[OREO v. FABIO] Specific Plea Of Invalidity, Tenable Grounds Essential To Challenge Validity Of Mark U/S 124 Trade Marks Act: Delhi High Court

The Delhi High Court recently rejected an application filed by “OREO” proprietor under Section 124 of the Trade Marks Act seeking permission to initiate rectification proceedings w.r.t. Parle’s “FABIO” mark registered in Class 30 (biscuits, cookies, etc.).

It opined that for Section 124(1) to apply in a case where the plaintiff seeks to challenge the validity of the defendant’s mark, “firstly, the defendant must raise a Section 30(2)(e) defence by citing the registration of its mark as a defence to infringement and, if the defendant does so, the plaintiff must plead invalidity of the defendant’s mark”.

Justice C. Hari Shankar added that, “the plaintiff has specifically to aver, and allege, that the registration of the defendant’s FABIO mark is invalid. Such an allegation must find place either in the plaint or in the replication”.

Reference was made to the court’s earlier decision in Dharampal Satyapal Ltd. v. Basant Kumar Makhija where it was opined that under Section 124(1)(ii), a court must satisfy itself that the plaintiff’s plea regarding invalidity of defendant’s mark is “an arguable plea”.

“…the requirement, envisaged by Section 124(1)(b), of the plaintiff’s challenging the validity of the defendant’s mark, envisages not only a specific plea, by the plaintiff, that the defendant’s mark is invalid, but also arguable grounds having been urged by the plaintiff in support of said challenge, so that the Court could satisfy itself that the challenge is prima facie tenable”, the court observed.

On perusal of the material on record, it was found that the challenge in the plaint was entirely w.r.t. validity of defendant’s “FAB!O” mark, not “FABIO”. “FABIO” was referred to at some places, but there was neither any challenge to the validity of “FABIO” nor any tenable ground in that regard.

Senior Advocate Chander M. Lall argued for the plaintiff that even if a plea of invalidity does not find place in the plaint or replication, the plaintiff can make out an entirely new case in that regard in the Section 124 application.

Rejecting the contention, the court said that a Section 124 application may explain in greater detail the grounds on which validity of defendant’s mark is challenged, however, the primary plea of invalidity ought to be forthcoming in the plaint or replication.

Another contention raised on plaintiff’s behalf was that its reserving a right in the plaint to initiate cancellation proceedings against defendant’s registration for “FABIO” satisfied the requirement of a tenable challenge to the mark’s validity.

The court rejected this contention too, observing that it was no prerogative of the plaintiff to reserve any such right.

“In fact, the plea, made ever so often, that a party reserves its right to raise a particular plea or urge a particular challenge, is based on a fundamental misconception of law. A party can only seek permission from a Court to reserve its rights to urge a challenge at a later point of time”, it said.

On the plaintiff’s attempt to impress upon the court that a challenge to “FAB!O” indirectly included a challenge to “FABIO”, Justice Shankar observed:

“Having chosen to maintain a stance that the registration of the mark FABIO cannot entitle the defendant to use FAB!O, the plaintiff cannot, in the absence of an independent challenge to the registration of the mark FABIO of the defendant, seek to claim the benefit of Section 124(1).”

The court took into account the fact that even as per the plaint, “impugned marks” did not include “FABIO”.

Notably, Advocate J. Sai Deepak appeared for the defendant and urged that a Section 124 application ought to be with regard to the mark asserted in the plaint. Finding no force in the contention, Justice Shankar remarked:

“Section 124(1)(b) clearly permits the plaintiff to question the validity of the mark which forms subject matter to the Section 30(2)(e) defence of the defendant. It does not necessarily require the mark asserted by the defendant in its Section 30(2)(e) defence to be the mark which is challenged in the plaint.”

Reportedly, plaintiff is the registered proprietor of “OREO” marks (device and word), which it uses in connection with its vanilla filled chocolate cream cracker biscuits. It had filed the suit alleging that the defendant was manufacturing and selling cookies/biscuits under a trade dress and the name “FAB!O” which were identical and/or deceptively similar to plaintiff’s.

Mr. Chander M. Lall, Sr. Advocate with Ms. Nancy Roy, Ms. Aastha Kakkar, Ms. Yashi Agarwal and Mr. Abhinav Bhalla, Advocates appeared for plaintiff

Mr. J. Sai Deepak, Mr. Bikash Ghorai, Mr. N.K. Bhardwaj, Ms. Anju Agrawal, Mr. Rahul Maratha, Mr. Abhishek and Mr. Avinash Kumar Sharma, Advocates appeared for defendant

Case Title: Intercontinental Great Brands LLC v. Parle Product Private Limited

Citation: 2023 LiveLaw (Del) 1069

Click Here To Read/Download Order