No plea has been raised by the Defendant No. 1 in its written statement of wanting to file rectification proceedings before IPAB to cancel the registration of the Plaintiff’s Trade mark, no amendment was applied to the written statement prior to framing of issues to bring forth the pleading to seek remedy of approaching IPAB for cancellation of the registered Trade mark of the Plaintiff, the fact that rectification proceedings have been initiated now seven years later from framing of issues, and that too after substantial evidence has been led by the Plaintiff, such a prayer now sought obviously not only is barred in view of ratio of the judgment of the Supreme Court in the case of Patel Field Marshal Agencies but the endeavour of the Defendant No. 1 was wholly mala fide

    MANU/DE/1531/2018 :: MIPR2018(2)SNC01

IN THE HIGH COURT OF DELHI

Country Inn Private Limited     vs  Country Inns and Suites and Ors.

CS(COMM) NO. 902/2016 DECIDED ON: 23.04.2018

Hon’ble Judges/Coram:

ValmikiJ.MehtaJ.

Counsels:

For Appellant/Petitioner/Plaintiff: Sachin Gupta, Advocate

For Respondents/Defendant: Prashant Gupta and Kanishk Kumar, Advocates

 

Infringement of Trade mark – Framing of Issue – Whether the  Defendant bonafide wants in a suit for infringement of the Trade mark to seek framing of an issue   by Court to approach IPAB for rectification/cancellation proceedings of a registered Trade mark of the Plaintiff. The application filed after trial in the suit has commenced issues were framed around seven years prior to filing the rectification proceedings  

Held, In the present case considering the fact that no plea has been raised by the Defendant No. 1 in its written statement of wanting to file rectification proceedings before IPAB to cancel the registration of the Plaintiff’s Trade mark, no amendment was applied to the written statement prior to framing of issues to bring forth the pleading to seek remedy of approaching IPAB for cancellation of the registered Trade mark of the Plaintiff, the fact that rectification proceedings have been initiated now seven years later from framing of issues, and that too after substantial evidence has been led by the Plaintiff, such a prayer now sought obviously not only is barred in view of ratio of the judgment of the Supreme Court in the case of Patel Field Marshal Agencies but the endeavour of the Defendant No. 1 was wholly mala fide to somehow or other stop the trial of the suit and which is the real intent of the present application. If at all there was any strength in the case of the Defendant No. 1 to seek cancellation of the registered Trade mark of the Plaintiff, then this Court fails to understand that why in this suit filed in the year 2008 till September, 2017 no application was filed by the Defendant No. 1 for rectification proceedings for cancellation of the registered Trade mark of the Plaintiff before the 1PAB or no such prayer made to this Court that IPAB was to be approached for cancellation of the registration of the Plaintiff’s Trade mark.

VALMIKI J. MEHTA, J (ORAL)

 

I.A. No.5499/2018 (under Section 124 of the Trade Marks Act by

defendant no.1)

 

1.

This application is filed by the defendant no.1 in the suit seeking permission of this Court to proceed ahead with the rectification petition filed for cancellation of the trademark registration of the plaintiff by the defendant no.1 against the plaintiff before the competent authority/Intellectual Property Appellate Board (IPAB) and for stay of the trial in the present suit till the disposal of therectification/cancellation proceedings before the IPAB. The following reliefs are claimed in the present application:-

“(a) Frame an issue to the effect whether the Plaintiff’s registrations under Nos.604932 in class 33, 604933 in class 32 and 604935 in class 29 are valid;

(b) Pass an order permitting the Defendant No.1 to proceed with the rectification proceedings filed by the Defendant No.1 against the Plaintiff’s registration Nos.604932 in class 33 (ORA/117/2017/TM), 604933 in class 32 (ORA/118/2017/TM) and 604935 in class 29 (ORA/119/2017/TM) pending before the IPAB.

(c) Stay further trial in the suit till the disposal of the rectification petition being ORA/117/2017/TM, ORA/118/2017/TM and ORA/119/2017/TM as filed by the Defendant No.1 against the Plaintiff’s registrations.

