Issues of Jurisdiction in IP laws

Intellectual property law is the rising sun of India. Churping of birds attract the human attention in morning, like wise, issue of Jurisdiction in IP cases attract the attention of legal fraternity.The issue of Jurisdiction is Venus in the galaxy called 'IP laws'.

Let me discuss the issue of Jurisdiction in IP laws in accordance with the respective Acts.

1) TRADEMARKS ACT,1999.

(A) Suit for Infringement of Trademark 

 Illustration

Mr. A is a registered proprietor of a Trademark 'X' for goods 'Y' in Ahmedabad.  The case of Mr. A is that Mr. B carrying on business in Mumbai, is using identical and/or deceptively similar Trademark for the identical goods  and thereby Mr. B is infringing the statutory rights of Mr. A.

Mr. A is willing to file a suit for infringement of Trademark.  Which court has jurisdiction to entertain and adjudicate the case of Mr. A. ?

Answer of this question is district court of Ahmedabad has jurisdiction to entertain and adjudicate the suit for infringement of Trademark as the words " the person/s  instituting the suit,actually  and voluntarily resides or carries on businesd or personalky works for gain " are used   the provisions of section 134 (2) of the Trademarks Act,1999. Further, section 134(2) begins with the words " For the purpose of clauses (a) and (b) of sub- section (1), District Court having jurisdiction .."  Hence what section 134(1) says is  required to be seen. 

Section 134 (1) says, " No suit 

(a) for the infringement of a registered trademark ; or

(b) relating to any right in a registered trade mark ; or 

(c) for passing off arsing out of the use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiff's trademark ,whether registered or unregistered. shall be instituted in any court inferior to a District Court having jurisdiction to try any suit. 

Now if the provisions of 134(1) and (2) of the Act are required to be read combinedly.  Such combined reading establishes that clause (c) of section 134 (1)  is not incorporated in  the provisions of section 134(2). Only (a) and (b) of sub section 1 are incorporated. Hence section 134 is applicable only for infringement of registered trademark and not for passing off action, hence Mr. A of the above-mentioned illustration is entitled to file a suit of infringement of his registered Trademark in Ahmedabad District Court.

(B) Suit for Passing off Action

As far as passing off action is concerned, the provisions of section 134 of the Act, is not applicable.

In that case  if Mr. A of illustration is willing to take action of passing off action in Ahmedabad, he has to establish that the goods of Mr. B under the impugned trademark is being sold in Ahmedabad at the time of file of suit for passing off action. That means his action is based on the terms " where the cause of action is arisen". It means section 20 of CPC is invoked because section 134 of Trademarks Act is silent about the terms "where the cause of action arises". Hence the help of section 20 of CPC is required to be taken for filing a suit in Ahmedabad Court by Mr. A for passing off action along with infringement action. 

Suppose the goods of Mr. B is not being sold in Ahmedabad,  then ? 

Under such circumstances, Mr. A is only entitled to file a suit for infringement action in Ahmedabad Court and not for passing off action.  A suit for passing off action is to be filed in Mumbai where Mr.B resides, carries on business or works for personal gain or cause of action arises in view of section 20 of CPC. 

(C) Suit for groundless threat u/s.142 of the Trademarks Act,1999:

The plain reading of section 134 read with 142 of the Trademarks Act, does not invoke the provisions of section 134 as it is silent about the filing of suit for groundless threat as mentioned in section 142 of the Act. Meaning thereby, suit for groundless threat can not be filed on the basis of the terms " the person/s  instituting the suit,actually  and voluntarily resides or carries on businesd or personalky works for gain " as mentioned in section 134 of the Act, but it can be filed on the basis of the (1) cause of action being arisen and (2) where the defendant resides or  carry on business or works for personal gain in accordance with the provisions of section 20 of CPC. Section 142(4) only speaks about instituting the suit in District Court but it is silent about which District Court.

2) THE COPYRIGHT ACT,1957

(A) Suit for infringement of Copyright:

Example: 

Mr. A is an author and owner of a book, residing in Ahmedabad. Mr. B, a resident of Mumbai makes a substantial and material reproduction of the book of Mr. A for sale of it in Mumbai and thereby infringes the Copyright of Mr. A. Which District Court has jurisdiction,  Ahmedabad Court or Mumbai Court ? 

The wordings of the provisions of section 134 of Trademarks Act, 1999 are similar to that of the provisions of Section 62 of the Copyright Act,1957. Meaning thereby, whenever there is infringement of Copyright, suit is filed in the court where plaintiff resides or carries on business or works for personal gain. Hence, the answer is Ahmedabad District court has jurisdiction as per section 62 of Copyright Act, of course, Mumbai Court has also jurisdiction to entertain and adjudicate the suit on the basis of ' cause of action being arisen' as per section 20 of CPC.

(B) Suit for groundless threat:

Section 60 of the Cooyright Act,1957 talks about the legal proceedings for groundless threats. The question is arisen that  whether the term " or the infringement of any other right " as mentioned in section 62(1) includes the right to file a suit for groundless threat? If yes, then ,as per  section 62 (2), the suit for groundless threat can be filed where the plaintiff of that suit actually or voluntarily resides or carries on business or personally works for gain. The proceeding of groundless threat is considered as civil proceeding arising under chapter 12 I.e. civil remedies of the Copyright Act.

3) The Designs Act, 2000

A) Suit for infringement of Copyright in Design:

Illustration:

Mr. A, being situated in Ahmedabad, is a registered proprietor of a design of an article and has copyright in design of that article.  The design of that article  is infringed by B who is situated in Kolkatta. 

Which court has jurisdiction to entertain and adjudicate the suit for infringement of registered design in this case ? 

Answering this question, let the second proviso of provisions of section 22 (2) of the Designs Act,2000 be referred. This second proviso says that suit seeking relief under S. 22(2) shall be insituted in the court of District Judge. This provision is client about the institution of the suit of which court, either the court where plaintiff is situated or the court where the defendant is situated or the court where the cause of action is arisen. Section 22 of the Act has no such wordings as  "the person/s  instituting the suit,actually  and voluntarily resides or carries on businesd or personalky works for gain "  which are provided in section 134 of the Trademarks Act,1999 and in section 62 of the Copyright Act, 1957. 

