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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 ..... y petitioner No.1 on 05.01.2021 having "TR" mark / brand. 2.1. Petitioner No.1 has filed 6 bills of entry, all dated 04.01.2021, with customs authorities i.e. respondent Nos. 2 to 5 for clearance. Petitioner asserts that without issuing any order of confiscation and in violation of the provisions of Rule 7 of the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 (briefly referred to as "the IPR Rules" hereinafter) and the provisions of the Copyright Act, 1957 (for short 'the said Act') respondent Nos.2 to 5 have suspended clearance of the imported goods. Being aggrieved, petitioners have approached this Court for seeking release of its consignment. 3. Before we advert to the submissions made on behalf of the respective parties, it will be apposite to refer to the relevant facts briefly :- 3.1. Petitioner No.1 is a company incorporated under the Companies Act, 1956 and is engaged in import and wholesale trade of bearings, bearing units and housing for bearings. Petitioner No.1 is the importer and distributor of bearings (manufactured and marketed by petitioner No.2) in India under the trademark "TR". Petitioner No.2 is incorporated under the laws of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igation Branch), Nhava Sheva - V based on a "system alert" on the ground of infringement of Intellectual Property Rights i.e. (IPR infringement). 3.7. On 13.01.2021 and 19.01.2021 petitioner No.1 addressed letters to respondent Nos. 2 and 4 and submitted all relevant documents seeking clearance of its consignment. 3.8. Petitioners' subsequent consignment in respect of identical goods i.e. "TR" brand bearings arrived at the Nhava Sheva Port in Mumbai on 20.01.2021. Petitioner No.1 filed various Bills of Entry for seeking clearance. Petitioners were allowed to clear the said consignment by the customs authorities on submitting the requisite consignment specific bond alongwith 25% security of the assessable value of the goods (which the petitioners submitted by way of bank guarantee). 3.9. Being aggrieved with the continued suspension of clearance of the goods imported by the 6 Bills of Entry, all dated 04.01.2021 by respondent Nos. 2 to 5, petitioners filed the present petition on 03.02.2021. 4. Initially, Mr. Jagteshwar Singh, proprietor of Reetzara International was not impleaded as a respondent though he had appeared seeking impleadment. By order dated 09.02.2021 petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Constitution of India and such action is arbitrary, high handed and without authority of law. 5.2. He submitted that petitioners have been litigating with respondent No.6 and M/s. Harman Overseas for ownership of the right to use the trademark / trade name "TR"; rival claims have been made by both sides over claiming sole proprietorship of the trademark "TR"; Suit No. 674 of 2014 has been filed by petitioners against M/s. Harman Overseas and its three partners namely Harman Deep Singh, Mrs. Inderjeet Singh and Mr. Jagteshwar Singh (respondent No.6) in the Bombay High Court and Suit No. 2431 of 2013 has been filed by M/s. Harman Overseas and its partners against petitioners in the Delhi High Court; neither the Bombay High Court nor the Delhi High Court has passed any interim / restraint order against the rival party from using the "TR" trademark; respondent No.6 has suppressed from the customs authorities the fact that a suit has been filed against him prior in point of time to restrain him from using the trademark "TR" over which he is claiming copyright proprietorship; respondent No.6 has further suppressed that he filed a suit for copyright infringement of "TR" mark in the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copyright in the artwork of trademark / label of the plaintiff ? ............" 5.3. He submitted that during pendency of the suit in the High Court, on 11th February, 2016, respondent No.6 applied for copyright registration of the "TR" artwork and registration was granted on 23.02.2017; respondent No.6 did not amend the Delhi High Court suit to place on record or rely upon the Copyright Registration Certificate; since it being settled law that registration of a copyright is not necessary in law and grant of registration does not confer a higher legal right to a copyright claimant nor does it improve his cause of action; registration is merely a prima facie proof of entry in the Copyright Register; respondent No.6 having been unsuccessful in securing any interim relief in the suit filed in the Delhi High Court in the year 2013, more that 7 years later, on 19th November, 2020 made application to the customs department seeking registration as a right holder in respect of the "TR" mark artistic work and claimed copyright therein by submitting Registration Certificate dated 23.02.2017 granted by the Registrar of Copyrights by suppressing the entire history of prior and pending litiga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same feld of