Delhi High Court
Abbott Healthcare Pvt Ltd vs Raj Kumar Prasad & Ors on 4 December, 2017
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 4th December, 2017
+ CS(OS) 3534/2012
ABBOTT HEALTHCARE PVT LTD ..... Plaintiff
Through Mr.Ranjan Narula and Ms. Astha
Joshi, Advocates
versus
RAJ KUMAR PRASAD & ORS ..... Defendants
Through Mr. Mohan Vidhani and Mr.
Ashish Singh, Advocates
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
IA No. 14337/2017 (under Section 124 of the Trade Marks Act by
the plaintiff) in CS (OS) No. 3534/2012.
1. The counsel for the defendants appears on advance notice and
seeks time to file reply.
2. It has been enquired from the counsel for the defendants as to what
is there to be pleaded factually for a reply to be required.
3. The counsel for the defendants agrees that his opposition to the
application is on legal grounds only; however, he still seeks adjournment
stating that he is not prepared for the arguments.
4. There is no reason for the counsel to appear unprepared before the
Court.
5. The counsel for the defendants states that even if he had not
appeared on advance notice, the Court would have issued notice.
6. That was for the counsel to decide; he cannot on the one hand earn
appearance and on the other hand ask the Court to treat him as not
CS(OS) 3534/2012 Page 1 of 14
appearing. Even otherwise, once the practice of serving of advance copy
has been enshrined in the Rules, if the Court finds that the opposite party,
in spite of service of advance copy, fails to appear and the application can
be disposed of without issuing notice, the court is entitled to do so.
7. The counsel for the defendants then contends that in the present
suit, though the plaintiff had knowledge of the registered trade mark of
the defendants, the rectification proceedings before the Registrar of Trade
Marks were not instituted prior to the institution of the suit and the
rectification proceedings have been instituted after the institution of the
suit and without seeking the permission of this court and the same do not
entitle the plaintiff to seek stay of its own suit.
8. The counsel for the plaintiff states that though it was the law
earlier but the Full Bench of this Court in Data Infosys Ltd. Vs. Infosys
Technology 2016 (65) PTC 209 (Del) has held otherwise and has drawn
attention to paras 31 & 32 of the judgment as reported in
MANU/DE/0283/2016.
9. I have enquired from the counsel for the plaintiff, whether the
plaintiff in the plaint has pleaded the invalidity of the trademark of the
defendants.
10. The counsel for the plaintiff replies in the affirmative and has
drawn attention to para 13 of the plaint. The plaintiff is however found
to have therein pleaded having already initiated the rectification
proceedings.
11. The counsel for the defendants clarifies that the plaint now on
record is the amended plaint and the plaintiff in the plaint as originally
CS(OS) 3534/2012 Page 2 of 14
filed pleaded that it intended to initiate rectification proceedings.
12. I have next enquired from the counsel for the plaintiff, whether
issues have been framed in the suit.
13. Issues are found to have been framed in the suit on 21st March,
2016 but the plaintiff is not found to have pressed any issue qua the
validity of the registration of the trade mark of the defendants.
14. Section 124 of the Trade Marks Act, 1999 is as under:
―124. Stay of proceedings where the validity of registration of the trade
mark is questioned, etc.--(1) Where in any suit for infringement of a trade
mark--
(a) the defendant pleads that registration of the plaintiff's trade
mark is invalid; or
(b) the defendant raises a defence under clause (e) of sub-section
(2) of section 30 and the plaintiff pleads the invalidity of
registration of the defendant's trade mark, the court trying the
suit (hereinafter referred to as the court), shall,--
(i) if any proceedings for rectification of the register in relation to
the plaintiff's or defendant's trade mark are pending before the
Registrar or the Appellate Board, stay the suit pending the final
disposal of such proceedings;
(ii) if no such proceedings are pending and the court is satisfied
that the plea regarding the invalidity of the registration of the
plaintiff's or defendant's trade mark is prima facie tenable,
raise an issue regarding the same and adjourn the case for a
period of three months from the date of the framing of the issue
in order to enable the party concerned to apply to the Appellate
Board for rectification of the register.
