How to resurrect a trademark in India

In the 2012 decision in Data Infosys & Ors v Infosys Technologies, the full bench of the Delhi High Court resolved the judicial conflict surrounding the question of whether the court’s earlier permission is necessary to rectify a registered trademark during the pendency of a suit under section 124(1)(b)(ii) of the Indian Trade Marks Act, 1999.

The court held by a majority that prior permission is not necessary. It was also held that the two situations whereby the infringement action is stayed are (a) when rectification proceedings are instituted before the filing of the suit; and (b) after the plea of invalidity is held to be prima facie tenable under section 124(i)(ii) of the act.

In the first situation, the suit has to be stayed if the rectification petition was filed before the filing of the suit. In the second situation, if the application for rectification is filed before the Intellectual Property Appellate Board (IPAB) following the filing of the suit, the court has to assess the tenability of an invalidity plea.

If the invalidity plea is prima facie found to be tenable, the court will stay the suit to enable the party to approach the IPAB within three months. If a party fails to file rectification proceedings in the time period granted by the court, the suit will not be stayed and the plea of invalidity will be deemed to have been abandoned.

Infosys Technologies filed a suit against Data Infosys before the Delhi High Court seeking a permanent injunction for infringement of its registered trademark ‘Infosys’. However, during the pendency of the suit, the application of Data Infosys to register the mark ‘Data Infosys’ was accepted and consequently registered under classes 9, 38 and 42.

The court allowed Data Infosys to amend its written statement accordingly. After becoming aware of this, Infosys Technologies immediately filed rectification proceedings against the registration before the IPAB without taking leave of the court. Aggrieved by this, Data Infosys filed an application before the single judge against the rectification proceedings. The judge considered the application and dismissed it on July 17, 2012, observing that there is no question of any prior permission from the court when the suit is pending.

Data Infosys challenged the order by filing an appeal before the division bench of the Delhi High Court. On August 27, 2012, the bench observed that the appeal raises a question about the interpretation of section 124(1)(b)(ii) of the act, ie, if a suit is pending and a rectification application is filed before the IPAB during the pendency of the suit, whether prior permission from the civil court is required for filing an application.

"THE COURT MENTIONED THAT IF IT FINDS THAT THE TRADEMARK REGISTRATION MAY BE INVALID, ONLY THEN WOULD IT STAY THE SUIT."

The bench considered that in view of the conflicting precedents, the issue needs to be examined by a larger bench in light of its importance to settle the legal issue, and referred the matter to the full bench of the court.

Data Infosys contended that:

1. The initial filing of rectification proceedings without seeking leave of the court constituted an abuse of process and that the proceedings before the IPAB were therefore null and void;

2. The proceedings for rectification cannot be initiated without the prima facie satisfaction by the court with the plea of invalidity;

3. The suit cannot be adjourned and stayed under section 124(1)(b)(ii) to await the outcome of the rectification proceedings initiated by the respondent before the IPAB; and

4. Permission under section 124(1)(b)(ii) is mandatory. If the rectification proceedings are filed without obtaining such permission, the proceedings cannot be maintained.

On the other hand, Infosys Technologies argued that:

1. The registered trademark ‘Infosys’ under classes 38, 9 and 42 should be rectified; and

2. No permission is required or mandated by section 124 of the Trade Marks Act before filing for rectification with the IPAB. It argued that it is a mere procedural provision dealing with the stay of a suit in various situations concerning an infringement action and that substantive jurisdiction of the IPAB is derived from the provisions of sections 47 and 57.

The full bench weighs in

The Delhi High Court’s full bench held that the IPAB has exclusive jurisdiction to consider and decide on the merits of a plea for trademark registration invalidity—applying sections 47 and 57 of the act—in the context of an infringement suit based on such a registered trademark. Access to the IPAB is not dependent on the civil court’s prima facie assessment of tenability of a plea for invalidation. In other words, section 124 does not control the choice of a litigant to seek rectification of a registered trademark.

In addition, the full bench said that the 2007 decision in AstraZeneca UK v Orchid Chemicals and Pharmaceuticals and all other related judgments are overruled. These held that the plea of rectification can be raised by a party to an infringement suit only if the court trying the suit rules it to be prima facie tenable, and that if such a finding is not recorded, the party cannot rectify a registered trademark.

The court held by a majority that the two situations whereby a suit for infringement action is stayed are when:

a. The rectification proceedings have been filed before the institution of such a suit, or;

b. When the plea of invalidity is held to be prima facie tenable by civil court.

Further, the court mentioned that if it finds that the trademark registration may be invalid, only then would it stay the suit. However, 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, no stay shall be granted and the court would proceed with the suit.

The full bench thereby finally provided clarity by holding that the party to the infringement suit is not required to gain permission from the court to file the rectification of the trademark registration. However, in order to stay the suit if a rectification plea is filed during the pendency of the suit, prima facie tenability of the invalidity is required.

Vikrant Rana is managing partner of SS Rana & Co. He is an advocate-on-record with the Supreme Court of India and a registered patent agent. He has litigated in courts all over India and provides practical legal advice to many Fortune 500 companies. He can be contacted at: vikrant@ssrana.com

Tulip De is an IP attorney at SS Rana & Co. She read law at National Law University, Odisha. She is proficient in all aspects of trademarks and copyright, including prosecution, searches, drafting assignments, IP enforcement, and civil litigation. She can be contacted at: tulip.de@ssrana.com