On August 20, 2024, a single-judge bench of the IP Division of the Madras High Court (MadHC) issued an Order (pdf) with notable observations about the feasibility of permitting a counterclaim in a trademark rectification petition filed underneath Sections 47 (cancellation of trademark on the grounds of non-use) and 57 (rectification of trademark) of the Trademark Act, 1999 (“TM Act”). The case concerned the trademark “Solidare” (Trademark No. 1574746 in Class 9). In this submit, I’ll look at the precedential worth the order could got down to re-evaluate the interplay and timeline between Sections 47, 57, and 124 (keep throughout go well with of infringement)—a trio typically seen collectively in the context of rectification petitions (mentioned here and here).
An Analysis of the Order
Firstly, for context, a rectification software have to be filed underneath Sections 47, 57, 68, or 77 (as relevant) of the TM Act learn with Rule 92 of the Trade Marks Rules, 2002. Now, the present matter pertains to Sections 47 and 57. An evaluation of this order requires a two-pronged strategy, as follows:
- A Lack of Provision in TM Act for Counterclaims in a Rectification Petition
Sections 57(1) and (2) present for the powers associated to modifying or cancelling trademark registrations on grounds of failure to adjust to the trademark’s registration guidelines or circumstances, presence of errors, incorrect entries, or lacking entries in the Register. Parties affected solely by these points can strategy the High Court or Registrar to make acceptable modifications. With respect to this, the MadHC held {that a} counterclaim is just not maintainable in a rectification continuing owing to a scarcity of a provision in the TM Act offering for such an motion. [To avoid any confusion, a ‘counterclaim’ is when the defendant makes a positive claim against the plaintiff in response to the plaintiff’s lawsuit on a certain cause of action under the CPC, and is distinct from the ‘counter statement,’ which is filed as a response to the initiated rectification proceedings] Moreover, the Petitioner’s counsel had additionally claimed for this finish that the Madras High Court Intellectual Property Rights Division Rules, 2022 additionally don’t present for such a counterclaim. On a search, I additionally couldn’t discover something on a counterclaim being accepted throughout the rectification proceedings per se in the Manual for Trade Marks by the Office of Controller General Patents, Designs & Trade Marks (CGPDTM). The MadHC commented that whereas the Code of Civil Procedure (CPC) [under Order VIII Rules 6A to 6G] expressly supplies for a counterclaim and additionally units out an elaborate process for coping with the identical, the TM Act neither supplies for nor offers with counterclaims at the very outset (Para 8).
From what I researched, it seems that that is the first prevalence of a counterclaim being made in a rectification petition. Older circumstances principally have counterclaims filed after the rectification petitions have been dismissed and the fits for infringements or passing off are involved presently. For occasion, in the case of Vivek Kochar v. KYK Corporation Limited (2022) the place the counterclaim in a passing-off go well with was a lot after the rectification had been ordered by the court docket). Another case might be {that a} counterclaim in the go well with for infringement, passing-off, and so forth. is ongoing and the social gathering makes an software for rectification thereafter. For occasion, in Roland Corporation vs Mr Sandeep Jain (2021), the rectification petition was filed after the counterclaim was filed for confusion of logos. Another variation of such eventualities might be witnessed in the case of Mandom Corp v. Fem Care Pharma Limited & Ors. (2020) (mentioned on the weblog here), counterclaims in an infringement go well with had been filed by the Applicant after the rectification petitions had been disposed of, be it by rejection in the first occasion, or acceptance in the second occasion.
- Wide Powers vested in the Court underneath Section 57(3) and (4)
Another side that was introduced up in the order was the utility of Sections 57(3) and 57(4) to name upon the discretionary powers vested in the court docket to determine any query or take any rectification motion suo moto when the scenario calls for. The counsel for the respondent initially contended that the powers conferred on the Court underneath Section 57 are so extensive that the MadHC can embrace the energy to rectify the trademark of the petitioner if a counterclaim had been to be made. The counsel relied on the order of the Delhi High Court (HC) in Nadeem Majid Oomerbhoy v. Gautam Tank (mentioned here) with respect to the train of the powers underneath Section 57(4) when the social gathering had did not adjust to part 124(1)(b) of the TM Act earlier than difficult the validity of this registration when a trademark infringement go well with was already pending. Moreover, with regard to the powers underneath Section 151 of the CPC, the counsel relied on the Supreme Court judgement of Rajendra Prasad Gupta v. Prakash Chandra Mishra.
While not precisely falling in step with what the counsel was asserting, the Court did enable the counterclaim to be handled as a petition for difficult the validity of the Petitioner’s mark. The MadHC famous that whereas sub-section (3) grants broad powers, it’s particularly for resolving points associated to the rectification of a trademark register. As for sub-section (4), it permits for broader concerns however requires discover and a chance for all events concerned. However, on this case, the counterclaim is filed by a celebration already concerned in the proceedings, so Sub-section (4) doesn’t have an effect on the resolution on whether or not this counterclaim is maintainable. The MadHC famous that regardless of the remark that counterclaims should not maintainable underneath the TM Act since the respondent submitted the counterclaim with the requisite charge and it was adopted by a written assertion from the petitioners, it must be handled as a petition as a substitute. MadHC assigned an unique petition quantity to such a counterclaim. The principal floor in the counterclaim in itself is moderately attention-grabbing because it claims that the Petitioner himself has copied its mark from a 3rd social gathering and subsequently his mark is just not supposed to stay in the register.
