The Hon’ble Madras High Court recently explored the contours of the rather well known Patel Field Marshal judgement (covered on the blog here and here) in M. Murali v. Sri Krishna Sweets Private Limited.
Patel Field Marshal judgment
The takeaways from the Patel Field Marshal judgment are quite straightforward. The Hon’ble Supreme Court held that all questions regarding the validity of a registered trademark are to be decided by the IPAB, thereby precluding the jurisdiction of civil courts. The IPAB’s jurisdiction is, however, contingent on the civil court’s findings on the prima facie tenability of a plea of invalidity. The trial in the suit would consequently also be stayed if an issue on validity was framed. Further, the judgment held that no issue would be framed on the validity of a mark by the civil court only if the party had either abandoned the issue of validity or if the civil court held against the party on a prima facie view itself.
Madras High Court’s View
The Hon’ble Madras High Court has given some interesting conclusions when interpreting the Patel Field Marshal judgment. As an aside, it must also be noted that this judgment is the latest in a litany of bitter litigation between two brothers before a sweetmeat empire, which had previously resulted in the High Court giving a wonderfully nuanced judgment on family rights in trademark law (covered on the blog here).
Coming to this order, the factual background is that the defendant had filed a challenge before the IPAB on validity of the plaintiff’s mark and had also mounted a counter claim on passing off. However, the issues framed thereafter did not touch upon the issue of validity. Thereafter, the defendant’s application before the IPAB was rejected on procedural grounds. After much litigation, the IPAB gave liberty to the defendant to file a fresh application by which time the Patel Field Marshal judgment had come into play. Consequently, the defendant moved applications before the trial court to frame an additional issue on invalidity and seeking permission to move a rectification before the IPAB. The defendant further took a specific stance that since the Patel Field Marshal judgment had not come out when the issues were framed, the Court would now have to exercise its determination on the issue of validity. However, the trial court held that the defendant had abandoned its rights to question the validity of the registration and rejected these applications. This was appealed in the order, which was resisted by the plaintiff broadly on the grounds that the defendant had not pleaded invalidity.
The Hon’ble High Court after considering the competing pleas on the sufficiency on pleadings on invalidity has held that “Mere pleading is not enough, but it should be specific insisting upon the court to frame an issue on this aspect”. Further, the order goes on to hold that “The rectification is based on non user and assignment of the trademark prohibited under Section 40 of the Act. Nowhere in the pleading the defendant raised any plea as the invalidity of registration nor the existence of the same in the Registers.” The order also held without expanding that “More over there is a clear difference between removal of registration and rectification of registration”.
In conclusion, amongst other findings, it was held that “A party who has acquiesced to framing of issues, and has not raised any plea or defense in the subsequent pleadings also is estopped from raising an additional issue as to invalidity of trade mark registered or to file a petition u/s. 124 of the Act” and that “Change of legal position, bereft of specific pleadings as to validity or invalidity of registration of trade mark, cannot be a ground entitling a party or compel a Civil Court to frame an additional issue in that regard.”
Analysis of the HC’s Interpretation of the Legal Position
The Trade Marks Act allows for a multi-pronged assault on validity under Sections 47 and Section 57. Section 47 prescribes non-use as grounds for “removal”. Section 57 gives sweeping powers to the IPAB to “rectify” a mark, and typically Section 9 and Section 11 provide the ammunition for Section 57(2) to kick in, apart from lesser celebrated candidates such as Section 12 and Section 40. Sections 47 and 57 were throughout the Patel Field Marshal judgment considered to be contemporaneous for challenging validity.
This order in interpreting Patel Field Marshal however, distinguishes Sections 47 and 57. It further goes on to hold that since the claims of non-use (Section 47) and improper assignment (Section 40) are not grounds to “rectify” a mark under Section 57, the pleadings were not sufficient to trigger an invalidity claim. This in my view does not accommodate the broad scope of Section 47, which is independent of a claim under Section 57. I also feel that this shifts the focus from the exercise in being a prima facie factual finding on validity, to being an exercise in determining the specificity and scope of pleadings. It is quite interesting to note that throughout the gamut of consideration, there is no discussion on the Court’s views on the validity of the impugned mark. I believe that the scope of the Patel Field Marshal judgement calls on the Court to engage in a factual exercise, not fettered by the statutory shackles of the IPAB, to decide on validity. This exercise is not prescribed as being dependent wholly on pleadings such as an application to reject a plaint. Patel Field Marshal judgement describes this exercise as “It is a basic requirement to further the cause of justice by elimination of false, frivolous and untenable claims of invalidity that may be raised in the suit.” The presence of robust pleadings cannot negate this concern and would necessarily requirement examination of not only facts but previous orders in the matter. The understanding until now was that one’s fate in an interim application would largely determine one’s fate under Section 124. An injunction finding that the plaintiff had a prima facie case, would typically allow the plaintiff to fend off any challenge to the validity of its mark. Conversely, adverse findings on a prima facie case would strengthen the cause of a defendant. This order however, sees a situation wherein a defendant has fended off an interim injunction application but is unable to challenge the validity of the very same mark. This is certainly a fresh spin on our understanding of this legal position, and will undoubtedly influence how we draft our vehement objections to validity of a mark in the future.
The analysis made by Mr. Mohan on the said order is quite reasonable and logical. The issues can also be framed on the basis of the documents produced before the trial court along with the aspects in the pleadings where parties are at variance.
The fact that a recitifcation / cancellation filed by the defendant against the plaintiffs registered trademark is enough to establish the variance of defendant wherein it can be deduced that the defendant has challenged the validity of Plaintiffs trademark. For poor pleading in Written statement, facts and documents may not be overlooked, as PATEL FIELD Marshal judgment rather makes it an obligation upon the trial court to frame an issue qua validity of Regd TM. In absence of framing such an issue the fate of rectification and thus the entire defense of the defendant in any suit goes to bin.