Only Prima Facie Satisfaction Required U/s 124(1)(ii) Of Trademarks Act, Court Not Required To Access Sufficiency Of Evidence: Rajasthan High Court

Section 124(1)(ii) states the procedure to be followed in cases where the validity of the registration of a trademark is questioned in a suit for infringement. It provides the court's authority to adjourn proceedings to allow a party to apply for rectification of the trademark registration.

Brief Facts:

M/s. Aadhar Products Pvt. Ltd. (“Respondent”) filed a suit alleging infringement and passing off of its registered label trademarks. The trial court issued a summons and the M/s. Lotus Organic Care (“Petitioner”) responded with a written statement. On October 9, 2022, the trial court framed the issues, and later, on February 23, 2023, additional issues were framed based on applications from both parties. Subsequently, the Petitioner sought to stay the proceedings under Section 124 of the Trademarks Act, 1999, intending to challenge the validity of the trademarks through a rectification application. However, the trial court rejected this application prompting the Petitioner to file the writ petition in the Rajasthan High Court (“High Court”).

The Petitioner contended that the trial court erred by not adequately considering the provisions of Section 124(1)(ii) of the Trademarks Act, which necessitates the court to be prima facie satisfied with the tenability of the rectification application. The Petitioner argued that the written statement clearly outlined the basis for questioning the validity of the trademarks, and thus, the trial court should have acknowledged the prima facie tenability of its contentions.

Conversely, the Respondent vehemently opposed the Petitioner's claims, maintaining that the trial court thoroughly examined the issue and rightly concluded that the Petitioner's arguments did not demonstrate prima facie tenability. It contended that the trial court appropriately assessed the submissions and found them insufficient to meet the requirements of Section 124(1)(ii).

Observations by the High Court:

The High Court referred to Section 124 (1) (ii) of the Trademarks Act of 1999. Section 124 (1) (ii) states: "If no such proceedings are pending and the court is satisfied that the plea regarding the invalidity of the registration of the plaintiff's or defendant's trademark is prima facie tenable, raise an issue regarding the same and adjourn the case for a period of three months from the date of the framing of the issue in order to enable the party concerned to apply to the High Court for rectification of the register." This provision mandates that the trial court, upon receiving an application under Section 124, must assess whether the argument regarding the invalidity of the trademark registration is prima facie tenable before proceeding to adjourn the case to allow for rectification proceedings.

The High Court noted that the trial court reviewed the pleadings presented by the Petitioner in its written statement and concluded that these did not sufficiently establish a prima facie case for the invalidity of the plaintiff's trademark registration. Consequently, the trial court denied the application. The High Court emphasized that the statutory obligation under Section 124 (1) (ii) requires the trial court to evaluate the pleadings for a prima facie indication of the trademark's invalidity, rather than to fully adjudicate the merits of the rectification application.

The High Court referred to the pleadings made by the Petitioner and found that they clearly aimed to demonstrate the prima facie invalidity of the plaintiff's trademark registration. It held that the trial court's role was to determine if the pleadings presented a plausible argument for invalidity, without delving into a detailed assessment of the evidence or the potential success of the rectification application. The High Court held the purpose of Section 124 is to temporarily halt proceedings to allow for the rectification process, which is adjudicated by a different forum with distinct procedural requirements.

It held that the trial court overstepped by engaging in a detailed evaluation of the evidence at this preliminary stage, which was unnecessary and contrary to the intention of Section 124

Therefore, the High Court held that the Petitioner's application under Section 124 should have been granted. The pleadings were sufficient to indicate a prima facie case for the invalidity of the plaintiff's trademark.

Case Title: M/s. Lotus Organic Care and Anr vs M/s. Aadhar Products Pvt. Ltd.

Case Number: S.B. Civil Writ Petition No. 18461/2023

Advocate for the Petitioner: Mr. Divyanshu Choudhary Mr. Vineet R.Dave

Advocate for the Respondent: Dr. Ashok Soni, Sr. Adv. assisted by Ms. Sonali Vyas, Mr. Aman Soni, Mr. Yash Dadhich & Mr. Romil Bagrecha

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