Hence, it is established that the intention of legislature is very clear that suit for infringement of design is not filed in the District Court where the plaintiff is situated or is residing or carrying on businesd or is working for personal gain, otherwise the above mentioned terms should have been mentioned in section 22 of the Designs Act. 

Under such circumstances, the person, who is registered proprietor of a design, has two options for  instituting a suit for infringement of registered design against the defendant in the District Court  (1) where a defendant resides or carries on business or personally works for gain or (2) where the cause of action arises in view of provisions of section 20 of CPC.

(B) Suit for groundless threat:

Section 23 of The Designs Act,2000 is related to the issue of groundless threat. This provision is based on the provision of section 106 of the Patents Act, 1970 as per the provisions of secrion 23 itself.  Further, section 23 is silent for issue of instituting the suit for groundless threat in respect of jurisdiction. In other words, which District court has jurisdiction for filing suit of groundless threat is not mentioned in the entire Act.  As section 23 is based on section 106 of the Patents Act, it is required to be read with section 104 of the Patents Act, for issue of jurisdiction which says that District Court has jurisdiction for  a suit for declaration under section 105 or for any relief under section 106 or for infringement of a patent. Further, here in this provision of 104, the word 'district court' is used, hence we need to reply upon the definition of 'district court' defined in section 2(e) of the Patents Act. This definition says, " district court has the meaning assigned to that expression by the Code of Civil Procedure, 1908." Meaning thereby the provisison of CPC which enlightens the definition of district court is required to be seen. It is provided in definition clause  section 2(4 )of CPC. I.e. "district" means the local limits of the jurisdiction of a principal Civil Court of original jurisdiction (hereinafter called a "District Court"), and includes the local limits of the ordinary original civil jurisdiction of a High Court.

4) The Patents Act, 1970

(A) Suit for infringement of Patent:

The Patents Act is silent about filing of a suit of infringement of Patent either in a court where pantee is situated or in a court where the defendant is situated. Section 104 of the Patents Act only speaks that suits for declaration or for infringement of Patent shall be insituted in District Court. Hence, such suit can be filed with the help of the provisions of CPC as the special statute is silent about the fact that which District Court has jurisdiction to entertain and adjudicate the suit for infringement of Patent.

(B) Suit for groundless threat:

Section 106 of the Patent Act is invoked for instituting the suit for groundless threat. This section is to be read with section 104 of the Act for issue of Jurisdiction as the provision of section 104 is for Jurisdiction as discussed in earlier paragraph.

So neither the designs Act or the Patents Act says about the intitution the suit likewise the provisions of section 134 of the Trademarks Act or the provisions of 62 of the Copyright Act.  In otherwords, both the designs Act and patents Act are silent about such terms which have been provided in s.134 (2) of the Trademarks Act and S.62(2) of the Copyright Act. 

5) The Geographical Indications of Goods (Registration and Protection) Act, 1999:

(A) Suit for infringement and Passing Off Action:

The provisions of Section 66 of this Act is as equal as the provisions of Section 134 of the Trademarks Act,1999. Hence the same rule of jurisdiction  is applicable what has been stated earlier for infringement of trademarks and for passing off action. 

(B) Suit for Groundless threat: 

Section 73 of the Act deals the the provisions of groundless. S. 73(4) says that a suit for groundless threat is insituted in District Court. Hence S.73(4) is read with the definition of district court defined in S.2(d) of the Act. We find approximately the same wordings of definition clause as are provided in S. 2(e) of the Patents Act.

6) The Protection of Plat Varieties and Farmers' Rights Act, 2001: 

Infringement of a registered variety:

Section 65(2)  of this Act clearly establishes that suit for infringement a variety registered under this Act is insituted in a District Court within the local limits of whose jurisdiction the cause of action arises. In this section there is omission  of the term the person/s  instituting the suit,actually  and voluntarily resides or carries on businesd or personalky works for gain "  or  "where the defendant resides or carries on business or personally works for gain". 

It is found that this section gives important to the cause of action being arisen, irrespective of place of plaintiff or defendant.  The term ' passing off action ' is not mentioned in the Act.

7) The Semiconductor Integrated Circuits Layout-Design Act,2000

There is no civil remedy available under this Act. A complaint in writing by registered proprietor or the registered user of a layout design for infringement is filed in competent criminal court. Section 56 read with S.18 of the Act.

8) The Biological Diversity Act, 2002:

There is no role of civil court  as no civil remedy is available in this Act. 

9) OTHER ISSUES PERTAINING TO JURISDICTION IN IP LAWS: 

a) Whether a jurisdiction of a court can be invoked on the basis of accessibility of website ? 

The asnwer of such question is in negative. Because internet can be accessed from any corner of the world, so the plaintiff can not invoke the jurisdiction of any court, provided that substantial sale transaction of infringing goods is being sold through website. For answering this issue i am quoting  the following paragraph.

"Para no. 58 of the judgement of Hon'ble Delhi High Court (DB) in the case of Banyan Tree Holding (P) Ltd. Vs. A. Murali Krishna Reddy & Anr. Question (i): For the purposes of a passing off action, or an infringement action where the Plaintiff is not carrying on business within the jurisdiction of a court, in what circumstances can it be said that the hosting of a universally accessible website by the Defendants lends jurisdiction to such Court where such suit is filed ("the forum court")?

Answer: For the purposes of a passing off action, or an infringement action where the Plaintiff is not carrying on business within the jurisdiction of a court, and in the absence of a long-arm statute, in order to satisfy the forum court that it has jurisdiction to entertain the suit, the Plaintiff would have to show that the Defendant "purposefully availed" itself of the jurisdiction of the forum court. For this it would have to be prima facie shown that the nature of the activity indulged in by the Defendant by the use of the website was with an intention to conclude a commercial transaction with the website user and that the specific targeting of the forum state by the Defendant resulted in an injury or harm to the Plaintiff within the forum state."

b) Whether a court has jurisdiction on the basis of establishment of  Trademark Registry ?

If the TM Registery is situated in Ahmedabad, and the defendant has applied his trademark before Ahmedabad TM Registey, can the jurisdiction of Ahmedabad Dist Court invoke on the basis of establishment of TM Registey in Ahmedabad ? 

