Gujarat High Court dismissed the three rectification applications by order dated 15.04.1998 which was affirmed in appeal by the Division Bench by its order dated 05.11.1998. PFM challenged the Division Bench’s Order before the Supreme Court in Civil Appeal Nos.4767 – 4769 of 2001.
CIVIL APPEALS AND SLP’S INVOLVED IN THE PATEL FIELD MARSHAL’S CASE
The Supreme Court was dealing with the following civil appeals/SLP’s:
(i) Civil Appeal Nos.4767 – 4769 of 2001: These Civil Appeals arose out of the three rectification petitions bearing R.A. Nos. 1 – 3 of 1997 under Sections 46/56 of the 1958 Act for removal and cancellation of the three trademarks registered in favour of the PMD. As stated above, the Single Judge of the Gujarat High Court, dismissed these rectification petitions on the ground that firstly, it is not maintainable as an infringement Suit filed by PMD is pending before Delhi High Court where PFM could have got the issue framed regarding the invalidity of the PMD’s registration of mark “MARSHAL”,and also that the petitions are barred by law of limitation.
In an Appeal against the aforesaid order of Single Judge, the Division Bench of the Gujarat High Court affirmed the decision of the Single Judge. Against this order PFM came to Supreme Court by filing three civil appeals which were numbered as 4767 – 4769 of 2001.
(ii) Civil Appeal No.19937 of 2017 arising out of SLP No.1851 of 2009: This appeal was against the Division Bench’s order of Delhi High Court, whereby the Division Bench by its order dated 24.10.2008, had allowed the appeal filed by PMD against the order dated 20.08.2008 of the Single Judge in the PMD’s infringement Suit holding that the Delhi High Court had no jurisdiction and therefore ordered for return of the plaint to the competent court in the State of Gujarat.
The Division Bench in its order dated 24.10.2009 had held that in the fact of the case the plaint ought not to have been rejected; however, as PMD had no objection to carry on the proceedings in the competent court at Rajkot, the plaint was returned to the Court at Rajkot.
The Supreme Court closed the proceeding in the Civil Appeal No.19937 of 2017 on the ground that since PMD has taken a stand that they will comply with the direction of the Single Judge to present the plaint before the competent court at Rajkot, it was not necessary for Supreme Court to continue to entertain the challenge made in the SLP so as to examine the legality of the correctness of the said order of the Division Bench dated 24.10.2008 on merits. Accordingly, the Supreme Court closed this civil appeal.
(iii) Civil Appeal No.19938 of 2017 arising out of SLP No.27309 of 2012 and SLP No.30121 of 2012: The issues arising in Civil Appeal Numbers 4767 – 4769 of 2001 were similar to SLP No.27309 of 2012 and 30121/2012. However, SLP No.30121 of 2012 was withdrawn before the Supreme Court.
Therefore, in the Supreme Court, only two appeals survived for consideration i.e., Civil Appeal No.4767 – 4769 of 2001 and civil appeal arising out of SLP No.27309 of 2012, wherein the issues were common.
DECISION OF SINGLE BENCH AND THE DIVISION BENCH OF GUJRAT HIGH COURT
Considering the aforementioned facts, we must also look at the specific issues that the Gujarat High Court's Single Judge and Division Bench were presented with and how they were resolved. This is noteworthy since the Supreme Court ultimately rejected PFM's appeals against the Division Bench of the Gujarat High Court's judgement, upholding the Division Bench's position, which in turn had upheld the position of the Gujarat High Court's Single Judge.
Decision Of Single Judge Of Gujarat High Court[9]:
While the PMD’s infringement Suit was still pending in the Delhi High Court, PFM filed the three rectification applications under Sections 46[10] and 56[11] of the 1958 Act for removal and cancellation of PMD’s trademark “MARSHAL” on various grounds. PMD in its reply to the aforesaid applications took the objection of maintainability in view of Section 107[12] and 111[13] of the Trade Marks Act.
The Single Judge based on the submissions made by the parties formulated two points for determination:
a) Whether the applications are barred by law of limitation?
b) and whether the proceeding initiated by PFM are misuse of the process of the law and untenable in law?
The Single Judge decided both the points in favour of PMD. In the present opinion we are not concerned with the issue of limitation but only on the aspect of objection to the maintainability of the rectification petitions.
The Single Judge, after discussing the scope of Section 111 of the 1958 Act and drawing an adverse inference against PFM for failure to produce its Written statement filed before the Delhi High Court, held the following:
(i) In view of Section 111 (3) that when a person sued by the holder of a trade mark for infringement, then if the said person has not already filed a rectification application prior to the filing of the Suit and has not raised a contention regarding validity of the registration in the written statement under Sections 46 and 47, then it would to be presumed that he has admitted they validity of the registration of the trade mark.
(ii) Even if the Defendant raises a contention in the Written Statement, regarding the validity of the trade mark, then he has to make an application for rectification within the period of three months or the further extended period and if he failed to file such an application as per the direction of the court, then it is the statutory presumption that he has abandoned his contention regarding the validity of the registration of the trade mark.
Accordingly, the Single Judge dismissed the rectification Petitions filed by PFM. The Single Judge also rejected PFM’s contention that since they are the aggrieved persons, they are entitled to file rectification application. The Judge held that though there is no dispute that the applicants are the aggrieved person and were entitled to file the rectification application prior to service of the Suit summons or by raising a contention regarding the same in the written statement but in view of their failure to file such applications before they were served with the Suit summons and having failed to raise a contention in their written statement, the rectification applications are not maintainable
Decision Of Division Bench Of The Gujarat High Court[14]
Against the aforesaid order, PFM filed an appeal before the Division Bench of the Gujarat High Court. The Division Bench rejected the Single Judge’s finding that since PFM did not produce the written statement filed in the infringement Suit pending before the Delhi High Court, an adverse inference can be drawn regarding the absence of plea of invalidity of PMD’s registration in the written statement.
The Division Bench held that the Single Judge could have called upon the applicant to produce the copy of the written statement instead of recording adverse inference about non raising of the plea. As a result, the DB read the written statement that PFM had submitted to the Delhi High Court and had been presented to the DB. The DB noted that PFM had argued that the Plaintiff's mark was not validly registered in the PMD's infringement Suit.
After observing the above, the Division Bench examined the question, i.e., the effect of raising of a plea of invalidity in the written statement by the Defendant in a Suit filed by the registered proprietor of trademark for infringement. The DB also examined the question whether the applicant was entitled to file the rectification applications, pending Suit before the Delhi High Court.
The Division Bench after detailed analysis of Sections 50, 47, 56, 107 and 111 held the following—firstly presuming that though PFM had raised an issue regarding inability of PMD’s marks but failed to get an issue framed in that regard:
(i) Once a Suit has been filed and plea of invalidity has been raised, the forum for making rectification application and its dealing is governed by Section 107 and not by Section 56.
(ii) that once a Suit has been filed, the rectification proceedings at the instance of either party to the Suit against the other, must take the course envisaged under section 111, that is to say, if proceedings for rectification are already pending before raising the plea of an invalidity, that is to say, the attention of an appropriate forum having already been invited to that issue, those proceedings must first be continued, decision thereon to be obtained and then civil Suit for infringement can proceed in the light of that decision.
In case, no such proceedings for rectification are pending at the time of raising the plea of invalidity, the prosecution of such plea by the person raising it depends on prima facie satisfaction of the court, about the tenability of this plea. If the plea has been found to be prima facie tenable and issue is raised to that effect then the matter is to be adjourned for three months at least to enable the person raising such plea to approach the High Court concerned, with a rectification application.
