Synergy Of Section 47, 57 &124 Of The Trademarks Act In Light Of Anubhav Jain Case

THE INTERPLAY OF S.124 AND S.47/S.57 OF THE TRADEMARKS ACT, 1999

Infringement Suit- S.124 of the Trademarks Act, 1999 (hereinafter referred to as the Act) deals with the stay of proceedings where the validity of registration of the trademark is in question. It deals with certain situations in that context which are as follows:

It lays down that in an infringement suit wherein the Plea of Invalidity is raised either by the Defendant or the Plaintiff against the registered trademark then the court shall abide by the following procedure which is as follows-

The Court trying the suit shall-

1. When the plea for rectification is pending- If the rectification proceedings are pending before the Registrar or High Court and the infringement suit is instituted afterward, then a such suit is to be stayed till the final disposal of the rectification proceedings. (S. 124(1)(b)(i));
2. Rectification proceedings not pending- When no such proceeding is pending at the time of institution of the suit, on prima satisfaction/tenability of the plea of invalidity of the plaintiff’s or the defendant’s trademark, the court may frame an issue regarding the same and adjourn the suit for three months to enable the party concerned to apply to Registrar or High Court for rectification of the trademark.

S. 124 of the Trademarks Act sets out a specific scheme to deal with the infringement suit. It applies only where there is, to begin with, a suit, alleging infringement of trademark pending before a Civil Court, and for the rectification of the register, the applicant has to approach the High Court however, the issue of invalidity can only be framed by the Civil Court.

Rectification of Trademark- S. 57 r/w Rule 97 of the Trademark Rules, (hereinafter ‘Rules’) gives power to the Registrar or High Court to cancel or vary registrations and to rectify the Register. On application made in the prescribed manner to the High Court or to the Registrar, by any person aggrieved, the authority may make such order as it may think fit for cancelling or varying the registration of a trademark on the ground of any contravention or failure to observe a stipulated condition.

Cancellation of Trademark- S. 47 of the Act provides for the removal of a registered trademark from the Register and imposition of limitations on grounds of non-use. A cancellation may also be filed on the grounds of mala fide registration, or wrongly remaining on the Register.

PATEL FIELD MARSHAL AGENCIES v. P.M. DIESELS LTD^[2]

In the present case, the issue raised was that

• When an infringement suit is pending wherein the issue of the validity of the registration of the trademark is in question has neither been raised by either of the parties nor the said question of validity is being framed in such suit and
• Even if framed it has not been pursued by the concerned party in the suit by filing an application to the High Court for rectification under S. 111 of the Trade and Merchandise Marks Act, 1958, (pari materia to S.124 of the Act)

Whether recourse to the remedy of rectification under S. 46 and 56 of the 1958 Act would still be available to contest the validity of the registration of the Trademark?

The Court held that: “all questions concerning the validity of a Trade Mark is required to be decided by the Registrar or the High Court and not by the Civil Court. The decisions will bind the Civil Court. In a case where the issue of invalidity is raised or arises independent of a suit, the prescribed statutory authority will be the sole authority to deal with the matter. However, in a situation where a suit is pending (whether instituted before or after the filing of a rectification application), the exercise of jurisdiction by the prescribed statutory authority is contingent on a finding of the Civil Court as regards the prima facie tenability of the plea of invalidity.”

Therefore, it meant that it is important to first resolve the root cause of any matter i.e., issue of invalidity and a decision on the same would bind the parties before the Civil Court. Only in the situation wherein the decision is against the party raising it or the party abandoning it, the suit will go on to decide on other issues in the suit.

The Supreme Court, inter alia, had made it abundantly clear that the right of seeking rectification of a mark u/s 47 and S.57 is subject to S. 124 of the Act when an infringement suit pertaining to that mark is pending for adjudication. The Court made it mandatory for the party to not only raise a plea of invalidity in the suit but also ensure that the Civil Court frames an issue before filing the rectification petition. Furthermore, upon abandoning such a plea, S. 124(3) of the Act shall apply, if the same is not pursued by either of the parties even after the extension of time given by the court according to the Act. and the right to seek rectification shall be lost forever.

ANOMALIES

There were certain anomalies in the present ratio- decidendi, which the Supreme Court did not discuss, that are as follows:

• The impugned case fails to address the situation wherein both the rectification proceedings and the civil suit for invalidity are already pending in respect of the same dispute. In such a case if the civil court does not give any findings timely and if the judgement above is strictly interpreted, meaning that rectifications are dependent on the findings of the civil court, until it frames an issue of invalidity the same cannot proceed.

This would delay the whole process wherein both matters are pending in parallel. Thus, the Trial Court will have to decide speedily if the suits ought to have stayed and frame issues accordingly or find that the plea of invalidity is untenable.

• When civil suits are pending and in related proceedings the Registrar’s orders are challenged before the High Court vide writ petitions. Given the requirement of conformity to the finding of the Registrar, if the Trial Court adopts the Registrar’s finding and decrees accordingly, it would again be reopened if a different conclusion is found on appeal against the Registrar’s order.

Though the approach would be to wait for such appeal to be disposed of, given our penchant for pendency this would mean that the pendency of suits may go up. The possibility of a challenge to any Registrar orders has not been considered in this recent order.

