IP Connect

India: Court's Permission not required for Rectification of Trademark during Pendency of a Suit

In a recent decision rendered by the Full Bench of the Delhi High Court in the case of Data Infosys & Ors. v. Infosys Technologies Ltd. [FAO (OS) 403/2012], the Hon’ble Court sought to provide some clarity and solve the judicial conflict on the question whether prior permission of the Court is necessary under Section 124(1)(b)(ii) of the Trade Marks Act, 1999, for rectification of a registered trade mark during the pendency of the suit. The Court held, by a majority, that prior permission from the Court was not necessary for initiating rectification proceedings during pendency of the suit. It was also held that if a party failed to file rectification proceedings in the time period granted by the Court, upon prima facie tenability of the invalidity of the registration of the trade mark, the suit would not be stayed and the plea of invalidity would be deemed to have been abandoned.

Brief facts of the case –

Infosys Technologies Ltd. filed a suit against Data Infosys, before the Delhi High Court for trademark infringement of its registered trade mark “Infosys” and sought a permanent injunction. However, during the pendency of the suit, the Appellant’s application for registration of its mark, “Data Infosys”, was accepted and was registered under Classes 9, 38 and 42. Upon becoming aware of this, the Respondent herein immediately filed rectification proceedings against such a registration without taking the leave of the Court.

Contentions by the Appellants (Data Infosys & Ors.) –

1. The Appellants contended that the proceedings for rectification of their trademark cannot be initiated without the prima facie satisfaction of the plea of invalidity of registration of the trade mark by the Court. It was also contended that the suit cannot be adjourned and stayed under Section 124(1)(b)(ii) of the Act to await the outcome of the rectification proceedings initiated by the Respondent before the Intellectual Property Appellate Board (hereinafter referred to as the “IPAB”).
2. By becoming aware of the proceedings, the Respondent initiated the filing for rectification procedure without taking leave of the Court. This constituted an abuse of power and the proceedings under IPAB were, thus, null and void. Later, however, the Learned Judge considered and dismissed the said proceedings. 
3. The Appellants argued that permission under Section 124(1)(b)(ii) is a condition precedent and mandatory. If the rectification proceedings are filed without obtaining such permission, the proceedings are not maintainable. It was argued specifically that not applying for rectification, as has been mentioned clearly in Section 124, is the statutory abandonment of the plea. Further, autonomy under Section 124(5) to the Court to proceed and to make interlocutory orders including injunction emphasizes the interpretation pressed by the Appellants. It was further contended that if the prior permission through the Court as to invalidity is not obtained, the right to apply for rectification is precluded.

Contentions by the Respondent (Infosys Technologies Ltd.) –

1. The Respondent sought rectification of the registered trade mark "Infosys" under Classes 38, 9 and 42 while taking leave of the Court to amend the written statement on permission.
2. The Respondent argued that no permission is required or mandated by Section 124 of the Trade Marks Act, 1999, before filing the petition with the IPAB. He argued that it is a mere procedural provision dealing with the stay of a suit in various situations concerning infringement actions. Substantive jurisdiction of IPAB is derived from the provisions of Sections 47 and 57 of the said Act.

The Respondent also relied upon the Madras High Court decision in the case of B. Mohamed Yousuff v. Prabha Singh Jaswant Singh & Ors. (WRIT APPEAL No.863 of 2006).

Observations & Decision of the Court –

1. The Court observed that as per Section 124, the Court’s jurisdiction extends only to examining whether a prima facie case for invalidity exists only for the limited purpose of granting an adjournment/stay, while the IPAB has the exclusive jurisdiction to decide on the validity of registration of the trade mark. An infringement suit in a civil court and the process of rectification can proceed separately.
2. The Court held that the IPAB has exclusive jurisdiction to consider and decide upon the merits of the plea of invalidating of a trademark registration, and that access to IPAB is not dependent on a Civil Court’s prima facie assessment of tenability of a plea of trade mark registration. While doing so, the Court also overruled the decision in the case of AstraZeneca UK Ltd. v. Orchid Chemicals (2006 (32) PTC 733 Del) that a party cannot avail the remedy of rectification of a registered trade mark unless the Court trying the suit for infringement of the same mark rules it to be prima facie tenable.
3. The Court held by a majority that the only two situations where a suit for infringement action can be stayed are as follows-
1. When the rectification proceedings have been filed before the institution of such suit, or;
2. When the plea of invalidity of the trade mark registration is held prima facie tenable.
4. The Court also mentioned that if indeed held tenable, if the party does not file the rectification proceeding in the time period granted by the Court, the plea of invalidity shall be deemed to be abandoned in the infringement suit and no stay shall be granted.

The appeal was, therefore, remitted back to the concerned Full Bench on February 11, 2016, subject to the orders of the Hon’ble Chief Justice.

Conclusion –

The Full Bench of the Delhi High Court thus finally provided clarity by holding that both the IPAB and Civil Courts have exclusive jurisdiction and a party does not require prior permission from the Court to have access to file the proceedings in the IPAB and situations where a suit of infringement can be stayed. The said judgment is available here.