* IN THE HIGH COURT OF DELHI AT NEW DELHI. % Date of decision: 3 rd January, CS(OS) 3534/2012. Versus

Transcription

1 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 3 rd January, CS(OS) 3534/2012 ABBOTT HEALTHCARE PVT LTD... Plaintiff Through: Mr. Ranjan Narula, Mr. Shashi P. Ojha & Ms. Astha Bhardwaj, Advs. Versus RAJ KUMAR PRASAD & ANR.... Defendants Through: Mr. Mohan Vidhani, Adv. CORAM: HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW IAs No.8/2018 & 9/2018 (both of the plaintiff under Order XIV Rule 1 CPC and under Section 124 of the Trade Marks Act, 1999) 1. Though these applications have come up before this Court for the first time today but the counsel for both the defendants appearing on advance notice has already filed replies thereto and which are on record and the counsel for the plaintiff states he has received copies of the said replies. The counsels have been heard. 2. The plaintiff has instituted the present suit inter alia for permanent injunction to restrain the defendants from infringing the trademark ANAFORTAN of the plaintiff by adopting the trade mark AMAFORTEN for the same medicinal preparations and to restrain the defendants from passing off their medicinal preparations as that of the plaintiff and for ancillary reliefs. CS(OS) 3534/2012 Page 1 of 17

2 3. The suit was entertained and summons thereof ordered to be issued though no ex parte injunction granted. Vide subsequent judgment dated 25 th April, 2014, the defendants were restrained by interim injunction from, till the pendency of the suit, using the trade mark AMAFORTEN or any other trade mark deceptively similar to the trade mark ANAFORTAN of the plaintiff. The appeal being FAO(OS) No.281/2014 preferred by the defendants did not meet with any success and was disposed of on 10 th September, The said interim injunction has thus attained finality. 4. The plaintiff, in the plaint as originally filed, admitted knowledge of registration of trade mark AMAFORTEN in favour of defendant no.1 and after institution of this suit, before framing of issues and without seeking any permission of this Court and without applying under Section 124 of the Trademarks Act, 1999, filed a Rectification Application in the Intellectual Property Appellate Board (IPAB) with respect to registration of the trade mark of defendants. 5. On 21 st March, 2016, the following issues were framed in the suit and the parties relegated to trial: (i) (ii) (iii) Whether the defendant s use of the trademark AMAFORTEN amounts to infringement of the plaintiff s registered trademark AMAFORTAN? OPP Whether the suit for infringement of the trademark of the plaintiff is barred as defendant is also a registered proprietor of the trademark in view of Section 28(3) read with Section 29 and Section 30(2)(e) of the Trade Mark Act, 1999? OPD. Whether this court has territorial jurisdiction to try the present suit? OPP (iv) Whether the defendant is passing off its goods as that of the plaintiff? OPP CS(OS) 3534/2012 Page 2 of 17

3 (v) (vi) Whether the plaintiff is entitled to the relief of injunction and damages, if so at what amount? OPP Relief. 6. The plaintiff filed IA No.14337/2017, under Section 124 of the Act, which came up before this Court on 4 th December, Finding that no issue on any plea of invalidity had been urged or been framed and on the statement of the counsel for the plaintiff that he will be applying for amendment of the issues, vide detailed judgment dated 4 th December, 2017, the said application was dismissed with liberty to the plaintiff to apply afresh if files an application for amendment of the issues and if the said application succeeds. 7. Hence, these applications. 8. The plaintiff seeks framing of the following additional issue:- Whether the registration of the impugned mark AMAFORTEN bearing registration no obtained by defendant no.1 is invalid and liable to be rectified? OPP and stay/adjournment of proceedings in the suit till the time the rectification application being ORA/119/2013/TM/KOL filed by plaintiff before IPAB in respect of defendant no.1 s trade mark registration no in class 5 is finally adjudicated and decided. 9. The counsel for the defendants has at the outset argued that the plaintiff, in the plaint as originally filed, pleaded knowledge of the registration of the defendants mark and pleaded that he will be filing an application for rectification of the Trade Marks Register; however, the CS(OS) 3534/2012 Page 3 of 17