What if any of those processes were unable to be furnished due to a lack of information at that time? What if new evidence for invalidity was found after the suit was decided? When a plea of invalidity is not made or when the issue is not framed then, then there arises a question of whether S. 124 still applies, making it necessary to take the permission of the Civil Court and get the issue framed before filing the rectification petition u/s 57 of the Act. According to Anubhav Jain Case, S. 124 does not apply in such situations, and thus, seeking permission is not required which we will discuss further-

ANUBHAV JAIN vs. SATISH KUMAR JAIN & ANR.^[3]

The plaintiff in the present case instituted a petition u/s 57 of the Act for the cancellation/ rectification of the register. However, the defendant contested the maintainability of the present petition as it does not follow the process laid down u/s 124 of the Act. It is to be noted that the in the present case there was no question of invalidity raised in the trial court by the defendants.

Thus, the court framed the following issues-

• Whether S.47 and S. 57 become abrogated in compliance with the S. 124 of the Act and whether the rights under S.124 in derogation of the rights available under S.57?
• Whether the party can go for recourse under the S. 47 and S.57 of the Act when S.124 is not raised in a suit?

The Delhi High Court held that the right under S. 57, for cancellation of a mark and rectification of the register remains available. However, if an infringement suit that has been filed by either of the parties and one of them against it pleads invalidity of the mark as a ground of defense to the suit, then the party filing the infringement suit would acquire an independent right under Clause (ii) of S.124 of the Act to move the IPAB (now the High Court) for rectification of the register. Therefore, S. 124 must be read as an “additional relief” and must not be read as the only right available, in abrogation of S. 57 (para 24-26). Therefore, it is possible to go for recourse under S. 47 and 57 of the Act and as well as in S.124 when the plea of invalidity is raised in a suit.

The High Court points out in para 30 of the Patel Field Marshal judgment which was relied on by the opposite counsel in the present case that- “In cases where the parties have not approached the Civil Court, S. 46 and S.56 (pari matria to S.47 & S.57 of the Act) provides an independent statutory right to an aggrieved party to seek rectification of a trade mark.” The SC further remarked that the Patel Field Marshal case lays down the procedure under Clause (ii) of the second part of Section 124 of the Act is set in motion. It states when the High Court, would acquire seisin over the issue of validity of the contested trademark. That does not, in any manner take away from the right of the defendant to independently invoke Section 57.

ANALYSIS

As such, when considering the principles of Article 141 of the Constitution of India, the High Court in the Anubhav Jain case stated that a judgment of the Supreme Court is to be read only as an authority for what it states, and not what may logically seem to follow from it. The Patel Field Marshal judgment is not an authority on the point that whether S.57 is dependent on S.124 of the Act, it simply analyses the situation when once an infringement suit is filed against the defendant and a plea of invalidity is not raised, the defendant loses its right to seek rectification u/s 47 and 57 of the Act or not.

The High Court has followed the principle of harmonious construction in the impugned case while interpreting S.57 and S.124 of the Act stated that they are not in derogation of each other, however; they exist in harmony with each other. They might seem to be overlapping but they lead to two independent remedies available to the parties in different circumstances. S.124(4) of the Act makes it amply clear that upon adjudication of the matter related to rectification proceedings, then the Trial court shall dispose of the suit in conformity with such order as far as the validity of the registration of the trademark is in question. Thus, S.124 will come into play only when the invalidity plea is raised in the suit and not otherwise.

In the case of Data Infosys Ltd. & Ors. vs. Infosys Technologies Ltd.^[4], (2016) the court unanimously held that “Access to IPAB(now High court) 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.” The same was asserted in the case Wonderful Developers Private Ltd Vs. Impresario Entertainment And Hospitality Private Ltd. & Ors. of that “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.” In Anubhav Jain's Case as well the Court tries to give effect to the decision of the Supreme Court indicating that S. 124 is independent of S.57 of the Act and is to be read as available in addition to the right available and conferred by S. 57.

So considering the practical side, one must understand that 57 is not subject to any other provisions in the act when read in its true sense. Another aspect of S. 124 is that it comes into play only when certain conditions are satisfied such as, a suit is filed in the civil court, the validity of the trademark is questioned, and the invalidity is found tenable by the civil court and so on.

Both of these judgments deal with two very different situations and hence, cannot be said to be contrary to one another. However, looking at the practicalities of the Anubhav Jain case the view tends to give a more practical approach and more remedies to the aggrieved party. This is practically beneficial to the aggrieved parties if the proceedings are pending before the High Court or Registrar for the rectification and in Civil court for the infringement which can be proceeded only upon the findings of the rectification pleadings then it will be really hard for the aggrieved party to get the justice in a timely manner. Already in the Trademark Registry, there is huge pendency of applications as given in the Pendency Report For Patents, Trademarks, Designs & Copyright (As On 31-07-2022).^[5] It might have repercussions of increasing the multiplicity of proceedings but opening doors for different recourse to the parties when one closes. It serves the purpose of the law to serve justice better.

Authors: Atul Dhyani, Partner (atul.dhyani@kanalysisindia.com) and Akanksha Anand, Associate (akanksha@kanalysisindia.com) at KAnalysis. Views are personal.

1. State of Bihar v. Meera Tiwary (2020) 17 SCC 305, Bharat Petroleum Corporation Ltd. v. N.R Vairamani (2004) 8 SCC 579 ↑

2. C.O. (COMM.IPD-TM) 55/2021 ↑

3. 2023 LiveLaw (Del) 52 ↑

4. 2016 (65) PTC 2009 (Del)[FB] ↑

5. https://ipindia.gov.in/writereaddata/Portal/Images/pdf/PENDENCY_REPORT_IN_THE_OFFICE_OF_CGPDTM_31-07-2022.pdf ↑