No Rights In A NON-used, Registered, Trademark?

In recent pronouncements, Delhi High Court has come down heavily against companies which, though registered proprietor of, never used the trade marks on their own choice.

Briefly stated, the law of the trade mark is that registered or not, any person can claim priority in a coined/invented trade mark and prevent others from using the same/deceptively similar mark lest people might confuse the source of the goods. The cardinal principle of IP law as, as taught by a former senior and a very seasoned lawyer: There can be only one mark and one source.

Non use of a trade mark, if it is on the Register, gives anyone a statutory right to file a cancellation petition before the Registrar of trade Mark under Section 47 of the trade Marks Act, 1999 to have the mark removed. The period to initiate the petition must be five years and one month prior to initiate the petition.

Now the Courts way up to Supreme Court realise that the use of a mark can be in various ways and there is no limitation for a person to use a mark. However, the Courts should see the evidence of use, even in any form.

Two prominent cases are Virumal Praveen Kumar vs. Needle Industries (India) and Fedders Lloyd Corporation Ltd. & Anr. Vs. Fedders Corporation.

In Needle Industries ruling, the High Court held the following in paragraph 24:

In view of the aforesaid factual position what has to be considered is whether the factum of the registration of the trademark in the name of appellant is sufficient to grant relief in favor of the respondents or whether something more is required. This has to be considered in view of the submission of learned counsel for the appellant that the trademark cannot exist in vacuum and in view of their being a non-user of trademark since 1981, the respondents are not entitled to any protection.

Quoting from the Cluett Peabody & Co. Inc. vs Arrow Apparals, passed by His Honour S. Kapadia in Bombay High Court, their Honours held further in paragraph 26:

Though delay be itself would not be a defense but if there was a non-user for a long period of time the mark would lose its distinctiveness or the mark is then permitted to die for non-user. The Bombay High Court observed “It is well settled that lapse of time may bring about a change in the state of things in such a manner that to grant injunction in favor of the plaintiff’s would be harsh and it may cause irreparable damage or harm to the rights of the defendants.” Thus the Bombay High Court was of the view that non-use of trademark does have a bearing in action for infringement specially at the interlocutory stage and equities would have to be balanced in such a situation. The Bombay High Court had further laid down certain principles in this behalf which have been reproduced in the impugned judgment. In point (f) of the order dated 28th March, 2000 it is stated that the object of the Act is to protect the right and not be a source of monopoly. In point (j) it has been observed that a mark can lose its distinctiveness by non-user. Thus the enforcement of the right of exclusive use of a trade mark will depend on continuous use of the mark by the proprietor. In point (k) it has been observed that the court shall not protect the right of proprietor unless there is sale of the articles to which trade mark is attached or related. (emphasis added)

In paragraph 23 of the Fedders Judgement, their Honours in the Division Bench held as follows:

Though the object of the Trade Marks Act is to protect the proprietary rights of a registered trademark holder, at the same time the object is not to facilitate any monopoly of such registered trade mark holder, despite non use of the trademark by him as contemplated by the Act. A trademark has no meaning, even if it is registered, unless it is used in relation to goods and/or services. A Trademark which drops out of the use, dies when there are no goods offered for sale as there is no use of the trademark. The mark can lose its distinctiveness by non use, where non use is on the part of registered trade mark holder but not on account of external factors beyond the control of such registered trade mark holder.

After the pronouncements of their Honours at the Division Bench, the aspect of non use in relation to defense set up in infringement action has notably been discussed in the following three rulings.

In Sun Pharma vs Cipla, His Honour R. S. Endlaw was dealing with a situation where the Defendant took up a defense that the Plaintiff has not used the registered mark for considerable length of time and was, therefore, disentitled for any relief, much less interim. His Honour examined at length and held the following in paragraph 19:

The law laid down thus appears to be that trade mark cannot be got registered and held by persons as ?investors? only and with no intention whatsoever to use the same in connection with any goods and services. Even though I feel that in present times of encouraging creativity and rights in ?abstract properties? viz in domain names, there should be no bar to professionals / intellectuals creating rights in marks and being permitted to profiteer from them and there is a need for re-think on this position, I find that even within the frame work of the existing law, in the present case, there is sufficient trade connection between the registered trade mark and the business/activities of the plaintiff and the plaintiff cannot be termed as a mere trafficker in the trade mark. The Apex Court itself noted the complexities and delays in modern times in starting a business and without the mark being taken off the Register, I find that action for infringement of registered trade mark cannot be defeated for disuse. We have in recent times also seen new scientific research finding well known brands in the field of pharmaceuticals to be harmful and the said research findings being reversed after a decade or more. It would be travesty to allow to be extinguished rights in such well known brands in the interregnum. Such rights have come to be known as ?intellectual properties? and there is no reason why facets of tangible property which can be bought and retained by persons who have no use therefor and merely as investors, ought not to apply to ?intellectual property? as well. In present day times of surrogacy, when the child may not belong to the mother from whose womb born and of sale for premium of automobile number plates, there is no reason why insistence on owners using or intending to use the mark or why restrictions in the name of trafficking, ought to continue vis-?-vis trade marks.

However, in this case, His Honour also found evidence that the Plaintiff was not sitting on the mark and was in fact, acting on it.

In the following two cases, neither the Court found any evidence of any use by the proprietor of the mark nor found any circumstances which prevented him from using it. The cases, as they turned out rightly, were dismissed on this ground alone.

In Smithkline Beecham Plc. & Anr vs Sunil Sarmalkar, His Honour Valmiki J. Mehta dismissed the suit of the Plaintiff, where the Defendants were no longer appearing on the ground of non use alone. In paragraph 7, His Honour held:

So far as the fact that the trade mark PANAMAX is registered in favour of the plaintiffs is concerned, the same cannot be disputed, however mere registration of a trade mark cannot confer a right unless goods have been sold under the said trade mark. The entire issue of distinctiveness qua the trade mark is necessarily with reference to sales made under a trade mark. If there are no sales there cannot be distinctiveness……

Quoting paragraphs from Fedders and Needle Industries, His Honour also observed that the Plaintiff did not even file a single document with respect of the tablet. The Judge held in paragraph no. 11:

So far as the alternative case of passing off with respect to the trade mark PANAMAX is concerned, even that right with respect to passing off has to be established by prior use of the trade mark PANAMAX by the plaintiffs as compared to the defendants. Actual use, as already stated above, is only by showing sales in the market. Sales admittedly have not been proved and established on record. A self-serving statement in an affidavit by way of evidence cannot be a substitute for actual discharge of onus of proof which is required to be done by leading credible evidence and which surely could have been done in this case inasmuch as if the plaintiff no.1 has huge sales it was not difficult at all for the plaintiff no. 1 to prove the sales of the paracetamol tablets under the trade mark PANAMAX.

In more recent pronouncement of Allergan Inc vs Intas Pharmaceuticals, His Honour Valmiki J. Mehta was dealing with the infringement case set up for trade marks BOTOX and BTX-A, both registered marks.

The Defendant stated that it has no conflict whatsoever with Botox and the Plaintiff conceded that the trade mark BTX-A, despite registered since the year 2002, was never used till 2012 in India. The Plaintiff stressed that even without the use of the mark, the registration should confer rights to prevent someone else using an identical/deceptively similar mark.