A Re-look At the Confluence of Sections 47, 57 and 124 of the Trademarks Act
To perceive the scheme of Section 124 a bit higher, the part supplies for a keep of the go well with for infringement the place both the plaintiff or the defendant has raised a problem of invalidity of the defendant’s or the plaintiff’s trademark registration, respectively. In this matter, one of the contentions raised by the petitioner’s counsel was even in a civil go well with, if the validity of the trademark of the plaintiff is challenged by the defendant, the treatment can be to file a rectification petition in compliance with Section 124 of the TM Act and no different means. The MadHC, nevertheless, has not commented on this rivalry in any of its analyses. That leaves us to analyse how far this assertion goes in gentle of the MadHC’s resolution to deal with the counterclaim as a brand new petition.
Moreover, the basic ideas established by the landmark judgment of the SC in Patel Field Marshal Agencies v. P.M. Diesels Ltd (2021) (mentioned here, here, here, and here) discover relevance. The case laid to relaxation a number of doubts concerning cures underneath Sections 47, 57 and 124 of the TM Act,1999 in an infringement go well with. The SC clarified that the proper to hunt rectification of a trademark underneath Sections 47 and 57 is restricted by Section 124 of the Act when an infringement go well with regarding the trademark is ongoing. It is required that the social gathering not solely increase the subject of invalidity inside the infringement go well with but in addition be sure that the Civil Court frames this subject earlier than they’ll file a rectification petition.
This was adopted by the DHC’s Anubhav Jain v Satish Kumar Jain (2023), a judgement that raised loads of eyebrows at its seeming diversion from Patel Field Marshal (mentioned here). Here, the DHC dominated that Section 124 of the TM Act, which permits for rectification throughout an ongoing infringement go well with, doesn’t override the rights underneath Sections 47 and 57. Both Section 124 and Sections 47 and 57 can be utilized concurrently when invalidity is raised as a defence. Not simply this, a number of judgments existed earlier than Patel that asserted that Sections 124 and 57 are each impartial of one another of their software. For occasion, Data Infosys Ltd. & Ors. vs. Infosys Technologies Ltd. (2016) held that Section 124 doesn’t restrict a celebration’s skill to hunt rectification of a trademark registration. Similarly, Wonderful Developers Private Ltd. vs. Impresario Entertainment and Hospitality Private Ltd. held that neither Section 124(1) nor 124(2) precludes a celebration from making use of to the Registrar or IPAB underneath Sections 47 or 57 for the removing or rectification of a trademark at any time. However, these had already been overruled by the Patel Field Marshal case.
Anubhav Jain asserts that Section 57 of the TM Act operates independently and permits for direct rectification, whereas Section 124 applies procedurally when a trademark’s validity is challenged throughout ongoing litigation and deemed legitimate by the court docket. On the different hand, Patel Field Marshal, which is the precedent, says that Section 57 will come into software after a problem on invalidity is framed by the court docket in the infringement go well with. The interpretation in Anubhav Jain was more likely to deliver a couple of multiplicity of proceedings, but this has been averted given the incontrovertible fact that the case has been (*57*).
Another attention-grabbing factor that has occurred lately in the context of this dialogue is the MR Amrish Aggarwal Trading vs M/s Venus Home Appliances judgement, which has overturned Sana Herbals Pvt. Ltd. vs. Mohsin Dehlvi, which held that no battle would come up if rectification and infringement fits had been tried concurrently. With respect to this, Amrish Aggarwal emphasised that underneath Section 124 of the TM Act, a court docket should keep go well with proceedings if rectification proceedings are initiated earlier than the go well with, as this avoids multiplicity of proceedings. The trial court docket should consider the benefit of any plea of invalidity throughout the go well with and keep proceedings for 3months if the plea is tenable. The court docket confirmed that the obligation to remain go well with proceedings stays in place if rectification or cancellation actions are pending previous to the go well with’s establishment.
In the extant matter, nevertheless, this has no implication as the position of Section 124 by no means got here into play in the first place. The MadHC has now instantly transformed the counterclaim to an unique petition as would have been finished when complying with Section 124, with out requiring the events to bear the prices and efforts once more, which is considerable for making certain expediency. It appears that the rectification petition will now be addressed earlier than the infringement go well with, much like when Section 57 petitions observe a Section 124 software, however with the chronology of the petitions reversed on this case. According to Section 124, a keep for the new go well with will possible apply till the rectification petition is resolved on its deserves. However, the MadHC hasn’t clarified the order through which the petitions will probably be addressed. It is unclear which rectification petition will probably be addressed first—whether or not the petitioner’s or the respondent’s (which is now a counterclaim transformed into an unique petition). Nevertheless, on the complete, the MadHC has used its powers in a rational and considered method.
[Hattip to Mr. Ramesh Ganapathy for letting us know about the Order.]