DHARAMPAL SATYAPAL LIMITED vs MR BASANT KUMAR MAKHIJA & ORS.

2023-10-17 Information

$~9
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(COMM) 806/2017 & I.A. 14129/2018
DHARAMPAL SATYAPAL LIMITED ….. Plaintiff
Through: Mr. Pravin Anand, Ms. Vaishali
Mittal, Mr. Siddhant Chamola and Mr. Shivang Sharma, Advs.

versus

MR BASANT KUMAR MAKHIJA & ORS. ….. Defendants
Through: Mr. Anirudh Bakhru and Mr.
Arnav Chatterjee, Advs.

CORAM:
HON’BLE MR. JUSTICE C. HARI SHANKAR
JUDGMENT (ORAL)
% 17.10.2023

I.A. 14129/2018 [under Section 124]

1. This is an application by the plaintiff under Section 124(1)1 of the Trade Marks Act, 1999, for framing an issue regarding the invalidity of the defendants Registration No. 14746572 for the device mark and adjournment of the present proceedings by three months so as to enable the plaintiff to file a rectification petition, assailing the said trade mark granted to the defendant.

2. Section 124 of the Trade Marks Act comes into play where the validity of the registration of the trademark granted either to the plaintiff or the defendant is questioned by the opposite party. Where the challenge to validity is by the plaintiff, Section 124 envisages that, in sequence,
(i) the defendant raises a defence under Section 30(2)(e)3 of the Trade Marks Act, meaning that the defendant sets up the fact of registration of the defendants mark as a defence to the plea of infringement and consequent prayer for injunction [Section 124(1)(b)],
(ii) the plaintiff pleads invalidity of the registration of the defendants trademark [Section 124(1)(b)], and
(iii) the Court is satisfied that the plea regarding invalidity is prima facie tenable [Section 124(1)(ii)].

3. If these three events happened in sequence, Section 124(1)(ii) requires the Court to
(i) raise an issue regarding the plea of invalidity, raised by the plaintiff and
(ii) adjourn the case by three months in order to enable the plaintiff to apply to the High Court for rectification of the Register of Trademarks.

4. Though it is not of particular relevance, sub-section (2)4 of Section 124 envisages stay of trial of the suit, where rectification is filed by the plaintiff within the period of three months contemplated by Section 124(1)(ii).

5. This Court is required, therefore, in the present case, to examine whether these ingredients are satisfied.

6. Raising of Section 30(2)(e) defence by the defendant

6.1 Sub para IX of the preliminary objections raised in the written statement filed by the defendant reads thus:
IX. That the Plaintiff has filed a Suit which is titled as Suit for Permanent Injunction restraining Infringement of Copyright and Trade Mark, Passing off, trade dress. Rendition of Accounts etc. The Suit for infringement of trade mark is barred by virtue of provisions of Section 28 (3) of the Trade Mark Act, 1999. Section 28(3) provides:

“28. Rights conferred by registration-

(3) Where two or more persons are registered proprietors of trade marks, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trade marks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those persons as against any other of those persons merely by registration of the trade marks but each of those persons has otherwise the same rights as against other persons (not being registered users using by way of permitted use) as he would have if he were the sole registered proprietor.”

The Defendant Nos. 1 and 2 are the Registered Proprietors of trade mark/label KARAMCHAND under No.2953829 in class 31, under No. 3061664 in class 31 and under No. 2386262 in class 31. The registrations are valid and subsisting in favour of the Defendant Nos.1 and 2. Thus, the Suit for infringement is barred under Section 28(3) of the Trade Marks Act, 1999.

(Emphasis supplied)

6.2 Inasmuch as the defendants have raised the plea of registration of the impugned mark as a defence to the plaintiffs plea for remedy against infringement, it is clear that a Section 30(2)(e) defence has been raised by the defendants. Indeed, this aspect was not disputed even by Mr. Bakhru, learned Counsel for the defendants.

7. Raising of plea of invalidity by plaintiff

7.1 Mr. Anand, learned Counsel for the plaintiff submits that the plea of invalidity of the mark of the defendant has been taken by the plaintiff in paras 29, 31, 32, 41 and 42 of the plaint and in paras 12 to 17 of the replication. These paragraphs read thus:

Paras 29, 31, 32, 41 and 42 of the plaint

29. Having learnt of the Defendants, the Plaintiff conducted a search on the website of the Registry of Trademarks to determine whether the Defendants had filed any application seeking rights over the abovementioned label. To the surprise of the Plaintiff, the search revealed that the Defendants have secured a registration over the deceptively similar logo. Furthermore, the Plaintiff also learnt that the Defendants had secured registrations and had filed applications over other trademarks consisting of “the expression KARAMCHAND.

Details of the trademark applications / registrations of the Defendants are as follows:

Application No.
Trademark
Mark Description
Class
Date of application
2953829
KARAMCHAND
Premium
Pan Masala

31
30/04/2005
2386262
KARAMCHAND

31
27/08/2012
3061664
KARAMCHAND
Premium PAN
MASALA

31
23/09/2015
2386263
KARAMCHAND

34
27/08/2012

Documents in support of the said applications are being filed in the present proceedings.

*****

31. Furthermore, the Defendants ought to have been very well aware of the Plaintiff as well as its well-known trademark RAJNIGANDHA. This is not only due to the fact that the Plaintiff is the market leader in such pan-masala products for a very long period of time, but it is also attributable to the fact that consumers instantly associate the blue, red and golden packaging and other unique elements forming the packaging of the RAJNIGANDHA products with the Plaintiff exclusively.