The answer is in negative. There is no such provision available in IP Acts. 

c) Whether jurisdiction of Court can be invoked on the basis of IP lawyer is practising in particular court ?

The answer is in negative. 

d) Whether Court has jurisdiction for composite suit ?

Yes composite suit is maintainable if all cause of action occure at one place. 

e) Whether both the parties to the suit are situated in Ahmedabad, can the jurisdiction of Delhi Court be invoked by the plaintiff in that suit ? 

The answer is in negative, provided that goods of the defendant ought to be sold in substantial and material form in Delhi for invoking the jurisdiction of Delhi Court.

f) Whether a court, having jurisdiction for infringement of Trademark can have jurisdiction for passing off action? 

Yes. 

g) Whether the provisions of Order 7 Rule 11 of CPC are applicable to  IP statutes? 

Yes they can be. For adjudication of an application u/O7.R.11, only averments made in the plaint are required to be considered. 

Chirag Bhatt

Advocate 

Whether the registration of a trademark of the defendant is a relevant factor to decide the case of passing off action?

Let me begin this article by way of giving an illustration.

Mr. A is a plaintiff who is a registered proprietor of a trademark X and Mr. B is a defendant who is also a registered proprietor of a trademark X1. Both Mr. A and Mr. B are engaged in the identical business under the above mentioned trademark X and X1 respectively.

Mr. A has filed a suit for passing off action against Mr. B seeking relief to restrain the defendant i.e. Mr. B from using the registered trademark i.e. X1. 

Mr. A is a prior user of the trademark X. Mr. A being plaintiff has fulfilled all the criterias of passing off action.

Under such circumstances whether Mr. A is entitled for injunction against Mr. B who is a registered proprietor of the trademark X1 in a case of passing off action.

When the case is for passing off action and not for infringement action, under such circumstances whether section 28(3) is applicable? Whether registration of the defendant’s trademark has relevancy in a case of passing off action? Whether the defence of registration of the trademark X1 taken by the defendant is sustainable or maintainable?

Answering the above mentioned question in respect of  passing off action first of all it is required to be considered what is passing off action. Passing off action is a common law remedy. It is not a statutory remedy and the ingredients of passing off action are required to be considered. They are (1) Goodwill and reputation established by the plaintiff under The Trademark Acts, (2) Misrepresentation made by the defendant under the trademark X1 in the course of trade, (3) occurrence of damage in the part of plaintiff, (4) prior use of the trademark by the trademark by the plaintiff.

If above mentioned criterias or ingredients are satisfied by the plaintiff in the case of passing off action the plaintiff is entitled for the relief of injunction against the defendant. Now the question as mentioned hereinabove whether registration of a trademark of the defendant is a relevant factor to adjudicate the case of passing off action.

Answering the same question I’d like to rely upon the judgement of Hon’ble Delhi HC(DB) in the case of

1. Century Traders vs Roshan Lal Duggar Co. reported in AIR 1978, Delhi 250(15).

1. In para no. 9 of the said judgement was held by Hon’ble DB, “In a passing off action registration of the trade mark is immaterial.” “.............it is clear that registration of the mark in the trade mark registry would be irrelevant in an action for passing off. Furthermore, it will be clear that in deciding whether a particular mark is common to the trade use of that mark would be extremely relevant. Mere registration would not be enough.”

2. In para no. 11 of the said judgement the case of Consolidated Foods Corporation v. Brandon and Co., Private Ltd. was cited wherein it was held that, “Registration itself does not create a trade mark. The trademark exists independently of the registration which merely affords further protection under the Statute. Common law rights are left wholly unaffected. Priority in adoption and use of a trade mark is superior to priority in registration.” 

3. In para no. 14 of the said judgement. “Thus, the law is pretty well-settled that in order to succeed at this stage the appellant had to establish use of the aforesaid mark prior in point of time than the impugned user by the respondents. The registration of the said mark or similar mark prior in point of time to user by the appellant is irrelevant in an action passing off and the mere presence of the mark in the register maintained by the trade mark registry did not prove its user by the persons in whose names the mark was registered and was irrelevant for the purposes of deciding the application for interim injunction unless evidence had been led or was available of user of the registered trademarks.”

2. S. Syed Mohideed vs P. Sulochana Bai

1. In this case Hon’ble SC in para no. 23 held that “the registration is no defence to a passing off action and nor the Trade Marks Act, 1999 affords any bar to a passing off action.”

2. Further in para no. 23 of the said judgement Hon’ble SC held “that registration is merely a recognition of the rights pre-existing in common law and in case of conflict between the two registered proprietors, the evaluation of the better rights in common law is essential as the common law rights would enable the court to determine whose rights between the two registered proprietors are better and superior in common law which have been recognized in the form of the registration by the Act.”

3. Intex Technologies (India) Ltd & others vs M/S Az Tech (India) & Another, Delhi HC

In para no. 18 it was held that, “It is also evident that insofar as a registered trade mark is concerned, the property exists in the mark, but in the case of passing off, the property is not in the mark but in the goodwill.” 

4. Geoscope Exim Pvt. Ltd. vs SNJ Distillers Pvt. Ltd., Madras HC dated 08/06/2022

In this case both the plaintiff and the defendant are the registered proprietor and they are engaged in the identical business. The plaintiff has filed the suit for passing off action seeking relief to restrain the defendant from using identical and/or deceptively similar trademark HOBBS to that of plaintiff’s trademark HOBSONS. Hon’ble Madras HC in para no. 10 of the order held that “there is some similarity between the two registered word marks HOBSONS and HOBBS but such similarity should be balanced against the fact that the wordmark HOBBS is registered. Even in a passing off action, in my view, this is a relevant though not controlling criterion and should be reckoned along with other aspects.” Hence, injunction is not granted to the  plaintiff.

5. Ranjit hosiery mills vs MANOHAR C MURJANI TRADING AS V M HOSIERY(AO no. 101/2022 Gujarat HC(DB))

The plaintiff has filed the suit for passing off action before Commercial Court Ahmedabad against the defendant. The plaintiff’s trademark is Ranjit Rocky and the defendant trademark is Rockley. Both are engaged in the hosiery business. Plaintiff is a prior user of the trademark Ranjit Rocky then that of the defendants trademark Rockley. The defendant is a registered proprietor of the trademark/word Rockley. Hon’ble Commercial Court has not granted injunction hence, plaintiff has preferred appeal from order before Hon’ble Gujarat HC as it is the order of Commercial Court appeal was heard by DB as commercial appellate court. Having heard both the advocates of the respective parties at length, Hon’ble Gujarat HC has restrained the respondent/defendant from using the label containing the word Rockley but not from using the word Rockley as the word Rockley is registered in the favour of the defendant.

