Delhi High Court
Wonderful Developers Private ... vs Impresario Entertainment And ... on 28 July, 2016
$~5
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 28.07.2016
+ CM(M) 376/2013 & CM No.5681/2013 (stay)
WONDERFUL DEVELOPERS PRIVATE LTD. ..... Petitioner
Through Mr.Sohan Singh Rana, Mrs.Bindra
Rana & Ms.Manashi Pathak,
Advocates.
versus
IMPRESARIO ENTERTAINMENT AND
HOSPITALITY PRIVATE LTD. & ORS. ..... Respondents
Through Ms.Shikha Sachdev & Ms.Jasleen
Kaur, Advocates
CORAM:
HON'BLE MR. JUSTICE JAYANT NATH
JAYANT NATH, J. (Oral)
CM(M) 376/2013 and CM No.5681/2013 (stay)
1. By the present petition the petitioner seeks to impugn the order dated
16.02.2013 passed by the learned trial court in T.M. No.143/2011.
2. By the said order, the learned trial court allowed the application under
Section 124 of the Trade Marks Act, 1999 read with Section 151 CPC for
stay of the suit filed by the respondent/defendant and stayed the suit
pertaining to the alleged infringement of the Trade Mark till rectification
proceedings before the Intellectual Property Appellate Board (hereinafter
referred to as 'IPAB') are disposed of but allowed the proceedings regarding
passing off to continue.
3. The petitioner filed a suit for permanent injunction for infringement of
the Trademark, passing off, rendition of accounts and damages etc.
regarding Trademark MOJO. The petitioner states that his Trademark
MOJO is a registered Trade Mark.
4. After filing of the suit by the petitioner, the defendant/respondent
moved an application under Section 124 of the Trade Marks Act for stay of
the suit. The respondent contended that it had on 27.02.2012 filed before the
IPAB an application for rectification of the register under Sections 57(2) and
124 of the Trade Marks Act regarding the Trade Marks of the petitioner. The
application by the respondent for rectification before IPAB was filed after
the petitioner had filed the suit.
5. The trial court by the impugned order noted that where a party
concerned has moved an application under Section 124(2) of the Trade
Marks Act before the IPAB for rectification of the Trade mark and the
rectification proceedings are pending adjudication, it is mandatory for the
trial court to grant stay in the matter. The trial court accordingly stayed the
proceedings pertaining to that part of the suit dealing with the infringement
of the Trademark till the disposal of the rectification proceedings. However,
the suit for passing off was directed to continue.
6. The learned counsel for the petitioner submits that in view of the
judgment of the Full Bench of this court in Data Infosys Ltd. & Ors. v.
Infosys Technologies Ltd., 2016 (65) PTC 2009 (Del)[FB], the present suit
could not be stayed. It is urged that the stay operates only in case
rectification application has been filed by the defendant prior to the filing of
the suit. The stay would follow in a case where such an application is not
filed before filing of the suit and where the trial court is satisfied that the
plea regarding the invalidity of the registration of the Trademark is prima
facie tenable and the trial court adjourns the case to permit the other side to
file a rectification petition. In that eventuality, the trial court may adjourn
the matter. He further submits that even otherwise the trial court can
continue to hear the injunction application.
7. The learned counsel appearing for the respondents has, however,
contended that she has no objection in case the stay application is heard but
she submits that as per the Full Bench judgment, the suit has to be stayed till
the order in the rectification petition by the IPAB is passed.
8. We may first look at Sections 124(1), (2) & (3) of the Trade Marks
Act, which reads as follows:
―124. Stay of proceedings where the validity of registration of
the trade mark is questioned, etc.--
(1) Where in any suit for infringement of a trade mark--
(a) the defendant pleads that registration of the plaintiff's
trade mark is invalid; or
(b) the defendant raises a defence under clause (e) of sub-
section (2) of section 30 and the plaintiff pleads the
invalidity of registration of the defendant's trade mark,
the court trying the suit (hereinafter referred to as the
court), shall,--
(i) if any proceedings for rectification of the register
in relation to the plaintiff's or defendant's trade mark
are pending before the Registrar or the Appellate
Board, stay the suit pending the final disposal of such
proceedings;
(ii) if no such proceedings are pending and the court is
satisfied that the plea regarding the invalidity of the
registration of the plaintiff's or defendant's trade mark
is prima facie tenable, raise an issue regarding the
same and adjourn the case for a period of three
months from the date of the framing of the issue in
order to enable the party concerned to apply to the
Appellate Board for rectification of the register.
(2) If the party concerned proves to the court that he has made
any such application as is referred to in clause (b) (ii) of sub-
section (1) within the time specified therein or within such
extended time as the court may for sufficient cause allow, the
trial of the suit shall stand stayed until the final disposal of the
rectification proceedings.
(3) If no such application as aforesaid has been made within the
time so specified or within such extended time as the court may
allow, the issue as to the validity of the registration of the trade
mark concerned shall be deemed to have been abandoned and
the court shall proceed with the suit in regard to the other issues
in the case.‖
9. Reference may be had to the judgment of this Court in the case of
Data Infosys Ltd. & Ors. vs. Infosys Technologies Ltd.(supra) the majority
of the Full Bench stated the issue pending before the court as follows:
"1.This Full Bench is called upon to answer a reference made in
terms of the order of the Division Bench dated 27.08.2012. The
Division Bench, by its order of reference noticed a judicial
conflict on the question whether prior permission of the Court
is necessary under Section 124(1)(b)(ii) of the Trade Marks
Act, 1999 (hereafter "the Act") for rectification of a registered
trademark, during the pendency of a suit. The first view is 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
Intellectual Property Appellate Board (hereafter "IPAB") - if
the procedure outlined therein is not followed. The other view
is that such proceedings (for 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."
