Nippon Soda Co. Ltd. vs V.P. Goyal And Anr
2014 Latest Caselaw 1085 Del

             *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                   Date of decision: 28th February, 2014.

+                      CS(OS) 2011/2010 & CC No.4/2011

         NIPPON SODA CO. LTD.                               ..... Plaintiff
                      Through:          Ms. Vaishali Mittal and Gurpreet Singh
                                        Kahloni, Advocates.

                                 Versus

         V.P. GOYAL AND ANR                                  ..... Defendants
                      Through:          Mr. S.K. Bansal, Mr. Ajay Amitabh
                                        Suman, Mr. Pankay Kumar, Mr.
                                        Santosh Kumar, Mr. Vikash Khera and
                                        Mr. Amit Chanchal Jha, Advocates.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J
I.A. No.3404/2013 (of plaintiff u/S 124 of Trademarks Act, 1999)

1.

The plaintiff in this suit for permanent injunction to restrain the

defendants from infringing the trademark TOPSIN of the plaintiff and passing

off their goods as that of the plaintiff seeks stay under Section 124(1)(i) of the

Trade Marks Act, 1999 of proceedings in the suit as well as in the counter

claim filed by the defendants.

2. The counsel for both the defendants has contested the application on

three grounds. Firstly, that for a stay to be applied for under Section 124(1)

of the Act, the plea has to be of the invalidity of the registration of the other

party; invalidity has to be interpreted narrowly and merely because a

rectification application may be pending, is no ground to stay the proceedings;

that there is no issue of invalidity of the trademark. Secondly, it is contended

that stay of proceedings under Section 124(1)(i) of the Act can be sought only

where the rectification proceedings are filed after the institution of the suit

and not in a case as the present one, where the plaintiff had filed rectification

proceedings prior to the institution of the suit. Lastly, it is contended that the

plaintiff as well as the defendant, in the suit and counter claim respectively,

besides claiming the relief against the infringement have also claimed the

relief against passing off and which relief in any case would survive and

cannot be stayed and the suit qua that has to go on.

3. The counsel for the defendants in support of the first of the aforesaid

contentions has argued that rectification of a trademark can be sought either

under Section 47 of the Act or under Section 57 of the Act. He has also

invited attention to Section 31, particularly sub-section (2) thereof and

contends that the word "invalidity" which has been not defined, has been used

in the said provision and that the word "invalidity" in Section 124 has to take

colour from Section 9 of the Act i.e. where the registration is sought to be

revoked on absolute grounds for refusal as mentioned in Section 9 of the Act.

4. On the second contention, though the counsel does not controvert that

there is no bar to institution of a suit after filing a rectification application but

contends that the "pendency of the proceedings for rectification" referred to in

Section 124(1)(i) ought to be only after the defendant in a suit has taken the

defence of a registered trademark and cannot be where the plaintiff has

already, prior to the institution of the suit, applied for rectification.

5. On the third contention, reliance is placed on Formica International

Ltd. Vs. Caprihans (India) Pvt. Ltd. AIR 1966 Calcutta 247 and on Micolube

India Limited Vs. Maggon Auto Centre 2010 (42) PTC 462 (Del.) to contend

that the stay under Section 124 of the Act would not apply to the relief

claimed of passing off.

6. The counsel for the plaintiff in response has argued that Section 124 of

the Act, after mentioning "invalidity" of the trademark, refers to the pendency

of rectification proceedings, whether before the Registrar or before the

Appellant Board. It is contended that the rectification proceedings are to be

instituted before the Registrar only, unless a suit is pending and in which case

as per Section 125, it can be instituted before the Intellectual Property

Appellant Board (IPAB) alone. It is contended that from Section 124(1)(i)

mentioning pendency of the proceedings either before the Registrar or the

IPAB, it is evident that the institution of the rectification application can be

prior to the institution of the suit also.

7. The counsel for the plaintiff has also argued that Section 31 applies qua

descriptive trademark only, while the plea of the plaintiff of its trademark

being a coined one.

8. It is also argued that the plea of the defendants in these proceedings, is

of the registration of the plaintiff‟s trademark being invalid.

9. On the third contention, reliance is placed on the order dated 21st

August, 2013 of this Court in CS(OS) No.1172/2008 titled Mount Everest

Mineral Water Ltd. Vs. Kadir Khan to contend that the proceedings on the

relief against passing off were stayed, holding that it is not feasible to split up

the prayers in the suit and have them decided at different points of time.

10. On enquiry, the counsel for the defendants states that the defendants

have applied for rectification before the IPAB simultaneously with filing the

counter claim and he is unable to tell, whether the counter claim was filed

first or the rectification application before the IPAB.

11. The counsel for the plaintiff states that the plaintiff has no objection to

its applications for rectification pending before the Registrar being transferred

to the IPAB, so that rectification proceedings of both the parties can be

decided together.