(2) If the party concerned proves to the court that he has made any such
application as is referred to in clause (b) (ii) of sub-section (1) within the time
specified therein or within such extended time as the court may for sufficient
cause allow, the trial of the suit shall stand stayed until the final disposal of
the rectification proceedings.
(3) If no such application as aforesaid has been made within the time so
specified or within such extended time as the court may allow, the issue as to
the validity of the registration of the trade mark concerned shall be deemed to
have been abandoned and the court shall proceed with the suit in regard to the
other issues in the case.
(4) The final order made in any rectification proceedings referred to in
CS(OS) 3534/2012 Page 3 of 14
sub-section (1) or sub-section (2) shall be binding upon the parties and the
court shall dispose of the suit conformably to such order in so far as it relates
to the issue as to the validity of the registration of the trade mark.
(5) The stay of a suit for the infringement of a trade mark under this
section shall not preclude the court from making any interlocutory order
(including any order granting an injunction directing account to be kept,
appointing a receiver or attaching any property), during the period of the stay
of the suit.‖
15. The plaintiff, though prior to the institution of this suit had not
instituted any proceeding for rectification of the registered trade mark of
the defendants, but in the plaint has pleaded that the trade mark of the
defendants has been registered in bad faith and is invalidly remaining on
the Register. The plaintiff, after the institution of the suit and without
raising an issue regarding invalidity of the registration of the defendants'
trade mark, filed rectification / cancellation proceedings before the
Intellectual Property Appellate Board (IPAB) for removal of the
registration in favour of the defendant and has thereafter filed this
application for stay of proceedings in this suit.
16. I have wondered whether to such a situation Section 124 supra
which contemplates only two situations, i.e. of proceedings for
rectification of the Register with respect to the defendants' trade mark
pending since prior to the institution of the suit and if no such
proceedings are pending at the time of institution of the suit, initiating
such proceedings after satisfying the Court that the plea regarding
invalidity of registration of defendants' trade mark is prima facie tenable
and raising an issue regarding the same, would apply. In the present
case, neither were the proceedings for rectification pending prior to the
institution of the suit nor did the plaintiff at the time of framing of issues
CS(OS) 3534/2012 Page 4 of 14
raise an issue regarding the invalidity of the registration of the
defendants' trade mark.
17. The majority view in Data Infosys Ltd. supra did not consider such
a contingency. However, the dissenting opinion, noticing such a
situation, observed i) that there is nothing in Section 124 to suggest that
either the plaintiff or the defendant is precluded from moving an
application before the Registrar / IPAB for rectification, after the filing of
the suit; ii) the scheme of Section 124(1)(i) appears to be, that the issue
with regard to stay of proceedings in the suit for infringement of trade
mark would be considered by the Court on the basis of the factual
situation as it obtains when such consideration takes place; and, iii)
therefore, if on the date of consideration of the said issue, proceedings for
rectification of the registration in relation to plaintiff's or defendants'
trade mark are pending before the Registrar or the IPAB, the Court shall
stay the suit pending final disposal of such proceedings, irrespective of
the fact that such rectification proceedings were initiated before, or after
the filing of the suit.
18. However the dissenting opinion in Data Infosys Ltd. supra is not a
precedent.
19. Without the said validity of the registration of the trade mark of the
defendants being in issue in this suit, the case for staying proceedings in
this suit, instituted prior to initiating the rectification proceedings, would
not arise and once that is so, the court would also not be required to form
a prima facie opinion with regard to the validity of the registration of the
trade mark of the defendants.
CS(OS) 3534/2012 Page 5 of 14
20. I may, however, notice that it is the contention of the counsel for
the plaintiff that the plaintiff has been granted interim injunction in this
suit owing to the prima facie invalidity of the registration in favour of the
defendant and the appeal preferred by the defendants to the Division
Bench against the order granting interim injunction has also been
dismissed.
21. The counsel for the plaintiff then contends that issues can be
rectified.
22. Certainly yes, but the plaintiff has to apply therefor and it is felt
that if oral request of the counsel for the plaintiff in this regard were to be
accepted, such pre-mature applications will continue to be filed, wasting
the time of the court.
23. The counsel for the plaintiff has then referred to para 25 of Patel
Field Marshal Agencies Vs. P.M. Diesels Ltd. 2017 SCC OnLine SC
1388 to contend that first the Court has to form a prima facie opinion
about the tenability of the issue of invalidity of the registration of a trade
mark and then frame issue to the said effect.
