2017 (12) TMI 96 - SC - Indian Laws

Intellectual Property Rights jurisdiction - plea of rectification upon abandonment - Held that - The first question posed is how an approach to the superior Court i.e. the High Court, under Section 111 of the 1958 Act, can be contingent on a permission or grant of leave by a court of subordinate jurisdiction. The above is also contended to be plainly contrary to the provisions of Section 41 (b) of Specific Relief Act, 1963. It is also urged that Section 32 of the 1958 Act provides a defence to a claim of infringement which is open to be taken both in a proceeding for rectification as well as in a suit. The said defence statutorily available to a contesting party cannot be foreclosed by a deemed abandonment of the issue of invalidity, it has been contended. Section 111 of the 1958 Act and the corresponding Section 124 of the 1999 Act nowhere contemplates grant of permission by the civil court to move the High Court or the IPAB, as may be, for rectification. The true purport and effect of Sections 111/124 (of the old and new Act) has been dealt within detail and would not require any further discussion or enumeration. The requirement of satisfaction of the civil Court regarding the existence of a prima facie case of invalidity and the framing of an issue to that effect before the law operates to vest jurisdiction in the statutory authority to deal with the issue of invalidity by no means, tantamount to permission or leave of the civil court, as has been contended. It is a basic requirement to further the cause of justice by elimination of false, frivolous and untenable claims of invalidity that may be raised in the suit. While Section 32 of the 1958 Act, undoubtedly, provides a defence with regard to the finality of a registration by efflux of time, we do not see how the provisions of aforesaid section can be construed to understand that the proceedings under Sections 46 and 56 on the one hand and those under Sections 107 and 111 on the other of the 1958 Act and the pari materia provisions of the 1999 Act would run parallelly. As already held by us, the jurisdiction of rectification conferred by Sections 46 and 56 of the 1958 Act is the very same jurisdiction that is to be exercised under Sections 107 and 111 of the 1958 Act when the issue of invalidity is raised in the suit but by observance of two different procedural regimes. In the light of the above while answering the question arising in the manner indicated above, we dismiss all the appeals under consideration and affirm the order passed by the High Courts.

Summary

Issues Involved:
1. Validity of registration of the trade mark "Field Marshal".
2. Jurisdiction of the Delhi High Court to entertain the suit.
3. Applicability of Sections 46/56 and 107/111 of the Trade and Merchandise Marks Act, 1958.
4. Interpretation of Section 111 regarding the stay of proceedings where the validity of registration is questioned.
5. Consequences of not filing a rectification application within the prescribed time.

Detailed Analysis:

1. Validity of Registration of the Trade Mark "Field Marshal":
The respondent owns three registered trade marks with the common feature "Field Marshal". The appellants applied for registration of the trade mark "Marshal" in 1982, leading to a legal notice from the respondent. Subsequently, the respondent filed a suit for infringement, rendition of accounts, and perpetual injunction against the appellants.

2. Jurisdiction of the Delhi High Court:
The Delhi High Court initially dismissed the interlocutory application for interim injunction on jurisdictional grounds. The Division Bench reversed this decision, but later, the single judge ordered the return of the plaint for presentation in Gujarat. The Division Bench upheld this order, and the case was transferred to Rajkot. The Supreme Court did not find it necessary to entertain the challenge against this order as the respondent complied with the direction to present the plaint in Rajkot.

3. Applicability of Sections 46/56 and 107/111 of the Trade and Merchandise Marks Act, 1958:
The appellants argued that Sections 46 and 56 provide independent rights for rectification of a trade mark, while Sections 107 and 111 govern situations where a suit for infringement is pending. The respondents contended that once the issue of invalidity is raised in a suit and found prima facie tenable, it must be decided in a rectification proceeding, and the suit should be stayed.

4. Interpretation of Section 111 Regarding the Stay of Proceedings:
Section 111 mandates that if the validity of a trade mark is questioned in an infringement suit, the suit should be stayed pending rectification proceedings. If no rectification application is filed within the prescribed time, the issue of validity is deemed abandoned. The Supreme Court emphasized that the legislative intent is to have all validity issues decided by the Registrar or High Court (now IPAB), not the civil court, to avoid conflicting decisions.

5. Consequences of Not Filing a Rectification Application Within the Prescribed Time:
The Supreme Court held that if the rectification application is not filed within the time specified by the civil court, the issue of validity is deemed abandoned and cannot be raised again. This ensures finality and prevents reopening of decrees/orders that have attained finality.

Conclusion:
The Supreme Court affirmed the orders of the High Courts, dismissing the appeals. The Court clarified that the jurisdiction to decide the validity of a trade mark lies with the statutory authorities (Registrar or IPAB), and the civil court's role is limited to determining the prima facie tenability of the invalidity plea. If the plea is deemed abandoned, it cannot be resurrected in a separate rectification proceeding.