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Section 124 in The Trade Marks Act, 1999
Section 124(1) in The Trade Marks Act, 1999
Section 57 in The Trade Marks Act, 1999
The Trade Marks Act, 1999

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Delhi High Court
The Financial Times Ltd vs Bennett Coleman & Co. Ltd. on 15 December, 2010
Author: S.Ravindra Bhat

$~2

* IN THE HIGH COURT OF DELHI AT NEW DELHI

DECIDED ON: 15.12.2010

+ CS (OS) 2055/2001

THE FINANCIAL TIMES LTD. ..... Plaintiff Through Mr. Ajay Gupta and Mr. Sanjay Jain, Sr. Advocates

with Mr. J.V. Abhay, Mr. Gaurav Mukherjee and

Ms. Prabhsahay Kaur, Advocates.

versus

BENNETT COLEMAN & CO. LTD. ..... Defendant Through Mr. Hemant Singh with Mr. Krishnendu Datta,

Mr. Sachin Gupta, Mr. Animesh Rastogi and

Mr. Diggaj Pathak, Advocates for defendants No.1 and 2.

Mr. Jagmohan Sharma, Advocate for defendant No.3.

CORAM:

MR. JUSTICE S. RAVINDRA BHAT

1. Whether the Reporters of local papers YES

may be allowed to see the judgment?

2. To be referred to Reporter or not? YES

3. Whether the judgment should be YES

reported in the Digest?

MR. JUSTICE S.RAVINDRA BHAT (OPEN COURT)

% IA No.3471/2002

Learned counsel for the defendants No.1 and 2 after some arguments states that he does not wish to press this application.

The application is accordingly dismissed as withdrawn.

IA No.4556/2010

1. This is an application by the first two defendants seeking stay of the proceedings in the

CS-2055/01 Page 1 suit under Section 124 of the Trade Marks Act, 1999. The defendants No.1 and 2 contend that, prima facie, the plaintiff's trade mark `FT' in respect of which the present infringement action has been filed, is not distinctive. The plaintiff had claimed that the `FT' letter mark was applied for in 1987. The defendant-applicant argues that the court's enquiry has to stop and conclude at the point of time when the application was made by the plaintiff in 1987. It is submitted that there is no material on record to show that letter mark `FT' had any inherent or acquired distinctiveness as of that period and that the materials on record till date are scanty.

2. Counsel for the applicants rely upon the judgment of this Court reported as Puma Stationer P. Ltd. and Anr. Vs. Hindustan Pencils Ltd. 2010 (43) PTC 479 (Del.). It is stated that the inexonerable operation of Section 124 is such that when an application for rectification is moved before the Board, the Court at best has to be satisfied that the said request is, prima facie, tenable and if so proceed to stay the suit.

3. The plaintiff contests the application. It is pointed out that Section 124 (1) (ii) is essentially discretionary and that the Court has to first conclude an appraisal of the materials on record, that the plea of non-registrability is, prima facie, tenable. It is submitted that the present suit is based on a registered mark which was applied for in 1987 and granted in 1994. The plaintiff's counsel points to pleadings and documents, firstly to the effect that on account of a Cabinet policy, foreign newspapers were not allowed direct entry in India. It is also argued that the plaintiff had a business relationship or arrangement with the defendant as a result of which the latter benefited to a certain extent.

4. The plaintiff submits that while the text of Section 124 undoubtedly indicates that the Court has to be satisfied that the non-registrability of a mark is prima facie tenable, at the same time, the Court's approach has to be circumspect since any determination about prima facie tenability would impinge on the marks of the rectification proceedings itself. Contesting the defendant's argument, it is submitted by the plaintiff that if the Court were to accept that the marks are inherently not distinctive and, therefore, not capable or registration, and reliance were to be placed on the decisions cited by the defendant, the plaintiff would be irrevocably prejudiced in the rectification proceedings since the Board, as an inferior Tribunal would find itself constrained to follow that logic regardless of other facts.

5. It is further argued that the suit is a composite one claiming infringement as well as alleged passing off. It is argued that the Defendant Nos.1 and 2 pleaded non-registrability in

CS-2055/01 Page 2 2002 and consciously did not apply for rectification and have chosen to do so in 2007, and have now moved an application three years later in 2010, under Section 124. It has lastly argued that the defendants argument lose credibility since they have applied for an identical mark `FT' with the Trade Mark Registry.

6. This Court has carefully considered the submissions. The defendant undoubtedly has a right to contest the inherent non-distinctiveness of a trade mark either by filing an application for its rectification under Section 57 on the applicable grounds or approach the Court, if necessary. Those statutory rights cannot be interfered with by the Court. All that the Court is required to do in a situation where a rectification proceeding is pending, [a situation visualized by Section 124(1) (b) (ii)] as on the date of the suit, is to stay it in the event it is satisfied that the invalidity of the plaintiff's trade mark is a prima facie tenable plea taken by the defendant. In the other situation visualized by Section 124(1) (b) (i), if the rectification proceedings are pending as on the date of the suit, the Court has no option but to stay the suit. In this case, concededly even though the defendants No.1 and 2 pleaded invalidity of the mark, they preferred an application for rectification only in 2007 and chose to approach this Court for stay of the present suit three years later, nine years after the suit was instituted. It is submitted that for about three years mediation proceedings were pending. Nothwithstanding this situation, the defendants No.1 and 2 do not state any reason why they approached five years after the written statement was filed, seeking rectification. Furthermore, the Court is also conscious that a blanket acceptance of the defendant's plea of prima facie tenability of the argument that the letter marks are inherently incapable of distinctiveness would lead to certain unforeseen results especially in cases like the present. The defendant-applicant would be in such circumstances possibly enabled to use the order and merely cite other supporting decisions to plead its case. This would invariably colour the competent Tribunal's view and tilt the proceedings unfairly in its favour. The Court is conscious that this reason cannot be invoked under all circumstances, because Section-124 does empower prima facie examination of tenability. Nevertheless, while exercising that jurisdiction, a fine distinction has to be kept in mind between the nature of "tenability" of such a plea, while considering a temporary injunction motion, and one for stay of suit.

7. Taking the entire conspectus of the above facts, particularly the pleas taken in the suit and the materials supporting the case, this Court is of the opinion that this is not an appropriate case where a prima facie view that the defence is tenable can be taken resulting stay of the suit. The

CS-2055/01 Page 3 Court cannot also help noticing that the defendants No.1 and 2 have claimed distinctiveness of the letter mark `FT' and applied for its registration (although in 2010), almost concurrently with the filing of the present application.

8. For the above reasons, this Court is of the view that the application is unmerited; it is accordingly dismissed.

CS (OS) 2055/2001

List on 27.1.2011.

S. RAVINDRA BHAT

(JUDGE)

DECEMBER 15, 2010

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CS-2055/01 Page 4