In case, the rectification proceedings are not already pending, and the court is not even prima facie satisfied about the tenability of the plea raised before it, the matter rests there. In case, no issue is framed, the remedy of the aggrieved party is to agitate against non framing of the issue for that reason either before the court itself, or by taking recourse to remedial forums, by which the Suit is governed.
(iii) One cannot envisage that a person who satisfies the court prima facie about the tenability of its plea, would be required to file an application for rectification within a specified time, else will lose his plea by abandonment, but, in case, a man facing infringement Suit, after raising the plea about invalidity of registration of mark fails even prima facie to satisfy the court about tenability of its plea, is left free to agitate the issue de hors the Suit as independent cause of action at any time thereafter, as in the present case, it would make the provision of Section 111, wholly irrelevant, and nugatory.
(iv) It is not correct that Section 111 operates only if a party raises plea of invalidity of the mark and seeks stay of the proceedings and not otherwise.
(v) Two-fold consequence has been provided on raising of an issue about the validity. Firstly, the stay of the proceedings of the trial, in case, the opportunity is availed to get the issue decided through rectification application. If such issue is already subject matter of a pending rectification proceedings, the court cannot proceed until such issue is determined. If such proceedings are not pending the trial court has to raise an issue in the Suit on being prima facie satisfied about its tenability, and give an opportunity to the objector to have resort to rectification application for which minimum of three months time is to be granted. That is to say trial is held up at least up to that time. On filing such rectification application within time allowed, entails further stay of proceedings in the Suit until rectification application is decided.
Secondly failure to avail the opportunity results in abandonment of the issue. If the provision has been confined only to stay proceedings of the Suit at the request of the party concerned, subsection (3) of Section 111 sounds totally out of context. The stay of the proceedings in case rectification applications are already instituted or instituted thereafter as a result of framing of issue is not in the discretion of the court. The proceedings of the trial court must be stayed. It cannot proceed further in the very scheme of things.
(vi) Either the issue is or is deemed to have been abandoned either by nor pressing the framing of issue or on failure to initiate rectification proceedings within time allowed if the issue is framed. Therefore, it is not possible to accept the contention of learned counsel that Section 111 comes into operation only in case a person raising plea of invalidity of others' trade mark is desirous of seeking stay of Suit and it is in the discretion of the court, to stay the proceedings.
The question of determination of issue and abandonment of it through non prosecution are interwoven in the scheme and therefore once the Suit for infringement has been instituted by proprietor of registered trade mark, and a plea of invalidity has been raised by the Defendant, the parties must adhere to follow the rectification proceedings as envisaged under Section 111 and not otherwise.
(vii) It also does not commend that though for the purpose of Suit a person raising the plea is deemed to abandon the plea, but independent of the Suit, during the pendency of that very Suit he is free to move rectification application and again plead for a judgment in the light of decision obtained outside the provisions of Section 111.
(viii) In case a plea is deemed to have been abandoned, the only remedy of the party concerned may be to approach that very court, to extricate himself from the consequence of abandonment, or higher forum. Else, so far as the parties to the Suit are concerned, they must be left to contest the Suit as it stands without independent recourse to rectification application once right to have recourse to rectification proceedings has accrued in their favour and they abandoned it by dint of their own act.
(ix) If plea as to invalidity is not raised, no question of filing the application arise, and operation of Section 111 remains dormant. As soon as plea of invalidity is raised Section 111 would spring into operation. In case, at this stage, civil court finds that there is no substance in the plea for the purpose of raising the issue in the trial, the resultant position would be the same as if the plea has been raised initially and found not tenable even prima facie to merit trial.
(x) The scheme is wholesome to avoid multiplicity of proceedings on frivolous grounds that withhold the proceedings which is founded on a trade mark which carried with it presumption of validity whether rebuttable under Section 31 or conclusive under Section 32.
(xi) In ordinary course, once a Suit has been filed for infringement of a registered trade mark, if the validity of registered trade mark is not denied in the written statement the fact is deemed to be admitted and trial proceeds on that basis. Later, the party failing to raise such issue cannot be heard to say that as no plea was raised, he is free to raise the same in later proceedings, without leave of court. Parties are also subject to rule that all pleas that could have been raised but not raised must be deemed to have abandoned the same. On this principle, rule of constructive res judicata is founded. A Suit for infringement is not excepted from the rule as far as parties to the Suit are concerned.
(xii) Like in any Suit, parties are not precluded from raising new plea on grounds which come into existence later on and was not in existence at earlier. This supports the plank that if plea of invalidity is not raised in the Suit, it amounts to admitting the validity of registration of trade mark by the Defendant. Then too that party is precluded from challenging the registration on grounds existing at the time of filing written statement or at the time when the Defendant had opportunity to raise such plea in the Suit in any other manner, but had failed to do so.
(xiii) That a plea which is raised in written statement but trial of which is not insisted upon by not insisting to frame an issue to that effect, such plea must be deemed to have been abandoned by the party raising the same in his pleadings. It becomes a case of overt abandonment.
(xiv) Once a person has abandoned the plea as to invalidity of the mark, he cannot raise fresh plea de hors the Suit by filing a rectification application and resume such plea.
(xv) If for any reason the Defendant in the Suit felt that he does not have sufficient material or sufficient grounds to challenge the validity of the mark of the Plaintiff when the issues were framed, but later on as a result of discovery of fresh material giving fresh grounds to challenge the validity of the mark, the procedure open for the Defendant was to have raised that issue before the trial court, invite its attention to that plea, for consideration whether prima facie the same is tenable and asked for framing of issues to that effect, so as to enable him to approach the rectification forum for getting a decision on that issue. But he cannot be independent of the Suit, raise the issue in a rectification application at any time after he has failed to raise such issue when he had opportunity to raise the issue and achieve indirectly what he failed to achieve directly by his own omission.
(xvi) Raising of issue about invalidity of a registered mark and its trial by the concerned High Court has been directly correlated to the trial of Suit for infringement by the statutory scheme making it mandatory requirement that once a Suit for infringement of registered mark is filed, the plea as to invalidity of mark, if not already decided, must be decided by High Court, the finding as to invalidity given by the appropriate forum to be binding on court trying the Suit and also that until such question as to invalidity of mark is decided, further proceedings in the Suit are to remain stayed and also providing for circumstance in which alone issue about invalidity during the pendency can be tried, viz, either by continuing with the proceedings in that regard if the same are already pending or on prima facie satisfaction of trial court about tenability of plea, lest frivolous proceedings come into being during the trial arresting the progress of proceedings and also to avoid abuse by legal process by resorting to dilatory tactics that may be adopted by any litigant, first to allow a protracted trial and then to infructuate it by filing an application for rectification independent of proceedings to invalidate the judicial pronouncement in the Suit which is inter parties.
The Division Bench also examined the scope of S.107 and 111 of the Act assuming that one of the issues framed in the Suit is an issue which covers the disputes about the validity of Plaintiff’s mark, and held the following:
(i) that then too the Defendant ought to have approached the High Court having jurisdiction within three months, or any period that may have been extended by the trial court for the purpose of making an application, and not having taken recourse to that, the Defendant must be deemed to have abandoned his plea in terms of subsection (3) of Section 111.
(ii) The contention of learned counsel that no order has been made asking the Defendant to file a rectification application within three months and therefore this cannot be considered as an order under subclause (ii) of subsection (1) so as to bring in operation of subsection (2) or subsection (3) of Section 111, is also rejected.
(iii) that the requirement of law is not for directing the objector to make an application, but the requirement is only to raise an issue and adjourn the trial of the Suit for three months. It is left to the person raising plea of invalidity to utilise period of three months to approach the appropriate forum.