(d) Pass any other or further order(s) as this Hon’ble Court may deem fit and proper in the facts and circumstances of the present case.”

  1. The present suit is filed by the plaintiff seeking the reliefs of injunction with respect to infringement of trademark, passing off and damages etc. Plaintiff claims right in the trademark COUNTRY INN and which trademark is used with respect to business of hotels, motels and restaurants etc. The plaintiff pleads to be the registered owner of the trademark COUNTRY INN as per four registrations which are granted and as stated in Para 4 of the plaint. Registrations in favour of the plaintiff are said to be dated 24.8.1983. The plaintiff pleads its immense goodwill in its registered trademark COUNTRY INN. Plaintiff has also given in the plaint the details of the revenue generated by it with respect to it using the trademark COUNTRY INN. As per the plaint, the defendant no.1 in the suit Country Inns and Suits by Carlson, Inc is pleaded to be infringing the registered trademark of the plaintiff and also passing off its services as that of the plaintiff. In the plaint, plaintiff pleads that it has already filed a petition for cancellation of the registration obtained by the defendant no.1 of its trademark COUNTRY INN & SUITES BY CARLSON. The trademark of the defendant no.1 is registered on 29.1.2002. Plaintiff has pleaded in the plaint its prior user of the trademark by virtue of the registration of the trademark COUNTRY INN. Accordingly, causes of action have been pleaded in the plaint with respect to the infringement of the trademark, passing off, acts of unfair competition, dilution and damages and reliefs are accordingly prayed as under:-

“(a) A decree of permanent injunction restraining the Defendants, their promoters, partners, family members, dealers, distributors, representatives and franchises, agents or any one acting for and on their behalf from using the trade mark “COUNTRY INN” alone or in conjunction with any other word/words which is identical to the Plaintiff’s registered Trade Mark “COUNTRY INN” or any other trade mark which is deceptively similar to the Plaintiff’s mark, in relation to hospitality services/resorts/hotels or any other goods and service in any manner whatsoever, so as to result in infringement of the Plaintiff’s registered trade mark, passing off, acts of unfair competition and dilution.

(b) Decree of damages of Rs.20,05,000/- be passed in favour of the Plaintiff and against the Defendants for infringement of the Plaintiff’s registered trade mark, passing off, acts of unfair competition and dilution.

(c) To pass a preliminary decree directing the Defendants to handover true and faithful accounts before the Hon’ble Court for determination of illegal profits earned by the Defendants on account of infringement of the Plaintiff’s registered trade mark, passing off, acts of unfair competition and dilution, and further to determine the amount of illegal profits so earned by the Defendants.

It is further prayed that after determination of the amount of illegal profits so made by the Defendants, a Final Decree may please be passed in favour of the Plaintiff for such amount found due and payable.

(d) An order of delivery up of all the infringing products bearing the impugned mark “COUNTRY INN” including but not restricted to the all printed material, stationery products, letter heads, brochures and dies for the purpose of destruction and/or erasure by the Plaintiff or any person appointed by the Hon’ble Court;

(e)      Cost of the suit may please be allowed;

(f)      Any other orders/directions may be passed in favour of the

Plaintiff Company that this Hon’ble Court may deem fit and proper in the facts and circumstances of the instant case.”

  1. Defendant no.1 has contested the suit. Defendant no.1 has pleaded rights to its trademark COUNTRY INN & SUITES BY CARLSON including on account of registration of its trademark. Defendant no.1 has denied the reliefs claimed by the plaintiff on the allegations of infringement, passing off etc. In Para 20 of the written statement, while replying to Para 4 of the plaint, the defendant no.1 has pleaded invalidity of the registration of the plaintiff by making the following averments:-

