Trial Court Must Pause Trademark Infringement Suit Once Validity Plea Is Found Tenable: Punjab & Haryana High Court

The Punjab and Haryana High Court has recently reiterated that once a trial court comes to the conclusion that a plea challenging the validity of a registered trademark is prima facie tenable, it must not proceed with the infringement suit and is bound to grant time to the concerned party to approach the Registrar or the High Court for rectification.

A single bench of Justice Pankaj Jain clarified that under section 124 of the Trade Marks Act, 1999, a trial court does not have the jurisdiction to try the issue with respect to rectification after recording such a prima facie finding.

The court observed that the statute mandates that challenges to the validity of a registered trademark be examined exclusively by the Registrar or the High Court.

Modifying a trial court order dated September 14, 2023, the High Court granted the defendant three months' time to move an appropriate application seeking rectification of the registered trademark and held that the claim qua infringement shall remain stayed during this period.

Relying on the apex court's ruling in Patel Field Marshal's case, the court held, "Once the Trial Court comes to a conclusion that the plea of invalidity of the registered trademark is prima facie tenable, the Act mandates providing the time to approach the Registrar or High Court. In the present case, the Trial Court not being the High Court does not have the jurisdiction to try the Issue w.r.t. rectification"

At the same time, the court drew a clear statutory distinction between infringement and passing off, holding that Section 124 of the Trade Marks Act applies only to suits for infringement and not to suits for passing off.

The court held that the cause of action for passing off is distinct from the cause of action for infringement and can therefore be pursued independently.

The case stems from a suit filed by Terrace Pharmaceuticals Pvt. Ltd., which says it is the registered owner of the trademark “MANTRA” for medicinal and pharmaceutical products.

The company alleged that Sanjeev Kumar Juneja was infringing its registered mark and passing off his goods by using MANTRA-formative marks, including “ROOP MANTRA”, “MEMORY MANTRA”, “KESH MANTRA” and “DR JUNEJA'S ROOP MANTRA”.

Juneja contested the suit, asserting that a trademark certificate had been issued in his favour in 2018. He filed an application under Section 124 of the 1999 Act seeking leave of the court to initiate rectification proceedings against the plaintiff's trademark and sought a stay of the infringement suit.

While the trial court framed an additional issue on the validity of the trademark, it dismissed the application for stay on the ground that it had been filed at a belated stage.

The High Court said the trial court's approach went against Section 124 of the Trade Marks Act, which requires the court to pause the infringement case once a prima facie challenge to the trademark's validity is found and allow the party time to approach the Registrar or the High Court for rectification.

Noting that the combined trial of infringement and passing-off claims had slowed down the proceedings, the High Court ordered that the passing-off claim be taken up separately as an independent suit, while the infringement claim would remain on hold until the rectification proceedings are decided.

The revision petition was accordingly disposed of.