Relying upon Needle Industries and Fedders, His Honour held in paragraph 6:

A reference to the aforesaid para shows that though registration of the trademark is intended to confer ownership rights qua the trademark which is registered, however, the object is not to facilitate any monopoly of such registered trademark holder despite non-use of the trademark. The Division Bench has also observed that a trademark has no meaning, even if it is registered, unless, it is used in relation to goods and services. The Division Bench has categorically observed that the trademark which drops out of the use dies when there are no goods under the trademark available for sale.

In paragraph 8, His Honour held:

A reading of the aforesaid two judgments leaves no manner of doubt that the entire object of trademark law in conferring ownership rights by registration of trademark is that the trademark becomes distinctive qua the goods on account of the sale of goods with such trademark in the market.

If there is no sale, there does not arise the issue of distinctiveness, and mere registration without sales with the trademark does not entitle grant of relief of infringement or passing off. Not only there is no distinctiveness without user of the mark but the judgments observe that the object of registration is not to allow a person to squat on the trademark i.e. continuation of the claim to the trademark without using the same.

Though the counsel for the Plaintiff relied upon the judgements of the Supreme Court for protecting persons claiming transborder reputation and use in special circumstances, His Honour categorically held that since the pleadings made no mention about any transborder reputation or any circumstances preventing the company to launch the product, the reliance was misplaced.

Though the matters shall travel to the Appeals Court but what is clear from the ruling is this:

The law pertaining to non use is a given. If you are not using the mark for a considerable length of time, merely flashing a registration certificate shall not help, more so when you are seeking interim protection against a person.

Novartis’s Gleevec: Supreme Court Brings Patent Law To New Heights.

The least popular branch of intellectual property (IP) law–patents–got the most coverage in media world over, thanks to the Supreme Court’s verdict today in Novartis patent litigation for Gleevec application.

The judgement of Supreme Court can be accessed here: Gleevec (pdf) (HTML)

Brief facts:

Novartis applied for a patent in India for a anti cancer drug by the name of Gleevec. Even before the application was taken up for consideration, it attracted 5 pre-grant opposition proceedings from Cancer Patients Aid, Natco, Ranbaxy, Cipla & Hetro Drugs. On December 15, 2005, Assistant Controller of Patents heard all 5 proceedings together and rejected patent application by Novartis.

Controller held that the invention claimed by the appellant was anticipated by prior publication, i.e., the Zimmermann patent; that the invention claimed by the appellant was obvious to a person skilled in the art in view of the disclosure provided in the Zimmermann patent specifications; and further that the patentability of the alleged invention was disallowed by section 3(d) of the Act

Novartis challenged the Controller’s order before the Madras High Court in 5 writ petition and filed 2 separate writ petitions challenging constitutionality of Section 3(d) of the Patents Act. Once the High Court dismissed the writ petitions challenging 3(d), Novartis did not prefer any appeal to the Supreme Court. The other bunch of 5 petitions were transferred to Intellectual Property Appellate Board (IPAB) for adjudication.

IPAB reversed Controller’s decisions in all 5 petitions to the extent that Novartis invention satisfied the tests of novelty and non-obviousness. The IPAB, however, held that the patentability of the subject product was hit by section 3(d) of the Act. In an unprecedented manner, and with the Consent of the parties to save considerable time, Their Honours in the Supreme Court decided to hear the appales against the IPAB order though the Appellate Court was Madras High Court.

The 5 Objectors stated before the SC that the TRIPS agreement has sufficient flexibility for Member States to control Patent rights to guard against adverse impact on public health.

The SC also noted that amended portion of section 3(d) clearly sets up a second tier of qualifying standards for chemical substances / pharmaceutical products in order to leave the door open for true and genuine inventions but, at the same time, to check any attempt at repetitive patenting or extension of the patent term on spurious grounds.

Furthermore, the Bench also noted that the Zimmermann patent, Novartis applied for, and in several cases obtained, patent in the US not only for the beta and alpha crystalline forms of Imatinib Mesylate, but also for Imatinib in a number of different forms. Novartis, however, never asked for any patent for Imatinib Mesylate in non-crystalline form, for the simple reason that it had always maintained that Imatinib Mesylate is fully a part of the Zimmermann patent and does not call for any separate patent.

This factor also played a crucial role before the Bench since Novartis maintained in the Indian application that Gleevec was a new substance as applied took a contrary position to earlier patent applications and even while sending a cease and desist letter to Natco.

When Novartis cited foreign rulings in support of the arguments, the Bench held as following:

“In this country the law of patent, after the introduction of product patent for all kinds of substances in the patent regime, is in its infancy. We certainly do not wish the law of patent in this country to develop on lines where there may be a vast gap between the coverage and the disclosure under the patent; where the scope of the patent is determined not on the intrinsic worth of the invention but by the artful drafting of its claims by skillful lawyers, and where patents are traded as a commodity not for production and marketing of the patented products but to search for someone who may be sued for infringement of the patent.”

Finally, in paragraph 164 of the judgement, SC has stated that while going through the Zimmermann patent one cannot but feel that it relates to some very serious, important and valuable researches. The subject patent application (Gleevec), on the other hand, appears to be a loosely assembled, cut-and-paste job, drawing heavily upon the Zimmermann patent.

Charity programme by Novartis:

Though a lot has been written & spoken about the charity programme by Novartis, few points are very important to note. IPAB in its order notes that : -

“We are fully conscious of the Appellant’s (Novartis’s) benevolent GIPAP program for free distribution of GLEEVEC to certain cancer patients. But as per information furnished in its written counter–argument by R 3 that when the Appellant was holding the right as Exclusive Marketing Rights on GLEEVEC it used to charge Rs.1,20,000/- per month for a required dose of the drug from a cancer patient, not disputed by the Appellant, which in our view is too un-affordable to the poor cancer patients in India. Thus, we also observe that a grant of product patent on this application can create a havoc to the lives of poor people and their families affected with the cancer for which this drug is effective.

Furthermore, Supreme Court in the order also notes that when asking Novartis about the massive pricing of the drugs, it stated to run a huge charity programme for free distribution of drugs as well to the needy. However, when the Supreme Court questioned if Novartis can abolish the charity programme and rework on the pricing, Novartis could not reply satisfactorily.

Point being, the Court were aware of the Charity argument of Novartis but the price difference between a monthly dosage of 120 thousands and 8 thousands was astonishing.

TRIPS agreement versus local laws:

The most crucial aspect which weighed in before Their Honours at the Bench was the contribution which the manufacturers of Indian generic industry had made world over to supply life saving drugs to poor countries. Two letters which the Bench quoted are relevant as well. One was dated 17 December, 2004, from Director, Dept of AIDS at WHO writing to Union Health Minister stating that WHO is aware that TRIPS compliance was important but also is most important that India continues to export cheaper medicines to not only Member States but also countries which are poor. Some countries which WHO mentioned where India is a massive supplier of cheap anti cancer life saving generic drugs were Ghana, Lesotho, Malawi, Namibia, Bangladesh, etc.

Another letter was from UNAIDS asking India to make sure that the Patent regime after complying with TRIPS does not restrict / undermine India’s position as a leader in supplying affordable life saving drugs to countries that do not have manufacturing capacity to manufacture such drugs.

