Del HC | Whether S. 124 of Trade Marks Act provide for stay of action against passing off? Read on

Delhi High Court: Asha Menon, J., addressed a suit for trade mark infringement, wherein the Court additionally addressed the scope of Section 124 of Trade Marks Act.

Instant petition, petitioner was aggrieved that on account of the fact that his suit, which he had filed against the defendants for infringement of his proprietary trade mark “RACER” as also passing off their goods as that of the petitioner and other reliefs, was stayed by the trial court.

The stated order was challenged and was further disposed of by permitting the petitioner to withdraw that petition and granting liberty to approach the Tribunal (sic.) by review petition.

Counsel for the petitioner, S.K. Bansal relied upon the judgment of this Court in J. K. Oil Industries v. Adani Wilmar Ltd., 2018 SCC OnLine Del 9367 to submit that when a suit was filed for infringement of trade mark as also for passing off, the filing of a rectification petition before the Intellectual Property Rights Board would result in the stay of the suit as far as infringement of trade mark was concerned under Section 124 of the Trade Marks Act, 1999, but that suit with regard to passing off was to continue.

With regard to the prayer of the petitioner for continuing the suit for passing off, the counsel submitted that since an injunction was already in force against the respondents and the respondents were not using the trade mark “RACER”, no prejudice was being caused to the petitioner, if the suit waiting for the disposal of the rectification petition filed by the respondents before the IPRB. Thus, the counsel submitted that the present petition deserved to be dismissed.

Analysis, Law and Decision

Bench stated that it is settled law that Section 124 of the Trade Marks Act does not provide for stay of action against the passing off and was applicable only where a rectification application/cancellation has been sought against the registered trade mark that a plaintiff claims to be exclusively it’s own.

The above is intended to avoid conflicting decisions by the Civil Courts and the Tribunal.

There is no such occasion arising in a suit for passing off. It is only when clever drafting discloses the intent of the plaintiff to get over the statutory bar, being aware of the rectification proceedings commenced against the trade mark that it claims is exclusively it’s own.

Hence, Court held that the trial court had misread the judgments of this Court in Micolube India Ltd. v. Maggon Auto Centre,    2010 SCC OnLine Del 138, and an error apparent on the face of the impugned order. Trial Court ought not to have directed that the entire suit be stayed, though, this Court including J.K. Oil Industries v. Adani Wilmar Ltd., 2018 SCC OnLine Del 9367, has consistently held that while the suit for infringement of trade mark has to be stayed under Section 124 of the Trade Marks Act, when a rectification petition is filed before the IPRB, an action for passing off could continue.

In view of the above petition was allowed. The order passed by the trial court was modified to read that Civil Suit No.577/2016 [New No.10725/2016] shall remain stayed under Section 124 of the Trade Marks Act qua the action for infringement of trade mark, but shall continue qua the relief sought against passing off and connected reliefs. [Parveen Kumar Gupta v. Ravi Chadha, 2021 SCC OnLine Del 3916, decided on 6-08-2021]


Advocates before the Court:

For the Petitioner: S.K. Bansal and Ajay Amitabh Suman, Advocates

For the Respondents: Ashish Deep Verma, Kamya Ritu Verma, Vijay Singh and Bharti Sharma, Advocates

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