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TMI Blog2021 (3) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... f law or Appellate Board, Commissioner of Customs may accordingly amend, suspend or cancel the notice and the corresponding protection. In the present case it is an admitted position that petitioners and respondent No.6 are litigating against each other to establish their respective right, title and entitlement to the ownership of TR brand. Both counsels have fairly argued and submitted across the bar that both parties have been unsuccessful in obtaining any interim order of injunction / restraint against the other party from using the TR trademark. As alluded to hereinabove though various proceedings are pending in courts, neither the petitioners nor respondent No.6 have been in a position to obtain any order from the civil court and produce the same before the customs authorities to take benefit of the statutory provisions. That apart if respondent No.6 succeeds in the suit proceedings filed in the Delhi High Court in proving that respondent No.6 is the owner and proprietor of the trademark TR and that the petitioners are infringing copyright in the artwork of trademark / label TR , it is only then that respondent No. 2 to 5 can confiscate / dispose of the goods in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cified in the bond in accordance with law - petition disposed off. - WRIT PETITION (L) NO. 3371 OF 2021 - - - Dated:- 12-3-2021 - UJJAL BHUYAN MILIND N. JADHAV, JJ. Mr. Venkatesh Dhond, Senior Advocate a/w. Mr. Rohan Kadam, Mr. Bhuvan Singh, Mr. Ashwini Kumar i/by Ms. Gunjan Chaubey, Advocates for the Petitioners. Mr. Vijay Kantharia a/w. Mr. Ram Ochani, Advocates for Respondent Nos. 2 to 5. Mr. Alankar Kirpekar and Mr. Shekhar Bhagat i/by Ms. Neelaja Kirpekar, Advocates for Respondent No.6. JUDGMENT : (PER : MILIND N. JADHAV, J.) Heard Mr. Venkatesh Dhond, learned senior counsel for the petitioners; Mr. Vijay Kantharia, learned counsel for respondent Nos. 2 to 5; and Mr. Alankar Kirpekar, learned counsel for respondent No.6. 2. By the present petition filed under Article 226 of the Constitution of India, petitioners have prayed for a writ of mandamus to respondent no. 4 i.e. Deputy / Assistant Commissioner of Customs (Special Intelligence Investigation Branch), Nhava Sheva - V, Tal Uran, District Raigad to revoke the suspension of clearance of its consignment i.e. bearings imported by petitioner No.1 on 05.01.2021 having TR mark / brand. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f petitioner No.1 submitted all relevant documents evidencing registration of TR mark under the Trade Marks Act, 1999 under class 7 (Bearing Unit, Housing for Bearing) in the name of petitioner No.2 and documents relating to authorisation of petitioner No.1 by petitioner No.2 as its authorised importer and distributor of TR mark bearing in India to the customs authorities. 3.5. It may be mentioned that respondent No.6 had filed complaint dated 26.12.2020 with respondent Nos. 2 to 5 raising a system alert that the goods imported by petitioner No.1 are suspected to be goods infringing Intellectual Property Rights and such import is in contravention of the provisions of Rule 7 of the IPR Rules enacted under the Customs Act, 1962 and the Trade Marks Act, 1999. 3.6. On 05.01.2021 some samples of the goods imported were taken by the Special Intelligence and Investigation Branch in the office of the Commissioner of Customs, Nhava Sheva - V from the consignment and it was orally informed that the entire consignment has been suspended for clearance by respondent No. 3 i.e. Additional Commissioner of Customs (Special Intelligence Investigation Branch), Nhava Sheva - V based on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He submitted that Rule 7 of the IPR Rules prescribes the procedure for suspension of clearance of goods. Under sub-rule 1(a) of Rule 7 goods can be suspended from clearance only when there is a reasonable belief that the imported goods are suspected to be infringing Intellectual Property Rights and such reasonable belief has to be a legally sustainable reasonable belief, as also a fair, objective and informed reasonable belief to be formed on the basis of material facts available on record that petitioners having duly furnished documents evidencing registration of trademark and authorisation to import to the authorities, continuation of restraint is uncalled for; petitioners were not informed about the joining of the complainant i.e. respondent No.6 who registered the 'system alert' and submitted the requisite consignment specific bond along with 25% security of the value of goods within 10 days leading to suspension; procedural safeguards provided under Rule 7 having not been followed the impugned action of continuing suspension of clearance of the goods violated the rights guaranteed to the petitioner under Articles 14, 19(1)(g) and 21 of the Constitution of India and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed affidavit of evidence; trial has now commenced; however on 14th March, 2018, when the interim application for interim relief was taken up for hearing the Court recorded that respondent No.6 did not wish to press its pending application for ad-interim relief since the trial of the suit had already commenced; interim application for interim