Gujarat High Court
Microsoft Corporation vs Azure Knowledge Corporation Private ... on 22 July, 2024
Author: Sunita Agarwal
Bench: Sunita Agarwal
NEUTRAL CITATION
C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 5927 of 2024
FOR APPROVAL AND SIGNATURE:
HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL
and
HONOURABLE MR. JUSTICE ANIRUDDHA P. MAYEE
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1 Whether Reporters of Local Papers may be allowed to No
see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of No
law as to the interpretation of the Constitution of India
or any order made thereunder ?
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MICROSOFT CORPORATION & ANR.
Versus
AZURE KNOWLEDGE CORPORATION PRIVATE LIMITED
==========================================================
Appearance:
MR. KAMAL TRIVEDI, SR. ADV., MR. MIHIR JOSHI, SR. ADV., MR. HARSHIT
TOLIA, SR. ADV., MR ANUJ K TRIVEDI, MS. POOJA DODD, MS. AKANKSHA
SINGH, MS. RIYA DANI, MR. VINAY BAIRAGRA, ADVS. (6251) for the Petitioner(s)
No. 1,2
MR. SHALIN MEHTA, SR. ADV. WITH MS. NISHA OJHA FOR M/S
WADIAGHANDY AND CO(5679) for the Respondent(s) No. 1
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CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA
AGARWAL
and
HONOURABLE MR. JUSTICE ANIRUDDHA P. MAYEE
Date : 22/07/2024
CAV JUDGMENT
(PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL) The present petition under Article 227 of the Constitution of India has been filed to assail the judgment and order dated 22 nd March, 2024 Page 1 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined passed by the Judge, Commercial Court, City Civil Court, Ahmedabad in Commercial Civil Suit No. 533 of 2021 (Ex. 137), rejecting the said application filed by the defendant under Section 124 of the Trade Marks Act, 1999 (hereinafter referred at as 'the T.M.Act, 1999').
2. The brief facts relevant to decide the controversy are that the Commercial Civil Suit praying for permanent injunction on the plea of infringement of the plaintiff's trade mark 'AZURE' by the defendant was filed on 06.02.2020. The plaintiff claims exclusive rights in the trade mark 'AZURE' with respect to which the plaintiff has obtained registration on 18.06.1998 as a device mark ('AZURE') under Class-9 for 'Computer Software'. On 05.04.2010, the plaintiff filed five applications for device mark 'AZURE' under Classes 16, 37, 38, 41 and 42, which were duly registered. Four more applications were, thereafter, filed for registration of the trade marks by the plaintiff comprised of the word 'AZURE'. The defendants, on the other hand, filed application for registration of trade mark 'AZURE' by moving an application on 23.10.2008, which was published for the first time in the month of June, 2017. Against the defendants' application seeking registration of the trade mark 'AZURE', the plaintiff issued notice to the defendants and the registration application is pending as on the date.
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3. In the suit for infringement filed by the plaintiff on 06.02.2020, the defendants have filed their written statement on 12.03.2020. The interim injunction application was rejected by the competent Court on 14.03.2020. On 19.11.2022, the defendants have filed application seeking amendment in the written statement to add pleadings with respect to the validity of the registered trade mark of the plaintiff. The amendment application was initially rejected on 04.05.2023 by the trial court, however, on a challenge before this Court in Special Civil Application No. 9620 of 2023, on 09.08.2023, this Court set aside the order of the trial court and allowed the request of the petitioner for amendment of the written statement. The application under Section 124 of the T.M.Act, 1999 was, thereafter, filed before the trial court to frame an issue on the plea of the defendant regarding the invalidity of the registration of the plaintiff's trade mark and adjourn the suit proceedings for a period of three months from the date of framing of the issue in order to enable the defendant to apply to the High Court for rectification of the Register of the Trade Mark.
4. This application has been rejected by the order impugned on the grounds that the defendants were aware of the fact that the plaintiff was using the trade mark 'AZURE' since 08.06.1998, i.e. for the last 25 years and further that on the application filed by the defendants before the Page 3 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined Registrar of Trade Mark in the year 2017, the plaintiff has taken objection by giving notice to the defendants. The plaintiff is a prior user of the trade mark 'AZURE', which has been registered under Class-9, however, the defendants have not taken any dispute regarding the validity of the registration of the plaintiff's trade mark in Class-9. At the time of filling of written statement on 12.03.2020, the defendants did not raise the plea of invalidity of the registration of the trade mark of the plaintiff. After two years of the filling of the written statement and the order of rejection of the interim injunction application, the defendants have taken objection about the validity of the registration of the trade mark of the plaintiff by moving application under Section 124 of the T.M.Act, 1999, which plea is not prima facie tenable.
5. The trial court has further proceeded to record that from the documents produced by the plaintiff such as invoices etc. from the year 1997, the plea of the defendants that the plaintiff is not using the said trade mark under Class-9 cannot be considered. It was further noted that no proceeding for rectification of the trade mark as per Section 124 is pending. There is a reference of Section 30(2)(e) considering the right of the defendants to use the trade mark, which is by registration under the Act. Further taking note that the documents filed by the plaintiff proved that the plaintiff was using the trade mark registered for the purposes of Page 4 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined Class-9, it was opined that the defendants have failed to satisfy the Court regarding prima facie tenability of his plea of invalidity of the registered trade mark of the plaintiff.
