Madras High Court
King Point Enterprise Co. Ltd vs M/S.Maarg (India) on 4 August, 2023
2023:MHC:3728
A.No.3981 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 04.08.2023
CORAM
THE HONOURABLE MR.JUSTICE SENTHILKUMAR RAMAMOORTHY
A.No.3981 of 2023
in C.S.No.163 of 2018
King Point Enterprise Co. Ltd.
U-IF.No.2, Chung Shan 2nd Road,
Chien Jen Dist, Kaohsiung,
Taiwan, Republic of China. ... Applicant
vs.
M/s.Maarg (India)
No.194/3, Rasappa Street,
Park Town, Chennai-600 003
Tamil Nadu, India
A Registered Partnership Firm
Represented by its Partner
Mutahir Gulam Hussain. ... Respondent
PRAYER: This application has been filed under Order XVI Rule 8 of
the Madras High Court Original Side Rules read with Section
124(1)(a)(i) of the Trade Marks Act, 1999, read with Section 151 of the
Code of Civil Procedure, 1908 to stay the suit in C.S.No.163 of 2018
1/13
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A.No.3981 of 2023
pending the final disposal of the rectification proceeding in
(T)OP(TM) No.32 of 2023.
For Applicant : M/s.K.Premchandar,
Chitra Subbiah, L.Ramprasad,
N.C.Vishal
For Respondent : Ms.J.Pooja
for M/s.Maarg India
*******
ORDER
Learned counsel for the defendant/petitioner in the connected
rectification petition [(T)OP(TM)/32/2023] seeks a stay of C.S.No.163
of 2018 because a defence was raised in the suit that the registration
of the trademark is invalid and a rectification petition was filed.
Although both the rectification petition and the suit are pending
before this Court, learned counsel contends that the statute mandates
that the rectification petition be decided first and that the suit be
stayed until then. In support of this contention, he places emphasis
on sub-sections (1) and (4) of section 124 of the Trade Marks Act,
1999 (The Trade Marks Act). Section 124 is set out below:
"(1) Where in any suit for infringement of a trade
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A.No.3981 of 2023
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
High Court, stay the suit pending 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 High Court for
rectification of the register.
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A.No.3981 of 2023
(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 issue in the case.
(4) The final order made in any rectification
proceedings referred to in sub-section (1) or sub-
section (2) shall be binding upon the parties and
the court shall dispose of the suit conformably to
such order insofar as it relates to the issue as to the
validity of the registration of the trademark.
(5)The stay of a suit for the infringement of a trade
mark under this section shall not preclude the
Court from making any interlocutory order
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A.No.3981 of 2023
(including any order granting an injunction,
directing account to be kept, appointing a receiver
or attaching any property), during the period of
the stay of the suit.”
2. He also places reliance upon an order of this Court dated
06.12.2019 in A.No.8547 of 2019 in C.S.No.410 of 2017, particularly
paragraphs 18 and 19 thereof. He further relies upon the judgment
of the Supreme Court in Patel Field Marshal Agencies and another -vs-
P.M.Diesels Limited and others (Patel Field Marshal), reported in (2018)
2 SCC 112, particularly paragraph 37 thereof, where the Court, in
relevant part, held 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".
3. In order to further substantiate this contention, learned
counsel draws inspiration from the Trade and Merchandise Marks
Act, 1958, and contends that section 111 thereof, which is in pari
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A.No.3981 of 2023
materia with the Trade Marks Act, provided for a stay of the suit
although the power of rectification was vested only with the High
Court. Therefore, he contends that the statutory mandate that the
rectification petition should be decided in the first instance continues
to operate notwithstanding the fact that the two proceedings may be
before the same forum. As the person seeking rectification, he
submits that the petitioner has the statutory right to insist on the
rectification petition being decided before the civil suit is taken up for
consideration.
4. Because a decision on this issue may have an impact on
several other matters pending before this Court, I called upon other
counsel who practice in this area to make brief submissions. In
summary, their submissions are as under:
(i) the scope of the civil suit may include an action for passing
off and as regards passing off, the suit is not liable to be stayed.
(ii) a rectification petition may be filed on the ground of non-
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A.No.3981 of 2023
use of the relevant mark. In such cases, the statute does not provide
for stay of the suit.
(iii) these provisions were introduced as a procedural device to
ensure that there is no conflict between the decision of the statutory
authority/High Court, which decides the validity of registration of
the trade mark, and the civil court deciding the action for
infringement and/or passing off.
(iv) Especially after the enactment of the Commercial Courts
Act, 2015 (the Commercial Courts Act) and the constitution of the
Intellectual Property Division, the object of expeditious disposal
would be defeated if the rectification petition is decided first and the
civil suit thereafter.