relief was accordingly disposed of; thus respondent No.6 gave up his prayer for interim relief (which could have included a restraint against importation of goods by the petitioners) and instead submitted himself to determination of his rights to adjudication after trial; respondent No. 6's title and entitlement to copyright of TR brand is being tried in the Delhi High Court suit; by order dated 9th January, 2017, the Delhi High Court has commenced the trial, inter alia framing the issues directly relating to the lis between the parties to claim ownership of TR mark / brand i.e. Issue No. (iii) and (iv) therein which read as under :- Issues : i.......... ii............ iii. Whether the plaintiffs are owner and proprietor of the trademark label TR? iv. Whether the defendants are infringing the copyrigh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ief was not pressed) rendered the parallel invocation of summary remedy under the IPR Rules inappropriate and impermissible; Court should harmoniously construe the IPR Rules with Section 53 of the Copyright Act, 1957 and Rule 79 of the Copyright Rules, 2013 and interpret the IPR Rules to mean that it is the duty of the Commissioner of Customs or the officer duly authorised to release the suspended consignment on expiry of the period of fourteen days in case the right holder fails to produce an order from the competent court restraining the Commissioner or the officer duly authorised from releasing the suspended consignment of goods; respondent No.6's complaint was limited to infringement of copyright and it did not seek relief for trademark infringement since the petitioners are registered proprietors under the Trademarks Act; in case of conflict the Copyright Act and the Copyright Rules will prevail over the IPR Rules. 5.4. He submitted that Section 53 was introduced in 2012; Rule 79 was framed alongwith the Copyright Rules, 2013; they being subsequent legislative enactments after the IPR Rules must necessarily be held to prevail over the IPR Rules since they operate in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sentative sealed samples were forwarded to the office of Deputy Commissioner of Customs, IPR Cell by the officers looking after examination and out of charge of the imported goods; authorized representative of the right holder was informed vide e-mail dated 07.01.2021 about suspension of clearance of goods imported by petitioner No. 1 and asked to join the proceedings; the authorized representative of the right holder presented for inspection and examination of goods within the stipulated period as prescribed in the IPR Rules in accordance with para 8 of the said rules; representative of right holder submitted technical report to the Deputy Commissioner of Customs, IPR Cell vide letter dated 16.01.2021 stating that the suspended goods are infringing the trademark 'TR bearing' and copyright in the artistic work TR of its client; office of Deputy Commissioner of Customs, IPR Cell intimated the authorized representative of the right holder value of the imported goods vide e-mail dated 20.01.2021 and called for submitting the requisite bond and bank guarantee within 3 working days; requisite bond and bank guarantee having being submitted, the goods were detained by following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 2000 on 17.12.2015 before the competent authority seeking cancellation of design application No. 249672 of the petitioner, petitioner immediately surrendered its registration under the Designs Act, 2000 by accepting that the registration was obtained by mistake; respondent No.6 has regularly enforced its proprietory rights in the trademark TR against third parties who have indulged in using the same by fling appropriate proceedings in diferent fora. 7.1. In respect of the present case, he submitted that petitioner filed a suit i.e. Suit No. 674 of 2014 before the Bombay High Court against respondent No.6 for claiming various reliefs on the basis of its trademark registration and prior use of TR brand; however Bombay High Court declined to pass interim injunction in favour of petitioners against respondent No.6 in the said suit as well as in appellate proceedings; simultaneously respondent No.6 filed Civil Suit (Commercial Suit) No. 1528 of 2016 against petitioners in the Delhi High Court seeking various reliefs on the ground of infringement of its trademark TR and passing of by the petitioners; respondent No.6 Mr. Jagteshwar Singh is the sole proprietor of M/s. Reetzara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned Bills of Entry to respondent No.6 on 20.01.2021 upon which within three days respondent No.6 submitted a surety bond of ₹ 2,54,53,277.00 and bank guarantee of ₹ 63,63,319.00 against the aforesaid 6 Bills of Entry to the respondent authorities; as such the detained goods are liable for absolute confiscation and/or destruction in accordance with law. 7.3. He submitted that respondent No.6 possesses registered copyright of the trademark TR as also registration under the Intellectual Property Rights and both registration certificates have been produced; petitioners have failed to prove prior use of the trademark TR in the Bombay High Court; petitioner's certificate of registration of TR trademark is dated 11.12.1996 whereas respondent No.6 has been using TR brand since 1985-86; copyright of