6. It was further observed that the attempt of the defendants in challenging the plaintiff's registered trade mark after a long period of time without sufficient reasons and filling of the application under Section 123 of the T.M.Act, 1999, after amendment of the written statement, at the stage of framing of issues in the suit, is nothing but an effort to delay the adjudication of the suit proceedings, more so when the High Court has directed to complete the trial within a period of one year.
7. This order of rejection of the application filed by the defendants is challenged in the instant petition with the assertion that the defendants have came out with the categorical assertion in the written statement that the plaintiff has obtained registration in numerous Classes (Classes 9, 16, 37, 38, 41 and 42) without any bona fide intention to use the registered marks, for the goods/services claimed. The plaintiff's registration in the aforesaid classes are for unreasonably broad specifications and is an effort to create monopolistic rights over a wide range of goods and services, even though they are not being used by the plaintiff. It was stated that Page 5 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined the plaintiff has obtained the registration by wrongly claiming use of 'AZURE' mark since 1.5.1996 in relation to broad range of goods and services, without placing any document on record to substantiate such a far-fetched claim. The plaintiff's registration for unreasonably broad range of goods and services, which have been obtained with false claim of use, are invalid and liable to be cancelled / partially cancelled / modified. It was stated that the defendant No.1 being the registered proprietor of the 'Windows AZURE' mark, cannot be stopped from using its own registered trade mark and could not be held liable for infringement, inasmuch as, one registered proprietor cannot stop another from using its own registered mark.
8. Section 47, 57, 124 and 125 of the T.M.Act, 1999 have been placed before us to submit that the defendants, who are aggrieved persons, have right to seek for rectification of the registered trade mark of the plaintiff by requesting the Registrar to impose limitations on the ground of non-use of the trade mark in relation to those goods or services by the proprietor.
9. Placing Section 124 of the T.M.Act, 1999, it was urged by the learned counsel for the petitioner that the only requirement while deciding the application moved by the defendants is to see the prima Page 6 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined facie tenability regarding the validity of the registration of the plaintiff's trade mark. Section 124(1)(b)(ii) requires the Civil Court (Commercial Court) to examine the prima facie tenability of the claim of the defendants who raised an issue regarding the same, to adjourn the case for a period of three months from the date of the framing of the issue to enable the defendants to apply to the High Court for rectification of the Register. Only genuineness of the plea of the defendant was to be looked into and it was not open for the trial court to enter into the merits of the claim of the defendant about the validity of the registered trade mark of the plaintiff, inasmuch as, the said jurisdiction lies with the High Court, which is empowered for rectification of the Register on a plea of the defendant under Section 124(1)(b)(ii). Once a triable issue has been raised by the defendants, there was no option before the trial court but to adjourn the proceedings of the suit for a period of three months, so as to enable the defendant to apply the High Court for rectification of the Register in terms of Section 124 of the T.M.Act, 1999.
10. It was submitted that the application under Section 124 has been filed with a clear assertion that the plaintiff's registration are liable to be cancelled / partially cancelled / modified because the goods and services claimed therein and the claim of use being far from reality. The plaintiff's registrations are vitiating the purity of the Register, while Page 7 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined obstructing the defendant No.1 from securing rights in "AZURE MARKS"
for offering such goods and services which are different from those of the plaintiffs. The registration of 'AZURE' mark got by the plaintiff for unreasonable broad specification of goods/services, are giving unfair advantage to the plaintiff by enabling it to enforce its rights against honest third party, like the defendants, in relation to the goods/services that are not being offered by the plaintiff. It was argued that once such is the position, there was no option for the trial court, but to allow the application of the defendents giving time to apply to the High Court.
11. Reliance is placed on the decision of the Apex Court in the case of Patel Field Marshal Agencies vs. P.M.Diesels Limited & Anr. [(2018) 2 SCC 112] to submit that the trial court was required to examine whether "the plea of the defendant is " prima facie tenable", which means that the merits of the claim of the invalidity of the registration could not be looked into.
12. The defendants have come out with the claim that the plaintiff has never been in the business of "Clouds Computing" registered in Class-9, which is sought to be covered by the use of words "Computer Software"
in the plaintiff's registration dated 8 th June, 1998. It was the case of the defendants that the plaintiff's registration covering "Computer Software"Page 8 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024
NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined may not extend to 'Cloud Computing' related offerings and ought to be registered only to the particular kind of Computer Software in respect of which the plaintiff's mark was actually used / "proposed to be used"
and that existed at the time of filling of such claim in the year 1998.
The plaintiff cannot claim monopolistic right of the mark 'AZURE' for all kinds of Computer Software and such a registration is against the spirit of the Trade Marks Act itself, as it is obstructing other honest traders from using and securing rights in the mark 'AZURE' for Computer Software related offerings that are very different from those of the plaintiff.
Similarly for other registrations in Classes 16, 37, 38 and 41, it was urged that the said registrations are liable to be expunged from the Register of the Trade Marks as the plaintiff wrongfully claims use of the 'AZURE' marks for the goods and services in relation to the said classes and no document has been placed on record to substantiate the claim of use of such trade marks. With regard to registration in Class-42, it was urged that because the registration covers broad range of Services in Class 42, the plaintiff cannot claim monopolistic right on the 'AZURE' mark for all kinds of "Computer Software" related services, which is against the public interest and is obstructing other honest traders from using and securing rights in the mark 'AZURE' for computer software related goods/services that are not even being offered by the plaintiff.