(iv) In this case, the order framing issue has been made on 19.4.1994 and Suit has been ordered to be listed for trial for 25th and 26th October 1995, that is to say, more than 18 months from the date of the order but the Defendant did not file any rectification application within three months from the date of order of framing of issues and therefore, PFM failed to extricate himself from his own conduct of abandoning the plea during the trial of Suit. Thus, viewed from any angle, PFM must be deemed to have abandoned the plea after raising the same in the Suit when the Suit is pending trial before the Delhi High Court.
(v) that raising of issue is not dependent merely on the raising of pleas but on application of mind by the court and rejection of plea results in closure of objector's to raise the dispute by way of a separate rectification application to indirectly set at naught the order referring to raise the issue or on raising of issue within three months thereof or within further extended time the Defendant has to file an application. Failure to do so results in abandonment of plea.
(vi) In the scheme of things, unless the application for rectification is pending before the summons of Suit for infringement has been served, the application thereafter must come only if the trial court finds on a plea to that effect is raised either in written statement or in some other forms that the plea is prima facie tenable and frames the issue enabling the party raising the plea to approach High Court for deciding the issue.
(vii) If until service of summons of Suit, the person aggrieved has not filed a rectification application in exercise of his right independently, thereafter he cannot resort to first file an application for rectification and thereafter raise a plea of invalidity to bring the case within the purview of clause (i) of Section 111(1). That will be permitting a device to infructuate the very scheme of Section 111 which envisage that except in case a rectification application is already pending once Suit for infringement has been filed a party seeking to challenge validity of mark must do so on prima facie satisfaction of the court about its tenability lest a person may be free to resort to frivolous litigation by resorting to successive proceedings on failing in proceeding and results in multiplicity of proceedings.
(viii) Refusal to frame issue amounts to finding that even prima facie a triable issue does not arise. For failure to file application within time results in abandoning the issue, for maintainability of application in such cases the plaint must disclose that the trial court had on raising of such plea of invalidity has raised an issue to that effect and date on what such issue has been raised. In view of provision of Section 107 read with Section 111 of the Act of 1958, these assertions become necessary part of cause of action itself.
(ix) Mere filing of written statement awaiting framing of issue also cannot make the rectification application maintainable. It is for the court trying the Suit to decide whether the issue is to be tried or not during the pendency of Suit.
(x) In the absence of any averment as to framing of issue by the trial court before whom plea as to invalidity of mark has been raised, the rectification application will still be not maintainable because in that event the application does not disclose the prima facie satisfaction about tenability and framing of issue which is precondition before trial of such issue through rectification can at all take place.
The Division Bench ultimately held that, whatever position be taken, the application with written statement read together, even if the order framing issue is not taken into consideration, does not disclose that application is maintainable.
THE DECISIONS IN ASTRAZENECA UK LTD., B. MOHD. YOUSUFF, AND DATA INFOSYS.
The Supreme Court while deciding the case Patel Filed Marshal discussed the following three cases:
ii. B. Mohd. Yousuff Vs Prabha Singh Jaswant Singh and Ors.[16]
iii. Data Infosys and Ors. VS Infosys Technologies Ltd.[17]
We must also look at the issues in the three cases and the rulings made by the respective courts in those three decisions because the Hon’ble Supreme Court upheld the position taken in AstraZeneca and rejected the position taken in Data Infosys and B. Mohd. Yousuff.
CASE OF ASTRAZENECA UK LTD.
Plaintiffs, AstraZeneca, filed a Suit for permanent injunction seeking restraint against Defendant, Orchid Chemicals, from using the trade mark 'MEROMER' alleged to be deceptively similar to the Plaintiff’s registered trade mark 'MERONEM'.
During the pendency of the Suit, Defendant’s mark also got registered and consequently, the Defendant asserted that since the registration of a trademark relates back to the date of application, which in this case prior to the date of institution of the Suit, the plaintiffs are not entitled for any relief based on infringement as the mark of the Defendant is also registered.
During the pendency of the Suit, Plaintiffs filed a rectification application, first to the Registrar and then to the Appellate Board. The Defendant objected to the maintainability of the rectification application on the ground that it violated Section 124 of the 1999 Act because it was made without the court's prior permission as required by S.124 of the 1999 Act.
The Court formulated the question that whether the Plaintiff could maintain a rectification application without prima facie satisfaction of the Court about tenability of the plea of the invalidity of the Defendant's mark.
The Single Judge after analysing S.124 held:
(i) that on a plain reading of S.124, it is apparent that the plaintiffs could not file the application for rectification without showing and obtaining prima facie satisfaction of the Court about their plea of the invalidity of the registration of the mark of the Defendant.
(ii) that in Kedar Nath v. Monga Perfumary and Flour Mills[18], Delhi High Court had held that a Defendant cannot file an application for rectification subsequent to the institution of the Suit under Section 111 without the court being satisfied about the contention as to validity of the Plaintiff’s registration is bona fide and prime facie sustainable.
(iii) that in Patel Field marshal Agencies v. P.M. Diesels Ltd. 1999 IPLR 1425, the Division Bench of the Gujrat High Court had that if the proceedings are not pending and the plea regarding invalidity of registration of the mark is raised, the Court trying the Suit is to be prima facie satisfied about tenability of the issue.
While dispelling the Plaintiff’s contention that since Plaintiff could not have filed the rectification petition prior to the filing of the Suit as the Defendant’s mark was registered during the pendency of the Suit, its rectification application is maintainable without prima facie satisfaction of the tenability of their plea by the Court, the Single Judge held that the distinction between Section 124(b)(i) and 124(b)(ii) is on the basis of pendency of the proceedings for rectification of the register and not on the basis of whether the party initiating the proceedings for rectification could initiate such proceedings before the institution of the Suit or not. There can be other eventualities under which a party may not be able to initiate the proceedings for rectification before the institution of the Suit, but that will not give them a right to circumvent the prima facie satisfaction of his plea for invalidity, by the Court. The distinguishing feature of the two sub clauses is only pendency of the proceedings and nothing more can be read into them.
The Single Judge further held that substantial compliance of the requirement of Section 124 by the plaintiffs is also not sustainable. Either there is compliance of the said provision or non-compliance in the facts and circumstances. Compliance will be when after the institution of the Suit, if an application for rectification is to be filed, prima facie invalidity of the opposing mark is to be demonstrated to the Court. The fact that the application could not be filed prior to the institution of the Suit, will not entitle a party to circumvent the prima facie satisfaction of the Court.
The Court ultimately held that the proceedings for rectification of the Defendant's mark could not be initiated by the plaintiffs without the prima facie satisfaction of their plea by this Court nor this case is liable to be adjourned or stayed for three months in terms of Section 124(b)(i) of the Act to await the outcome of the rectification proceedings initiated by the plaintiffs before the Appellate Board.
The above ruling of the Single Judge was affirmed by the Division Bench in Astrazeneca UK Ltd. and Anr. v. Orchid Chemicals and Pharmaceuticals Ltd.[19]
The view in Astrazeneca affirmed by the Division Bench was preferred in United Biotech Pvt. Ltd. v. Orchid Chemicals and Pharmaceuticals Ltd.[20] by another Division Bench of the Delhi High Court, which concluded that as far as Delhi High Court is concerned, the view upheld was that unless permission under Section 124 is obtained - a provision referred to as "mandatory" - rectification proceedings would not be maintainable.
B. Mohd. Yousuff
This was a fight between three parties for a mark MAHRAJA. Several Revision petitions, Writ petitions and a Writ appeal came to be filed by the rival parties before the Madras High Court against the orders arising out of applications for registration, notices of opposition, rectification orders, renewal of registration and the order of the IPAB.
