Importance Of Raising Plea Of Invalidity Of Registration Of Trade Mark Within Prescribed Timeline: An Analysis

The Hon’ble Apex Court in the case of Patel Field Marshal Agencies Vs. P.M. Diesels Ltd. &Ors. [1] threw light upon the said issue of invalidity.

PATEL FIELD MARSHAL AGENCIES vs. P.M. DIESELS LTD. & ORS.

Parties:

Respondent is the registered owner of 3 trademarks, the common feature of all which is the words “Field Marshal” having registration certificate of the year 1964 & 1968 for the same.

In 1982, Appellants and Anr. Applied for registration of Trademark “Marshal” for their use.

Having come to know of the said application and perceiving similarity between the mark in respect of which registration was sought by the Appellants and the mark(s) registered in favour of the Respondent, the Respondent served a legal notice asking the appellants to desist from using the mark in question “Marshal”

Brief Facts& Issues:

The Hon’ble Apex Court in the present matter answered the following questions:

  1. In a situation where a suit for infringement is pending wherein the issue of validity of the registration of the trade mark in question has been raised either by the Plaintiff or the Defendant and no issue on the said question of validity has been framed in the suit or if framed has not been pursued by the concerned party in the suit by filing an application to the High Court for rectification Under Sections 111 read with Section 107 of the Trade and Merchandise Marks Act, 1958, whether recourse to the remedy of rectification Under Sections 46/56 of the 1958 Act would still be available to contest the validity of the registration of the Trade mark.
  2. How an approach to the superior Court under Section 111 of the 1958 Act, can be contingent on a permission or grant of leave by a court of subordinate jurisdiction. The above was also contended to be plainly contrary to the provisions of Section 41 (b) of Specific Relief Act, 1963. It was also urged that Section 32 of the 1958 Act provides a defence to a claim of infringement which is open to be taken both in a proceeding for rectification as well as in a suit.

Applicable rules:

Section 46, 56, 107 & 111 of Trade and Merchandise Marks Act, 1958

Section 124 of the Trademarks Act, 1999

Arguments

Appellants

It was argued that Section 107 and 111 of the 1958 Act contemplates grant of permission by the learned Trial Court for filing of a rectification application, which requirement, it is urged, does not seem to follow from a reading of the aforesaid two provisions of the 1958 Act.

Further attention was brought towards section 28, 29, 32, 46 & 56 of the Act and Section 41 of the SRA, 1963. It was contended that the question of conclusiveness as to validity of the registration of the trade mark can be raised in an infringement suit as also in a rectification application. Reliance was placed on National Bell Co. vs. Metal Goods Mfg.  Co. (P) Ltd. &Anr. [2]; Cotton Corporation of India Ltd. vs. United Industrial Bank Ltd. &Ors. [3]; B. Mohammed Yousuff vs. Prabha Singh Jaswant Singh &Ors. [4] and Data Infosys Ltd. &Ors. vs. Infosys Technologies Limited [5].

Respondent

It was contended that the provisions of Section 111 of the 1958 Act particularly Sub-sections (3) and (4) thereof make it very clear that once the Civil Court is satisfied with regard to the prima facie tenability of the issue of invalidity of the registration of a trade mark that may be raised before it by any party to an infringement suit, the said question has to be decided in a rectification proceeding and not in the suit.

It was further contended that rectification proceedings Under Sections 46 and 56 of the 1958 Act govern a situation where no suit for infringement is pending & otherwise, provisions of Section 111 would take over and govern the proceedings in the suit including the issue of invalidity. Further, it was urged that both sets of provisions cannot mutually exist as such mutual existence and operation may lead to conflicting decisions on the same question i.e. by the HC under 1958 Act or by the IPAB under 1999 Act.

Decision:

The Hon’ble Apex Court took note of the relevant provisions of the 1958 Act i.e. Section 46, 56, 107 & 111. The Hon’ble Court observed that Registration of a trade-mark vests in the registered owner an exclusive right to use the mark in relation to the goods in respect of which the mark has been registered. This is, however, subject to such conditions and limitations as may be incorporated in the registration itself. It also grants to the registered owner a right to seek and obtain relief in case of infringement of the mark.