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13. With reference to the judgment of the Apex Court in Nandhini Deluxe vs. Karnataka Cooperative Milk Producers Federation Limited [(2018) 9 SCC 183], it was submitted that the underline principle of the provisions contained in Section 47 of the T.M.Act, 1999 is that the proprietor of trade mark cannot enjoy monopoly over the entire classes of goods and services, more particularly when he is not using the said trade mark in respect of certain goods falling under the same class. With reference to the judgments of the Delhi High Court in Dharampal Satyapal Limited vs. Basant Kumar Mahija & Ors. (2023 SCC Online Delhi 6598) and Pepsico Inc. & Anr. vs. Parle Agro Private Limited (2023 SCC Online Delhi 5823), it was urged that while dealing with the plea under sub-section (b)(ii) of Section 124 (1) of the Act, the Court while dealing with the plea regarding invalidity of the registration of the trade mark, the Court has to be satisfied that the plea is prima facie tenable and once it is satisfied that the plea of invalidity is prima facie tenable, the Court may raise the issue regarding the same and adjourn the case, whereupon the defendant can file a rectification petition.
14. The finding of prima facie tenability is a statutory safegaurd to ensure that the defendants do not file rectification proceedings as a counter blast to the infringement action taken against them. However, this inquiry by the concerned Court is limited to the examination of Page 10 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined rectification petition not being on frivolous and untenable grounds, or not in order to delay the proceedings in the suit. The examination into the prima facie tenability of the plea of the defendant would not be extended for making an inquiry into the merits of the claim of the defendant. If the issue raised by the defendant is arguable or triable, the trial court would have no option, but to adjourn the proceedings of the suit giving opportunity to the plaintiff to file rectification application within the time prescribed in sub-section (1)(b)(ii) of Section 124 or within such extended time as the Court may for sufficient cause allow. On such application being filed before the High Court, the trial court would have to stay the trial of the suit until the final disposal of the rectification proceedings in view of sub-section(2) of Section 124 of the Act.
15. It was further argued by the learned senior counsel appearing for the petitioner that the trial court has erred in addressing the claim of the plaintiff about the plea of infringement of its registered trade mark by the defendants and arriving at the conclusion that both the trade marks are identically similar and the plaintiff is prior user of the trade mark.
These findings are alien to the proceedings under Section 124 of the T.M.Act, 1999. The trial court has, in fact, addressed on prima facie tenability of the plea of the defendants while rejecting the application under Section 124 of the Act, inasmuch as, the delay in filling of such Page 11 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined application or raising the plea at the time of framing of issue by the trial court, can have no bearing on the prima facie tenability of the claim of the defendant. As the trial court as exceeded in its jurisdiction in entering into the merits of the claim of the plaintiff about the infringement of its registered trade mark, and has failed to record the necessary findings in support of its order, the jurisdictional error is liable to correction by invoking supervisory jurisdiction of this Court under Article 227 of the Constitution of India. References have been made to the judgment of the Apex Court in Kishore Kumar Khaitan vs. Praveen Kumar Singh [(2006) 3 SCC 312] to support the said submission.
16. Mr. Shalin Mehta, the learned senior advocate appearing for the respondents/plaintiffs, however, would rely upon the decision of the Apex Court in Arce Polymers Pvt. Ltd. vs. Alpine Pharmaceutical Pvt. Ltd. [(2022) 2 SCC 221] to agitate that it is a case of waiver, i.e. intentional relinquishment of a known right by the defendant. Though the defendant has a statutory right to raise the plea under Section 124 during the trial of the suit for infringement, but the plea raised by the defendant is quite belated, inasmuch as, the suit was filed on 06.02.2020 and the application seeking amendment in the written statement to add the pleadings with regard to invalidity of the registered trade mark of the plaintiff was filed on 19.11.2022. The defendants did not take the plea Page 12 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined of validity of the registered trade mark of the plaintiff at the time of filling written statement on 12.03.2020. After two years from the date of filling the written statement and the dismissal of the interim injunction application filed by the plaintiff vide order dated 14.3.2022, the defendants filed amendment application to amend the written statement to take objection about the validity of the registration of the trade mark of the plaintiff.
17. The defendants being well aware of the registered trade mark of the plaintiff and that the plaintiff is using the said trade mark since 08.06.1998, has abandoned his statutory right to take objection about the validity of the registration of the trade mark of the plaintiff. The rectification application under Section 124 of the T.M.Act, 1999 filed by the defendants has, thus, rightly been rejected by the trial court on account of the delay on the part of the defendants, noticing that filling of the said application after amendment of the written statement at the stage of framing of issues, is nothing but an attempt to delay the adjudication of the case.
18. Having heard the learned counsels for the parties and perused the record, before dealing with the rival submissions, we may go through the statutory scheme of the Trade Marks Act, 1999. The Trade Marks Act, Page 13 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined 1999 was enacted to amend and consolidate the laws relating to the trade marks, to provide for registration and better protection of trade marks for goods and services and for the prevention of the use of the fraudulent marks. From the Statement of Object and Reasons, the avowed object of the Trade Marks Act can be discerned, which is to enlarge the field of registrability by providing for registration of trade for services, in addition to the goods, simplifying the procedure for registration of registered user and enlarging scope of permitted use, apart from other objects. Chapter-II contains provisions for registration of trade marks, maintenance of Register of Trade Mark and effect of registration of parts of trade mark. Section 7 of the Act, 1999 provides that the Registrar shall classify the goods and services, as far as may be, in accordance with the International classification of the goods and services for the purposes of registration of the trade mark. Any question arising as to the Class within which any goods or services falls, shall be determined by the Registrar, whose decision shall be final. Section 8 provides for publication of Alphabetical Index of classification of goods and services referred to in Section 7, where goods or services are not specified in the Public Alphabetical Index, the classification of goods and services shall be determined by the Registrar in accordance with sub-section (2) of Section 7.