respondent No.6 to use TR brand is not questioned by the petitioner in the suit pending in the Bombay High Court; registration of copyright involves detailed procedure set out in Chapter - X of the Copyright Act and more specifically sections 44 to 48 of the Act; complaint to respondent Nos. 2 to 5 has been made under the IPR Rules with respect to copyright regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justice should be swift and sure; that the guilty should be published while the events are still fresh in the public mind and that the innocent should be absolved as early as is consistent with a fair and impartial trial. Another reason is that it is undesirable to let things slide till memories have grown too him to trust. This however, is not a hard and fast rule. Special considerations obtaining in any particular case might make some other course more expedient and just. For example, the civil case or the other criminal proceeding may be so near its end as to make it expedient to stay it in order to given precedence to a prosecution ordered under S. 476. But in this case we are of the view that the civil suits should be stayed till the criminal proceedings have furnished. 8. In rejoinder submissions Mr. Dhond, learned senior counsel for the petitioners urged the Court to consider that trademark registration of the petitioners is dated 11.12.1996 under the Trade Marks Act whereas the registration certificate under the Copyright Act relied upon by respondent No.6 has been issued on 11.02.2016; the Copyright Act is a self contained code which provides for remedy and, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is laying down that multiplicity of litigation should be avoided as it is not in the interest of the parties and public time would be wasted over meaningless litigation. On this principle it has been held that when possession is being examined by the Civil Court and parties are in a position to approach the Civil Court for adequate protection of the property during the pendency of the dispute, the parallel proceedings i.e. Section 145 proceedings should not continue. 14. Reliance has been placed on the case of Jhummamal alias Devandas v. State of Madhya Pradesh and others, reported in 1989(1) RCR (Crl.) 428 : 1988(4) S.C.C. 452 . It is submitted that this authority lays down that merely because a civil suit is pending does not mean that proceedings under Section 145 Criminal Procedure Code should be set at naught. In our view this authority does not lay down any such broad proposition. In this case the proceedings under Section 145 Criminal Procedure Code had resulted in concluded order. Thereafter the party, who had lost, filed civil proceedings. After filing the civil proceedings he prayed that the final order passed in the Section 145 proceedings be quashed. It is in that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a person duly authorized to do so by the right holder; (b) intellectual property means a copyright as defined in the Copyright Act, 1957, trade mark as defined in the Trade Marks Act,1999, patent as defined in the Patents Act, 1970, design as defined in the Designs Act, 2000 and geographical indications as defined in the Geographical Indications of Goods (Registration and Protection) Act, 1999; (c) Intellectual property law means the Copyright Act, 1957, the Trade Marks Act,1999, the Patents Act, 1970, the Designs Act, 2000 or the Geographical Indications of Goods (Registration and Protection) Act, 1999 ; (d) right holder means a natural person or a legal entity, which according to the laws in force is to be regarded as the owner of protected intellectual property right, its successors in title, or its duly authorized exclusive licensee as well as an individual, a corporation or an association authorized by any of the aforesaid persons to protect its rights. 3. Notice by the right holder. - (1) A right holder may give notice in writing to the Commissioner of Customs or any Customs officer authorised in this behalf by the Commissioner, at the port ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consignee and the owner of the goods and the competent authorities against all liabilities and to bear the costs towards destruction, demurrage and detention charges incurred till the time of destruction or disposal, as the case may be; (b) the right holder shall execute an indemnity bond with the Commissioner of Customs indemnifying the Customs authorities against all liabilities and expenses on account of suspension of the release of allegedly infringing goods. 6. Prohibition for import of goods infringing intellectual property rights:- After the grant of the registration of the notice by the Commissioner on due examination, the import of allegedly infringing goods into India shall be deemed as prohibited within the meaning of Section 11 of the Customs Act, 1962. 