importation and the same subject matter i.e. copyright; respondent No. 6's complaint dated 26th December, 2012, listed his trademark registration, however detention and seizure of petitioners' goods was sought on the ground that, "M/s. NBU Bearings Pvt. Ltd... is importing bearings under the brand TR which are in violation of our client's Copyright."; thus, respondent No.6's grievance was only limited to his allegation of copyright infringement; petitioner No.2 is a registered proprietor of its "TR" mark under Class 7 (Regn No. 739266) and its trademark is subsisting; since petitioner No.2 is a registered proprietor, respondent No.6's trademark registration is curtailed by Section 28(3) and of the Trade Marks Act and therefore, respondent No.6 has no right to take action against the petitioners under the Trade Marks Act. 6. PER CONTRA Mr. Kantharia, learned counsel for respondent Nos. 2 to 5 has referred to the affidavit in reply dated 23.02.2021 filed by the Commissioner of Customs, Nhava Sehva - V Commissionerate and contended that M/s. Reetzara International (proprietary concern of respondent No.6) has been granted registration of "TR" brand by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e due process of law. 6.1. He submitted that respondent Nos. 2 to 5 have complied with the provisions of the Customs Act read with the IPR Rules by following the due process of law; petitioners initially neither submitted any relevant documents before respondent Nos. 2 to 5 relating to its lis with respondent No. 6 nor any documents relating to its registration of "TR" brand under the Trade Marks Act, 1999 under class 7 in the name of petitioner No. 2; petitioner No. 2 is not registered with the customs under the IPR Rules 2007; petitioner No. 2 is using the 'TR Brand' for manufacture and marketing of bearings since 1976 but it is registered in India under the Trade Marks Act, 1999 w.e.f. 11.12.1996. He therefore prayed for dismissal of the petition. 7. Mr. Alankar Kirpekar, learned counsel appearing for respondent No.6 submitted that he filed complaint dated 26.12.2020 with the customs department against the petitioner's import of goods bearing "TR" brand from China upon which consignment under the 6 Bills of Entry, all dated 04.01.2021, were suspended from clearance by the customs authorities; respondent No.6 has filed relevant documents and particulars with respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional having its address at 608, Best Sky Tower, Netaji Subhash Place, District Centre, Wazirpur, New Delhi - 110034 and is engaged in the business of manufacturing, trading and importing of various types of ball bearings, pillow blocks, bearing units and related goods since 1986; respondent No.6 bonafdely adopted the trademark "TR" in the year 1986 and started using it in relation to his goods and business and obtained Registration No. 1349903 in class 07 since 08.04.2005 for all types of ball bearings, bearing units and pillow blocks; the artwork involved in the trademark of respondent No.6 is an original artwork of which respondent No.6 is the owner and proprietor and holds copyright therein within the meaning of the Copyright Act; respondent No.6 has obtained copyright registration No. A-116201/2017 dated 23.02.2017 and taken all necessary steps towards protection of its trademark and copyright with the customs authorities and obtained the recordials under the IPR Rules as per the following details :- Particulars Registration No. Unique Permanent Registration No. (in short "UPRN") Trademark TR BEARING (DEVICE) 13449903 PINTKD6TM0767 Copyright TR (Artistic Work) A-116 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 is free to take appropriate action under the provisions of the Trade Marks Act, the Customs Act as also the Designs Act for violation and copyright infringement of the trademark "TR" used by respondent No.6 since 1985-86. 7.4. In support of his case he has referred to and relied upon the case of Kamaladevi Agarwal vs. State of West Bengal and Ors. decided on 17.10.2001 and reported in 2002 (1) SCC 555 to emphasise that where civil and criminal cases are pending in respect of the same cause of action, precedence shall be given to the criminal proceedings. He has referred to para 15 of the said case which reads thus : "15. We have already noticed that the nature and scope of civil and criminal proceedings and the standard of proof required in both matters is different and distinct. Whereas in civil proceedings the matter can be decided on the basis of probabilities, the criminal case has to be decided by adopting the standard of proof of "beyond reasonable doubt". A Constitution Bench of this court. dealing with the similar circumstances, in M.S. Sheriff & Anr. v. State of Madras & Ors. held that where civil and criminal cases are pending, precedence shall be given to criminal p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties have to be read harmoniously; provisions of sub-section (4) of Section 53 will override the IPR Rules; in case of conflict between