Author’s Opinion:

In passing off action registration of the trademark has no relevance, neither can the defendant take the defence of the registration of his trademark as it is settled principle laid down by Hon’ble SC and Hon’ble Delhi HC(DB) in the above mentioned judgements in view of the judgement of Hon’ble SC and Hon’ble Delhi HC(DB) whether the order passed by Madras HC and the order passed by Gujarat HC(DB) respectively are contrary to the settled principle of law. In para no. 10 of the order passed by the Madras HC though it was a case of passing off action registration of the defendant’s trademark has been considered a relevant factor for not granting an injunction to the plaintiff. With profound respect to the Hon’ble Madras HC whether this view taken by it can’t be contrary to the principle laid down by the apex court and Hon’ble Delhi HC(DB) that in passing off action registration has no relevance and registration is not a defence? Further when the plaintiff before Madras HC is prior user and when the plaintiff and the defendant both are engaged in the similar business and when the Madras HC has observed the similarity between the two trademarks HOBSONS and HOBBS, is it not the case where the injunction ought to be granted at the stage of adjudication of injunction application filed under Order 39 Rule 1 and 2 of CPC?

As far as the order of Gujarat HC(DB) is concerned there is a case of passing off action, plaintiff is a prior user, plaintiff has established ingredients of passing off action, defendant is admittedly a subsequent user, defendant has taken the defence of registration of his trademark Rockley. With immense respect to Hon’ble DB of Gujarat HC, Hon’ble Gujarat HC has considered the registration of the defendant in the case of passing off action, is it true justification in the case of passing off action. As the registration of the trademark doesn’t give any new right to the registered proprietor. The registration gives proprietary right to the trademark but in passing off action the property is not in the mark but in the goodwill. So when the goodwill has been established by the plaintiff, prior use has been established along with all ingredients of passing off action as well as Order 39 Rule 1 and 2, should the Hon’ble DB have considered the registration of the trademark of the defendant in passing off action which is otherwise contrary to the settled principle of law and the said registration has already been challenged by the plaintiff therein?

Considering the above mentioned judgements of various courts, my opinion is that in passing of action registration of the trademark has no relevance and the same is not a valid defence in the eyes of law.

Chirag Bhatt
Advocate

   

Trademark AMUL is protected

There is a slap on the face of infringers who are using the trademark AMUL with or without knowledge  by  way of the judgement delivered by Honb'le Kolkata High Court on 1st September,2022 in the case of Kaira District Cooperative Milk Producers Union Ltd. & Anr.Vs. Maa Tara Trading Co. & Ors. (CS no..107 / 2020).

The plaintiff has filed a commercial suit for infringement and passing off action for its registered trademark AMUL  against the defendants as the defendant is using the trademark AMUL for candle. 

None appeared on behalf of the defendants. The defendants were engaged in different business. The defendants were using the trademark AMUL for different goods i.e. Candle. The plaintiff was engaged in the business of milk and dairy products at national and international markets. The trademark AMUL is registered since 1958 in favour of the plaintiff. 

 Two issues of law are involved in this judgement.

Issue no. 1 :  Whether the plaintiff is entitled to restrain the defendants for the identical trademark which is being used by the defendants for different goods.i.e.the goods for which the trademark AMUL has not been used by the plaintiff?

Issue no. 2 :  Whether the Courts should grant judgement and decree invoking the provisions of Order 8 Rule 10 of Code of Civil Procedure, 1908(CPC)?

Let me discuss these issues here.

Issue No.1: Issue number one is related to the infringement of The trademark for the goods for which the plaintiff is not the registered proprietor. In other words the defendant is using the Trademark for different goods under such circumstances whether the plaintiff is entitled to be protected if his registered trademark is being used by the defendant for the different goods or services and such goods or services have not been used by the plaintiff.

Section 29(4) of The Trademarks Act plays very important role in this regard which says that A registered trademark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which— (a) is identical with or similar to the registered trademark; and

(b) is used in relation to goods or services which are not similar to those for which the trade mark is registered; and

(c) the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or reputation of the registered trademark.

For better understanding of this section, I have made a specific video on my youtube channel C.Bhatt-law study which is titled as Infringement of Trademark for dissimilar goods or services. In the provision of section 29(4) three criterias are provided by the legislature for invoking section 29(4) for the protection of registered trademarks in the case of infringement for dissimilarity of goods and services. The three criterias as mentioned in section 29(4) must be satisfied wholly unless they are satisfied wholly, section 29(4) is not applicable. Further if either of such criteria or conditions is satisfied, section 29(4) is not applicable.

Section 29(4)(a) says that the infringing mark must be identical with or similar to the registered trademark.

29(4)(b) says that the infringing mark must be used in relation to the goods or services which are not similar to the registered trademark.

29(4)(c) is very important which says that

(i)  The registered trade mark has a reputation in India;

(ii)and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or reputation of the registered trademark.

The above mentioned criterias mentioned in provisions of section 29(4)(c) must be satisfied by the plaintiff along with the criterias mentioned in 29(4) (a) and (b).

In the present case before Hon’ble Calcutta HC whether the plaintiff has satisfied the criterias of section 29(4)?

Replying to this question first of all the trademark Amul used by the defendant is identical with or similar to the registered trademark is required to be considered. The answer is in affirmative because the word Amul has been used by the defendant in exactly the same fonts as is used by the plaintiff.

Secondly the defendant has used the registered trademark Amul of the plaintiff in relation to different goods i.e. candles.

The third criteria has also been satisfied by the plaintiff as the registered trademark Amul of plaintiff has a reputation in India and thus use of the said mark without due cause takes unfair advantage of or is detrimental to the distinctive character or repute of registered trademark.