“20. The contents of paragraph 4 of the plaint are wrong and denied. It is vehemently denied that the Plaintiff is the prior user, legal owner and lawful proprietor of the alleged COUNTRY INN mark. The alleged registrations for the alleged COUNTRY INN mark relied upon by the Plaintiff have no relevance whatsoever in the present proceedings and do not in any manner support the case of the Plaintiff as these registrations do not cover hospitality services. The alleged registrations are for a particular design COUNTRY IN (device) and not the words COUNTRY INN. Further, the Plaintiff has not been using its alleged COUNTRY INN (device) mark in respect of goods falling in classes 20, 30, 32 and 33. It is quite clear that these registrations were obtained by the Plaintiff with no real intent to use the same for the goods for which they are registered. It is settled law that trademark rights are not created by mere registration held in vacuum minus any bonafide and present intent to use the mark. The registrations of the Plaintiff are thus subject to cancellation on grounds of non-use and the answering Defendant reserves its rights in this regard. It is also denied that the Plaintiff’s application for the alleged COUNTRY INN (device) mark in class 42 is likely to be registered in due course. The very fact that the application for registration of this mark was made in June 2008 shows that the Plaintiff itself realized that it would need specific statutory cover for its primary hospitality business and the earlier registrations obtained by it would not be relevant to its business.”

This suit was filed in October, 2008 and the written statement was filed by the defendant no.1 in March, 2009.

  1. After completion of pleadings and procedure of admission/denial of documents, the following issues were framed on 25.7.2011:-

“1. Whether the suit has been signed, filed and instituted by a competent person? OPD

  1. Whether this Hon’ble Court lacks the jurisdiction to entertain and try the present suit? OPD
  2. Whether the trademark registration Nos. 1237378 and 1548619 in favour of the Defendants have wrongly been registered and are liable to be cancelled? OPP
  3. Whether the plaintiff is the prior user of the trademark “COUNTRY INN” in India? If so, its effect? OPP
  4. Whether the Defendant no.1 is the prior adopter and international user of the mark “COUNTRY INN”? OPD
  5. Whether the Defendant no.1 did not enjoy any transborder reputation in India at the time of the first use of the mark “COUNTRY INN” by the plaintiff in India? OPP
  6. Whether the plaintiff’s claim of infringement is maintainable in view of Sections 28(3)and 30(2)(e)of the Trade Marks Act, 1999? OPD
  7. Whether the plaintiff has approached this Hon’ble Court with unclean hands by misrepresenting and suppressing material facts pertaining to its knowledge of the Defendant no.1’s prior statutory and common law rights in India? If so, its effect. OPD
  8. Whether the adoption of the mark “COUNTRY INN” by the plaintiff was tainted at its inception? If so, its effect. OPD
  9. Whether the defendants have been carrying their hospitality business under the mark “COUNTRY INN & SUITES BY CARLSON” and “COUNTRY INN BY CARLSON” in India since January 2002? If so, its effect. OPD
  10. Whether the suit is barred by delay, laches and acquiescence?

OPD

  1. Whether the use of the trademark “COUNTRY INN and SUITES BY CARLSON” by the defendants has resulted in the infringement of the registered trademark of the plaintiff? OPP
  2. Whether the use of the trademark “COUNTRY INN and SUITES BY CARLSON” by the defendants has resulted in the passing off the services of the defendants as those of the plaintiff? OPP
  3. Whether the use of the trademark “COUNTRY INN and SUITES BY CARLSON” by the defendants has resulted in acts of unfair competition and dilution of the goodwill of the plaintiff in India? OPP
  4. Whether the plaintiff is entitled to damages? If so, to what extent?

