[This post has been authored by Ritwik Sharma. Ritwik is a final year student of law at the Institute of Law, Nirma University.]
In what can be considered déjà vu, the Trade Marks Registry has once again released notifications to carry out mass abandonments. As per this post, nearly 98,000 trademark applications and 82,000 opposed trademark applications are now vulnerable to abandonment due to the non-filing of the reply to examination reports and counterstatements respectively within the prescribed time-period specified in the communications of the Registry. For this, the Registry is drawing on its discretionary powers under Sections 21(2), 132 of the Trade Marks Act, 1999 and Rule 33 of the Trade Marks Rules, 2017 to deem these motions as abandoned. The previous attempt of the Registry to do this was in 2016 which was stopped in its tracks by the Delhi High Court, after significant backlash from the legal community. However, it is interesting that the Registry has felt the need to resort to such an extreme step twice in less than a decade, irrespective of the reception it received last time. One may wonder what drives the Registry to take such a drastic measure, when abandonment was drafted as automatic under the letter of the law. Are such drastic measures indicative of only partial legislative attention given to the needs of the Registry or does there exist a simpler and more fundamental issue?
Current Legal Framework on Abandonment
Looking at the Trade Marks Rules, it is obvious that wherever an applicant, opponent or any other party is in default of certain rules, their motion is deemed as abandoned. For instance, Rule 45 provides a period of two months to file evidence in support of opposition. Transgression of this rule results in the deeming abandonment of the opposition. Similar provisions can be found scattered throughout the Rules. Although this may be perceived as straightforward, the Trade Marks Act narrates another tale. The party-centred regulatory focus of the Trade Marks Rules is replaced with Registry-focused empowerment in the Act. Sections 131 and 132 of the Act allow the Registrar to grant extensions even after expiration of the initial period of limitation, regardless of whether the application has been deemed as abandoned. It further allows the Registrar to do so for all deadlines that are not expressly provided for in the Act. Evidently, this would mean that the Registrar has considerable discretion and power to dilute the deeming abandonment provisions in the Rules.
Judicial Approach to Abandonment
The ability of the parent provisions of the Act to guide the interpretation of the Rules has been consistently upheld by the judiciary. In Hastimal Jain Trading vs. Registrar of Trade Marks and Ors., the Delhi High Court had occasion to deliberate on this issue in the context of the Trade Marks and Merchandise Act, 1958 and its corresponding Rules. The Court argued that the procedural mandates in the Rules are not mandatory in nature and are subject to the discretion of the Registrar, as provided in the 1958 Act. To some extent, the Court overturned the earlier decision of the Court in Hindustan Embroidery Mill vs. Hernia E. Mill, wherein the Court had held that the Registrar cannot resuscitate an action that has been abandoned by the legal fiction of abandonment.
Looking at the current legislative framework, the IPAB had considered this issue in Sahil Kohli vs. Registrar of Trade Marks. The Board recognised that as far as the Trade Marks Rules are concerned, the power of the Registrar has undergone consistent contraction and is now almost non-existent. However, since the Rules are subject to the parent legislation, Section 131 of the Trade Marks Act would override this diminution and restore the wide berth of the Registrar in condoning delay. In doing so, the decision of the Delhi High Court in Sunrider Corporation vs. Hindustan Lever Limited and Ors., was regarded as irrelevant. In Sunrider, the Delhi High Court had considered the reduction of discretion of the Registrar in the then-applicable 2002 Rules. It held that this reduction was a consequence of the legislative intention to reduce delays and therefore, the discretion of the Registrar was circumscribed to the time period prescribed in the Rules.
Therefore, it would seem that the presence of Section 131 has been the driving factor for Courts when dealing with the legislative scheme of abandonment. As recent as last week, in Kaira District Cooperative Milk Producers Union Ltd. & Anr. vs. Registrar of Trademarks & Ors., the Delhi High Court reiterated that the discretion to extend timelines vests with the Registrar by virtue of Section 131. It went on to observe that this discretion should be exercised judiciously and fairly. Although such caution is definitely welcome, it does not serve much practical purpose. The consistent characterization of Section 131 as an overriding provision casts a shadow of ignorance of the consecutive amendments to the Trade Marks Rules, which brought considerable stringency.
What is the True Nature of Abandonment?
