In the event of infringement of a trademark, there are various strategies which are adopted by the trademark owner and by the infringer. The aim of the trademark owner is obviously to stop the infringer from using his/her trademark while the infringer may wish to invalidate the registration of the subject trademark. There is an apt expression in Hindi which says “na rahega baans na bajegi baansuri” (without the bamboo there cannot be a flute to be played). This article deals with the strategies used by both the trademark owner and the (alleged) infringer.
The common strategy adopted by a trademark owner is to send the infringer a cease and desist notice. This notice becomes the genesis of trademark invalidation proceedings filed by the infringer. In India, trademark invalidation proceedings are usually filed by infringers pursuant to receiving such a notice. This strategy is also often used to defend trademark infringement suits. If you are successful in invalidating the registration of the trademark, you cannot be held guilty of infringing it.
There are instances when a large and powerful company sends a cease and desist notice to a small-scale operator who is allegedly infringing its mark. Gauging the size of the trademark owner, the infringer may be sufficiently daunted by the notice and may cease to infringe the trademark forthwith. However, often, the infringer applies to invalidate the registration of the impugned trademark after receiving the cease and desist notice. Therefore, we do not recommend that the trademark owner send a cease and desist notice to the infringer.
Procedure to be followed for invalidation before infringement suit has been filed -- If a suit for infringement has not been instituted, then trademark invalidation proceedings may be initiated before the Registrar of Trademarks or the Intellectual Property Appellate Board (“IPAB”). Instituting such proceedings before the Registrar of Trademarks is comparatively less expensive. Moreover, one of the advantages in instituting such proceedings before the Registrar is that the evidence in support of the claim of invalidation may be filed after the opposite party (the trademark owner) has filed its reply (known as counterstatement) to the invalidation. This allows the person invalidating sufficient time to gather and prepare evidence after filing the application for invalidation of trade mark.
If after invalidation proceedings have been initiated before the Registrar of Trademarks or the IPAB, a suit for infringement is filed before a Court, such a suit is liable to be stayed by the Court pending the decision of the Registrar of Trademarks or the IPAB as the case may be.
Procedure to be followed for invalidation after infringement suit has been filed -- In cases where trademark invalidation proceedings have been filed after the institution of the infringement suit, there is a conflict in the interpretation of different Courts in India as to the rules of procedure to be followed.
Section 124 of the Trade Marks Act, 1999, inter alia, deals with the stay of infringement proceedings pending before a Court, in situations where the validity of the registration of a trademark is being questioned by the alleged infringer. The Section states that if a trademark infringement suit has been instituted, and if the defendant wishes to contest and invalidate the registration of the plaintiff’s trademark, the defendant has to first take such a plea before the Court before whom the infringement suit is pending. Thereafter, the Court will look into the prima facie tenability of the plea of invalidity of registration. If the Court is satisfied, it will 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.
This adjournment is given to enable the defendant to apply to the IPAB for invalidation of the trademark registration. After such an application is made to the IPAB by the defendant, the Court before whom the trademark infringement suit is pending stays the suit until the validity of the registration of the trademark is determined by the IPAB.
The Delhi High Court and the Gujarat High Court have held the view that while a suit for infringement is pending, the defendant has to take the leave of the Court to apply for invalidation proceedings, by way of a plea. The Court has to satisfy itself of the tenability of such a plea and it will then raise an issue regarding the same. According to the Delhi High Court, only after this, may the party initiate trademark invalidation proceedings before the IPAB during a pending infringement suit.
However, the Madras High Court has taken a very different view, while deciding an application made in the case of Arvind Laboratories vs. Infotek Software & Systems Pvt. Ltd.Relying on a prior decision of the same Court, the Madras High Court observed that the relevant clause of Section 124 of the Trade Marks Act, 1999 is an enabling provision. It also observed “the plain reading of Section 124 (1)(b)(ii) shows that it does not mandate a party to obtain the ‘leave of the Court’ or ‘an order of the Court’ for filing an application for rectification. The right to file an application for rectification is a statutory right conferred upon a party who is aggrieved by an entry made in the Register. The said statutory right cannot be curtailed except by the very provisions of the statute.”
We hope that the Supreme Court gets an opportunity to decide a case soon relating to this point of trademark law in order to bring uniformity in its interpretation.
Abandonment of claim of invalidity of trademark in an infringement suit -there may arise a situation where the Court has allowed the defendant time to make an application for invalidation of registration of a trademark at the IPAB and the defendant fails to do the same within such time. In such cases, the issue as to the invalidity of the plaintiff’s trade mark is deemed to have been abandoned and the Court then proceeds with the suit for infringement. In other words, the defendant is thereafter estopped from claiming that the registration of the Plaintiff’s trademark is invalid.
Regardless of the procedure for obtaining a stay of infringement proceedings where the validity of the registration of a trade mark is in question, it is worth noting that the Act allows the passing of interlocutory orders (including granting of injunction, directing of account to be kept etc.) during the stay of the suit.