A preliminary objection was raised by one of the parties, as to the very maintainability of the rectification application of the other Party on the ground that since a civil Suit for infringement was pending, the rectification petition could not have been filed without having the leave of the Court for filing the rectification application.
The Division Bench of the High Court dismissing the objection held the following:
(i) Section 124 (1)(b)(ii) of the Act is only an enabling provision. Sub clause (i) and sub clause (ii) of Clause (b) of sub section (1) of Section 124 operates at two different levels for two different situations.
While sub clause (i) deals with a situation where any proceeding for rectification is already pending, sub clause (ii) deals with a situation where any proceeding for rectification is not pending. Both the sub clauses focus their field of operation only in relation to the stay of the civil Suit.
The conditions laid down in sub clause (ii) are intended to enable a party to obtain stay of the Suit and not intended to provide for a discretion for the Court to permit or not to permit any application for rectification. Such a position is made clear by sub sections (2) to (5) of Section 124, which deals with the consequences of filing and not filing an application for rectification and of the ultimate outcome of such application for rectification.
In other words, the requirements of raising an issue, adjourning the case and a prima facie satisfaction spelt out in Section 124 (1)(b)(ii) should be read as the requirements for the grant of a stay of the Suit and not as a requirement or pre-condition for filing an application for rectification.
(ii) The plain reading of Section 124(1)(b)(ii) shows that it does not mandate a party to obtain the leave of the Court or an order of the Court, for filing an application for rectification.
(iii) The right to file an application for rectification is a statutory right conferred upon a party who is aggrieved by an entry made in the Register. The said statutory right cannot be curtailed except by the very provisions of the statute. The said right is circumscribed by certain requirements such as the contravention of the provisions of the Act or failure to observe a condition entered on the Register etc., as spelt out under sub sections (1) and (2) of Section 57 of the Act.
(iv) In respect of the Forum in which such an application for rectification could be filed, there is a restriction under Section 125, in that such an application could be filed only before the Appellate Board if a Suit for infringement was already pending. Apart from these restrictions, we do not see any other restriction with regard to the filing of an application for rectification.
(v) To interpret Section 124 (1)(b)(ii) to mean that an order should be obtained from the civil Court for filing an application for rectification, regarding prima facie satisfaction, would amount to imposing one more restriction upon the right of a person to seek rectification of the Register. We do not find any such restriction or requirement of the leave/permission of the court, under section 124 (1) (b) (ii).
The Division Bench held that a party is permitted to file an application for rectification, without obtaining the permission of this Court or without having an issue framed and prima facie satisfaction recorded in the pending Suit. The Division Bench disagreed with the positions taken by the Gujarat DB in Patel Field Marshal and the Single Judge of the Delhi High Court in Astrazeneca.
Data Infosys
In this case, a Full Bench of the Delhi High Court[21] was grappling with a judicial conflict (Astrazeneca and Mohd. Yousuff) on the question whether during the pendency of a Suit, prior permission of the Court is necessary under Section 124(1)(b)(ii) of the Act for rectification of a registered trademark. The Bench had to determine the correct view out of the following two:
a) that proceedings for rectification of the Defendant's mark cannot be initiated without the prima facie satisfaction of the plea by the Court and that the Suit cannot be adjourned or stayed in terms of Section 124(1)(b)(ii) of the Act to await the outcome of the rectification proceedings initiated by the Plaintiff before the IPAB- if the procedure outlined therein is not followed.
b) that rectification before the IPAB can be initiated without the permission of the court trying the infringement Suit and the consequence of not obtaining permission is only that the applicant cannot seek stay of Suit.
In this case, the respondent, Infosys Technologies Ltd. ("Infosys"), filed a Suit for permanent injunction against the appellant Data Infosys ("the Defendant") seeking injunction against infringement of its registered trademarks in "Infosys" and allied marks.
During the pendency of the Suit, the Defendant's application for registration of its mark "Data Infosys" was accepted and accordingly, the Defendant amended its Suit.
Infosys thereafter filed an application for rectification of Defendant’s registered trademark "Data Infosys" before the IPAB.
Upon becoming aware of the rectification proceedings, the Defendant moved an application alleging that the initial filing of rectification proceedings without seeking leave of the Court constituted an abuse of process and that the proceedings before the IPAB were, therefore, null and void.
The Single Judge, hearing the Suit, dismissed the Defendant's application.[22]
This is how it came before the Division Bench and ultimately before the full bench when the Division Bench referred the matter to full bench in view of conflicting decisions of the Court.
The Full Bench after discussing Astrazeneca, Md. Yousuff, DB judgment of Gujrat High Court in Patel field Marshal, and United Biotech decided to follow Md. Yousuff view and disagreed with Astrazeneca and Patel field Marshal. The Full Bench held the following:
a) Majority judgment (Vipin Sanghi, J dissenting on this point) 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).
b) 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.
c) 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.
The majority reached to the above conclusions’ basis the following discussions:
a) The effect of prima facie evaluation-one way or another, of the tenability of the plea of invalidity, does not impinge on the right of the party raising such a plea to apply to the Appellate Board for rectification. Even where the Court, prima facie, says that the plea of invalidity is not tenable, the party setting up such a plea is not precluded from preferring a rectification application before the Appellate Board.
b) Given the structure and phraseology of Section 124, the difference between clause (b) (i) and (ii) is the pendency of proceedings before IPAB.
c) 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.
d) 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. This view finds support from the decision of the Madras High Court in B Mohammed Yousuff ‘s case.
e) Even if the Plaintiff, or the Defendant -as the case may be (i.e. the party concerned setting up the invalidity plea), files a rectification application under Section 47/57 of the Act after the expiry of the period of three months, or such extended time as the Court may grant, though the rectification application would be maintainable and would be decided on its own merits by the IPAB, the final decision of the IPAB on the said application would have no bearing on the Suit, in view of the deemed abandonment of the plea of invalidity. Thus, belated filing of the rectification proceedings would not result on the stay of the Suit.
f) The view espoused by Astrazeneca UK Ltd. (supra) curtails the remedy afforded by Sections 47 and 57 of the Act to seek rectification and prejudices an aggrieved person.
g) What needs to be underlined is that unlike the pre-existing law, where the High Court had the exclusive jurisdiction to pronounce upon issues of trademark validity (by virtue of Section 111 of the Trade and Merchandise Marks Act, 1958), that jurisdiction is now exclusively confined on another forum, i.e. the IPAB.
h) either the court holding the invalidity plea to be prima facie untenable (and, therefore, not adjourning the proceedings in the Suit for any length of time), or the plea of invalidity being held to be prima facie tenable, (and, consequently, the proceedings in the Suit being adjourned for a period of three months to approach IPAB), and the concerned party not filing the rectification application within the period of three months, or such extended period as the court may grant, is not deemed abandonment of the right to claim rectification, but rather deemed abandonment of the defence of invalid trademark registration in the infringement Suit. In other words, the right to claim rectification is never taken away. Thus, the Astra Zeneca (supra) line of thinking does not appeal to us and we reject the same.
i) The structure of Section 124 nowhere indicates that jurisdiction of IPAB (where an invalidity plea is urged in, or after filing of Suit) is conditional upon the civil court's determination of the prima facie tenability of the invalidity plea.
j) Further, there is nothing in Section 124(1) or 124(2) to suggest that either the Plaintiff, or the Defendant is precluded from moving an application before the Registrar /IPAB under Section 47 or 57 of the Act for removal/rectification of the registered trademark of the opposite party at any point of time, i.e. before, or after the filing of the Suit for infringement by the Plaintiff, or before or after the filing of the written statement by the Defendant. To infer so, in this court's opinion would result in anomalous consequences, because if a proceeding under section 47/57 - urging the plea of invalidity is filed before filing of the Suit, the IPAB would be obliged to consider the matter on merits having regard to all the materials, as the Suit would necessarily have to be stayed (Section 124(1)(i)). However, in the other situation, access to the IPAB itself would be dependent upon the assumed 'permission' of the civil court, entirely dependent upon that court's prima facie view of the case. Now, the plea of invalidity and the grounds are common - as indicated in Sections 47 and 57.
k) To hold-as the Astra Zeneca line of authority mandates-that such a proceeding (under section 47/57) is preconditioned upon prima facie view of the civil court, results in different standards being applied to judge invalidity of the trademark's registration.
l) This court is unconvinced by the arguments of the Defendant and other counsel who supported the Astra Zeneca (supra) decision about its soundness also because the deemed abandonment of the invalidity plea - the consequence enacted by Section 124(3), is only in respect of the stay of the Suit.
