Patel Field Marshal Agencies v. P M Diesels Ltd.

Citation: AIR 2017 SCC 1388

Court: Supreme Court of India

Bench: Justice Ranjan Gogoi, Justice Navin Sinha

Facts:

P M Diesel Ltd. (the “PMD”) was the registered owner of three trademarks, each of which contained the phrase ‘Field Marshal’. In 1989, PMD instituted a suit of trademark infringement before the High Court of Gujarat against Patel Field Marshal Agencies ( “Patel Field”). As one of the reliefs under the infringement suit, PMD had prayed for a perpetual injunction against Patel Field from using the trade names ‘Patel Field Marshal Agencies’ and ‘Patel Field Marshal Industries’. While the infringement suit was pending, the PMDs had also filed an interlocutory application for a temporary injunction against the Patel Fields. In turn, the Patel Field questioned the validity of the PMD’s trademarks and claimed for the rectification of trademarks in the register. In pursuance of the same defense, the Patel Field filed three rectification applications for the removal and cancellation of the PMD’s trademarks containing the words ‘Field Marshal’.

A single-judge bench of the High Court of Gujarat dismissed the rectification applications, which was subsequently affirmed by a Division Bench of the Gujarat High Court. Aggrieved by this decision, the Patel Fields appealed to the Supreme Court of India which is presently being discussed here.

Issues:

• Whether the remedy of rectification of a trademark by the statutory authority established under the Act would be available in an event where the issue of the validity of registration of a trademark has already been raised in an infringement suit before a civil court?

Laws Involved:

Trade and Merchandise Marks Act, 1958 (“Old Act”)

• Section 46

• Section 56

• Section 107

• Section 111

Trademarks Act, 1999 (“New Act”)

• Section 47

• Section 57

• Section 125

• Section 124

Note that the judgment shuffles between the corresponding sections of the Old and New Act. For sake of uniformity, this case analysis will exclusively use references to the New Act (now referred to as “Act”).

Analysis:

Sections 46, 56, 107, and 111 of the Old Act corresponding to Sections 47, 57, 125, and 124 of the New Act provide for rectification proceedings for the removal of a trademark from the Register. While Sections 47 and 57 provide for independent rectification proceedings before the statutory authority and the Intellectual Property Appellate Board (“IPAB”), Sections 124 and 125 provide for rectification proceedings instituted in relation to a suit for trademark infringement. What creates the confusion is that in the latter scenario, one may only approach the civil court which has to first determine whether the issue of the validity of registration of a trademark exists prima facie. If the court determines the answer to this question in the positive, then one has to institute rectification proceedings within the limitation period of three months set out in the Act, failing which the issue regarding the validity of the trademark would automatically be deemed to be abandoned. In this scenario, the Supreme Court tried to determine what happens to one’s right under Sections 47 and 57 when a suit for infringement is instituted. Do Sections 124 and 125 automatically oust the applicability of Sections 47 and 57? Or do they work in parallel?

A number of High Courts such as the Madras and Delhi High Courts tried answering the above questions which were discussed by the Apex Court in detail. In the case of Astrazeneca UK Ltd. v. Orchid Chemicals and Pharmaceuticals Ltd.[1], the Delhi HC held that where the civil courts decide that the issue of validity of the trademark registration doesn’t exist prima facie, the only option available for an aggrieved litigant is to appeal the same. In this scenario, the litigant cannot challenge the validity of the trademarks for a second time by filing rectification proceedings under Sections 47 and 57 with the IPAB. In contrast to this, the Madras HC in B. Mohamed Yousuff v. Prabha Singh[2] stated that both remedies were independent of the other and ran parallel. The same issue was then taken up by the Delhi HC again in Data Infosys Ltd. v. Infosys Technologies Ltd.[3] where the Division Bench overruled Astrazeneca case. The Delhi HC held that where civil courts decide that the issue of validity of the trademark registration doesn’t exist prima facie, or if the court states that it exists prima facie, but the litigant fails to institute the rectification proceedings within the limitation period, then, his remedy under Sections 47 and 57 remain unaffected, and such litigant may choose to challenge the validity of the trademarks under these sections at a later stage.

The Apex Court disagreed with the Delhi HC in the Data Infosys case and stated that based on the established principles of interpretation of statutes, any legislation must be read in its entirety. It clarified that where rectification proceedings are instituted independently, only the IPAB has authority to decide the validity of registration of a trademark, which will in turn bind the civil courts. However, the SC clarifies that the same doesn’t apply when the issue of validity of trademark is raised in a suit for trademark infringement and states “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.” Therefore, in case of the latter and in line with the Astrazeneca case, the SC said that when the civil court finds that the issue of validity of the trademark registration doesn’t exist prima facie, the only other option available for an aggrieved litigant is to appeal the same and his rights under Sections 47 and 57 stands exhausted. The same applies if the litigant fails to file rectification proceedings within the limitation period after the civil court finds that there exists a prima facie case questioning the validity of the trademark.

Conclusion:

The Supreme Court finally settled the question surrounding the apparent parallel remedy for challenging the validity of trademarks through rectification proceedings. Additionally, the order of the Supreme Court prevents multiple proceedings on the same issue, backlog of cases, and the resultant conflict in decisions.

---

References:

[1] Astrazeneca UK Ltd. v. Orchid Chemicals and Pharmaceuticals Ltd., 2006 SCC OnLine Del 1668.

[2] B. Mohamed Yousuff v. Prabha Singh, (2008) 38 PTC 576.

[3] Data Infosys Ltd. v. Infosys Technologies Ltd., 2016 (65) PTC 209 Del.