32. It is pertinent to note that a comparative analysis of the Defendants manner of use of vis a vis the Plaintiffs trademarks clearly sets out the base for ”likelihood of confusion While a mere cursory glance at the packaging of the pan masala pouches manufactured, supplied and sold by the Defendants clearly reveals that it is intended to cause confusion as to the source of origin of the products; a deeper analysis will also show the high degree of imitation performed by the Defendant

Manner of use / presentation by the Plaintiff
Manner of use / presentation by Defendants

1) A distinctive metallic blue background colour with a vignette effect on the upper and lower edges of the pouch.
2) A map of the world appearing across the face of the pouch.
3) A two letter monogram prominently placed in red colour on a golden coloured device, super imposed on the map of India.
4) The word ‘premium’ appearing in an oblong device having a golden border like Flavoured Pan masala.
5) In super-imposing relationship with the aforesaid device is a larger windshield type device having the Plaintiff’s brand ‘Rajnigandha’ appear in a bold red font with a white ghost outline and a frosted appearance in a substantial portion of the said windshield device.
6) Tag lines written on the bottom of the pouch in white colour.
7) On the reverse side of the main face of the aforesaid pouch, there is a silver rectangular portion with descriptive matter as covered under The Legal Metrology Act, 2009.

*****

41. As stated earlier, the Plaintiff is also the prior user of the packaging of the products sold under the mark RAJNIGANDHA. The Defendants (the admitted subsequent users of the packaging) have deliberately adopted a deceptively similar trade style, getup, color-scheme and layout in order to induce consumers into purchasing the Defendants’ pan masala products, under the mistaken belief that they are actually the Plaintiffs famous pan masala sold under the trademark RAJNIGANDHA.

Being in the trade of pan masala products, the Defendants ought to have been aware of the Plaintiffs’ highly reputed products under the mark RAJNIGANDHA and their constituent trade-dress. Therefore, the Defendants’ action of adopting a nearly identical packaging and trade-dress evidences their mala fide intention of riding upon the goodwill and reputation of the Plaintiffs’ products.

42. The Defendants are benefitting from the confusion caused in the minds of consumers regarding the source of their pan masala products under the deceptively similar manner of use by the Defendants for their pan masala products KARAMCHAND. This is because purchases made of the Defendants’ products are the result of a mistaken impression that they emanate from the Plaintiff. Furthermore, the present case is one of triple identity, since the Defendant is making use of:

i) A deceptively similar trade dress as employed by the Plaintiff s in relation to its RAJNIGANDHA pan masala product and associated manner of use;

ii) The Defendants’ have adopted the said packaging style in relation to the same product as that of the Plaintiff, with regard to the pan masala products as that of the Plaintiff;

iii) The products of the Plaintiff and the Defendants are sold vide same trading channels including retail outlets, grocery stores and street vendors;

Paras 12 to 17 of replication

12. The Defendants have adopted a packaging which is nearly identical to that of the Plaintiff, in relation to pan masala products that it sells under the mark KARAMCHAND. Details of the registration secured by the Defendant are given below;

Application
No.
Trademark
Mark Description
Class
Date of application
2953829
KARAMCH
AND
Premium
Pan Masala

31
30/04/2015

13. The Defendants have admittedly started making use of the said packaging only from the year 2012, thereby evidencing the fact that the Defendants use is subsequent to that of the Plaintiff.

14. A mere perusal of the packaging of the Defendants and the Plaintiffs in relation to the said pan masala products leaves no room for doubt that they are nearly identical to one another. The numerous aspects of near identity and deceptive similarity between the two packaging styles is evident from the comparison table below:

Manner of use / presentation by the Plaintiff
Manner of use / presentation by Defendants

15. The above-mentioned contentions make it evident that the Defendants’ said trademark registration bearing number 2953829 is liable to be taken off the register from trade-marks since it is invalid and in contravention of the provisions of inter alia section 9, section 11, section 18, section 29 of the Trade Marks Act, 1999

(i) The Plaintiff adopted its distinctive packaging style much prior to that of the Defendants, and had even secured registrations for the said label marks. The Plaintiffs pan masala products bearing the said label and trade-dress are immensely popular amongst the general public, so much so that persons associate the blue, red and golden colored trade-dress (including other aspects of the trade-dress as depicted above) solely and exclusively with the Plaintiff. The adoption and use by the Defendants of a nearly identical trade-dress and packaging is not only subsequent, but it is also mala fide, as the Defendants aim to ride upon the goodwill vested in the Plaintiffs packaging and trade-dress. The existence of pan masala products under such similar packaging styles is bound to cause confusion in the minds of the public, and result in passing off and infringement thereof. Consequently, the Defendants’ trademark registration falls foul of section 9.

(ii) The Plaintiffs’ said unique packaging and trade-dress has been held to be well-known as per the provisions of section 2(1) (zg) of the Trade Marks Act, 1999 by orders of this Hon’ble Court. As a result, the Plaintiffs trademark amounts to an earlier trademark as per section 11 of the said Act, with respect to the Defendants’ registration. The subsequent adoption, deceptive similarity of the two trademarks in relation to the identical products, i.e. pan masala is bound to cause confusion in the minds of the general public and result in detriment to the goodwill and exclusivity of the Plaintiffs trademark and packaging style. Consequently, the Defendants’ said trademark registration falls foul of the provisions of section 11 of the Trade Marks Act, 1999.

(iii) As stated earlier, the Defendants commercialization of its products under the impugned registration amounts to a gross misrepresentation to the public that their products emanate from the Plaintiff instead. A person having ordinary intelligence and imperfect recollection is bound to purchase the Defendants’ pan masala products under the mistaken impression that they are the Plaintiffs RAJNIGANDHA products and/or otherwise emanate from the Plaintiff. Furthermore, it is important to remember that pan masala as a product is consumed more by the rural population, who might not be very well versed with the English script and might not be in a position to distinguish the two products based upon the minor and almost negligible differences on the packaging (such as different brand name, trading style, address etc.) of the Plaintiff and that of the Defendants. It is well-established that the nature of consumers plays a very important role, when adjudicating upon the likelihood of confusion between two similar trademarks and/or trade dress.