As per the judgment, a Defendant, in a pending infringement Suit challenging the invalidity of the Plaintiff’s registered mark, without going through the drill of Section 124 (ii), i.e., the Civil Court first satisfying itself regarding the tenability of the plea of the Defendant challenging the validity of registration of Plaintiff’s mark and framing of the issue regarding the same and adjourning the case for three months from the date of the framing of the issue to enable the Defendant to apply to the High Court for rectification of the register, can straightway file a Section 57 application before the High Court for rectification of the register.
THE FINAL FRONTIER: Supreme Court Accepts Views In AstraZeneca & Patel Field Marshal (Gujrat DB) and Rejects Md. Yousuff And Data Infosys
Now, let’s see what the Supreme Court decided in the Civil Appeals and SLP’s before them in Patel Field Marshal Case.
The Supreme Court after noting the facts leading to the filing of different appeals, recorded the submissions of the appellant, i.e., PFM and Respondent, i.e., PMD before discussing their views and conclusions.
PFM’s arguments
(i) Section 107 and 111 of the 1958 Act nowhere provides grant of permission by the Trial Court for filing of a rectification application.
(ii) That under the 1958 Act, there are two categories of right vested; the first in the owner of a registered trade mark (Sections 28 and 29) and the second in a person aggrieved by such registration (Sections 46 and 56). The aforesaid two rights are parallel and independent of each other.
(iii) that the only requirement for filing a rectification application under the provisions of Sections 107 and 111 of the 1958 Act is that person filing such an application must be a “person aggrieved” which would include a person against whom an infringement action has been taken or is threatened by the registered proprietor of the trade mark.
(iv) that the question of conclusiveness as to validity of the registration of the trade mark can be raised in an infringement suit as also in a rectification application.
(v) The very requirement of permission of a subordinate court (District Court) for filing of the rectification application before a higher Court (High Court), in the light of the provisions of Section 107 and 111, cannot be the legislative intent.
(vi) The provisions of Section 41 (b) of the Specific Relief Act, 1963 which restrains a subordinate court from preventing a person from instituting any proceeding in a higher court has also been stressed upon.
(vii) Reliance placed on B. Mohamed Yousuff and the judgment of the Full Bench of the Delhi High Court in Data Infosys
PMD’s contentions
(i) that the provisions of Section 111 (3) and (4) of the 1958 Act make it very clear 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 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.
(ii) that rectification proceedings under Sections 46 and 56 of the 1958 Act govern a situation where no suit for infringement is pending. In a situation where a suit for infringement has been filed and the question of validity of registration arises therein and the Civil Court is satisfied as to the prima facie tenability of the issue of invalidity of the registration of the trade mark, the provisions of Section 111 would take over and govern the proceedings in the suit including the issue of invalidity.
(iii) that there is a deemed abandonment of the rights conveyed under Sections 46 and 56 of the 1958 Act in the event a suit for infringement is pending wherein the question of invalidity has been raised and found to be prima facie tenable.
(iv) that the rights under Sections 46 and 56 on the one hand and those contained in Sections 107 and 111 on the other must be understood to be operating in two different fields; both sets of provisions cannot mutually exist as such mutual existence and operation may lead to conflicting decisions on the same question i.e. by the High Court under the 1958 Act or by the IPAB under the 1999 Act on the one hand and the Civil Court adjudicating the infringement suit on the other.
(v) that the abandonment of the plea of invalidity contemplated by Section 111(3) of the 1958 Act is a complete relinquishment for all practical purposes and not only for the purpose of the suit. The abandonment contemplated by Section 111 (3) of the 1958 Act does not keep alive the plea of invalidity to be urged/agitated separately in a rectification proceeding under Section 46/56 of the 1958 Act.
(vi) the ratio in B. Mohamed Yousuff (supra) and Data Infosys are not in consonance with the true purport and effect of the legislative scheme and therefore this Court may conclusively and authoritatively decide the issue.
Supreme Court’s findings[23]
After recording the contentions of both sides and referring to the relevant provisions of 1958 Act, the Supreme Court firstly noticed that Sections 46, 56, 111 and 107 of the 1958 Act have been replicated in the 1999 Act. And as the judicial precedents that would require elaboration are in the context of the 1999 Act, for purpose of clarity, the Supreme Court held that Sections 46, 56, 111 and 107 of the 1958 Act correspond to Sections 47, 57, 124 and 125 of the 1999 Act.
In Paras 17 to 22, the Court discussed the views in Astrazenca, Md. Yousuff, and Data Infosys and noted that Md. Yousuff and Data Infosys have taken a view different from the Single Judge’s view in Astrazeneca.
The Supreme Court further noted that in cases where in a suit for infringement of a registered trade mark the validity of the registration of the trade mark is questioned either by the plaintiff or by the defendant, Section 107 of the 1958 Act provides that an application for rectification shall be made to the High Court and not to the Registrar notwithstanding the provisions contained in Section 46 or Section 56 of the 1958 Act. This, according to the Court, would seem to suggest that in such cases (where a suit for infringement is pending) the legislative scheme is somewhat different.
After discussing the scheme of S.111, in Para 25 of the Judgment, the Supreme Court, in Para 27 held the following:
“Para 26. Following well accepted principles of interpretation of statutes, which would hardly require a reiteration, the heading of Section 111 of the 1958 Act i.e. “Stay of proceedings where the validity of registration of the trade mark is questioned, etc.” , cannot be understood to be determinative of the true purport, intent and effect of the provisions contained therein so as to understand the said section to be contemplating only stay of proceedings of the suit where validity of the registration of the trade mark is questioned. Naturally, the whole of the provisions of the section will have to be read and so read the same would clearly show lack of any legislative intent to limit/confine the operation of the section to what its title may convey.”
The above para takes a view very different from Md. Yousuff and Data Infosys where the High Courts had held main focus/purpose of S.124 is stay of the Suit. Astrazeneca and Gujrat High Court had in consonance of the Supreme Court vies had held that it is incorrect that Section 111 operates only if a party raises plea of invalidity of the mark and seeks stay of the proceedings and not otherwise.
The Supreme Court in Para 27 noted that while the validity of a Trade Mark is required to be decided by the Registrar or the High Court under the 1958 Act or by the Registrar or the IPAB under the 1999 Act and not by the Civil Court, but at the same time, court opined that both 1958 and 1999 Act goes on to provide a different procedure to govern the exercise of the same jurisdiction in two different situations.
The Supreme Court elaborated that 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, the Court further held that 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.