At the outset, it should be noted that abandonment is considered to be a deeming consequence. A deeming provision can be understood as a legal fiction which is envisioned to bring about a predetermined legal consequence of an action, thereby disallowing any speculation or imagination to determine any other course of action. According to Patel Field Marshal Agencies vs. P. M. Diesel and Ors., the applicability of legal fictions is restricted to those situations wherein a contrary provision is provided in the statute. It is unclear whether this mean that deeming abandonment, as provided for in the Trade Marks Rules, is a consequence circumscribed by Section 131 of the Act. The judgment goes on to hold that whenever the consequence of non-compliance with timelines is provided, the legislature must have intended for the same and the provision becomes mandatory in nature. In Sharif-ud-din vs. Abdul Ghani Lone, the Apex Court had categorically distinguished between mandatory and directory provisions and held that whenever the failure to comply with procedural rigours of an action is prescribed with some consequence in the legislation, then the same should be considered mandatory. Furthermore, in Mannalal Khetan vs. Kedar Nath Khetan, the Supreme Court had recognised that use of negative form of language in a provision is a tell-tale sign of its mandatory nature. Along with this, the observations of the Delhi High Court in Sunrider must also be weighed. The Court had traced the intention of the legislature throughout different amendments brought about in procedure which gradually circumscribed and, in the end, eliminated the discretion of the Registrar in the Rules. This means that deeming abandonment under the Trade Marks Rules could legitimately be construed as mandatory in nature.
In this context, it would seem that Section 131 dilutes the Trade Marks Rules not by proper legislative scheme, but by the necessity of harmonious construction. In light of the constant state of delay at the Registry, should Section 131 continue to drive existing status-quo? Perhaps, it is time to reconsider and revaluate the contents of the Trade Marks Act and enact a more adaptive and comprehensive system to tackle delayed actions and abandonment.
Where Should We Go from Here?
To their credit, the Registry has allowed parties to contest abandonment as prescribed under law. Not only that, the notice also specifies that parties who have complied with the deadlines may approach the Grievance Cell of the Registry with requisite evidence within 45 days of the issue of notice to avoid any perverse action. However, considering the enormous number of applications and oppositions facing the axe, such measures were necessary to avoid a repeat of the opposition it faced in 2016. The Registry now faces a heavy assignment of having to process grievances and other communications made to it in a relatively short span of time. Secondly, parties vulnerable to the notices would understandably remain nervous till they hear from the Registry regarding their pending applications.
A more sustainable alternative to this issue could be a legislative overhaul which balances resuscitation with the need to ensure speedy disposal of actions at the Registry. This could be achieved by reshaping Section 131 of the Act. Trade Marks Act should reinforce and push for automatic abandonment, as prescribed in the Trade Marks Rules. Therefore, the Registry would no longer need to issue a separate notice or communication declaring a motion as abandoned. The moment the application or opposition is in default due to expiration of the prescribed deadlines, the parties involved can conclusively determine abandonment and need not wait for the intervention of the Registrar. The discretion of the Registrar, as mentioned in the Trade Marks Act, should instead be replaced with a separate procedure for resuscitation, wherein parties must apply for resuscitation within one year from the day of abandonment and show sufficient cause for condonation of their delay. Separate detailed proceedings for the same should be provided, wherein the Registrar would be at liberty to permit the application. Ideally, this provision should also provide certain grounds which the Registrar may consider, while hearing an application for resuscitation. These hearings must be undertaken in a time-bound manner so as to balance the interests of the parties, the purity of the register and also ensure punctuality. Such a process shifts the burden on the party who wishes to push their application to ensure that they are vigilant of the deadlines they are bound by. This would streamline the operations of the Registry, since abandoned applications and oppositions would now be removed automatically. Moreover, separate resuscitation hearings supported with guiding provisions would help the Registry streamline its hearing workload as well. The practicality of this model can be observed in foreign jurisdictions. Section 73 of the Canadian Patent Act lays down a strict procedural regime for patent applicants. It details the grounds for abandonment and also prescribes the preconditions for approval of a resuscitation application.
Adoption of such a model in India would definitely be a fruitful endeavour. It removes the incongruity between Section 131 and the Trade Marks Rules and recognises the legislative attention to delay as mentioned in Sunrider. Perhaps, it would also finally do justice to Justice Iyer’s seminal words making procedural rigours an actual handmaid to justice.
