The Delhi High Court appointed two amicus curiae to aid in determining whether a challenge to the defendant’s trademark could be considered under Section 124 of the Trademarks Act (“TM”), 1999, even when the defendant did not raise a defense under Section 30(4) of TM Act in a trademark infringement case titled Nadeem Majid Oomerbhoy v. Sh. Gautam Tank and Ors. On September 11, 2023, the Delhi High Court ruled that it could not declare infringement against a registered trademark holder without first invalidating the trademark registration. This article explores the legal aspects of evaluating the validity of registered trademarks in India, focusing on the interaction between Section 57(4) and Section 124 of the TM Act in light of this judgment.
Understanding Section 124: A Unique Framework for Contesting Trademark Legitimacy
Section 124 of the Trademarks Act 1999 is a specific provision that outlines the procedure for challenging the legitimacy of a registered trademark, particularly in the context of ongoing trademark infringement litigation. Subsection 124(1)(b) becomes relevant when the defendant asserts a defense based on Section 30(2)(e) of the Act. When the defendant raises such a defense, and the plaintiff subsequently contests the validity of the defendant’s trademark, Section 124(1)(ii) obligates the court to assess the validity of the plaintiff’s challenge.
The process prescribed in Section 124 commences when the defendant raises a defense related to Section 30(2)(e), which focuses on the non-registration of the trademark in question. If the defendant does not raise this defense, the application under Section 124 is considered inappropriate, as illustrated in the current case.
‘Super’ or Not?: Factual Matrix of POSTMAN Infringement Case
In 2005, a trademark lawsuit was initiated, with the plaintiff seeking an injunction against the defendants for using the plaintiff’s registered trademark, “POSTMAN.” The plaintiff argued that the defendant’s use of the wordmark “SUPER POSTMAN” for the same product, i.e., edible groundnut oil, constituted an infringement of their registered mark.
Before the lawsuit was filed, the defendant had submitted an application on April 29, 2004, seeking the registration of the contested wordmark, “SUPER POSTMAN.” This application was eventually approved by the Trade Marks Registry after a lengthy 19-year period, on February 13, 2023, resulting in the registration of the mark. Subsequently, the plaintiff submitted an application under Section 124(1)(b) of the TM Act, raising doubts about the validity of the registration granted to the defendants.
Section 124: Why It Does Not Apply to the Current Case
Justice C. Hari Shankar’s bench presided over a trademark infringement case in which the defendants had later obtained registration for the contested trademark. The Court emphasized that, according to Section 23(1) of the TM Act, 1999, the registration effectively dated back to April 29, 2004, the application filing date, which preceded the plaintiff’s filing of the trademark suit. Consequently, the Court stated it could not accuse the defendants of infringing the plaintiff’s trademark unless the registration of the defendants’ trademark was found invalid.
The Court also noted that Section 124 of the Act did not apply to the plaintiff since the defendants had not specifically invoked a defense under Section 30(2)(e) regarding registering the contested trademark. The plaintiff’s application under Section 124(1)(b) of the TM Act, which challenged the validity of the defendants’ registration and requested an adjournment to file rectification proceedings, had previously been rejected by the Court.
Because the defendants’ mark was not yet registered when the written statement was filed, and no subsequent pleadings relied on the registration as a defense, the Court determined that the Section 124 procedure could not be employed. Therefore, the Court decided to assess the validity of the defendants’ trademark using its suo motu powers under Section 57(4), separate from Section 124.
The Court acknowledged that “The plaintiff has already manifested its intention to question the validity of the registration of the defendants’ SUPER POSTMAN trademark. That challenge, however, was raised under Section 124, which is not applicable to the facts of the present case. Inasmuch as such a challenge has specifically been raised, and Section 29(1) and Section 30(2)(e) proscribe the Court from returning any finding of infringement without in the first instance invalidating the defendants’ registration, the Court is inclined to accept the suggestion of learned amici and to examine the validity of the defendants’ trademark in the exercise of the suo motu powers conferred on it by Section 57(4), which is vested in it independent of Section 124.”
The Court ruled that since the defendants did not raise a defense under Section 30(2)(e), the plaintiff could not benefit from Section 124. The Court also emphasized that it couldn’t ignore the fact that the defendants’ trademark was registered and couldn’t find infringement against a registered trademark holder, as Sections 29 and 30(2)(e) clearly prohibited this. Any such finding would be illegal, in violation of the TM Act.
However, the Court also recognized the importance of allowing the plaintiff to challenge the validity of the defendant’s registration. The Court further commented that “Inasmuch as the said registration, if valid, acts as an insurmountable hurdle to the plaintiff securing any relief against infringement, the plaintiff has necessarily to be afforded an opportunity to question the validity of the said registration, if the scales of justice are to remain equipoised.”
Exploring Section 57(4): An Alternative Route to Challenge Trademark Validity
Although the plaintiff’s application under Section 124 was dismissed, the Hon’ble Court recognized its authority to assess the validity of the defendant’s trademark through Section 57(4) of the TM Act 1999. Section 57(4) reads: “The Registrar or the Appellate Board or the court, as the case may be, shall, while dealing with a proceeding under this Act, have the power of the civil court trying a suit, and in particular in respect of the following matters, namely… (4) that the registration of the trade mark is wrongly remaining on the register.”
This provision confers upon the court suo moto powers to evaluate trademark validity. Consequently, the Court opted to scrutinize the legitimacy of the defendants’ trademark by exercising the authority granted to it under Section 57(4) of the TM Act.
Section 57(4): Its Relevance in the Post-IPAB Era
The significance of this observation by the Hon’ble Court becomes even more pronounced in the aftermath of the abolition of the Intellectual Property Appellate Board (“IPAB”). Previously, IPAB held jurisdiction over trademark disputes. However, following the elimination of IPAB, the responsibility for adjudicating trademark matters, including challenges to trademark validity, has now shifted to the Court. Appeals are now directly transferred to High Courts from the Registrar’s office. Therefore, the Delhi High Court’s decision gains paramount importance in light of the changes introduced by the Tribunal Reforms Act of 2021 and the 2021 amendment to the TM Act, 1999. The chasm of uncertainty left after the removal of IPAB must now be addressed and rectified by the courts through decisions like this to streamline the process of handling infringement cases and subsequent appeals.
Hence, the present case provides valuable insights into the intricacies of contesting the validity of registered trademarks under Indian trademark law. While Section 124 offers a specific framework for such challenges, its applicability depends on the defendant raising specific defenses outlined in Section 30(2)(e). In cases where this condition is not met, Section 124 cannot be invoked.
Nevertheless, Section 57(4) emerges as an alternative avenue for challenging the validity of a trademark, enabling the Court to proactively assess the legitimacy of a registered trademark, particularly in the post-IPAB era.
In a final statement, the Court noted, “In that view of the matter, list this matter on October 31 2023 to hear both sides on the aspect of validity of the registration granted to the defendants’ SUPER POSTMAN trademark on February 13 2023.”