The resultant loss caused to the Plaintiffs market share, exclusivity and reputation of its pan masala products under the above mentioned trademark amounts to passing off and violation of the Plaintiffs rights under section 29 of the Trade Marks Act, 1999

16. Therefore, it is evident that the trademark registration secured by the Defendants is mala fide, invalid and is bound to be struck off from the Register of Trade Marks. The extreme mala fides of the Defendants’ actions is evident from the fact that the Defendants also make use of another packaging, under a saffron colored scheme, in relation to the same products, i.e. pan masala. The Defendants have secured registration over the said packaging under registration 3061664 in class 31. Despite having the option to manufacture, sell and make available to the public its products under the KARAMCHAND brand under a different color scheme, the Defendants deliberately commercialize their products under a packaging and trade-dress which is deceptively similar to that of the Plaintiff, with a deliberate intent to derive unlawful gains from the reputation of the Plaintiff.

17. The Plaintiff reserves its rights to institute appropriate proceedings before the Trade Marks Registry and/or the Intellectual Property Appellate Board for the rectification of the Defendant’s above mentioned trademark registration.

7.2 Mr. Bakhru submits that pleas taken in the replication cannot be taken into account for the purpose of Section 124(1)(b). Any plea regarding the invalidity of the defendants mark, he submits, has to be taken in the plaint. Averments contained in the replication cannot constitute pleadings to the effect that the registration of the defendants mark is invalid. He places reliance, in this context, on Order VII Rule 15 of the Code of Civil Procedure, 1908 (CPC) as well as the decision of a Coordinate Bench of this Court in Travellers Exchange Corporation Ltd. v. Celebrities Management Pvt. Ltd.6, from which he relies on the following paragraphs:
7. Upon learning of Defendant’s registration of the trademark TRAVELXP in various classes from the written statement, Plaintiffs took the plea of invalidity of Defendant’s registration in the mark, in the replication and filed an application under Section 124 of the Act, being I.A. 1152/2017. However, Court was of the view that plea of invalidity is required to be pleaded in the plaint and vide order dated 31.01.2019 permitted the Plaintiffs to withdraw the application, with liberty to seek amendment of the plaint. Pursuant to the liberty granted, Plaintiffs filed an application for amendment of the plaint, to incorporate the plea of invalidity, being I.A. 4121/2019. Vide order dated 22.08.2019, the application was allowed and the amended plaint was taken on record. Subsequent thereto, the present application was filed by the Plaintiffs.

7.3 Mr. Bakhru has also cited the decision of R.C. Lahoti, J, as he then was, sitting singly in this Court in Anant Construction (P) Ltd. v. Ram Niwas7, specifically para 24, which reads as under:

24. To sum up:

(1) replication and rejoinder have well defined meanings. Replication is a pleading by plaintiff in answer to defendant’s plea. Rejoinder is a second pleading by defendant in answer to plaintiffs reply i.e. replication.

(2) To reach the avowed goal of expeditious disposal, all interlocutory applications are supposed to be disposed of soon on their filing. A delivery of copy of the I.A. to the counsel for opposite party is a notice of application. Reply, if any, may be filed in between, if the time gap was reasonable enough enabling reply being filed.

(3) I.As which do not involve adjudication of substantive rights of parties and/or which do not require investigation or inquiry into facts are not supposed to be contested by filing written reply and certainly not by filing replication.

(4) A replication to written statement is not to be filed nor permitted to be filed ordinarily, much less in routine. A replication is permissible in three situations.
(i) when required by law;
(ii) when a counter claim is raised or set off is pleaded by defendant; and
(iii) when the court directs or permits a replication being filed.

(5) Court would direct or permit replication being filed when having scrutinised plaint and written statement the need of plaintiff joining specific pleading to a case specifically and newly raised in written statement is felt. Such a need arises for the plaintiff introducing a plea by way of confession and avoidance.

(6) A plaintiff seeking leave of the court has to present before it the proposed replication. On applying its mind the court may grant or refuse the leave.

(7) A mere denial of defendant’s case by plaintiff needs no replication. The plaintiff can rely on rule of implide or assumed traverse and joinder of issue.

(8) Subsequent pleadings are not substitute for amendment in original pleadings.

(9) A plea inconsistent with the pleas taken in original pleadings cannot be permitted to be taken in subsequent pleadings.

(10) A plea which is foundation of plaintiff’s case or essentially a part of causes of action of plaintiff, in absence whereof the suit will be liable to be dismissed or the plaint liable to be rejected cannot be introduced for the first time by way of replication.

7.4 Mr. Anand submits, per contra, that Section 124(1)(b) envisages the plea of invalidity of the defendants mark being taken consequent on the defendant raising a Section 30(1)(e) defence. As the Section 30(1)(e) defence would be taken only in the written statement, he submits that it is but natural that the occasion for the plaintiff to plead invalidity of the defendants mark by way of a response to the defence taken by the defendant would necessarily be only in the replication. Mr. Anand also points out that, in para 24 of Anant Construction, Lahoti, J has himself noted that replication is a pleading by plaintiff in answer to defendants plea.

7.5 Mr. Bakhru rejoins to submit that, even if the occasion to challenge the validity of the defendants trade mark arose after the written statement had been filed by the defendants, the plaintiff would have to do so by way of amendment of the plaint as was done in Travellers Exchange Corporation and not by way of replication.

7.6 Having considered the submissions of both sides on this issue, I am of the opinion that the averments contained in the replication cannot be ignored while considering whether the plaintiff has pleaded invalidity of the defendants mark within the meaning of Section 124(1)(b) of the Trade Marks Act.

