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This is a decision by a Single Judge of the Bombay High Court which was pronounced on August 13, 2012 (for entire judgment see here). Though this is a slightly old decision, it is relevant as it discusses an important aspect of trademark law i.e. whether it is permissible for courts to go into the question of validity of registration of a trademark at the stage of interlocutory orders, despite the presumption of validity created under Section 31 of the Trademarks Act, 1999.
Facts and Issues
The plaintiff and defendant are both engaged in manufacturing, selling and marketing pharmaceutical products. The plaintiff has a registered mark ‘LUCYNTA’ and has brought an action of infringement against the defendant who uses the mark ‘NUCYNTA’ for a drug sold worldwide. The defendant has proved that his mark was registered in several countries, much prior to the registration of the plaintiff’s mark in India. Consequently, the defendant alleges that it is the plaintiff who has adopted a deceptively similar mark and hence should not be entitled to any relief. Before going into the contentions raised, the court sought to answer the question of whether it was permissible for a court to go into the question of validity of registration of a trademark at the stage of interlocutory orders. The court looked at this question from two angles – passing off and infringement.
After having laid out the scheme of the Trademarks Act, 1999, by highlighting provisions relevant to the present case -Sections 27, 28, 29 and 31, the court moved on to the question of permissibility of examining the validity of registration of a trademark at the interim stage, from the point of view of passing-off. In this regard, the court primarily relied on the cases of R.Dongre v. Whirlpool Corp (SC) and Marico Ltd. v. Agro Tech Foods Ltd. (Div. Ben. Delhi HC) where it was held that registration of a trademark does not provide a defense to proceedings for passing off, as under Section 27(2) of the Act and a prior user of a trademark can sue any subsequent user (even a registered user) for passing off. It was also held that questions of validity of registration of a trademark could be gone into at an interlocutory stage since the presumption (registration showing prima facie validity of a trademark) created under Section 31 was a rebuttable presumption.
Given the ratio of these cases, the court held that in cases of passing off, it was a settled position of law that a prior user could initiate an action even against a registered user. Therefore, in such cases the court would be permitted to go into the issue of validity of registration of a trademark at an interim stage and would also be permitted to grant an order of injunction against the registered user.
However, with regard to whether courts can go into the question of validity of registration of a trademark at the stage of interlocutory applications in an action infringement of trademark, the court was caught. This was because, as cited by the court, there existed a line of precedents which had held that courts should not consider the validity of the registration of a mark on a motion for interlocutory injunction. They had further held that as long as a mark remains on the register, even if wrongly, others should not imitate it. (Hindustran Embroidery Mills Pvt. Ltd. v. K. Ravindra and Co. (Single Judge Bom. HC) and M/s.Maxheal Pharmaceuticals v. Shalina Laboratories Pvt.Ltd (Div. Ben. Bombay HC)).
However, to the court, the above mentioned rule would create an anomaly. This is because on the one hand, a court would be allowed to go into the question of validity of the registration of a trademark at the interim stage in an action of passing off and would be permitted to order an injunction against the registered user, however, on the other hand, the registered user would also be entitled to sue the prior user for infringement on the basis of registration and if the above decisions were to be followed, the court would have to issue an injunction against the prior user.
In order to overcome this anomaly, the court relies on the Full Bench decision of the Bombay HC in the case of Abdul Cadur Allibhoy v. Mahomedally Hyderally, where the court held that a plaintiff who himself has imitated somebody else’s mark is not entitled to an order of injunction. This is a principle of equity, which the court says, is equally applicable to an action of infringement and passing off. Therefore, this would have the effect of permitting the court to question the tentative validity of the registration of a trademark both in the case of passing off and infringement, even at the interim stage.
In this regard, the court peruses Section 28 (1) and highlights the following phrases – ‘subject to the other provisions of this Act’ and ‘if valid’, showing that protection can be granted to a proprietor only if registration is valid. Also, with regard to the presumption created under Section 31, the court upholds the view taken in Marico Limited v. Agro Tech Foods Limited and holds that this is a rebuttable presumption and the onus would lie on the person who challenges the validity of the trademark to establish that the mark is tentatively invalid.
As for an action of passing off, the court says that the question would not be as to who has started using the mark first in India but the question would be who is first in the world market.
The court concludes by observing a need to reconsider the findings of the Division Bench in M/s.Maxheal Pharmaceuticals v. Shalina Laboratories Pvt.Ltd and therefore orders the matter to be placed before a larger bench for further determination.