OPP

  1. Whether the use of the trademark “COUNTRY INN” by the plaintiff amounts to infringement of the registered mark of the defendants? OPD
  2. Whether the use of the trademark “COUNTRY INN” by the plaintiff amounts to passing off the defendants’ services under the trademark “COUNTRY INN and SUITES BY CARLSON”? OPD
  3. Whether the defendants are entitled to damages? If so, to what extent? OPD
  4. Relief”

5.(i) In view of the aforesaid paras, it is seen that the defendant no.1 as per its written statement has not stated that prior to filing of the present suit, the defendant no.1 had already applied for cancellation of the registered trademark of the plaintiff, and the written statement of the defendant no.1 also does not plead that the defendant no.1 proposes to file an application for cancellation of the registration obtained by the plaintiff with respect to its trademark COUNTRY INN. By the written statement of the defendant no.1, no issue is prayed for being framed for stay of the present suit and by this Court taking a prima facie view on the invalidity of the registration of the trademark of the plaintiff. In view of lack of pleadings of the defendant no.1 with respect to the defendant no.1 having filed a petition for rectification before filing of the suit or the defendant no.1 proposes to do so even after filing of the suit by the plaintiff, consequently no issue has been framed by this Court with respect to prima facie invalidity of the plaintiff’s trademark registration and accordingly to stay of trial of this suit on account of issue of validity of plaintiff’s registration to be examined by IPAB.

(ii) It is only now much later and recently on 12.9.2017 that the defendant no.1 has filed proceedings for rectification/cancellation of the plaintiff’s registration before the IPAB. The defendant no.1 accordingly claims that in view of the defendant no.1 now having applied for cancellation of the plaintiff’s registration before IPAB, consequently now this Court should exercise powers under Section124 of the Trade Marks Act, 1999 to frame an issue with respect to invalidity of the plaintiff’s registration and thereafter allowing the defendant no.1 to proceed with rectification proceedings and to stay further trial of the suit.

  1. Section 124of the Trade Marks Act reads as under:-

“Section 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.”

  1. On a reading of Section 124of the Trade Marks Act it is seen that there is an entitlement in a defendant in a suit which is filed alleging infringement of the plaintiff’s registered trademark to raise defences for invalidity and cancellation of the registered trademark of the plaintiff, and asking the Court to take a prima facie view of the invalidity of the registration and entitling the defendant within three months or an extended period to approach the IPAB for filing rectification proceedings and for cancelling of the registered trademark of the plaintiff. The issue is that whether such a right of the defendant in a suit for infringement of the trademark to seek framing of an issue with respect to seeking permission of the Court to approach IPAB for rectification/cancellation proceedings of the registered trademark of the plaintiff, can be filed even though trial in the suit has commenced now for many years and issues have been framed around seven years prior to filing the rectification proceedings by the defendant no.1 before the IPAB for cancellation of the registered trademark of the plaintiff.
  2. This Court does not have to examine the issue as stated in para immediately preceding in detail by academically examining the legal issue including with reference to various judgments inasmuch as now the issue in question has been concluded in terms of the recent judgment of the Supreme Court in the case of Patel Field Marshal Agencies & Anr. Vs. P.M. Diesels Ltd. & Ors. 2018 (73) PTC 15. The relevant paras of the judgment of the Supreme Court are paras 23 to 32 and these paras read as under:-

“23. Registration of a trade-mark vests in the registered owner an exclusive right to use the mark in relation to the goods in respect of which the mark has been registered. This is, however, subject to such conditions and limitations as may be incorporated in the registration itself. It also grants to the registered owner a right to seek and obtain relief in case of infringement of the mark. Section 46 in Chapter VI of the 1958 Act contemplates removal from the register of any registered trade mark, inter alia, on the ground that the same was registered without any bona fide intention of use and, in fact, such mark has not been used up to one month prior to the date of the application for removal or that for a continuous period of five years there has been no bona fide use of the mark. Chapter VII of the 1958 Act deals with rectification and correction of the register of trade marks. Under Section 56, the Tribunal, (Registrar or, as the case may be, the High Court), on application, may cancel or vary the registration of a trade mark on the ground of any contravention, or failure to observe a condition subject to which registration was granted.