Conversely, the Court stated that in a situation where the Civil Court does not find a triable issue on the plea of invalidity the remedy of an aggrieved party would not be to move under Sections 46/56 of the 1958 Act but to challenge the order of the Civil Court in appeal. This would be necessary to avoid multiple proceedings on the same issue and resultant conflict of decisions.
Para 27 of the Judgement specifically overrules the views of Md. Yousuff and Data Infosys which had ruled that prima facie determination of the invalidity of the mark is only for the purpose of stay of suit and the Defendant’s right to file rectification under S.47 is in no manner restricted by such determination. Similarly, the Supreme Court also overruled the view of the two High Courts that right of a party under S.46/47 are independent of the right under S.111, by holding that if the Civil Court does not find a triable issue on the plea of invalidity, the remedy of an aggrieved party would not be to move under Sections 46/56 of the 1958 Act but to challenge the order of the Civil Court in appeal.
The Supreme Court in Para 30 after holding that in cases where the parties have not approached the civil court, Sections 46 and 56 provide an independent statutory right to an aggrieved party to seek rectification of a trade mark, however, in the event the Civil Court is approached, inter alia, raising the issue of invalidity of the trade mark such plea will be decided not by the civil court but by the Tribunal under the 1958 Act. The Tribunal will however come into seisin of the matter only if the Civil Court is satisfied that an issue with regard to invalidity ought to be framed in the suit, held the Court. Once an issue to the said effect is framed, the matter will have to go to the Tribunal and the decision of the Tribunal will thereafter bind the Civil Court. If despite the order of the civil court the parties do not approach the Tribunal for rectification, the plea with regard to rectification will no longer survive.
Para 30 as referred above, makes it clear that the Tribunal or the High Court, in case of a party wishes to file a rectification petition after filing of the Suit, will have the jurisdiction to decide the validity of the registration only and only when the Civil Court is satisfied that an issue with regard to invalidity ought to be framed in the suit and not otherwise. By taking this view the Supreme Court overruled the view of Data Infosys which had ruled that the prima facie determination of the invalidity of the mark is only for the purpose of stay of suit and the Defendant’s right to file rectification under S.47 is in no manner restricted by such determination.
The Supreme Court also rejected the opinion of Data Infosys on the point that a party does not lose its right to file a rectification petition if it fails to approach the tribunal for rectification within the time granted. The Supreme Court specifically held, as mentioned above, that if despite the order of the civil court the parties do not approach the Tribunal for rectification, the plea with regard to rectification will no longer survive.
The above view of the Supreme Court gets further strengthened by reading Para 31 where the Court opined that there is no provision in the 1958 Act to understand the provisions of Section 111(3) in any other manner except that the right to raise the issue of invalidity is lost forever if the requisite action to move the High Court/IPAB (now) is not initiated within the statutorily prescribed time frame.
Para 32 of the Judgments is the justification for holding what the Supreme Court held in Para 23-31, which is excerpted below:
32. Thus, by virtue of the operation of the 1958 Act, the plea of rectification, upon abandonment, must be understood to have ceased to exist or survive between the parties inter se. Any other view would be to permit a party to collaterally raise the issue of rectification at any stage notwithstanding that a final decree may have been passed by the civil court in the meantime. True, the decree of the Civil Court will be on the basis of the conclusions on the other issues in the suit. But to permit the issue of rectification, once abandoned, to be resurrected at the option of the party who had chosen not to pursue the same at an earlier point of time would be to open the doors to reopening of decrees/orders that have attained finality in law. This will bring in uncertainty if not chaos in the judicial determinations between the parties that stand concluded. Besides, such an interpretation would permit an aggrieved party to get over the operation of a statute providing for deemed abandonment of the right to raise an issue relevant; in fact, fundamental to the lis. The position may be highlighted by reference to a suit for infringement where the defendant raises the plea of invalidity of the plaintiff's trade mark and also in the alternative takes up any of the defenses available in law. The defendant by operation of Section 111(3) of the 1958 Act is deemed to have abandoned the plea of invalidity. In the trial it is found that the defendant is guilty of infringement and is appropriately restrained by a decree of the Civil Court. If the right under Section 46/56 of the 1958 Act is to subsist even in such a situation, the possible uncertainty and possible anarchy may well be visualized. This is why the legislature by enacting Section 111 of the 1958 Act has mandated that the issue of invalidity which would go to the root of the matter should be decided in the first instance and a decision on the same would bind the parties before the civil court. Only if the same is abandoned or decided against the party raising it that the suit will proceed in respect of the other issues, if any. If the above is the legislative intent, which seems to be clear, we do not see how the same can be overcome by reading the rights under Sections 46 and 56 of the 1958 Act to exist even in a situation where the abandonment of the same right under Section 111(3) has taken effect in law. The mandate of the 1958 Act, particularly, Section 111 thereof, appears to be that if an aggrieved party does not approach the Tribunal for a decision on the issue of invalidity of registration as provided for under Section 111(2) and (3), the right to raise the issue (of invalidity) would no longer survive between the parties to enable the concerned party to seek enforcement of the same by recourse to or by a separate action under the provisions of Section 46/56 of the 1958 Act.
The Supreme Court thereafter in Para 34 onwards dealt with some of the subsidiary questions raised by the parties.
The Supreme Court answered the question raised by PFM as to the requirement of permission of a subordinate court to approach a higher court being contrary to the provisions of Section 41 (b) of Specific Relief Act, 1963. The SC in Para 35 noted that neither Section 111 of the 1958 Act nor the corresponding Section 124 of the 1999 Act contemplates grant of permission by the civil court to move the High Court or the IPAB, as the case may be, for rectification.
The Supreme Court held that the requirement of satisfaction of the civil Court regarding the existence of a prima facie case of invalidity and the framing of an issue to that effect before the law operates to vest jurisdiction in the statutory authority to deal with the issue of invalidity by no means, tantamount to permission or leave of the civil court, as has been contended, but it is a basic requirement to further the cause of justice by elimination of false, frivolous and untenable claims of invalidity that may be raised in the suit.
The Supreme Court, in Para 36, ultimately, while dealing with S.32 of the 1958 Act, held that the proceedings under Sections 46 and 56 on the one hand and those under Sections 107 and 111 on the other of the 1958 Act and the pari materia provisions of the 1999 Act cannot run parallelly.
After answering the question arising in the appeals, the Supreme Court dismissed all the appeals under consideration. It affirmed the order passed by the Division Bench of the Gujarat High Court.
ANALYSIS OF ANUBHAV JAIN
We have seen how, on what facts, and under what circumstances the Supreme Court decided Patel Field Marshal. We have also seen the judgments of the Gujarat High Court and Delhi High Court in Patel Field Marshal, which were under challenge before the Supreme Court. We have also seen the decisions in AstraZeneca, Md. Yousuff, and Data Infosys, which were cited by the parties and considered by the Supreme Court while taking the views, aforementioned.
We have also seen that the Supreme Court while rejecting the views in Md. Yousuff and Data Infosys, accepted the views of the Single Judge in Astrazeneca. It also rejected the arguments of PFM which had cited and based their arguments on the decisions of Md. Yousuff, and Data Infosys. The Supreme Court had affirmed the decision of the Gujrat High Court in Patel Field Marshal.
Now, in view of the above, we must examine the correctness of Anubhav Jain on the touchstone of the Supreme Court Judgment in Patel Field Marshal. Let’s compare what Supreme Court says in Patel Field Marshal and what the Single Judge holds in Anubhav Jain.