7.7 The sequence envisaged by the provision is clear and unambiguous. Section 124(1)(b) clearly envisages a situation in which the defendant raises a defence under clause (e) of sub-section (2) of section 30 and the plaintiff pleads the invalidity of registration of the defendants trade mark. And is a word of myriad etymological connotations, depending on where and how it is used, and, here, I am inclined to think that and has been used as synonymous with following which, meaning that, first, a Section 30(2)(e) defence would be raised by the defendant, and, thereafter, the plaintiff challenges the validity of the defendants mark.

7.8 That this is the correct interpretation to be placed on Section 124(1)(b) becomes apparent when one considers what a Section 30(2)(e) defence is. Section 30(2)(e) enables the defendant to plead the right, to use his mark, which flows from its registration, as a defence against the charge of infringement and the plea for injunction. Thus, a Section 30(2)(e) defence involves assertion, by the defendant, of the rights flowing from registration of the impugned mark. When this is seen in the light of the latter half of Section 124(1)(b), which reads and the plaintiff pleads the invalidity of registration of the defendants trade mark, it is clear that the provision envisages a challenge, by the plaintiff, to the defendants mark only because the defendant is asserting the rights which flow from its registration. The occasion for the plaintiff to plead invalidity of the defendants trademark, as per Section 124(1)(b), therefore, arises only consequent on the defendant raising a Section 30(2)(e) defence.

7.9 Section 124(1)(b), therefore, clearly envisages the plaintiff raising a plea of invalidity of the defendants trademark as a response to the reliance, by the defendant, on the registration of its mark as a defence to the plea of infringement and consequent prayer for injunction.

7.10 Mr. Bakhru does not dispute that there is a specific challenge to the validity of the defendants trademark raised in paras 12 to 17 of the replication. His contention is, however, that, even if it were to be assumed that the occasion for the plaintiff to challenge the validity of the defendants mark would arise consequent on the defendant raising a Section 30(2)(e) defence, the plaintiff would have to do so by amending the plaint, and not in replication.

7.11 The submission, in my view, is too hypertechnical to commend acceptance. Besides, a replication is, by its very nature, intended to meet the assertions in the written statement. It would, therefore, be paradoxical to hold that, even though the Section 30(2)(e) defence is raised in the written statement, the plaintiff is foreclosed from meeting it in replication by challenging the validity of the defendants mark, and has to amend the plaint itself.

7.12 This position is also supported by the opening words in para 24 of Anant Construction, which note that a replication is a pleading by plaintiff in answer to defendants plea. Having himself relied on Anant Construction, Mr Bakhru cannot be heard, simultaneously, to contend that either that a replication is not a pleading, or that the answer to the Section 30(2)(e) defence, taken by the defendant in the written statement, cannot be taken by the plaintiff in replication, and that the plaintiff would, instead, have to amend the plaint itself.

7.13 Travellers Exchange does not state, anywhere, that a plea of invalidity of the defendants trademark cannot be taken in a replication. What is said in para 7 is with respect to an earlier order dated 31 January 2019 passed by this Court in the said case in which, as per para 7 of the judgment dated 20 October 2022, this Court was of the view that the plea of invalidity is required to be pleaded in the plaint. Mr. Bakhru, however, fairly submits that there is actually no earlier order in the case which so opines, and that the order dated 31 January 2019 was merely an order seeking liberty to raise the plea of invalidity in the plaint. No statement of law, to the effect that the plea of invalidity of the defendants trade mark, consequent on the defendant raising a Section 30(2)(e) defence in the written statement, must necessarily be taken by amending the plaint, and cannot be taken in the replication can, therefore, be said to have been enunciated in Travellers Exchange.

7.14 Insofar as paras 29, 31, 32, 41 and 42 of the plaint are concerned, even if no specific submission to the effect that the defendants mark is invalid has been taken, the ingredients which are required to be pleaded in order for the plaintiff to succeed in a plea of invalidity under Section 11 are all contained in the said passages. Para 29 pleads that the defendants mark is deceptively similar to the plaintiffs marks [which were registered much prior in point of time and are, therefore, earlier trademarks within the meaning of Section 11(4)]. Para 31 pleads that the plaintiffs mark is well-known. Para 32 pleads that there is a likelihood of confusion if both the marks are allowed to prevail or co-exist. In the face of these pleadings as contained in the plaint, seen in conjunction with the fact that in reply to the defendants Section 30(2)(e) defence in the written statement, a specific challenge to the validity of the defendants trademark was taken in the replication, I am unable to concur with Mr. Bakhru in his submission that no plea of invalidity of registration of the defendants trademark was taken by the plaintiff.

7.15 Even otherwise, the word pleading does not figure anywhere in Section 124(1). The word that is used is pleads. When understanding the scope and ambit of the expression pleads in Section 124(1), especially keeping in mind the sequence envisaged by Section 124(1)(b), I am of the opinion that the word pleads cannot be restrictively read as the verb equivalent of the noun pleading as defined in Order VI Rule 1 of the CPC.

7.16 The word plead has, in fact, various connotations in law, not restricted stricto sensu to the verb equivalent of pleading as defined in Order VI Rule 1. Article 220 of the Constitution of India, for example, reads No person who, after the commencement of this Constitution, has held office as a permanent Judge of a High Court shall plead or act in any court or before any authority in India except the Supreme Court and the other High Courts, and, in this context, the High Court of Calcutta has, in J.P. Mitter v. H.K. Bose8, held that plead means to address the Court as an Advocate on behalf of either party. P. Ramanatha Aiyars classic Advanced Law Lexicon (5th Edition), in fact, defines plead as address Court as advocate or party; maintain a cause in Court; allege as a plea in proceedings in Court.

7.17 The word plead, in grammar, is the verb equivalent both of plea and pleading. In law, it could be one or the other, depending on the context in which it is used. As used in Section 124(1)(b), plead, in my view, is etymologically closer to the noun plea rather than the noun pleading. In a manner of speaking, plead may be regarded as the verb equivalent, not of pleading, but of plea, as used in Section 124(1)(b).