4 plaintiff while filing the amended plaint, pursuant to order dated 11 th March, 2015 on an earlier application of plaintiff for amendment, without seeking amendment of the plaint to the said effect, has carried out changes in the amended plaint verified on 27 th March, 2015 to plead that the plaintiff had already filed an application for rectification before the IPAB. It is his contention that the said amendment cannot be looked at as being unauthorized. 10. The counsel for the plaintiff agrees and states that for the present purpose, the plaint verified on 15 th December, 2012, as originally filed, be seen and not the amended plaint on record. 11. The counsel for the defendants has at the outset, argued that the plaintiff having not pressed for an issue, when the issues were framed, is deemed to have abandoned the said issue. 12. The counsel for the plaintiff, in rejoinder, refers to S. Surjit Singh Sahni Vs. Brij Mohan Kaur 65 (1997) DLT 670 and on order dated 30 th April, 2013 in CS(OS) No.1457/2009 titled Ranbaxy Laboratories Ltd. Vs. Intas Pharmaceuticals Ltd. and against which no appeal is stated to have been preferred, holding that framing of issues is the duty of the Court and rejection of an earlier prayer does not debar a fresh prayer for framing an issue if it arises from the pleadings and ought to have been framed and has mistakenly not been framed. It is argued that the Court, at the time of framing of issues on 21 st March, 2016, has not applied its mind and not refused to frame the issue about invalidity. It is thus contended that the plaintiff can apply for framing of additional issue. CS(OS) 3534/2012 Page 4 of 17

5 13. I tend to agree with the counsel for plaintiff. The Code of Civil Procedure, 1908 (CPC), vide Order XIV Rule 5 empowers the Court to, at any time before passing a decree, amend the issues or frame additional issues and provides that all such amendments or additional issues as may be necessary for determining the maters in controversy between the parties shall be so made or framed. Thus, merely because at the time of framing of issues, an issue though arising from pleadings, has not been pressed and/or framed would not stop a subsequent application. The position may be different where an issue is pressed and not framed by a speaking order. In such case, the bar of res judicata, also applicable at successive stages of same proceeding, may come in way of an application under Order XIV Rule 5 CPC. However, in the present case, a perusal of order dated 21 st March, 2016, when issues were framed, does not show any such thing. 14. The counsel for the defendant has drawn attention to the dicta of the Division Bench of Gujarat High Court in Patel Field Marshal Agencies Vs. P.M. Diesels Ltd (19) PTC 718 (Guj) against which Supreme Court has pronounced in Patel Field Marshal Agencies Vs. P.M. Diesels Ltd SCC OnLine SC 1388 (analysed in detail in the earlier judgment dated 4 th December, 2017) and has by reference to paragraph 15 thereof contended that the plaintiff herein having chosen to, after filing of this suit and without seeking the permission of the Court under Section 124 of the Trade Marks Act, apply to the IPAB for rectification, has now lost the right to apply under Section 124 of the Act. It is argued that the present suit was filed in the year 2012; the rectification petition before the IPAB was filed by the plaintiff in the year 2013 and issues in this suit CS(OS) 3534/2012 Page 5 of 17

6 were framed on 21 st invalidity. March, 2016 without pressing the issue qua 15. I have drawn the attention of the counsel for the defendants to the dicta of the Supreme Court in Patel Field Marshal Agencies supra and where the Supreme Court has inter alia held that in case where the issue of invalidity is raised or arises independent of the suit, the prescribed statutory authority will be the sole authority to deal with the matter; however, in a situation where a suit is pending (whether instituted before or after the filing of the rectification application), the exercise of jurisdiction by the prescribed authority is contingent on a finding of the Civil Court as regards the prima facie tenability of the plea of invalidity. Though the Supreme Court has dismissed the appeal preferred against the judgment aforesaid of the Division Bench of the Gujarat High Court but merely for the said reason, all the observations in the judgment of the Gujarat High Court cannot be said to have been approved by the Supreme Court. 16. Supreme Court, in judgment aforesaid, has exhaustively laid down the law with respect to Section 124 of the Trade Marks and for the situation where a rectification petition is filed after the filing of the suit, held that the exercise of jurisdiction by the prescribed statutory authority i.e. the Registrar or the IPAB with respect thereto is contingent on a finding of the Civil Court as regards prima facie tenability of the plea of invalidity of the registration of the trade mark. 17. Thus, it cannot be said that the plaintiff, for having applied to the IPAB for rectification, after the institution of this suit and without seeking CS(OS) 3534/2012 Page 6 of 17