12. I have considered the aforesaid contentions.

13. Though Clause (a) & (b) of Section 124(1) use the word „invalid‟ in

relation to a plea of registration of others mark, but subsequently Clause (i)

provides for stay "if any proceedings for rectification of the register" are

pending. I have thus enquired from the counsel for the defendants, whether

any distinction is made out in the statute between the proceeding for

rectification on the ground of invalidity or on any other ground.

14. No answer is forthcoming. In my opinion, the counsel, by drawing

attention to Section 47, 57 & 31(2) has been unable to show any such

distinction in rectification proceedings. Moreover, Section 124(1)(i), while

mandating the Court to stay the proceedings in the suit, only mentions

proceedings for rectification of the register, without drawing any distinction

between proceedings on the ground of invalidity or otherwise. Though the

word "proceedings for rectification" could have taken colour from the word

„invalid‟ in the earlier part of the provision but in the absence of any

distinction in the provisions dealing with rectification, of rectification on the

ground of invalidity or any other ground, no such distinction can be drawn.

Rather, the counsel for the defendants also on enquiry admits that the prayer

in the rectification proceedings initiated, both by the plaintiff and the

defendants, is of removal from the register of the mark of the other. It is thus

not as if, the rectification sought is of any minor part of the mark for it to be

said that the proceedings are not for invalidity without the Act itself making

any distinction between rectification proceedings on the ground of invalidity

of the mark or on any other ground, acceptance of the argument of the counsel

for the defendants would amount to doing violation to the language and

purport of Section 124.

15. The counsel for the defendants, by drawing attention to the issues

framed in these proceedings, has also contended that no issue on the invalidity

of trademarks was urged or framed. He thus contends that when invalidity is

not in issue, the question of stay does not arise. Though the counsel for the

plaintiff controverts but in my view the same is immaterial. Section 124

provides for stay of proceedings in two situations, mentioned in clauses (i)

and (ii) thereof. While, Clause (i) provides for stay where the rectification

proceedings are pending, Clause (ii) provides for stay in cases where no such

rectification proceedings are pending. Again, while for stay under Clause (ii),

satisfaction of Court that the plea regarding invalidity is prima facie tenable

and raising of an issue is necessary, there is no such requirement for stay

under Clause (i), where mere pendency of rectification proceeding is enough.

There is thus no merit in the said contention also.

16. A single Judge of the Calcutta High Court in ITC Limited Vs. Godfrey

Phillips India Ltd. MANU/WB/0676/2010 was concerned with the question

whether the plea by the defendant, of non use by the plaintiff of the registered

trademark and pendency of an application before the IPAB for removal of the

mark from the register, was a plea of invalidity, for the proceedings in the suit

to be stayed. It was held that while such challenge on the ground of non user

is on a ground in which the propriety of the mark getting on the register is not

in question, the words rectification and cancellation of the mark in the context

of Section 57 of the Act imply obliteration and the word invalid in

Section 124 has to be understood in the sense of questioning the

sanctity of the entry in the Register of the Marks; accordingly Section 124

was held to be not applicable to a case of removal of the mark.

17. As far as the second contention is concerned, again Section 124(1)(i) of

the Act, while using the words „if any proceedings for rectification of the

register ......are pending‟ does not make any distinction, between whether the

rectification proceedings have been instituted prior to the institution of the

suit or subsequent to the institution of the suit. There is also merit in the

contention of the counsel for the plaintiff that if the reference in Section 124

was to be of the rectification proceedings instituted only after the institution

of the suit, the need for mentioning the pendency of the rectification

proceedings before the Registrar would not have arisen.

18. It may be noticed, that the Division Bench of this Court in Astrazeneca

UK Ltd. Vs. Orchid Chemicals & Pharmaceuticals Ltd. 2007 (34) PTC 469

(DEL) has held that permission under Section 124 (b) is mandatory and if

proceedings for rectification are filed without obtaining such permission,

those would not be maintainable. It may also be noticed that the matter has

been referred to the Full Bench of the Court and is pending in FAO(OS)

No.403/2012 titled Data Infosys Vs. Infosys Technologies Ltd. However, in

the present case, the application for rectification was filed prior to institution

of suit.

19. As far as the stay of the suit/counter claim insofar as for the relief

against passing off is concerned, there is no manner of doubt that Section 124

can have no application thereto. However, I tend to agree with the view taken

in Mount Everest Mineral Water Ltd. supra and do not find the judgment

relied upon by the counsel for the defendants in this regard i.e. Micolube

India Limited supra to have considered the said aspect. The reasoning given

in Mount Everest Mineral Water Ltd. supra that the suit for the same relief

on the ground of infringement as well as passing off cannot be split up and

cannot be decided at different points of time, is found to apply with all force

to the present situation.

20. The application is therefore allowed. The proceedings in the suit as

well as in the counter claim are stayed with liberty to the parties to apply for

revival after the decision of the rectification proceedings.

RAJIV SAHAI ENDLAW, J

FEBRUARY 28, 2014 Bs..