Hence, the criterias mentioned in section 29(4) have been satisfied by the plaintiff. It is pertinent to note that the trademark Amul of plaintiff has been listed at number 66 in the list of well known trademark by trademark registry in the year 2013 IPAB has considered the trademark Amul as well known in the case of M/s. Kaira District Co-Operative Milk Producers Union Limited v/s Deputy Registrar of Trade Marks & Others OA/56/2011/TM/KOL and Miscellaneous Petition No. 150 of 2011 decided on 7th march 2013.

Issue No.2:

The issue no 2 is related to Order 8 Rule 10 of CPC. As the suit is filed in commercial division of Kolkata High Court, and the defendant has not remained present before the Court after being summoned, nor has he filed written statement in the case, the plaintiff has invoked the provisions of Order 8 Rule 10 of CPC which says that,

“ Procedure when party falls to present written statement called for by Court.- Where any party from whom a written statement is required under rule 1 or rule 9 fails to present the same within the time permitted or fixed by the Court, as the case may be, the Court shall pronounce judgement against him, or make such order is relating to the suit as it thinks fit and on the pronouncement of such judgement a decree shall be drawn up”.

As per the latest amendment in CPC in view of Commercial Courts Act, the defendant is not entitled to file written statement beyond the period of 120 days as per the proviso of Order VIII Rule 1. The proviso of Rule 10 of Order VIII says that “ [Provided that] no Court shall make an order to extend the time provided under Rule 1 of this Order for filing of the written statement.”.

Having read the section and proviso thereof it emerges out that

(1) It is the discretionary power of the court to pronounce the judgement against the defendant in absence of filing of written statement.

(2) The defendant is not permitted to file written statement beyond the period of 120 days in the commercial cases. ( That is not the issue in the present case).

Hon’ble Kolkata High Court has relied on the judgement of Hon’ble SC in the case of C.N. Ramappa Gowda vs. C.C. Chandergowda reported in{ (2012) 5 SCC 265 paras 25,26,27 }, has held that the present suit is a commercial suit under the Commercial Courts Act, and it it the clear intention of the legislature to dispose of the suits, having commercial nature expeditiously without being lingered. Further , The Court has also satisfied with the averments made in the plaint and the documents and affidavit produced by the plaintiff.

Hence, as per the opinion of the Court it is the fit case to invoke the provisions of Order VIII Rule 10 of CPC and accordingly the decree has been passed in terms of the prayer paras in favour of the plaintiff and against the defendant.

Author’s Opinion:

1) The protection of a well known mark is inevitable when all legal criteria are satisfied otherwise the motto of the declaration of a well known mark as mentioned in the Trademarks Act, 1999 becomes infructuous. Further in the present case the trademark AMUL has a well established reputation not only in India but beyond the border of India. Though the defendant has used the trademark AMUL for different goods, perhaps the plaintiff has not used its registered trademark for the said different goods, but non use of the plaintiff’s registered trademark, is not the criteria or defence for not satisfying the provisions section 29(4) of the Trademarks Act, 1999. When Legislature has with good intention of protection has incorporated the provisions of S. 29(4) in the Trademarks Act, 1999, the registered trademark must be protected if all the three conditions mentioned therein have been satisfied by the plaintiff. Hence, the decision of Hon’ble Kolkata High Court is just, apt and appropriate. It is noted that the trademark AMUL has satisfied all the conditions beyond the limit as it is declared as a well known mark. To be a well known mark is not the condition but a registered trademark having reputation in India is the condition. There is a difference between a well known mark and a registered trademark having reputation. The definition of a

well known trademark as provided in S.2(1) (zg) of the Trademarks Act, 1999 is silent about words used by the Legislature in Section 29 (4) ( c ) i.e. the registered trademark has a reputation in India. Hence it is possible that the well known trademark may not be registered as registration of trademark is not the criteria for being a well known trademark as per the definition of it but use of the mark is a must. In the present case AMUL is a registered and a well known trademark, hence, the

Hon’ble High Court has rightly protected it.

2) As far as Order 8 Rule 10 of CPC is concerned, in the present litigation scenario, it ought to be invoked by the Courts in the genuine cases when there is no written statement , when the defendant has never come up before the Court after the summons being served. The Courts ought to avoid pedantic approach to conduct the Trial by the plaintiff ex parte in the cases like AMUL to expedite the genuine commercial litigation with the more judicial consciousness based on the plaint and documents produced by the plaintiff.

Author

Chirag Bhatt 

Advocate.

Khadi under IP protection

The history of our nation witnesses that khadi has made revolution in the era of renaissance in our country. ‘Khadi’ became an epitome of the nation at that time.

Once again ‘Khadi’ is in the news in the field of intellectual property laws. There was a legal battle between Khadi and Village Industries Commission and Raman Gupta and others before Delhi High Court(CS (Comm) 133 of 2022 & I.A. 3299 of 2022 dated 26-7-22).

The brief factual matrix is that ‘Khadi’ and Village Industries, being plaintiffs, have filed a suit for infringement of Trademark ‘Khadi’ along with other ancillary reliefs against Raman Gupta and others i.e. defendants. The plaintiff is the registered proprietor of the mark ‘Khadi’ and its variants in several classes, along with the ‘Charkha Logos’. The said trademarks are also registered in various countries like the U.K, China, Australia, USA, Bhutan, Mexico, New Zealand etc. The plaintiff has its own websites www.kviconline.gov.in, www.ekhadiindia.com which sells over 50,000 products ranging from food products, grocery products, oils to diyas, woollen products, cosmetics, etc. The plaintiff has also manufactured and sold various medical products, such as hand wash, hand sanitizers, etc. A mobile Application is launched by plaintiff under the name Khadi India. It is also the case of the plaintiff that the trademark Khadi along with ‘Charkha logo’ is licensed to several third parties. Products of Khadi are sold on e-commerce platforms. The trademark ‘Khadi’ has been protected in earlier legal proceedings.

The defendants are using the trading style ‘Khadi by Heritage’ and also the mark Khadi and charkha logos. The defendants are using the impugned trademarks for PPE kits, hand sanitizers, fireballs through their website.

Hon’ble Delhi High Court granted ex parte ad interim injunction in favour of the plaintiff and against the defendant as the use of the word Khadi by the defendant as a trading style or as a trademark is illegal and unlawful. The defendant is also restrained from using the domain name www.khadibyheritage.com and its variants.

