Continuing Cause Of Action In Trademark Suits No Defence To Multiple Proceedings, Principles Of Res Judicata, Forum Shopping Applicable: Delhi HC

The Delhi High Court has observed that a trademark owner cannot drag a Defendant to multiple fora, being a higher court or before a court of coordinate jurisdiction, when the matter is pending before the first Court, especially when the matter is part heard before the first Court, merely to find a forum where it is able to get relief.

Justice Pratibha M Singh added that principles such as res judicata, res subjudice, bar under Order II Rule 2 of CPC, forum shopping, which apply in general to civil and criminal proceedings would also be applicable to trademark suits as well.

The Court was dealing with a suit seeking permanent injunction restraining the Defendant from infringement of trademark, passing off, unfair competition, rendition of accounts of profits/damages, delivery up and other reliefs. It was the Plaintiff's case that the defendant was infringing upon its registered trademark 'LETROZ' by using the mark 'LETERO' in respect of its medicinal and pharmaceutical preparations.

Before the matter could be heard on merits, a query was put to the counsel for the Plaintiff as to how the present suit would be maintainable in as much as for this very trademark, an earlier suit, has already been filed by the Plaintiff against the very same Defendants before Trial Court and the same was still pending.

It was argued on behalf of the plaintiff that every sale by the Defendants constituted a fresh cause of action and thus, despite the pendency of the first suit before the trial court, the suit before High Court would also be maintainable.

On the other hand, it was argued on behalf of the the Defendants that the cause of action in both suits was identical and that the earlier was in fact part-heard before the District Court in the fresh injunction application, as recorded in the order dated 30th March, 2021. Therefore, it was submitted that filing of the present matter in another Court was a gross abuse of process.

While the Court was of the view that whenever there is a fresh cause of action, a fresh suit would lie, it added that the same has to be within the four corners of law.

The Court said that the plea of continuing cause of action cannot be stretched to an impermissible limit so as to permit multiple suits between the same parties relating to the same trademarks in different fora.

"This would constitute clear forum shopping, since if the Plaintiff's submission is accepted, a party would be permitted to file multiple suits in different Courts until it hits upon a forum where relief is granted in its favour. In the present case, as recorded earlier, the reliefs sought in both the suits in the present matter are identical, except for the relief of rendition of accounts which has now been projected as a relief for damages," the Court observed.

The Court further observed that the bar of seeking only either rendition of accounts or damages cannot be circumvented by filing two separate suits. It added that it would be impermissible for the Plaintiff to avoid the impact of sec. 135(1) of the Trademarks Act, 1999, by seeking to distinguish the two suits, by claiming that one is a suit for rendition of accounts and the other is a suit for damages. Therefore the Court said that only one relief can be claimed for infringement of the same mark, either damages or rendition of accounts.

On the aspect of non-grant of relief in the first suit in the form of interim injunction by the Commercial Court, the Court observed:

"Admittedly, the order sheets of the Commercial Court show that the matter has been adjourned sometimes unnecessarily. But can the Plaintiff rely on this fact as the sole ground to maintain the present suit? The answer is an emphatic NO. A perusal of the order sheet of the Trial Court as recorded above shows that the Commercial Court is seized of the matter and submissions have been partly heard on the injunction application. The entertaining of this suit before this Court, would in effect mean that the Plaintiff would be permitted to argue again on merits and seek an interim injunction here, while the same matter is part-heard before the Commercial Court."

"In view of all these reasons including identity of the cause of action, multiple reliefs being impermissible under Section 135 of the Trademarks Act and the present suit being filed during the pendency of the first suit, if the present suit is entertained by this Court, this would clearly encourage forum shopping by a litigant who has been unable to get relief in a particular forum and hence decides to knock the doors of this Court."

Terming the matter as a classic case of forum shopping and a mis-adventure, the Court said that in so far as the delay in adjudication in the Commercial Court, any grievance which the Plaintiff had in respect of the delays caused in the first suit, the Plaintiff would be free to seek its remedies in accordance with law in respect of the said delay.

The Court was of the view that when the Trial Court was seized of the same very matter between the same very parties, the present suit could not be entertained on the basis of the plea that there was a fresh cause of action.

"This would be a gross abuse of the process and would in fact be contrary to public policy. If such a suit is entertained, it would encourage litigants to indulge in forum shopping which cannot be the objective of the provisions of Section 10 and 11 of the CPC. This would also result in unnecessary burden on the Defendant who would be forced to incur repeated legal costs and undue harassment. Such a course of action cannot be condoned by the Court," the Court said.

At the outset, the Court noted that such state of affairs had arisen because of the fact that the Presiding Officer who had heard the matter and had to pass orders chose to delay the decision in the interim injunction application indefinitely until he got transferred from the said posting.

"This Court has repeatedly emphasised on the need for Judicial Officers to pronounce orders after hearing arguments and not releasing matters. In fact, whenever transfer of a Judicial Officer is effected, if orders are pending to be passed in a matter that the said Judicial Officer is seized of, a note is issued to the effect that the order has to be pronounced," the Court said.

Accordingly, the Court said that the present judgment be brought to the notice of the Inspecting Committee of the concerned Judicial Officer by the worthy Registrar General of this Court.

"Copy of this order be sent to the concerned Inspecting Committee through the worthy Registrar General, as also for circulation to all judicial officers in the Trial Court," it added.

The suit was dismissed as not being maintainable.

Case Title: SUN PHARMA LABORATORIES LTD v. HETERO HEALTHCARE LTD & ANR.

Citation: 2022 LiveLaw (Del) 314

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