Facts and procedural history of the case

This suit was filed by Patel Field Marshal Agencies against the company, P.M. Diesels Ltd. before the Supreme Court. The respondent company owned 3 registered trademarks, the common highlight of which was the phrase “Field Marshals”. The company filed a petition in the Delhi High Court against the appellant company with the claim that they had infringed the trademark and that they had rendered accounts of profits for the mark “Marshal”. In the same suit, they had claimed a permanent injunction to prevent the use of the marks “Patel Field Marshal Agencies” and “Patel Field Marshal Industries” by the appellant company. Along with this, another claim for an interlocutory injunction was also argued by the respondents.

The appellant company, however, questioned the validity of the trademark “Field Marshal” owned by the respondent company, claiming that it must be changed in the trademark register.

The appellant company, simultaneously, filed 3 separate suits in the Gujarat High Court, contending the removal and cancellation of the 3 trademark registrations belonging to the respondent company in 1997 under Sections 46 and 56 of the Trade and Merchandise Marks Act of 1958. The Judge dismissed the applications in the year 1958, which was then affirmed by the Division Bench of the Gujarat High Court. This order passed by the High Court was challenged in 2001.

Issues

1. Whether the question of the validity of the trademark raised in the suit will have a remedy under Section 111 read with Section 107 of the Trade and Merchandise Marks Act of 1958?
2. Whether the party will have recourse under Sections 46 and 56 of the Trade and Merchandise Marks Act of 1958?

Rules

1. Section 46: If a Trademark has been registered with no intention of using it and if it hasn’t been used within 1 month before an application for its removal or for a continuous period of 5 years, the trademark can be removed from the trademark register.
2. Section 56: The Tribunal may cancel or modify the registration of a trademark if it is satisfied that any provision has been violated or there has been a failure to comply with any condition for which the trademark was registered.
3. Section 107: An application may be filed before the High Court for rectification of a trademark to challenge the registration of a trademark.
4. Section 111: If a person files an application to rectify a trademark and a subsequent proceeding is pending before the Registrar or a High Court for infringement and an appeal is taken, the suit will stay. If no suit is pending and only a suit is filed for infringement of a trademark, the Court shall pass an order within 3 months of filing such a suit.

Analysis 

The appellants contended that Sections 28 and 29 and Sections 46 and 56 were parallel and independent of each other. The former two sections deal with the rights vested in the owner of a registered trademark and the later two sections deal with the rights vested in a person aggrieved by the registration of that trademark. To file an application for rectification under Sections 107 and 111, it is required that the person filing the application must be the aggrieved party which includes the person against whom a suit for infringement has been filed. 

With respect to the validity of the trademark registration, the appellant company contended that the question of conclusiveness can be raised in both a suit for infringement as well as a rectification suit.

It was also contended that it is not required to approach a Subordinate Court before approaching the High Court to file a suit for rectification. This was contended by the appellant company while referring to Section 41(b) of the Specific Relief Act, 1963 which states that a Subordinate Court shall not prevent a person from filing suits.

In contrast, the respondents contended that the rights are given as per Sections 46 and 56 and Sections 107 and 111 operate in 2 different views. It is not possible for both the provisions to exist mutually as conflicts may arise for decisions to be made under those provisions.

As per Sections 111, the respondents argued that if the Subordinate Court is satisfied with the issue of invalidity of trademark registration, the order must be decided in the rectification proceeding and not in the suit itself.

As per Section 111(3), the rejection of a plea of invalidity is a loss for all purposes and it does not keep the plea of invalidity alive under Sections 46 and 56.

Judgment

In a suit for infringement of a registered trademark, if the validity of the registration of the trademark is argued by the aggrieved party, Section 107 shall provide that an application for rectification must be made to the High Court and not to the Registrar, apart from the provisions under Sections 46 and 56. This is to ensure that in such situations where a suit for infringement is pending, the legislative scheme is not the same.

Section 111 explicitly states that if a proceeding for rectification of a registered trademark belonging to either the appellant or the respondent is pending before the Registrar or the High Court and a suit for infringement is filed in which the same plea is raised by either party, the suit shall stay before the High Court or the Registrar.

It was finally concluded by that Court that, in a case of invalidity of a registered trademark which is independent of a suit, the specified statutory authority will be the only authority to deal with the matter in question. However, only in a situation where a suit is pending which is either instituted before or after the filing of an application for rectification, the question of jurisdiction by the necessary statutory authority shall differ based on a finding of the Civil Court which is in relation to the suit for invalidity of that registered trademark.

On the other hand, where a situation arises where the Civil Court is not able to find an issue which can try the suit of invalidity, the compensation for the aggrieved party would not be able to move under Sections 46 and 56. However, it can be done to challenge the order of the Civil Court in a subsequent appeal to avoid multiplicity of proceedings on the same issue which may result in a conflict of decisions.

In addition to this, the Court held that Section 111(3) was only a legal narrative. While stating the consequences for non-compliance of any act, the legislature is required to understand that such consequences are necessary, which may affect the substantive rights of the parties. Under Section 111(3), the right to raise the question of invalidity will be lost if the suit is not moved to the Tribunal or the High Court within the stipulated time period.

The appeal was thus dismissed and the order was passed in favour of the respondent company. 

Conclusion

In this case, the Supreme Court dealt with the issue of whether rectification of a registered trademark under Sections 46 and 56 of the Trade and Merchandise Act, 1958 can be availed in the case where an infringement suit is previously pending in which an issue of the validity of the registered trademark has been raised by either party but an issue of validity had been framed in the suit.

The Supreme Court thus conclusively delivered a clarification with respect to the Trade and Merchandise Act of 1958. Along with this, the Supreme Court also stated that if a proceeding for rectification of the trademark in question is pending before the Registrar or the High Court, and simultaneously a suit for infringement is filed the suit for infringement shall remain stayed.