[Case Brief] Patel Field Marshal Agencies and Another V/s P.M. Diesels Ltd. and Others – Supreme Court of India

Case NamePatel Field Marshal Agencies and ANR. Vs. P.M. Diesels Ltd. and Ors.
Case numberCivil Appeal Nos.4767-4769 of 2001
CourtSupreme Court of India
BenchJustice Ranjan Gogoi, Justice Navin Sinha
Author of the judgmentJustice Ranjan Gogoi
Decided On November 29, 2017
Relevant Act/SectionsTrade and Merchandise Marks Act, 1958 - Sections 45/56 and Sections 111 read with Section 107
Author of the case brief Praher Vaidya

Brief facts and Procedural History-

The present civil appeal before the Supreme Court has been filed by Patel Field Marshal Agencies (“Appellant”) against the company PM Diesels Ltd. (“Respondent”).

The respondent was the registered owner of three trademarks, the common feature of all of these trademarks are the words “Field Marshal”. In the year 1989, the respondent instituted a suit before the High Court of Delhi for infringement of trademark and rendition of accounts of profit for the use of the mark “Marshal” by the appellant and for perpetual injunction to restrain the appellants from using the trading styles “Patel Field Marshal Agencies” and “Patel Field Marshal Industries”. An Interlocutory Application for a temporary injunction was also filed. The defendants in the suit, i.e., the appellants herein, contested the validity of the registration of the respondent’s trademark “Field Marshal” and claimed that the same was liable to be rectified in the trademark register.

When the suit in question was pending adjudication in the High Court of Delhi, the appellants herein initiated parallel proceedings before the High Court of Gujarat (in the year 1997) seeking rectification of the registration of the trademark(s) granted to the respondent. Specifically, the appellants had filed three rectification applications under Sections 46/56 of the Trade and Merchandise Marks Act, 1958 (“1958 Act”) for removal and cancellation of the three trademarks registered in favour of the petitioner. The learned single Judge of the High Court of Gujarat dismissed the three applications in question by Order dated 15.04.1998. The said order has been affirmed in appeal by the Division Bench of the Gujarat High Court by its Order dated 25.11.1998. This order has been subjected to challenge in Civil Appeal of 2001 presently under consideration.

The issue raised in the appeal-

In an infringement suit, wherein the question of validity of registration of the trademark in question has not been raised/pursued, will the concerned party will have remedy under Sections 111 read with Section 107 or will the party still have recourse to the remedy under Sections 45/56 of the Trade and Merchandise Marks Act, 1958?

Arguments of the appellants-

  1. Under the 1958 Act, there are two categories of right vested; the first in the owner of a registered trademark (Sections 28 and 29) and the second in a person aggrieved by such registration (Sections 46 and 56). The aforesaid two rights are parallel and independent of each other. The only requirement for filing a rectification application under the provisions of Sections 107 and 111 of the 1958 Act is that person filing such an application must be a “person aggrieved” which would include a person against whom an infringement action has been taken or is threatened by the registered proprietor of the trademark.
  2. The question of conclusiveness as to the validity of the registration of the trademark can be raised in an infringement suit and it can also be raised in a rectification application.
  3. It cannot be said that there is a requirement of permission of a subordinate court (District Court) for the filing of the rectification application before a higher Court (High Court), in the light of the provisions of Section 107 and 111, as that cannot be the legislative intent behind the same.
  4. There exists a higher provision under Section 41(b) of the Specific Relief Act, 1963 which restrains a subordinate court from preventing a person from instituting proceedings.

Arguments of the Respondents-

  1. By the plain reading of Section 111(3) & 111(4) of the 1958 Act, it is clear that once the Civil Court is satisfied with regard to the prima facie tenability of the issue of invalidity of the registration of a trademark then the said question has to be decided in a rectification proceeding and not in the suit. It was argued that the suit will remain stayed and the final decision of the statutory authority in the rectification proceeding will govern the parties to the suit.
  2. Rectification proceedings under Sections 46 and 56 of the 1958 Act govern a situation where there is no suit for infringement pending. In a situation where a suit for infringement has been filed and the question of validity of registration arises therein and the Civil Court is satisfied as to the prima facie tenability of the issue of invalidity of the registration of the trade mark, the provisions of Section 111 would take over and govern the proceedings in the suit including the issue of invalidity.
  3. There is also a deemed abandonment of the rights conveyed under Sections 46 and 56 of the 1958 Act, in the event a suit for infringement is pending wherein the question of invalidity has been raised and found to be prima facie tenable.
  4. The rights under Sections 46 and 56 and those contained in Sections 107 and 111 must be understood to be operating in two different fields; both sets of provisions cannot mutually exists as such mutual existence and operation may lead to conflicting decisions on the same question.
  5. The abandonment of the plea of invalidity contemplated by Section 111(3) of the 1958 Act is a complete relinquishment for all practical purposes and not only for the purpose of this suit. The abandonment contemplated by Section 111 (3) of the 1958 Act does not keep alive the plea of invalidity to be urged/agitated separately in a rectification proceeding under Section 46/56 of the 1958 Act.

Judgement of the court-

If in a suit for infringement of a registered trade mark the validity of the registration of the trade mark is questioned by the party then Section 107 of the 1958 Act provides that an application for rectification shall be made to the High Court and not to the Registrar notwithstanding the provisions contained in Section 46 or Section 56 of the 1958 Act. This would seem to suggest that in such situations (where a suit for infringement is pending) the legislative scheme is somewhat different.

The section 111 of the 1958 Act specifically provides that if a proceeding for rectification of the register in relation to the trade mark of either the plaintiff or the defendant is pending before the Registrar or the High Court, as may be, and a suit for infringement is filed wherein the aforesaid plea is raised either by the defendant or by the plaintiff, the suit shall remain stayed.

Thus, it was concluded by the Court that-

(i) In a case where the issue of invalidity is raised or arises independent of a suit, the prescribed statutory authority will be the sole authority to deal with the matter. However, 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.

(ii) Conversely, in a situation where the Civil Court does not find a triable issue on the plea of invalidity, the remedy of an aggrieved party would not be to move under Sections 46/56 of the 1958 Act but to challenge the order of the Civil Court in appeal. This would be necessary to avoid multiple proceedings on the same issue and resultant conflict of decisions.

Furthermore, Section 111(3) is a legal fiction. The legislature while providing consequences for non-compliance with timelines for doing of any act must be understood to have intended such consequences to be mandatory in nature, thereby, also affecting the substantive rights of the parties. The right to raise the issue of invalidity under section 111 (3) is lost forever if the requisite action to move the High Court/Intellectual Property Appellate Tribunal is not initiated within the statutorily prescribed time frame. Thus the appeal was accordingly dismissed and the decision was held in favour of the respondent.

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