7. Suspension of clearance of imported goods:- (1)(a) Where the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, based on the notice given by the right holder has a reason to believe that the imported goods are suspected to be goods infringing intellectual property rights, he shall suspend the clearance of the goods. (b) The Deputy Commissioner of Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his authorised representative does not join the proceedings within a period of ten working days from the date of suspension of clearance leading to a decision on the merits of the case, the goods shall be released provided that all other conditions of their import under the Customs Act, 1962, have been complied with: Provided that the above time- limit of ten working days may be extended by another ten working days in appropriate cases by the Commissioner or an officer authorized by him in this behalf. (7) In the case of perishable goods suspected of infringing intellectual property rights, the period of suspension of release shall be three working days which may be extended by another four days subject to the satisfaction of the Commissioner or the officer authorized by him in this behalf that such extension shall not affect the goods. (8) Notwithstanding anything contained in these Rules, in the case of suspension of clearance of perishable goods on the basis of notice of the right holder or his authorized representative, the right holder or his authorized representative shall join the proceedings as required under these Rules within three working days or the exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejudice to the protection of confidential information the Deputy Commissioner of Customs or Assistant Commissioner of Customs , as the case may be, may also provide additional relevant information relating to the consignment which has been suspended from clearance . 11.Disposal of infringing goods. - (1). Where upon determination by the Deputy Commissioner of Customs or Assistant Commissioner of Customs , as the case may be, it is found that the goods detained or seized have infringed intellectual property rights, and have been confiscated under section 111 (d) of the Customs Act, 1962 and no legal proceedings are pending in relation to such determination, the Deputy Commissioner of Customs or Assistant Commissioner of Customs , as the case may be, shall, destroy the goods under official supervision or dispose them outside the normal channels of commerce after obtaining no objection or concurrence of the right holder or his authorized representative: Provided that if the right holder or his authorized representative does not oppose or react to the mode of disposal as proposed by the Deputy Commissioner of Customs or Assistant Commissioner of Customs , as the case m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ights. They prescribe a remedy to prevent importation of goods that infringe intellectual property rights recognized and defined under the parent statutes relating to copyright, patent, trademarks, designs and geographical indications. 10.3. The above position can be understood from a reading the definitions under Rules 1(a) to 2(d) of the IPR Rules. Rule 2 of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 defines goods infringing intellectual property rights to mean any goods which are made, reproduced, put into circulation or otherwise used in breach of the intellectual property laws in India or outside India and without the consent of the right holder or a person duly authorized to do so by the right holder . Clause (b) of Rule 2 of the said Rules defines, intellectual property which means a copyright as defined in the Copyright Act, 1957, trademark as defined in the Trade Marks Act, 1999, patent as defined in the Patents Act, 1970, design as defined in the Designs Act, 2000 and geographical indications as defined in the Geographical Indications of Goods (Registration and Protection Act, 1999. Under clause (c) of Rule 2 of the said Rules, Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g regard to the likely expenses on demurrage, cost of storage and compensation to the importer in case it is found that works are not infringing copies. (3) When any goods treated as prohibited under subsection (2) have been detained, the Customs Officer detaining them shall inform the importer as well a the person who gave notice under sub-section (1) of the such goods within forty-eight hours of their detention. (4) The Customs Officer shall release the goods, and they shall not longer be treated as prohibited goods, if the person who gave notice under sub-section (1) does not produce any order from a court having jurisdiction as to the temporary or permanent disposal of such goods within fourteen days from the date of their detention. 10.6. Though sub-section (1) to (3) of section 53 sets out the procedure after a complaint is filed by a right holder i.e. owner of any work / mark, however after following the procedure under sub-section (4) of section 53, a legal duty is cast on the customs officer to release the goods and no longer treat them as prohibited goods if the right holder i.e. the person giving notice does not produce an order from a court having jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to observe the mandate of the 2013 Rules, have acted clearly beyond jurisdiction. 10.9. Section 28 of the Trade Marks Act, 1999 provides for rights conferred by registration under the said Act, and reads thus : Section 28. Rights conferred by registration.