It is, therefore, a fallacy to say that Indian Patent Act is not in consonance with the requirements under TRIPS or that Courts were not mindful of the R&D and charities done by Novartis. However, at the end of the day, courts will have to interpret provisions of Patent Act keeping India as a jurisdiction because Patent provisions, unlike trademarks and copyright, are not enforceable internationally.

In Gleevec ruling, SC has displayed as excellent and pragmatic approach in dealing with one of the most complicated branches of law. The judgement, apart from being excellently sound in law, is written in such an elaborate manner that any person with even basic knowledge about patent law can understand and appreciate it.

After a long time, an excellent IP ruling from  the Supreme Court.

Intellectual Property Rights by Ananth Padmanabhan @LexisNexisIndia

I jumped at the opportunity given by LexisNexis to try my hand at this new book, Intellectual Property Rights-Infringement and Remedies by Ananth Padmanabhan. After buying the revised Venkateswaran on Passing Off last year, I wasn’t a big fan of LexisNexis though it is one of my most preferred publishing house.

Well begun is half done. Not just a cliche. In the preface alone, the Author does a great job and appreciates the various schools of thought in commentary books we have. He also notes what is the main problem in usual ones.

The first chapter gives out the brief details of various forms of injunctions granted by Courts and various heads / branches of the intellectual property rights. Next chapter deals with infringement of trade marks and reliefs. Chapter three deals with copyright. Fourth chapter discusses patents. Author covered designs infringement in fifth chapter. The last chapter gives brief detail on common law rights focusing on the trade secret aspects.

The book, like others, has a compilation of various statutes and rules of different laws covering intellectual property rights.

The attention with which the Author has dealt with the topics in each of the branch of intellectual property law is magnificent, fantastic and surprisingly elaborate–without giving legal jargon. The Author has not given paragraphs after paragraphs of a judgement and that has helped in the book giving us his  perspective–which is a cardinal rule of a book–rather than a lecture flowing through a Court ruling.

Only after going through the book can one realise that the purpose of the author was not just to write 500 odd pages but to give us his understanding of plethora of judgement and commentaries summarised in these pages about various aspects of intellectual property right. The table of contents in each chapter is very helpful and will assist the reader to reach the precise proposition.

At various instances, the Author has given a detailed study where he has disagreed with a particular judgement. This is not something which we usually get to read in a typical commentary book. The Author has made sure that the disagreement with a particular judgement is explained properly rather than just branding a judgement as non application of mind.

Though the Appendix has 10 acts / rules, what is missing is Trade and Merchandise Marks Act 1958, Trade and Merchandise Marks Rules 1959, Designs Act, 1911 and the Designs Rules, 1933 which surely come handy.

The book is must for anyone studying / practicing / interested in intellectual property laws. I am really glad that I have this one from LexisNexis in my library next to the Nimmer, Copinger and Venkateswaran among others.

Court Fee In Delhi: Increased or DECREASED For IP Matters?

A little background:

Government of NCT of Delhi issued a notification on July 23, 2012 bringing into force the Court Fee (Delhi Amendment) Act, 2012. The notification increased the Court Fee applicable in Delhi since August 01, 2012.

In Schedule I dealing with Ad Valorem Fees, few significant changes in the civil suits–for written statements too–and  cheque bouncing cases by the notification are the following: -

1. Upto fifty thousand rupees–two percent on such amount or a thousand rupees as fixed fee, whichever is more;
2. From fifty thousand rupees to twenty lakh–three percent on such amount or value; and
3. Above twenty lakhs–four percent on such amount.

As expected, the fixed fee on the written statements and the fees for the cheque bouncing cases of higher amount were the biggest sufferers. Imagine a situation where a person has bounced cheques worth 4 million. His court fee alone before the Magistrate shall be one hundred and sixty thousands in the notification.

It is true that some fees needs to be increased in some segments but no increase should have happened, as presently, without keeping in mind the paying capacity of a litigant.

Since the notified Schedules increased Court Fee substantially across the board, Delhi High Court Bar Association (DHCBA) filed a writ petition in the High Court of Delhi and obtained a stay on the notification on August 9, 2012. During the course of this writ petition, it came to be known that the Govt approached the Supreme Court by filing a Special Leave Petition against the stay order. Their Honours sitting in the Supreme Court, on September 26, 2012, vacated the stay granted by the High Court. Meaning thereby, the notification would prevail.

However, later on DHCBA appeared before the Supreme Court and apprised the Bench their view. On October 16, SC modified the earlier order dated September 26 only to the extent that the written statements will not have the fixed fee and the cheque bouncing cases would go on with the earlier fees.

The Bench disposed off the SLP on October 30 requesting the High Court to decide the writ petition at the earliest.

With this background, let us see one branch of the civil suits pending in the High Court–intellectual property (IP) matters pertaining to actions for infringement of patent, design, copyright and trademark. In the Schedule II to the notification detailing the fixed fee, at Article 30, following are the charges specifically for the IP suits: -

1.  When filed before a Civil Judge–five hundred rupees;
2. When filed before a District Judge–one thousand rupees; and
3. When filed before the High Court–five thousand rupees.

Though the first entry is GRAVELY flawed since the IP matters can never be filed before a Civil Judge. The District Court is the first instance Court for IP matters.

Coupled with the enhanced fees for the applications, vakalatnama (form of authorisation for an advocate to appear) and other sundry charges–not to forget 4 percent on 2 million (eighty thousand) and five thousand rupees as fixed fee, counsels were affixing fees close to ninety thousands for IP actions. It is not difficult to imagine that fresh filing would have surely taken a beating.

Since the notification came into force and effect from August 01, 2012, the counsels were also required to make up deficient court fee in the suits filed after this date.  Article 30 states that suit and or petitions will require fixed fees of five thousand rupees. The counter claims were always filed with the fees proportionate to the amount claimed. Same is happening as of now too except for the fixed fees.

Last week, on December 7, 2012, to the Author’s knowledge–subject to correction–His Honour Mr. V. K. Jain, in a civil suit admitted a fresh civil action with only ten thousand rupees as court fees. Now, a very seasoned and distinguished intellectual property attorney filed this suit. I’m sure that the ever so generous counsel will share some details to enlighten me. Though I understand that some counsels are now filing suits with only Schedule II fees.

The order is available here.

Following is an extract of the order: -

As per Article 30 of Schedule II to the Court Fee Act, as applicable to Delhi, in any suit or petition under the Intellectual Property Rights, the court fee required to be paid is Rs.5,000/- when the suit or petition is filed before the High Court. Since this is a suit seeking to enforce Intellectual Property Rights of the plaintiff Company, it is clearly governed by the aforesaid Article and accordingly requisite court fee stands already paid.

What I, as a counsel practicing intellectual property law myself, do not understand is how come the ad valorem fee (in Schedule I) gets a waiver. The said Article nowhere says that the counter claims, of whatever amount, shall not require ad valorem fees. Why sudden exemption to plaints then? My limited understanding of the notification and the Schedules nowhere tells me that the Schedule I is, henceforth, inapplicable to IP matters. If it is, then the Govt should rectify it to remove the anomaly since we were, earlier, filing even IP matters with the increased Court fees.