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19. Section 11 provides for relative grounds for refusal of the registration, and provides that the trade mark shall not be registered, if because of its identity or similarity with earlier trade mark and an identity or similarity of goods or services covered by the trade mark there exists likelihood of confusion on the part of the public, which includes a likelihood of association with the earlier trade mark. Chapter- III contains procedure for and duration of registration. Section 25 contains in the said Chapter for initial registration of the trade mark for a period of 10 years, subject to further renewal from time to time in the prescribed manner, within the prescribed period and subject to payment of prescribed fee. Chapter IV contains provisions regarding effect of registration. Section 28 speaks of rights conferred by the registration, and is relevant to be noted as under :-
"28. Rights conferred by registration.--(1) Subject to the other provisions of this Act, the registration of a trade mark shall, if valid, give to the registered proprietor of the trade mark the exclusive right to the use of the trade mark in relation to the goods or services in respect of which the trade mark is registered and to obtain relief in respect of infringement of the trade mark in the manner provided by this Act.
(2) The exclusive right to the use of a trade mark given under sub-section (1) shall be subject to any conditions and limitations to which the registration is subject.
(3) Where two or more persons are registered proprietors of trade marks, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trade marks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those persons as against any other of those persons merely by registration of the trade marks but each of those persons has otherwise the same rights as against other persons (not being registered users using by way of Page 15 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined permitted use) as he would have if he were the sole registered proprietor."
20. Section 29 which provides the condition as to when the registered trade mark can be said to have been infringed by a person not being a registered proprietor or a person using by way of permitted use and further provides factors which would be relevant to examine the plea of infringement, which are identity or similarity to the registered trade mark and identity or similarity of the goods or services covered by such registered trade mark and because of which there is a likelihood to create confusion on the part of the public, or which is likely to have association with the registered trade mark. Section 31 speaks of registration to be treated as prima facie evidence of the validity thereof in all legal proceedings relating to a trade mark registered under the Act, 1999.
21. Chapter VI contains provisions pertaining to use of trade marks and the registered users. Section 47, as contained in Chapter VI, is relevant for our purposes and the same is extracted hereinunder :-
47. Removal from register and imposition of limitations on ground of non-use.--(1) A registered trade mark may be taken off the register in respect of the goods or services in respect of which it is registered on application made in the prescribed manner to the Registrar or the High Court by any person aggrieved on the ground either-- (a) that the trade mark was registered without any bona fide intention on the part of the applicant for registration that it should be used in relation to those goods or services by him or, in a case to which the provisions of section 46 apply, by the company concerned or the registered user, as the case may be, and that there has, in fact, been no bona fide use of the trade mark in relation to those goods or services by any proprietor thereof for the Page 16 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined time being up to a date three months before the date of the application;
or
(b) that up to a date three months before the date of the application, a continuous period of five years from the date on which the trade mark is actually entered in the register or longer had elapsed during which the trade mark was registered and during which there was no bona fide use thereof in relation to those goods or services by any proprietor thereof for the time being:
Provided that except where the applicant has been permitted under section 12 to register an identical or nearly resembling trade mark in respect of the goods or services in question, or where the Registrar or the High Court, as the case may be is of opinion that he might properly be permitted so to register such a trade mark, the Registrar or the High Court, as the case may be, may refuse an application under clause (a) or clause (b) in relation to any goods or services, if it is shown that there has been, before the relevant date or during the relevant period, as the case may be, bona fide use of the trade mark by any proprietor thereof for the time being in relation to--
(i) goods or services of the same description; or
(ii) goods or services associated with those goods or services of that description being goods or services, as the case may be, in respect of which the trade mark is registered.
(2) Where in relation to any goods or services in respect of which a trade mark is registered--
(a) the circumstances referred to in clause (b) of sub-section (1) are shown to exist so far as regards non-use of the trade mark in relation to goods to be sold, or otherwise traded in a particular place in India (otherwise than for export from India), or in relation to goods to be exported to a particular market outside India; or in relation to services for use or available for acceptance in a particular place in India or for use in a particular market outside India; and
(b) a person has been permitted under section 12 to register an identical or nearly resembling trade mark in respect of those goods, under a registration extending to use in relation to goods to be so sold, or otherwise traded in, or in relation to goods to be so exported, or in relation to services for use or available for acceptance in that place or for use in that country, or the tribunal is of opinion that he might properly be permitted so to register such a trade mark, on application by that person in the prescribed manner to the High Court or to the Registrar, the tribunal may impose on the registration of the first-mentioned trade mark such limitations as it thinks proper for Page 17 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined securing that that registration shall cease to extend to such use. (3) An applicant shall not be entitled to rely for the purpose of clause (b) of sub-section (1) or for the purposes of sub-section (2) on any non-use of a trade mark which is shown to have been due to special circumstances in the trade, which includes restrictions on the use of the trade mark in India imposed by any law or regulation and not to any intention to abandon or not to use the trade mark in relation to the goods or services to which the application relates."
