The Single Bench of the Delhi High Court in the case of SAP SE vs Swiss Auto Products & Anr. consisting of Justice Sanjeev Narula requested for the formation of a larger bench to decide on whether the rules dealing with procedural aspects, including those relating to the filing of evidence introduced by the Trademarks Rules, 2017, would apply retrospectively to proceedings initiated under the Trademarks Rules, 2002.
Facts:
The main issue of this appeal was whether the appellant was allowed to provide more evidence to support its request to register a trademark. This raised a crucial legal question about the relationship between the timeline of the application and the procedural rules that apply at different stages, creating a legal dilemma.
SAP SE, a business software company, started in 1972 and became a major player in the industry, including in India since 1992. The company owns the trademark "SAP" and registered it in multiple classes. In 1999, they applied for registration of the trademark in class 09 for computer programs and software. However, Swiss Auto Products filed an opposition to the registration in 2007 and the company responded with a counter-statement in 2011, requesting evidence to support their opposition.
Procedural History:
Both parties had numerous discussions to reach a settlement, but these talks were unsuccessful. Respondent No. 1 contacted the Registrar of Trademarks (Respondent No. 2) to use the facts from the opposition notice as evidence. Respondent No. 1 then submitted a sworn statement to support their opposition, but the copy received by the Appellant’s attorney was missing some attachments. The attorney promptly requested these missing attachments, but Respondent No. 1 demanded compensation for their expenses in copying and sending the attachments. Eventually, in 2013, the Appellant’s attorney received the requested copies. The Appellant then argued that the deadline for submitting evidence should start from November 12, 2013, and filed multiple requests for extensions of time. The Appellant submitted an Interlocutory Petition with supporting evidence, but Respondent No. 2, vide order dated 12thJune 2019 (“Impugned Order”), refused to accept the evidence.
Contentions Made:
Appellant: It was contended that the appellant was diligent in prosecuting their application and the delay in filing evidence was due to unavoidable circumstances. A short delay of three months should not prevent it from protecting its intellectual property. It claimed that the Registrar could have allowed the delay by using their discretion under Rule 53 of the Trademarks Rules, 2002 (“2002 Rules”) and that it was incorrect for Respondent No. 2 to say that only a one-month extension was allowed. It argued that u/s 131 of Trademarks Act, 1999 (“the Act”), the 2002 Rules and the Act should be interpreted together to suggest that the time period stated in Rule 51 is not mandatory and the Registrar can choose to extend it beyond one month.
Respondent: The appeal against the Registrar's order is not allowed according to the Act. The Appellant did not mention Rule 53 in its appeal and instead asked the Registrar to use their discretionary power. The argument based on Rule 53 was only brought up in written notes and could not be used to challenge the order. The rule it mentioned was not applicable in this case. Since the previous courts have deemed the filing of evidence as mandatory, the Appellant’s argument about it being optional was irrelevant.
Observations by the Court:
The main focus of the Bench was to determine if the rules regarding evidence submission timelines were mandatory or optional. However, before discussing this, the Bench first needed to establish if Respondent No. 2 had the authority to use these rules in making the decision in question. This was an important step because the rules regarding evidence submission had changed with the new Trademarks Rules of 2017. The comparison between the 1959 Rules and the 2017 Rules showed that Rule 53 of the 1959 Rules was considered a directory, not mandatory, as seen in Hastimal Jain Trading as Oswal Industries v. Registrar of Trademarks.
It noted that the Impugned Order that was issued on June 12, 2019, was made when the 2002 Rules were no longer in effect and had been replaced by the 2017 Rules. It examined Rule 158 of the 2017 Rules, which stated that the 2017 Rules repealed the 2002 Rules entirely, except for actions taken before March 6, 2017. In this case, the proceedings for the trademark application and opposition began under the 2002 Rules, but the decision by Respondent No. 2 was not final.
Regarding the issue of retrospective application of the law, it relied on Hitendra Vishnu Thakur v. State of Maharashtra and SEBI v. Classic Credit Ltd to reiterate that the presumption against applying laws retroactively does not apply to laws that only deal with matters of procedure or evidence. Relying on Anant Gopal Sheorey v. State of Bombay, it opined that the provisions regarding timelines for filing evidence, in this case, were procedural and did not create any vested rights for any party. The rule against applying laws retrospectively did not apply to these provisions, and any ongoing cases would be governed by the amended procedure.
It pointed out that the preamble of the 2017 Rules stated that the same have replaced the 2002 Rules, except for actions taken before the replacement. However, the preamble does not provide a list of these actions, which was an omission by the legislation.
It opined that the Examiner made a mistake by applying the 2002 Rules instead of the 2017 Rules. The 2017 rules do not mention any provisions for pending cases to be governed by the old rules. Therefore, the Registrar should have decided based on the current rules and not the old ones. It denied concurring with the judgment in Mahesh Gupta v. Registrar of Trademarks and Anr. which held that the proceedings which were initiated under the 2002 Rules would have to be adjudicated under the said Rules.
Judgment:
The Bench requested for this file to be placed before the Hon’ble Chief Justice to decide on whether the 2017 Rules would apply to ongoing cases that were initiated under the 2002 Rules and if not filing evidence in support of a trademark application would still be governed by the 2002 Rules. The matter would be presented before a Larger Bench on July 14, 2023, after obtaining the necessary orders from the Chief Justice.
Case: SAP SE vs Swiss Auto Products & Anr.
Citation: C.A.(COMM.IPD-TM) 130/2021
Bench: Hon’ble Mr. Justice Sanjeev Narula
For Appellant: Mr. Peeyoosh Kalra, Mr. CA Brijesh and Ms. Pragati Agrawal, Advs.
For Respondents: Mr. Sanjeev Singh, Advocate for R-1. Mr. Harish Vaidyanathan Shankar, CGSC with Mr. Srish Kumar Mishra, Mr. Sagar Mehlawat and Mr. Alexander Mathai Paikaday, Advocates for R-2.
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