(v) the order passed in the rectification petition may be
appealed against and would result in the suit being stayed for a long
duration.
5. In light of these submissions, the statutory scheme in relation
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A.No.3981 of 2023
to the following situations should be noticed: (i) both a civil suit and
rectification petition are pending; or, (b) pending suit, a rectification
petition is proposed to be filed. Under the Trade Marks Act, the
power of rectification is vested both on the statutory authority/
Registrar and the High Court. Therefore, in order to obviate a
situation where a decision of the Registrar on the validity of
registration could becoming binding on a civil court (i.e. District
Court or High Court exercising original jurisdiction, as the case may
be); in cases where the validity of registration of the plaintiff's
trademark is questioned by way of a defence in an infringement
action or where the civil court concludes that the plea of invalidity of
the relevant trade mark is prima facie tenable and, therefore, permits
the filing of a rectification petition, the rectification petition is
required to be filed only in the High Court and not before the
Registrar (Sections 124(1)(a) or (b)(ii) and 125(1) of the Trade Marks
Act).
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A.No.3981 of 2023
6. Sub-sections (1) and (2) of section 124 of the Trade Marks Act
provide for the stay of a suit/stay of trial of a suit for infringement of
a trade mark only if the defendant or plaintiff, as the case may be,
pleads that the registration of the counter party's trade mark is
invalid and initiates proceedings for rectification. Such rectification
petition may be filed prior or subsequent to the suit. If the
rectification petition is filed subsequent to the suit, by virtue of the
judgment in Patel Field Marshal, leave of the civil court is necessary so
as to preclude the filing of frivolous rectification petitions, especially
to frustrate the prosecution of a suit. As is evident from Section 57
read with Section 124 of the Trademarks Act, the statutory intent is
that the validity of registration of the trade mark should be decided
only in the rectification action and not in the civil suit. Since the civil
court (the jurisdictional district court or high court exercising original
jurisdiction) and rectification forum (the Registrar or the High Court
concerned) may be different or the forum may be the same (the High
Court) but the judge may be different, the statute provides for a stay
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A.No.3981 of 2023
of the civil suit so as to preclude inconsistent conclusions. In such
situations, the issue of validity of registration of the trade mark is
required to be decided first in the rectification petition before the
infringement suit is decided because the validity of registration
would be the foundation of the infringement action. Therefore, sub-
section (4) of section 124 provides that the final order in the
rectification proceeding shall be binding on the parties and that the
civil court should dispose of the suit in accordance therewith insofar
as it relates to the validity of the registration of the trademark. This
leads to the inference that the civil suit should be stayed and the
rectification petition should be decided prior to the infringement
action if either forum or adjudicator of the civil suit and rectification
petition are different.
7. On the contrary, in a situation where both the civil suit and
the rectification petition are pending before the same forum and
judge, as in this case, there is no likelihood of inconsistency.
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A.No.3981 of 2023
Additionally, the manner in which the suit and rectification petition
are dealt with, by consolidation or otherwise, may be tailored to
meet the specific requirements of the proceedings before the Court
while also satisfying the mandate of sub-section (4) of Section 124.
By way of illustration, if the civil suit is only for infringement and the
defence of invalidity of registration of the trade mark is raised in
such suit and is accompanied by a prior or subsequent rectification
petition, it may be appropriate to frame and decide a preliminary
issue on the validity of the registered trade mark because the fate of
the suit would hinge thereon. On the other hand, if the civil suit is
both for infringement and passing off, the decision on the validity or
otherwise of the registered trade mark would impact the suit only
insofar as it relates to infringement, but would have no bearing on
the relief of passing off. In such cases, a joint trial would be
appropriate albeit by framing issues and directing the conduct of the
joint trial in such manner as to enable the petitioner in the
rectification petition to first lead evidence on the alleged invalidity of
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A.No.3981 of 2023
the registered trade mark. There would be no purpose or necessity to
stay the suit in any of these circumstances. Most importantly, if the
procedure is tailored to suit the specific requirements in the manner
aforesaid, the statutory mandate would be adhered to both in letter
and spirit. It would also promote the just and expeditious resolution
of commercial disputes, which is in consonance with the objects of
the Commercial Courts Act.
8. For reasons set out above, the request for a stay of the civil
suit is declined by dismissing A.No.3981 of 2023 without any order
as to costs.
04.08.2023
(1/3)
Index : Yes/No
Internet : Yes/No
Neutral Citation:Yes/No
rna
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A.No.3981 of 2023
SENTHILKUMAR RAMAMOORTHY,J
rna
A.No.3981 of 2023
in C.S.No.163 of 2018
04.08.2023
https://www.mhc.tn.gov.in/judis