22. Similarly, Section 57 contained in Chapter-VII pertaining to rectification and correction of register, is also relevant to be noted herein :-
"57. Power to cancel or vary registration and to rectify the register.--(1) On application made in the prescribed manner to the High Court or to the Registrar by any person aggrieved, the Registrar or the High Court, as the case may be, may make such order as it may think fit for cancelling or varying the registration of a trade mark on the ground of any contravention, or failure to observe a condition entered on the register in relation thereto.
(2) Any person aggrieved by the absence or omission from the register of any entry, or by any entry made in the register without sufficient cause, or by any entry wrongly remaining on the register, or by any error or defect in any entry in the register, may apply in the prescribed manner to the High Court or to the Registrar, and the Registrar or the High Court, as the case may be, may make such order for making, expunging or varying the entry as it may think fit.
(3) The Registrar or the High Court, as the case may be, may in any proceeding under this section decide any question that may be necessary or expedient to decide in connection with the rectification of the register.
(4) The Registrar or the High Court, as the case may be, of its own motion, may, after giving notice in the prescribed manner to the parties concerned and after giving them an opportunity of being heard, make any order referred to in sub-section (1) or sub-section (2).
(5) Any order of the High Court rectifying the register shall direct that notice of the rectification shall be served upon the Registrar in the prescribed manner who shall upon receipt of such notice rectify the register accordingly."Page 18 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024
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23. A perusal of Sections 47 and 57 of the Act indicates that it would be solely within the jurisdiction of the Registrar or the High Court, as the case may be, to take off a registered trade mark from the Register of Trade Marks in respect of the goods or services, on an application made by an aggrieved person on the grounds stated in Clauses (a) and (b) of sub-section (1) of Section 47, i.e. on the ground of the trade mark being registered without any bona fide intention on the part of the owner or proprietor of the registered trade mark that it would be used in relation to those goods and services by him. Section 57 prescribes for cancellation or varying the registration of trade mark on the ground of any contravention, or failure to observe condition entered on the Register in relation thereto, by the Registrar or the High Court, as the case may be, on an application filed by an aggrieved person.
24. From the above stated provisions, it is evident that the registration of a trade mark cannot be held to be absolute, perpetual and invariable under all circumstances. Registration may be in respect of goods and services specified in the Alphabetical Index of classification of goods and services referred to in Section 7 or classification determined by the Registrar in accordance with sub-section (2) of Section 7. Various provisions of the Trade Marks Act pertaining to the registration, infringement, noted hereinabove, indicate that the Act contemplates Page 19 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined registration in respect of particular goods. Section 9(1)(a) contained in Chapter-II provides the absolute ground for refusal of registration and sub-section (1)(a) provides that the trade marks which are devoid of any distinctive character, not capable of being distinguished the goods or services of one person from those of another person, shall not be registered. A conjoint reading of Sections 7, 8 and 9 indicates that the registration is of the goods and not the Class. Section 11 of the Act, 1999 prohibits registration of the mark in respect of identical or similar goods or services. The provision does not include the same Classes of goods within its umbrella.
25. The Apex Court in the case of Vishnudas Trading AS Vishnudas Kishendas vs. Vazir Sultan Tobacco Co. Ltd., Hyderabad and Another [(1997) 4 SCC 201], while dealing with the question of validity of the order of the Registrar based on an application under Section 46 read with Section 56 of the Trade Marks Act, 1958 for rectification of the registered trade mark mainly on the ground of non-user of the same in respect of particular goods manufactured by applicant company, has examined the provisions of the Trade Mark Act, 1958 Act exhaustively and noted that the respondent company therein got registration of its brand name 'Charminar' under the Broad Classification (Manufactured Tobacco). So long as the registration remained operative, the respondent company was Page 20 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined claiming exclusive use of the said brand name in respect of the articles made of tobacco coming under the said Broad Classification (Manufactured Tobacco). The appellant made an application for registration of 'quiwam' and 'zarda' under the said brand name 'Charminar', which was rejected. The applicant, thereafter, made an application for rectification of the registration made in favour of the respondent company so that the said registration was limited only in respect of the articles being manufactured and marketed by the respondent company namely 'Cigarette' (therein). It was further noted in paragraph No. '46' and '47' as under :-
"46. There is no manner of doubt that the varieties of articles made of tobacco are differently used and they have their distinctive quality and separate identity. These articles are also marketed as distinct articles of use in different manner. In the common trade channel such articles are not only held different and distinct articles but are marketed separately. It does not require any imagination to hold that snuff or quiwam are entirely distinct products and even though the said products and the cigarettes, bidis, cheroot are also made of tobacco and all such products may come under the broad classification manufactured tobacco, each of the said products is always held as a distinct and separate article of use having its specific characteristics."
