By Rima Majumdar and Gaurav Goswami
Introduction
Whether a High Court has territorial jurisdiction to transfer to itself a trademark cancellation petition that is pending before another State’s Trademark Registry? Can the dynamic effect of a trademark registration be the reason for the transfer of a rectification petition? These are some of the questions that a Single Judge of the Madras High Court answered, while dealing with an Application filed by the Plaintiff for transferring its trademark cancellation proceedings.
The Hon’ble Court, while underscoring the interplay between jurisdictional boundaries and consolidation of proceedings, considered the principle of Dynamic effect and test of reasonableness and fairness held that it is proper to consolidate the infringement suit and the rectification application together and render a single decision adjudicating both the claims.
Furthermore, the Hon’ble Court, observed that, being a constitutional and superior court, it possess the inherent power to transfer to itself a Rectification Application pending in a Trademark Registry outside its jurisdiction.
Brief facts about the Case:
- Nippon Paint Holdings (hereinafter referred to as the ‘Plaintiff’) originally filed a suit for infringement against Suraj Sharma (hereinafter referred to as the ‘Defendant’) in the Madras High Court on January 9, 2024, pleading that the Defendants have infringed their trademark and are selling the impugned products in Chennai.
- Both the Plaintiff and the Defendant are the registered proprietors of the identical trademark ‘NIPPON PAINT’ in identical class of goods, obtaining registration from the Trademarks Registry in Chennai and Delhi respectively.
- Prior to the filing of the suit, the Plaintiffs had filed a rectification petition before the Trademark Registry at New Delhi against the Defendant’s mark.
- The Plaintiff after filing the suit immediately filed an application seeking transfer of Rectification Petition filed by them before the Trademark Registry in New Delhi to the file of Hon’ble High Court.
- While opposing the transfer application, the Defendants questioned its maintainability on the ground that the Madras High Court does not have territorial jurisdiction over the Trademarks Registry at New Delhi.
Contentions of Plaintiff
- The Court is empowered to consolidate all proceedings and hear the same together as per Rule 14 of the Madras High Court IPD Rules, 2022.
- The Defendants are selling the infringing products in Chennai and are advertising their goods within the territorial limits of this Court. Therefore, a part of Cause of Action has arisen within the jurisdiction of this Court.
- There exists no statutory bar for this Court to hear the rectification proceedings pending before the Trademark Registry in Delhi and the present infringement suit together.
- The dynamic effect of the impugned registration of the Defendants is felt within the jurisdiction of this Court, thereby allowing the Court to entertain this transfer application.
Submissions of Defendant
- The Madras High Court does not have the territorial jurisdiction to decide the present transfer application as the Registrar of Trademarks in Delhi, before which the rectification petition was filed, falls under the original jurisdiction of the Delhi High Court.
- Under Section 124 of the Trade Marks Act, the present suit proceedings are to be stayed until the rectification petition is adjudicated upon. Thus, this transfer application would not be maintainable.
- The Madras High Court has original jurisdiction only over the Trademarks Registry in Chennai. Thus, if this transfer application is allowed, the statutory right of both parties to file an appeal before the Delhi High Court in respect of the Rectification Petition will be defeated.
Issues considered by the Hon’ble Court
- Statutory Bar for this High Court to entertain the transfer application
No statutory bar exists under the Trade Marks Act for entertaining a transfer application to transfer the rectification application to a court where an infringement suit is already pending and a part of cause of action has also arisen within the jurisdiction of this Court. - Forum conveniens
The forum conveniens for deciding the rectification application is only the Madras High Court, as an effective adjudication can be rendered only through a consolidated hearing of the infringement suit and the rectification proceedings. - Dynamic Effect
The dynamic effect of the registration of the Defendants’ mark in New Delhi has an effect in Chennai, as the infringing products are being advertised and sold by the Defendants in Chennai within the jurisdiction of this Court. - Suo Motu powers of Registry and Inherent powers of High Court
When the Registrar of Trademarks has suo motu powers to transfer the rectification petition to High Courts, it can be inferred that the High Court, being a constitutional and a superior court, also has inherent powers to transfer rectification petitions to its file. - Omission of definition of ‘High Court’ in Trade Marks Act, 1999- ‘High Court’ had been defined in the Act of 1958 but the same was omitted when the Trade Marks Act, 1999 came into force. This deliberate omission may be to get over the traditional approach of jurisdiction in intangible matters on account of increasing globalization and the advent in Information Technology. The intention of legislature would not have been to curtail the powers of the High Court but to make justice more accessible.
- Consolidation of proceedings
Allowing the suit for infringement and the rectification proceedings to be adjudicated separately may create complexities and result in conflicting decisions. Thus, it is in the interest of justice and uniformity to consolidate both the proceedings together and adjudicate both by a single decision.
Judgement
The Hon’ble High Court of Madras, while allowing the application seeking for transfer of the trademark cancellation proceedings from the file of Trademarks Registry in New Delhi to the file of this Court, made the following observations:
- The Trademark Registry has suo motu powers to transfer Rectification Petitions pending on its file to the High Court at any stage for further adjudication. Thus, the High Court being a constitutional court and a superior court, will also have inherent powers to transfer trademark cancellation Petitions to its file.
- The Tribunals Reforms Act, 2021 abolished the Intellectual Property Appellate Board (IPAB) and reinstated the powers of High Court to hear trademark cancellation petitions.
- The Plaintiffs’ place of business is Chennai. Furthermore, the dynamic effect of the Defendants’ registration is felt at Chennai since the Defendants have been advertising and selling the infringing products in Chennai. Thus, a part of cause of action arises within the jurisdiction of the Madras High Court.
- No prejudice will be caused to the Defendants as the Defendants are already appearing before the Court to defend the infringement suit.
- Omission to define the word ‘High Court’ under the Trade Marks Act, 1999 makes it clear that there is no statutory bar to entertain the transfer of the Rectification Petition filed by Plaintiffs before the Trademark Registry in New Delhi to the file of the Madras High Court.
Conclusion
The Madras High Court’s decision to transfer the rectification proceedings from the Trademark Registry in New Delhi to its file not only aligns with the principle of consolidation for effective adjudication but also sheds light on the applicability of the Rule of Harmonious Construction and the Doctrine of Dynamic Effect in cases related to Intellectual Property. This decision sets a precedent for the field of Intellectual Property and Trademarks and would help the Courts to avoid multiplicity of proceedings and ensure that conflicting decisions do not arise from parallel proceedings on the same subject matter.
Anuj Dhar, Assessment Intern at S.S. Rana & Co. has assisted in the research of this article.
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