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2024 Supreme(Raj) 1332

IN THE HIGH COURT OF RAJASTHAN
VINIT KUMAR MATHUR, J.
M/s. Lotus Organic Care and Ors. - Petitioners
Versus
M/s. Aadhar Products Pvt. Ltd. - Respondent
S.B. Civil Writ Petition No. 18461 of 2023.
Decided on : 16-05-2024

Advocates:
Advocate Appeared:
For the Appellant : Mr. Divyanshu Choudhary, Mr. Vineet R.Dave.
For the Respondent:Dr. Ashok Soni, Sr. Advocate assisted by Ms. Sonali Vyas, Mr. Aman Soni, Mr. Yash Dadhich & Mr. Romil Bagrecha.

The trial court must only record prima facie satisfaction regarding the invalidity of a trademark under Section 124 of the Trademarks Act without detailed evaluation of evidence.

Headnote:(A) Trademarks Act, 1999 - Section 124 - Writ petition against order rejecting application for stay of proceedings in trademark infringement suit - Trial court failed to prima facie satisfy itself regarding tenability of invalidity of trademark - Court emphasized that only prima facie satisfaction is required, not detailed evaluation of evidence. (Paras 8, 10, 12, 14)

(B) Application under Section 124 - The trial court must record prima facie satisfaction regarding the invalidity of the trademark without delving into the merits of the case. (Paras 11, 13)

Facts of the case:
The petitioner filed a writ petition against the trial court's order rejecting its application under Section 124 of the Trademarks Act, claiming the trademarks of the respondent were invalid. The trial court had framed issues in a suit for infringement and passing off.

Findings of Court:
The court found that the trial court had erred in not recognizing the prima facie tenability of the petitioner's claims regarding the invalidity of the trademarks.

Issues: The main issue was whether the trial court properly assessed the prima facie tenability of the invalidity claims under Section 124.

Ratio Decidendi: The court ruled that the trial court must only record prima facie satisfaction regarding the invalidity of the trademark without detailed evidence evaluation.

Result: Writ petition allowed; trial court's order quashed.

Judgement Key Points

Key Points: - The court states that the trial court must only record prima facie satisfaction regarding the invalidity of the trademark under Section 124, and not engage in detailed evaluation of evidence. (!) (!) - Section 124(1)(ii) requires that if a plea on invalidity is prima facie tenable and no such proceedings are pending, the court should raise an issue and adjourn to allow rectification proceedings. (!) (!) - The writ petition allowed; the trial court’s order rejecting Section 124 application was quashed and stayed proceedings related to infringement while permitting rectification proceedings to proceed. (!) - The pleadings in the written statement can suffice to establish prima facie tenability for Section 124; detailed appraisal is not required at this stage. (!) (!) - The suit for passing off may continue on its own framed issues, while the rectification process is undertaken separately. (!) - The court clarifies that the trial court is not required to evaluate the merits of the rectification application, only to satisfy prima facie about invalidity. (!) (!)

What is the proper scope of judicial inquiry under Section 124(1)(ii) of the Trademarks Act when a stay of proceedings is sought in a trademark infringement suit?

What are the proper criteria for a trial court to record prima facie satisfaction regarding the invalidity of a trademark registration under Section 124, without delving into detailed evaluation of evidence?

What remedies or procedural steps are available when a trial court erroneously refuses to grant stay under Section 124 and how does a High Court review Address such error?


ORDER :

Mr. Vinit Kumar Mathur, J. - Heard learned counsel for the parties.

2. The present writ petition has been filed against the order dated 19.10.2023 passed by the learned Additional District and Sessions Judge, Mawli, District Udaipur in Civil Suit No.62/2022 (17/2018), whereby the application preferred by the petitioner under Section 124 of the Trademarks Act, 1999 (hereinafter referred to as the 'Act of 1999') has been rejected.

3. Briefly noted the facts giving rise to the present writ petition are that the respondent-plaintiff filed a suit for infringement and passing off of its registered label trademarks (1961814 & 2551769) before the learned trial court. In the suit filed by the respondent-plaintiff, the summons were issued. The petitioner-defendant filed written statement to the suit preferred by the respondent-plaintiff. The trial court framed the issues on 09.10.2022. Thereafter, on the application moved by the respondent-plaintiff as well as by the petitioner-defendant, an additional issue was framed by the trial court on 23.02.2023. After framing of the issues by the learned trial court, the petitioner preferred an application under Section 124 of the Trademarks Act, 1999 for staying the suit proceedings on the ground that the petitioner proposed to file a rectification application against the Trademarks Nos.1961814 & 2551769 of the respondent-plaintiff. On the application, the learned trial court heard the counsel for the parties and rejected the same vide order dated 19.10.2023. Hence, the present writ petition has been filed.

4. Learned counsel for the petitioner submits that the learned trial court has committed an error in passing the order dated 19.10.2023 as the specific provisions of Section 124 (1) (ii) have not been taken note of while appreciating the facts in the present case. Learned counsel submits that the trial court was under an obligation to prima facie get itself satisfied for tenability of the submissions made in the written statement as well as in the application preferred under Section 124 with respect to the rectification application and proceedings to be undertaken by the petitioner before the appropriate forum. He submits that in paragraph 2 and 2-4 of the written statement, the basic foundation has been laid by the petitioner with respect to the plea of validity of the rectification application to be preferred before the appropriate forum. He, therefore, submits that the learned trial court has committed an error while not appreciating the contentions raised by the petitioner in the written statement with respect to the prima facie tenability of the plea of invalidity of the Trademark used by the plaintiff-respondent. He, therefore, prays that the writ petition may be allowed and the order dated 19.10.2023 may be quashed and set aside.

5. Per contra, the learned Sr. Counsel for the respondent vehemently opposed the submissions made by the counsel for the petitioner and submits that the learned trial court has dealt with the issue in detail and has rightly come to the conclusion that prima facie tenability of the submissions made before the trial court in the written statement is not made out to bring home the case of the petitioner under the ambit of Section 124 (1) (ii) and, therefore, the contentions raised by the petitioner in the written statement are not sufficient to satisfy the mandate of prima facie tenability of the contentions with respect to the invalidity of the trademark of the plaintiff-respondent to be canvassed in the rectification application to be preferred before the appropriate forum. The learned counsel submits that the learned trial court has taken note of the submissions and has rightly come to the conclusion that the same are not sufficient for prima facie satisfying the trial court regarding the tenability of the rectification application before the appropriate forum.

6. Learned Sr. Counsel further submits that Section 124 is applicable only in the cases where the

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