Demarcating the powers of judicial bodies

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Demarcating the powers of judicial bodies

The Full Bench of Delhi High Court, in the recent ruling of Data Infosys Ltd. v. Infosys Technologies Ltd., has precisely defined the powers of the High Courts and the Intellectual Property Appellate Board (IPAB) Tribunal.

The brief factual contents of the case are that the Respondent (Infosys Technologies) had filed a suit of infringement of its registered trademark ‘Infosys’ against the Defendant (Data Infosys) in the High Court of Delhi. The Respondent sought relief against the use of its corporate name, including the use by the defendant of the domain name www.datainfosys.net which amounted to infringement of its registered trademarks under classes 16, 9 and 7 under the erstwhile Trade and Merchandise Marks Act, 1958. During the pendency of the suit, the Defendant’s mark ‘Data Infosys’ was registered by the Trademark Registrar under class 38. The Respondent filed a rectification application before the IPAB with respect to the defendant’s registered trademark without prior permission of the Court. The Defendant challenged the filing of the Rectification proceedings stating that the Respondent filed the above application without the leave of the Court as mandated by section 124 (1)(b)(ii) of the Trademarks Act and therefore such an Application for rectification is void and not maintainable.

Issue

The question before the Hon’ble Court was whether prior permission of the Court is necessary under section 124 (1)(b)(ii) of the Trademarks Act for filing a rectification application before the IPAB after an infringement suit has been filed and is pending before the Court?

Defendant’s contention

The Ld. Counsel on behalf of the Defendant argued that the permission under section 124 (1)(b)(ii) is a condition precedent and mandatory. If rectification proceedings are filed without obtaining such permission, such proceedings would not be maintainable. The Ld. Counsel cited a case Asterazaneca UK Ltd. & Anr. v. Orchid Chemicals and Pharmaceuticals Ltd. to substantiate their claims that ‘the plaintiffs could not file the Application for rectification without showing and obtaining prima facie satisfaction of the Court about their plea of invalidity of registration of the mark of the Defendant’. The Ld. Counsel also interpreted section 47 and 57 of the Trademarks Act in order to understand the textual content behind the idea of framing the Trademarks Act. The Counsel stated that sections 47 and 57 are general provisions that give exclusive powers to the IPAB in matters of removal/ rectification of a trademark whereas section 124 creates a special situation where the IPAB’s powers to try the case is subjected to prior permission of the Court and thus must prevail over the other sections and also to avoid conflicting decisions as to the validity of the trademarks ensuring non frustration of infringement proceedings.

Respondent’s contention

The Ld. Counsel on behalf of the Respondent argued that the interpretation accorded to the Section 124(1)(b) would show that the prima facie view of the Court in regard to tenability of a trademark invalidity plea is not to enable it to move the IPAB for the rectification of a registered trademark during the pendency of the suit, but only for the purpose of seeking stay of the suit. It was argued that thus, if the party seeking rectification does not obtain a favourable ruling of the Court under section 124 (1)(b)(ii) or obtains prima facie view of the invalidity plea being tenable and yet does not avail of it, the only result can be its abandonment or inability to set-up the invalidity of the mark as a defence in the suit. It was submitted that being a creation of statute, and vested with the exclusive authority to examine the validity of registered trademarks, IPAB's jurisdiction cannot be ousted and its authority reduced or curtailed or subordinated to that of the Civil Court in the manner suggested by the defendant. Learned counsel pointed out that even textually, Section 124(1)(b)(ii) only enables the Court to take a prima facie view but ultimately the decision about the validity of the mark is that of the IPAB alone; it cannot be questioned or put in issue in civil suit later.

Judgment

The Bench, comprising of Justice S. Ravindra Bhat, Justice Vipin Sanghi and Justice Najmi Waziri delivered the judgment in the favour of the Respondents. The Court held that as per section 124, the Court’s jurisdiction extends only to examining whether a prima facie case for invalidity exists only for the limited purpose of granting an adjournment/ stay. The Bench held that the Court has no discretion in the matter of stay of the suit, once it is brought to its notice that removal/rectification proceedings in respect of the registered trademark in question is pending. However, where no such rectification application is pending, and rectification proceedings are filed later, the stay is not automatic but is at the discretion of the Court. In such a situation, the Court has to examine whether a prima facie case has been set up with respect to invalidity. In case the Court does not come to a prima facie finding, or the party seeking rectification does not duly file such an application with the prescribed time, the Court noted that the only consequences are:

1. The party loses the right to argue that the suit is to be stayed and

2. The plea of invalidity would be deemed to be abandoned in the

suit. Therefore, even if the plaintiff/defendant files a rectification application, the final decision of the IPAB would have no bearing on the suit, in view of the deemed abandonment of the plea of invalidity.

2The above judgment passed by the Bench finally threw clarity on the jurisdictional powers of the Courts as well as the IPAB thereby giving much needed powers to the IPAB for deciding the rectification application and thereby demarcating the boundaries of the Tribunal and the Courts to avoid overlapping of the powers ensued by the Trademarks Act.

Contributed By : Ferzin Daboo (Advocate)
   Designed By : Vikash Singh