The Schedule II is in addition to or rather an exemption from Schedule I requires clarity.

My senior colleagues in the Bar will agree with me that, invariably, cash rich companies file cases to protect their intellectual property. If the idea of the Government was to give these companies some exemption so to say then same logic should apply to every citizen who is approaching the High Court after, presently, arranging mammoth Court Fees and resources.

I am again stressing everyone to read the increased jurisdiction note and enlighten me with their thoughts for me to gain knowledge on this critically important segment in my area of practice.

I am sure in times to come, I will be able to get more clarity since, as of now, I have very little.

Suggestions welcome.

Delhi High Court allows appeal by Liv.52. Restrains LIV-T.

A long drawn out legal battle, which started in 1996, has reached some finality on November 9, 2012 when Their Honours Pradeep Nandrajog and Manmohan Singh sitting in the Division Bench of Delhi High Court reversed the judgement by His Honour Dr. S. Muralidhar dismissing civil action by ‘Liv.52′ against ‘LIV-T’.

The judgement by His Honour Dr. Muralidhar is available here. The decision by the Appeals Court is available here.

Brief facts: Plaintiff, Himalaya Drug Co. (HDC), is registered proprietor since 1957–and user since 1955–of trademark ‘Liv.52′ for medicinal preparationn for treatment of disorder of liver. HDC initiated action against LIV-T trademark of SBL Limited (SBL), the Defendant, for using the trademark for the identical medicinal preparation.

Brief legal hisotry of this battle is that HDC sent a legal notice to SBL in March 1996 to cease and desist the usage of the LIV-T trade mark. The notice wasn’t a success and HDC instituted a civil action against SBL in Delhi High Court in the same year claiming damages to the tune of over Rs. 500,000.

The Court granted ex-parte interim relief to HDC on 23rd May, 96 and restrained LIV-T. The Court later, on 12th July, 96, confirmed the interim injunction and restrained SBL. SBL challenged this injunction order in the Appeals Court claiming LIV to be derived from descriptive and generic term liver and used it in reference to it as well.

Their Honours sitting in the Division Bench vacated the injunction on 15 July, 1997 agreeing with SBL’s contentions that the mark Liv.52 and LIV-T are not deceptively similar. The Court further held that the acronym, LIV, has become publici juris and generic by multiple people using LIV to sell their medicinal preparations.

HDC challenged this order in the Supreme Court which remanded the matter again to the Single Judge with a request to decide the matter expeditiously, on 27 February 1998.

The Single Judge framed issues in the matter on 30th November 98 and the trial commenced.

In 2003, due to increase in the pecuniary jurisdiction of Courts, all the civil suits pending in High Court which were of less than 2 million in valuation were transferred to the District Courts. So was also the fate of HDC’s civil suit. After an amendment application which enhanced the valuation of the suit, the matter was again transferred to the High Court in the year 2005.

Both parties led their evidence and after the final arguments, His Honour Dr. Muralidhar decided all the issues. Issue No. 10, which is reproduced herein, was the crux of the lawsuit: -

Whether the use of the trademark “LIV-T” by the Defendant amounts to infringement of trade mark of the Plaintiff?

His Honour dismissed this issue, as also HDC’s suit, primarily, on following grounds:

1) Liv followed by a dot and numerals cannot be similar to LIV written in capital followed by a hyphen and a capital T;

2) The competing marks ‘Liv.52′ and ‘LIV-T’ are not phonetically similar;

3) There was no likelihood of confusion at the end of a pharmacist in comparing the two marks; and

4) HDC had not been able to establish any evidence on actual confusion by a consumer.

HDC’s counsel, Mr. Hemant Singh, one of the best intellectual property litigation lawyer, stressed on the aspect that SBL, all this while, never raised any objection to HDC’s trademarks and never sought rectification as well. HDC also pressed that the marks Liv.52 and LIV-T were overall structurally and phonetically similar. HDC also argued that being medicinal preparations, utmost care should be there in allowing similar sounding brands to compete.

SBL’s primary argument was that the suffix LIV has become common to the trade and there are various manufacturers using LIV to denote their medicines. This argument weighed in with His Honour Dr. Muralidhar in His observation that LIV has indeed become generic and publici juris.

HDC, obviously, carried the judgement in appeal.

The Division Bench (DB), before deciphering the impugned order, observed that since HDC’s trademark ‘Liv.52′ was registered since 1957, under Section 32 of the old Act, the registration was conclusive proof of its validity. Per the Division Bench, this discussion assumed significance since the Single Judge held that ‘LIV’ has become publici juris which is a wrong finding in light of Section 32.

The DB also placed strong reliance on Issue No. 12 which is reproduced here: -

Whether the word mark “LIV” is Publici-Juris and if so, to what effect?

The Appeals Court further held that the competing mark have to be judged in the light of overall similarity and not by placing them next to each other. The DB also observed that it was SBL which had the onus to prove the issue that whether ‘LIV’ has become publici juris or generic and it produced no such evidence.

Moreover, the DB dealt in detail the case laws protecting the marks even though the marks contained component derived from organ / salt. Furthermore, the DB also held that as ‘Liv.52′ was HDC’s registered mark since 1957 and the fact that SBL never applied for the cancellation of these trademarks, in light of Section 32, ‘Liv.52′ enjoys a formidable and enforceable reputation.

Unlike Section 37 of The Lanham Act of the US which is reproduced here: -

§ 37 (15 U.S.C. § 1119). Power of court over registration; certification of decrees and
orders
In any action involving a registered mark the court may determine the right to registration, order the cancellation of registrations, in whole or in part, restore cancelled registrations, and otherwise rectify the register with respect to the registrations of any party to the action. Decrees and orders shall be certified by the court to the Director, who shall make appropriate entry upon the records of the Patent and Trademark Office, and shall be controlled thereby.

there is no such corresponding provision in Trade Marks Act, 1999 to enlarge the scope of an infringement proceeding, as undertaken by His Honour Muralidhar in the impugned judgement.

The DB, therefore, reversed the judgement by His Honour Muralidhar and granted the injunction to HDC’s Liv.52 against SBL’s LIV-T and allowed SBL to exhaust the pending stock within a period of six months.

That this order shall reach the Supreme Court is a but natural consequence. Let us await what finally becomes of this long legal battle.

But the IP jurisprudence should indeed carve out a stricter measure qua the trademarks for medicinal preparations. Here is an example how a wrong medication can be fatal. A 65 years old male in Mumbai died due to consuming wrong medication which the chemist gave to him. But then, is confusion at the end of a pharmacist alone to be blamed? What about few doctors writing the prescription in largely illegible handwriting? I hope the Indian Medical Council has some study for this and is taking some corrective measures.

Let us await if there is any observation by the Supreme Court in the instant matter.

Hawkins vs Murugan. The Unsuitable Trademark? Big Corporation vs Ancillary Industry.

A Division Bench of Delhi High Court yesterday set aside a judgement dated January 4, 2008 of a Single Judge which allowed a manufacturer of gaskets for pressure cookers to write the following quote on packaging of one such type of gasket:

Suitable for Hawkins.