circulars and the Rules on the one hand and statutory provisions on the other hand a harmonious interpretation will have to be arrived at by the adjudicating authority depending upon the facts and circumstances governing each case; in the present case the customs authorities having obtained evidence of pending litigations from both parties cannot adjudicate or determine the issue of ownership of "TR" brand or even cannot, prima facie, on the basis of the available material decide and will have to inform the person who has given notice under sub-section (1) of Section 53 i.e. the right holder (respondent No.6) that if he does not produce any order from the civil court having jurisdiction as to temporary or permanent disposal of such goods, then it shall be mandatory on the customs authorities to release the goods within 14 days from the date of detention; in the present case considering that the lis of ownership of "TR" brand is the subject matter of civil proceedings / suits in the Bombay High Court and in the Delhi High Court and respondent No.6 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suit had been filed first. An Order of status quo had already been passed by the competent civil court. Thereafter Section 145 proceedings were commenced. No final order had been passed in the proceedings under Section 145. In our view on the facts of the present case the ratio laid down in Ram Sumer's case fully applies. We clarify that we are not stating that in every case where a civil suit is filed, Section 145 proceedings would never lie. It is only in cases where civil suit is for possession or for declaration of title in respect of the same property and for and granted by the civil court that proceedings under Section 145 should decide the question of title as well as possession between the parties and the orders of the civil court would be binding on the Magistrate." 9. Before we advert to the submissions made by the learned counsel for the parties, it will be appropriate to consider the relevant provisions of the applicable statutes briefly. 10. The Customs Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 (IPR Rules) were framed by the Central Government in exercise of its powers under section 11 (2) (n) & (u) read with section 156 of the Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intellectual property rights shall be given in the format prescribed in the Annexure to these Rules. (3) Every such notice shall be accompanied by a document as specified by the Commissioner, evidencing payment of application fee of Rs. 2000 (two thousand rupees only). (4) If any of the information as required in the format under sub-rule (2) is not provided, the Deputy Commissioner of Customs or Assistant Commissioner of Customs may, as the case may be, ask the right holder or his authorised representative to provide the same within 15 days, which may be extended on sufficient reasons being shown. (5) The right holder shall inform customs authority when his intellectual property ceases to be valid or if he ceases to be the owner of such intellectual property right. 4. Registration of notice by the Commissioner. - (1) Within 30 working days from the date of receipt of the notice under sub-rule(1) of Rule 3, or from the date of expiry of the extended time as contemplated in sub-rule (4) of Rule3, as the case may be, the Commissioner shall notify the applicant whether the notice has been registered or rejected. (2) In a case where the notice has been registered, the Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as the case may be, shall immediately inform the importer and the right holder or their respective authorised representatives through a letter issued by speed post or through electronic mode of the suspension of clearance of the goods and shall state the reasons for such suspension. (3) Where clearance of the goods suspected to be infringing intellectual property has been suspended and the right holder or 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 import of such goods 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 days in appropriate cases by the Commissioner or an officer authorized by him in this behalf. (4) Where the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, has suspended clearance of goods on his own initiative and right holder does not give notice under rule 3 of the Rules or does not fulfill the obligation under Rule 5, withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded in sub-rule (7) , as the case may be, failing which the goods shall be released. (9) If within ten working days or the extended period under sub-rule (6), as the case may be, and within three working days or the extended period as provided in sub-rule (7) of this rule in the case of perishable goods, the right-holder or his authorized representative joins the proceedings, the Deputy Commissioner of Customs or Assistant Commissioner of Customs , as the case may be, having reasons to believe that the goods are goods infringing intellectual property rights and liable to confiscation under section 111 (d) of the Customs Act, may seize the same under section 110 of the Customs Act. 8. Examination of goods by right holder.