7 the permission of the Court under Section 124 of the Act, is now precluded from seeking such permission. As per the dicta of the Supreme Court, IPAB will not have jurisdiction to decide such application for rectification filed by the plaintiff without this Court pronouncing on the prima facie tenability of the plea of the plaintiff as to invalidity of the registration of the trade mark of the defendants. 18. The counsel for the defendants has next contended that even if an additional issue as sought were to be framed and the application under Section 124 of the Trade Marks Act to be allowed, the Court can at best grant stay of the trial only qua the plea of infringement and cannot grant stay of proceedings qua the plea of passing off. It is argued that the witness of the plaintiff has been avoiding to be cross-examined. 19. I have enquired from the counsel for the defendants that now that there is an interim injunction against the defendants, what purpose will be served in proceeding with the trial qua the relief of passing off inasmuch as the interim injunction would continue till the claim of the plaintiff of infringement is also decided. 20. The counsel for the plaintiff in this regard has drawn attention to my judgment in Nippon Soda Co. Ltd. Vs. V.P. Goyal 2014 (58) PTC 386 (Del) following the order dated 21 st August, 2013 in CS(OS) No.1172/2008 titled Mount Everest Mineral Water Ltd. Vs. Kadir Khan, holding that the relief of injunction on the basis of infringement and passing off cannot be split up and cannot be decided at different points of time. CS(OS) 3534/2012 Page 7 of 17

8 21. The counsel for the defendants then states that the defendants have raised the plea of this Court not having territorial jurisdiction and an issue on which plea has also been framed. 22. I find that the defendants had earlier filed IA No.2100/2013 under Order VII Rule 10 of the CPC and which was disposed of on 8 th February, 2013 holding that since the plaintiff had invoked the territorial jurisdiction of this Court under Section 134 of the Trade Marks Act as well as Section 20 of the CPC, the plea of this Court lacking territorial jurisdiction cannot be decided without trial. Once that is so, the mandate of Order XIV Rule 2 CPC is for decision of all the issues together and it will not be in the fitness of things to relegate the parties to trial to decide only the issue of territorial jurisdiction. Thus, if the plaintiff were to succeed in these applications, the proceedings in the suit as a whole would have to be stayed. 23. The counsel for the defendants next draws attention to the dicta of the Division Bench of this Court in Puma Stationer P. Ltd. Vs. Hindustan Pencils Ltd (43) PTC 479 (Del.) (DB) to contend that the Division Bench has held that stay of proceedings can only be on the claim of infringement and not on the claim of passing off. 24. The Division Bench in Puma Stationer P. Ltd. supra is not found to have adjudicated the said issue and is merely found to have, while granting stay of proceedings under Section 124 of the Trade Marks Act, observed that the passing off action may continue. Such orders / judgments in which the legal point is not urged, reasoned and decided, do not constitute a precedent and thus it cannot be said that the Division CS(OS) 3534/2012 Page 8 of 17