7.18 For all the aforesaid reasons, I am of the opinion that, in the present case, the plaintiff has pleaded invalidity of the defendants trademark within the meaning of Section 124(1)(b).

8. The aspect of prima facie tenability

8.2 One the requirements of the defendants having raised a Section 30(2)(e) defence and the plaintiff having pleaded invalidity of the defendants trademark, as contemplated by Section 124(1)(b), stand satisfied, the Court is required to examine whether the plea regarding the invalidity of the registration of the defendants trademark, as taken by the plaintiff, is prima facie tenable.

8.3 There was some amount of discussion on this aspect as well, specifically on the scope and ambit of the expression prima facie tenable. I have had an occasion to cogitate on this issue and have expressed my view thereon in paras 64 to 77 of the decision in Pepsico Inc. v. Parle Agro Pvt. Ltd.9 which read thus:

64. The challenge in the afore-extracted passages from the written statement of Parle seeks to invoke Section 9(1) of the Trade Marks Act, which proscribes, absolutely, registration of marks which are devoid of any distinctive character [vide clause (a)] or designate the kind, quality, quantity, intended purpose, values, or other characteristics of the goods in respect of which the marks are used [vide clause (b)], or which have become customary in the current language or in the bonafide and established practices of the trade [vide clause (c)]. Parle’s case – as articulated by Mr. Sudhir Chandra – is that the registration of PepsiCo’s For The Bold trade mark is invalid because it is purely descriptive of the tortilla chips in respect of which it is used and, inasmuch as bold is a word of common and customary English usage, is also a phrase which has become customary in the current language and in the bonafide and established practices of the trade. Mr. Sudhir Chandra invokes, therefore, all three clauses of Section 9(1).

65. Para 5.2 of the plaint provides the following raison d’ etre for the use of the tagline For The Bold for its DORITOS tortilla chips: In the year 2013, Plaintiff No. 1 launched a global marketing campaign in relation to its DORITOS range of products/tortilla chips under tagline For The Bold. The idea underlying the For The Bold campaign was to encourage and urge the consumers of DORITOS to live boldly by seizing the moments in life and breaking out of the norm of everyday life, to experience more and live more. Through this campaign, the consumers were also urged to try and experience intense flavours of the DORITOS products that would ignite them to seize the moment and release their inner boldness.

66. Thus, it does appear that, in its pleadings in the plaint, PepsiCo has sought to relate the tagline For The Bold with the flavour of the tortilla chips in respect of which the said tagline is used and to attribute a purpose to the said tagline. What has to be seen is whether, in the backdrop of these rival assertions, as contained in the written statement of Parle and in the plaint of PepsiCo, the challenge, by Parle, to the validity of PepsiCo’s For The Bold trade mark is, or is not, tenable.

67. Tenable is not an adjective which one customarily encounters in statutory instruments. Indeed, it is an expression which is gloriously uncertain in its import and, ordinarily, should not even form part of a provision in a statute, especially one which seriously impacts commercial rights of parties. Nonetheless, it is there and, therefore, the Court has to live with it.

68. In the context of Section 87(1)(a) of the Trade and Merchandise Act, 1958 – which, though it deals with criminal prosecution, also envisages satisfaction, by the Magistrate, regarding the tenability of the challenge to the validity of a trade mark – P. Ramanatha Aiyar, in his classic Advance Law Lexicon, defines tenable as capable of being retained, kept or defended. That, really, is the only definition of tenable that I have come across, in any law lexicon. Black, Jowitt and Stroud are all silent on it.

69. The scope and import of the expression tenable as employed in Section 124(1)(a)(ii) can perhaps be better appreciated if one examines the consequences of a finding, by the court, under the said provision, that the plea of invalidity of the plaintiff’s trade mark, as raised by the defendant, is prima facie tenable. The use of the expression prima facie is also, in this connection, of no little significance. The Court, while exercising its subjective satisfaction in terms of Section 124(1)(a)(ii) is, therefore, only required to satisfy itself regarding the prima facie tenability of the challenge, by the defendant, to the plaintiff’s trade mark – or vice-versa. It has to be remembered that, if the court finds the challenge to be prima facie tenable, the court only proceeds to frame an issue and adjourn the proceedings to enable the defendant – or the plaintiff, as the case may be – to prefer a rectification proceeding. The actual issue of whether, in fact, the validity of the mark is, or is not, meritorious, is within the exclusive province of the authority which is in seisin of the rectification proceeding, once it is filed.

70. An exhaustive discussion of this aspect of the matter is contained in the judgment of the Supreme Court in Patel Field Marshal Agencies v. P.M. Diesels Ltd.10 . The respondent P.M. Diesels Ltd. (PMD hereinafter) was the registered owner of three trade marks, to all of which Field Marshal was common. They were registered in 1964 and 1968. The appellant Patel Field Marshal Agencies (PFM hereinafter) applied for registration of the trade mark Marshal. PMD instituted Suit No. 1612/1989 before this Court, alleging that the use of Marshal by PFM infringed PMD’s registered Field Marshal trade mark. An injunction against use, by PFM, of the mark Marshal was, therefore, sought. PFM, in response, questioned the validity of the registration of the mark Field Marshal in favour of PMD. This Court framed an issue to the said effect in the suit. An application for interlocutory injunction, preferred by PMD, was allowed by a learned Single Judge of this Court. However, by a subsequent order, the learned Single Judge opined that this Court did not possess the territorial jurisdiction to adjudicate the suit and, therefore, returned the plaint or presentation before the competent court in Gujarat. The plaint was thereafter filed before the learned Additional District Judge (ADJ), Rajkot, as Civil Suit 1/2009. The controversy arose in the context of the Trade and Merchandise Marks Act, 1958 (the TMA 1958).

