The interplay between trademark infringement proceedings and non-use cancellation proceedings under Sections 47 and 124 of the Trade Marks Act, 1999 raises a deceptively simple question: can a Section 47 proceeding trigger a stay of an infringement suit? With the Calcutta and Delhi High Courts taking divergent approaches, Arushi Bisht and Snehal Singh examine the statutory and practical implications of treating “rectification proceedings” under Section 124 as encompassing non-use cancellation proceedings. Arushi Bisht is an Intellectual Property Attorney with four years of experience in the field. She currently serves as a Senior Associate at a leading IP boutique firm. Snehal Singh is a Legal Counsel at Pernod Ricard India with a background in Intellectual Property law. He currently advises on legal and regulatory matters across the alco-beverage sector, supporting business operations and growth initiatives across India.
Can Section 124 be Invoked in Section 47 Cancellation Proceedings under the Trade Marks Act, 1999?
By Arushi Bisht and Snehal Singh
The nexus between trademark infringement suits and rectification or cancellation proceedings under the Trade Marks Act, 1999 (“TM Act”) remains a contested terrain. Before delving into the issue, it is useful to revisit Section 124 of the TM Act, which provides for the stay of infringement proceedings where the validity of a registered trademark is challenged and rectification proceedings concerning the mark are pending
The real controversy arises when Section 124 is invoked in the context of cancellation proceedings under Section 47. Although Section 124 refers to pending “rectification proceedings,” Section 47 concerns removal of a registered trademark on the ground of non-use rather than rectification based on invalidity. This raises the interpretive question whether a Section 47 cancellation proceeding falls within the expression “rectification proceedings” for the purposes of Section 124.
The Statutory Maze….
As discussed above, Section 124 comes into play when the validity of trademark registration is doubted in an infringement suit and the rectification proceeding is also pending in respect of the same. In such cases, the court “stay” the infringement suit until rectification proceedings are over.
Section 57 of TM Act deals with rectification, as the name suggests, by challenging wrongful entries and errors in the trademark register, or the very validity of the trademark registration. On the other hand, Section 47 deals with removal of a trademark for non-use, if the trademark has not been in continuous use for the period of 5 years and 3 months or where there was no intention to use the trademark at the time of registration. Unlike Section 57, it does not question the validity of the registration or how the trademark entered the register in the first place. Its main point is whether the trademark deserves to remain on the trademark register or not.
The TM Act does not explicitly clarify whether cancellation proceedings under Section 47 fall within the ambit of “rectification proceeding” under Section 124. This lack of clarity has left the judiciary in uncertainty.
The Judicial Approach
Calcutta High Court, while dealing with Godfrey Phillips (India) Ltd. v. ITC Ltd., clearly distinguished between ‘removal’ and ‘rectification’ on the basis of invalidity. It held that non- use is a post-registration event; wherein the trademark is not invalid but is merely removed for lack of use. Such removal operates prospectively, extinguishing the proprietor’s rights from the date of the order. In contrast, rectification on grounds of invalidity operates retrospectively, as the mark is deemed never to have been validly registered.
Therefore, a non-use challenge cannot trigger Section 124, as it does not challenge the validity of the trademark registration.
Thus, in the absence of a challenge to validity, Section 124 would not be attracted.
Moving on to Delhi High Court’s approach on this subject in Nippon Soda Co. Ltd. v. V.P. Goyal adopted was completely different. The Court emphasized the statutory language of Section 124, which refers broadly to the pendency of “rectification proceedings”. It interpreted this expression as encompassing both Section 57 rectification proceedings and Section 47 cancellation proceedings, without drawing any distinction between them. It did not follow the narrow approach taken by the Calcutta High court.
The first case adopts a doctrinal approach by distinguishing between cancellation for non-use and rectification based on invalidity. Whereas the second case adopts a functional approach, treating both Section 47 and Section 57 proceedings alike for the purpose of Section 124.
Problems
But it also raises a few concerns: if Section 124 is applied to Section 47 proceedings, it risks turning the stay mechanism into a strategic litigation tool. A defendant in an infringement suit could initiate cancellation proceedings of non–use, which will be a time consuming inquiry as it would be highly dependent on factual circumstances and thereby securing an automatic stay. This could result in prolonged delays in infringement matters, where even short delays may cause significant commercial harm.
Further, non- use does not necessarily undermine past infringement claims. Even if a trademark is no longer in use, this does not extinguish the proprietor’s rights in respect of the past infringement. Allowing a stay solely on the basis of present non – use would conflate past rights (which were valid) and future entitlement (which may be weakened due to non- use). One cannot deny relief for the past infringement just because the trademark is not being in used now.
At the same time, a complete exclusion of Section 47 proceedings from the ambit of Section 124 may lead to insufficiencies. If cancellation proceedings and infringement suits proceed simultaneously, courts may be required to adjudicate overlapping issues, potentially leading to conflicting findings and duplicative litigation.
Suggestions
Therefore, a middle ground needs to be established. While the language of the TM Act does mention about invalidity, which supports the claim that Section 124 should not apply to all Section 47 proceedings. At the same time, if Section 124 is not strictly attracted, courts may, in appropriate cases, stay or adjourn suits to avoid inconsistency or prejudice.
Permitting every Section 47 proceeding to trigger Section 124 may incentivize defendants to institute non-use actions merely to secure a stay of infringement proceedings. Such an interpretation may convert Section 124 from a protective mechanism into a tactical device capable of frustrating enforcement actions.
For instance:
i) Where the cancellation proceeding directly impacts the basis of the infringement claim, a stay is justified.
ii) Where the Section 47 removal proceeding is peripheral to the issues in the infringement suit, the suit should proceed. For instance, where the infringement claim can be decided independently of the outcome of the non-use proceeding, there is little justification for staying the entire suit.
Such an approach can help in preventing the misuse of Section 124 and balance doctrinal clarity with practical efficiency.
Conclusion
The controversy surrounding Sections 47 and 124 ultimately reflects two competing conceptions of trademark rights. One treats registration as the source of exclusivity, whereas the other views continued use as the foundation of trademark protection. Until the Supreme Court settles the issue, courts are likely to remain divided between these competing understandings. In the meantime, a nuanced case-by-case approach may offer the most workable solution, preserving both procedural efficiency and doctrinal coherence.