- The Commissioner or the officer duly authorized in this behalf shall allow a right holder and the importer or their duly authorized representatives to examine the goods, the clearance of which has been suspended, and may provide representative samples for examination, testing and analysis to assist in determining whether the goods are pirated, counterfeit or otherwise infringe an intellectual property right, without prejudice to the protection of confidential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e costs toward destruction, demurrage and detention charges incurred till the time of destruction or disposal, as the case may be, shall be borne by the right holder. (2) There shall not be allowed the re-exportation of the goods infringing intellectual property rights in an unaltered state. (3) The Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, may on his own, or at the request of the right holder, retain samples of goods infringing intellectual property rights prior to their destruction or disposal and provide the same to the right holder or importer if such samples are needed as evidence in pending or future litigations. 12. Exclusion of baggage and De-minimis Imports.- Goods of a non-commercial nature contained in personal baggage or sent in small consignments intended for personal use of the importer are not subject to the above Rules. 13. Protection of action taken under the Rules.- Customs officers when acting in good faith and having followed the procedures set out in these Rules shall not be liable for: (a) any failure to detect goods infringing intellectual property rights, (b) the inadvertent release of such goods, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... customs authorities does not ipso facto lead to breach of any of the parent statutes, neither does it bring into its ambit any new right which is not provided under the respective statute nor does it extinguish any right, unless protected by an interim order / order of the civil court. 10.4. The Copyright Act, 1957 was amended by the Copyright (Amendment) Act, 2012. The Statement of Objects and Reasons of the Bill declared that the amendments proposed, inter alia, sought to :- "3. (xix) strengthen enforcement of rights by making provisions of controls of importing infringing copies by the Customs department, disposal of infringing copies and presumption of authorship under civil remedies." 10.5. The 2012 Amending Act substituted section 53 in its entirety. Amended section 53 of the Copyright Act, 1957 reads thus :- 53. Importation of infringing copies. -- (1) The owner of any right conferred by this act in respect of any work or any performance embodied in such work, or his duly authorized agent, may give notice in writing to be Commissioner of Customs, or to any other officer authorized in this behalf by the Central Board of Excise and Customs, -- (a) that he is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f, by the Central Board of Excise and Customs in accordance in Form-XVI and shall be accompanied by fee as specified in the Second Schedule. (2) The person who gives notice under in sub-rule (1) shall deposit, within the time specified by the Commissioner, such amount as the Commissioner may deem fit as security having regard to the likely expenses on demurrage, cost of storage and compensation to the importer in case it is found that the works are not infringing copies. (3) The Commissioner or the officer duly authorized in this behalf, on arrival of such works, if satisfied, shall suspend the clearance of such works for a period of fourteen days and shall inform the arrival and detention of work to the person who has given the notice. (4) At the request of the importer or his duly authorized agent, Commissioner or the officer duly authorized in this behalf, shall inform the name and address of the person who gave the notice. (5) The Commissioner or the officer duly authorized inthis behalf shall release the consignment on expiry of a period of fourteen days, in case the person who gave notice failed to produce an order from the competent court having jurisdiction restrain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any of those trademarks against each other but have the same rights as against the other persons. 10.11. Section 30 of the Trade Marks Act, 1999 provides for limits on efect of registered trademark and sub-section (2) thereof provides the conditions when there would be no infringement of a trademark. Clause (e) of sub-section (2) of section 30 of the Trade Marks Act is relevant and reads thus : "(2) A registered trademark is not infringed where - (a)............................ (b)............................ (c)............................ (d)............................ (e) the use of a registered trade mark, being one of two or more trademarks registered under this Act which are identical or nearly resemble each other, in exercise of the right to the use of that trademark given by registration under this Act." 10.12. Rule 7 of the IPR Rules provides the procedure for suspension of clearance of goods. Sub-Rule (1)(a) of Rule 7 is directly relevant in the present case and reads thus : "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 imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that Respondent No.6 did not wish to press the same for interim relief since the trial had commenced. The burden of proof for proving issue Nos. (iii), (iv) and (v) as can be seen above is on respondent No.6 in the suit pending in the Delhi High Court. 3 issues as framed go to the root of the matter i.e. asserting ownership rights in respect of "TR" trademark, infringement of copyright of "TR" trademark and passing of action. 12. By notification bearing Notification No. 56/2018Customs dated 22.06.2018, Government of India in exercise of its powers conferred by sub-section (1) of section 156 of the Customs Act, 1962 read with clauses (n) and (u) of subsection (2) of section 11 of the said Act effected an amendment to the Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 dated 08.05.2007 (IPR Rules) as under :- "1(i) These rules may be called the Intellectual Property Rights (Imported Goods) Enforcement Amendment Rules, 2018. (ii) They shall come into force on the date of their publication in the Official Gazette. 2. In the said rules, - (A) in rule 2. - (i) in clause (b), the words and figures "patent as defined in the Patents Act, 1970," shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duce the same before the customs authorities to take benefit of the statutory provisions. 14. 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 accordance with the statutory provisions and/or continue suspension of clearance of goods imported by the petitioners. In the absence of any interim order / order from the civil court from being placed on record by respondent No.6 it will therefore not be appropriate for respondent Nos. 2 to 5 to withhold / detain the consignments imported by the petitioners beyond the prescribed period of 14 days. Subsection (4) of section 53 of the Copyright Act, 1957 substituted w.e.f. 21.06.2012 calls upon the customs officer to release the goods and to no longer treat the goods as prohibited goods if the person giving notice of 'system alert' under sub-section (1) of section 53 (i.e. the owner of any right conferred by the Copyright Act, 1957) does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 018 have been enacted under the provisions of sub-section (2)(n) and (u) of sub-section (2) of section 11 of the Customs Act by the Central Government. 16. Thus on a thorough consideration and a conjoint reading of the aforesaid provisions it is clear that unless there is finality to the suit proceedings between the petitioners and respondent No.6 pending in the civil courts i.e. Delhi High Court and Bombay High Court or any interim order is passed by the said courts, both the parties having referred to and relied upon several documents which cannot be adjudicated or veracity of which cannot be gone into in the present writ proceeding, such documents produced by both the parties will have to be accepted as prima-facie evidence supporting the case of each party by this Court. Further in the absence of a court order as contemplated under sub-section (4) of section 53 of the Customs Act, 1962 would not be justified for respondent Nos. 2 to 5 to withhold the consignment imported by the petitioners until respondent No.6 i.e. owner of the copyright obtains an order / interim order from the civil court declaring respondent No.6 as the owner of the mark "TR" brand and places the same befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -section (3) of section 28 of the Trademark Act, 1999 which deals with rights conferred by registration. The definition of 'intellectual property law' also includes the Copyright Act, 1957, the Patent Act, 1970, the Designs Act, 2000 and the Geographical Indications of Goods (Registration and Protection) Act, 1999 and therefore to state that the IPR Rules notified under the Customs Act, 1962 will have to be read independent of the provisions of section 53 of the Copyright Act, 1957 would not be the correct proposition. 19. In view of the above discussions and findings, we find merit in the submissions made on behalf of the petitioners. Since there has been no finality to the proceedings which are pending between the petitioners and respondent No.6 in the Delhi High Court and Bombay High Court in respect of ownership of "TR" brand, the imported goods vide Bills of Entry Nos. 2220018, 2221281, 2224083, 2224577, 2224920, 2225033 all dated 04.01.2021 suspended from clearance will have to be released to the petitioners subject to the petitioners executing such bond with such surety or security and such conditions as may be specified in the bond in accordance with law. For this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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