  1. In cases where in a suit for infringement of a registered trade mark the validity of the registration of the trade mark is questioned either by the Plaintiff or by the Defendant, Section 107of the 1958 Act provides that an application for rectification shall be made to the High Court and not to the Registrar notwithstanding the provisions contained in Section 46or Section 56 of the 1958 Act. This would seem to suggest that in such cases (where a suit for infringement is pending) the legislative scheme is somewhat different.
  2. The above seems to become more clear from what is to be found in Section 111of the 1958 Act which deals with “stay of proceedings where the validity of registration of the trade mark is questioned”. The aforesaid provision of the 1958 Act specifically provides that if a proceeding for rectification of the register in relation to the trade mark of either the Plaintiff or the Defendant is pending before the Registrar or the High Court, as may be, and a suit for infringement is filed wherein the aforesaid plea is raised either by the Defendant or by the Plaintiff, the suit shall remain stayed. Section 111further provides if no proceedings for rectification are pending on the date of filing of the suit and the issue of validity of the registration of the Plaintiff’s or the Defendant’s trade mark is raised/arises subsequently and the same is prima facie found to be tenable, an issue to the aforesaid effect shall be framed by the Civil Court and the suit will remain stayed for a period of three months from the date of framing of the issue so as to enable the concerned party to apply to the High Court for rectification of the register. Section 111(2) of the 1958 Act provides that in case an application for rectification is filed within the time allowed the trial of the suit shall remain stayed. Sub-section (3) of Section 111 provides that in the event no such application for rectification is filed despite the order passed by the Civil Court, the plea with regard to validity of the registration of the trade mark in question shall be deemed to have been abandoned and the suit shall proceed in respect of any other issue that may have been raised therein. Sub-section (4) of Section 111 provides that the final order as may be passed in the rectification proceeding shall bind the parties and the civil court will dispose of the suit in conformity with such order insofar as the issue with regard to validity of the registration of the trade mark is concerned.
  3. Following well accepted principles of interpretation of statutes, which would hardly require a reiteration, the heading of Section 111of the 1958 Act i.e. “Stay of proceedings where the validity of registration of the trade mark is questioned, etc.”, cannot be understood to be determinative of the true purport, intent and effect of the provisions contained therein so as to understand the said Section to be contemplating only stay of proceedings of the suit where validity of the registration of the trade mark is questioned. Naturally, the whole of the provisions of the Section will have to be read and so read the same would clearly show lack of any legislative intent to limit/confine the operation of the Section to what its title may convey.
  4. Rather, from the resume of the provisions of the 1958 Act made above it becomes clear that all questions with regard to the validity of a Trade Mark is required to be decided by the Registrar or the High Court under the 1958 Act or by the Registrar or the IPAB under the 1999 Act and not by the Civil Court. The Civil Court, infact, is not empowered by the Act to decide the said question. Furthermore, the Act mandates that the decisions rendered by the prescribed statutory authority [Registrar/High Court (now IPAB)] will bind the Civil Court. At the same time, the Act (both old and new) goes on to provide a different procedure to govern the exercise of the same jurisdiction in two different situations. In a case where the issue of invalidity is raised or arises independent of a suit, the prescribed statutory authority will be the sole authority to deal with the matter. However, in a situation where a suit is pending (whether instituted before or after the filing of a rectification application) the exercise of jurisdiction by the prescribed statutory authority is contingent on a finding of the Civil Court as regards the prima facie tenability of the plea of invalidity.
  5. Conversely, in a situation where the Civil Court does not find a triable issue on the plea of invalidity the remedy of an aggrieved party would not be to move Under Sections 46/56of the 1958 Act but to challenge the order of the Civil Court in appeal. This would be necessary to avoid multiple proceedings on the same issue and resultant conflict of decisions.
  6. The 1958 Act clearly visualizes that though in both situations i.e. where no suit for infringement is pending at the time of filing of the application for rectification or such a suit has came to be instituted subsequent to the application for rectification, it is the Registrar or the High Court which constitutes the Tribunal to determine the question of invalidity, the procedure contemplated by the Statute to govern the exercise of jurisdiction to rectify is, however, different in the two situations enumerated. Such difference has already been noted.
  7. The intention of the legislature is clear. All issues relating to and connected with the validity of registration has to be dealt with by the Tribunal and not by the civil court. In cases where the parties have not approached the civil court, Sections 46and 56provide an independent statutory right to an aggrieved party to seek rectification of a trade mark. However, in the event the Civil Court is approached, inter alia, raising the issue of invalidity of the trade mark such plea will be decided not by the civil court but by the Tribunal under the 1958 Act. The Tribunal will however come into seisin of the matter only if the Civil Court is satisfied that an issue with regard to invalidity ought to be framed in the suit. Once an issue to the said effect is framed, the matter will have to go to the Tribunal and the decision of the Tribunal will thereafter bind the Civil Court. If despite the order of the civil court the parties do not approach the Tribunal for rectification, the plea with regard to rectification will no longer survive.
  8. The legislature while providing consequences for non-compliance with timelines for doing of any act must be understood to have intended such consequences to be mandatory in nature, thereby, also affecting the substantive rights of the parties. This is how Section 111(3)of the 1958 Act has to be understood. That apart, it is very much within the legislative domain to create legal fictions by incorporating a deeming clause and the court will have to understand such statutory fictions as bringing about a real state of affairs between the parties and ushering in legal consequences affecting the parties unless, of course, there is any other contrary provision in the statue. None exists in the 1958 Act to understand the provisions of Section 111(3)in any other manner except that the right to raise the issue of invalidity is lost forever if the requisite action to move the High Court/IPAB (now) is not initiated within the statutorily prescribed time frame.
  9. Thus, by virtue of the operation of the 1958 Act, the plea of rectification, upon abandonment, must be understood to have ceased to exist or survive between the parties inter se. Any other view would be to permit a party to collaterally raise the issue of rectification at any stage notwithstanding that a final decree may have been passed by the civil court in the meantime. True, the decree of the Civil Court will be on the basis of the conclusions on the other issues in the suit. But to permit the issue of rectification, once abandoned, to be resurrected at the option of the party who had chosen not to pursue the same at an earlier point of time would be to open the doors to reopening of decrees/orders that have attained finality in law. This will bring in uncertainty if not chaos in the judicial determinations between the parties that stand concluded. Besides, such an interpretation would permit an aggrieved party to get over the operation of a statute providing for deemed abandonment of the right to raise an issue relevant; in fact, fundamental to the lis. The position may be highlighted by reference to a suit for infringement where the Defendant raises the plea of invalidity of the Plaintiff’s trade mark and also in the alternative takes up any of the defenses available in law. The Defendant by operation of Section 111(3)of the 1958 Act is deemed to have abandoned the plea of invalidity. In the trial it is found that the Defendant is guilty of infringement and is appropriately restrained by a decree of the Civil Court. If the right Under Section 46/56of the 1958 Act is to subsist even in such a situation, the possible uncertainty and possible anarchy may well be visualized. This is why the legislature by enacting Section 111 of the 1958 Act has mandated that the issue of invalidity which would go to the root of the matter should be decided in the first instance and a decision on the same would bind the parties before the civil court. Only if the same is abandoned or decided against the party raising it that the suit will proceed in respect of the other issues, if any. If the above is the legislative intent, which seems to be clear, we do not see how the same can be overcome by reading the rights under Sections 46 and 56 of the 1958 Act to exist even in a situation where the abandonment of the same right under Section 111(3) has taken effect in law. The mandate of the 1958 Act, particularly, Section 111 thereof, appears to be that if an aggrieved party does not approach the Tribunal for a decision on the issue of invalidity of registration as provided for under Section 111(2) and (3), the right to raise the issue (of invalidity) would no longer survive between the parties to enable the concerned party to seek enforcement of the same by recourse to or by a separate action under the provisions of Section 46/56 of the 1958 Act.” (emphasis added)