Single Judge in Anubhav Jain
Supreme Court in Patel Field Marshal/Gujrat High Court/Astazeneca
1.
since the Defendant did not raise any plea of invalidity in its written statement in the Respondent No.1’s Suit, the prerequisite under Section 124 (1) (a), i.e., the Defendant must plead that registration of Plaintiff’s trademark is invalid, is absent and therefore Section 124 would not apply in the present case at all. (Para 10-12)
If plea as to invalidity is not raised, no question of filing the application arise, and operation of Section 111 remains dormant. Gujrat DB, affirmed by Supreme Court)
In ordinary course, once a Suit has been filed for infringement of a registered trade mark, if the validity of registered trade mark is not denied in the written statement the fact is deemed to be admitted and trial proceeds on that basis. Later, the party failing to raise such issue cannot be heard to say that as no plea was raised, he is free to raise the same in later proceedings, without leave of court. (Gujrat DB, affirmed by Supreme Court)
It also does not commend that though for the purpose of Suit a person raising the plea is deemed to abandon the plea, but independent of the Suit, during the pendency of that very Suit he is free to move rectification application and again plead for a judgment in the light of decision obtained outside the provisions of Section 111. (Gujrat DB, affirmed by Supreme Court)
Once a person has abandoned the plea as to invalidity of the mark, he cannot raise fresh plea de hors the Suit by filing a rectification application and resume such plea.
2.
that even if the Defendant would have raised a plea of invalidity in the Respondent No.1’s Suit then also Section 124 cannot possibly be read in a manner as to defeat the right of the Petitioner to defend the independent right and invoke Section 57 of the Act.
That is an independent right, independently conferred by Section 57 of the 1999 Act (Para 19).
while the right under Section 57 remains available but if an infringement Suit is filed by the Opposite Party and the Defendant pleads invalidity of the Plaintiff’s mark, the Defendant would acquire an independent right under Clause (2) of Section 124 of the Act to move the High Court for rectification of the Register.
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. (Para 27 of the SC judgment)
Conversely, in a situation where the Civil Court does not find a triable issue on the plea of invalidity the remedy of an aggrieved party would not be to move under Sections 46/56 of the 1958 Act but to challenge the order of the Civil Court in appeal. This would be necessary to avoid multiple proceedings on the same issue and resultant conflict of decisions (para 28 of the SC Judgment)
In cases where the parties have not approached the civil court, Sections 46 and 56 provide an independent statutory right to an aggrieved party to seek rectification of a trade mark. However, in the event the Civil Court is approached, inter alia, raising the issue of invalidity of the trade mark such plea will be decided not by the civil court but by the Tribunal under the 1958 Act. The Tribunal will however come into seisin of the matter only if the Civil Court is satisfied that an issue with regard to invalidity ought to be framed in the suit. (Para 30 of the SC Judgement)
that on a plain reading of S.124, it is apparent that the plaintiffs could not file the application for rectification without showing and obtaining prima facie satisfaction of the Court about their plea of the invalidity of the registration of the mark of the Defendant. (Astrazeneca affirmed by the Supreme Court)
that in Kedar Nath v. Monga Perfumary and Flour Mills[24], Delhi High Court had held that a Defendant cannot file an application for rectification subsequent to the institution of the Suit under Section 111 without the court being satisfied about the contention as to validity of the Plaintiff’s registration is bona fide and prime facie sustainable. (Astrazeneca affirmed by the Supreme Court)
From the above chart it is apparent that what the Single Judge has held are against the ruling of Patel Field Marshal but also against the rulings in Astrazeneca and Gujrat DB—which were affirmed by the Supreme Court. We can also see that the arguments by the Single Judge were similar to arguments made in Md. Yousuff and Data Infosys—which were specifically rejected by the Supreme Court.
Let's examine how the Single Judge used the findings of the Supreme Court to support his ruling while also overcoming the ratio in Patel Field Marshal. Let's discuss each of his conclusions from Paragraph 20 forwards in the judgement.
Para 20-25 of the Judgment:
The Single Judge holds that Section 124 cannot possibly be read in a manner as to defeat the right of the petitioner (defendant in the suit) to defend the independent right of the petitioner to invoke Section 57 of the 1999 Act, seeking rectification of the register of trademark and cancellation of the trademark of Respondent 1. That as an independent right, independently conferred by Section 57 of the 1999 Act.
As per the Single Judge's opinion in Paragraph 21[25], the Supreme Court's ruling in Patel Field Marshl underlines the aforementioned stance of his. He contends that Satish Jain, i.e., the Respondent's reliance on Paras 29, 31, 34, and 35 shows the opposite of what the Respondent had contended.
To substantiate the above, the Single Judge further states in Para 24 that the sentences from the decision in Patel Field Marshal Agencies1 extracted in para 21 (supra)i.e., Para 30 of the Supreme Court judgment, on which the Respondent placed reliance, in fact, clearly indicate that the right conferred on the defendant in an infringement suit, to move the learned IPAB, or this Court, for rectification of the register of marks is an independent right.
But if we read Para 30 carefully, the Supreme Court nowhere states that the right conferred on the defendant in an infringement suit, to move the IPAB, or the Civil Court, for rectification of the register of marks is an independent right. In fact, what the Supreme Court states that in cases where the parties have not approached the civil court, Sections 46 and 56 provide an independent statutory right to an aggrieved party to seek rectification of a trade mark. So, the independent right to approach under S.46/56 is only when the parties have not approached the civil court, i.e., no civil suit for infringement is pending between the parties. This is apparent from the next sentence after the sentence in cases where the party…. The next sentence starts with HOWEVER, that means the statement in the prior sentence is subject to the next sentence, i.e., if the Civil court is approached raising the issue of invalidity of the mark such plea will not be decided by the civil court but by the tribunal.
The next sentence after this in the judgment assumes huge importance where the Supreme Court clarifies that the tribunal referred in the prior sentence will however come into seisin of the matter only if the Civil Court is satisfied that an issue with regard to invalidity ought to be framed in the suit. The Supreme Court further states in the same para that if despite the order of the civil court the parties do not approach the Tribunal for rectification, the plea with regard to rectification will no longer survive.
Para 30 is so clear about the procedure provided under S.124, that it is surprising that the Single Judge understood the para to support his view that a Defendant can file a rectification petition without following the procedure stipulated in the Section, i.e., without establishing the prima facie invalidity of the mark in the Suit.
The Single Judge probably, laid too much emphasis on the word independent statutory right referred to by Supreme Court while observing that… in cases where the parties have not approached the civil court, Sections 46 and 56 provide an independent statutory right to an aggrieved party to seek rectification of a trade mark.
This is also apparent from Single Judge’s observation in Para 24 where he emphasises on independent right (putting it in italic) and thereafter stating “This clearly indicates that it is a right which is independent of other rights available under the Trade Marks Act for the same purpose.
In Para 24, the Single Judge further says that right under S.124 is in addition to the right available by Section 57 and it cannot be read as the only right available, in abrogation of Section 57 of the Trade Marks Act.
The Supreme Court as well as Astrgeneca and the Gujarat DB, none state that S.111 of the 1998 Act (pari materia to S.124 of the 1999 Act) is the only right available. What the three courts, in unison, have held that a party has a right to approach under S.56 (which is pari materia to S.57 of the 1999 Act), if no infringement Suit is pending before the Civil Court, but in case an infringement suit is pending a defendant or the Plaintiff, as the case may be, will have the right to file S.57 petition only after following the procedure provided in S.111 of the 1998 Act/S.124 of the 1999 Act, i.e., first raise a plea before the Civil Court and satisfy the court regarding prima facie tenability of the plea of invalidity of the registration of the other party’s mark, resulting in Court framing the issue and adjourning the case for three months for the party to file S.57 petition.