10. The Full Bench concluded as follows:
―This Full Bench therefore, in its unanimous opinion, holds that:
1. (a) IPAB has exclusive jurisdiction to consider and decide
upon the merits of a plea of trademark registration invalidity -
applying Section 47 and 57 of the Act- in the context of an
infringement suit based on such registered trademark. Access to
IPAB is not dependent on the civil court's prima facie
assessment of tenability of a plea of invalidity of trademark
registration. In other words, Section 124 of the Trademarks Act
does not control the choice of a litigant to seek rectification of a
registered trademark.
(b) The decision in Astrazeneca UK Ltd. and Anr. v. Orchid
Chemicals and Pharmceuticals Ltd. 2007 (34) PTC 469 (DB)
(Del) and all other judgments which hold that the plea of
rectification can be raised by a party to an infringement suit,
only if the court trying the suit, rules it to be prima facie tenable
and that if such finding is not recorded, the party cannot avail
the remedy of rectification of a registered trademark, is
accordingly overruled.
2. This Court holds, by its 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)). In the first situation, if
such plea exists, before the filing of the suit, the Court has to
stay the suit to await the decision of the IPAB. In the second
situation, if there is no application for rectification before the
IPAB when the suit is filed and a party to the infringement suit,
wishes to challenge it after the filing of the suit, it may do so,
but the court has to assesses the tenability of the invalidity plea-
if it finds it prima facie tenable, then and then alone, would it
stay the suit to enable the party to approach the IPAB within a
time period. If the party does not avail of this, or approaches the
IPAB after the period given, the court would proceed with the
suit; the plea of invalidity is deemed abandoned in the
infringement suit.‖
11. We are here not concerned with the first eventuality as stated under
Section 124(1)(i) which deals with a situation where the rectification
proceedings are instituted before filing of the suit. We are here only
concerned with the second situation stated under Section 124(1)(ii) where no
such plea exists when the suit was filed. The Full Bench took the view that
in such eventuality the party to the suit which is to challenge the invalidity
after filing of the suit, may do so and the court has to assess the tenability of
the invalidity plea that if it finds it tenable and then alone would stay the suit
to enable the party to approach the IPAB within a stated time. If the party
would not avail any of this, or approaches the IPAB after the period given,
the court would proceed with the suit and the plea of invalidity is deemed
abandoned in the infringement of the suit.
12. In the written statement filed by the respondents, the respondent(s)
have reserved their rights to start rectification proceeding against the
petitioner's registered Trade mark for its removal on the register. The
written statement is dated 21.02.2012. The application under Section 124 of
the Trade Marks Act is also of the same date. The application for
rectification filed before the IPAB is also of the same date. Hence, the
respondents without requesting the trial court to assess the tenability of the
invalidity plea have gone and filed the rectification application before the
IPAB.
13. A perusal of the conclusion reached by the Full Bench would show
that such an eventuality as the facts of the present case, i.e. the rectification
application being filed after filing of the suit, but without approaching the
court and requesting the trial court to assess the tenability of the invalidity
plea has not been dealt with by the Full Bench. The Full Court only deals
with the situation where the plea of invalidity is first held to be prima facie
tenable and then rectification application is filed before IPAB. The relevant
portion of the said judgment in the last para of the conclusion reads as
follows.
―2.....In the second situation, if there is no application for
rectification before the IPAB when the suit is filed and a party to
the infringement suit, wishes to challenge it after the filing of the
suit, it may do so, but the court has to assesses the tenability of
the invalidity plea- if it finds it prima facie tenable, then and
then alone, would it stay the suit to enable the party to approach
the IPAB within a time period. If the party does not avail of this,
or approaches the IPAB after the period given, the court would
proceed with the suit; the plea of invalidity is deemed
abandoned in the infringement suit.‖
14. The Full Bench also noted that the structure of Section 124 of the
Trade Marks Act nowhere indicates that jurisdiction of IPAB is conditional
upon the civil court's determination of the prima facie tenability of the
invalidity of the plea. Relevant portion of the judgment reads as follows:
"39. 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.
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."
15. Hence, according to the Full Bench, the respondents followed the
valid procedure so far as the filing of the application for rectification before
the IPAB is concerned.
16. The issue would be as to what would be the appropriate steps to be
taken by the civil courts in such a situation. Keeping in view the direction of
the Full Bench, in my opinion, the mere filing of the rectification application
after filing of the suit without approaching the trial court first cannot in any
manner prejudice the respondents. The respondents cannot be deprived of
the benefit of Section 124 of the Act merely because it did not, first before
filing the rectification application, approach the trial court for an issue to
assess the tenability of the invalidity issue. The case of the respondents
would still be covered by the second situation noted by the Full Bench
where no application for rectification has been filed when the suit was filed.
Hence, the trial court would have to go into and assess the tenability of the
invalidity plea and if it finds it prima facie tenable then it would stay the suit
to await the decision of the IPAB. If for some reasons, the trial court
concludes that the plea is prima facie not tenable, it may proceed with the
suit.
17. A perusal of the impugned order would show that the trial court has
interpreted Section 124 of the Act to mean that whenever the defendant has
moved a rectification application under Section 124 of the Act before IPAB,
the suit would ipso facto be liable to be stayed to await the order of the
IPAB on the issue.
18. In the light of the above, the impugned order of the trial court staying
the suit regarding the infringement of the Trade mark is set aside. The matter
is remanded back to the trial court to consider the application under Section
124 of the Trade Marks Act of the respondents afresh in the light of the
directions made above. The petition stands disposed of.
JAYANT NATH, J.
JULY 28, 2016/v