Hon’ble Delhi High Court has perused the record of the case and thereafter came to the conclusion that plaintiff is the registered proprietor of the trademark Khadi and its variants since the year 2014 and has used them since 1956. Perusal of the record and considering the facts of the case of the plaintiff in para no. 13 of the judgement, Hon’ble Delhi HC is of the opinion that the use of the mark and name ‘Khadi by Heritage’ by the defendant would result in causing irreparable confusion to the consumers and such use also creates illusion in the minds of the people that the defendant must be associated with the plaintiff. And therefore Hon’ble Delhi HC has granted a decree of permanent injunction in terms of the prayer paragraphs of the plaint against the defendant.

Hon’ble Delhi HC has also passed an order for the award of damages and cost in favour of the plaintiff and against the defendant observing that the use of the trademark/logo/domain name by the defendant is deliberate/conscious and malafide in nature.

Author’s Opinion:

● Awarding damage in favour of the plaintiff is embodied in section 135 of The Trademarks Act, 1999. If such damage is asked in the form of relief.

● In the cases of intellectual property laws to prove damage may be very difficult during the Trial.

● Hon’ble Delhi HC has awarded damage of Rs. 10,00,000 and cost of Rs. 2,00,000 in favour of the plaintiff and against the defendant on the basis of deliberate, melafide and conscious use of the trademark by the defendant. It is a welcoming step taken by Hon’ble Delhi HC to protect the intellectual property rights in their real sense by way of awarding damages. As in the present case the plaintiff has been using the trademark Khadi and its variants since 1956 and the filing of trademark applications by the defendant deliberately establishes the dishonesty on the part of the defendant further in the examination reports of the trademark applications filed by the defendants the trademarks of the plaintiff have been cited as conflicting marks by the trademark registry. This fact also establishes that the defendant is well within the knowledge of the plaintiff’s registered trademarks and its variants. The defendant continued to use his trademark which establishes dishonesty on the part of the defendant.

● Hence, the order passed by the Hon’ble Delhi HC restraining the defendant from using the trademark Khadi and awarding the damages and cost is just an appropriate in the eyes of law.

● Such judgements passed by the courts become one of the best examples at national and international level to encourage more and more people not only to trust in Indian Judiciary but also to the development of their industries and business under the umbrella of intellectual property rights.

● In genuine cases, awarding damage and cost becomes inevitable for encouragement of protection of IPR so that justice in its real sense would be justified.

● It can be said that Khadi becomes an offbeat stuff to wear now-a-days but it had played a very important role during the time of our freedom and it also plays very important at present by way of getting it protected from Hon’ble Delhi High Court.

Author

Chirag Bhatt

Advocate.

Cbhattlawoffice 

Section 12A of the Commercial Courts Act, 2015

On 17th August 2022, Hon’ble Supreme Court delivered one judgement in the case of M/S. PATIL AUTOMATION PRIVATE LIMITED AND ORS. - APPELLANT(S) VERSUS RAKHEJA ENGINEERS PRIVATE LIMITED - RESPONDENT(S) wherein the issue is in respect of section 12A of commercial courts act 2015(Hereinafter referred as the Act). Whether statutory pre-litigation mediation as mentioned in that section is mandatory and whether the courts below have erred in not allowing the applications filed under order 7 rule 11 of CPC to reject the plaints.

Factual Matrix:

The factual matrix in a nutshell is that a commercial suit under order 37 of CPC was filed for recovery of more than one crore rupees along with 12% interest before District Court, faridabad. A written statement was subsequently filed by the defendant therein. The defendant also filed an application under Order 7 Rule 11 of CPC taking stand of the provisions of section 12A of the commercial courts act.

In the commercial suit filed before the District Court, Hon’ble District Court relying upon one judgement of Hon'ble Bombay High Court in the case of Gange Taro Vazirani vs. Deepak Raheja(2021) SCC online Bombay 195 while adjudicating an application filed by the defendant under order 7 rule 11 and observed that the aim and object of section 12A of the Act is to ensure that before a commercial dispute is filed before the court, the alternative means of dissolution are adapted so that genuine cases come before the court, the District Court further observed that though the provisions of section 12A is mandatory in nature, if the suit of the plaintiff is rejected it’d have catastrophe effect and that was not the intention of legislature and thereby the District Court have rejected an application under order 7 rule 11 filed by the defendant i.e. appellant before Hon'ble Supreme Court. However, it is pertaining to note that the division bench of Bombay High Court in the case of Deepak Raheja vs. Ganga Taro Vazirani reported in(2021) SCC online Bom HC 3124 has reversed the order passed by the single judge in the said case.

The defendant has filed a revision application before the Hon’ble High Court. The Hon'ble High Court has confirmed the order passed by the trial court and further held that “the purpose of referring the dispute to the mediation centre is to explore settlement. If the suit is filed without taking recourse to the procedure, it should not entail rejection of the plaint as this could not have been the intention of the legislature. It is further observed that an enactment is to be interpreted in a manner that it doesn’t result in delivery of ‘perverse justice’. Further the trial court has directed the parties to appear before secretary of district legal services authority for the purposes of mediation and meanwhile the civil suit shall be kept in abeyance”.  The Order of HC has been challenged before Hon’ble SC, hence this judgement. 

Therefore it is a need of hour to mention here the provisions of section 12A of the commercial courts Act. Section 12A was inserted on 3rd May 2018 in the Commercial Courts Act. Section 12A is embodied under chapter 3A under title pre-institution mediation and settlement which is as under.

“(1) A suit, which does not contemplate any urgent interim relief under this Act, shall not be instituted unless the plaintiff exhausts the remedy of pre-institution mediation in accordance with such manner and procedure as may be prescribed by rules made by the Central Government.

(2) The Central Government may, by notification, authorise the Authorities constituted under the Legal Services Authorities Act, 1987 (39 of 1987), for the purposes of pre-institution mediation.

(3) Notwithstanding anything contained in the Legal Services Authorities Act, 1987 (39 of 1987), the Authority authorised by the Central Government under sub-section (2) shall complete the process of mediation within a period of three months from the date of application made by the plaintiff under sub-section (1):

Provided that the period of mediation may be extended for a further period of two months with the consent of the parties:

Provided further that, the period during which the parties remained occupied with the pre-institution mediation, such period shall not be computed for the purpose of limitation under the Limitation Act, 1963 (36 of 1963).