The judgement of the Division Bench, comprising Their Honours Nandrajog and Mridul, can be accessed here and that of His Honour Sanjay Kishan Kaul can be accessed here. The Bone of contention of the Hawkins’ civil suit for trademark infringement was the said quote. The counsels of both sides addressed extensive arguments in this unique matter of primary infringement of trademark for ancillary goods.

The Plaintiff, hereinafter Hawkins, came to know in January 2000 that the defendant was using the trademark HAWKINS/Hawkins in respect of parts of pressure cooker and thus served a Cease and Desist Notice (C&D) on the defendant raising grievances. Hawkins further claimed  that it  did not see the product subsequently in the market till October, 2004 when it again noticed the defendant’s gaskets being sold in the market and thus again issued a C&D which was disputed by the defendant vide its letter.

The chief defense in the action was that the Defendant  adopted its own  trademark MAYUR and only state on their product/gasket that it is suitable for Hawkins Pressure Cookers. Thus there was no chance of deception or infringement of Hawkins’ trademark  since the trademark of the defendant MAYUR has been used prominently on the packing of their product/gasket.

Hawkins stressed on potential confusion and deception for the consumers who might just read its trademark without noticing if it was being, which it was indeed, not manufactured by Hawkins.

The Defendant countered it by alleging unfair and monopolistic practices by Hawkins.

His Honour Kaul framed various issues in the suit.

Hawkins conceded that it did not dispute that the defendant can use the trade name to indicate that the spare part is fit for use in a particular machinery but not without being accompanied with a disclaimer that the spare part is not manufactured by the original manufacturer.

The argument, according to His Honour Kaul, boiled down to sole decisive factor: Whether the Defendant is using the trademark Hawkins as a trademark to sell the gaskets.

While dealing with this issue, His Honour Kaul summarised the matter in the following analogy in para 55:

(1) The first party has to be owner of the registered trademark;

(2) The second party uses the mark in the course of trade which is identical with or deceptively similar to trademark in relation to goods and services in respect of which the trademark is registered;

(3) The use is in such a manner as to render the use of the trademark by the second party likely to be taken as being used as a trademark.

In para 61 of the judgement, His Honour Kaul dealt with the style and manner of packaging of the Defendant and in para 62, His Honour held that no consumer can be deceived by such a packaging even if there is a sticker with the impugned quote since the Defendants have their own trademark and packaging and are not trying to take advantage of Hawkins’ goodwill. The matter ended right then and there once His Honour Kaul held that the Defendant was not using Hawkins as a trademark. There was, therefore, no confusion, deception and more importantly, infringement of Hawkins trademark.

There was another important factor too.

The defendant in the evidence stated that the gaskets manufactured by them were specifically made for them to be fitted in the Hawkins pressure cookers. This fact weighed with His Honour and he held in para 64 of the judgement that Hawkins was indulging in monopolistic practices through the instant litigation and denied relief.

Naturally, Hawkins appealed the matter. Their Honours sitting in the Division Bench, (DB), totally agreed with the law laid down by the His Honour Kaul on the aspect of ancillary products using the trademark of other companies.

However, what the DB specifically noted was the premise of judgement below was erroneous that the gaskets were specifically manufactured for Hawkins pressure cookers. In para 19 of the ruling, the DB categorically noted that the gaskets of the Defendant were not specific to Hawkins and would fit on pressure cookers of such size of various other manufacturers as well. Per the DB it would mean:

that it is not reasonably necessary to indicate, for the benefit of the consumer, that the adaptable goods relate to only one particular brand of pressure cookers.

Another aspect which the DB considered was the packaging of the Defendant giving more prominence to the trademark Hawkins to catch the eye of a consumer. The DB allowed the Defendant/Respondent to exhaust the impugned packaging within three months and use a phrase to indicate on the packaging material of the gasket that the gasket is suitable for all pressure cookers, as is being done by other manufacturers of gaskets.

The impugned judgement was set aside and the Defendant, therefore, is restrained from using the quote “suitable for Hawkins” in the said circumstances.

What emerges from the two ruling in such a unique situation is that, to sell his goods / services, any person within the parameter of reasonableness can use another’s trademark as long as the following test is met out:

(a) The trademark is essential to be used to sell the specified product;

(b) No confusion/deception is intended with such use;

(c) No undue–read extra–emphasis is given to the trademark on the packaging / promotion; and

(d) The goods / services have been specifically designed to become a cognate goods of the trademark.

What is also interesting in the approach is that the law laid down is in support of, and not against, promotion of the ancillary industry. As is desirable that the ancillary units progress along with the big corporation, it is essential that the latter does not feel cheated or wronged by the product / campaign of the former.

Enforcement Actions In Intellectual Property Infringement

In intellectual property (IP) infringement actions, the civil / criminal actions have their own procedures to follow. Actions can be with or without an application for search and seizure. In cases where a Plaintiff prays for appointment of a Court appointed Commissioner (LC) to visit the promises of Defendant and prepare inventory of infringing goods, generally the search should be conducted at the earliest to recover maximum possible goods. Any delay in the action might cause the infringing goods to disappear / flooded in the market, out of the control and possession of the Defendant and making the search and seizure action futile.

Enforcement actions to protect IP infringement are most important aspect of protecting the brand and keeping the pirates in control.

Briefly, the steps to be undertaken are the following steps: -

1. Investigating targets for locating and evaluating pirates and their activity;

2. Advising clients upon the investigation report;

3. Obtaining search & seizure order from the Judge;

4. Assisting the LC and police to conduct the search & seizure; and

5. Assisting the LC and Police for timely filing of the report and inventory in Court.

After the report of LC / police comes on record, the next step is that the Judge evaluates the inventory of infringing / counterfeiting products. Defendant, thereafter, has to prove that the seized goods are not counterfeit / infringing. Failing to do so, Defendant is always well advised to settle with the Plaintiff / Complainant after paying token damages and suffering injunction.

A well executed search and seizure action can save Plaintiff a lot of time and energy as the inventory of infringing goods proves the factum of counterfeiting. The sole issue to decide, generally, is of the damages which the Defendant agrees to pay to the Plaintiff to settle the matter.

A poorly executed search and seizure can not only cause a lot of monetary loss to the Plaintiff but also cause irreparable embarrassment before the Judge in a given case.

The Author has, so far, conducted several such actions as LC or as attorney for the Plaintiff assisting the LC. At many places the operation was smooth. At most places the operation has been forgettable because the Defendant, or his employees, acted smart and tried to obstruct the proceedings.

Execution of such actions, also called, though wrongly, ‘raid’ by many, requires considerable preparation. Though only after landing at a site can one truly evaluate the situation, rule of thumb is to execute the commission, collect all evidence at the earliest and leave the premises.

All the best.

Trademark Rectification Petition Without Leave Of Court: Maintainable?

The focus in the present post is on Section 124 of the Trade Marks Act, 1999. The provision deals with the situation where, when a civil suit for infringement, not just passing off simpliciter, is pending, how and when can a rectification proceedings take place. The law is unambiguous but still takes many man-hours inside and outside courtroom due to purposeful interpretations and flawed logic by some.

The provision is reproduced herein:

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 sub-section (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 pending and the court is satisfied that the plea regarding the invalidity of the registration of the plaintiff’s or defendant’s trade mark is prima facie tenable, raise an issue regarding the same and adjourn the case for a period of three months from the date of the framing of the issue in order to enable the party concerned to apply to the Appellate Board for rectification of the register.