24. Before considering the aforesaid argument, I need to notice that
Supreme Court in judgment aforesaid has set aside the dicta of the Full
Bench of this Court in Data Infosys Ltd. supra.
25. Supreme Court in the judgment aforesaid formulated the following
question for consideration:
―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
CS(OS) 3534/2012 Page 6 of 14
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.‖
and held that though the question arose in the context of the 1958 Act but
continues to be a live issue in view of the pari materia provisions
contained in the 1999 Act.
26. Supreme Court proceeded to answer the question formulated as
under:
(i) that the 1958 and the 1999 Act suggest that if a proceeding
for rectification of the Register in relation to the trade mark
of either the plaintiff or the defendant is pending and a suit
for infringement is filed wherein the said plea is raised either
by the plaintiff or the defendant, the suit shall remain stayed;
(ii) that if no proceeding for rectification are pending on the date
of filing of the suit and the issue of validity of registration of
the plaintiff or the defendant trade mark is raised 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 for rectification;
(iii) that if no such application for rectification is filed despite
such order of the Civil Court, the plea with regard to validity
CS(OS) 3534/2012 Page 7 of 14
of registration of trade mark shall be deemed to have been
abandoned and the suit shall proceed in respect of any other
issue that may have been raised therein;
(iv) that the heading / title of Section 111 of the 1958 Act and
Section 124 of the 1999 Act cannot be understood to be
determinative of the true purport, intent and effect of the
provisions contained therein;
(v) that the purport of the said provisions is that all questions
with regard to the validity of a trade mark is required to be
decided by the Registrar or the IPAB (under the 1999 Act)
and not by the Civil Court;
(vi) that the Civil Court in fact is not empowered to decide the
said question;
(viii) that the Acts mandate that the decisions rendered by the
prescribed statutory authority i.e. IPAB will bind the Civil
Court;
(ix) at the same time, both, the old and the new Acts go on to
provide a different procedure to govern the exercise of the
same jurisdiction in two different situations;
(x) that in 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
CS(OS) 3534/2012 Page 8 of 14
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;
(xi) that in a situation where the Civil Court does not find a
triable issue on the plea of invalidity, the remedy of an
aggrieved party would not be to move the IPAB for
rectification but to challenge the order of the Civil Court in
appeal - this is necessary to avoid multiple proceedings on
the same issue and resultant conflict of decisions;
(xii) that the intention of Legislature is clear; all issues relating to
and connected with the validity of registration have to be
dealt with by the Tribunal and not by the Civil Court;
(xiii) that in cases where the parties have not approached the Civil
Court, the statute provides an independent statutory right to
an aggrieved party to seek rectification of a trade mark;
(xiv) that 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;
(xv) that the IPAB (under the 1999 Act) 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 IPAB and the decision of the IPAB will
thereafter bind the Civil Court;
CS(OS) 3534/2012 Page 9 of 14
(xvi) that if despite the order of the Civil Court, the parties do not
approach the IPAB for rectification, the plea with regard to
rectification will no longer survive;
(xvii) that the Legislature, while providing consequences for non-
compliance with timelines for doing any act, must be
understood to have intended such consequences to be
mandatory in nature, thereby also affecting the substantive
rights of the parties;
(xviii) that it is very much within the legislative domain to create
legal fictions by incorporating a deeming clause and the
Court will have to understand such statutory fictions as
bringing about a real state of affairs between the parties and
ushering in legal consequences affecting the parties unless
there is anything to the contrary in the provisions of the
statute;
(xix) that nothing exists in the Trade Marks Act to understand the
provisions of Sections 111/ 124 of the 1958 / 1999 Act in
any other manner except that the right to raise the issue of
invalidity is lost forever if the requisite action to move the
IPAB (under the 1999 Act) is not initiated within the
statutorily prescribed time frame; thus by virtue of operation
of the Act, the plea of rectification, upon abandonment, must
be understood to have ceased to exist or survive between the
parties inter se;
(xx) to permit the issue of rectification, once abandoned, to be