(4) If the parties to the commercial dispute arrive at a settlement, the same shall be reduced into writing and shall be signed by the parties to the dispute and the mediator.

(5) The settlement arrived at under this section shall have the same status and effect as if it is an arbitral award on agreed terms under sub-section (4) of section 30 of the Arbitration and Conciliation Act, 1996 (26 of 1996).”

Having read the above mentioned section more specifically 12A(1) it establishes that a suit having commercial nature cannot be instituted unless the plaintiff seeks the remedy of pre-institution mediation as per the manner and procedure. This section has one condition precedent i.e., “which does not contemplate any urgent interim relief under this Act.” This establishes that if there is any urgent interim relief under the Act, the provision of section 12A(1) is not applicable.

Having analysed and observed the statement of objects and reasons of the Act, and referring to various judgements of Hon’ble SC, in para 53 Hon’ble SC observed that section 12A of the Act is mandatory in nature. Hon’ble Supreme Court further observed that mere use of the word ‘shall’ not be the reason for their opinion for section 12A. It was further observed that the object of section 12A is to conduct the mediation between the parties without any involvement of the court prior to the institution of the suit.

In para 54 of the judgement, it was observed that section 12 is the fastest route without for a moment taking the precious time of a court. It was further observed that section 12A of the Act is applicable only to the suit which does not contemplate any urgent interim relief. It was the observation of the court that in a suit where the urgent relief is short, the legislature has carefully vouch-safed immediate access to justice as contemplated ordinarily through the courts.

In para no. 63 while comparing with the provisions of section 80(1) of CPC it was observed that in section 12A of the Act also the bar of institution of the suit is applicable only in a case in which the plaintiff does not contemplate urgent interim relief.

The second issue is with regard to rejection of plaint:

Q. Whether the court can reject the plaint without the application U/O 7 rule 11 of CPC being filed?

                                           OR

Q. Whether it is mandatory to file an application U/O 7 rule 11 for rejection of a plaint?

Para 68 :- (C) of the judgement.

The answer of this question is given in para 68(C) of the judgement relying on the judgement of SC in the case of Madirajn Venkata Ramana Raju, Hon’ble SC held that in a clear case, where on allegations in the suit, it is found that the suit is barred by any law, as would be the case , where the plaintiff in a suit under the Act does not plead circumstances to take his case out of the requirement of section 12A, the plaint should be rejected without issuing summons. Undoubtedly, on issuing summons it will be always open to the defendant to make an application as well under order 7 rule 11. In other words the power under O.7.R.11 is available to the court to be exercised suo moto.

Mediation:

Para no. 74:  mediation is recommended by Hon’ble SC: 

Para no. 74 emphasises on the carving need of mediation in commercial disputes and the availability of highly skilled and trained mediators with respective issues in mediation. Hon’ble SC in the same paragraph further observes that there must be trained mediators and training program by experts should be held in state judicial academy in this regard, High Court may also undertake periodic exercise to establish a panel of trained mediators in District and Taluka levels as per need.

Para no.84 Section 12A of the Act is mandatory in nature: 

In para 84 Hon’ble SC declares that “section 12A of the act is mandatory and holds that any suit instituted violating the mandate of section 12A must be visited with rejection of plaint under order 7 rule 11. This power can be exercised even suo moto by the court as explained earlier in the judgement.” It is further clarified that section 12A of the Act becomes mandatory with the effect from 20-8-2022 so that concerned stakeholders become sufficiently involved. It is further directed by the SC that, “In case the plaints have already been rejected and no steps have been taken within the period of limitation, the matter can’t be reopened on the basis of this declaration.” Still further, if the order of rejection of the plaint has been acted upon by filing a fresh suit, the declaration of prospective effect will not avail the plaintiff. Finally, if the plaint is filed violating Section 12A after the jurisdictional High Court has declared section 12A mandatory also, the plaintiff will not be entitled to the relief. Thus, it is clarified in this paragraph by Hon’ble SC that no retrospective effect of the declaration of section 12A of the Act being mandatory is applicable to any case prior to the date of 20-8-2022. 

Appeal filed by appellant defendant was allowed by Hon’ble SC rejecting the plaint filed under order 37 of CPC.

Author’s Opinion:

In this judgement Hon’ble SC has majorly cleared three issues:

(i)   Section 12A of the commercial courts act is mandatory in nature.

(ii)  Courts have power to reject the plaint under order 7 rule 11 of CPC suo moto, application under order 7 rule 11 of CPC is not required.

(iii)  The applicability of provisions of Act is to the suits only wherein urgent interim relief is not sought.

Whether this judgement is boon or curse?

(A)  Boon

 To answer this,

1. The objects and reasons of the commercial courts Act are required to be considered and looked into.

2. The purpose of the commercial courts Act being enacted is only to develop and encourage commercialization and industrialization in the country with the faster and competent legal support in the era of technology and science.

3. The effect of this judgement may be at Global commercial level so that more and more Global investors come to India for commercial purposes.

4. This judgement of SC is a renaissance not only to the Indian judiciary but also to the business world in India as well as the foreign countries.

5. To encourage commercial mediation in the country as per para 74 of the judgement, such is a welcoming step towards making commercial utopian and peace fraternity and harmony. I think this is the original nature of our country.

6. To encourage mediators having sound knowledge of the particular subjects or issues involved between the parties to the mediation.

7. Period of mediation 3 months plus extention upto 2 months: Five months: This period even excluded from limitation period.

8. To restrain false and bogus litigation.

9. To lessen the burden of courts from annoying suits and arguments and to increase the productivity of the courts in respect of genuine creative and productive works.

    (B) Curse

1. The issue involved in this judgement is with regard to order 37 of CPC.

2. In section 2(i)(c) i.e. definition of the commercial dispute, there are 22 matters apart from money disputes i.e. order 37 of CPC summary suit. For example, disputes related to IPR, in the case of IPR, urgent relief is must otherwise the whole suit becomes infructuous.