The Hon’ble Court observed that following the accepted principles of interpretation of statutes, the heading of Section 111 of the 1958 Act cannot be understood to be determinative of the true purport, intent and effect of the provisions contained therein so as to understand the said Section to be contemplating only stay of proceedings of the suit where validity of the registration of the trade mark is questioned. Naturally, the whole of the provisions of the Section will have to be read and so read the same would clearly show lack of any legislative intent to limit/confine the operation of the Section to what its title may convey.

While observing the legislative intent the Hon’ble Court observed that all issues relating to and connected with the validity of registration has to be dealt with by the Tribunal and not by the civil court. In cases where the parties have not approached the civil court, Sections 46 and 56 provide an independent statutory right to an aggrieved party to seek rectification of a trade mark. However, in the event the Civil Court is approached, inter alia, raising the issue of invalidity of the trade mark such plea will be decided not by the civil court but by the Tribunal under the 1958 Act. The Tribunal will however come into seisin of the matter only if the Civil Court is satisfied that an issue with regard to invalidity ought to be framed in the suit. Once an issue to the said effect is framed, the matter will have to go to the Tribunal and the decision of the Tribunal will thereafter bind the Civil Court. If despite the order of the civil court the parties do not approach the Tribunal for rectification, the plea with regard to rectification will no longer survive.

The Hon’ble Supreme Court on how to understand Section 111(3) of the 1958 Act observed that the legislature while providing consequences for non-compliance with timelines for doing of any act must be understood to have intended such consequences to be mandatory in nature, thereby, also affecting the substantive rights of the parties.

It was held by the Court that by virtue of the operation of the 1958 Act, the plea of rectification, upon abandonment, must be understood to have ceased to exist or survive between the parties inter se. Any other view would be to permit a party to collaterally raise the issue of rectification at any stage notwithstanding that a final decree may have been passed by the civil court in the meantime. It was further observed that to permit the issue of rectification, once abandoned, to be resurrected at the option of the party who had chosen not to pursue the same at an earlier point of time would be to open the doors to reopening of decrees/orders that have attained finality in law. This will bring in uncertainty if not chaos in the judicial determinations between the parties that stand concluded. It was observed that the Defendant by operation of Section 111(3) of the 1958 Act was deemed to have abandoned the plea of invalidity.

The Hon’ble Court further observed that the mandate of the 1958 Act, particularly, Section 111 thereof, appears to be that if an aggrieved party does not approach the Tribunal for a decision on the issue of invalidity of registration as provided for Under Section 111(2) and (3), the right to raise the issue (of invalidity) would no longer survive between the parties to enable the concerned party to seek enforcement of the same by recourse to or by a separate action under the provisions of Section 46/56 of the 1958 Act.

Now, while answering the subsidiary and incidental questions raised as stated in Point No. 2 under the heading Brief Facts & Issues in the present article, the Hon’ble Court observed Section 111 of the 1958 Act and the corresponding Section 124 of the 1999 Act nowhere contemplates grant of permission by the civil court to move the High Court or the IPAB, as may be, for rectification. Further answering the same, the Hon’ble Court observed that the requirement of satisfaction of the civil Court regarding the existence of a prima facie case of invalidity and the framing of an issue to that effect before the law operates to vest jurisdiction in the statutory authority to deal with the issue of invalidity by no means, tantamount to permission or leave of the civil court, as has been contended.

Further, it was observed that Section 32 of the 1958 Act cannot be construed to understand the proceedings under section 46 and 56 on one hand and those under section 107 and 111 on the other of the 1958 Act and the parimateria provisions of the 1999 Act would run parallelly.

Thus, held that the jurisdiction of rectification conferred by Sections 46 and 56 of the 1958 Act is the very same jurisdiction that is to be exercised Under Sections 107 and 111 of the 1958 Act when the issue of invalidity is raised in the suit but by observance of two different procedural regimes.

The Appeal was dismissed and the orders passed by the High Courts were affirmed.

Author: Rajat Sabu, Senior Associate at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at rajat@khuranaandkhurana.com.

References:

[1]AIR 2017 SC 5619

[2] AIR 1971 SC 898

[3] (1983) 4 SCC 625

[4] (2008) 38 PTC 576

[5] 2016 (65) PTC 209 Delhi FB

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