CS(OS) 3534/2012 Page 10 of 14
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, bringing about uncertainty if not chaos in the
judicial determinations between the parties that stand
concluded;
(xxi) such an interpretation would permit an aggrieved party to
get over the operation of a statute providing for deemed
abandonment of the right to raise an issue relevant, in fact,
fundamental to the lis;
(xxii) the mandate of Sections 111 / 124 appears to be that if an
aggrieved party does not approach the IPAB for a decision
on the issue of invalidity of registration as provided for
under Section 124 (1)(b)(ii) and Section 124 (2) & (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 Sections 47 & 57 of the 1999 Act;
(xxiii) Section 124 of the 1999 Act nowhere contemplates grant of
permission by the Civil Court to move the IPAB, for
rectification; 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 IPAB to deal with
the issue of invalidity by no means tantamounts to
CS(OS) 3534/2012 Page 11 of 14
permission or leave of the Civil Court - it is the basic
requirement to further the cause of justice by elimination of
false, frivolous and untenable claims of invalidity that may
be raised in the suit;
(xxiv) the provisions of either the 1958 or the 1999 Act cannot be
construed to understand that the proceedings for rectification
of Register on the one hand and those under Section 124 on
the other hand would run parallelly; and,
(xxv) the jurisdiction of rectification conferred by Sections 47 and
57 of the 1999 Act is the very same jurisdiction that is to be
exercised under Section 124 of the 1999 Act when the issue
of invalidity is raised in the suit but by observance of two
different procedural regimes.
27. I have analysed the dicta aforesaid of the Supreme Court in detail
as surprisingly, neither the counsel for the plaintiff who though cited the
same as also Data Infosys Ltd. point out that Data Infosys Ltd. had been
overruled thereby, not the counsel for the defendants raise the same.
28. From the aforesaid analysis of the dicta of the Supreme Court in
Patel Field Marshal Agencies supra, my view is re-enforced that without
an issue having been urged and framed, this Court cannot in exercise of
powers under Section 124 stay the proceedings in the suit as is the want
of the plaintiff. It is only after an issue qua invalidity of registration is
framed that the legislature has provided for stay of proceedings in the suit
to avoid the Civil Court as well as IPAB both adjudicating the same
question and to avoid duplicity / multiplicity. To the said extent, Section
CS(OS) 3534/2012 Page 12 of 14
124 is akin to Section 10 of the CPC albeit that even if proceedings
before the IPAB have not been instituted prior to the institution of the
suit, IPAB is given supremacy in deciding the question of rectification.
29. As far as the contention of the counsel for the plaintiff, that first
the Court has to form a prima facie opinion about the maintainability of
the issue of invalidity of the registration and then frame an issue with
respect thereto is concerned, issues as per Order XIV of the CPC are to
be framed on substantial questions of law and fact arising for
determination from the pleadings of the parties. Without a substantial
question of fact and law emerging from the pleadings in the suit, even a
plea of invalidity of registration, within the meaning of 124(1)(b) cannot
be said to have been raised. From the conduct of the plaintiff of having
not pressed for an issue qua invalidity of registration of the trade mark of
the defendants, various inferences in law can be drawn including of either
the plaintiff having not pleaded the invalidity of the registration of the
defendants' mark or of the plaintiff having abandoned the said plea. I am
unable to find para 25 of Patel Field Marshal Agencies supra laying
down to the contrary; rather, the entire exercise contemplated in Section
124(1)(b)(ii) of forming a prima facie opinion and raising an issue
regarding the same is to be simultaneously undertaken and the plaintiff as
of now is found to have missed the bus.
30. However I refrain from rendering any final opinion since the
counsel for the plaintiff has orally requested for amendment of issues and
which request has been denied as aforesaid and the counsel for the
plaintiff states that he will be filing an application therefor. It is felt that
CS(OS) 3534/2012 Page 13 of 14
rendering any final opinion at this stage may come in the way of the
plaintiff making such an application if a right therefor vests in him in
law.
31. For the aforesaid reasons, the application is dismissed as not
maintainable with liberty however to the plaintiff to apply afresh if files
an application for amendment of issues and if the same succeeds.
No costs.
RAJIV SAHAI ENDLAW, J.
4th DECEMBER, 2017 ‗mw'/gsr/pp CS(OS) 3534/2012 Page 14 of 14