9.(i) A reading of the Para 25 of the judgment in the case of Patel Field Marshal Agencies (supra) shows that it is necessary that the issue on the aspect of invalidity of the registration of the plaintiff’s trademark in an infringement suit has to be got framed by the civil court on an application of a defendant. In case the plea with respect to invalidity of the registration of the plaintiff’s trademark is abandoned i.e no application is filed at an appropriate stage by the defendant, then the suit will proceed with respect to issues which arises therein. The last few lines of Para 27 of the judgment in the case of Patel Field Marshal Agencies (supra) lays down that where rectification proceedings were not initiated by the defendant prior to filing of the suit then in such a case exercise of jurisdiction by the prescribed authority/IPAB is contingent on a finding of the civil court with respect to prima facie tenability of the plea of invalidity of registration. In Para 28, Supreme Court observes that once a civil court gives a finding with respect to lack of invalidity of the registration of the plaintiff’s trademark, the aggrieved party (i.e the defendant) has to challenge that order by an appeal but such a party cannot move the IPAB for cancellation of the registration, and to which extent the ratio laid down by the Full Bench of this Court in the case of Data Infosys Ltd. and Ors. Vs. Infosys Technologies Ltd. 2016 (65) PTC 209 (Del)(FB) will stand overruled where it is held that proceedings for cancellation before IPAB can always be filed even during pendency of the suit and the judgment of the IPAB will prevail so far as the issue of validity or otherwise of the registered trademark of the plaintiff. In Para 30 of the judgment of the Supreme Court in the case of Patel Field Marshal Agencies (supra) Supreme Court has clearly observed that jurisdiction of IPAB only comes in if the civil court is satisfied with respect to invalidity of the registered trademark of the plaintiff and consequently on such aspect an issue has been framed in the suit. It has been observed in this Para 30 that if despite the order of the civil court parties do not approach the IPAB for rectification then the plea with respect to rectification will no longer survive i.e it stands abandoned. This aspect is further reiterated more categorically by the Supreme Court in Paras 31 and 32 of the judgment in the case of Patel Field Marshal Agencies (supra) that a right to raise an issue of invalidity is lost forever in case the defendant in the suit alleging infringement of the trademark does not move the High Court at an appropriate point of time. Para 32 is indeed exhaustive and consequently sets out the ratio that the right of seeking rectification proceedings and for decision by the IPAB on the issue of validity of registration is lost and abandoned if not raised or application not filed before IPAB by the concerned authority within the time granted by the High Court or the extended time, and that once the right to urge the issue of rectification is abandoned the same cannot be resurrected at the option of the party who claims invalidity of the registration. Supreme Court has observed that to allow otherwise would be to cause complete uncertainty and chaos in the judicial determination with respect to rights under a disputed trademark, and which will arise in case civil court has in the meanwhile pronounced upon the rights of the parties to the suit by a judgment. Supreme Court has categorically observed that the right to file rectification proceedings before the IPAB of a defendant can be lost by abandonment by not approaching the High Court.

