Case Analysis: Patel Field Marshal Agencies v. PM Diesels LTD

Patel Field Marshal Agencies And ANR.

v.

P.M. Diesels LTD. And ORS.

CITATIONAIR 2017 SCC 1388
CourtSupreme Court of India
Case numberCivil Appeal Nos.4767-4769 of 2001
Bench Ranjan Gogoi Justice, Navin Sinha Justice
Act ReferredTrade and Merchandise Marks Act, 1958
SectionsSections 45/56 and Sections 111 read with Section 107[1]

Introduction

The present civil appeal before the Supreme Court has been filed by Patel Field Marshal Agencies (“Appellant”) against the company PM Diesels Ltd. (“Respondent”). The Apex Court dealt with an important question of the Trademark Law in the case and it adjudicated on Sections 46, 56,107 ,111 of the Trade and Merchandise Marks Act, 1958.

Facts of the Case 

  1. The respondent was the registered owner of three trademarks, the common feature of all of these trademarks are the words “Field Marshal”
  2. In the year 1989, the respondent instituted a suit before the High Court of Delhi for infringement of trademark and rendition of accounts of profit for the use of the mark “Marshal” by the appellant and for perpetual injunction to restrain the appellants from using the trading styles “Patel Field Marshal Agencies” and “Patel Field Marshal Industries”
  3. An Interlocutory Application for a temporary injunction was also filed. The defendants in the suit, i.e., the appellants herein, contested the validity of the registration of the respondent’s trademark “Field Marshal” and claimed that the same was liable to be rectified in the trademark register.
  4. When the suit in question was pending adjudication in the High Court of Delhi, the appellants herein initiated parallel proceedings before the High Court of Gujarat (in the year 1997) seeking rectification of the registration of the trademark(s) granted to the respondent
  5. Specifically, the appellants had filed three rectification applications under Sections 46/56 of the Trade and Merchandise Marks Act, 1958 for removal and cancellation of the three trademarks registered in favour of the petitioner. 
  6. The learned single Judge of the High Court of Gujarat dismissed the three applications in question by Order dated 15.04.1998. The said order has been affirmed in appeal by the Division Bench of the Gujarat High Court by its Order dated 25.11.1998. This order has been subjected to challenge in the Civil Appeal of 2001 presently under consideration.

Issue Raised

Whether it is an infringement suit? The question of validity of registration of the trademark in question has not been raised/pursued, will the concerned party will have remedy under Sections 111 read with Section 107 or will the party still have recourse to the remedy under Sections 45/56 of the Trade and Merchandise Marks Act, 1958?

Contentions of the parties

Arguments on behalf of Appellant

  • It was stated that under the act there are two types of rights which are granted. One is granted to the owner of a registered trademark(Sections 28 and 29) and the other is granted to a person who is aggrieved by such a registration(Sections 46 and 56).. Both are independent and parallel of each other.
  • The appellants argued that Section 107 and Section 111 contemplate granting of permission by the trial court for filing of an application for rectification and the same does not follow from a bare reading of the two provisions.
  • The only condition necessary to prefer an application under Section 107 read with Section 111 would be that a person should be an aggrieved person.
  • There exists a higher provision under Section 41(b) of the Specific Relief Act, 1963 which restrains a subordinate court from preventing a person from instituting proceedings.

Arguments on behalf of Respondent

  • The defendants contended that Section 111 (3) and Section 111(4) make it clear that once the court is satisfied that a question regarding the validity of a registration of trademark has arisen then the same has to be decided in a rectification proceeding.
  • It was argued that Section 46 and Section 56 relate to a situation where no suit is pending adjudication for infringement. These sections are independent of Section 107 and Section 111.
  • It was argued that when a suit for infringement has been filed and questions of the trademark’s validity have arisen and the court is satisfied about the issue then the provisions of Section 111 will be applicable. If a party abandons the plea of invalidity then it would mean that the same is relinquished and recourse to Section 45 and 56 would close..

Sections Referred

  • Section 46- Removal from register and imposition of limitations on ground of non-use.

Section 46 contemplates that if a trademark has been registered without any bonafide intentions of using it, and the same has not been used one month prior to an application for removal or for a continuous period of five years, then the same can be removed from the register.

  • Section 56Power to cancel or vary registration and to rectify the register.

Section 56 of the Act, empowers the tribunal to cancel the registration of a trademark or vary such a registration if it is shown that any provisions have been contravened or there has been a failure to observe any condition for which the registration was granted.

  • Section 107- Application for rectification of register to be made to the High Court in certain cases.

Section 107 of the Act says that if the registration is challenged of a trademark then an application can be preferred to the High Court for a rectification. Such an application is not to be made to the Registrar.

  • Section 111- Stay of proceedings where the validity of registration of the trade mark is questioned, etc.

Section 111 of the Act provides that if an application is made for rectification before the registrar or the high court and a proceeding is pending adjudication for an infringement of a trademark and if a plea is taken about the same then the suit shall be stayed. If no such application is pending for rectification and a suit is instituted on a later date for infringement, then in such a case if an application is made for rectification or the issue subsequently arises then the suit shall be stayed for a period of three months and the court shall frame issues to that effect.

  • Section 41(b) of Specific Relief Act:  Injunction when refused.

An injunction cannot be granted—(b) to restrain any person from instituting or prosecuting any proceeding in a court not subordinate to that from which the injunction is sought 

Judgement of the court

The Supreme Court settled the issue by holding that:

  • The questions of validity of registration are to be decided by the tribunal and not the civil court. In situations where the party has not moved the civil court, Section 46 and 56 provide a party the statutory right to seek rectification.
  • If a party has moved the civil court and the issue of validity of a trademark has been raised then such a plea will be decided by the tribunal and not the civil court. This will happen only if the civil court is satisfied and it has framed an issue to that effect. The decision of the tribunal will be binding on the civil court.
  • If the parties do not approach the tribunal for rectification after the order of the civil court then the parties relinquish the plea to rectification.
  • It was held that the plea of rectification would cease if the same is abandoned and the recourse under Section 46 and Section 56 would not be available to the parties. If the same is allowed to subsist then the same would lead to anarchy.

It was observed that the intent of the legislature by enacting Section 111 is to address the question of invalidity needs to be decided in the first instance. Once the plea of rectification has been raised and settled will the suit proceed with regard to the other


[1] [NOTE: Sections 46,56,111 and 107 of the 1958 Act are pari matria to Sections 47,57,124 and 125 of the 1999 Act]

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