The Single Judge has erred in holding that S.124 gives a separate right to a party challenging the registration of the mark. Section 124 doesn’t provide a right for filing cancellation application, that right is only under S.46 and 57. Section 124 only provides a procedure which a party has to follow before filing S.56 Application. So, S.124 is not an additional right to challenge registration, as held by the Single Judge, but only a procedure to be followed under certain circumstances, i.e., when a suit for infringement is pending before any application under S.46 and 57 is filed.
Para 26 of the Judgement
The Single Judge held that the passages relied upon by Respondent merely set out the statutory scheme of S.124 and not in any manner takes away the right of the Defendant to independently invoke S.57.
The Single Judge then refers to the principle that judgments of the Supreme Court are not to be read as Euclid’s theorems, but are to be understood in the background of the facts in which they were rendered and held that paras 31 and 34 of the decision in Patel Field Marshal Agencies merely clarifies the scheme of Section 124 of the Trade Marks Act and does not in any manner hold, as Mr. Barathi would seek to contend, that the right available under Section 57 stood eviscerated thereby.
If the Single Judge would have examined the background of the Supreme Court Judgment, i.e., the judgements from which the civil appeals arose (Judgement of the Gujrat High Court), he would not have held what he held.
Even a plain reading of the Supreme Court Judgment makes it clear that it was dealing with an appeal arising out of case where the Single Judge as well as the Division Bench of Gujrat High Court had dismissed rectification applications filed by the Defendant under S.56 of the 1958 Act during the pendency of the Civil Suit and without taking leave of the court by following procedure under S.111.
The Supreme Court had after discussing Md. Yousuff and Data Infosys—which took position identical to the Single Judge in Anubhav Jain—dismissed the appeal and affirmed the Division Bench Judgment of the Gujrat High Court.
The Gujrat High Court had in no uncertain terms had held that in case, no such proceedings for rectification are pending at the time of raising the plea of invalidity, the prosecution of such plea by the person raising it depends on prima facie satisfaction of the court, about the tenability of this plea. If the plea has been found to be prima facie tenable and issue is raised to that effect then the matter is to be adjourned for three months at least to enable the person raising such plea to approach the High Court concerned, with a rectification application. In case, the rectification proceedings are not already pending, and the court is not even prima facie satisfied about the tenability of the plea raised before it, the matter rests there.
The Single Judge also erred in holding that if a plea of invalidity of the registered mark is not raised in the pending suit, S.124 would not be applicable. The basic postulate of CPC provides for otherwise as held by the Gujrat Division Bench.
The Division Bench had held that if plea of invalidity is not raised in the Suit, it amounts to admitting the validity of registration of trade mark by the Defendant and a party is precluded from challenging the registration on grounds existing at the time of filing written statement or at the time when the Defendant had opportunity to raise such plea in the Suit in any other manner but had failed to do so.
Further, the Court held that a plea which is raised in written statement but trial of which is not insisted upon by not insisting to frame an issue to that effect, such plea must be deemed to have been abandoned by the party raising the same in his pleadings. It becomes, as per the Court, a case of overt abandonment. The Division Bench had finally held that once a person has abandoned the plea as to invalidity of the mark, he cannot raise fresh plea de hors the Suit by filing a rectification application and resume such plea.
The above view is endorsed by the Supreme Court when it says that there is no provision in the 1958 Act to understand the provisions of Section 111(3) in any other manner except that the right to raise the issue of invalidity is lost forever if the requisite action to move the High Court/IPAB (now) is not initiated within the statutorily prescribed time frame.
EPILOGUE
The Single Judge by the Judgment has once again raised an issue, i.e., interpretation of S.124, which was buried, and for good, by the Supreme Court. The doctrine of stare decisis binds courts to stand by their decisions and not disturb the undisturbed. The Single Judge has disturbed the quietus given by the Supreme Court to the controversy which had vexed different High Courts for several decades.
The Courts have after the decision in Patel Field Marshal understood the interpretation of S.124 of the 1999 Act to the effect that if an infringement Suit is pending and the Defendant or the Plaintiff, as the case may be, has taken a plea of invalidity of the registered mark of the other, it must go through the drill of S.124 and take leave of the Court before filing a S.57 Petition and after satisfying the Court of tenability of the plea of invalidity of the mark.
By making a decision in the Anubhav Jain case, the Single Judge has reignited the debate and given the chance to dishonest defendants or plaintiffs who had in the infringement suit up until this point not raised the argument that the mark of the other party was invalid, believing that they had given up the right to contest the registration, to file a rectification application on the basis of the Anubhav Jain's judgement.
Chaos will result from this, which the Supreme Court addressed in Patel Field Agency by saying the following:
“Thus, by virtue of the operation of the 1958 Act, the plea of rectification, upon abandonment, must be understood to have ceased to exist or survive between the parties inter se. Any other view would be to permit a party to collaterally raise the issue of rectification at any stage notwithstanding that a final decree may have been passed by the civil court in the meantime. True, the decree of the Civil Court will be on the basis of the conclusions on the other issues in the suit. But to permit the issue of rectification, once abandoned, to be resurrected at the option of the party who had chosen not to pursue the same at an earlier point of time would be to open the doors to reopening of decrees/orders that have attained finality in law. This will bring in uncertainty if not chaos in the judicial determinations between the parties that stand concluded. Besides, such an interpretation would permit an aggrieved party to get over the operation of a statute providing for deemed abandonment of the right to raise an issue relevant; in fact, fundamental to the lis.”
[1] Partner JSA, Contact No.9818857346 [2] 2016 SCC OnLine Del 677 : (2016) 65 PTC 209 [3] 2006 SCC OnLine Mad 961 : 38 PTC 576 [4] (2018) 2 SCC 112 [5] C.O. (COMM.IPD-TM) 55/2021 decided on 9.01.2023; at the time of writing this piece, the Division Bench by its order of 17.02.2023 stayed the Single Judges order in an appeal filed by Satish Jain (LPA 121/2023) [6] FAO (COMM) 185/2022 [7] Order dated 8.02.2023 [8] C.O. (COMM.IPD-TM) 55/2021 [9] Patel Field Marshal Agencies vs P.M. Diesels Ltd. on 15 April, 1998 [10] Section 46 of the 1958 is equivalent to S.47 of the 1999 Act [11] Section 56 of the 1958 is equivalent to S.57 of the 1999 Act [12] Section 107 of the 1958 is equivalent to S.125 of the 1999 Act [13] Section 111 of the 1958 is equivalent to S.124 of the 1999 [14] Patel Field Marshal Agencies vs P.M. Diesels Ltd. on 25 November 1998 [15] (2006 (32) PTC 733 (Del.) [16] MANU/TN/2924/2006 [17] 2016 SCC OnLine Del 677: (2016) 65 PTC 209 (FB) [18] AIR 1974 Delhi 12 [19] 2007 (34) PTC 469 (DB) (Del) [20] 2012 (50) PTC 433 (Del) (DB) [21] Full Bench comprised of J. Ravindra Bhat, J. Vipin Sanghi, and J. Nazimi Waziri. J. Bhat wrote the majority Opinion, while J. Sanghi wrote a separate opinion differing on certain views of the Majority Opinion. [22] Valmiki Mehta J., as a single judge, had dismissed the application filed by Data Infosys under Section 124 of the 1999 Act for stay of the proceedings initiated against them before the IPAB by Infosys. He relied upon observations in B.Mohamed Yousuff (Supra) that that Section 124 of the 1999 Act does not require any prior permission of the Court where the suit claiming infringement of the trade mark is pending for initiating proceedings for cancellation of the registered trade mark. [23] J. Gogoi wrote the judgment [24] AIR 1974 Delhi 12 [25] Para
Comments