(ii) In my opinion the ratio of the judgment of the Supreme Court in the case of Patel Field Marshal Agencies (supra) has to be read that there is abandonment of the plea of invalidity of plaintiff’s registration if this plea is not raised before the suit is set down for trial/leading evidence after framing of issues. The observations of the Supreme Court of abandonment of plea of invalidity of plaintiff’s registration to have meaning will have to be read that the plea of invalidity of plaintiff’s registration for approaching IPAB will be before the stage of trial inasmuch as raising the plea of invalidity of plaintiff’s registration and for approaching IPAB is related to the passing of directions to stay trial of the suit. Trial of the suit starts after framing of issues and commencement of leading of evidence with respect to the issues framed and therefore stay of trial is before the commencement of trial and not after commencing of trial. Once therefore the defendant in an infringement suit does not seek framing of an issue of invalidity of plaintiff’s registration by the Court by taking a prima facie view on invalidity of plaintiff’s registration of its trademark before the commencement of trial then the defendant is deemed to have abandoned its right to question the validity of the registration of the plaintiff’s trademark and such right to question plaintiff’s registration is lost and will no longer survive. Para 31 of the the case of Patel Field Marshal Agencies (supra) by reference to the deeming clause in old Section 111 of the Trade Marks Act (new Section 124) holds that if High Court is not approached i.e not approached at the correct stage but at a late stage i.e after commencement of trial then the right to raise issue of invalidity is lost forever.