3. This judgement of Hon’ble SC becomes land of law U/A 141 of constitution of India, and it is binding to all courts of India under such circumstances, whether District Courts where the IPR suit can be filed i.e.(original jurisdiction for filing suits related to IPR) can be considered that there is urgent relief in IPR case, hence this judgement is not applicable.

4. Issue involved in this judgement is related to O.37 of CPC and is not related to the issue of IPR.

5. Can this judgement become a boon for the commercial courts to issue urgent notice to the other side and to avoid ex parte injunction in the cases of IPR? However in my opinion it can not be as Section 12A excludes urgent relief or it is not applicable to urgent relief. It is pertinent to note that there is no specific definition of “URGENT RELIEF” and it can’t be, hence it may vary case to case basis.

6. Having read section 12A of the commercial courts Act, it is clear that a suit which contemplates any urgent interim relief under this Act(Commercial Courts Act), this provision is not applicable, however the term urgent interim relief under this act means an urgent interim 

relief under the commercials courts act. In that case urgent interim relief by way of order 39 R. 1 & 2 of CPC can be considered as under relief under commercial courts act, 2015? Answering this question, I rely on section 2 of the commercials Courts Act, which says that, “The words and expression used and not defined in this Act, but defined in the code of Civil Procedure, 1908(5 of 1908) and the Indian Evidence Act, 1872(1 of 1872) shall have the same meanings respectively assigned to them in that code and the Act.”

Considering the above mentioned discussion, it can be said that the judgement passed by Hon’ble SC will be a boon in the coming days and it can not be a curse, if it is interpreted in its real sense and just and proper manner.

Author

Chirag Bhatt

Advocate.

Cbhattlawoffice

Gujarat

Principle laid down 52 years back is reiterated by SC:

  In the case of Renaissance Hotel Holdings Inc versus B.Vijaya Sai  and others on 19th January 2022 Hon’ble Supreme Court  has reiterated the principle let down by it 52 years back in the case of Ruston & Hornsby Limited vs Zamindara Engineering Co.  and Hornsbury limited reported in AIR 1970 SC 1649 para no.7 wherein Hon’ble Supreme Court held that , “where the defendant’s trade mark is identical with plaintiff’s trademark, the Court will not inquire whether the infringement is such as is likely to deceive or cause confusion.” The said principle has been reiterated by  Supreme Court in the present case in para nos.47 and 54 of the judgement.  Along with the above mentioned issue of law, there are several other issues have been dealt with by Supreme Court in the present case of renaissance hotel. The issues are as under:  1 ) Applicability of section 29 (3) of the trademarks act 1999 is observed in paragraph nos. 48,51 and 71 of the judgement. Section section 29(3) says that when the identical mark is used for identical goods or services in the course of trade, the Court shall presume that there is likelihood of confusion on the part of the public at large. 2) Applicability of section 29 (4) of the trademarks act 1999:  Hon’ble Supreme Court has also observed the issue pertaining to applicability section 29 (4)  of the trademarks act 1999 in para number 50, 52, and 71 of the judgement. Section  29 (4) of the trademarks act 1999 says that there is an infringement if other person who is not either registered proprietor or permitted user is using the identical end or deceptively similar trademark for the goods or services which is different than that of the goods/services for which the trademark is  registered. 3) Applicability of section 29 (5) of the trademarks act 1999:The issue in respect of section 29 (5) of the Act is also dealt with in paragraph nos. 55 and 71 of the judgement. Section 29(5) is in respect of trade name or the corporate name. If anybody is using the registered trademark as a trade name or as a corporate name without any permission or consent from the registered  proprietor of the trademark, there is an infringement. 4) Applicability of section 29 (9) of the trademarks act 1999: The issue related to phonetical similarity is also dealt with in para nos.56  & 71. The issue  pertaining to phonetic similarity is provided in section 29(9) which says that when the mark is used in the course of trade and the said mark is phonetically similar  to the registered trademark, there is an infringement. 5) Applicability of section 30 (1) of the Trademarks Act 1999:  The issue related to honest practises in industrial or commercial matters in para no.59 of the judgement.  In that paragraph, SC observed that under which circumstances, the defence of section 30 (1) is available and applicable. SC observed that the benefit of S. 30(1) of the Trademarks Act is only available if the two conditions are fulfilled together. The conditions are (1) the use of the impugned trademark is in accordance with the honest practices in industrial and commercial matters and (2) that such a use is not such as to take unfair advantage of or be detrimental to the distinctive character or repute of the trademark as the word ‘and’ is used between clause (a) &(b) of Section 30(1) of the Act. If either of these two conditions is taken as a defence, such defence under S.30(1) can not be  considered by the court.  6) The principle of interpretation of statute and provisions therein is also discussed in paragraph no. 60 by relying upon one judgement of Supreme Court in the case of Reserve Bank of India versus peerless general finance and investment company limited and others reported in 1987 1 SCC 424 para no.33. 7) Principle laid down in Midas case: Supreme Court in the case Midas Hygine Industries private limited versus Sudhir Bhatia. The principle laid down by  Supreme Court in paragraph no.5 of the said judgement was that , “it is well settled law that in the case either of trademark or of copyright normally an injunction must follow. Mere delay in bringing action is not sufficient to defeat grant of injunction the grant of injunction. The grant of injunction also becomes necessary if it prima facie appears that they adoption of the mark was itself dishonest.” The said ratio laid down by Supreme Court in that case  is retreated in para nos. 64 and 65 in the present case of renaissance hotel where  in para no. 65, Supreme Court further  observed that the ratio laid down in Midas case can not be used as a ratio for the proposition that, if the plaintiff fails to prove that defendant’s use was dishonest, an injunction cannot be granted. 8) Ratio laid down in Khoday Distilleries is not applicable: Another issue was also dealt with by Supreme Court in respect of the ratio laid down by Supreme Court in the case of Khoday Distilleries.  In paragraph no.66 of the present case ,it is held that the ratio laid down in Khoday case   is not applicable for infringement of a trademark. The Khoday case was in respect of rectification of a trademark and was  not for infringement action.  To conclude it can be said that by way of this judgement of renaissance hotel holdings Inc Honb’le Supreme Court has observed and clarified several issues of law in respect of trademarks act. 

 Author Chirag Bhatt 

IP Advocate 

9824025041 

Email: bhatt7@yahoo.com