(2) If the party concerned proves to the court that he has made any such application as is referred to in clause (b) (ii) of sub-section (1) within the time specified therein or within such extended time as the court may for sufficient cause allow, the trial of the suit shall stand stayed until the final disposal of the rectification proceedings.

(3) If no such application as aforesaid has been made within the time so specified or within such extended time as the court may allow, the issue as to the validity of the registration of the trade mark concerned shall be deemed to have been abandoned and the court shall proceed with the suit in regard to the other issues in the case.

(4) The final order made in any rectification proceedings referred to in sub-section (1) or sub-section (2) shall be binding upon the parties and the court shall dispose of the suit conformably to such order in so far as it relates to the issue as to the validity of the registration of the trade mark.

(5) The stay of a suit for the infringement of a trade mark under this section shall not preclude the court from making any interlocutory order (including any order granting an injunction directing account to be kept, appointing a receiver or attaching any property), during the period of the stay of the suit.

The provision, broadly envisages following key question: Where, in a suit for infringement action, a party raises a plea of invalidity of opposite party’s trade mark, can the party file, if not already filed, a rectification petition without leave of the Court? Or where a rectification petition is already pending on the date when the question of invalidity is raised, can the suit be stayed to await the decision on the rectification petition?

Now to see briefly some rulings on this propositions.

As far back as in November 1972, His Honour Avadh Behari Rohatgi in Kedar Nath vs Monga Perfumery & Flour Mills was dealing with Section 111 of the erstwhile 1958 Act which is corresponding to Section 124 of the present Act. His Honour, in paragraph 19 of the judgement dealt with the provision as follows:

19. Mr. D. D. Sharma, the learned counsel for the defendant, submits that the suit is liable to be stayed under Section 111 and he emphasises the use of the word ‘shall’ in the section and submits that it is obligatory for the Court to stay the proceeding under Section 111. I do not agree with this contention because the scheme of the section shows that before the Court stays a -Proceeding in the infringement action, proceeding for rectification of the register under Section 111 must be pending on that date. The defendant cannot file an application subsequent to the institution of the suit under Section 111 and claim that the plaintiff’s suit for infringement must be stayed. If no proceeding for rectification of the register is pending on the date of the institution of the suit by the plaintiff then Section 111 is attracted and a Court may adjourn the case for a period of three months in order to enable the defendant to apply to the High Court for rectification of the register. In that case the Court must be satisfied that the contention as to validity of the defendant’s registration is bona fide and prima facie sustainable. In the present case I am not satisfied that the contention as to validity raised by the defendant is bona fide or prima facie sustainable. No material has been placed on the record to Prove a prima facie case that the plaintiff’s registration is invalid or that the defendant has been carrying on business since 1952 as alleged by him, The defendant obtained his sales tax registration number in 1965. He has not placed any material on the record to show what were his sales during the period from 1952 to 1965. No case at all has been made out to show that the defendant has any prima facie and sustainable case for the cancellation of the plaintiff’s registered trademark. Stay of action may be refused if particulars of concurrent user or prior user are not furnished. (emphasis added)

Meaning thereby, His Honour held that the prima facie tenability of the invalidity is sine qua non of any action for rectification of a trademark under the provision.

Similarly, in Pfizer Products Inc. vs Rajesh Chopra And Ors., Delhi High Court rejected the contention of the Defendant for staying the suit since he had  preferred a rectification petition against the trade marks GEODON and ZOLOFT of the Plaintiff. Per Her Honour Gita Mittal, the application for stay and the rectification were not maintainable since the Defendant had not obtained the prior permission from the Court.

In Pernod Ricard S.A.France  vs Rhizome Distilleries, Her Honour Khetrapal, following S. 124(5),  granted interim injunction to the Plaintiff despite pendency of the rectification proceedings before the IPAB. His Honour Justice Murlidhar in Arun Colour Chem & Ors vs Mithumal Essance Mart also adjourned the suit sine die to await the decision of the rectification proceedings even though the suit was at the stage of final arguments.

In BDA Private Limited vs Paul P. John, His Honour B. D. Ahmed adjourned the suit for three months to enable the Plaintiff to move for rectification after His Honour was satisfied about the prima facie tenability of Plaintiff’s questioning of validity of Defendant’s trade mark.

Very recently in Double Coin Holdings Ltd. vs Trans Tyres (India) His Honour V. K. Jain followed the provision and stayed the suit since rectification proceedings were already pending. Vide s. 124(5) His Honour Jain decided the interlocutory application and thereafter stayed the suit till the time the proceeding for rectification before the IPAB are culminated.

In Apex Laboratories Pvt. Ltd vs Apex Formulations Madras High Court was dealing with the old Act (1958) and in compliance of the Section 111 (b) (ii) (corresponding to the present 124(b)(ii)), His Honour framed the issue about the invalidity and adjourned the suit for three months to enable the Defendant to move for rectification of Plaintiff’s mark.

 In Putzmeister Aktingesellchaft vs Aquarius Engineers, Calcutta High Court adjourned the matter sine die since the proceedings for rectification were already pending.

Punjab and Haryana High Court in Parveen Kumar vs Kuldeep Chand Jain followed the provision as well.

That the provision is applicable only in an infringement proceedings is unambiguous. Bombay High Court in Shakti Traders vs Shakti Press quashed the order of staying the proceedings under the provision since the suit in question was for passing off and not infringement.

The rule of thumb for this provision is the judgement by His Honour Anil Kumar of Delhi High Court in Astrazeneca Uk Ltd. And Anr. vs Orchid Chemicals. The judgement leaves no ambiguity whatsoever about the application and the procedure for Section 124. In the instant case, the Plaintiff had moved an application for rectification for Defendant’s trademark. The Defendant took the objection that the rectification petition was not maintainable since the Plaintiff had not obtained prior permission of the Court before approaching IPAB for rectification. Following are few extracts from the ruling:

29. The said provision envisages two eventualities in case the defendant has raised a defense under Section 30 of the Act and the plaintiff has pleaded invalidity of the registration of the defendant’s trade mark, one where the application seeking rectification is already pending and the other where the application is to be filed seeking rectification. In the present case the application for rectification is filed after the institution of the suit which fact has not been denied.

30. Under Section 124(b) if the application for rectification is already pending the suit can be stayed pending final disposal of such proceedings. In case the application for rectification or any such proceeding is not pending, then a party seeking rectification can apply for rectification subject to prima facie satisfaction of the Court regarding invalidity of the registration of the mark of the opposite party. In the present case the plaintiffs, however, have sought rectification of the trade mark of the defendant by filing an application first to the Registrar and thereafter to the Appellate Board without seeking prima facie satisfaction of this Court.

31. On plain reading of this provision, it is apparent that the plaintiffs could not file the application for rectification without showing and obtaining prima facie satisfaction of the Court about their plea of the invalidity of the registration of the mark of the Defendant. Section 124 of the Trade Marks Act, 1999 is similar to the Section 111 of the Trade and Merchandise Marks Act,1958….

