Section 124 of the Trade Marks Act does not provide for stay of action against passing off and is applicable only where a rectification application/cancellation has been sought against the registered trade mark that a plaintiff claims to be exclusively its own. This is intended to avoid conflicting decisions by the Civil Courts and the Tribunal. This was held by the Hon’ble Justice Asha Menon in the case of Praveen Kumar Gupta Vs. Ravi Chadha and Ors. [CM (M) 428/2021, CM APPL.20526/2021] on the 06th of August before the Hon’ble High court of Delhi at New Delhi.
The present petition has been filed by the aggrieved petitioner since the fact that his suit, which he had filed against the defendants for infringement of his proprietary trade mark “RACER” as also passing off their goods as that of the petitioner and other reliefs, was stayed by the learned Trial Court vide order dated 6th March, 2017. This order, he challenged, by way of CM (M) 737/2017, which was disposed of vide order dated 6th December, 2017 permitting the petitioner to withdraw that petition and granting liberty to approach the Tribunal (sic.) by Review Petition. Thereafter, the petitioner filed a Review Petition, but the learned Trial Court was of the view that the application for review had been filed beyond the period of limitation. As a result, the petitioner filed an application under Section 5 of the Limitation Act for condonation of delay on the ground that time had been spent before the Hon’ble High Court in pursuing the CM (M) petition. However, the learned Trial Court rejected the application under Section 5 of the Limitation Act and observed that since the High Court, while disposing of the CM (M), had not commented on limitation, no ground for condonation of delay was made out. As a result thereof, the Review Petition was also dismissed.
The counsel for the petitioner submitted that when a suit was filed for infringement of trade mark as also for passing off, the filing of a rectification petition before the Intellectual Property Rights Board would result in the stay of the suit as far as infringement of trade mark was concerned under Section 124 of the Trade Marks Act, 1999, but that suit with regard to passing off was to continue. Furthermore, since the High Court had allowed the petitioner to file an application for review, filing of the application for condonation of delay was over looked. The cause shown for not immediately filing the review application after the impugned order dated 6th March, 2017 had been passed was clearly explained. The application under Section 5 of the Limitation Act was no doubt filed on 30th December, 2020, but that was only because the review application remained pending since it was filed in February, 2018 and no one had raised this issue of limitation, till the learned Trial Court did so. The counsel for the respondents submitted that the court was empowered, even without objections being taken, to satisfy itself regarding limitation, when any suit or application or appeal is filed before it. Therefore, merely because the respondents had not raised such an objection, would not prevent the court from looking into the issue of limitation. Further, it was submitted that the application for condonation of delay was filed three years after the order dated 6th March, 2017 and the filing of the application for review. There was no explanation whatsoever for not filing the application for condonation of delay during this entire time. Moreover, ince an injunction was already in force against the respondents and the respondents were not using the trade mark “RACER”, no prejudice was being caused to the petitioner, if the suit waited for the disposal of the rectification petition filed by the respondents before the IPRB. Thus, the learned counsel submitted that the present petition deserved to be dismissed.
The learned judge heard the submissions of both the parties and observed that that the rial court has erred in rejecting the application under Section 5 of the Limitation Act by observing that it was taking a ‘holistic reading’ of the order dated 6th December, 2017. In our view, a ‘holistic reading’ would have pointed out to the learned Trial Court, that permission to file a review petition had been granted in the backdrop of the submission that while a suit for infringement could be stayed under Section 124 of the Trade Marks Act the suit for passing off could continue. The court also referred to the judgement in Formica International Ltd. v. Caprihans (India) Pvt. Ltd., AIR 1966 Cal 247, wherein it was held that, “the entire suit would have to be stayed till the rectification proceedings are completed. No such plea has been taken in the present case. In fact, such a plea cannot be taken as it is after the institution of the suit that the defendants/respondents have filed an application for rectification.” Relying on the judgement in, J. K. Oil Industries v. Adani Wilmar Limited, 2018 SCC OnLine Del 9367, “while the suit for infringement of trade mark has to be stayed under Section 124 of the Trade Marks Act, when a rectification petition is filed before the IPRB, an action for passing off could continue.”, the court held that, “The settled law is thus that Section 124 of the Trade Marks Act does not provide for stay of action against passing off and is applicable only where a rectification application/cancellation has been sought against the registered trade mark that a plaintiff claims to be exclusively its own. This is intended to avoid conflicting decisions by the Civil Courts and the Tribunal. There is no such occasion arising in a suit for passing off. It is only when clever drafting discloses the intent of the plaintiff to get over the statutory bar, being aware of the rectification proceedings commenced against the trade mark that it claims is exclusively its own.” The petition was allowed.