71. During the pendency of the suit before this Court, PFM initiated rectification proceedings before the High Court of Gujarat, challenging the registration of the Field Marshal trade marks in favour of PMD. The rectification applications were dismissed by a learned Single Judge, whose decision was upheld in appeal by the Division Bench. PFM appealed to the Supreme Court.

72. In these circumstances, the Supreme Court framed the following issue as arising for consideration before it, in para 9 of the report: In a situation where a suit for infringement is pending wherein the issue of validity of the registration of the trade mark in question has been raised either by the plaintiff or the defendant and no issue on the said question of validity has been framed in the suit or if framed has not been pursued by the party concerned in the suit by filing an application to the High Court for rectification under Section 111 read with Section 107 of the Trade and Merchandise Marks Act, 1958, whether recourse to the remedy of rectification under Sections 46/56 of the 1958 Act would still be available to contest the validity of the registration of the trade mark.

73. Broken up into its constituents, the issue as framed by the Supreme Court was this. The plaintiff files a suit for infringement. The defendant, in response, questions the validity of the trade mark that the plaintiff seeks to assert. The Court does not frame any issue regarding validity of the plaintiff’s trade mark. Else, the Court does frame an issue, but the defendant fails to proceed and filed a rectification application under Section 111 of the TMA 1958 . Can the defendant file a rectification petition under Section 46 or Section 56 of the TMA 1958?

74. The following paragraphs from the judgment provide the
answer:

28. In cases where in a suit for infringement of a registered trade mark the validity of the registration of the trade mark is questioned either by the plaintiff or by the defendant, 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 cases (where a suit for infringement is pending) the legislative scheme is somewhat different.

29. The above seems to become more clear from what is to be found in Section 111 of the 1958 Act which deals with stay of proceedings where the validity of registration of the trade mark is questioned. The aforesaid provision 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. Section 111 further provides that if no proceedings for rectification are pending on the date of filing of the suit and the issue of validity of the registration of the plaintiff’s or the defendant’s trade mark is raised/arises subsequently and the same is prima facie found to be tenable, an issue to the aforesaid effect shall be framed by the civil court and the suit will remain stayed for a period of three months from the date of framing of the issue so as to enable the party concerned to apply to the High Court for rectification of the register. Section 111(2) of the 1958 Act provides that in case an application for rectification is filed within the time allowed the trial of the suit shall remain stayed. Subsection (3) of Section 111 provides that in the event no such application for rectification is filed despite the order passed by the civil court, the plea with regard to validity of the registration of the trade mark in question shall be deemed to have been abandoned and the suit shall proceed in respect of any other issue that may have been raised therein. Sub-section (4) of Section 111 provides that the final order as may be passed in the rectification proceeding shall bind the parties and the civil court will dispose of the suit in conformity with such order insofar as the issue with regard to validity of the registration of the trade mark is concerned.

30. Following well-accepted principles of interpretation of statutes, which would hardly require a reiteration, the heading of Section 111 of the 1958 Act i.e. Stay of proceedings where the validity of registration of the trade mark is questioned, etc., cannot be understood to be determinative of the true purport, intent and effect of the provisions contained therein so as to understand the said section to be contemplating only stay of proceedings of the suit where validity of the registration of the trade mark is questioned. Naturally, the whole of the provisions of the section will have to be read and so read the same would clearly show lack of any legislative intent to limit/confine the operation of the section to what its title may convey.

31. Rather, from the résumé of the provisions of the 1958 Act made above, it becomes clear that all questions with regard to the validity of a trade mark is required to be decided by the Registrar or the High Court under the 1958 Act or by the Registrar or the IPAB under the 1999 Act and not by the civil court. The civil court, in fact, is not empowered by the Act to decide the said question. Furthermore, the Act mandates that the decisions rendered by the prescribed statutory authority [Registrar/High Court (now IPAB)] will bind the civil court. At the same time, the Act (both old and new) goes on to provide a different procedure to govern the exercise of the same jurisdiction in two different situations. 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.

32. 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.

33. The 1958 Act clearly visualises that though in both situations i.e. where no suit for infringement is pending at the time of filing of the application for rectification or such a suit has come to be instituted subsequent to the application for rectification, it is the Registrar or the High Court which constitutes the tribunal to determine the question of invalidity, the procedure contemplated by the statute to govern the exercise of jurisdiction to rectify is, however, different in the two situations enumerated. Such difference has already been noted.

34. The intention of the legislature is clear. All issues relating to and connected with the validity of registration has to be dealt with by the Tribunal and not by the civil court. In cases where the parties have not approached the civil court, Sections 46 and 56 provide an independent statutory right to an aggrieved party to seek rectification of a trade mark. However, in the event the civil court is approached, inter alia, raising the issue of invalidity of the trade mark such plea will be decided not by the civil court but by the Tribunal under the 1958 Act. The Tribunal will however come into seisin of the matter only if the civil court is satisfied that an issue with regard to invalidity ought to be framed in the suit. Once an issue to the said effect is framed, the matter will have to go to the Tribunal and the decision of the Tribunal will thereafter bind the civil court. If despite the order of the civil court the parties do not approach the Tribunal for rectification, the plea with regard to rectification will no longer survive.

75. Patel Field Marshal Agencies , therefore, clarifies that the challenge to the validity of the plaintiff’s mark, though raised by the defendant in the suit of the plaintiff, is to be decided, not by the Court hearing the suit (hereinafter the suit Court), but by the authority which the defendant would proceed to move for rectification. At the time when Patel Field Marshal Agencies was rendered, the authority before whom the rectification petition could be maintained was the Intellectual Property Appellate Tribunal (IPAB). The task of the suit Court, whether under Section 111(1)(ii) of the TMA 1958 or the corresponding Section 124(1)(a)(ii) of the present Trade Marks Act, is only to pronounce on the prima facie tenability of the challenge, by the defendant, to the validity of the plaintiff’s trade mark. Once the suit Court finds the challenge to be tenable and frames in issue in that regard, the challenger-defendant would have to move the IPAB for rectification, and it was the IPAB alone which could decide on the aspect of rectification and, therefore, on the validity of the plaintiff’s trade mark, one way or the other.

