13 September 2016

Stay of Proceedings where validity of registration of trade mark questioned

In the matter of FAO (OS) No. 717/2010 involving Times Publishing House LTD and Financial Times Ltd & Ors., a Divisional Bench (DB) of the High Court of Delhi, on 29 August 2016, sustained the order of the Single Judge dismissing the application under Section 124 of the Trade Marks Act, 1999 made by Times Publishing House Ltd (Times, hereinafter). The application, made by Times, sought stay on the infringement proceeding initiated against Times by Financial Times Ltd (Financial, hereinafter) for infringing Financial’s registered letter mark ‘FT’, on the grounds that a rectification petition that they had filed seeking cancellation of Financial’s mark was pending adjudication before the IPAB.


Facts in Brief:

In 2001, Financial instituted an infringement suit alleging Times to have wrongly used their registered letter mark ‘FT’. In their defence, inter alia, Times submitted that the letter mark ‘FT’, not being distinctive, was liable to be cancelled. In their replication that followed after four years, Financial highlighted that Times had also sought registration of the letter mark ‘FT’ and thus could not plead that said mark was incapable of being registered.

In 2007, after a lapse of 3 years that the parties spent in a failed attempt to mediate, Times filed a rectification petition before IPAB seeking cancellation of the trademark. Subsequently, in 2010, Times made the above-mentioned application under Section 124 of the Trade Marks Act, 1999 seeking stay on the infringement proceeding until the rectification petition was adjudicated. Dismissal of the application by the Single Judge, who highlighted that the application for rectification was filed after six years of institution of the infringement suit and that the stay was sought after nine years of the suit, resulted in the present appeal before the DB.


Analysis and Principle laid down:

Dismissing the application for the stay, the DB observed that, in an infringement suit where a plaintiff asserts his rights under the Trademark Act, the party pleading stay of the suit must show bona-fides and seek the stay as well as seek the rectification of the Trademark expeditiously.

The DB also referred to the case of Data Infosys Ltd. & Ors. Vs. Infosys Technologies Ltd. [2016 (65) PTC 209 (Delhi) (FB)], adjudicated by the Full Bench of the High Court of Delhi, and noted that “If the rectification plea is pending before the filing of the infringement suit, the court has no choice but to adjourn the suit and await the final disposal of the challenge before IPAB. If, on the other hand, no such plea is pending at the time of filing of the suit (for infringement)- the court has to examine. If urged in the written statement, the prima facie tenability of the invalidity plea; if it holds the plea to be tenable, it should adjourn the matter to enable the party to approach IPAB. In case it holds the plea to be not tenable, there is no obligation to adjourn the suit.”

Since the IPAB, in 2012, had already held that the registered Trademark is valid, the DB had no reasons for determining prima facie tenability of the invalidity plea and therefore allowing the stay in the instant case. Nonetheless, before concluding, the DB observed that they find it strange that on the one hand, Times sought registration of the letters mark ‘FT’ themselves claiming distinctiveness, while on the other, questioned Financial’s registration of the mark as being incapable of acquiring distinctiveness.

While the court, in its wisdom, did not make any explicit remarks on conduct of a party making an invalidity plea, it may be observed that an attempt by the party to register the very mark it has tried to invalidate on the grounds of lack of distinctiveness, may not be seen as bona-fide by the courts.


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