"47. .....In our view, if a trader or manufacturer actually trades in or manufactures only one or some of the articles coming under a broad classification and such trader or manufacturer has no bonafide intention to trade in or manufacture other goods or articles which also fall under the said broad classification, such trader or manufacturer should not be permitted to enjoy monopoly in respect of all the articles which may come under such broad classification and by that process preclude the other traders or manufacturers to get registration of separate and distinct goods which may also be grouped under the broad classification. If same or similar and covered by earlier registration and Page 21 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined
ii) trade mark claimed for such goods must be same or deceptively similar to the trade mark already registered. It may be noted that under sub-section (3) of Section 12 of Trade Act. in an appropriate case of honest concurrent use and/or of other special circumstances, same and deceptively similar trade marks may be permitted to another by the Registrar, subject to such conditions as may deem just and proper to the Registrar. It is also to be noted that the expression "goods" and "description of goods"
appearing in Section 12(1) of Trade Marks Act indicate that registration may be made in respect of one or more goods or of all goods conforming a general description. The Trade Marks Act has noted distinction between description of goods forming a genus and separate and distinctly identifiable goods under the genus in various other Sections e.g. goods of same description in Section 46, Sections 12 and 34 and class of goods in Section 18, Rules 12 and 26 read with 4th Schedule to the Rules framed under the Act.
26. It was held that the 'Class' mentioned in the Fourth Schedule may subsume or comprise a number of goods or articles which were separately identifiable and vendible and which were not goods of the same description as commonly understood in trade or in common parlance.
"Manufactured tobacco" was a Class mentioned in Class 34 of Fourth Schedule of the Rules, but within the said Class, there were number of distinctly identifiable goods which were marketed separately and also used differently. It was not only permissible, but it will be only just and proper to register one or more articles under a class or genus if in reality registration only in respect of such articles was intended, by specifically mentioning the names of such articles and by indicating the Class under which such article or articles were to be comprised. It was, thus, held that it was permissible to register only 'Cigarette' or 'some other specific Page 22 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined products' made of "manufactured tobacco" as mentioned in Class-34 of the Fourth Schedule of the Rules. In light of the language of Section 8 of the Trade Mark Act, 1958, it was held that the argument that registration of trade mark is to be made only in respect of class or genus and not in respect of articles of different species under the genus, was based on incorrect appreciation of Section 8 of the Trade Marks Act, 1958 and Fourth Schedule of the Rules. It was, thus, held that since the registration initially had not been done in this manner, the rectification of the registration by limiting or confining the registration of the trade mark of the respondent company to particular goods namely Cigarette in the facts and circumstances of the said case, cannot be held as illegal or unjustified.
27. Referring to the said observations in Vishnudas Trading AS Vishnudas Kishendas (supra), the Apex Court in Nandhini Deluxe (supra) has observed in paragraph No.33 as under :-
"We may mention that the aforesaid principle of law while interpreting the provisions of the Trade and Merchandise Marks Act, 1958 is equally applicable as it is unaffected by the Trade Marks Act, 1999 inasmuch as the main object underlying the said principle is that the proprietor of a trade mark cannot enjoy monopoly over the entire class of goods and, particularly, when he is not using the said trade in respect of certain goods falling under the same class. In this behalf, we may usefully refer to Section 11 of the Act which prohibits the registration of the mark in respect of the similar goods or different goods but the provisions of this sectiion do not cover the same class of goods."Page 23 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024
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28. From the above noted Statutory provisions and the judicial pronouncements, it is evident that the focus of trade mark and registration thereof, is of concrete, specific, identifiable and vendible goods and not on a concept or a class or genus of goods. A trade mark can appertain only to specific goods and not to a generic class. No trade mark is and can be registered in respect of class of goods without any reference to particular goods and articles, which is treated in or manufactured and in respect of which the applicant, trader or manufacturer seeks the trade mark. The classification of goods and the name of class, as set out by the Registrar in the Alphabetical Index in section 7, is for the purposes of enabling the Registrar of the Trade Mark to ascertain for which class, specific goods or services or a particular article, the mark is to be registered before registering any trade mark in respect thereof. Though Section 18(2) of the T.M.Act, 1999 permits a single application to be made for the registration of a trade mark for different classes of goods and services, but Section 11 prohibits the registration of trade mark in respect of identical or similar goods or services covered by the registered trade mark and not covering the same class of goods. The plea of infringement under Section 29 of the T.M.Act. 1999 is pertaining to a case where a registered trade mark is being used by a person, not being a registered proprietor or a person using by way of permitted use, in the course of trade, which is identical Page 24 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined or similar of the goods and services covered by the registered trade mark, so as to create a situation of likelihood of confusion on the part of the public or to have an association with the registered trade mark.
29. Pertinent is to note that the provision speaks of identity or similarity of the goods and services covered by the registered trade mark and does not cover the same Class of goods in which they fall. As observed by the Apex Court in Nandhini Deluxe (supra), the principle of law narrated in Vishnudas Trading AS Vishnudas Kishendas (supra), while interpreting the provisions, the T.M.Act, 1958 is equally applicable, as it is unaffected by the Trade Marks Act, 1999, inasmuch as, the main object underlining the said principle is that the proprietor of the trade mark cannot enjoy monopoly over the entire class of goods and particularly when he is not using the said trade mark in respect of certain goods falling under the same class.