76. It goes without saying, therefore, that the IPAB, on whom the Supreme Court conferred exclusive jurisdiction in this regard, could not be trammelled in any manner in exercising the said jurisdiction. The court, while holding [under Section 111(1)(ii) of the TMA 1958 or the corresponding Section 124(1)(a)(ii) of the present Trade Marks Act] that the challenge, by the defendant, to the validity of the plaintiff’s trade mark was prima facie tenable would not, therefore, be entitled to make any such observation on the merits of the said challenge, as would bind, or even influence, the IPAB in adjudicating the rectification proceeding. As such, the findings of the court under Section 124(1)(a)(ii) regarding the tenability of the challenge, whether by the plaintiff or by the defendant, to the mark of the opposite party, has to be strictly prima facie, and nothing more. The suit Court can, under Section 124(1)(a)(ii), therefore, only pronounce on the issue of whether the challenge is arguable or not. Any observation beyond this is bound to influence the authority which subsequently has to adjudicate on the rectification petition and which is the only authority – as per Patel Field Marshal Agencies – which can pronounce on the challenge to validity.

77. Prima facie tenability, within the meaning of Section 124(1)(ii) of the Trade Marks Act, therefore, would imply only a prima facie view that the challenge to the validity of the mark of the opposite party, as raised in the plaint or in the written statement, is a challenge worth consideration. It cannot amount, in any manner of speaking, to an expression of opinion, even tentative or perfunctory, regarding the merits of the said challenge.

(Emphasis supplied)

8.4 In my considered opinion, the word tenable as used in Section 124(1)(ii) cannot be accorded too rigid an interpretation. In Patel Field Marshal Agencies, the Supreme Court has clearly held that the task of examining the merits, or otherwise, of the plea of invalidity, whether raised by the plaintiff or the defendant, is on the Court or authority which would deal with the rectification proceedings. At the time when Patel Field Marshal Agencies was rendered, that authority was the IPAB. The statute has not been amended in any way even after the IPAB was abolished. Even while replacing the words the Board in Section 124(1) of the Trade Marks Act with the High Court, the various clauses of the provision have been allowed to remain in status quo ante.

8.5 Patel Field Marshal Agencies clearly requires the task of examining the merits of the plea of invalidity of the mark to be entirely discharged by the authority hearing the rectification. The suit Court, even while holding the challenge to validity to be prima facie tenable and, consequently, adjourning the matter, is not, as per Patel Field Marshal Agencies, to enter into the merits of the plea. If the Court were, therefore, to return a finding, even tentative, on the merits of the plea of invalidity, it is bound to influence the authority which would deal with the rectification. At the time when Patel Field Marshal Agencies was rendered, that authority was the IPAB. Mr. Bakhrus contention is that the aspect of prima facie tenability would require the Court to return a finding of possibility of success by the plaintiff in its challenge to validity of the defendants mark. If that submission were to be accepted, it would fly in the teeth of the law enunciated in Patel Field Marshal Agencies, as if the suit Court were to return any finding of possible chance of success in the challenge to invalidity, it would be bound to influence the IPAB which would subsequently hear the rectification petition. It is for this reason, therefore, that I have expressed the view, in Pepsico that the aspect of prima facie tenability in Section 124(1)(ii) would only require the Court to pronounce on the arguability of the plea of invalidity. Anything more than that would actually dilute the law that the Supreme Court has enunciated in Patel Field Marshal Agencies.

8.6 Mr. Bakhru has cited, before me, the judgment of a Coordinate Bench of this Court in Burger King Corporation v. Ranjan Gupta11, paras 11, 12, 13 and 32 of which reads thus:

11. A perusal of sub clause (b)(ii) of Section 124(1) of the Act shows that the Court has to be satisfied that the plea regarding the invalidity of registration of the trademark is prima facie tenable. Thereupon, the Court may raise an issue regarding the same and adjourn the case for a period of three months from the date of framing of the said issue to enable the concerned party to apply for rectification of the register. It is significant to note that there is no or between the words prima facie tenable and raise an issue regarding the same. In fact, the aforesaid phrases are separated by which means that the Court will proceed to frame the issue with regard to invalidity of the registration of the trademark only upon being satisfied that the plea of invalidity is prima facie tenable. Thereupon, the defendant can file a rectification petition.

12. I am in agreement with the submission of the plaintiff that the finding of prima facie tenability is a statutory safeguard to ensure that the defendants do not file rectification proceedings as a counter blast to the infringement actions against them, unless their plea of invalidity is prima facie tenable. If this were not so, the defendants would be permitted to challenge the registrations of the plaintiff by filing rectification petitions on frivolous and untenable grounds. It is for this reason that the legislature has placed the safeguard of prima facie tenability in cases where the rectification proceedings are filed after a suit for infringement has been filed, whereas no such safeguard is there in cases where rectification proceedings have been filed before the suit.

13. In Patel Field Marshal (supra), the Supreme Court observed that where a civil suit is pending, the jurisdiction can be exercised by a statutory authority only on account of finding of the Civil Court as regards the prima facie tenability of the plea of invalidity. It was further observed that such a finding is a basic requirement so that false, frivolous and untenable claims of invalidity are not raised.

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32. In view of the discussion above, I am of the considered view that the plea raised by the defendant with regard to the invalidity of registrations granted in favour of the plaintiff in respect of the trademark BURGER KING and other formative marks, is prima facie not tenable. There is no reasonable prospect of the defendants succeeding in the cancellation petitions filed by them. Therefore, no issue with regard to validity of the registrations of trademarks of the plaintiff is liable to be framed in the facts and circumstances of the present case.

