India: Power Of Registrar To Accept Rectification Application During The Pendency Of Suit

Sec. 57 of the Trade and Merchandise Marks Act, 1958 gives power to registrar to rectify the register. However, the plain reading of this section gives rise to a conflicting situation in light of section 107 of the Act, which puts a bar on power of registrar in this regard. The Intellectual Property Appellate Board, Chennai addressed the question of power of registrar to accept rectification application during a pendency of suit in High Court, in the of Sun Pharmaceutical Industries Ltd v. Stadmed Pvt.Ltd &Ors., 2006 (33) PTC 506 (IPAB).

The rectification application is filed by Stadmed Pvt.Ltd (respondent) against M/s Sun Pharmaceutical Industries Ltd who is the appellant in this case. The Sun pharmaceuticals are the manufacturers of medicines and medicinal preparations. They are selling the medicines under the registered trademarks ‘ALZOLAM’ and ‘ZOLAM’. . The trademark ‘ZOLAM’ was first applied and registered by a company named FDC Limited during 1986.The mark was later on assigned to one Mr.Harish Uchil who in turn assigned the said mark to the appellant. The petitioners are presently the proprietors of the said mark.

The appellant claims that they have filed an infringement suit against respondent in the High court of Calcutta for the infringement of said marks. However, the injunction granted in that case was ultimately vacated.

Later on, tadmed Pvt Ltd filed an application for rectification on the ground that the trade mark ‘ZOLAM’ is not distinctive and the same was registered without any bonafide intention to use and that there is infact no bonafide use of the said mark for the time being. One month before the date of application or that up to the date of one month before the date of application a continuous period of five years have elapsed during which the trademark ZOLAM was not used and hence, it is liable to be removed from the registrar. It was further pointed out that the application of the Stadmed to the said mark is pending before the registrar.

Respondent further preferred another application for rectification on the ground that the trademark ‘ALZOLAM’ was also not registrable as it is deceptively similar to the basic drug ‘ALPRAZOLAM’ and the registrar decided against respondent i.e. Stadmed Pvt. Ltd.

The case of the Sun Pharmaceuticals is that when the registrar had allowed the rectification of the mark a suit for the infringement of the same was pending before the High Court and, hence the application ought to have been made to the High Court as per Section107 of the Trade and Merchandise Marks Act 1958, and registrar have no jurisdiction to entertain the petition.

The Deputy registrar by his order held that the Act or Rules are silent as to whether the registrar should not deal with the rectification application or whether the same should be withdrawn and refiled while the suit is pending before the High Court, and hence proceeded with the matter and asked appellant to file counter statement. The registrar after recording the evidence, allowed the application for rectification for the trade mark ‘ZOLAM’ and disallowed the rectification application on ‘‘ALZOLAM’. The present appeal is against this order of Deputy Registrar.

The specific contention raised by the appellant is that the Deputy registrar had failed to appreciate that section 107(1) provides that in a suit for infringement, where the validity of the registration is questioned by the defendant, he issue of the validity has to be decided by an application made to the High Court. Hence, the deputy registrar ought to have dismissed the application as per the provisions of Section 107(1) of the Act and ought to have been referred the same to the High Court as per the Section 107(2) of the Act.

In order to buttress their argument they relied on the Whirlpool Corporation v. Registrar of Trademarks, Mumbai & Ors, 1998 PTC (18) 717 (SC); where the Court held that " The extent of jurisdiction conferred by the Section 56 of the Registrar to rectify the Register, is however, curtailed by Section 107 which provides that an application for rectification shall, in certain situation, be made4 only to the High court. These situations are mentioned in Sub-section (1) of section 107, namely where in a suit for infringement of the registered Trademark, the validity of the registration is questioned by the Defendant or the defendant, in that suit, raises the defense contemplated by section 30(1) (d) in which the acts which do not constitute an infringement, have been specified, and the plaintiff in reply to this defense questions the validity of the registration of defendant’s trademark. In these situations, the validity of the registration of the Trademark can be determined only by the High Court and not by the registrar".

On the other hand, respondent contented that they are carrying on with the manufacture of medicines and they had applied for the registration of the mark ‘ZOLAM’ which they have invented and adopted for pharmaceutical products since 1991. Further, it was pointed out that the said suit in the Calcutta High Court was stayed on the ground that an application for rectification is pending before the Registrar and this has not been challenged by Sun pharmaceuticals. It is alleged that the Sun pharmaceuticals have approached the court with unclean hands and hence the appeal is to be dismissed. Owing to the above facts, it is contented that the issue cannot be reopened.

The court placed its reliance on the Whirlpool Corporation case and held that the registrar have no power to entertain the application for rectification under section 107 of the Trade and Merchandise Marks Act, 1958 when the suit is pending before the High Court.

Section 107(1) and (2) of the Trade and Merchandise Act, 1958 categorically holds that when a suit for infringement is pending before the High Court the registrar has no power to entertain an application for rectification. The view of the deputy registrar that the Act or rules are not are not clear in this matter is unfounded. If a matter is pending before the higher court, it is the prerogative of that court to decide the matter and the lower court is not expected to make any observations in the same case. The objective is to give finality to the judgment of the Court and this seems to be the rationale for section 107(1) and (2). The case can also be considered as an example of purposive interpretation given to the two provisions.

Though the case is based on the Trade and Merchandise Marks Act, 1958 but the procedure with regard to powers of registrar for accepting a rectification application during Pendency of suit is similar in the Trade Marks Act, 1999 – the present Act in force. The corresponding section to 107 of Trade and Merchandise Marks Act, 1958 is section 125 of the Trade Marks Act, 1999 which states that "notwithstanding anything contained in section 47 or section 57, such application shall be made to the Appellate Board and not to the Registrar".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.