30. Coming to the provisions of Section 124 and 125, as contained in Chapter XIII of the Act, we my note that the position pertaining to application of Section 124(1)(b)(ii) has been explained by the Apex Court in Patel Field Marshal Agencies (supra). With reference to the position of law pertaining to the Sections 107 and 111 of the T.M. Act, 1958, the Apex Court was dealing with an order passed by the Delhi High Court Page 25 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined on an application filed by the defendant and the plea taken in the written statement contesting validity of the respondent's registered trade mark claiming that the same was liable to be rectified in the Trade Mark Register. An issue to that effect was framed in the suit. Observing that the provisions of Sections 46, 56, 107 and 111 of 1958 Act are pari materia to the provisions in Sections 47, 57, 124 and 125 of the T.M. Act, 1999, the Apex Court on comparison of the provisions of the two enactments, former and later enactments, has observed that all the questions with regard to the validity of a trade mark, is required to be decided by Registrar or the High Court under 1958 Act or under 1999 Act, and not by the civil court. The civil court is not empowered by the Act to decide the said question. In a case where the issue of invalidity is raised or arisen independent of the suit, the prescribed statutory authority will be the sole authority to deal with the matter.
31. It was held therein that Section 111 of the Act, 1958 and the corresponding Section 124 of the 1999 Act, no where contemplates grant of permission by the Civil Court to move the prescribed statutory authority for rectification. The requirement of satisfaction of the civil court regarding the existence of the 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, Page 26 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined by no means tantamount to permission or leave of the civil Court. It was held that the inquiry as to the prima facie tenability of the plea of invalidity is a basic requirement to further cause of justice by elimination of false, frivolous and untenable claims of invalidity that may be raised in the suit. It was observed in paragraph Nos. '27' and '29' as under :-
"27. 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. Section 46 in Chapter VI of the 1958 Act contemplates removal from the register of any registered trade mark, inter alia, on the ground that the same was registered without any bona fide intention of use and, in fact, such mark has not been used up to one month prior to the date of the application for removal or that for a continuous period of five years there has been no bona fide use of the mark. Chapter VII of the 1958 Act deals with rectification and correction of the register of trade marks. Under Section 56, the Tribunal, (Registrar or, as the case may be, the High Court), on application, may cancel or vary the registration of a trade mark on the ground of any contravention, or failure to observe a condition subject to which registration was granted.
29. The above seems to become more clear from what is to be found in Section 111 of the 1958 Act which deals with "stay of proceedings where the validity of registration of the trade mar k is questioned" . The aforesaid provision of the 1958 Act specifically provides that if a proceeding for rectification of the register in relation to the trade mark of either the plaintiff or the defendant is pending before the Registrar or the High Court, as may be, and a suit for infringement is filed wherein the aforesaid plea is raised either by the defendant or by the plaintiff, the suit shall remain stayed. Section 111 further provides if no proceedings for rectification are pending on the date of filing of the suit and the issue of validity of the registration of the plaintiff's or the defendant's trade mark is raised/arises subsequently and the same is prima facie found to be tenable, an issue to the aforesaid effect shall be framed by the Civil Court and the suit will remain stayed for a period of three months from the date of framing of the issue so as to enable the concerned party to apply to the High Court for rectification of the register. Section 111(2) of the 1958 Act provides that in case an Page 27 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined application for rectification is filed within the time allowed the trial of the suit shall remain stayed. Sub-Section (3) of Section 111 provides that in the event no such application for rectification is filed despite the order passed by the Civil Court, the plea with regard to validity of the registration of the trade mark in question shall be deemed to have been abandoned and the suit shall proceed in respect of any other issue that may have been raised therein. Sub-section (4) of Section 111 provides that the final order as may be passed in the rectification proceeding shall bind the parties and the civil court will dispose of the suit in conformity with such order insofar as the issue with regard to validity of the registration of the trade mark is concerned."
32. This Court in Atul Products Ltd. vs. Atul Dyes [1982 (2) GLR 648], while dealing with an application under Section 111 of the Trade Marks Act, 1958 filed in a suit for infringement of registered trade mark and passing off, has held that no eventuality is contemplated by Section 111 nor it says that delay in making application during proceedings of the suit will be termed as mala fide or lack of bona fide. Though it is true that in order to get relief from the Court, the party must show that it is acting properly or with all bona fides, however, it is another thing to say that because the party has delayed, there are no bona fides, and, therefore, the application for stay should have been rejected in its entirety. It was observed that when the jurisdiction is granted to the Court by the Statute, that jurisdiction has to be exercised within the framework of that Statute and the Court would not import any word into the Statute, which are not put by the Legislature. If the Legislature thought it fit to use the words "believe", "prima facie", the Legislature would have also used the word " bona fide" and then the requirement for Page 28 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined the Court was to consider the question of bona fide as well. But this is not the tenor of the enactment and, therefore, use of the word " bona fide' in the order of rejection of application under Section 111(2) does not seem to be proper.
33. We find ourselves in complete agreement to the said preposition of law laid down by the learned single Judge of this Court in Atul Products Ltd. (supra), while dealing with the provisions contained in Section 111 of the T.M. Act, 1958, which is pari materia to Section 124 of the T.M. Act, 1999.
34. The scope of examination by the trial court in a plea of invalidity raised by the defendant under Section 124 of the T.M.Act, 1999, was to examine the prima facie tenability of the claim of the defendant, i.e. as to whether the claim of the defendant is false or frivolous or untenable. As observed by the Apex Court in Patel Field Marshal Agencies (supra), the issue of validity of the registered trade mark, can only be decided by the statutorily prescribed authority and the Civil Court has no jurisdiction to deal with the merits of the rectification application. In a case where, rectification proceedings in relation to the registered trade mark is pending before the statutory authority, the Court trying the suit for infringement, has no option but to stay the suit till the final disposal of Page 29 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined such proceedings. However, if no such proceedings for rectification are pending on the date of filling of the suit and the issue of validity of the registration of the plaintiff's or the defendant's trade mark is raised/arises subsequently, the Civil Court will be required to be satisfied that the plea of invalidity is prima facie tenable to frame a issue regarding the satisfaction and adjourn the case for the period prescribed in Section 124(1)(b)(ii) to enable the party concerned to apply to the statutory authority for rectification of the Register.