8.7 Mr. Bakhru submits that, as a Coordinate Bench has taken the view that the aspect of prima facie tenability would involve returning of a finding of success in the cancellation petition which would subsequently be filed, if this Court is to take a view that prima facie tenability merely involves the aspect of arguability, the matter may be placed before the Division Bench as it would result in two Coordinate Single Benches adopting different views. I am unable to agree.

8.8 I do not read the passages from the Burger King Corporation which Mr. Bakhru has cited as laying down, as a proposition of law, that prima facie tenability within the meaning of Section 124(1)(ii) means reasonable chance of success. The reference to reasonable chance of success is only contained in para 32 of the said decision. The said paragraph, if closely read, does not indicate that the Court has regarded reasonable chance of success as the barometer by which the test of prima facie tenability is to be gauged.

8.9 The Coordinate Bench, in para 32 of its decision in Burger King Corporation, first observes that, in view of the discussion above, the plea of the defendant (in that case) with regard to invalidity of the registration granted to the plaintiff was not prima facie tenable. As such, the finding of lack of prima facie tenability was based on the discussions which preceded para 32, and not on the observation which followed in the next sentence. Mr. Bakhru has not drawn my attention to any observation, in the paragraphs which precede para 32 in Burger King Corporation, to the effect that there was no reasonable chance of success in the rectification petition which would come to be filed. The observation, in the second sentence of para 32, that there was no reasonable prospect of the defendants succeeding in the cancellation petition filed by them cannot, therefore, be read as the ground on which the coordinate Bench held that there was no prima facie tenability in the challenge to validity. It is only a succeeding observation. This is clear from the in view of the discussion above opening words of para 32. As such, I am unable to read Burger King Corporation, as Mr. Bakhru would read it, as setting the standard to decide prima facie tenability, for the purposes of Section 124(1)(ii) as a standard of reasonable prospect of success.

8.10 Even otherwise, Burger King Corporation does not examine the impact of the decision of the Supreme Court in Patel Field Marshal on the exact scope and ambit of the interpretation of the expression prima facie tenable in Section 124(1)(ii), though Patel Field Marshal is incidentally noted in the decision.

8.11 I do, therefore, not find the judgment in Burger King Corporation to be in any way in conflict with the view that I have taken in Pepsico, as would justify referring of the issue to the Division Bench.

9. Mr. Bakhru also sought to contend that, in fact, in the draft issues which were placed before the Court on 10 October 2019, one of the issues was related to the validity of the defendants mark, but that this Court did not deem it appropriate to frame it as an issue. Mr. Anand points out that, at the time when the order dated 10 October 2019 was passed, the present application of the plaintiff under Section 124 was pending. As such, the issues which the Court proceeded to frame on 10 October 2019 cannot inhibit the Court from framing an additional issue regarding the validity of the defendants trademark, as sought in the present application.

10. For all the aforesaid reasons, I am of the opinion that, as
(i) the defendants have taken a 30(2)(e) defence,

(ii) the plaintiff has pleaded invalidity of the defendants mark within the meaning of Section 124(1)(ii), and
(iii) the plea of invalidity is, according to me, prima facie tenable, as it is an arguable plea, within the meaning of Section 124(1)(ii), the prayers in this application deserve to be granted.

11. Accordingly, this Court frames the following additional issue:

Whether the registration of the defendants mark vide Registration No. 1474657 dated 30 April 2015 granted to the defendants, by allowing Application No. 2953829, is valid?

12. In accordance with Section 124(1)(ii), the hearing of the suit stands adjourned to 31 January 2024 in order to enable the plaintiff to file a rectification petition.

13. The application stands allowed accordingly.

IA 13786/2017 [under Order XXXIX Rules 1 and 2 of the CPC]

14. Re-notify on 31 January 2024.

C.HARI SHANKAR, J
OCTOBER 17, 2023
ar
Click here to check corrigendum, if any

1 124. Stay of proceedings where the validity of registration of the trade mark is questioned, etc.
(1) Where in any suit for infringement of a trade mark
(a) the defendant pleads that registration of the plaintiff’s trade mark is invalid; or
(b) the defendant raises a defence under clause (e) of sub-section (2) of Section 30 and the plaintiff pleads the invalidity of registration of the defendant’s trade mark,
the court trying the suit (hereinafter referred to as the court), shall,
(i) if any proceedings for rectification of the register in relation to the plaintiff’s or defendant’s trade mark are pending before the Registrar or the High Court, stay the suit pending the final disposal of such proceedings;
(ii) if no such proceedings are pending and the court is satisfied that the plea regarding the invalidity of the registration of the plaintiff’s or defendant’s trade mark is prima facie tenable, raise an issue regarding the same and adjourn the case for a period of three months from the date of the framing of the issue in order to enable the party concerned to apply to the High Court for rectification of the register.
2 Wrongly stated in the application as Registration No. 2953829, which is actually the number of the Application
3 30. Limits on effect of registered trade mark.
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(2) A registered trade mark is not infringed where
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(e) the use of a registered trade mark, being one of two or more trade marks registered under this Act which are identical or nearly resemble each other, in exercise of the right to the use of that trade mark given by registration under this Act.
4 124. Stay of proceedings where the validity of registration of the trade mark is questioned, etc.
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(2) If the party concerned proves to the court that he has made any such application as is referred to in clause (b)(ii) of sub-section (1) within the time specified therein or within such extended time as the court may for sufficient cause allow, the trial of the suit shall stand stayed until the final disposal of the rectification proceedings.
5 1. Pleading. Pleading shall mean plaint or written statement.
6 298 (2023) DLT 101 : (2023) 93 PTC 425
7 (1995) ILR 2 DELHI 76
8 AIR 1963 Cal 178
9 2023 SCC OnLine Del 5823
10 28(2018) 2 SCC 112
11 2023 SCC OnLine Del 1383
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