  1. In my opinion, considering the fact that in the present case no plea has been raised by the defendant no.1 in its written statement of wanting to file rectification proceedings before IPAB to cancel the registration of the plaintiff’s trademark, no amendment was applied to the written statement prior to framing of issues to bring forth the pleading to seek remedy of approaching IPAB for cancellation of the registered trademark of the plaintiff, the fact that rectification proceedings have been initiated now seven years later from framing of issues, and that too after substantial evidence has been led by the plaintiff, such a prayer now sought obviously not only is barred in view of ratio of the judgment of the Supreme Court in the case of Patel Field Marshal Agencies (supra) but the endeavour of the defendant no.1 is wholly malafide to somehow or other stop the trial of the suit and which is the real intent of the present application. If at all there was any strength in the case of the defendant no.1 to seek cancellation of the registered trademark of the plaintiff, then this Court fails to understand that why in this suit filed in the year 2008 till September, 2017 no application was filed by the defendant no.1 for rectification proceedings for cancellation of the registered trademark of the plaintiff before the IPAB or no such prayer made to this Court that IPAB is to be approached for cancellation of the registration of the plaintiff’s trademark.
  2. In view of the aforesaid discussion, it is held that defendant no.1 has abandoned its claim for filing of the rectification/cancellation proceedings before the IPAB with respect to the registered trademark of the plaintiff COUNTRY INN inasmuch as the rectification proceedings have been filed in September, 2017 after commencement of trial, that not only this plea of rectification/cancellation proposed to be filed did not exist in the present written statement filed in March, 2009 but also does not exist till the filing of the present application by the defendant no.1, and in fact till date there is no application filed before this Court to amend the written statement showing intention to apply for rectification proceedings (though in September, 2017 an application to amend the written statement could not have been moved in the facts of the present case being after trial having commenced way back) with the fact that now seeking to file rectification proceedings is futile because defendant no.1 is held to deemed to have abandoned its claim in the facts of the present case for seeking cancellation of the registered trademark of the plaintiff.
  3. Section 35 CPC pertaining to awarding of costs has been amended by the Legislature with respect to commercial suits. The present suit is a commercial suit. As per the provision of Section 35 CPC applicable to commercial courts, courts must award costs at different stages of the proceedings, costs are awarded keeping in view conduct of parties, and that costs are also awarded considering the lack of merits in the case which is put forth, and therefore considering the frivolous nature of the present application, and that the present application is malafide and an abuse of process of law, the same isdismissed with costs of Rs.2 lacs. Out of these costs of Rs. 2 lacs a sum of Rs. 1 lac be paid to the plaintiff and a sum of Rs. 1 lac be deposited with the website www.bharatkeveer.gov.in. I note that Section 35deals only with costs being awarded in favour of a party to litigation and there is no provision specifically dealing with imposing of costs for abusing the process of law and which situation will be covered by Section 151 CPC and under which the costs of Rs. 1 lac are to be deposited with the aforesaid website. Costs shall be paid/deposited by the defendant no.1 within a period of six weeks from today.

I.A. stands dismissed in terms of aforesaid observations. I.A. No.5500/2018 (under Section 151 CPC by defendant no.1)

  1. By this application, defendant no.1 prays for change of its name from Country Inns & Suits by Carlson Inc. to Country Inn & Suits By Radisson Inc.
  2. Counsel for the plaintiff very fairly does not oppose the application which is formal in nature. This application is allowed. Defendant no.1 will file amended memo of parties within one week from today.

I.A. stands disposed of.

APRIL 23, 2018/ Ne                           VALMIKI J. MEHTA, J

 

 

 

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