On April 29, 2014, in a Regular
First Appeal (RFA) preferred against the rejection of a plaint by the Court of
first instance under Order 7, Rule 11 of the CPC, a Division
Bench of the Delhi High Court held that an action for infringement by one
registered proprietor of a trademark against another registered proprietor is
maintainable under the Trademark Act, 1999, subject to the conditions under
Section 124 of the Act being satisfied.
In the facts of the case, both the Plaintiff and the Defendant had registrations on the mark "HERITAGE" in Class 30. The appeal was preferred by the Plaintiff against
the order of the Learned Single Judge who held that Section 28(3) of the Act
prohibited a registered proprietor of a trademark from suing another registered
proprietor. In other words, according to the Learned Single Judge, the only
cause of action that a registered owner may have against another registered
owner is that of passing off, but not infringement.
This proposition was rejected by
the Division Bench in light of Section 124(1)(b) of the Act which clearly
refers to a situation where a suit for infringement is filed by a registered TM
owner against another. To this end, the Division Bench cited the decision of
the High Court in Clinique Laboratories LLC and
Anr. Vs. Gufic Ltd. and Anr. (April
9, 2009) in which after a detailed discussion on Sections 28(3), 30(2)(e) and
124(1)(b) of the Act, it was held that a suit for infringement by a registered
TM owner is indeed maintainable against another registered TM owner. In fact,
it was further held that Section 124(5) permits the grant of an interim
injunction as well in such a suit for infringement.
Extracted below are the relevant observations from
the Clinique decision which was
subsequently applied in Mrs.Rajnish Aggarwal & Ors.
v. M/s Anantam and most recently in Abbott Healthcare v. Raj
Kumar Prasad on April 25, 2014:
“8. In my view, Section 29 of the
Act providing for infringement of the registered trademark does not contemplate
infringement by another registered proprietor. Sections 29(1), (2) & (4)
expressly provide that "registered trademark is infringed by a person who,
not being a registered proprietor ..........." Though, Section 29(5) which
has been newly introduced in the 1999 Act does not use the same language but in
my view the same would be irrelevant for the present purposes. Section 30 (2)
(e) further fortifies the said position by expressly providing that the
registered trademark is not infringed where the use being as one of two or more
trademarks registered under the Act which are identical or nearly resemble each
other and in exercise of the right to use of that trademark given by
registration thereof. However, Sections 28(3), 29 & 30(2) (e) cannot be
read in isolation. If the intent was that there could be no action for
infringement against the registered proprietor, the legislature while giving
the right for rectification before the Registrar would not have in Section 31
made the registration as only prima-facie evidence of validity thereof. If that
had been the intention all that would have been said is that as long as the
registration exists it is valid, without any question of prima-facie or not.
Then the courts would have had to wait for the outcome of the rectification
proceedings.
9. Registration has been made
only prima-facie evidence of the registration otherwise being in accordance
with the Act under Section 31(1) as contended by senior counsel for plaintiff
but I find that even Section 28 (1) while being subject to other provisions of
Act, further provides that "registration of the trademark, if valid, give
to the registered proprietor" exclusive right to use the trademark. Thus the validity of registration can be gone into, wherever
permissible under the Act. Section 124(1) (b) also indicates that it was within
the contemplation of the legislature that there could be a suit for
infringement of trademark where the defendant takes a plea under Section 30 (2)
(e) i.e. that use by him is not infringement because of his mark being also
registered. The legislature while further providing for stay of suit in such
cases, in sub Section (5) expressly provided that such stay would not preclude
the court from making any interlocutory order. Section 31 r/w the scheme of 124
leads to an un-escapable conclusion that (A) there can be a suit for
infringement against the registered proprietor (B) that upon the defendant
taking the plea of his registration and of there being thus no infringement,
such suit has to be stayed awaiting the rectification proceedings and (C) the
court is empowered in such case to pass any interlocutory order. The court
while passing interlocutory order will necessarily have to prima facie
adjudicate the validity of the two competing registrations. Upon inquiry, it
was informed that the Registrar while trying the rectification application has
no power to grant interim relief. The legislature under Section 124 (5) has
thus empowered the court under Section 124 (5) to grant injunction against use
of a registered trademark also if the court is satisfied of the invalidity
thereof. Though in view of Section 31, the test would be much stricter;
10. In my opinion, unless the
provisions are so read, effect cannot be given thereto.
11. Once having reached a
conclusion that registration is only prima facie evidence of validity, it is
axiomatic that if the court is satisfied otherwise on the basis of material
on record and in the facts of the case, the court is empowered to injunct use
of registered trademark also. I do not find any reason to limit/restrict the
applicability of sub Section (5) as suggested by the senior counsel for the
defendant, in the absence of the legislature providing so. If the legislature
had felt that there could be no infringement by a registered trademark, there
was no need to provide for such a suit as in Section 124 (1) (b) and (i). In
fact, sub-clause (i) of 124 (1) shows that the suit can be instituted even
where the rectification proceedings are pending i.e. where the plaintiff is
even at the time of institution of the suit aware of the defendant having a
registered trademark.
12. I also find merit in the
contention of the senior counsel for the plaintiff with reference to Section 31
(2) of the Act. Section 31 (2) suggests that the court notwithstanding
registration being prima- facie evidence of validity as provided in Section
31(1) can hold the registered trademark to be invalid. The court can hold the
registration to be invalid, on any ground or for non compliance of any of the
conditions for registration provided under the Act. It further provides that if
the invalidity of registration is averred for the reason of non compliance of
Section 9 (1), i.e. of evidence of distinctiveness having not been submitted
before the Registrar, then the party pleading validity of registration shall be
entitled to give evidence in legal proceedings where validity is challenged, of
the mark having acquired distinctiveness on date of registration. Section 32
permits evidence of acquisition of distinctive character within the meaning of
Section 9(1) post registration, also being led in such proceedings. It follows
that where validity of registration is challenged on grounds other than
provided in Section 9(1) of the Act, the test is whether the criteria laid down
in such other provisions of the Act, for registration has been satisfied or
not. Since, Section 124 otherwise provides for stay of proceedings in such suit
and only permits passing an interlocutory order, such finding of invalidity
naturally has to be on the touchstone of principles for interlocutory order
only and not as at the time of final decision of the suit, in as much as the
finding in the rectification proceedings has been otherwise made binding in the
suit and on all aspects of validity i.e. under Section 9 as well as under
Section 11.
13. Neither counsel has cited any
direct judgment on this aspect. Nor have I been able to find any.
14. I thus conclude that a suit
for infringement of registered trademark is maintainable against another
registered proprietor of identical or similar trademark and in such suit, while
staying the further proceedings pending decision of the registrar on
rectification, an interim order including of injunction restraining the use of
the registered trademark by the defendant can be made by the court, if the
court is prima facie convinced of invalidity of registration of the defendant’s mark.”
Therefore, from the above, it is
clear that so long as the validity of the defendant’s trademark registration
has been challenged either prior to the institution of the suit, or such a
challenge has been raised in the plaint by the plaintiff who is also a
registered TM owner, a suit for infringement by a registered TM owner is maintainable
against another registered TM owner.
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