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IN THE HIGH COURT OF DELHI AT NEW DELHI
S. RAVINDRA BHAT, VIPIN SANGHI, NAJMI WAZIRI, JJ.
DATA INFOSYS LTD. AND ORS. - Appellants
Versus
INFOSYS TECHNOLOGIES LTD. - Respondent
FAO (OS) 403/2012, C.M. APPL.14591/2012, 14592/2012 & 11302/2013
Decided on : 05.02.2016
The Full Bench of the Delhi High Court was called upon to answer a reference made in terms of the order of the Division Bench dated 27.08.2012. The Division Bench, by its order of reference noticed a 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 (hereafter "the Act") for rectification of a registered trademark, during the pendency of a suit. The first view is that proceedings for rectification of the defendant’s mark cannot be initiated without the prima facie satisfaction of the plea by the Court and that the suit cannot be adjourned or stayed in terms of Section 124(1)(b)(ii) of the Act to await the outcome of the rectification proceedings initiated by the plaintiff before the Intellectual Property Appellate Board (hereafter “IPAB”) - if the procedure outlined therein is not followed. The other view is that such proceedings (for rectification before the IPAB) can be initiated without the permission of the court trying the infringement suit and the consequence of not obtaining permission is only that the applicant cannot seek stay of suit.
Fact of the Case:
The respondent, Infosys Technologies Ltd. (hereafter called "Infosys") sued the preset appellant Data Infosys (hereafter referred to as "the defendant") and claimed permanent injunction against infringement of its registered trademarks in "Infosys" and allied marks. The trademarks were registered in Classes 16, 9 and 7 under the erstwhile Trade and Merchandise Marks Act, 1958 (hereafter referred to as “the 1958 Act”). Infosys also sought relief against the use of its corporate name, including the use by the defendant of the domain name - www.datainfosys.net which - it was argued-amounted to infringement of its registered trademarks. The defendant entered appearance and contested the suit. It argued that whereas Infosys was in the field of software development, the defendant was providing internet services within India only and that the two business activities were different. Other defences such as delay etc. were set-up.
Finding of the Court:
The Court held that the two situations whereby the infringement action is stayed, are when the rectification proceedings are instituted before the filing of the suit (Section 124 (1) (i)) and after the plea of invalidity is held to be prima facie tenable under Section 124 (1) (ii)). In the first situation, if such plea exists, before the filing of the suit, the Court has to stay the suit to await the decision of the IPAB. In the second situation, if there is no application for rectification before the IPAB when the suit is filed and a party to the infringement suit, wishes to challenge it after the filing of the suit, it may do so, but the court has to assesses the tenability of the invalidity plea- if it finds it prima facie tenable, then and then alone, would it stay the suit to enable the party to approach the IPAB within a time period. If the party does not avail of this, or approaches the IPAB after the period given, the court would proceed with the suit; the plea of invalidity is deemed abandoned in the infringement suit.
Issues: 1. 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 trademark, during the pendency of a suit? 2. Whether proceedings for rectification of the defendant’s mark can be initiated without the prima facie satisfaction of the plea by the Court?
Ratio Decidendi: 1. The Court held that the two situations whereby the infringement action is stayed, are when the rectification proceedings are instituted before the filing of the suit (Section 124 (1) (i)) and after the plea of invalidity is held to be prima facie tenable under Section 124 (1) (ii)). In the first situation, if such plea exists, before the filing of the suit, the Court has to stay the suit to await the decision of the IPAB. In the second situation, if there is no application for rectification before the IPAB when the suit is filed and a party to the infringement suit, wishes to challenge it after the filing of the suit, it may do so, but the court has to assesses the tenability of the invalidity plea- if it finds it prima facie tenable, then and then alone, would it stay the suit to enable the party to approach the IPAB within a time period. If the party does not avail of this, or approaches the IPAB after the period given, the court would proceed with the suit; the plea of invalidity is deemed abandoned in the infringement suit. 2. The Court held that proceedings for rectification of the defendant’s mark can be initiated without the prima facie satisfaction of the plea by the Court.
Final Decision: The appeal is, accordingly remitted for consideration of the merits by the concerned roster Division Bench on 11.02.2016, subject to the orders of Hon’ble the Chief Justice.
MR. JUSTICE S. RAVINDRA BHAT
1. This Full Bench is called upon to answer a reference made in terms of the order of the Division Bench dated 27.08.2012. The Division Bench, by its order of reference noticed a 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 (hereafter "the Act") for rectification of a registered trademark, during the pendency of a suit. The first view is that proceedings for rectification of the defendant’s mark cannot be initiated without the prima facie satisfaction of the plea by the Court and that the suit cannot be adjourned or stayed in terms of Section 124(1)(b)(ii) of the Act to await the outcome of the rectification proceedings initiated by the plaintiff before the Intellectual Property Appellate Board (hereafter “IPAB”) - if the procedure outlined therein is not followed. The other view is that such proceedings (for rectification before the IPAB) can be initiated without the permission of the court trying the infringement suit and the consequence of not obtaining permission is only that the applicant cannot seek stay of suit.
2. Before discussion of the rival contentions and their merits on the question referred, a brief factual narrative is essential. The respondent, Infosys Technologies Ltd. (hereafter called "Infosys") sued the preset appellant Data Infosys (hereafter referred to as "the defendant") and claimed permanent injunction against infringement of its registered trademarks in "Infosys" and allied marks. The trademarks were registered in Classes 16, 9 and 7 under the erstwhile Trade and Merchandise Marks Act, 1958 (hereafter referred to as “the 1958 Act”). Infosys also sought relief against the use of its corporate name, including the use by the defendant of the domain name - www.datainfosys.net which - it was argued-amounted to infringement of its registered trademarks. The defendant entered appearance and contested the suit. It argued that whereas Infosys was in the field of software development, the defendant was providing internet services within India only and that the two business activities were different. Other defences such as delay etc. were set-up.
3. During the pendency of the suit, the defendant’s application for registration of its mark "Data Infosys" was accepted and its registration was granted in class 38, i.e. telecommunication, communication by computer, by fibre, electronic transmission of voice, etc. The defendant was also granted registration of the same mark "Data Infosys" in Class 9 as on 22.03.2004, i.e. computer hardware; likewise, trademark registration was granted in respect of class 42. The defendant sought leave of the Court to amend its written statement and incorporate these developments; the Court permitted leave to amend the suit/its defence, on 19.07.2006.
4. Infosys thereafter sought rectification of the registered trademark "Data Infosys" under Classes 38, 9 and 42 (classified under Section 8 of the Act read with Rule 22 and Fourth Schedule to the Trademark Rules, 2001) before the Intellectual Property Appellate Board (IPAB). Upon becoming aware of these proceedings, the defendant moved an application alleging that 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. By an order dated 17.07.2012, the learned Single Judge, before whom the defendant's application was listed considered and dismissed it.
5. Section 124 of the Act reads as follows:
"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 defense under clause (e) of sub-section (2) of section 30 and the plaintiff pleads the invalidity of registratio
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