Introduction
When a trade mark is consistently used and registered, it is usually protected from infringement by third parties. Although the majority of trade mark laws in various jurisdictions combine both types of protection, only registration ensures a trademark's full legal protection. Section 124 of the Trade Marks Act allows for the stay of proceedings where the legal of the trade mark's registration is questioned, while Section 134 of the Trade Marks Act offers the remedy of bringing an infringement suit against any unauthorized use of a trademark. The enactment of the Tribunal Reforms Act, 2021 resulted in the establishment of Delhi High Court's Intellectual Property Division (IPD) and the Intellectual Property Appellate Board (IPAB) being dissolved. The procedural aspects of trademark cancellation petitions have been greatly impacted by these developments, particularly when civil litigation involving the same trademark is still pending. A major source of legal ambiguity is the application of Section 124, particularly with regard to the stay of civil lawsuits for trademark infringement when a rectification petition is filed.
Section 124 of the Trademarks Act, 1999
It allows either party in the suit to raise an invalid registration of a trade mark as a defense to the infringement claim. The defendant may raise this defense in response to the plaintiff's claim in a trade mark infringement suit, and the plaintiff may raise it in an infringement suit where the defendant relies on Section 30(2)(e) (limits on the effects of registered trademarks) of the Trademarks Act, 1999 to justify the use of the infringed trade mark. If the validity of either party's trade mark registration is challenged, the court must satisfy itself that such a dispute exists and frame an issue in that regard, while staying the infringement suit to decide the validity of such registration.
In the case of Mr. Amrish Aggarwal v. M/s Venus Home Appliances Pvt. Ltd. & Anr., [C.O. (COMM. IPD- TM)- 258/2022] the Delhi High Court held that stay on proceedings of suit for infringement is mandatory during the pendency of a rectification petition filed before the Registrar or the High Court, even after the abolition of IPAB. The Court set aside the decision passed in the case of Sana Herbals Pvt. Ltd. v. Mohsin Dehlvi [2022 SCC On Line Del 4482] and held that"Notwithstanding the abolition of the IPAB and the power of rectification reverting to the High Court, a Trial Judge would necessarily have to stay its hands once it is apprised of the pendency of a rectification or cancellation action and which may have been initiated prior to the institution of the suit itself".
In this case Intercontinental Great Brands LLC v. Parle Product Private Limited [2023 LiveLaw (Del) 1069], the Hon'ble Delhi High Court laid down two pre-requisites which need to be fulfilled while filing the application under section 124 of the Act i.e., the defendant has taken defense under section 30(2)(e) and the plaintiff has raised maintainable plea against invalidity of the trademark. It also cleared that the Court is bound by Section 124 if it is satisfied with the conditions followed by the parties. The court must put a stay on proceedings for suit of infringement till the rectification proceedings are not settled or frame issues regarding validity of the trademark and then stay proceeding for three months from the date of framing issues and allow the concerned party to raise a plea for rectification of register before respective High Court.
Conclusion
By significantly reducing the possibility of court decisions and drastically reducing on the lengthy legal proceedings that frequently impede trademark litigation, a clear and uniform interpretation of Section 124 would improve the overall effectiveness of India's trademark enforcement system. As a result, trademark owners would feel more confident in the legal system and be motivated to actively defend their intellectual property rights.
The statute's explicit goal seems to be to guarantee that rectification challenges are only brought before the High Court or the Registrar, and as a result, the trial judge must stay its hands in any ongoing legal proceedings. The parties would be bound by the final orders made in the rectification or cancellation proceedings, and the court hearing the case would also be required to decide how to proceed with the suit in accordance with the ruling that may have been reached during those proceedings.
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