Stay of proceeding in a trademark infringement suit

Trademark battles on Indian turf have generated an impressive amount of case law, but the fight over the letter mark “FT” between the Financial Times of the UK and Bennett Coleman & Co of India is in a class of its own. Bennett Coleman is the flagship company of The Times Group, the largest media conglomerate in India and publisher of The Times of India, the country’s largest-circulation daily newspaper.

Since the institution of the suit, the parties have continuously been on a warpath. Lately, a judgment in the case has raised some of the finer points of trademark law in India.

Distinctive or not?

An application was filed by Bennett Coleman for stay of proceeding under section 124 of the Trade Marks Act 1999. Bennett Coleman questioned the validity of the registration of the mark “FT”, which was held by the Financial Times. Bennett Coleman contended that a prima facie consideration of the mark would reveal it to be of a non-distinctive nature, and also that there was little material on record to show that the letter mark FT has any inherent or acquired distinctiveness.

Indian trademark law provides for stay of proceeding in a suit for infringement of a trademark in cases where (i) the defendant pleads invalidity of the plaintiff’s mark or (ii) the plaintiff pleads invalidity of the defendant’s mark against the defendant’s defence of its right to use an identical or nearly resembling trademark given by registration under the Act.

In order to stay the proceedings in the infringement suit, the court is required to ascertain whether any proceedings for rectification of the register in relation to the plaintiff’s or defendant’s trademark are pending before the Intellectual Property Appellate Board (IPAB). If a rectification proceeding is pending, the suit will be stayed until the final disposal of such proceedings. When there is no rectification proceeding pending and the court is satisfied that the plea of invalidity of the plaintiff or defendant’s mark is prima facie tenable, the suit will be adjourned for a period of three months in order to apply for the rectification of the register.

Bennett Coleman contended that under section 124, when an application for rectification is made before the IPAB, the court has to be satisfied that the said request is prima facie tenable. If it is satisfied, it may proceed to stay the suit. In this case, the court factored in a considerable delay by Bennett Coleman in filing rectification proceedings and applying for stay of the suit under section 124 of the Act. Furthermore the court also emphasized that it was conscious that a blanket acceptance of Bennett Coleman’s plea of prima facie tenability of the argument that letter marks are inherently incapable of distinctiveness may colour the IPAB’s view and hence lead to unforeseen results.

Application dismissed

Finally the Court dismissed Bennett Coleman’s application as unmerited and held that the reasoning it sought to employ could not be invoked under all circumstances because although section 124 does mandate prima facie examination of tenability, the pleas heard in the suit and the materials supporting the case did not justify a prima facie view that the defence (non-distinctiveness of the letter mark) was tenable and should lead to a stay of the suit.

The Court made a significant observation that while carrying out a prima facie examination of tenability of the plea of invalidity of a mark, 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 the stay of suit.

Nuances

The case, although fraught with delays of an extraordinary nature on the part of the defendant, highlights the nuances of trademark law in a very succinct manner. In all legal proceedings, the registration of the mark under the Act serves as prima facie evidence of a presumption of validity. Thus a plea of invalidity of a registered trademark in an infringement suit allows for rectification proceeding to be instituted and disposed before deciding on the issue of whether identical or deceptive similar trademarks are likely to cause confusion on the part of public, due to a false association with the registered mark.

The court case observed that the plea of invalidity should be tested on different threshold levels depending on whether it is

(i) being examined during the hearing of an application for interim injunction under civil procedure code or

(ii) the stay of proceeding under section 124 of the Act. Although the court stopped short of elucidating on the fine distinction between the two threshold levels, it seems that that the threshold for prima facie examination of tenability of the plea of invalidity of a mark in an application under section 124 of the Act is at a higher level than the threshold for the same in a motion for interim injunction.

This is presumably due to the inherent nature of the provisions under which the applications are made. In an application for interim injunction, the determination of the prima facie case involves a comprehensive appreciation of the facts and circumstances with respect to the plea of infringement and invalidity of the mark.

In contrast, the stay of proceeding under section 124 of the Act is specific to the case where only validity of the mark is questioned. Thus a high threshold becomes imperative to examine the prima facie tenability of the plea of invalidity.

The “tenability” of a validity challenge is a significant part of almost all trademark litigations in which issues relating to rectification of the register are pleaded by either of the parties. In order to make a challenge “tenable”, an applicant must show, with respect to registration of a trademark, one of four things:

1. an entry duly registered has been removed or omitted from the register for no valid reason; or

2. an entry has been entered in the register although the mark has not been registered; or

3. an entry wrongly remains on the register despite an order for its removal or rectification; or

4. a particular entry has been registered, but with some error or defect which renders it different from the entry which was granted registration.

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 should be circumspect since any determination of prima facie tenability may impinge on the rectification proceedings themselves.

Manisha Singh Nair is a partner at Lex Orbis, an intellectual property practice law firm headquartered in New Delhi