9 Bench in Puma Stationer P. Ltd. has held contrary to Mount Everest Mineral Water Ltd. supra and Nippon Soda Co. Ltd. supra. 25. No other arguments have been raised by the counsel for the defendants. 26. I have however drawn attention of the counsel for the plaintiff to Order XIV Rule 1 of the CPC which inter alia provides that issues arise when a material proposition of fact or law is affirmed by one party and denied by the other and that material propositions are those propositions of law or fact which a plaintiff must allege in order to show a right to sue or a defendant must allege in order to constitute his defence. The plaint as originally filed, in para 13 thereof merely pleads as under: 13. That sometime in July 2012, the Plaintiff through its market enquiries came to know about the unauthorized use of the AMAFORTEN mark by the Defendants. On further inquiry the Plaintiff further came to know that besides blatantly copying the trade mark of the Plaintiff s, the Defendant No.1 has surreptitiously registered the said similar mark AMAFORTEN in class 5 under number It is submitted that the Plaintiff intends to file rectification proceedings against the aforesaid registration of Defendant No.1 as the said mark has been registered is bad faith and the mark is invalidly remaining on the register. Copy of the online extract showing the registration of the Defendant s mark AMAFORTEN is submitted herewith. I have enquired from the counsel for the plaintiff as to how the aforesaid plea can constitute a material proposition of fact of invalidity of the mark of the defendants, for the plaintiff to be entitled to raise an issue thereon. 27. Both counsels are ad idem that the claim of invalidity before the IPAB is to be under Section 57 of the Act. It has thus been enquired from the counsel for the plaintiff as to where in the plaint has the plaintiff made requisite pleas qua invalidity of the mark. It has further been enquired, CS(OS) 3534/2012 Page 9 of 17

10 whether not at the stage under Section 124 of the Trade Marks Act, for the Court to form a prima facie opinion about the tenability of the plea of invalidity, there have to be detailed pleas therefor. 28. The counsel for the plaintiff draws attention to Section 57(2) of the Act which entitles any person aggrieved from any entry made in the Register without sufficient cause, or from any entry wrongfully remaining on the Register, or from any error or defect in any entry in the Register, to apply to the Registrar or the IPAB for rectification. Attention is next invited to Section 11 of the Act prescribing the relative grounds for refusal of registration and which inter alia provides that a trade mark shall not be registered if, because of its identity with an earlier trade mark and similarity of goods or services covered by the trade mark, or because of its similarity to an earlier trade mark and the identity or similarity of the goods or services covered by the trade mark, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the earlier trade mark. The counsel for the plaintiff contends that there is no dispute that the plaintiff is the prior registrant of its mark ANAFORTAN and a reading of the entire plaint shows pleas of similarity and likelihood of confusion having been made. It is further contended that the plaintiff, in view of Section 12 of the Act, has in para no.13 of the plaint reproduced above, also pleaded the registration of the mark of the defendants to be in bad faith. 29. Thus, the only question which remains to be decided is, whether the plea of the plaintiff in the plaint of invalidity of the mark of the defendants is a material or substantive plea so as to invite framing of an issue. CS(OS) 3534/2012 Page 10 of 17

11 30. Though the counsel for the plaintiff has sought to contend that no plea is required to be raised and it is sufficient for the litigant to merely plead invalidity, inasmuch as the Civil Court does not have the jurisdiction to decide the plea of invalidity, but no merit is found in the said contention. Supreme Court, in Patel Field Marshal Agencies supra has held that in cases where proceedings for rectification are not pending at time of institution of the suit, IPAB will come into seisin of the matter of rectification only if the Civil Court is satisfied that an issue with regard to invalidity ought to be framed in the suit and once an issue to the said effect is framed, the matter will have to go to the IPAB and the decision of the IPAB will thereafter bind the Civil Court. It thus cannot be urged today that the plea of invalidity has to be any different from a plea on which the CPC requires an issue to be framed and which as aforesaid, has to be in terms of Order XIV Rule 1 of the CPC. 31. I have considered the aforesaid controversy. 32. The pleas of the plaintiff in the plaint, qua similarity and confusion are found to be in the context of infringement and passing off and the plaintiff is not found to have made the requisite pleas of the entry made in the Register with respect to the defendants mark being without sufficient cause. In my view, when no proceedings for rectification of the Register in relation to the trade mark of the opposite party to a suit are pending before the Registrar or the IPAB, Section 124 of the Act cannot be invoked till the party invoking the same has, in its pleadings, pleaded the invalidity of registration of the mark of the opposite party. However, merely pleading invalidity would not suffice, inasmuch as the further CS(OS) 3534/2012 Page 11 of 17

