Rectification Petition Maintainable Before High Court If ‘Dynamic Effect’ Of Trademark Registration Felt Within Its Jurisdiction: Delhi High Court

The Delhi High Court has ruled that High Courts have territorial jurisdiction to entertain the rectification petition seeking removal of trademark from the Register of Trademarks under the Trade Marks Act, 1999, if the ‘dynamic effect’ of the impugned registration is felt within the High Court’s jurisdiction by the person who has challenged the validity of the trade mark registration or has sought its removal.

Accordingly, the court said, the High Court dealing with a suit for infringement of Trademark would have the jurisdiction to entertain the rectification petition after the court comes to the conclusion that the plea of invalidity raised by the party under Section 124(1)(ii) of the Act, is tenable.

The court has thus refused to restrict such jurisdiction to High Courts covering the five offices of the Trade Marks Registry.

“The interests of wholesome administration of justice, and a possible conflict of views also, therefore, justifies conferment, on the High Court which is in seisin of the suit, or which exercises supervisory jurisdiction over the District Court which is in seisin of the suit, of the jurisdiction to decide the rectification petition as well, especially as there is no statutory proscription thereto,” the court has ruled.

The bench of Justice C. Hari Shankar was dealing with the issue whether a petition under Section 47 or 57 of the Trade Marks Act, for removal of trademark from the Register of Trademarks and consequent rectification of the register would lie only before the High Court having territorial jurisdiction over the office of the Trademark Registry where the impugned mark was registered, or the same could be filed in another High Court.

The court observed that Section 124(1)(ii) of the Act applies where there is no rectification proceeding pending on the date when a trademark infringement suit is instituted, but the plaintiff or the defendant raises a plea of invalidity of the trademark of the opposite party. In either of these cases, Section 124(1)(ii) requires the Court to satisfy itself that the plea of invalidity is tenable. If the Court finds that the plea is tenable, the Court is required to raise an issue regarding the plea of invalidity and to adjourn the matter by three months in order to enable the party concerned to apply to the High Court for rectification of the register.

Noting that the expression “High Court” is not defined in the Trade Marks Act, the court remarked that the Act has not expressly excluded any High Court from exercising jurisdiction either under Section 47 or 57. “There is, therefore, no express statutory proscription against any High Court exercising jurisdiction either under Section 47 or 57,” said the court.

The High Court was dealing with the issue whether it had the jurisdiction to entertain the petition filed by Dr. Reddy’s Laboratories seeking cancellation of the respondent- Fast Cure Pharma’s RAZOFAST mark.

During the pendency of the infringement suit filed by Dr. Reddy’s against Fast Cure Pharma, the Delhi High Court had granted adjournment under Section 124(1)(ii), enabling the former to file a petition seeking cancellation of the respondent’s RAZOFAST mark. Dr. Reddy’s, thereafter, proceeded to file the rectification petition before the Delhi High Court. In view of the same, the court was considering whether the rectification petition would lie before it or before the Calcutta High Court which exercised territorial jurisdiction over the Kolkata office of the Trade Marks Registry, which had granted registration of the impugned RAZOFAST mark.

The bench was also dealing with a petition filed by the Centre Consortium LLC under Section 47 of the 1999 Act, seeking cancellation of the registration granted to the opposite party by the Ahmedabad office of the Trade Marks Registry, on the ground of non-use by the latter for over five years.

At the outset, the court remarked that there is only one provision in the Trade Marks Act which provides for rectification of the Register of Trade Marks by removing a registered mark, which is Section 57. Accordingly, the petition for rectification referred to in Section 124(1)(ii), would also have to be filed under Section 57 alone, and under no other provision, the court said.

While observing that the validity of trade mark registration is an essential prerequisite for an infringement suit to be maintained, and that the validity of the registration and infringement of the mark are inextricably intertwined, the court ruled, “It is intrinsic to the ethos of the Trade Marks Act and to its very structure, therefore, that the question of validity and the question of infringement should be decided by one Court.”

The court referred to the decision of the Full Bench of the Delhi High Court in Girdhari Lal Gupta vs K. Gian Chand & Co. (1978), which had enunciated the “dynamic effect” principle. The court remarked that with the expansion of the internet, and the access to goods and services by persons anywhere in the country, a litigant is free to file an infringement or passing off suit before any Court within whose jurisdiction “use” of the impugned mark takes place. The court said the “use” of the impugned mark could take place merely by making the goods bearing the mark available for sale and purchase online, with or without proof of actual sale or purchase. “The “dynamic effect” of the registration is, therefore, felt within every such jurisdiction,” it observed.

“Applying the principle enunciated in Girdhari Lal Gupta, therefore, a rectification petition could be instituted before any Court within whose jurisdiction the dynamic effect of the registration of the defendant’s trademark is felt. That would, however, be conditional on the petitioner establishing that it is in fact suffering the dynamic effect of the registration within such jurisdiction, either by actually accessing the impugned mark within such jurisdiction, or intending to do so,” said the court.

The court said that since the petitioners, in each of the rectification petitions, were experiencing the dynamic effect of the registration of the impugned trade mark within the jurisdiction of the Court, the rectification petition would, therefore, be maintainable before it.

Thus, holding the rectification petitions as maintainable, Justice Shankar concluded, “I, therefore, hold that applications under Section 47 or Section 57 of the Trade Marks Act, 1999, as also under Section 124(1)(ii), would be maintainable not only before the High Courts within whose jurisdiction the offices of the Trade Mark Registry which granted the impugned registrations are situated, but also before the High Courts within whose jurisdiction the dynamic effect of the impugned registration is felt by the petitioner/applicant. The dynamic effect of the impugned registrations in these cases having been felt by the petitioners before this Court, these petitions are maintainable before it.”

Case Title: DR. REDDY’S LABORATORIES LIMITED vs FAST CURE PHARMA AND ANR.

Citation: 2023 LiveLaw (Del) 815

Counsel for the Petitioner: Mr. Ranjan Narula, Mr. Shashi P. Ojha, Ms. Aishani Singh and Ms. Shivangi Kohli, Advs.

Counsel for the Respondent: Mr. Harish Vaidyanathan Shankar, CGSC with Mr. Srish Kumar Mishra, Mr. Alexander Mathai Paikaday and Mr. M. Sriram, Advs. for R-2

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