Last month Delhi High Court in Jumeirah Beach Resort Llc vs Designarch Infrastructure Pvt Ltd., directed the Trademarks Registry to transfer five pending rectification applications to it. While the court itself identified that there is no provision within the Trademarks Act that authorizes it to pass such an order, it nonetheless saw “no difficulty in directing the said transfer.” The court justified this on two grounds- 1) If the Registrar of the Trademark can ‘refer’ the matter to the court under Section 125 (2) of the Trademarks Act, why can’t the court ‘direct’ such a transfer when the connecting matters are already pending before the court; 2) The ultimate goal in all the commercial matters is an expeditious and meaningful disposal of the suits.
The Plaintiff’s set of petitions contains petitions against infringement and regarding rectification of the Defendant’s mark, which were transferred to the court post the Tribunal Reforms Act. On the other hand, the defendant argued that they already have 5 rectification petitions pending before the trademarks registry seeking cancellation of the plaintiff’s mark. Considering this matrix, the court passed the order to consolidate all the petitions with regard to this matter to dispose of the matter in its entirety.
This will not be the first case where the court has directed a transfer of rectification application from the Registrar to the appellate authority. In 2012 Delhi High Court in Costa And Company Pvt Ltd vs UoI And Ors, reached a similar conclusion where it found a direction to the Registrar to transfer rectification application to the IPAB was justified. The court did this by discussing the tenets of appellate jurisdiction and relied on the Supreme Court’s decision in Tirupati Balaji Developers v. Bihar where the court held that powers of serving as appellate jurisdiction carry ancillary power to serve the principal purpose. Relying on this logic and considering that the IPAB was the appellate authority, the court held that such a transfer was valid. Another interesting observation that the court made was that IPAB is not bound by the provisions and procedures within CPC as per (now omitted) Section 92.
Speaking of the present case, I am not sure the rationale of the Costa Company decision can be applied as it is. First, in Costa Company though the court agreed that a direction for transfer is possible considering that the IPAB is the appellate authority against the orders of the Registrar, it also acknowledged that IPAB was a quasi-judicial body that was not bound by the provisions of the CPC. However, the same flexibility does not apply to the High Courts, as Section 92 has now been redacted post the Tribunal Reforms Act. In light thereof, while it is appreciated that the purpose was to expedite the adjudication of the dispute the court should have clearly discussed how it was exempted from following the procedures under CPC and was justified in directing the Trademarks Registrar (which is a part of the executive) to transfer the rectification application to it.
In this vein, Rule 26 of the IPD Rules does provide flexibility to the court where it can exercise the power to transfer under Section 24 of the CPC, to consolidate matters pending before a Commercial Court with matters pending before the IPD. However, this power applies with regard to consolidating the matters pending before a court and not an executive body. The Plaintiff in the present case did raise this argument but the court dismissed it and instead opined “The intent and purpose of Order XXVI, [Which I think should have been Rule 26 of the IPD Rules and not Order XXVI which talks about Commissions] howsoever it may be worded, is obviously to ensure that proceedings relating to the same or related IPR subject matters are heard together and that, if any such proceeding(s) are pending before the IPD of this Court, all connected and related proceedings should also be taken up by it.” This ‘end justifies means’ approach is slightly problematic as it somewhat undermines the doctrine of separation of powers.
Lastly, it is pertinent to point out that the court held that commercial matters require an expeditious and meaningful disposal of the proceedings, however, in doing so the court passed an order against the Registrar of the Trademarks, without impleading it as a necessary party nor in the presence of its counsel, to justify the delay (if any) on their end. In fact in the previous order dt. 29 August, 2022 the court had directed that the “Ld. counsel for the Registrar of Trademarks to also assist the Court.” however, the order is silent on if these submissions were made if at all or not.