12 requirement of Section 124 of the Act, is that the party so invoking Section 124 of the Act, must satisfy the Court that the plea regarding invalidity of registration of the mark of other is prima facie tenable and the Court raises an issue regarding the same. For the Court to raise an issue qua the plea of invalidity, the provisions of Order XIV Rule 1 of CPC, which provides that issues arise when a material proposition of fact or law is affirmed by one party and denied by the other. Issues are not to be framed on all propositions of fact or law to be found in the pleadings. 33. I have in Kawal Sachdeva Vs. Madhu Bala Rana 2013 SCC OnLine Del 1479 held that the Court is required to peruse the pleadings together with material on record to determine whether the plea taken can be said to be a material one or not so as to invite framing of an issue thereon. Reference was made to D.M. Deshpande Vs. Janardhan Kashinath Kadam (1998) 8 SCC 315, where, in the absence of particulars viz. date, mode and terms of creation of tenancy in the pleadings, it was held that an issue on a bare claim of tenancy ought not to have been framed. Reference in Kamal Sachdeva supra was also made to Lakshmikant Shreekant (HUF) Vs. M.N. Dastur & Company Pvt. Ltd (44) DRJ 502 holding that the Court is required to frame issues of fact or of law that necessarily and properly arise for determining the real controversy involved on the pleadings of the parties and that such issues arise when a material proposition of fact or law is affirmed by one party and denied by the other and the Court would not frame an issue which does not arise on the pleadings nor an issue need be framed on a point of law which is perfectly clear; it was further held that the Court is required to apply its mind and understand the facts before framing the issue and CS(OS) 3534/2012 Page 12 of 17

13 that if a plea is mala fide or preposterous and vexatious and can be disposed of without going into the facts or is contrary to law or the settled legal position, the Court will not be justified in adopting a hands off policy and allow the game of the defendant to have its sway. Reference was also made to Zulfiquar Ali Khan Vs. Straw Products Limited 87 (2000) DLT 76 where it was observed that a litigant often takes all sorts of false or legally untenable pleas and legal process should not be allowed to be exercised by such persons and only such pleas which give rise to clear and bona fide dispute or triable issues should be put to trial and not illusory, unnecessary or mala fide, based on false or untenable pleas. It was also held that Court is not bound to frame an issue on an unnecessary or baseless plea, thereby causing unnecessary and avoidable inconvenience to the parties and waste of valuable court time. Reliance was also placed on Mohammad Hayatkhan Karimkhan Vs. Taramati MANU/MH/1494/2010 holding that in order to frame an issue, it is necessary to consider, whether the plea raised is bona fide or merely raised to delay the decision in the matter and that the Court is not under any obligation to frame and remit the issue mechanically, merely on the same being raised in the written statement, without judicial satisfaction of its necessity and justification. It was yet further held that the Court has a duty to examine the substance and refuse to frame and remit any issue, if the same appears to be demonstrably frivolous and mala fide. Reliance was also placed on Sociedade Patriotica Dos Baldios Das Novas Conquistas Vs. Sudhakar Sagun Bhandari MANU/MH/0819/2008 and Uttam Sambha Deshmukh Vs. Yamunabai MANU/MH/0387/1998 CS(OS) 3534/2012 Page 13 of 17

14 holding that when a vague plea is taken, the Court should hesitate to frame an issue on such a vague and bald plea unsubstantiated by any material. 34. I may add that Order XIV Rule 1(2) of CPC defines material propositions to be those propositions of law or fact which a plaintiff must allege in order to show a right to sue or a defendant must allege in order to constitute his defence. 35. I may also add that Kawal Sachdeva supra was followed in Adarsh Kumar Puniyani Vs. Lajwanti Piplani 2015 SCC OnLine Del I am thus of the opinion that a mere plea of invalidity in the pleading would not be enough to raise an issue of invalidity or to satisfy the Court that the said plea is prima facie tenable. The party invoking Section 124 of the Act in its pleading will have to make specific averments that may entail it to have the registration of the mark of the other expunged from the Register, even though no such relief can be claimed from the Civil Court. 37. Supreme Court in Patel Field Marshal Agencies supra analyzed by me in the earlier judgment dated 4 th December, 2017 in this suit, held that the plea with regard to invalidity of registration of trade mark can be deemed to have been abandoned on non-filing of an application for rectification, after order under Section 124 of the Act. It follows that (i) if no application under Section 124 of the Act is filed, even though plea of invalidity is taken in the suit, the said plea would also be deemed to be abandoned; and, (ii) that if plea of invalidity, though is taken but, is not a plea within the meaning of Order XIV Rule 1 of CPC on which the Court can raise an issue or on which the Court can be satisfied of the prima facie CS(OS) 3534/2012 Page 14 of 17

