2016 Supreme(Del) 2639
IN THE HIGH COURT OF DELHI AT NEW DELHI
JAYANT NATH, J.
WONDERFUL DEVELOPERS PRIVATE LTD. – Petitioner
Versus
IMPRESARIO ENTERTAINMENT AND HOSPITALITY PRIVATE LTD. & ORS. - Respondents
CM(M) 376/2013 & CM No. 5681/2013 (stay)
Decided On : 28-07-2016
For the Petitioner:Mr. Sohan Singh Rana, Mrs. Bindra Rana & Ms. Manashi Pathak, Advocates.
For the Respondents:Ms. Shikha Sachdev & Ms. Jasleen Kaur, Advocates.
Headnote:
Trade Marks Act - Stay of Suit - Section 124 - Summary: The court discussed the application of Section 124 of the Trade Marks Act, 1999 and the interpretation of the provision in relation to the stay of proceedings where the validity of registration of the trade mark is questioned. The court highlighted the mandatory nature of granting stay when rectification proceedings are pending and the requirement to assess the tenability of the invalidity plea before staying the suit. The judgment of the Full Bench in Data Infosys Ltd. & Ors. v. Infosys Technologies Ltd. was referenced to establish the exclusive jurisdiction of IPAB to consider and decide upon the merits of a plea of trademark registration invalidity, and the conditions under which the infringement action is stayed. The court emphasized that the mere filing of the rectification application after filing of the suit without approaching the trial court first cannot prejudice the respondents, and the trial court must assess the tenability of the invalidity plea before staying the suit.
Fact of the Case:
The petitioner filed a suit for permanent injunction for infringement of the Trademark MOJO, while the respondent moved an application under Section 124 of the Trade Marks Act for stay of the suit, citing pending rectification proceedings before the IPAB.
Finding of the Court:
The court set aside the impugned order of the trial court staying the suit regarding the infringement of the Trade mark and remanded the matter back to the trial court to consider the application under Section 124 of the Trade Marks Act of the respondents afresh.
Issues: The main issue was the interpretation and application of Section 124 of the Trade Marks Act in relation to the stay of proceedings where the validity of registration of the trade mark is questioned, and the assessment of the tenability of the invalidity plea before staying the suit.
Ratio Decidendi: The court emphasized the mandatory nature of granting stay when rectification proceedings are pending and the requirement to assess the tenability of the invalidity plea before staying the suit, as established in the judgment of the Full Bench in Data Infosys Ltd. & Ors. v. Infosys Technologies Ltd.
Final Decision: The impugned order of the trial court staying the suit regarding the infringement of the Trade mark was set aside, and the matter was remanded back to the trial court to consider the application under Section 124 of the Trade Marks Act of the respondents afresh.
JAYANT NATH, J.
CM(M) 376/2013 and CM No. 5681/2013 (stay)
1. By the present petition the petitioner seeks to impugn the order dated 16.02.2013 passed by the learned trial court in T.M. No. 143/2011.
2. By the said order, the learned trial court allowed the application under Section 124 of the Trade Marks Act, 1999 read with Section 151 CPC for stay of the suit filed by the respondent/defendant and stayed the suit pertaining to the alleged infringement of the Trade Mark till rectification proceedings before the Intellectual Property Appellate Board (hereinafter referred to as ‘IPAB’) are disposed of but allowed the proceedings regarding passing off to continue.
3. The petitioner filed a suit for permanent injunction for infringement of the Trademark, passing off, rendition of accounts and damages etc. regarding Trademark MOJO. The petitioner states that his Trademark MOJO is a registered Trade Mark.
4. After filing of the suit by the petitioner, the defendant/respondent moved an application under Section 124 of the Trade Marks Act for stay of the suit. The respondent contended that it had on 27.02.2012 filed before the IPAB an application for rectification of the register under Sections 57(2) and 124 of the Trade Marks Act regarding the Trade Marks of the petitioner. The application by the respondent for rectification before IPAB was filed after the petitioner had filed the suit.
5. The trial court by the impugned order noted that where a party concerned has moved an application under Section 124(2) of the Trade Marks Act before the IPAB for rectification of the Trade mark and the rectification proceedings are pending adjudication, it is mandatory for the trial court to grant stay in the matter. The trial court accordingly stayed the proceedings pertaining to that part of the suit dealing with the infringement of the Trademark till the disposal of the rectification proceedings. However, the suit for passing off was directed to continue.
6. The learned counsel for the petitioner submits that in view of the judgment of the Full Bench of this court in Data Infosys Ltd. & Ors. v. Infosys Technologies Ltd., 2016 (65) PTC 2009 (Del)[FB], the present suit could not be stayed. It is urged that the stay operates only in case rectification application has been filed by the defendant prior to the filing of the suit. The stay would follow in a case where such an application is not filed before filing of the suit and where the trial court is satisfied that the plea regarding the invalidity of the registration of the Trademark is prima facie tenable and the trial court adjourns the case to permit the other side to file a rectification petition. In that eventuality, the trial court may adjourn the matter. He further submits that even otherwise the trial court can continue to hear the injunction application.
7. The learned counsel appearing for the respondents has, however, contended that she has no objection in case the stay application is heard but she submits that as per the Full Bench judgment, the suit has to be stayed till the order in the rectification petition by the IPAB is passed.
8. We may first look at Sections 124(1), (2) & (3) of the Trade Marks Act, which 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 defence under clause (e) of subsection (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 pendin