35. Section 124(2) provides that if any such application with regard to any clause (b) (ii) of sub-section(1) of Section 124 is made within the time specified by the Court, the trial court should adjourn the matter till the final disposal of the rectification proceedings. The final order passed in rectification proceedings referred to in sub-section (1) of Section 124 shall be binding upon the parties, and the civil court will dispose of the suit in conformity with such order in so far as the issue with regard to the validity of the registration of the trade mark is concerned. However, in case of failure on the part of the concerned party to move an application within the time specified or allowed by the Civil Court, the issue as to the validity of the registration of the trade mark is concerned, shall be deemed to have been abandoned and the Court shall proceed with the suit in regard to the said issue in the case.
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36. In light of above legal position and the facts of the present case, we may note that the learned Judge presiding the commercial court, completely ignored the above legal position while proceeding to reject the application under Section 124 raising the plea of invalidity of the registered mark, on the premise, that there is a long delay of two years in making the said application and at no prior stage of the proceedings in the suit or at the time of filling of the written statement by the defendants on 12.03.2020, the plea of invalidity of the trade mark of the plaintiff was raised. As noted hereinabove, the statutory requirement of examining the plea of invalidity is prima facie tenability on the claim of the plaintiff. The stage at which such a plea may be raised by the defendant has not been provided in the Statute i.e. under Section 124. Section 124(1)(b)(ii) requires the Court, where the plea regarding invalidity of registration is raised, to satisfy itself to prima facie tenability of the said plea. Moreover, the defendant is contesting the suit since date of filling of the written statement on 12.03.2022 and the application seeking amendment of the plaint incorporating the plea of invalidity of the trade mark had initially been dismissed, but has been allowed under the order passed by this Court as noted hereinabove. After the amendment application was allowed by the High Court vide judgment and order dated 09.08.2023 setting aside the order dated 4.5.2023 Page 31 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined rejecting the application under Order VI Rule 17 seeking amendment to the written statement, the application under Section 124 of the T.M.Act, 1999 raising a plea of invalidity of the registered trade mark of the plaintiff has been filed. In these facts of the case, view taken by the trial court in rejecting the application filed under Section 124 of the T.M.Act, 1999 on the ground of delay on the part of the defendants in making the application after rejection of interim injunction application filed by the plaintiff, is perverse.
37. We may further record that after forming opinion of the tenability of the application under Section 124 of the T.M.Act, 1999, on the ground of delay in moving the same, the trial court has committed a further error of law in considering the prima facie case regarding validity of the registered trade mark, i.e. on the prima facie merit of the plea of the defendants with regard to the invalidity of the trade mark of the plaintiff. In our considered opinion, this inquiry was not permitted and the trial court could not have entered into the merits of the case of the defendants regarding invalidity of the registered trade mark of the plaintiff, while inquiring about the prima facie tenability of the said claim. The inquiry wherein the Court was required to be satisfied about the prima facie tenability of the plea of the invalidity of registered trade mark, was restricted to the elements of false, perverse or untenable Page 32 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined claims of invalidity, if any, which is the basic requirement to further the cause of justice. There is no observation in the order of the trial court as to the plea of the defendants being false, frivolous and untenable.
38. The trial court has erred in further recording two ingredients of Section 30(2)(e) to record that the plaintiff is using trade mark under Class-9 for the last 25 years, which was registered in the year 1998 and the defendants have challenged the plaintiff's trade mark after a long period of time without sufficient reasons, when it was aware of the fact that the plaintiff is using the trade mark for these years. These reasonings given by the trial court in rejecting the application under Section 124 of the T.M.Act, 1999 itself, reflects on the confusion in the mind of the trial court in dealing with the said application.
39. For the aforesaid, we find that the trial court has exceeded its jurisdiction in examining the prima facie tenability of the plea of the invalidity of the registered trade mark of the plaintiff raised by the defendants in the suit proceedings, wherein the plea of infringement of the registered mark of the plaintiff has been raised.
40. Before concluding, we may also note that the suit is at the stage of framing of the issues and hence, the defendants cannot be non-suited Page 33 of 34 Downloaded on : Tue Jul 23 20:55:17 IST 2024 NEUTRAL CITATION C/SCA/5927/2024 CAV JUDGMENT DATED: 22/07/2024 undefined from raising the said plea on the ground of delay.
41. For the above, while setting aside the impugned judgment and order dated 22.03.2024 in exercise of powers under Article 227 of the Constitution of India, the matter is remitted back for fresh consideration by the trial court on the merits of the application under Section 124 of the T.M.Act, 1999 moved by the defendants, keeping in mind the above stated position of law as to the examination of the said plea within the scope of Section 124 of the T.M.Act, 1999. Both the parties are directed to co-operate in the proceedings and the trial court is required to decide the application under Section 124 of the T.M.Act, 1999, preferably within a period of one month from the date of receipt of the copy of this order.
42. Subject to the above observations and direction, the petition stands disposed of.
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