15 tenability thereof, even then the party taking such a plea would be deemed to have abandoned the right to challenge the validity of the registration of the mark of the other. 38. Though I have hereinabove observed that the pleas in the plaint pointed out by the counsel for the plaintiff are not requisite but following the principle enunciated in Teva Pharmaceutical Industries Ltd. Vs. Natco Pharma Ltd. (2014) 210 DLT 591 (DB) that the litigant ought not to suffer for poor pleadings and in view of the fact that Patel Field Marshal Agencies supra is of recent vintage and the counsels, on enquiry, state that there is no precedent on the said aspect, I am of the view that benefit should be given to the plaintiff and the aforesaid weakness in the pleadings of the plaintiff should not be allowed to come in the way of the plaintiff to now have an issue on the said aspect framed. 39. Accordingly, the following additional issue is framed in the suit: Whether the registration of the mark AMAFORTEN bearing registration No obtained by the defendant no.1 is invalid and liable to be rectified? OPP. 40. Once the issue is framed, what was argued by the counsel for the plaintiff on 4 th December, 2017 that the interim injunction in the suit in favour of the plaintiff upheld by the Division Bench, is on a prima facie view of similarity and likelihood of confusion, would hold good and the application under Section 124 of the Trade Marks Act will have to be allowed. 41. The applications are accordingly allowed. CS(OS) 3534/2012 Page 15 of 17

16 42. I have considered, whether to adjourn the proceedings in this suit for three months to enable the plaintiff to now apply afresh for rectification. 43. However, in the present case, the Rectification Petition as aforesaid has already been filed as far back as in the year I have thus enquired the stage of proceedings in the said Rectification Petition before the IPAB. 44. The counsel for the plaintiff states that pleadings have been completed in the Rectification Petition. 45. Though as per the dicta aforesaid of the Supreme Court in Patel Field Marshal Agencies supra, the IPAB till now had no jurisdiction to entertain the said Rectification Petition but it is felt that no purpose will be served in directing the plaintiff to file a fresh Rectification Petition and it is deemed expedient to allow the Rectification Petition already pending to continue. Hence, the need to stay the proceedings in the suit initially for a period of three months is not felt. 46. The proceedings in the suit qua the reliefs claimed on the basis of infringement as well as passing off, for the reasons aforesaid, are stayed with liberty to the parties to apply for revival as and when the need arises. 47. The applications are disposed of. 48. The counsel for the defendants at this stage states that the issue no.3 framed on 21 st March, 2016 be treated as a preliminary issue as plaintiff has already filed affidavit by way of examination of chief of one of its witnesses. CS(OS) 3534/2012 Page 16 of 17

17 49. I have already hereinabove referred to the order dated 8 th February, 2013 of dismissal of the application of the defendants under Order VII Rule 10 of the CPC and which order has attained finality. It has been held therein that the said issue of territorial jurisdiction cannot be decided without recording evidence. Once evidence is required to be recorded, the decision of the issues in terms of Order XIV Rule 2 of CPC and Mars, Incorporated Vs. T. Raghulal 2009 SCC OnLine Del 1667 cannot be piecemeal and thus the issue of territorial jurisdiction cannot be ordered to be treated as a preliminary issue. JANUARY 03, 2018 gsr/bs RAJIV SAHAI ENDLAW, J. CS(OS) 3534/2012 Page 17 of 17