- (1) Subject to the other provisions of this Act, the registration of a trademark shall, if valid, give to the registered proprietor of the trademark the exclusive right to the use of the trade mark in relation to the goods or services in respect of which the trademark is registered and to obtain relief in respect of infringement of the trademark in the manner provided by this Act. (2) The exclusive right to the use of a trademark given under sub-section (1) shall be subject to any conditions and limitations to which the registration is subject. (3) Where two or more persons are registered proprietors of trademarks, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trade marks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e suit was allowed to be withdrawn. Petitioners thereafter filed a fresh suit bearing No. 674 of 2014, against Respondent No. 6, for trademark infringement and passing of, inter alia, in respect of its registered 'TR' trademark and their common law TR mark. At the same time, respondent No.6 in November, 2013, filed Commercial Suit (OS) No. 2431 of 2013 in the Delhi High Court against petitioners for copyright infringement of its TR artwork and trademark infringement of wrongly obtained TR registration and applied for interim reliefs in respect of both causes of action by Interim Application No. 19725 of 2013. In this suit, no copyright registration was asserted; in fact none was then granted at that point of time; ad-interim relief was not granted to Respondent No.6 for seven years until the trial commenced with framing of issues on 9th January 2017 in the Delhi High Court and the following issues came to be framed :- i. Whether this Court has no territorial jurisdiction to entertain and try the present suit? OPD ii. Whether the plaint has been signed and verified by an authorized person? OPP iii. Whether the plaintiffs are owner and proprietor of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case of any such amendment, cancellation, suspension or revocation of the Intellectual Property Right during the validity of the notice registered under rule 4, the same shall be brought to the notice of the Commissioner of Customs by the right holder within a period of one month of the date of communication of any such amendment, cancellation, suspension or revocation of the Intellectual Property Right to the right holder or any person authorised by him in this regard; (d) in the event of any amendment, cancellation, suspension or revocation of the Intellectual Property Right by the authorities under the intellectual Property Law or by any Court of Law or Appellate Board, the Commissioner of Customs may accordingly amend, suspend or cancel the notice and the corresponding protection. . 12.1. It is seen that condition(d) has been inserted which states that in the event of any amendment, cancellation, suspension or revocation of the Intellectual Property Right by the authorities under the Intellectual Property Law or by any Court of law or Appellate Board, Commissioner of Customs may accordingly amend, suspend or cancel the notice and the corresponding protection. 13. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioners have also placed on record the requisite authorisation. Sub-section (2) of section 53 calls upon the Commissioner of Customs to undertake a signifcant exercise for treating infringing copies of the work / mark as prohibited goods that have been imported into India. This exercise involves scrutiny of the evidence furnished by the owner of the right and to arrive at a satisfaction thereafter that there has been an infringement. However, correspondingly sub-section (3) calls upon the customs officer to inform the importer of the goods as well as the owner / person who has given the 'system alert' by way of notice within 48 hours of the detention of goods. 15. In the present case, it has been clarified and is an admitted position that both parties i.e. petitioners and respondent No.6 have appeared before the customs officers / authorities i.e. respondent Nos. 2 to 5 and have presented documentary evidence, interalia, pertaining to their respective entitlement to the TR mark; the lis in respect of establishing ownership to the TR is admittedly pending before the Delhi High Court and the Bombay High Court; there has been no finality of ownership of TR brand in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctual property law' which means Copyright Act, 1957, Trademark Act, 1999, Patent Act, 1970, Designs Act, 2000 or Geographical Indications of Goods (Registration and Protection) Act, 1999. Rules (2) begins by defining goods infringing 'intellectual property rights' to mean any goods which are made, reproduced, put into circulation or otherwise used in breach of the intellectual property laws in India or outside and without the consent of the right holder. 18. In view of the meanings prescribed in the IPR Rules, contention of respondent No.6 that the provisions of the Copyright Act will have to be read dehors the IPR Rules cannot be accepted and will have to be rejected. Respondent No.6 has filed its complaint under the provisions of section 53 on the basis of his Copyright registration No.A-11621 of 2017 dated 23.02.2017, notwithstanding the fact that the issue of ownership and entitlement to the TR brand being expressly framed as an issue in the suit proceedings pending trial in the Delhi High Court. If that be the case, assertion of respondent No.6 to independently maintain its complaint with the customs authorities on the basis of sub-section (1) of section 53 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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