32. The Learned counsel for the plaintiffs has tried to distinguish these cases. According to him on the date of filing of the present suit, no application seeking invalidity of the registration of the defendant’s trade mark was pending as the trade mark of the defendant has been registered during the pendency of the suit and the certificate of registration was issued after filing of the suit and therefore, the application for rectification could not be filed prior to the institution of the suit. The plea of the plaintiffs therefore, is that their application for rectification filed before the Appellate Board is maintainable without prima facie satisfaction of the tenability of their plea by the Court. If the application for rectification of the defendant’s trade mark is maintainable without prima facie satisfaction of this Court, then this suit is also liable to be stayed as claimed by the plaintiffs under Section 124(b) of the Act, though under Section of 124(5) of the Act, the application for injunction and for vacation or modification of an ex parte order can be considered and decided by this Court. The distinction between Section 124(b)(i) and 124(b)(ii) is on the basis of pendency of the proceedings for rectification of the register and not on the basis of whether the party initiating the proceedings for rectification could initiate such proceedings before the institution of the suit or not. There can be other eventualities under which a party may not be able to initiate the proceedings for rectification before the institution of the suit, but that will not give them a right to circumvent the prima facie satisfaction of his plea for invalidity, by the Court. The distinguishing feature of the two sub clauses is only pendency of the proceedings and nothing more can be read into them. The plea of substantial compliance of the requirement of Section 124 by the plaintiffs is also not sustainable. Either there is compliance of the said provision or non compliance in the facts and circumstances. Compliance will be when after the institution of the suit, if an application for rectification is to be filed, prima facie invalidity of the opposing mark is to be demonstrated to the Court. The fact that the application could not be filed prior to the institution of the suit, will not entitle a party to circumvent the prima facie satisfaction of the Court. Consequently the proceedings for rectification of the defendant’s mark could not be initiated by the plaintiffs without the prima facie satisfaction of their plea by this Court nor this case is liable to be adjourned or stayed for three months in terms of Section 124(b)(i) of the Act to await the outcome of the rectification proceedings initiated by the plaintiffs before the Appellate Board. (emphasis added)

The ruling and the consequences are as clear as they can be. It is strange to find some judgements and even expensive commentary books not giving any importance to the said ruling by His Honour Anil Kumar.

It is author’s understanding that the compliance of  s.124 is sine qua non to argue a case for staying an infringement suit in light of the pending or proposed rectification action. However, as seen from various pronouncements, merely filing a rectification petition does not ipso facto guarantee that the action for infringement shall be stayed till the rectification proceedings have attained a finality.

However, due the view taken by Their Honours of Division Bench of Madras High Court in B. Mohamed Yousuff vs M/S.Prabha Singh Jaswant Singh, IPAB has recently made the provision more ambiguous than ever. After going through plethora of rulings on the provision, IPAB in Jeet Biri Manufacturing v Pravin Kumar Singhal, reported at 2011 (47) PTC 231 (IPAB) has relied on the said ruling of the Madras High Court. The relevant portion of Madras DB judgment are as follows:

(N) In our considered view, Section 124 (1)(b)(ii) of the Act is only an enabling provision. Sub clause (i) and sub clause (ii) of Clause (b) of sub section (1) of Section 124 operates at two different levels for two different situations. While sub clause (i) deals with a situation where any proceeding for rectification is already pending, sub clause (ii) deals with a situation where any proceeding for rectification is not pending. Both the sub clauses focus their field of operation only in relation to the stay of the civil suit. The conditions laid down in sub clause (ii) are intended to enable a party to obtain stay of the suit and not intended to provide for a discretion for the Court to permit or not to permit any application for rectification. Such a position is made clear by sub sections (2) to (5) of Section 124, which deals with the consequences of filing and not filing an application for rectification and of the ultimate outcome of such application for rectification. In other words, the requirements of raising an issue, adjourning the case and a prima facie satisfaction spelt out in Section 124 (1)(b)(ii) should be read as the requirements for the grant of a stay of the suit and not as a requirement or pre-condition for filing an application for rectification. The plain reading of Section 124(1)(b)(ii) shows that it does not mandate a party to obtain the leave of the Court or an order of the Court, for filing an application for rectification. The right to file an application for rectification is a statutory right conferred upon a party who is aggrieved by an entry made in the Register. The said statutory right cannot be curtailed except by the very provisions of the statute. The said right is circumscribed by certain requirements such as the contravention of the provisions of the Act or failure to observe a condition entered on the Register etc., as spelt out under sub sections (1) and (2) of Section 57 of the Act. In respect of the Forum in which such an application for rectification could be filed, there is a restriction under Section 125, in that such an application could be filed only before the Appellate Board if a suit for infringement was already pending. Apart from these restrictions, we do not see any other restriction with regard to the filing of an application for rectification. To interpret Section 124 (1)(b)(ii) to mean that an order should be obtained from the civil Court for filing an application for rectification, regarding prima facie satisfaction, would amount to imposing one more restriction upon the right of a person to seek rectification of the Register. We do not find any such restriction or requirement of the leave/permission of the court, under section 124 (1) (b) (ii). Therefore, with great respect to the learned Judges who were parties to the decisions of the Gujarat and Delhi High Courts, relied upon by the Delhi Party, we are of the considered view that the Tindivanam Party was right in filing an application for rectification, without obtaining the leave of this Court or without getting an issue framed and prima facie satisfaction recorded, in C.S.No.726 of 2004.

Following the said ruling, IPAB has held that since there are conflicting rulings by various High Courts, the IPAB shall follow Madras DB ruling. That is not the sole point, IPAB further held that Section 124 does not provide for the situation where the permission for filing the rectification is refused by the Court. According to the IPAB, s. 124 does not provide for an aggrieved person to move an application under section 57 for cancellation of a trade mark.

After giving academic perspective on superintendence of various High Courts over the IPAB, including Circuit Benches, IPAB concluded that the permission of Court is not required to move for cancellation petition in a pending suit for infringement because of the following reasoning: -

1. Ordinary reading of s. 124 does not specify that leave should be obtained;

2. Language of s. 124 is clear;

3. The word ‘enable’ in s. 124 does not grant a new right to a party which he anyway has in section 57;

4. Section 57 does not say that the powers under that provision are subject to s. 124;

5. S. 124 does not have a non-obstante clause to override;

6. Granting leave by Court includes refusing leave as well and Court only can decide that issue; and

7.  The verdict of IPAB should be uniform to apply for all Benches.

Now, IPAB has dealt with the matter at length, there is no doubt about that. However, what IPAB has failed to consider is that S. 124 has to be read along with S. 125 which is reproduced herein:

125. Application for rectification of register to be made to Appellate Board in certain cases.—

(1) Where in a suit for infringement of a registered trade mark the validity of the registration of the plaintiff’s trade mark is questioned by the defendant or where in any such suit the defendant raises a defence under clause (e) of sub-section (2) of section 30 and the plaintiff questions the validity of the registration of the defendant’s trade mark, the issue as to the validity of the registration of the trade mark concerned shall be determined only on an application for the rectification of the register and, notwithstanding anything contained in section 47 or section 57, such application shall be made to the Appellate Board and not to the Registrar.

(2) Subject to the provisions of sub-section (1), where an application for rectification of the register is made to the Registrar under section 47 or section 57, the Registrar may, if he thinks fit, refer the application at any stage of the proceedings to the Appellate Board.

The alleged conflict between s. 57 and s. 124 is clearly answered in s. 125 (2). It is imperative that the statutes are given their fullest meaning without tampering with the provision.

Moreover, what IPAB, and many others, also fail to consider is that when the court is examining the tenability of a plea under s. 124, the views expressed are solely on prima facie material and arguments. At no point is the Court superseding jurisdiction of the IPAB. Furthermore, if the Court is refusing leave finding no prima facie case in the questioning of the validity of the mark, it further implies following two eventualities: -

One, if a person is not able to prove even a prima facie tenability in questioning of a invalidity of a mark, how in the world will he be able to prove himself to be an “aggrieved person” under section 57?

Second, if the Court has refused leave to file for rectification, that party can still challenge the order in a higher forum. How is it different from the thousand appeals we file once the Court of first instance refuses the temporary injunctions, or any other relief, like refusing to allow amendment of pleadings, etc?

What is further shocking is that IPAB had not taken into account that the Supreme Court in Whirlpool Corporation v Registrar Of Trade Marks in 1998 had already decided this matter. Their Honours in Supreme Court were considering the provisions of the 1958 Act.  The relevant paragraphs are the following:

The extent of jurisdiction conferred by Section 56 (s. 57 in 1999 Act) on the Registrar to rectify the Register, is, however curtail by Section 107 which provides that an application for rectification shall, in certain situations, be made only to the High Court. These situations are mentioned in Sub-section (1) of Section 107, namely, where in a suit for infringement of the registered Trade Mark, the validity of the registration is questioned by the defendant or the defendant, in that suit, raises the defence contemplated by Section 30(1)(d) in which the acts which do not constitute an infringement, have been specified, and the plaintiff in reply to this defence questions the validity of the defendant’s Trade Mark. In these situations, the validity of the registration of the Trade Mark can be determined only by the High Court and not by the Registrar.

Section 107 thus impels the proceedings to be instituted only in the High Court. The jurisdiction of the Registrar in those cases which are covered by Section 107 is totally excluded. Significantly, Section 107(2) provides that if an application for rectification is made to the registrar under Section 46 or Section 47(4) or Section 56, the Registrar may, if he thinks fit, refer that application, at any stage of the proceeding, to the High Court.

Similarly, under Section 111 (S. 124 of 1999 Act) of the Act, in a pending suit relating to infringement of a Trade Mark, if it is brought to the notice of the Court that any rectification proceedings relating to plaintiff’s or defendant’s trade Mark are pending either before the Registrar or the High Court, the proceedings in the suit shall be stayed pending final decision of the High Court or the Registrar. Even if such proceedings are not pending either before the Registrar or the High Court, the trial court, if prima facie satisfied that the plea regarding invalidity of plaintiff’s or defendant’s Trade Mark is tenable, amy frame an issue and adjourn the case for three months to enable the party concerned to apply to the High Court for rectification of the Register. If within three months, the party concerned does not approach the High Court, the plea regarding invalidity of Trade Mark would be treated as abandoned but if such an application has been given hearing, the suit would be stayed awaiting final decision of the High Court. The finding of the High Court would bind the parties and the issue relating to the invalidity of Trade Mark would be decided in terms of those findings.

What the IPAB further ignored to consider is that the non compliance of s. 124 treats the invalidity issue of a trade mark as abandoned and waived. The point IPAB should have considered is that if a party is deemed to have waived such a critical issue as abandoned before the court trying the suit, how it would be possible for such a person to prove the ingredients to be called as an “aggrieved person” before IPAB which is subordinate to the Court? Reliance on Madras DB ruling has a basic flaw in ignoring that Madras DB did not consider Whirlpool while deciding the matter.

The situation which IPAB has created is summarised as this: Court shall be bound by the final order passed by the IPAB in the rectification proceedings, but, IPAB is not bound by the order and ratio of plethora of judgements making it clear that the permission under Section 124 is sine qua non before moving for rectification. Now there shall be parallel proceedings for the same matter requiring assessment of same evidence by multiple authorities and chances of conflicting judgments are brighter than ever.

Thanks to IPAB, the matter shall now require re-examination by the higher forums so that the earlier orders can be repeated for saving future deliberate interpretations.

Copyright vs Designs rights overlap

Though many countries provide dual protection in intellectual property rights for a single/common commodity, Indian laws are distinct. To briefly summarize, main branches of intellectual property rights are: -

a) Trademark rights which is available for name, shape, logo etc.;

b) Copyright which is available for artistic creative works in art, literary, music etc.;

c) Patent which grants monopoly to use and exploit a particular product / process for a certain period; and

d) Designs rights which gives protection for the 3D objects like cutlery, trade dress, motifs and patterns on fabric/ceramic etc.

The term of Copyright is one of the longest. Term of a trademark is perpetual subject to periodic renewal and no cancellation action. Patent lasts for 20 years–though in practice it only starts to make money after few years of grant. Designs have the shortest term of 15 years–10 years further extendable to another 5.

In the present post, I am focusing only on copyright and design.

Protection in copyright is granted from the moment it is created. However, Designs Act, 2000–as also in 1911 Act–protection is available to a person once he applies and thereafter granted a registration for his design. The Act bars displaying the article in question to general public before the application.

An artwork is protected under the Copyright Act 1957. But, the moment the artwork is applied to any article to give the article an aesthetic appeal, and once the article is sold in more than 50 number of units, under Section 15(2) of the Act, the artwork loses its copyright and comes under the realms of the design law.

Here is where the problem comes. Many designers, inadvertently, display their creations in fashion weeks, in their boutiques, showrooms etc. This constitutes displaying to general public and their creations are not eligible for design protections. When some other persons copies the design, the designer, based on wrong legal advice or her own understanding, files an action for copyright infringement against the person.

Delhi High Court in the ruling of Samsonite Corp vs Vijay Sales clarified the situation that once an object has been sold in over 50 units, the only protection is under the Designs Act. The link to the ruling is http://indiankanoon.org/doc/279539/ and the citation is 73 (1998) DLT 732.

Thereafter, in 2006, Justice Sanjay Kishan Kaul in Microfibres Inc vs Girdhar in an excellent judgement clarified the position even further and dealt with the situation where the patterns on the fabric were identically copied. The judgement is reported at 128 (2006) DLT 238, 2006 (32) PTC 157 Del and can be read at http://indiankanoon.org/doc/1210059/

There had been, post His Honour Justice Kaul’s judgement, two similar rulings by Delhi High Court on this point. One by His Honour Justice Sikri while dealing with copying of Tupperware utensils in Dart Industries reported at 2007 (35) PTC 285 Del http://indiankanoon.org/doc/1138401/ and another by His Honour Justice Bhat in the Mattel Inc while dealing with copying of the Scrabble board http://indiankanoon.org/doc/1138401/

All three rulings reached the Appellate Bench which decided the case against the Plaintiffs in each. The Appellate Bench’s ruling can be accessed at http://indiankanoon.org/doc/1082937/

The Courts, time and again, have held that once the creation is in public domain, the creator loses protection in design and post sake of 50 units, cannot claim any copyright as well.

 

Word of caution to my designer friends is: Please apply for design protection–which does not cost much–rather than taking an action for copyright infringement later which will be costly and futile.